Exhibit A


<PAGE>


                               THREE SISTERS RANCH
                                   ENTERPRISES

                              THIRD LEASE ADDENDUM

         This Third Lease Addendum is entered into effective  September 17, 1998
by and  between  Three  Sisters  Ranch  Enterprises,  a  California  partnership
("Landlord") and Conceptus, Inc., a California corporation ("Tenant").

         This Third Lease  Addendum is attached to and forms a part of the Lease
identified  below,  together with any  amendments,  modifications  and exhibits,
including  a  prior  Lease  Addendum  and a prior  Lease  Addendum  and  Partial
Termination   Agreement.   This  Third  Lease  Addendum  constitutes  additional
covenants  and  agreements  which are  intended  to  prevail in the event of any
conflict  between the  covenants  and  agreements  contained in this Third Lease
Addendum  and those  contained  in the Lease  itself  and/or the Lease  Addenda.
Except for the additions,  changes and removals  listed herein,  all other terms
and conditions of the Lease will remain in full force and effect  throughout the
term of the Lease.


                                    Recitals

         A. On or about April 15, 1997, Landlord and Tenant entered into a lease
("Lease"), for the certain premises owned by Landlord, and thereafter executed a
Lease Addendum and a Lease Addendum and Partial  Termination  Agreement.  Tenant
currently occupies 16,397 square feet of 957 Industrial Road, Suites D, F, G, H,
J, L, P and R, San Carlos,  California,  94070 (together, the "Premises"),  that
are all  part of a  building  complex  more  commonly  known  as the San  Carlos
Business Center.

         B. Tenant has  notified  Landlord  that Tenant  intends to sublease the
Premises,  that Tenant  intends to collect rent from the  subtenant in an amount
("Excess Rent") in excess of the Rent due to Landlord under the Lease,  and that
Tenant  intends to enter into a separate  agreement  with the  subtenant for the
leasing of furniture to be used in the Premises.

         C. Tenant has also  notified  Landlord that Tenant has spent the sum of
$575,910 ("Tenant Costs") in tenant improvements for the Premises.


                              TERMS AND CONDITIONS

         1. During the remaining Term of the Lease, for so long as Tenant is not
in material  default  under any of the  provisions  of the Lease (which  default
remains uncured after the expiration of all applicable cure periods),  Paragraph
21B shall be amended to read as follows:

                  B. Bonus Rent. The rent collected by Tenant from the subtenant
                  shall be paid to the parties:

                           1. The  Rent due  under  the  Lease  shall be paid to
                           Landlord.

                           2. That  portion of Excess  Rent up to and  including
                           $0.15 per square foot of the  Premises  shall be paid
                           to Landlord ("Landlord's Share").

                           3.  That  portion  of the  Excess  Rent in  excess of
                           Landlord's Share shall first be allocated and paid to
                           Tenant  to  reimburse  Tenant  for (a) the  costs  of
                           tenant improvements paid for by Tenant, not to exceed
                           $575,910.00  ("Tenant  Costs") and (b) any reasonable
                           brokerage  commission   (`Commission")   incurred  by
                           Tenant in connection with obtaining a sublease.  Such
                           Tenant Costs and  Commission  shall be amortized over
                           the remaining Term of the Lease,  and Tenant shall be
                           paid a monthly  amount  of  Excess  Rent in excess of
                           Landlord's   Share   based   on   such   amortization
                           ("Tenant's Share").

                                       1

<PAGE>


                           4. Any amount of Excess Rent in excess of  Landlord's
                           Share and  Tenant's  Share  shall be divided and paid
                           ten percent (10%) to Tenant and ninety  percent (90%)
                           to Landlord.

         2. In the event that  Tenant is in  material  default  under any of the
terms of the Lease (which  default  remains  uncured after the expiration of all
applicable  cure  periods),  from and after written  notice from  Landlord,  the
original Paragraph 21B, as set forth in the Lease, shall control the division of
Excess Rent and shall  supercede  and replace the revised  Paragraph  21B as set
forth above in Paragraph 1 of this Third Lease Addendum.

         3. The Option to Renew  provided  for in  paragraph  43 of the Lease is
hereafter  null and void and  neither  Tenant nor the  subtenant  shall have any
option to renew or extend the Term of this Lease.

         IN WITNESS  HEREOF,  the Parties  hereto have executed this Third Lease
Addendum as of the date set forth above.


