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                                   LEASE AGREEMENT

1.   PARTIES. This Lease, dated for reference purposes only, January 11, 1996,
     is made by and between SOUTH BAY/FORTRAN, a California limited partnership,
     ("Landlord"), and NOVELLUS SYSTEMS, INC., a California corporation
     ("Tenant").

2.   PREMISES. Landlord hereby leases to Tenant and Tenant hereby leases from
     Landlord, upon the terms and conditions hereinafter set forth, those
     certain premises (the "Premises") presently known, as of the date of this
     Lease, as 4415 Fortran Court, situated in the City of San Jose, County of
     Santa Clara, State of California, described as follows: for purposes of
     this Lease, the rentable square footage area of the Building shall be
     deemed to be approximately thirty-eight thousand two hundred eighty-four
     (38,284) square feet (the "Building"), as shown cross-hatched on the site
     plan (the "Site Plan") attached hereto as EXHIBIT "A". The Building is
     located on a larger parcel (the "Parcel") containing other buildings (the
     "Buildings") as shown on the Site Plan, which Parcel is described in
     EXHIBIT "B" attached hereto. In the event Landlord subdivides the Parcel in
     the future into two (2) or more legal parcels, the term "Parcel" shall
     thereafter refer to the legal parcel on which the Premises are located.
     Landlord shall deliver the premises in good condition and repair, including
     the roof, heating, ventilation and air conditioning (HVAC) equipment and
     structural integrity of the building and in compliance with all
     governmental codes, ordinances and statues, including those applicable
     under the Americans of Disabilities Act (ADA). Landlord shall not be
     required to make any alterations, additions or improvements to the Premises
     and the Premises shall be leased to Tenant in an "as-is" condition, except
     for those improvements as defined as "Landlord's Improvements" in EXHIBIT
     "C" attached hereto and made a part hereof. THE EXACT SQUARE FOOTAGE SHALL
     BE DETERMINED UPON FINAL APPROVAL OF THE FINAL TENANT IMPROVEMENT PLANS,
     WHICH TENANT DESIRES TO CONSTRUCT AT ITS SOLE COST, PURSUANT TO EXHIBIT "D"
     ATTACHED HERETO.

3.   TERM. The term of this Lease ("Lease Term") shall be for two (2) years,
     commencing upon the earlier of i) RECEIPT OF A CERTIFICATE OF OCCUPANCY OR
     FINAL BUILDING PERMIT, upon completion of tenant improvements, as outlined
     in EXHIBITS "C" AND "D" attached hereto, or, ii) April 15, 1996, (the
     "Commencement Date") and ending two (2) years thereafter, unless sooner
     terminated pursuant to any provision hereof. Notwithstanding said scheduled
     Commencement Date, if for any reason Landlord cannot deliver possession of
     the Premises to Tenant on said date, Landlord shall not be subject to any
     liability therefor, nor shall such failure affect the validity of this
     Lease or the obligations of Tenant hereunder, but in such case Tenant shall
     not be obligated to pay rent until possession of the Premises is tendered
     to Tenant and the commencement and termination dates of this Lease shall be
     revised to conform to the date of Landlord's delivery of possession. In the
     event Landlord shall permit Tenant to occupy the Premises prior to the
     Commencement Date, such occupancy shall be subject to all the provisions of
     this Lease, including the obligation to pay the Monthly Installment of
     rent, and Common Area Charges.

4.   RENT.

     A.   TIME OF PAYMENT. Tenant shall pay to Landlord as rent for the Premises
          the sum specified in Paragraph 4.B below (the "Monthly Installment")
          each month in advance on the first day of each calendar month, without
          deduction or offset, prior notice or demand, commencing on the
          Commencement Date and continuing through the term of this Lease,
          together with such additional rents as are payable by Tenant to
          Landlord under the terms of this Lease. The Monthly Installment for
          any period during the lease Term which period is less than one (1)
          full month shall be a prorata portion of the Monthly Installment based
          upon a thirty (30) day month.

     B.   MONTHLY INSTALLMENT. The Monthly Instalment of rent payable each month
          during the term shall be Twenty Thousand Six Hundred Seventy-Three and
          36/100ths Dollars ($20,673.36) per month.

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     C.   LATE CHARGE. Tenant acknowledges that late payment by Tenant to
          Landlord of rent and other sums due hereunder will cause Landlord to
          incur costs not contemplated by this Lease, the exact amount of which
          will be extremely difficult to ascertain. Such costs includes, but are
          not limited to, processing and accounting charges, and late charges
          which may be imposed on Landlord by the terms of any mortgage or deed
          of trust covering the Premises. Accordingly, if any installment of
          rent or any other sum due from Tenant shall not be received by
          Landlord within ten (10) days after such amount shall be due, Tenant
          shall pay to Landlord, as additional rent, a late charge equal to six
          percent (6%) of such overdue amount. The parties hereby agree that
          such late charge represents a fair and reasonable estimate of the
          costs Landlord will incur by reason of late payment by Tenant.
          Acceptance of such late charge by Landlord shall in no event
          constitute a waiver of Tenant's default with respect to such overdue
          amount, nor prevent Landlord from exercising any of its other rights
          and remedies granted hereunder.

     D.   ADDITIONAL RENT. All taxes, insurance premiums, Common Area Charges,
          late charges, costs and expenses which Tenant is required to pay
          hereunder, together with all interest and penalties that may accrue
          thereon in the event of Tenant's failure to pay such amounts, and all
          reasonable damages, costs and attorneys' fees and expenses which
          Landlord may incur by reason of any default of Tenant or failure on
          Tenant's part to comply with the terms of this Lease, shall be deemed
          to be additional rent ("Additional Rent") and shall be paid in
          addition to the Monthly Installment of rent, and, in the event of
          nonpayment of the Monthly Installment of rent.

     E.   PLACE OF PAYMENT. Rent shall be payable in lawful money of the United
          States of America to Landlord at 511 Division Street, Campbell CA, or
          to such other person(s) or at such other place(s) as Landlord may
          designate in writing.

     F.   ADVANCE PAYMENT. Concurrently with the execution of this Lease, Tenant
          shall pay the Landlord the sum of Twenty Thousand Six Hundred Seventy-
three and 36/100ths Dollars ($20,673.36) to be applied to the Monthly Instalment
of rent first accruing under this Lease.

5.   SECURITY DEPOSIT. Tenant shall deposit the sum of Twenty Thousand Six
     Hundred Seventy-three and 36/100ths Dollars ($20,673.36) (the "Security
     Deposit") upon execution of this Lease, to secure the faithful performance
     by Tenant of each term, covenant and condition of this Lease. If Tenant
     shall at any time fail to make any payment or fail to keep or perform any
     term, covenant or condition on its part to be made or performed or kept
     under this Lease, Landlord may, but shall not be obligated to and without
     waiving or releasing Tenant from any obligation under this Lease, use,
     apply or retain the whole or any part of the Security Deposit (A) to the
     extent of any sum due to Landlord; (B) to make any required payment on
     Tenant's behalf; or (C) to compensate Landlord for any loss, damages,
     attorneys' fees or expense sustained by Landlord due to Tenant's default.
     In such event, Tenant shall, within five BUSINESS (5) days of written
     demand by Landlord, remit to Landlord sufficient funds to restore the
     Security Deposit to its original sum. No interest shall accrue on the
     Security Deposit. Landlord shall not be required to keep the Security
     Deposit separate from its general funds. Should Tenant comply with all the
     terms, covenants, and conditions of this Lease and at the end of the term
     of this Lease leave the Premises in the condition required by this Lease,
     then said Security Deposit, less any sums owing to Landlord, shall be
     returned to Tenant within thirty (30) days after the termination of this
     Lease and vacancy of the Premises by Tenant.

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6.   USE OF PREMISES. Tenant shall use the Premises only in conformance with
     applicable governmental laws, regulations, rules and ordinances for the
     purpose of office, research & development, light manufacturing,
     distribution and warehousing of products for the electronics industry, and
     for no other purpose. Tenant shall indemnify, protect, defend, and hold
     Landlord harmless against any loss, expense, damage, attorneys' fees or
     liability arising out of the failure of Tenant to comply with any
     applicable law. Tenant shall not commit or suffer to be committed, any
     waste upon the Premises, or any nuisance, or other acts or things which may
     disturb the quiet enjoyment of any other tenant in the buildings adjacent
     to the Premises, or allow any sale by auction upon the Premises, or allow
     the Premises to be used for any unlawful purpose, or place any loads upon
     the floor, walls or ceiling which endanger the structure, or place any
     harmful liquids in the drainage system of the Building. No waste materials
     or refuse shall be dumped upon or permitted to remain upon any part of the
     Premises outside of the Building proper, except in trash containers placed
     inside exterior enclosures designated for that purpose by Landlord. No
     materials, supplies, equipment, finished products or semi-finished
     products, raw materials or articles of any nature shall be stored upon or
     permitted to remain on any portion of the Premises outside of the Building
     proper. Tenant shall strictly comply with the provisions of Paragraph 39
     below.

7.   TAXES AND ASSESSMENTS.

     A.   TENANT'S PROPERTY. Tenant shall pay before delinquency any and all
          taxes and assessment, license fees and public charges levied, assessed
          or imposed upon or against Tenant's fixtures, equipment, furnishings,
          furniture, appliances and personal property installed or located on or
          within the Premises. Tenant shall cause said fixtures, equipment,
          furnishings, furniture, appliances and personal property to be
          assessed and billed separately from the real property of Landlord. If
          any of Tenant's said personal property shall be assessed with
          Landlord's real property, Tenant shall pay Landlord the taxes
          attributable to Tenant within ten (10) days after receipt of a written
          statement from Landlord setting forth the taxes applicable to Tenant's
          property.

     B.   PROPERTY TAXES. Tenant shall pay, as additional rent, its Pro Rata
          Share (as defined below) of all Property Taxes levied or assessed with
          respect to the land comprising the Parcel and with respect to all
          buildings and improvements located on the Parcel which become due or
          accrue during the term of this Lease. Tenant shall pay such Property
          Taxes to Landlord within twenty (20) days after receipt of billing.
          Provided that Landlord bills Tenant at least thirty (30) days prior to
          the delinquency date of such Property Taxes, Tenant shall pay such
          Property Taxes to Landlord at least ten (10) days prior to the
          delinquency date, and if Tenant fails to do so, Tenant shall reimburse
          Landlord, on demand, for all interest, late fees and penalties that
          the taxing authority charges Landlord. In the event Landlord's
          mortgagee requires an impound for Property Taxes, then on the first
          day of each month during the Lease Term, Tenant shall pay Landlord one
          twelfth (1/12) of its annual share of such Property Taxes. IF PAYMENT
          IS MADE ON A MONTHLY BASIS, LANDLORD SHALL ANNUALLY RECONCILE SAID
          PAYMENTS VERSUS THE ACTUAL PROPERTY TAX BILL FOR THE PERIOD IN
          QUESTION AND EITHER REIMBURSE TENANT FOR ANY OVERPAYMENTS OR BILL
          TENANT FOR ANY PAYMENTS LESS THAN THE ACTUAL BILL. Tenant's liability
          hereunder shall be prorated to reflect the Commencement and
          termination dates of this Lease. Tenant's share of the Property Taxes
          shall be determined by Landlord from the respective valuation assigned
          in the Assessor's worksheet or such other information as may be
          reasonably available. Landlord's reasonable determination thereof, in
          good faith, shall be conclusive.

          As used in this Lease, the term "Tenant's Pro Rata Share" shall mean a
          fraction, expressed as a percentage, the numerator of which is the
          number of square feet of floor space contained in the Premises (38,284
          SQUARE FEET) and the denominator of which is the number of square feet
          of floor space contained in all of the Buildings located on the Parcel
          (295,529 SQUARE FEET). As of the Commencement Date, Tenant's Pro Rata
          Share is twelve and ninety-five hundredths percent (12.95%).

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          For the purpose of this Lease, "Property Taxes" means and includes all
          taxes, assessments (including, but not limited to, assessments for
          public improvements or benefits), taxes based on vehicles, utilizing
          parking areas, taxes based or measured by the rent paid, payable or
          received under this Lease, taxes on the value, use, or occupancy of
          the Premises, the Buildings and/or the Parcel, Environmental
          Surcharges, and all other governmental impositions and charges of
          every kind and nature whatsoever, whether or not customary or within
          the contemplation of the parties hereto and regardless of whether the
          same shall be extraordinary or ordinary, general or special,
          unforeseen or foreseen, or similar or dissimilar to any of the
          foregoing which, at any time during the Lease Term, shall be
          applicable to the Premises, the Buildings and/or the Parcel or
          assessed, levied or imposed upon the Premises, the Buildings and/or
          the Parcel, or become due and payable and a lien or charge upon the
          Premises, the Buildings and/or the Parcel, or any part thereof, under
          or by virtue of any present or future laws, statutes, ordinances,
          regulations or other requirements of any governmental authority
          whatsoever. The term "Environmental Surcharges" shall mean and include
          any and all expenses, taxes, charges or penalties imposed by the
          Federal Department of Energy, the Federal Environmental protection
          Agency, the Federal Clean Air Act, or any regulations promulgated
          thereunder or any other local, state or federal governmental agency or
          entity now or hereafter vested with the power to impose taxes,
          assessments, or other types of surcharges as a means of controlling or
          abating environmental pollution or the use of energy. The term
          "Property Taxes" shall not include any federal, state or local net
          income, estate, or inheritance tax imposed on Landlord, OR PENALTIES
          AND INTEREST INCURRED BY LANDLORD'S LATE PAYMENT, UNLESS PENALTY OR
          INTEREST IS SPECIFICALLY DUE TO TENANT'S LATE PAYMENT OF PROPERTY
          TAXES.