Three Sisters Ranch Enterprises                 Conceptus, Inc.
Landlord                                        Tenant

By: /s/ Martin E. Ruberry                       By: /s/ Sanford Fitch
    ----------------------------                    ----------------------------
    Martin E. Ruberry                               Sanford Fitch
    General Manager                                 Senior Vice President &
                                                    Chief Financial Officer

Date:  September 21, 1998                       Date:  September 17, 1998

                                       2

<PAGE>


                                 LEASE ADDENDUM

         This Lease Addendum is entered into this 31st day of July,  1997 by and
between  Conceptus,  Inc.  ("CONCEPTUS")  as  Tenant,  and Three  Sisters  Ranch
Enterprises  ("TSRE")  as  Landlord  (successor  to Trammel  Crow NW,  Inc.  and
Industrial Way I Limited Partnership).

         CONCEPTUS and TSRE agree that the lease for the certain  premises known
as 981 Industrial  Road, San Carlos,  California.  That six (6) building project
totaling  approximately,  123,280  square  feet  commonly  known  as San  Carlos
Business Park, San Carlos, California, is modified as follows:

1.       Tenant,  by this  Addendum,  includes 957 G, 957 H and 957 R lndustrial
         Road, San Carlos as part of the demised premises: Tenant shall pay rent
         according to the existing rent  schedule  (starting at $1.05 per square
         foot  per  month  NNN)  for  2,800  +/-  square  feet in  Units  G, & H
         commencing  September  1, 1997 and for 1,000 +/- square  feet in Unit R
         commencing  November 1, 1997. The rent term shall be  co-terminus  with
         the existing  lease and, in addition to the lease term, all other terms
         and conditions shall remain the same.

2.       Landlord  shall deliver 957 G, and 957 H Industrial Road, San Carlos to
         Tenant on or before  September  1, 1997 and 957 R Industrial  Road, San
         Carlos, to Tenant on or before November 1, 1997.

3.       Copies  of all  legal  notices  from  Tenant  shall  also be  copied to
         Landlord's attorney:

                Ted J. Hannig
                Miller, Starr & Regalia
                1001 Marshall Street, Suite 100
                Redwood City, Ca 94063
                Fax: 415/482-3030

         Except as modified,  the Lease between Landlord and Tenant shall remain
in full force and effect.


CONCEPTUS, INC.

By: /s/ Sanford Fitch
    ----------------------------
    Mr. Sanford Fitch

Title: Vice President, Finance & CFO

Date:  7/31/97
    ----------------------------


THREE SISTERS RANCH ENTERPRISES
A California Partnership

By: /s/ Martin E. Ruberry
    ----------------------------
    Mr. Martin E. Ruberry

Title: General Manager

Date:  ?????????
    ----------------------------


<PAGE>


CB COMMERCIAL                                       [LOGO] CB/MADISON COMMERCIAL
REAL ESTATE GROUP, INC.                             COMMERCIAL    Advisory Group


April 21, 1997                                      Delivering Solutions Through
                                                    Local Knowledge Worldwide
                                                    FOUNDED 19??   

Mr. Bob McSweeney
Vice President
CB COMMERCIAL REAL ESTATE GROUP, INC.
950 Tower Lane, Suite 870
Foster City Ca 94404

RE:   957 Industrial Road, Suites G & H, San Carlos, California.


Dear Bob:

On behalf of Conceptus Inc. (Hereinafter,  "Tenant"), CBC/Madison Advisory Group
(Hereinafter,  "CBC/Madison")  is pleased to present  this LETTER OF INTEREST to
lease an additional  2,800 rentable square feet located at the above  referenced
Premises.

This  additional  space would be leased under the same terms and  conditions  as
that Lease dated 4/22/97 by and between Conceptus,  Inc. and Three Sisters Ranch
Enterprises (Hereinafter  "Landlord").  The commencement date would be August 1,
1997 or upon substantial  completion of Tenant's improvements whichever is later
and shall expire May 31, 2002.

Bob, if you should have any questions  regarding this Letter of Interest, please
give me a call.

Sincerely,


CBC/MADISON ADVISORY GROUP


/s/ Rico Cheung
-----------------
Rico Cheung
Director
Biosciences Group
(415) 577-2920


ACKNOWLEDGED:

Conceptus Inc.:                       Three Sisters Rnth Enterprises, Inc.:

By: /s/ Sanford Fitch                  By: /s/ Martin E. Ruberry
    ----------------------                 ----------------------
    Mr. Sanford Fitch                     


Title: Vice President & CFO           Title: General Manager


Date: 4/22/97                         Date: 4/23/97


            950 TOWER LANE, SUITE 870, FOSTER CITY, CALIFORNIA 94404

<PAGE>


                               THREE SISTERS RANCH
                                   ENTERPRISES


                 LEASE ADDENDUM & PARTIAL TERMINATION AGREEMENT


TENANT                            Conceptus, Inc.


TENANT'S ADDRESS:                 981 Industrial Road
                                  San Carlos, CA 94070


LANDLORD:                         Three Sisters Ranch Enterprises


LANDLORD'S ADDRESS:               P.0. Box 1444
                                  San Carlos, CA 94070


Project:                          San Carlos Business Park

Description                       That  six  (6)   building   project   totaling
                                  approximately  123,280  square  feet  commonly
                                  known as San Carlos Business Park, San Carlos,
                                  California.                                   


LEASE TERMINATION:                Tenant, by this Addendum, terminates its right
                                  of use  or  occupancy  as to  981 B and  981 D
                                  Industrial  Road,  San  Carlos  (approximately
                                  11,941 square feet +/-) as part of the demised
                                  Premises as of December 1, 1997;  Tenant shall
                                  pay the sum of $89,557.50 as a termination fee
                                  (an agreed  upon sum based upon a  calculation
                                  of six months' rent  composed of six times the
                                  sum of  $12,528.05  of  monthly  base rent and
                                  $2,388.20 of monthly CAM costs);  Tenant shall
                                  leave  the   Premises  in  broom  swept  clean
                                  condition  free of debris and shall return all
                                  keys to Landlord;  all terms and conditions of
                                  the other existing leases between Landlord and
                                  Tenant shall remain the same except failure to
                                  make  payment  hereunder  at time of execution
                                  shall  constitute a default under all existing
                                  leases with  Landlord  and shall be treated as
                                  failure to pay Rent.


THREE SISTERS RANCH ENTERPRISES
"Landlord"


/s/ Martin E. Ruberry
-------------------------------
Martin E. Ruberry
General Manager


CONCEPTUS, INC.


By: /s/ Kathryn Tunstall
    ---------------------------
    Kathryn Tunstall
    Pres. and CEO

                                       1

<PAGE>


                               THREE SISTERS RANCH
                                   ENTERPRISES

                                TABLE OF CONTENTS
                                                                            Page
                                                                            ----
BASIC LEASE INFORMATION ....................................................   1
PREMISES ...................................................................   1
POSSESSION AND LEASE COMMENCEMENT ..........................................   1
TERM .......................................................................   1
USE ........................................................................   1
RULES AND REGULATIONS ......................................................   2
RENT .......................................................................   2
BASIC OPERATING COST .......................................................   3
INSURANCE AND INDEMNIFICATION ..............................................   5
WAIVER OF SUBROGATION ......................................................   6
LANDLORD'S REPAIRS AND SERVICES ............................................   6
TENANT'S REPAIRS ...........................................................   6
ALTERATIONS ................................................................   7
SIGNS ......................................................................   7
INSPECTION/ POSTING NOTICES ................................................   7
UTILITIES ..................................................................   7
SUBORDINATION ..............................................................   8
FINANCIAL STATEMENTS .......................................................   8
ESTOPPEL CERTIFICATE .......................................................   8
SECURITY DEPOSIT ...........................................................   8
TENANT'S REMEDIES ..........................................................   8
ASSIGNMENT AND SUBLETTING ..................................................   8
AUTHORITY OF PARTIES .......................................................   9
CONDEMNATION ...............................................................   9
CASUALTY DAMAGE ............................................................  10
HOLDING OVER ...............................................................  10
DEFAULT ....................................................................  11
LIENS ......................................................................  12
TRANSFERS BY LANDLORD ......................................................  12
RIGHT OF LANDLORD TO PERFORM TENANT'S COVENANTS ............................  12
WAIVER .....................................................................  12
NOTICES ....................................................................  13
ATTORNEYS' FEES ............................................................  13
SUCCESSORS AND ASSIGNS .....................................................  13
FORCE MAJEURE ..............................................................  13
BROKERAGE COMMISSION .......................................................  13
MISCELLANEOUS ..............................................................  13
ADDITIONAL PROVISIONS ......................................................  14

                                       i

                                          PLEASE INITIAL: [??] Landlord     [??]
                                          Tenant

<PAGE>


                               THREE SISTERS RANCH
                                   ENTERPRISES

                             BASIC LEASE INFORMATION


LEASE DATE:                       5/31/97


TENANT                            Conceptus, Inc.