     C.   OTHER TAXES: Tenant shall, as additional rent, pay or reimburse
          Landlord for any tax based upon, allocable to, or measured by the area
          of the Premises or the Buildings or the Parcel; or by the rent paid,
          payable or received under this Lease; any tax upon or with respect to
          the possession, leasing, operation, any tax upon or with respect to
          the possession, leasing, operation, management, maintenance,
          alteration, repair, use or occupancy of the Premises or any portion
          thereof; any privilege tax, excise tax, business and occupation tax,
          gross receipts tax, sales and/or use tax, water tax, sewer tax,
          employee tax, occupational license tax imposed upon Landlord or Tenant
          with respect to the Premises; any tax upon this transaction or any
          document to which Tenant is a party creating or transferring an
          interest or an estate in the Premises.

8.   INSURANCE.

     A.   INDEMNITY. EXCEPT FOR LANDLORD'S BREACH UNDER THIS LEASE, GROSS
          NEGLIGENCE, OR WILLFUL MISCONDUCT, Tenant agrees to indemnify, protect
          and defend Landlord against and hold Landlord harmless from any and
          all claims, causes of action, judgements, obligations or liabilities,
          and all reasonable expenses incurred in investigating or resisting the
          same (including reasonable attorneys' fees), on account of, or arising
          out of, AND TO THE EXTENT RELATING TO TENANT'S operation, maintenance,
          use or occupancy of the Premises and all areas appurtenant thereto.
          This Lease is made on the express understanding that Landlord shall
          not be liable for, or suffer loss by reason of, injury to person or
          property, form whatever cause (except for active negligence or willful
          misconduct of Landlord), which in any way may be connected with the
          operation, use or occupancy of the Premises specifically including,
          without limitation, any liability for injury to the person or property
          of Tenant, its agents, officers, employees, licensees and invitees.

     B.   LIABILITY INSURANCE. Tenant shall, at Tenant's expense, obtain and
          keep in force during the term of this Lease a policy of comprehensive
          public liability insurance insuring Landlord and Tenant against claims
          and liabilities arising out of the operation, use, or occupancy of the
          Premises and all areas appurtenant thereto, including parking areas.
          Such insurance shall be in an amount of not less than Three Million
          Dollars ($3,000,000.00) for bodily injury or death as a result of any
          one occurrence and Five Hundred Thousand Dollars

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          ($500,000.00) for damage to property as a result of any one
          occurrence. The insurance shall be with companies approved by
          Landlord, with approval Landlord agrees not to withhold unreasonably.
          Tenant shall deliver to landlord, prior to possession, and at least
          thirty (30) days prior to the expiration thereof, a certificate of
          insurance evidencing the existence of the policy required hereunder
          and such certificate shall certify that the policy (1) names Landlord
          as an additional insured, (2) shall not be canceled or altered without
          thirty (30) days prior written notice to Landlord, (3) insures
          performance of the indemnity set forth in Paragraph 8.A above, (4) the
          coverage is primary and any coverage by Landlord is in excess thereto
          and (5) contains a cross-liability endorsement. Landlord may maintain
          a policy or policies of comprehensive general liability insurance
          insuring Landlord (and such others as are designated by Landlord),
          against liability for personal injury, bodily injury, death and damage
          to property occurring or resulting from an occurrence in, on or about
          the Premises or the Common Area, with such limits of coverage as
          Landlord may from time to time determine are reasonably necessary for
          its protection. The cost of any such liability insurance maintained by
          Landlord shall be a Common Area Charge and Tenant shall pay, as
          additional rent, its share of such cost to Landlord as provided in
          Paragraph 12 below.

     C.   PROPERTY INSURANCE. Landlord shall obtain and keep in force during the
          term of this Lease a policy or policies of insurance covering loss or
          damage to the Premises and the Buildings, in the amount of the full
          replacement value thereof, providing protection against those perils
          included within the classification of "all risk" insurance, plus a
          policy of rental income insurance in the amount of one hundred percent
          (100%) of twelve (12) months rent (including, without limitation, sums
          payable as Additional Rent), plus, at Landlord's option, flood
          insurance and earthquake insurance, and any other coverages which may
          be required from time to time by Landlord's mortgagee. Tenant shall
          have no interest in nor any right to the proceeds of any insurance
          procured by Landlord on the Premises. Tenant shall, within twenty (20)
          days after receipt of billing, pay to Landlord as additional rent, the
          full cost of such insurance procured and maintained by Landlord.
          Tenant acknowledges that such insurance procured by Landlord shall
          contain a deductible which reduces Tenant's cost for such insurance
          and, in the event of loss or damage, Tenant shall be required to pay
          to Landlord the amount of such deductible.

     D.   TENANT'S INSURANCE. Release of Landlord. Tenant acknowledges that the
          insurance to be maintained by Landlord on the Premises pursuant to
          Subparagraph C above will not insure any of Tenant's property.
          Accordingly, Tenant, at Tenant's own expense, shall maintain in full
          force and effect on all of its fixtures, equipment, leasehold
          improvements and personal property in the Premises, a policy of "All
          Risk" coverage insurance to the extent of at least ninety percent
          (90%) of their insurable value. Tenant hereby releases Landlord, and
          its partners, officers, agents employees and servants from any and all
          claims, demands, losses, expenses or injuries to the Premises or to
          the furnishings, fixtures, equipment, inventory or other personal
          property of Tenant in, about, or upon the Premises, which are caused
          by perils, events or happenings where the same are covered by the
          insurance required by this Lease or which are the subject of insurance
          carried by Tenant and in force at the time of such loss.

     E.   MUTUAL WAIVER OF SUBROGATION. TENANT AND LANDLORD HEREBY MUTUALLY
          WAIVE THEIR RESPECTIVE RIGHTS OF RECOVERY AGAINST EACH OTHER OF ANY
          LOSS OF OR DAMAGE TO THE PROPERTY OF EITHER PARTY, TO THE EXTENT SUCH
          LOSS OR DAMAGE IS INSURED BY ANY INSURANCE POLICY REQUIRED TO BE
          MAINTAINED BY THIS LEASE OR OTHERWISE IN FORCE AT THE TIME OF SUCH
          LOSS OR DAMAGE. EACH PARTY SHALL OBTAIN ANY SPECIAL ENDORSEMENTS, IF
          REQUIRED BY THE INSURER, WHEREBY THE INSURER WAIVES ITS RIGHT OF
          SUBROGATION AGAINST THE OTHER PARTY HERETO. THE PROVISIONS OF THIS
          SUBPARAGRAPH 8.3 SHALL NOT APPLY IN THOSE INSTANCES IN WHICH THE
          WAIVER OF SUBROGATION WOULD CAUSE EITHER PARTY'S INSURANCE COVERAGE TO
          BE VOIDED OR OTHERWISE MADE UNCOLLECTIBLE.

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9.     UTILITIES. Tenant shall pay for all water, gas, light, heat, power, 
electricity, telephone, trash pickup, sewer charges and all other services 
supplied to or consumed on the Premises, and all taxes and surcharges 
thereon. In addition, the cost of any utility services supplied to the Common 
Area or not separately metered to the Premises shall be a Common Area Charge 
and Tenant shall pay its share of such costs to Landlord as provided in 
Paragraph 12 below.

10.    REPAIRS AND MAINTENANCE.

       A.     LANDLORD'S REPAIRS. Subject to provisions of Paragraph 16, 
              Landlord shall keep and maintain the exterior roof, structural 
              elements and exterior walls of the Building in good order and 
              repair. Landlord shall not, however, be required to maintain, 
              repair or replace the interior surface of exterior walls, nor 
              shall Landlord be required to maintain, repair or replace 
              windows, doors, skylights or plate glass. Landlord shall have no 
              obligation to make repairs under this Subparagraph until a 
              reasonable time after receipt of written notice from Tenant of 
              the need for such repairs. Tenant shall reimburse Landlord, as 
              additional rent, within THIRTY (30) days after receipt of 
              billing, for the cost of such repairs and maintenance which are 
              the obligation of Landlord hereunder, provided however, that 
              Tenant shall not be required to reimburse Landlord for the cost 
              of maintenance and repairs of the structural elements of the 
              Building unless such maintenance or repair is required because of 
              the negligence or willful misconduct of Tenant or its employees, 
              agents or invitees. As used herein, the term "structural elements 
              of the building" shall mean and be limited to the foundation, 
              footings, floor slab (bit not flooring), structural walls, and 
              roof structure (INCLUDING ROOFING OR ROOF MEMBRANE ONLY TO BE 
              INCLUDED DURING THE FIRST TWO (2) YEARS OF THE LEASE TERM, UNLESS 
              TENANT MAKES ANY PENETRATIONS TO THE ROOFING OR ROOF MEMBRANE AT 
              ANY TIME DURING THEIR TENANCY, IN WHICH CASE TENANT SHALL BE 
              SOLELY RESPONSIBLE FOR REPAIRS AND MAINTENANCE OF THE ROOFING 
              AND ROOF MEMBRANE.) UPON EXPIRATION OF THE FIRST TWO (2) YEARS OF 
              THE LEASE TERM, TENANT SHALL BECOME RESPONSIBLE FOR REPAIRS AND 
              MAINTENANCE BIT NOT REPLACEMENT OF THE ROOFING OR ROOF 
              MEMBRANE. 

          B.  TENANT'S REPAIRS. Except as expressly provided in Subparagraph 
              A above, Tenant shall, at its sole cost, keep and maintain the 
              entire Premises and every part thereof, including without 
              limitation, the windows, window frames, plate glass, glazing, 
              skylights, truck doors, doors and all door hardware, the walls 
              and partitions, and the electrical, plumbing, lighting, 
              heating, ventilating and air conditioning systems and equipment 
              in good order, condition and repair. The term "repair" shall 
              include replacement, restorations and/or renewals when necessary 
              as well as painting. THE TERM "REPAIR" SHALL NOT INCLUDE 
              REPLACEMENT OF HEATING, VENTILATING AND AIR CONDITIONING 
              ("HVAC") EQUIPMENT DURING THE FIRST TWO (2) YEARS OF THE LEASE 
              TERM ONLY EXCEPT ON HVAC EQUIPMENT INSTALLED BY TENANT AS PART 
              OF THE FINAL TENANT IMPROVEMENT PLANS PURSUANT TO EXHIBIT "D" AND 
              UNLESS SUCH REPLACEMENT IS DUE TO TENANT'S ABOVE "STANDARD USE", 
              TENANT'S MISUSE, OR TENANT'S FAILURE TO MAINTAIN THE HVAC 
              EQUIPMENT, AS REQUIRED BELOW. THE TERM "STANDARD USE" SHALL BE 
              DEFINED AS OPERATION BASED ON A NORMAL BUSINESS DAY'S HOURS, NOT 
              TO EXCEED TEN (10) HOURS. ANY OPERATION THAT EXCEEDS THE 
              "STANDARD USE" HOURS SHALL BE DEEMED TO BE "ABOVE STANDARD USE". 
              Tenant's obligation shall extend to all alterations, additions 
              and improvements to the Premises, and all fixtures and 
              appurtenances therein and thereto. Tenant shall, at all times 
              during the Lease Term, have in effect a service contract for the 
              maintenance of the heating, ventilating and air conditioning 
              ("HVAC") equipment with an HVAC service contract shall provide 
              for periodic inspection and servicing at least once every three 
              (3) months during the term hereof, and Tenant shall provide 
              Landlord with a copy of such contract and all periodic service 
              reports.

              Should Tenant fail to make repairs required of Tenant hereunder 
              forthwith upon FIFTEEN (15) DAYS WRITTEN notice from Landlord 
              or should Tenant fail thereafter to diligently complete the 
              repairs, Landlord, in addition to all other remedies available 
              hereunder or by law and without waiving any alternative 
              remedies, may make the same, and in that event,

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              Tenant shall reimburse Landlord as additional rent for the cost 
              of such maintenance or repairs within five (5) days of written 
              demand by Landlord

              Landlord shall have no maintenance or repair obligation 
              whatsoever with respect to the Premises except as expressly 
              provided in Paragraphs 10.A and 11.  Tenant hereby expressly 
              waives the provisions of Subsection 1 of Section 1932 and 
              Section 1941 and 1942 of the Civil Code of California and all 
              rights to make repairs at the expense of Landlord as provided 
              in Section 1942 of said Civil Code.  There shall be no 
              allowance to Tenant for diminution of rental value, and no 
              liability on the part of Landlord (EXCEPT FOR LANDLORD'S GROSS 
              NEGLIGENCE OR WILLFUL MISCONDUCT) by reason of inconvenience, 
              annoyance or injury to business arising from the making of or 
              the failure to make, any repairs, alternations, decorations, 
              additions or improvements in or to any portion of the Premises 
              or the Building or Common Area (or any or the areas used in 
              connection with the operation thereof, or in or to any 
              fixtures, appurtenances or equipment), or by reason of the 
              negligence of Tenant or any other tenant or occupant of the 
              Parcel.  In no event shall Landlord be responsible for any 
              consequential damages arising or alleged to have arisen from any
              of the foregoing matters.  Tenant hereby agrees that Landlord 
              shall not be liable for injury to Tenant's business or any loss
              of income therefrom or for damage to the goods, wares, 
              merchandise or other property of Tenant, Tenant's employees, 
              invitees, customers, or any other person in or about the 
              Premises, the Building, or the Common Area, nor shall Landlord 
              be liable for injury to the person of Tenant, Tenant's 
              employees, agents or contractors whether such damage or injury 
              is caused by or results from fire, steam, electricity gas, 
              water or rain, or from the breakage, leakage, obstruction or
              other defects of pipes, sprinklers, wires, appliances, 
              plumbing, air conditioning or lighting fixtures, or from any 
              other cause, whether the said damage or injury results from any
              other cause, whether the said damage or injury results from 
              conditions arising upon the Premises or upon other portion of 
              the Building, or from other sources or places and regardless of
              whether the cause of such damage or injury or the means of 
              repairing the same is inaccessible to Tenant.  Landlord shall 
              not be liable for any damages arising from any act or neglect of
              any other tenant, if any, of the Building or the Parcel.