TENANT'S ADDRESS:                 981 Industrial Road
                                  San Carlos, CA 94070


LANDLORD:                         Three Sisters Ranch Enterprises


LANDLORD'S ADDRESS:               P.0. Box 1444
                                  San Carlos, CA 94070


Project:                          San Carlos Business Park

Description                       That  six  (6)   building   project   totaling
                                  approximately  123,280  square  feet  commonly
                                  known as San Carlos Business Park, San Carlos,
                                  California.


Building Description:             Building 1:

                                  That  approximately  23,000  square foot,  one
                                  story tilt-up  concrete  building known as 981
                                  Industrial Road in San Carlos, California. The
                                  building is outlined in blue on Exhibit A.

                                  Building 2:

                                  That  approximately  21,680  square foot,  one
                                  story tilt-up  concrete  building known as 957
                                  Industrial Road in San Carlos, California. The
                                  building is outlined in yellow on Exhibit A.

Premises:                         (a) That  approximately  11,941 square feet of
                                  rentable  area  known as Suites B and D of 981
                                  Industrial Road, San Carlos,  California.  The
                                  demised   premises  are  outlined  in  red  on
                                  Exhibit A. See Paragraph 1.

                                  (b) That  approximately  8,217  square feet of
                                  rentable  area known as Suite L, J, D and F of
                                  957 Industrial  Road, San Carlos,  California.
                                  The demised  premises are outlined in green on
                                  Exhibit A. See Paragraph 1.

                                  (c) That  approximately  4380  square  feet of
                                  rentable   area   known  as  Suite  P  of  957
                                  Industrial Road, San Carlos,  California.  The
                                  demised  premises  are  outlined  in  pink  on
                                  Exhibit A. See Paragraph 1.


Permitted Use:                    General  office,   storage  and  distribution,
                                  light manufacturing not involving hazardous or
                                  toxic  materials  other than those  consistent
                                  with  normal  office  use and  other  directly
                                  related and concurrent related legal uses. See
                                  Paragraph 4.


Parking Density:                  Three (3) unreserved automobile parking spaces
                                  per  1,000   square   feet,   free  of  charge
                                  throughout the term of the Lease.


<PAGE>


Estimated Term
Commencement Date:                The Lease Term shall commence on:

                                  Suites B & D, 981 Industrial Road: 05/15/97
                                  Suites  D, F, L & J, 957 Industrial Road:
                                  06/01/97
                                  Suite P, 957 Industrial Road:
                                  When vacated by existing tenant,  Lessee shall
                                  have  30 days of  free  rent  pursuant  to the
                                  terms set forth herein.


Length of Term:                   (a) INITIAL  TERM:  All leases shall expire on
                                  May 31, 2002.

                                  Tenant may not  terminate  any  portion of the
                                  leases premises hereunder, except as specified
                                  as to  asbestos  remediation  as set  forth in
                                  this Lease.  Failure to pay rent on any suite,
                                  or other breach of this lease as to any suite,
                                  shall be a  default  of the  entire  lease and
                                  each suite  shall be subject to such  default.
                                  The   occupancy   rights  of  the   suites  is
                                  coterminous   and  the  termination  of  lease
                                  rights,  by lapse of time or by  breach  shall
                                  terminate all lease occupancy rights as to all
                                  suites  (except as to  termination  due to ACM
                                  abatement as provided for below).

                                  (b) TERM  EXTENSIONS:  One (1) extension for a
                                  Sixty (60) Month period according to the terms
                                  of Paragraph 43.