11.      COMMON AREA.  Subject to the terms and conditions of this Lease and 
         such rules and regulations as Landlord may from time to time 
         REASONABLY prescribe, Tenant and Tenant's employees, invitees and 
         customers shall, in common with other occupants of the Parcel, and 
         their respective employees, invitees and customers, and others 
         entitled to the use thereof, have the nonexclusive right to use the 
         access roads, parking areas and facilities provided and designated 
         by Landlord for the general use and convenience of the occupants of 
         the Parcel, which areas and facilities are referred to herein as 
         "Common Area.  This right shall terminate upon the termination of 
         this Lease.  Landlord reserves the right from time to time to make 
         changes in the shape, size, location, amount and extent of the 
         Common Area.  Landlord further reserves the right to promulgate such 
         reasonable rules and regulations relating to the use of the Common 
         Area, and any part or parts thereof, as Landlord may deem 
         appropriate for the best interest of the occupants of the Parcel. 
         The rules and regulations shall be binding upon Tenant upon delivery 
         of a copy of them to Tenant, and Tenant shall abide by them and 
         cooperate in their observance. Such rules and regulations may be 
         amended by Landlord from time to time, with or without advance 
         notice, and all amendments shall be effective upon delivery of a 
         copy of them to Tenant. Tenant shall have the non-exclusive use of 
         no more than one hundred fifty-three (153) of the parking spaces in 
         the Common Area as designated from time to time by Landlord. Tenant 
         shall not at any time park or permit the parking of Tenant's trucks 
         or other vehicles, or the trucks or other vehicles of others, 
         adjacent to loading areas so as to interfere in any way with the use 
         of such areas, nor shall Tenant at any time park or permit the 
         parking of Tenant's vehicles or trucks, or the vehicles or trucks of 
         Tenant's suppliers or others in any portion of the Common Area not 
         designated by Landlord for such use by Tenant. Tenant shall not 
         abandon any inoperative vehicles or equipment on any portion of the 
         Common Area. Tenant shall make no alterations, improvements or 
         additions to the Common Area.


                                       7
<PAGE>

         Landlord shall operate, manage, insure, maintain and repair the Common
         Area in good order, condition and repair. The manner in which the
         Common Area shall be maintained and the expenditures for such
         maintenance shall be at the COMMERCIALLY REASONABLE discretion of
         Landlord. The cost of such repair, maintenance, operation, insurance 
         and management, including without limitation, maintenance and repair 
         of landscaping, irrigation systems, paving, sidewalks, fences, and 
         lighting, shall be a Common Area Charge and Tenant shall pay to 
         Landlord its share of such costs as provided in Paragraph 12 below.

12.      COMMON AREA CHARGES. Tenant shall pay to Landlord, as additional 
         rent, upon demand but not more often than once each calendar month, 
         an amount equal to its Pro Rata Share of the Common Area Charges as 
         defined in Paragraphs 8.C, 9, 11 of this Lease. Tenant acknowledges 
         and agrees that the Common Area Charges shall include an additional 
         five percent (5%) of the actual expenditures in order to compensate 
         Landlord for accounting, management and processing services.

         NOTWITHSTANDING ANYTHING CONTAINED THE LEASE, NO EXPENSES INCURRED 
         FOR THE FOLLOWING SHALL BE INCLUDED IN OPERATING EXPENSES: (i) 
         REPAIRS OR OTHER WORK OCCASIONED BY FIRE, WINDSTORM OR OTHER 
         CASUALTY OF A NATURE COVERED BY INSURANCE REQUIRED TO BE CARRIED BY 
         LANDLORD PURSUANT TO THE TERMS OF THIS LEASE OR ANY PRESENT OR 
         FUTURE GROUND LEASE OR DEED OF TRUST COVERING THE PROJECT (EXCEPT 
         FOR THE COST OF CASH REPAIRS OR OTHER WORK THAT RELATES TO THE 
         DEDUCTIBLE PORTION OF THE INSURANCE POLICY COVERING SUCH CASUALTY) 
         OR BY THE EXERCISE OF THE RIGHT OF EMINENT DOMAIN; (ii) LEASING 
         COMMISSIONS, ACCOUNTANTS' OR ATTORNEYS' FEES, COSTS AND 
         DISBURSEMENTS AND OTHER EXPENSES INCURRED IN CONNECTION WITH THE 
         NEGOTIATIONS OR DISPUTES WITH THE TENANTS OR OTHER OCCUPANTS OR 
         PROSPECTIVE TENANTS OR OTHER OCCUPANTS, OR ASSOCIATED WITH THE 
         ENFORCEMENT OF ANY LEASES OR DEFENSE OF LANDLORD'S TITLE TO OR 
         INTEREST IN THE PROJECT OR ANY PART THEREOF; (iii) COSTS (INCLUDING 
         PERMIT, LICENSE AND INSPECTION FEES) INCURRED IN RENOVATING OR 
         OTHERWISE IMPROVING OR DECORATING, PAINTING, OR REDECORATING SPACE 
         FOR TENANTS CONSESSIONAIRIES OR OTHER OCCUPANTS OR VACANT RENTABLE 
         SPACE; (iv) THE COSTS OF ANY SERVICES SOLD OR PROVIDED TENANTS OR 
         OTHER OCCUPANTS FOR WHICH LANDLORD IS ENTITLED TO BE REIMBURSED BY 
         SUCH TENANTS OR OTHER OCCUPANTS AS AN ADDITIONAL CHARGE OR RENTAL 
         OVER AND ABOVE THE BASIC RENT AND ESCALATIONS PAYABLE UNDER THE 
         LEASE WITH SUCH TENANT OR OTHER OCCUPANT; (v) EXCEPT TO THE EXTENT 
         EXPRESSLY PROVIDED ABOVE, COSTS INCURRED BY LANDLORD FOR ANY 
         ALTERATION, ADDITION OR EQUIPMENT THAT IS CONSIDERED A CAPITAL 
         IMPROVEMENT OR REPLACEMENT UNDER GENERALLY ACCEPTED ACCOUNTING 
         PRINCIPLES; (vi) DEPRECIATION AND AMORTIZATION; (vii) EXCEPT TO THE 
         EXTENT EXPRESSLY PROVIDED ABOVE, COSTS OF A CAPITAL NATURE, 
         INCLUDING, BUT NOT LIMITED TO CAPITAL IMPROVEMENTS, CAPITAL REPAIRS, 
         CAPITAL EQUIPMENT, AND CAPITAL TOOLS, ALL AS DETERMINED IN 
         ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES; (viii) 
         EXPENSES IN CONNECTION WITH SERVICES OR OTHER BENEFITS OF A TYPE 
         THAT IS NOT PROVIDED TENANT IN REASONABLE PROPORTION TO THE SPACE 
         LEASED BY TENANT BUT THAT IS PROVIDED TO ANOTHER TENANT OR OCCUPANT; 
         (ix) COSTS INCURRED DUE TO VIOLATION BY LANDLORD OR ANY OTHER TENANT 
         OF THE TERMS AND CONDITIONS OF ANY LEASE; (x) INTEREST ON DEBT OR 
         AMORTIZATION PAYMENTS ON ANY MORTGAGES OR DEEDS OF TRUST OR ANY OTHER 
         BORROWINGS; (xi) LANDLORD'S GENERAL CORPORATE OVERHEAD AND GENERAL 
         ADMINISTRATIVE EXPENSES; (xii) ALL ITEMS AND SERVICES FOR WHICH 
         TENANT OR ANY OTHER TENANT SEPARATELY REIMBURSES LANDLORD OR PAYS 
         THIRD PERSONS; (xiv) ADVERTISING AND PROMOTIONAL EXPENDITURES; (xv) 
         PROPERTY MANAGEMENT FEES EXCEEDING THREE PERCENT(3%) OF GROSS 
         REVENUE; AND (xvi) ANY OTHER EXPENSE THAT UNDER GENERALLY ACCEPTED 
         ACCOUNTING PRINCIPALS AND PRACTICES WOULD NOT BE CONSIDERED A 
         MAINTENANCE OR OPERATING EXPENSE.

         TENANT MAY AUDIT THE LANDLORD'S ACCOUNTING RECORDS REGARDING 
         OPERATING EXPENSES AND TAXES AND UPON TEN (10) DAYS' ADVANCE WRITTEN 
         NOTICE. IF TENANT DISCOVERS AN OVERSTATEMENT OF OPERATING EXPENSES 
         OR TAXES, LANDLORD SHALL PROMPTLY REFUND ANY AMOUNTS OWED TO TENANT. 
         IF


                                       8
<PAGE>

         TENANT DISCOVERS AN OVERSTATEMENT OF OPERATING EXPENSES AND TAXES 
         WHICH EXCEEDS ONE HUNDRED TEN PERCENT (110%) OF THE ACTUAL OPERATING 
         EXPENSES AND TAXES, LANDLORD SHALL REIMBURSE TENANT FOR ALL 
         REASONABLE COSTS AND EXPENSES OF TENANT'S AUDIT.

13.      ALTERATIONS. Tenant shall not make, or suffer to be made, any 
         alterations, improvements or additions in, on, about or to the 
         Premises or any part thereof, without the prior written consent of 
         Landlord, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD, and 
         without a valid building permit issued by the appropriate 
         governmental authority. As a condition to giving such consent, 
         Landlord may require that Tenant agree to remove any such 
         alterations, improvements or additions at the termination of this 
         Lease and to restore the Premises to their prior condition. Unless 
         Landlord requires that Tenant remove any such alterations, 
         improvement or addition, and alteration, addition or improvement to 
         the Premises, except moveable furniture and trade fixtures not 
         affixed to the Premises, shall become the property of Landlord upon 
         termination of the Lease and shall remain upon and be surrendered 
         with the Premises at the termination of this Lease. Without limiting 
         the generality of the foregoing, all heating, lighting, electrical 
         (including all wiring, conduit, outlets, drops, buss ducts, main and 
         subpanels), air conditioning, partitioning, drapery, and carpet 
         installations made by Tenant regardless of how affixed to the 
         Premises, together with all other additions, alterations and 
         improvements that have become an integral part of the Building, 
         shall be and become the property of the Landlord upon termination of 
         the Lease, and shall not be deemed trade fixtures, and shall remain 
         upon and be surrendered with the Premises at the termination of this 
         Lease.

         IT IS HEREBY ACKNOWLEDGED BY LANDLORD THAT TENANT DESIRES TO 
         CONSTRUCT CERTAIN IMPROVEMENTS AS OUTLINED IN THE FINAL TENANT 
         IMPROVEMENT PLANS PURSUANT TO EXHIBIT "D" ATTACHED HERETO AND MADE A 
         PART HEREOF. LANDLORD SHALL DETERMINE UPON FINAL APPROVAL OF THE 
         FINAL TENANT IMPROVEMENT PLAN THOSE IMPROVEMENTS EXISTING PRIOR TO 
         CONSTRUCTION OF THE FINAL TENANT IMPROVEMENT PLANS WHICH LANDLORD 
         SHALL REQUIRE TENANT TO RETURN TO ITS ORIGINAL CONDITION UPON 
         EXPIRATION OR EARLIER TERMINATION OF THIS LEASE. LANDLORD SHALL MORE 
         CLOSELY DEFINE THOSE IMPROVEMENTS TO BE RETURNED TO ORIGINAL 
         CONDITION BY TENANT IN A PLAN ATTACHED HERETO AS EXHIBIT "E".

         If, during the term hereof, any alteration, addition or change of 
         any sort to all or any portion of the Premises is required by law, 
         regulation, ordinance or order of any public agency, Tenant shall 
         promptly make the same at its sole cost and expense. If during the 
         term hereof, any alteration, addition, or change to the Common Area 
         is required by law, regulation, ordinance or order of any public 
         agency, AND IS REQUIRED DUE TO TENANT'S SPECIFIC USE OR OCCUPANCY OF 
         THE PREMISES, Landlord shall make the same and the cost of such 
         alteration, or change shall be a Common Area Charge and Tenant shall 
         pay its share of said cost to Landlord as provided in Paragraph 12 
         above.

14.      ACCEPTANCE OF THE PREMISES. By entry and taking possession of the 
         Premises pursuant to this Lease, Tenant accepts the Premises as 
         being in good and sanitary order, condition and repair and accepts 
         the Premises in their condition existing as of the date of such 
         entry, and Tenant further accepts the tenant improvements to be 
         constructed by Landlord, if any, as being completed in accordance 
         with the plans and specifications for such improvements, except for 
         punch list items. Tenant acknowledges that neither the Landlord nor 
         Landlord's agents has made any representation or warranty as to the 
         suitability of the Premises to the conduct of Tenant's business. Any 
         agreements, warranties or representations not expressly contained 
         herein shall in no way bind either Landlord or Tenant, and Landlord 
         and Tenant expressly waive all claims for damages by reason of any 
         statement, representation, warranty, promise or agreement, if any, 
         not contained in this Lease. This Lease constitutes the entire 
         understanding between the parties hereto and no addition to, or 
         modification of, any term or provision of this Lease shall be 
         effective until set forth in a writing signed by both Landlord and 
         Tenant.


                                       9
<PAGE>

15.      DEFAULT.

         A.      EVENTS OF DEFAULT. A breach of this Lease shall exist if any 
                 of the following events (hereinafter referred to as "Event of 
                 Default") shall occur:

                 1.       Default in the payment when due of any installment 
                          of rent or other payment required to be made by Tenant
                          hereunder, where such default shall not have been
                          cured within three (3) days after written notice of
                          such default is given to Tenant;

                 2.       Tenant's failure to perform any other term, 
                          covenant or condition contained in this Lease where 
                          such failure shall have continued for THIRTY (30) 
                          DAYS after written notice of such failure is given 
                          to Tenant; UNLESS THE NATURE OF DEFAULT IS SUCH 
                          THAT IT CANNOT BE CURED WITHIN THIRTY (30) DAYS, IN 
                          WHICH CASE TENANT SHALL NOT BE IN DEFAULT PROVIDED 
                          TENANT COMMENCES SAID CURE WITHIN THIRTY (30) DAYS 
                          FROM WRITTEN NOTICE AND DILIGENTLY PURSUES SAID 
                          CURE.

                 3.       Tenant's vacating (WITHOUT WRITTEN NOTICE TO 
                          LANDLORD) or abandonment of the Premises;

                 4.       Tenant's assignment of its assets for the benefit 
                          of its creditors:

                 5.       The sequestration of, attachment of, or execution 
                          on, any substantial part of the property of Tenant 
                          or on any property essential to the conduct of 
                          Tenant's business shall have occurred and Tenant 
                          shall have failed to obtain a return or release of 
                          such property within thirty (30) days thereafter, 
                          or prior to sale pursuant to such sequestration, 
                          attachment or levy, whichever is earlier;

                 6.       Tenant or any guarantor of Tenant's obligations 
                          hereunder shall commence any case proceeding or 
                          other action seeking reorganization, arrangement, 
                          adjustment, liquidation, dissolution or composition 
                          of it or its debts under any law relating to 
                          bankruptcy, insolvency, reorganization or relief of 
                          debtors, or seek appointment of a receiver, 
                          trustee, custodian, or other similar official for 
                          it or for all or any substantial part of its 
                          property;

                 7.       Tenant or any such guarantor shall take any 
                          corporate action to authorize any of the actions 
                          set forth in Clause 6 above; or

                 8.       Any case, proceeding or other action against Tenant 
                          or any guarantor of Tenant's obligations hereunder 
                          shall be commenced seeking to have an order for 
                          relief entered against it as debtor, or seeking 
                          reorganization, arrangement, adjustment, 
                          liquidation, dissolution or composition of it or 
                          its debts under any law relating to bankruptcy, 
                          insolvency, reorganization or relief of debtors, or 
                          seeking appointment of a receiver, trustee, 
                          custodian or other similar official for it or for 
                          all or any substantial part of its property, and 
                          such case, proceeding or other action (i) results 
                          in the entry of an order for relief against it which 
                          is not fully stayed within seven (7) business days 
                          after the entry thereof or (ii) remains undismissed 
                          for a period of forty-five (45) days.

         B.      REMEDIES. Upon any Event of Default, Landlord shall have the 
                 following remedies, in addition to all other rights and
                 remedies provided by law, to which Landlord may resort
                 cumulatively, or in the alternative:


                                      10

<PAGE>
     1.   RECOVERY OF RENT. Landlord shall be entitled to keep this Lease in
          full force and effect (whether or not Tenant shall have abandoned the
          Premises) and to enforce all of its rights and remedies under this
          Lease, including the right to recover rent and other sums as they
          become due, plus interest at the Permitted Rate (as defined in 
          Paragraph 33 below) from the due date of each installment of rent
          or other sum until paid.

     2.   TERMINATION. Landlord may terminate this Lease by giving Tenant
          written notice of termination. On the giving of the notice all of
          Tenant's rights in the Premises and the Building and Parcel shall
          terminate. Upon the giving of the notice of termination, Tenant shall
          surrender and vacate the Premises in the condition required by
          Paragraph 34, and Landlord may re-enter and take possession of the
          Premises and all the remaining improvements or property and eject
          Tenant or any of Tenant's subtenants, assignees or other person or
          persons claiming any right under or through Tenant or eject some and
          not others or eject none. This Lease may also be terminated by a
          judgement specifically providing for termination. Any termination
          under this paragraph shall not release Tenant from the payment of any
          sum then due Landlord or from any claim for damages or rent previously
          accrued or then accruing against Tenant. In no event shall any one or
          more of the following actions by Landlord constitute a termination of
          this Lease:

          a.   maintenance and preservation of the Premises;

          b.   efforts to relet the Premises;

          c.   appointment of a receiver in order to protect Landlord's interest
               hereunder;

          d.   consent to any subletting of the Premises or assignment of this
               Lease by Tenant, whether pursuant to provisions hereof concerning
               subletting and assignment or otherwise; or

          e.   any other action by Landlord or Landlord's agents intended to
               mitigate the adverse effects from any breach of this Lease by
               Tenant.

     3.   DAMAGES. In the event this Lease is terminated pursuant to
          Subparagraph 15.B.2 above, or otherwise, Landlord shall be entitled to
          damages in the following sums:

          a.   the worth at the time of award of the unpaid rent which has been
               earned at the time of termination; plus

          b.   the worth at the time of award of the amount by which the unpaid
               rent which would have been earned after termination until the
               time of award exceeds the amount of such rental loss that Tenant
               proves could have been reasonably avoided; plus

          c.   the worth at the time of award of the amount by which the unpaid
               rent for the balance of the term after the time of award exceeds
               the amount of such rental loss that Tenant proves could be
               reasonably avoided; and

          d.   any other amount necessary to compensate Landlord for all
               detriment proximately caused by Tenant's failure to perform
               Tenant's obligations under this Lease, or which in the ordinary
               course of things would be likely to result therefrom including,
               without limitation, the following: (i) expenses for cleaning,
               repairing or restoring the Premises; (ii) expenses for altering,
               remodeling or otherwise improving the Premises for the

                                          11
<PAGE>


               purpose of reletting, including installation of leasehold
               improvements (whether such installation be funded by a reduction
               of rent, direct payment or allowance to the succeeding lessee, or
               otherwise); (iii) real estate broker's fees, advertising costs
               and other expenses of reletting the Premises; (iv) costs of
               carrying the Premises such as taxes and insurance premiums
               thereon, utilities and security precautions; (v) expenses in
               retaking possession of the Premises; (vi) attorneys' fees and
               court costs; and (vii) any unamortized real estate brokerage
               commission paid in connection with this Lease.

          e.   The "worth at the time of award" of the amounts referred to in
               Subparagraphs (a) and (b) of this Paragraph, is computed by
               allowing interest at the Permitted Rate. The "worth at the time
               of award" of the amounts referred to in Subparagraph (c) of this
               Paragraph is computed by discounting such amount at the discount
               rate of the Federal Reserve Board of San Francisco at the time of
               award plus one percent (1%). The term "rent" as used in this
               Paragraph shall include all sums required to be paid by Tenant to
               Landlord pursuant to the terms of this Lease.

16.  DESTRUCTION. In the event that any portion of the Premises are destroyed or
     damaged by an uninsured peril, Landlord or Tenant may, upon written notice
     to the other, given within thirty (30) days after the occurrence of such
     damage or destruction, elect to terminate this Lease; provided, however, 
     that either party may, within thirty (30) days after receipt of such
     notice, elect to make any required repairs and/or restoration at such
     party's sole cost and expense, in which event this Lease shall remain in
     full force and effect, and the party having made such election to restore
     or repair shall thereafter diligently proceed with such repairs and/or
     restoration.

     In the event the Premises are damaged or destroyed from any insured peril
     to the extent of fifty percent (50%) or more of the then replacement cost
     of the Premises, Landlord may, upon written notice to Tenant, given within
     thirty (30) days after the occurrence of such damage or destruction, elect
     to terminate this Lease. If Landlord does not give such notice in writing
     within such period, Landlord shall be deemed to have elected to rebuild or
     restore the Premises, in which event Landlord shall, at its expense,
     promptly rebuild or restore the Premises to their condition prior to the
     damage or destruction and Tenant shall pay to Landlord upon commencement of
     reconstruction the amount of any deductible from the insurance policy.

     In the event the Premises are damaged or destroyed from any insured peril
     to the extent of less than fifty percent (50%) of the then replacement
     cost of the Premises, Landlord shall, at Landlord's expense, promptly
     rebuild or restore the Premises to their condition prior to the damage or
     destruction and Tenant shall pay to Landlord upon commencement of
     reconstruction the amount of any deductible from the insurance policy.

     In the event that, pursuant to the foregoing provisions, Landlord is to
     rebuild or restore the Premises, Landlord shall, within thirty (30) days
     after the occurrence of such damage or destruction, provide Tenant with
     written notice of the time required for such repair or restoration. If such
     period is longer than NINETY (90) days from the issuance of a building
     permit, WHICH TIME FOR RECEIPT OF A BUILDING PERMIT SHALL NOT EXCEED TWENTY
     (20) DAYS, Tenant may, within thirty (30) days after receipt of Landlord's
     notice, elect to terminate the Lease by giving written notice to Landlord
     of such election, whereupon the Lease shall immediately terminate. IF
     LANDLORD UNDERTAKES SUCH REPAIRS AND IS NOT COMPLETED WITHIN ONE HUNDRED
     TWENTY (120) DAYS, TENANT HAS THE RIGHT TO TERMINATE THE LEASE, UPON
     WRITTEN NOTICE TO LANDLORD. The period of time for Landlord to complete the
     repair or restoration shall be extended for delays caused by the fault or
     neglect of Tenant or because of acts of God, acts of publication, labor
     disputes, strikes, fires, freight embargoes, rainy or stormy weather,
     inability to obtain materials, supplies or fuels, acts of

                                          12
<PAGE>
     contractors or subcontractors, or delay of contractors or subcontractors
     due to such causes, or other contingencies beyond the control of Landlord.
     Landlord's obligation to repair or restore the Premises shall not include
     restoration of Tenant's trade fixtures, equipment, merchandise, or any
     improvements, alterations or additions made by Tenant to the Premises.

     Unless this Lease is terminated pursuant to the foregoing provisions, this
     Lease shall remain in full force and effect; provided, however, that during
     any period of repairs or restoration, rent and all other amounts to be paid
     by Tenant on account of the Premises and this Lease shall be abated in
     proportion to the area of the Premises rendered not reasonably suitable for
     the conduct of Tenant's business thereon. Tenant hereby expressly waives
     the provisions of Section 1932, Subdivision 2 and Section 1933, Subdivision
     4 of the California Civil Code.

17.  CONDEMNATION

     A.   DEFINITION OF TERMS. For the purposes of this Lease, the term (1)
          "Taking" means a taking of the Premises or damage to the Premises
          related to the exercise of the power of eminent domain and includes a
          voluntary conveyance, in lieu of court proceedings, to any agency,
          authority, public utility, person or corporate entity empowered to
          condemn property; (2)"Total Taking" means the taking of the entire
          Premises or so much of the Premises as to prevent or substantially
          impair the use thereof by Tenant for the uses herein specified;
          provided, however, in no event shall a Taking of less than ten percent
          (10%) of the Premises be deemed a Total Taking; (3)"Partial Taking"
          means the taking of only a portion of the Premises which does not
          constitute a Total Taking; (4)"Date of Taking" means the date upon
          which the title to the Premises, or a portion thereof, passes to and
          vests in the condemnor or the effective date of any order for
          possession if issued prior to the date title vests in the condemnor;
          and (5)"Award" means the amount of any award made, consideration paid,
          or damages ordered as a result of a Taking.

     B.   RIGHTS. The parties agree that in the event of a Taking all rights
          between them or in and to an Award shall be as set forth herein and
          Tenant shall have no right to any Award except as set forth herein.

     C.   TOTAL TAKING. In the event of a Total Taking during the term hereof
          (1) the rights of Tenant under the Lease and the leasehold estate of
          Tenant in and to the Premises shall cease and terminate as of the Date
          of Taking; (2) Landlord shall refund to Tenant any prepaid rent; (3)
          Tenant shall pay Landlord any rent or charges due Landlord under the
          Lease, each prorated as of the Date of Taking; (4) Tenant shall
          receive from Landlord those portions of the Award attributable to
          trade fixtures of Tenant and for moving expenses of Tenant; and (5)
          the remainder of the Award shall be paid to and be the property of
          Landlord.

     D.   PARTIAL TAKING. In the event of a Partial Taking during the term
          hereof (1) the rights of Tenant under the Lease and leasehold estate
          of Tenant in and to the portion of the Premises taken shall cease and
          terminate as of the Date of Taking; (2) from and after the Date of
          Taking the Monthly Installment of rent immediately prior to the Taking
          by a fraction, the numerator of which is the number of square feet
          contained in the Premises after the Taking and the denominator of
          which is the number of square feet contained in the Premises prior to
          the Taking; (3)Tenant shall receive from the Award the portions of the
          Award attributable to trade fixtures of Tenant; and (4) the remainder
          of the Award shall be paid to and be the property of Landlord.