Rent:
Base Rent

Suite Numbers             Sq. Ft.          Period       Base NN Rent per Sq. Ft.
-------------             -------          ------       ------------------------

981 Ind. Ste. B & D        11,941     5/15/97 - 5/31/98         $1.05 
                                      6/01/98 - 5/31/98         $1.10 
                                      6/01/99 - 5/31/00         $1.15 
                                      6/01/00 - 5/31/01         $1.20 
                                      6/01/01 - 5/31/02         $1.25 


957 Ind. Ste. D, F, J & L   8,217     6/01/97 - 5/31/98         $1.05 
                                      6/01/98 - 5/31/99         $1.10 
                                      6/01/99 - 5/31/00         $1.15 
                                      6/01/00 - 5/31/01         $1.20 
                                      6/01/02 - 5/31/02         $1.25 


957 Ind. Ste. P             4,380     When  vacated by  existing  tenant  leasee
                                      shall have 30 days of free rent thereafter
                                      per rent amounts for 957 Ind. Ste. D, F, J
                                      & L.

Estimated First Year Basic Operating Cost:  $0.20 /sq.ft./mo. NNN (not to exceed
                                            $0.20 /sq.ft./mo.  NNN for 1997) See
                                            Paragraph 7.


<PAGE>
FIRST MO. RENT THRU 6/30/97      $27,434.92

Security Deposit:                $25,764.90   Paragraph 19.

Tenant's Proportionate Share:

Of Building 1:  51.9%
Of Building 2:  58.1%

Of Project:     19.9%

Broker:                      Tenant: CB/Madison         See Paragraph 35.
                             Landlord: CB Commercial


The foregoing Basic Lease  Information is  incorporated  into and made a part of
this Lease.  Each reference in this Lease to any of the Basic Lease  Information
shall  mean  the  respective   information  above  and  shall  be  construed  to
incorporate  all of the terms  provided  under the  particular  Lease  paragraph
pertaining to such  information.  In the event of any conflict between the Basic
Lease Information and the Lease, the latter shall control. All square footage is
approximate.  Measurements  are  calculated  uniformly  throughout  the project.
Tenant  may have  measurements  verified  by an  architect  at its sole cost and
expense.


<PAGE>


                               THREE SISTERS RANCH
                                   ENTERPRISES

                                      LEASE

                  THIS LEASE is made as of this 15th day of April,  1997, by and
                  between Three Sisters Ranch  Enterprises  (hereinafter  called
                  "Landlord") and Conceptus, Inc. (hereinafter called "Tenant").

PREMISES      1.  Landlord  leases to Tenant and Tenant  leases  from  Landlord,
                  upon the terms and  conditions  hereinafter  set forth,  those
                  premises  (the  "Premises")  outlined  in red on Exhibit A and
                  described in the Basic Lease Information.  The Premises may be
                  all or part of the building(s) (the  "Building(s)")  or of the
                  project  (the "Project")  which  may  consist of more than one
                  building. Tenant's right to use the Premises shall include the
                  right of reasonable  ingress and egress to the  Premises,  the
                  right  to use any  other  reasonably  necessary  easements  or
                  rights of way, and the right to use common and joint use areas
                  throughout  the  Project.  The  Building(s)  and  Project  are
                  outlined in blue and green respectively on Exhibit A.


POSSESSION    2.  A. Existing Improvements.  In the event this Lease pertains to
 AND LEASE        a Premises in which the  interior  improvements  have  already
 COMMENCE-        been constructed ("Existing Improvements"),  the provisions of
      MENT        this Paragraph 2.A. shall apply and the term commencement date
                  ("Term Commencement Date") shall be the earlier of the date on
                  which:  (1)  Tenant  takes  possession  of  some or all of the
                  Premises;  or (2) Landlord  delivers  written notice to Tenant
                  that  Tenant  may  occupy  the  Premises.  If for  any  reason
                  Landlord  cannot deliver  possession of the Premises to Tenant
                  on the Estimated Term Commencement Date, Landlord shall not be
                  subject to any liability  therefor,  nor shall  Landlord be in
                  default  hereunder,  and Tenant agrees to accept possession of
                  the  Premises  at such time as Landlord is able to deliver the
                  same,  which date  shall then be deemed the Term  Commencement
                  Date.  Tenant  shall not be liable for any Rent for any period
                  prior to the Term Commencement Date. Tenant  acknowledges that
                  Tenant has inspected and accepts the Premises in their present
                  condition,  broom clean,  "as is", as suitable for the purpose
                  for which the  Premises  are leased.  Tenant  agrees that said
                  Premises and other  improvements  are in good and satisfactory
                  condition  as of when  possession  was taken.  Tenant  further
                  acknowledges  that no  representations  as to the condition or
                  repair of the  Premises  nor  promises  to alter,  remodel  or
                  improve the  Premises  have been made by Landlord  unless such
                  are  expressly  set forth in this Lease.  Tenant  shall,  upon
                  demand, execute and deliver to Landlord a letter of acceptance
                  of delivery of the Premises.