18.  MECHANICS' LIEN. Tenant shall (A) pay for all labor and services performed
     for, materials used by or furnished to, Tenant or any contractor employed
     by Tenant with respect to the Premises; (B) indemnify, defend, protect and
     hold Landlord and the Premises harmless and free from any liens,

                                          13
<PAGE>

     claims, liabilities, demands, encumbrances, or judgements created or
     suffered by reason of any labor or services performed for, materials used
     by or furnished to, Tenant or any contractor employed by Tenant with
     respect to the Premises; (C) give notice to Landlord in writing five (5)
     days prior to employing any laborer or contractor to perform services
     related to, or receiving materials for use upon the Premises; and (D)
     permit Landlord to post a notice of nonresponsibility in accordance with
     the statutory requirements of California Civil Code Section 3094 or any
     amendment thereof. It the event Tenant is required to post an improvement
     bond with a public agency in connection with the above, Tenant agrees to
     include Landlord as an additional obligee.

19.  INSPECTION OF THE PREMISES. Tenant shall permit Landlord and its agents to
     enter the Premises at any reasonable time, UPON REASONABLE NOTICE, for the
     purpose of inspecting the same, performing Landlord's maintenance and
     repair responsibilities, posting a notice of non-responsibility for
     alterations, additions or repairs and at any time within ninety (90) days
     prior to expiration of this Lease, to place upon the Premises, ordinary
     "For Lease" or "For Sale" signs.

20.  COMPLIANCE WITH LAWS. Tenant shall, at its own cost, comply with all of the
     requirements of all municipal, county, state and federal authorities now in
     force, or which may hereafter be in force, pertaining to TENANT'S SPECIFIC
     use and occupancy of the Premises, and shall faithfully observe all
     municipal, county, state and federal law, statutes or ordinances now in
     force or which may hereafter be in force. The judgement of any court of
     competent jurisdiction or the admission of Tenant in any action or
     proceeding against Tenant, whether Landlord be a party thereto or not, that
     Tenant has violated any such ordinance or statute in the use and occupancy
     of the Premises shall be conclusive of the fact that such violation by
     Tenant has occurred.

21.  SUBORDINATION. The following provisions shall govern the relationship of
     this Lease to any underlying lease, mortgage or deed of trust which now or
     hereafter affects the Premises, the Building and/or the Parcel, or
     Landlord's interest or estate therein (the "Project") and any renewal,
     modification, consolidation, replacement, or extension thereof (a "Security
     Instrument").

     A.   PRIORITY. This Lease is subject and subordinate to Security
          Instruments existing as of the Commencement Date. However, if any
          Lender so requires, this Lease shall become prior and superior to any
          such Security Instrument.

     B.   SUBSEQUENT SECURITY INSTRUMENTS. At Landlord's election, this Lease
          shall become subject and subordinate to any Security Instrument
          created after the Commencement Date. Notwithstanding such
          subordination, THE HOLDER OF SUCH SECURITY INSTRUMENT SHALL AGREE IN
          WRITING, AS A CONDITION OF SUCH SUBORDINATION, THAT TENANT'S RIGHT TO
          QUIET POSSESSION OF THE PREMISES SHALL NOT BE DISTURBED SO LONG AS
          TENANT IS NOT IN DEFAULT AND PERFORMS ALL OF ITS OBLIGATIONS UNDER
          THIS LEASE, UNLESS THIS LEASE IS OTHERWISE TERMINATED PURSUANT TO ITS
          TERMS.

     C.   DOCUMENTS. PROVIDED THAT THE CONDITION TO SUBORDINATION SPECIFIED IN
          PARAGRAPH 21.B IS SATISFIED, Tenant shall execute any document or
          instrument required by Landlord or any Lender to make this Lease
          either prior or subordinate to a Security Instrument, which may
          include such other matters as the Lender customarily requires in
          connection with such agreements, including provisions that the Lender
          not be liable for (1) the return of the Security Deposit unless the
          Lender receives it from Landlord, and (2) any defaults on the part of
          Landlord occurring prior to the time that the Lender takes possession
          of the Project in connection with the enforcement of its Security
          Instrument. Tenant's failure to execute any such document or
          instrument within ten (10) days after written demand therefor shall
          constitute a default by Tenant.

     D.   TENANT'S ATTORNMENT. Tenant shall attorn (1) to any purchaser of the
          Premises at any foreclosure sale or private sale conducted pursuant to
          any Security Instrument

                                          14
<PAGE>

          encumbering the Project; (2) to grantee or transferee designated in
          any deed given in lieu of foreclosure; or (3) to the lessor under any
          underlying ground lease should such ground lease be terminated.

     E.   LENDER. The term "Lender" shall mean (1) any beneficiary, mortgagee,
          secured party, or other holder of any deed of trust, mortgage, or
          other written security device or agreement affecting the Project; and
          (2) any lessor under any underlying lease under which Landlord holds
          its interest in the Project.

22.  HOLDING OVER. This Lease shall terminate without further notice at the
     expiration of the Lease Term. Any holding over by Tenant after expiration
     shall not constitute a renewal or extension or give Tenant any rights in or
     to the Premises except as expressly provided in this Lease. Any holding
     over after the expiration with the consent of Landlord shall be construed
     to be a tenancy from month to month, at ONE HUNDRED TWENTY-FIVE PERCENT
     (125%) of the monthly rent for the last month of the Lease Term, and shall
     otherwise be on the terms and conditions herein specified insofar as
     applicable.

23.  NOTICES. Any notice required or desired to be given under this Lease shall
     be in writing with copies directed as indicated below and shall be
     personally served or given by mail OR OVERNIGHT DELIVERY. Any notice given
     by mail shall be deemed to have been given when forty-eight (48) hours
     have elapsed from the time such notice was deposited in the United States
     mails, certified and postage prepaid, addressed to the party to be served
     with a copy as indicated herein at the last address given by that party
     to the other party under the provisions of this Paragraph. At this date of
     execution of this Lease, the address of Landlord is:

          511 Division Street
          Campbell CA 95008

     and the address of Tenant is:

          81 Vista Montana
          San Jose, California 95134


24.  ATTORNEY'S FEES. In the event either party shall bring any action or legal
     proceeding for damages for any alleged breach of any provision of this
     Lease, to recover rent or possession of the Premises, to terminate this
     Lease, or to enforce, protect or establish any term or covenant of this
     Lease or right or remedy of either party, the prevailing party shall be
     entitled to recover as a part of such action or proceeding, reasonable
     attorneys' fees and court costs, including attorneys' fees and costs for
     appeal, as may be fixed by the court or jury. The term "prevailing party"
     shall mean the party who received substantially the relief requested,
     whether by settlement, dismissal, summary judgement, judgement, or
     otherwise.

25.  NONASSIGNMENT.

     A.   LANDLORD'S CONSENT REQUIRED. Tenant's interest in this Lease is not
          assignable, by operation of law or otherwise, nor shall Tenant have
          the right to sublet the Premises, transfer any interest of Tenant
          therein or permit any use of the Premises by another party, without
          the prior written consent of Landlord to such assignment, subletting,
          transfer or use, which consent Landlord agrees not to withhold
          unreasonably subject to the provisions of Subparagraph B below. A
          consent to one assignment, subletting, occupancy or use by another
          party shall not be deemed to be a consent to any subsequent
          assignment, subletting, occupancy or use by another party. Any
          assignment or subletting without such consent shall be void and shall,
          at the option of Landlord, terminate this Lease.

                                          15

<PAGE>


                    Landlord's waiver or consent to any assignment or
                    subletting hereunder shall not relieve Tenant from any
                    obligation under this lease unless the consent shall so
                    provide.

               B.   TRANSFEREE INFORMATION REQUIRED.  If Tenant desires to
                    assign its interest in this Lease or sublet the
                    Premises, or transfer any interest of Tenant therein,
                    or permit the use of the Premises by another party
                    (hereinafter collectively referred to as a "Transfer"),
                    Tenant shall give Landlord at least thirty (30) days
                    prior written notice of the proposed Transfer and of
                    the terms of such proposed Transfer, including, but
                    not limited to, the name and legal composition of the
                    proposed transferee, a financial statement of the
                    proposed transferee, the nature of the proposed
                    transferee's business to be carried on in the Premises,
                    the payment to be made or other consideration to be
                    given to Tenant on account of the Transfer, and such
                    other pertinent information as may be requested by
                    Landlord, all in sufficient detail to enable Landlord
                    to evaluated the proposed Transfer and the prospective
                    transferee.  It is the intent of the parties hereto that
                    this Lease shall confer upon Tenant only the right to use
                    and occupy the Premises, and to exercise such other rights
                    as are conferred upon Tenant by this Lease.  The parties
                    agree that this Lease is not intended to have a bonus value 
                    nor to serve as a vehicle whereby Tenant may profit by a
                    future Transfer of this Lease or the right to use or
                    occupy the Premises as a result of any favorable terms
                    contained herein, or future changes in the market for
                    leased space.  It is the intent of the parties that any
                    such bonus value that may attach to this Lease shall be
                    and remain the exclusive property of Landlord.
                    Accordingly, in the event Tenant seeks to Transfer its
                    interest in this Lease or the Premises, Landlord shall
                    have the following options, which may be exercised at
                    its sole choice without limiting Landlord in the
                    exercise of any other right or remedy which Landlord
                    may have by reason of such proposed Transfer:

                    (1)  Landlord may elect to terminate this Lease
                         effective as of the proposed effective date of the
                         proposed Transfer and release Tenant from any
                         further liability hereunder accruing after such
                         termination date by giving Tenant written notice
                         of such termination within twenty (20) days after
                         receipt by Landlord of Tenant's notice of intent
                         to transfer as provided above.  If Landlord makes
                         such election to terminate this Lease, Tenant
                         shall surrender the Premises, in accordance with
                         Paragraph 34, on or before the effective
                         termination date; or

                    (2)  Landlord may consent to the proposed Transfer on
                         the condition that Tenant agrees to pay to
                         Landlord, as additional rent, any and all rents or
                         other consideration (including key money) received
                         by Tenant from the transferee by reason of such
                         Transfer in excess of the rent payable by Tenant
                         to Landlord under this Lease (less any brokerage
                         commissions or advertising expenses incurred by
                         Tenant in connection with the Transfer, INCLUDING
                         TENANT IMPROVEMENT COSTS).  Tenant expressly
                         agrees that the foregoing is a reasonable
                         condition for obtaining Landlord's consent to any
                         Transfer; or

                    (3)  Landlord may reasonably withhold its consent to
                         the proposed Transfer.

          26.  SUCCESSORS.  The covenants and agreements contained in this
               Lease shall be binding on the parties hereto and on their
               respective heirs, successors and assigns (to the extent the
               Lease is assignable).

          27.  MORTGAGEE PROTECTION.  In the event of any default on the
               part of Landlord, Tenant will give notice by registered or
               certified mail to any beneficiary of a deed of trust or
               mortgagee of a mortgage encumbering the Premises, whose
               address shall have been furnished to Tenant, and shall offer
               such beneficiary or mortgagee a reasonable opportunity to
               cure the default, including time to obtain possession of the
               Premises by power of sale or judicial foreclosure, if such
               should prove necessary to effect a cure.


                                          16

<PAGE>


          28.  LANDLORD LOAN OR SALE.  Tenant agrees promptly following
               request by Landlord to (A) execute and deliver to Landlord
               any documents, including estoppel certificates presented to
               Tenant by Landlord, (i) certifying that this Lease is
               unmodified and in full force and effect and the date to
               which the rent and other charges are paid in advance, if
               any, and (ii) acknowledging that there are not, to Tenant's
               knowledge, any uncured defaults on the part of Landlord
               hereunder, and (iii) evidencing the status of the Lease as
               may be required either by a lender making a loan to Landlord
               to be secured by a deed of trust or mortgage covering the
               Premises or a purchaser of the Premises from Landlord and
               (B) to deliver to Landlord the financial statement of TENANT
               IN FORM AND CONTENT GENERALLY PREPARED BY TENANT, including
               a balance sheet and profit and loss statement, for the last
               completed fiscal year all prepared in accordance with
               generally accepted accounting principles consistently
               applied.  Tenant's failure to deliver an estoppel
               certificate within ten (10) days following such request
               shall be an Event of Default under this Lease, PROVIDED
               TENANT DOES NOT DELIVER SAID ESTOPPEL CERTIFICATE WITHIN
               FIVE (5) DAYS AFTER WRITTEN NOTICE OF DELINQUENCY.

          29.  SURRENDER OF LEASE NOT MERGER.  The voluntary or other
               surrender of this Lease by Tenant, or a mutual cancellation
               thereof, shall not work a merger and shall, at the option of
               Landlord, terminate all or any existing subleases or
               subtenants, or operate as an assignment to Landlord of any
               or all such sublease or subtenants.
          
          30.  WAIVER.  The waiver by Landlord or Tenant of any breach of any
               term, covenant or condition herein contained shall not be deemed
               to be a waiver of any preceding or succeeding breach of the same
               or any other covenant or condition herein contained.

          31.  GENERAL.

               A.   CAPTIONS.  The captions and paragraph headings used in
                    this Lease are for the purposes of convenience only.
                    They shall not be construed to limit or extend the
                    meaning of any part of this Lease, or be used to
                    interpret specific sections.  The word (s) enclosed in
                    quotation marks shall be construed as defined terms for
                    purposes of this Lease.   As used in this Lease, the
                    masculine, feminine and neuter and the singular or
                    plural number shall each be deemed to include the other
                    whenever the context so requires.

               B.   DEFINITION OF LANDLORD.  The term "Landlord" as used in
                    this Lease, so far as the covenants or obligations on
                    the part of Landlord are concerned, shall be limited to
                    mean and include only the owner at the time in question
                    of the fee title of the Premises, and in the event of
                    any transfer or transfers of the title of such fee, the
                    Landlord herein named (and in case of any subsequent
                    transfers or conveyances, the then grantor) shall after
                    the date of such transfer or conveyance be
                    automatically freed and relieved of all liability with
                    respect to performance of any covenants or obligations
                    on the part of Landlord contained in this Lease,
                    thereafter to be performed; provided that any funds in
                    the hands of Landlord or the then grantor at the time
                    of such transfer, in which Tenant has an interest,
                    shall be turned over to the grantee.  It is intended
                    that the covenants and obligations contained in this
                    Lease on the part of Landlord shall, subject as
                    aforesaid, be binding upon each Landlord, its heirs,
                    personal representatives, successors and assigns only
                    during its respective period of ownership.

               C.   TIME OF ESSENCE.  Time is of the essence for the
                    performance of each term, covenant and condition of
                    this Lease.

               D.   SEVERABILITY.  In case any one or more of the
                    provisions contained herein, except for the payment of
                    rent, shall for any reason be held to be invalid,
                    illegal or unenforceable in any respect, such
                    invalidity, illegality or unenforceability shall not
                    affect any other provision of this Lease, but this
                    Lease shall be construed as if such invalid, illegal or
                    unenforceable


                                          17

<PAGE>

                    provision had not been contained herein.  This Lease shall
                    be construed and enforced in accordance with the laws of the
                    State of California.

               E.   JOINT AND SEVERAL LIABILITY.  If Tenant is more than
                    one person or entity, each such person or entity shall
                    be jointly and severally liable for the obligations of
                    Tenant hereunder.

               F.   LAW.  The term "law" shall mean any judicial decision,
                    status, constitution, ordinance, resolution,
                    regulation, rule, administrative order, or other
                    requirement of any government agency or authority
                    having jurisdiction over the parties to this Lease or
                    the Premises or both, in effect at the Commencement
                    Date of this Lease or any time during the Lease Term,
                    including, without limitation, any regulation, order,
                    or policy of any quasi-official entity or body (e.g.,
                    board of fire examiners, public utility or special
                    district).

               G.   AGENT.  AS USED HEREIN THE TERM "AGENT" SHALL MEAN,
                    WITH RESPECT TO EITHER LANDLORD OR TENANT, ITS
                    RESPECTIVE AGENTS, EMPLOYEES, CONTRACTORS (AND THEIR
                    SUBCONTRACTORS), AND INVITEES (AND IN THE CASE OF
                    TENANT, ITS SUBTENANTS).

               H.   WAIVER OF JURY TRIAL

                    LANDLORD AND TENANT HEREBY WAIVE THEIR RESPECTIVE RIGHT
                    TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM,
                    COUNTERCALIM OR CROSS-COMPLAINT IN ANY ACTION
                    PROCEEDING AND/OR HEARING BROUGHT BY EITHER LANDLORD
                    AGAINST TENANT OR TENANT AGAINST LANDLORD ON ANY MATTER
                    WHATSOEVER ARISING OUT OF, OR IN ANY WAY CONNECTED
                    WITH, THIS LEASE, THE RELATIONSHIP OF LANDLORD AND
                    TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES OR
                    ANY CLAIM OF INJURY OR DAMAGE, OR THE ENFORCEMENT OF
                    ANY REMEDY UNDER ANY LAW, STATUTE, OR REGULATION,
                    EMERGENCY OR OTHERWISE, NOW OR HEREAFTER IN EFFECT.

                    INITIALS:      /s/
                                   ------------(LANDLORD)

                                   /s/
                                   ------------(TENANT)

          32.  SIGN.  Tenant shall not place or permit to be placed any
               sign or decoration on the land or the exterior of the
               Building without the prior written consent of Landlord,
               WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD.  Tenant,
               upon written notice by Landlord, shall immediately remove any
               sign or decoration that has placed or permitted to be placed on 
               the land or the exterior of the Building without the prior 
               written consent of Landlord, and if Tenant fails to so remove 
               such sign or decoration within five (5) days after Landlord's 
               written notice, Landlord may enter upon the Premises and remove 
               said sign or decoration and Tenant agrees to pay Landlord, as
               additional rent upon demand, the COMMERCIALLY REASONABLE
               cost of such removal.  At the termination of this Lease,
               Tenant shall remove any sign which it has placed on the
               Parcel or Building and shall repair any damage caused by the
               installation or removal of such sign.

          33.  INTEREST ON PAST DUE OBLIGATIONS.  Any Monthly Installment
               of rent or any other sum due form Tenant under this Lease
               which is received by Landlord after the date the same is due
               shall bear interest from said due date until paid, at an
               annual rate equal to the lesser of (the "Permitted Rate"):
               (1) twelve percent (12%); or (2) five percent (5%) plus the
               rate established by the Federal Reserve Bank of San
               Francisco, as of the Twenty-fifth (25th) day of the month
               immediately preceding the due date, on advances to member
               banks under Section 13 and 13 (a) of the Federal Reserve
               Act, as now in effect or hereafter from time to time
               amended.  Payment of such interest shall not excuse or cure
               any default by Tenant.  In addition, Tenant shall pay all
               costs and attorneys' fees incurred by Landlord in collection
               of such amounts.


                                          18

<PAGE>


          34.  SURRENDER OF THE PREMISES.  On the last day of the term
               hereof, or on the sooner termination of this Lease, Tenant
               shall surrender the Premises to Landlord in their condition
               existing as of the Commencement Date of this Lease, EXCEPT
               AS PROVIDED IN PARAGRAPH 13 ABOVE AND EXHIBIT "E" ATTACHED
               HERETO, ordinary wear and tear excepted, with all originally
               painted interior walls washed and other interior walls
               cleaned, and repaired or replaced, all carpets shampooed and
               cleaned, the air conditioning and heating equipment serviced
               and repaired by a reputable and licensed service firm, all
               floors cleaned and waxed, all to the reasonable satisfaction
               of Landlord.  Tenant shall remove all of Tenant's personal
               property and trade fixtures from the Premises, and all
               property not so removed shall be deemed abandoned by Tenant.
               Tenant, at its sole cost, shall repair any damage to the
               Premises caused by the removal of Tenant's personal
               property, machinery and equipment, which repair shall
               include, without limitation, the patching and filling of
               holes and repair of structural damage.  If the Premises are
               not so surrendered at termination of this Lease, Tenant
               shall indemnify, defend, protect and hold Landlord harmless
               from and against loss or liability resulting from delay by
               Tenant in so surrendering the Premises including without
               limitation, any claims made by any succeeding tenant or
               losses to Landlord due to lost opportunities to lease to
               succeeding tenants.

          35.  AUTHORITY.  The undersigned parties hereby warrant that they
               have proper authority and are empowered to execute this
               Lease on behalf of Landlord and Tenant, respectively.

          36.  PUBLIC RECORD.  This Lease is made subject to all matters of
               public record affecting title to the property of which the
               Premises are a part.  Tenant shall abide by and comply with
               all private conditions, covenants and restrictions
               ("CC&R's") of public record now (TO LANDLORD'S KNOWLEDGE
               THERE ARE NO CURRENT CC&R's OF PUBLIC RECORD) or hereafter
               affecting the Premises and any amendment thereof, A COPY OF
               WHICH LANDLORD SHALL PROVIDE TO TENANT.  All assessments and
               charges which are imposed, levied or assessed against the
               Parcel and Buildings pursuant to the above-described
               covenants, conditions and restrictions shall be a Common
               Area Charge and Tenant shall pay its share of such
               assessments and charges to Landlord as provided in Paragraph
               12 above.

          37.  BROKERS.  Each party represents and warrants to the other
               that there are no brokerage commissions or fees payable in
               connection with this Lease, except to the Commercial
               Property Services Company ("CPS") and, with the exception of
               CPS, each party hereby agrees to indemnify and hold the
               other harmless from and against any brokerage commissions or
               fee, obligation, claim or damage (including reasonable
               attorneys' fees) paid or incurred by the other party as a
               result of a breach of this Paragraph 37.  This indemnity
               shall survive the expiration or sooner termination of this Lease.

          38.  LIMITATION ON LANDLORD'S LIABILITY.  Tenant, for itself and
               its successors and assigns (to the extent this Lease is
               assignable), hereby agrees that in the event of any actual,
               or alleged, breach or default by Landlord under this lease
               that:

               (A)  Tenant's sole and exclusive remedy against Landlord
                    shall be as against Landlord's interest in the
                    Building;

                B)  No partner or officer of any partner of Landlord shall
                    be sued or named as a party in a suit or action (except
                    as may be necessary to secure jurisdiction of the
                    partnership);

                C)  No service of process shall be made against any partner
                    of Landlord (except as may be necessary to secure
                    jurisdiction of the partnership);

                D)  No partner of Landlord shall be required to answer or
                    otherwise plead to any service of process;

                E)  No Judgment will be taken against any partner of
                    Landlord;


                                          19

<PAGE>


                F)  Any judgment taken against any partner of Landlord
                    maybe vacated and set aside at any time nunc pro tunc;


                G)  No writ of execution will ever be levied against the
                    assets of any partner of Landlord;

                H)  The covenants and agreements of Tenant set forth in
                    this Section 38 shall be enforceable by Landlord and
                    any partner of Landlord.

          39.  HAZARDOUS MATERIAL.

               A.   DEFINITIONS.  AS USED HEREIN, THE TERM "HAZARDOUS
                    MATERIAL" SHALL MEAN ANY SUBSTANCE: (i) THE PRESENCE OF
                    WHICH REQUIRES INVESTIGATION OR REMEDIATION UNDER ANY
                    FEDERAL, STATE OR LOCAL STATUTES, REGULATION,
                    ORDINANCE, ORDER, ACTION, POLICY OR COMMON LAW; (ii)
                    WHICH IS OR BECOMES DEFINED "HAZARDOUS WASTE,"
                    "HAZARDOUS SUBSTANCE," POLLUTANT OR CONTAMINANT UNDER
                    ANY FEDERAL, STATE OR LOCAL STATUTE, REGULATION, RULE
                    OR ORDINANCE OR AMENDMENTS THERETO INCLUDING, WITHOUT
                    LIMITATION, THE COMPREHENSIVE ENVIRONMENTAL RESPONSE,
                    COMPENSATION AND LIABILITY ACT (42 U.S.C. SECTION 9601
                    ET SEQ.) AND/OR THE RESOURCE CONSERVATION AND RECOVERY
                    ACT (42 U.S.C. SECTION 6901 ET SEQ.); (iii) WHICH IS
                    TOXIC, EXPLOSIVE, CORROSIVE, FLAMMABLE, INFECTIOUS,
                    RADIOACTIVE, CARCINOGENIC, MUTAGENIC, OR OTHERWISE
                    HAZARDOUS AND IS OR BECOMES REGULATED BY ANY
                    GOVERNMENTAL AUTHORITY, AGENCY, DEPARTMENT, COMMISSION,
                    BOARD, AGENCY, OR INSTRUMENTALITY OF THE UNITED STATES,
                    THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION
                    THEREOF; (iv) THE PRESENCE OF WHICH ON THE PREMISES
                    CAUSES OR THREATENS TO CAUSE A NUISANCE UPON THE
                    PREMISES OR TO ADJACENT PROPERTIES OR POSES OR
                    THREATENS TO POSE A HAZARD TO THE HEALTH OR SAFETY OF
                    PERSONS ON OR ABOUT THE PREMISES; (v) THE PRESENCE OF
                    WHICH ON ADJACENT PROPERTIES COULD CONSTITUTE A TRESPASS
                    TO LANDLORD OR TENANT; (vi) WITHOUT LIMITATION WHICH
                    CONTAINS GASOLINE, DIESEL FUEL, OR OTHER PETROLEUM
                    HYDROCARBONS; (vii) WITHOUT LIMITATION WHICH CONTAINS
                    POLYCHLORINATED BIPHENYLS (PCBs), ASBESTOS OR UREA
                    FORMALDEHYDE FOAM INSULATION; OR (viii) WITHOUT
                    LIMITATION RADON GAS.

               B.   LANDLORD'S INDEMNITY.  LANDLORD SHALL INDEMNIFY,
                    DEFEND, PROTECT AND HOLD TENANT HARMLESS FROM AND
                    AGAINST ALL LIABILITIES, CLAIMS, PENALTIES, FINES,
                    RESPONSE COSTS AND OTHER EXPENSES (INCLUDING, BUT
                    LIMITED TO, REASONABLE ATTORNEYS' FEES AND CONSULTANTS'
                    FEES AND COSTS) ARISING OUT OF, RESULTING FROM, OR
                    CAUSED BY ANY HAZARDOUS MATERIAL USED, GENERATED
                    DISCHARGED, TRANSPORTED TO OR FROM, STORED OR DISPOSED
                    OF BY LANDLORD OR ITS AGENTS IN, ON, UNDER, OVER, THROUGH
                    OR ABOUT THE PREMISES AND/OR THE SURROUNDING REAL
                    PROPERTY.

               C.   PERMITTED USE.  SUBJECT TO THE COMPLIANCE BY TENANT
                    WITH THE PROVISIONS OF SUBPARAGRAPHS D, E, F, G, I, J
                    AND K BELOW, TENANT SHALL BE PERMITTED TO USE AND STORE
                    ON THE PREMISES THOSE HAZARDOUS MATERIALS LISTED IN
                    EXHIBIT "F" ATTACHED HERETO IN THE QUANTITIES ATTACHED
                    SET FORTH IN EXHIBIT "F".

               D.   HAZARDOUS MATERIAL MANAGEMENT PLAN.  PRIOR TO TENANT
                    USING, HANDLING, TRANSPORTING OR STORING ANY HAZARDOUS
                    MATERIAL AT OR ABOUT THE PREMISES (INCLUDING, WITHOUT
                    LIMITATION, THOSE LISTED IN EXHIBIT "F"), TENANT SHALL
                    SUBMIT TO LANDLORD A HAZARDOUS MATERIALS MANAGEMENT
                    PLAN ("HMMP") FOR LANDLORD'S REVIEW AND APPROVAL, WHICH
                    APPROVAL SHALL NOT BE UNREASONABLY WITHHELD.  THE HMMP
                    SHALL DESCRIBE: (i) THE QUANTITIES OF EACH MATERIAL TO
                    BE USED, (ii) THE PURPOSE FOR WHICH EACH MATERIAL IS TO
                    BE USED, (iii) THE METHOD OF STORAGE OF EACH MATERIAL,
                    (iv) THE METHOD OF TRANSPORTING EACH MATERIAL TO AND
                    FROM THE PREMISES AND WITHIN THE PREMISES, (v) THE
                    METHODS TENANT WILL EMPLOY TO MONITOR THE USE OF THE
                    MATERIAL AND TO DETECT ANY LEAKS OR POTENTIAL HAZARDS,
                    AND (vi) ANY OTHER INFORMATION ANY DEPARTMENT OF ANY
                    GOVERNMENTAL ENTITY (CITY, STATE OR FEDERAL) REQUIRES
                    PRIOR TO THE ISSUANCE OF ANY REQUIRED PERMIT FOR THE
                    PREMISES OR DURING TENANT'S OCCUPANCY OF THE PREMISES.
                    LANDLORD MAY, BUT SHALL HAVE NO OBLIGATION TO


                                          20

<PAGE>
          REVIEW AND APPROVE THE FOREGOING INFORMATION AND HMO, AND SUCH
          REVIEW AND APPROVAL OR FAILURE TO REVIEW AND APPROVE SHALL NOT
          ACT AS AN ESTOPPEL OR OTHERWISE WAIVE LANDLORD'S RIGHTS UNDER
          THIS LEASE OR RELIEVE TENANT OF ITS OBLIGATIONS UNDER THIS LEASE.
          IF LANDLORD DETERMINES IN GOOD FAITH BY INSPECTION OF THE
          PREMISES OR REVIEW OF THE HMMP THAT METHODS IN USE OR DESCRIBED
          BY TENANT ARE NOT ADEQUATE IN LANDLORD'S GOOD FAITH JUDGEMENT TO
          PREVENT OR ELIMINATE THE EXISTENCE OF ENVIRONMENTAL HAZARDS, THEN
          TENANT SHALL NOT USE, HANDLE, TRANSPORT, OR STORE SUCH HAZARDOUS
          MATERIALS AT OR ABOUT THE PREMISES UNLESS AND UNTIL SUCH METHODS
          ARE APPROVED BY THE LANDLORD IN GOOD FAITH AND ADDED TO AN
          APPROVED HMMP. ONCE APPROVED BY LANDLORD, TENANT SHALL STRICTLY
          COMPLY WITH THE HMMP AND SHALL NOT CHANGE ITS USE, OPERATIONS OR
          PROCEDURES WITH RESPECT TO HAZARDOUS MATERIALS WITHOUT SUBMITTING
          AN AMENDED HMMP FOR LANDLORD'S REVIEW AND APPROVAL AS PROVIDED
          ABOVE.

     E.   USE RESTRICTIONS. EXCEPT AS SPECIFICALLY ALLOWED IN SUBPARAGRAPH
          C ABOVE, TENANT SHALL NOT CAUSE OR PERMIT ANY HAZARDOUS MATERIAL
          TO BE USED, STORED, GENERATED, DISCHARGED, TRANSPORTED TO OR
          FROM, OR DISPOSED OF IN OR ABOUT THE PREMISES, OR ANY OTHER LAND
          OR IMPROVEMENT IN THE VICINITY OF THE PREMISES. WITHOUT LIMITING
          THE GENERALITY OF THE FOREGOING, TENANT, AT ITS SOLE COST, SHALL
          COMPLY WITH ALL LAWS RELATING TO THE STORAGE, USE, GENERATION,
          TRANSPORT, DISCHARGE AND DISPOSAL BY TENANT OR ITS AGENTS OF ANY
          HAZARDOUS MATERIAL. IF THE PRESENCE OF ANY HAZARDOUS MATERIAL ON
          THE PREMISES CAUSED OR PERMITTED BY TENANT OR ITS AGENTS RESULTS
          IN CONTAMINATION OF THE PREMISES OR ANY SOIL, AIR, GROUND OR
          SURFACE WATERS UNDER, THROUGH, OVER, ON, IN OR ABOUT THE
          PREMISES, TENANT AT ITS EXPENSE, SHALL PROMPTLY TAKE ALL ACTIONS
          NECESSARY TO RETURN THE PREMISES AND/OR THE SURROUNDING REAL
          PROPERTY TO THE CONDITION EXISTING PRIOR TO THE APPEARANCE OF
          SUCH HAZARDOUS MATERIAL.

     F.   TENANT INDEMNITY. TENANT SHALL DEFEND, PROTECT, HOLD HARMLESS AND
          INDEMNIFY LANDLORD AND ITS AGENTS AND LENDERS WITH RESPECT TO ALL
          ACTIONS, CLAIMS, LOSSES (INCLUDING, DIMINUTION IN VALUE OF THE
          PREMISES),FINES, PENALTIES, FEES,(INCLUDING, BUT NOT LIMITED TO,
          REASONABLE ATTORNEYS' AND CONSULTANTS' FEES AND COSTS) COSTS,
          DAMAGES, LIABILITIES, REMEDIATION COSTS, INVESTIGATIONS COSTS,
          RESPONSE AND OTHER EXPENSES ARISING OUT OF, RESULTING FROM, OR
          CAUSED BY ANY HAZARDOUS MATERIAL USED, GENERATED DISCHARGED,
          TRANSPORTED TO OR FROM, STORED, OR DISPOSED OF BY TENANT OR ITS
          AGENTS IN, ON, UNDER, OVER, THROUGH OR ABOUT THE PREMISES AND/OR
          THE SURROUNDING REAL PROPERTY. TENANT SHALL NOT SUFFER ANY LIEN
          TO BE RECORDED AGAINST THE PREMISES AS A CONSEQUENCE FOR THE
          DISPOSAL OF ANY HAZARDOUS MATERIAL ON THE PREMISES BY THE TENANT
          OR ITS AGENTS, INCLUDING ANY SO CALLED STATE, FEDERAL OR LOCAL
          "SUPER FUND" LIEN RELATED TO THE "CLEAN UP" OF ANY HAZARDOUS
          MATERIAL IN, OVER, ON, UNDER THROUGH, OR ABOUT THE PREMISES.

     G.   COMPLIANCE. TENANT SHALL IMMEDIATELY NOTIFY LANDLORD OF ANY
          INQUIRY, TEST, INVESTIGATION, ENFORCEMENT PROCEEDING BY OR
          AGAINST TENANT OR THE PREMISES CONCERNING ANY HAZARDOUS MATERIAL.
          ANY REMEDIATION PLAN PREPARED BY OR ON BEHALF OF TENANT MUST BE
          SUBMITTED TO LANDLORD PRIOR TO CONDUCTING ANY WORK PURSUANT TO
          SUCH PLAN AND PRIOR TO SUBMITTAL TO ANY APPLICABLE GOVERNMENT
          AUTHORITY AND SHALL BE SUBJECT TO LANDLORD'S CONSENT. TENANT
          ACKNOWLEDGES THAT LANDLORD, AS THE OWNER OF THE PROPERTY, AT
          ITS ELECTION, SHALL HAVE THE SOLE RIGHT TO NEGOTIATE, DEFEND,
          APPROVE AND APPEAL ANY ACTION TAKEN OR ORDER ISSUED WITH REGARD TO ANY
          HAZARDOUS MATERIAL BY ANY APPLICABLE GOVERNMENT AUTHORITY.

     H.   ASSIGNMENT AND SUBLETTING. IT SHALL NOT BE UNREASONABLE FOR
          LANDLORD TO WITHHOLD ITS CONSENT TO ANY PROPOSED ASSIGNMENT OR
          SUBLETTING IF (i) THE PROPOSED ASSIGNEE'S OR SUBTENANT'S
          ANTICIPATED USE OF THE PREMISES INVOLVES THE STORAGE, GENERATION,
          DISCHARGE,



                                          21

<PAGE>


          TRANSPORT, USE OR DISPOSAL OF ANY HAZARDOUS MATERIAL NOT
          PERMITTED UNDER SUBPARAGRAPH C ABOVE; (ii) IF THE PROPOSED
          ASSIGNEE OR SUBTENANT HAS BEEN REQUIRED BY ANY PRIOR
          LANDLORD, LENDER, OR GOVERNMENT AUTHORITY TO "CLEAN UP" OR
          REMEDIATE ANY HAZARDOUS MATERIAL AND HAS FAILED TO PROMPTLY
          DO SO; (iii) IF THE PROPOSED ASSIGNEE OR SUBTENANT IS
          SUBJECT TO INVESTIGATION OR ENFORCEMENT ORDER OR PROCEEDING
          BY ANY GOVERNMENTAL AUTHORITY IN CONNECTION WITH THE USE,
          GENERATION, DISCHARGE, TRANSPORT, DISPOSAL OR STORAGE OF ANY
          MATERIAL AMOUNT OF HAZARDOUS MATERIAL; PROVIDED THAT (ii)
          AND (iii) WILL NOT APPLY IN THE CASE OF A FORTUNE 500
          COMPANY.

     I.   SURRENDER. UPON THE EXPIRATION OR EARLIER TERMINATION OF THE
          LEASE, TENANT, AT ITS SOLE COST, SHALL REMOVE ALL HAZARDOUS
          MATERIALS FROM THE PREMISES THAT TENANT OR ITS AGENTS INTRODUCED
          TO THE PREMISES. IF TENANT FAILS TO SO SURRENDER THE PREMISES,
          TENANT SHALL INDEMNIFY, PROTECT, DEFEND AND HOLD LANDLORD
          HARMLESS FROM AND AGAINST ALL DAMAGES RESULTING FROM TENANT'S
          FAILURE TO SURRENDER THE PREMISES AS REQUIRED BY THIS PARAGRAPH,
          INCLUDING, WITHOUT LIMITATION, ANY ACTIONS, CLAIMS, LOSSES,
          LIABILITIES, FEES (INCLUDING, BUT NOT LIMITED TO, REASONABLE
          ATTORNEY'S FEES AND CONSULTANTS' FEES AND COSTS),FINES, COSTS,
          PENALTIES, OR DAMAGES IN CONNECTION WITH THE CONDITION OF THE
          PREMISES INCLUDING, WITHOUT LIMITATION, DAMAGES OCCASIONED BY THE
          INABILITY TO RELET THE PREMISES OR A REDUCTION IN THE FAIR MARKET
          AND/OR RENTAL VALUE OF THE PREMISES BY REASON OF THE EXISTENCE OF
          ANY HAZARDOUS MATERIALS IN, ON OVER, UNDER, THROUGH OR AROUND THE
          PREMISES.

     J.   RIGHT TO APPOINT CONSULTANT. LANDLORD SHALL HAVE THE RIGHT TO
          APPOINT A CONSULTANT TO CONDUCT AN INVESTIGATION TO DETERMINE
          WHETHER ANY HAZARDOUS MATERIAL IS BEING USED, GENERATED,
          DISCHARGED, TRANSPORTED TO OR FROM, STORED OR DISPOSED OF IN, ON,
          OVER, THROUGH, OR ABOUT THE PREMISES, IN AN APPROPRIATE AND
          LAWFUL MANNER. IF TENANT HAS VIOLATED ANY LAW OR COVENANT IN THIS
          LEASE REGARDING THE USE, STORAGE OR DISPOSAL OF HAZARDOUS
          MATERIALS ON OR ABOUT THE PREMISES, TENANT SHALL REIMBURSE
          LANDLORD FOR THE COST OF SUCH INVESTIGATION. TENANT, AT ITS
          EXPENSE, SHALL COMPLY WITH ALL REASONABLE RECOMMENDATIONS OF THE
          CONSULTANT REQUIRED TO CONFORM TENANT'S USE, STORAGE OR DISPOSAL
          OF HAZARDOUS MATERIALS TO THE REQUIREMENTS OF APPLICABLE LAW OR
          TO FULFILL THE OBLIGATIONS OF TENANT HEREUNDER.

     K.   HOLDING OVER. IF ANY ACTION OF ANY KIND IS REQUIRED TO BE TAKEN
          BY ANY GOVERNMENTAL AUTHORITY TO CLEAN-UP, REMOVE, REMEDIATE OR
          MONITOR HAZARDOUS MATERIAL (THE PRESENCE OF WHICH IS THE RESULT
          OF THE ACTS OR OMISSIONS OF TENANT OR ITS AGENTS) AND SUCH ACTION
          IS NOT COMPLETED PRIOR TO THE EXPIRATION OR EARLIER TERMINATION
          OF THE LEASE, TENANT SHALL BE DEEMED TO HAVE IMPERMISSIBLY HELD
          OVER UNTIL SUCH TIME AS SUCH REQUIRED ACTION IS COMPLETED, AND
          LANDLORD SHALL BE ENTITLED TO ALL DAMAGES DIRECTLY OR INDIRECTLY
          INCURRED IN CONNECTION WITH SUCH HOLDING OVER, INCLUDING WITHOUT
          LIMITATIONS, DAMAGES OCCASIONED BY THE INABILITY TO RE-LET THE
          PREMISES OR A REDUCTION OF THE FAIR MARKET AND/OR RENTAL VALUE OF
          THE PREMISES.

     L.   EXISTING ENVIRONMENTAL REPORTS.  TENANT HEREBY ACKNOWLEDGES
          THAT IT HAS RECEIVED, READ AND REVIEWED THE REPORTS AND TEST
          RESULTS DESCRIBED IN EXHIBIT "G" ATTACHED HERETO AND MADE A
          PART HEREOF (THE "EXISTING ENVIRONMENTAL REPORTS").

     M.   PROVISIONS SURVIVE REPORTS.  THE PROVISIONS OF THIS
          PARAGRAPH 39 SHALL SURVIVE THE EXPIRATION OR TERMINATION OF
          THIS LEASE.


                                          22

<PAGE>


     N.   CONTROLLING PROVISIONS.  THE PROVISIONS OF THIS PARAGRAPH 39 ARE 
          INTENDED TO GOVERN THE RIGHTS AND LIABILITIES OF THE LANDLORD AND 
          TENANT HEREUNDER RESPECTING HAZARDOUS MATERIALS TO THE EXCLUSION OF 
          ANY OTHER PROVISIONS IN THIS LEASE THAT MIGHT OTHERWISE BE DEEMED 
          APPLICABLE.  THE PROVISIONS OF THIS PARAGRAPH 39 SHALL BE 
          CONTROLLING WITH REPECT TO ANY PROVISIONS IN THIS LEASE THAT ARE
          INCONSISTENT WITH THIS PARAGRAPH 39.

40.  OPTION TO EXTEND.

     Tenant shall be granted on (1) option to extend the term of this lease
     through and including October 29, 1998.  Such extension to be on the
     same terms and conditions as the initial term, including the Base
     Monthly Rent.  It shall be a precedent to the exercise of this option
     that Tenant shall not be in default under this Lease, BEYOND ANY
     APPLICABLE CURE PERIOD, at the time of the exercise of the option.
     Tenant shall exercise said option only by written notice delivered to
     exercise of the option.  Tenant shall exercise said option only by
     written notice delivered to Landlord at least ONE HUNDRED TWENTY (120)
     days prior to the expiration of the original term of this lease.

41.  RIGHTS OF FIRST REFUSAL.

     A. In the event this Lease is in full force and effect and provided
     Tenant is not in default under the terms and conditions of the Lease,
     BEYOND ANY APPLICABLE CURE PERIOD, Landlord hereby grants Tenant the
     Right of First Refusal (First Right), second to AG Associates' Option
     to Expand, the premises as defined herein.  Said First Right shall be 
     secondary to AG Associates Option to Expand, as defined in their lease
     dated July 21, 1995.

     B.  Furthermore, Tenant shall have the Right of First Refusal ("Second
     Right") to lease any space designated in Exhibit A, as "site plan",
     Landlord shall notify Tenant in writing of the terms for which
     Landlord is willing to lease the subject premises.

     C.  The foregoing rights shall be contingent upon Tenant's responding
     to Landlord in writing of Tenant's intent to exercise said right(s) of
     first refusal within TWO (2) BUSINESS DAYS of notification to Tenant
     by Landlord of an impending offer on said subject premises.  Tenant
     shall have two (2) BUSINESS DAYS to accept the terms and conditions as
     written by Landlord and to agree in writing to lease the subject
     premises.  If Landlord has not received a written response to lease
     the subject premises from Tenant within TWO (2) BUSINESS DAYS of
     Tenant's receipt of an offer from Landlord, then it shall be deemed
     that Tenant is waiving its right to lease the subject space, and
     Landlord will be free to lease to the original offering party, on the
     same terms and conditions as were originally offered to Tenant.


                                          23

<PAGE>


     D.  Neither Right of First Refusal, as outlined above, shall apply to
     extensions of leases for space with Tenants who are in occupancy of
     buildings designated in the Exhibit A site plan as of the commencement
     date of this Lease (the "Existing Leases").  As of the date of this
     Lease, the tenants under Existing Leases are: Reply Corporation and AG
     Associates, Inc.  Only AG Associates ha sa right to lease 4415 Fortran
     Court, which is superior to the Rights of First Refusal granted to
     Tenant herein.

IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set
forth below.

TENANT:                                      LANDLORD:

Novellus Systems, Inc., a California         South Bay/Fortran, a California
corporation                                  limited partnership


By: /s/ Unintelligible                        By:  /s/ Unintelligible
   ------------------------------                 ------------------------------

Title:  Treasurer                             Title: General Partner
      ---------------------------                    ---------------------------

Dated:  1/31/96                               Dated:  1/31/96
      ---------------------------                  ---------------------------



                                          24

<PAGE>
                                 San Jose Technology Park
                             Office/R&D/Manufacturing Space,


                                        [MAP]


[LOGO]

<PAGE>

                                   EXHIBIT "B"

LEGAL DESCRIPTION:


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

Beginning at the Southwesterly corner of that certain 31.74 acre tract of land
described in the deed from The First National Bank of San Jose, a corporation,
to F. W. Zanker and Curtner Zanker, dated May 5, 1939, recorded May, 8, 1939 in
Book 934 Official Records, page 16, Santa Clara County Records, in the Northerly
line Alviso-Milpitas Road, thence from said point of beginning N. 89 deg. 35' E.
630.30 feet to the Southeasterly corner thereof; thence along the Easterly line
of said 31.74 acre tract for the three following courses and distances:  N. 1
deg. 13' E. 768.90 feet, N. 0 deg. 57' E. 597.96 feet and N. 0 deg. 31' E.
149.97 feet to the Southeasterly corner of that certain 9.316 acre tract of land
described in the deed from F. W. Zanker, et al, to B. S. Brazil, a single man,
dated October 25, 1943, recorded November 16, 1943 in Book 1176 Official
Records, page 21, Santa Clara County Records; thence S. 89 deg. 35' W. along the
Southerly line of said 9.316 acre tract 651.78 feet to the Southwesterly corner
thereof in the Westerly line of said 31.74 acre tract; thence S. 0 deg. 08' W.
along said last mentioned line 1512.88 feet to the point of beginning.

Excepting therefrom that portion thereof conveyed to the City of San Jose, a
municipal corporation, recorded September 2, 1985 in Book J828, page 1719,
Official Records, described as follows:

Beginning at the Southeasterly corner of that certain 31.74 acre tract of land
described in the deed from the First National Bank of San Jose, a corporation,
to F. W. Zanker and Curtner Zanker, dated May 5, 1939, recorded May 8, 1939 in
Book 934 Official Records, page 16, Santa Clara County Records, said point being
on the Northerly line of Alviso-Milpitas Road, thence leaving said point of
beginning along the Easterly line of said 31.74 acre parcel N. 1 deg. 13' E.
30.00 feet to the true point of beginning of the parcel herein being described;
thence leaving said true point of beginning and said Easterly line along the
following courses and distances;  From a tangent bearing of N. 88 deg. 47' 00"
W. along a curve to the right with a radius of 50.00 feet, through a central
angle of 126 deg. 52' 12" for an arc length of 110.71 feet to a point on reverse
curvature; from a tangent bearing of N. 38 deg. 05' 12" E. along a curve to the
left with a radius of 50.00 feet, through a central angle of 36 deg. 52' 12" for
an arc length of 32.18 feet; N. 1 deg. 13' 00" E. 361.13 feet; N. 0 deg. 57' 00"
E. 597.93 feet; N. 0 deg. 31' 52" E. 18.69 feet; along a tangent curve to the
left with a radius of 40.00 feet, through a central angle of 90 deg. 56' 58" for
an arc length of 63.50 feet to a point on a line parallel with and distant 90.00
feet Southerly, measured at right angles from the Southerly line of that certain
9.316 acre parcel of land described in the deed from F. W. Zanker, et al, to B.
S. Brazil, recorded November 16, 1943 in Book 1176 of Official Records, at page
21, Santa Clara County Records; thence along said parallel line, S. 89 deg. 34'
54" W. 579.99 feet to a point on the Westerly line of said 31.74 acre parcel of
land; thence leaving said parallel line along said Westerly line, No. 0 deg. 06'
10" E. 90.00 feet to the Southwesterly corner of the hereinabove described 9.316
acre parcel; thence leaving said Westerly line along the Southerly line of said
9.316 acre parcel, N. 89 deg. 34' 54" E. 651.24 feet to the Southeasterly corner
thereof, said corner lying in said Easterly line of the hereinabove

<PAGE>

                                   EXHIBIT "B"

described 31.74 acre parcel; thence along said Easterly line the following
course and distances:  S. 0 deg. 31' 52" W. 149.98 feet; S. 0 deg. 57; 00" W.
598.11 feet and S. 1 deg. 13' 00" W. 598.11 feet and S. 1 deg. 13' 00" W. 471.20
feet to the true point of beginning.

ALSO EXCEPTING THEREFROM all that portion conveyed to the State of California by
Grant Deed recorded August 31, 1994 in Book N 579, Page 2028, Official Records,
described as follows:

Being a portion of that certain parcel of land described in the Deed from Ray H.
Collishaw and Earlyn R. Collishaw, husband and wife, to William L. Marocco, a
single man, recorded May 4, 1982 in Book G 762 of Official Records at Page 218,
Santa Clara County Records.

Beginning at the southeast corner of said parcel conveyed to Marocco; thence
from said Point of Beginning, along the southerly line of said parcel conveyed
to Marocco N. 89 deg. 01' 16" W. 626.45 feet to the southwest corner of said
parcel conveyed to Marocco; thence along the westerly line of said parcel
conveyed to Marocco N. 1 deg. 13' 13" E. 227.77 feet; thence leaving said
westerly line, from a tangent bearing of S. 67 deg. 46' 42" E., along a curve to
the right with a radius of 275.00 feet, through a central angle of 18 deg. 08'
37" for an arc length of 87.08 feet; thence S. 49 deg. 38' 05" E., 103.64 feet;
thence along a tangent curve to the left with a radius of 275.00 feet, through a
central angle of 34 deg. 57' 21" for an arc length of 167.78 feet; thence S. 84
deg. 35' 26" E. 318.98 feet to a point in the easterly line of said parcel
conveyed to Marocco          ng said easterly line S. 2 deg. 20' 03" W.,
31.97 feet to the Point of Beginning.


ARB No. 15-30-9 & 9.1

<PAGE>

                                   EXHIBIT "C"

                                  IMPROVEMENTS

Prior to the commencement of the lease, Landlord shall be make the following
improvements to the Premises ("Landlord's Improvements"):

A)   Replace ceiling insulation in rear manufacturing area;
B)   Replace areas of carpet that are worn and irreparably soiled;
C)   Repaint interior walls, as necessary; and,
D)   Repair any broken glass, cracks in tile floor of manufacturing area and
     make additional cosmetic repairs as reasonably necessary, to be agreed upon
     by Landlord in advance.

Tenant shall be allowed to construct certain interior improvements (the
"Improvements") in the Premises prior to the commencement of the Term of this
Lease in accordance with the terms of Paragraph 13 of the Lease and in
accordance with the plans which shall be approved by Landlord prior to
commencement of construction and shall become an exhibit to the Lease
hereto ("Approved Plans").  Landlord shall determine and notify Tenant prior to
approval and commencement of construction of the Approved Plans, which
Improvements Landlord will require Tenant to remove or return to original
condition upon expiration or earlier termination of the Lease.

<PAGE>

                                    EXHIBIT D
                         FINAL TENANT IMPROVEMENT PLANS

                                (To Be Provided)

<PAGE>

                                    EXHIBIT E
                  PLAN SHOWING IMPROVEMENTS TO BE RETURNED TO
                    ORIGINAL CONDITION UPON LEASE EXPIRATION

                                (To Be Provided)


<PAGE>

                                    EXHIBIT F

                       HAZARDOUS MATERIALS MANAGEMENT PLAN

                           (To Be Provided by Tenant)


<PAGE>

                                   EXHIBIT "G"

1.   ATT report dated July 9, 1992: Preliminary (Phase I) Environmental Site
     Assessment Update for the Property at 4405 - 4445 Fortran Court, San Jose,
     California.  (Project No. 929368).

2,   SECOR International Incorporated report dated July 10, 1995: Phase I
     Environmental Site Assessment Report - 4405, 4415, 4425, 4435 and 4445
     Fortran Drive, San Jose, CA  (Job No. 70076-001-01).