                  B.  Construction  of  Improvements.  In the event  this  Lease
                  pertains to a Building to be constructed or improvements to be
                  construed within a Building,  the provisions of this Paragraph
                  2.B shall apply in lieu of the  provisions  of Paragraph  2.A.
                  above  and the  term  commencement  date  ("Term  Commencement
                  Date")  shall be the earlier of the date on which:  (1) Tenant
                  takes  possession of some or all of the  Premises,  or (2) the
                  improvements  constructed  or to be  construed in the Premises
                  shall have been substantially completed in accordance with the
                  plans and  specifications  described  on Exhibit B, whether or
                  not  substantial  completion of the Building itself shall have
                  occurred. If for any reason Landlord cannot deliver possession
                  of the Premises to Tenant on the Estimated  Term  Commencement
                  Date, Landlord shall not be subject to any liability therefor,
                  nor shall  Landlord be in default  hereunder.  In the event of
                  any dispute as to substantial  completion of work performed or
                  required to be  performed  by  Landlord,  the  certificate  of
                  Landlord's   architect   or   general   contractor   shall  be
                  conclusive.   Substantial   completion   shall  have  occurred
                  notwithstanding   Tenant's   submission   of  a  punchlist  to
                  Landlord,  which Tenant shall submit, if at all, within thirty
                  (30) days after the Term Commencement Date. Tenant shall, upon
                  demand, execute and deliver to Landlord a letter of acceptance
                  of  delivery of the  Premises.


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

USE           4.  A.  General.  Tenant shall use the Premises for the  Permitted
                  Use and for no other  use or  purpose.  Tenant  shall  control
                  Tenant's employees,  agents, customers,  visitors, , invitees,
                  licensees,     contractors,     assignees    and    subtenants
                  (collectively,  "Tenant's  Parties")  in  such a  manner  that
                  Tenant and  Tenant's  Parties  cumulatively  do not exceed the
                  Parking Density at any time. Tenant and Tenant's parties shall
                  have  nonexclusive  right to use, in common with other parties
                  occupying  the  Building  or Project,  the  parking  areas and
                  driveways   of  the   Project,   subject  to  such  rules  and
                  regulations as Landlord may from time to time prescribe.

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

                                         APPROVAL INITIALS: [??] Landlord   [??]
                                         Tenant

<PAGE>


                  non-compliance by any other tenant or occupant of the Building
                  or Project with any of the above-referenced rules or any other
                  terms or provisions  of such  tenant's or occupant's  lease or
                  other contract.

              C.  Compliance with Regulations.  Except as otherwise  provided in
                  this Agreement,  by entering the Premises,  Tenant accepts the
                  Premises  in the  condition  existing  as of the  date of such
                  entry, subject to all existing or future applicable municipal,
                  state   and   federal   and   other   governmental   statutes,
                  regulations, laws and ordinances,  including zoning ordinances
                  and regulations  governing and relating to the use,  occupancy
                  and   possession  of  the  Premises  and  the  use,   storage,
                  generation  and disposal of Hazardous  Materials  (hereinafter
                  defined)   in,  on  and  under  the   Premises   (collectively
                  "Regulations").  Subject to the terms and  conditions  of this
                  Agreement,  Tenant,  at is sole expense,  shall use and occupy
                  the Premises in compliance with all laws,  including,  without
                  limitation,  the  Americans  With  Disabilities  Act,  orders,
                  judgments,   ordinances,   regulations,   codes,   directives,
                  permits, licenses, covenants and restrictions now or hereafter
                  applicable    to   the    Premises    (collectively,    "Legal
                  Requirements").  The Premises  shall not be used as a place of
                  public accommodation under the Americans With Disabilities Act
                  or  similar  state   statutes  or  local   ordinances  or  any
                  regulations promulgated thereunder, all as may be amended from
                  time  to  time.  Tenant  shall,  at  its  expense,   make  any
                  alterations or modifications,  within or without the Premises,
                  that are  required by Legal  Requirements  related to Tenant's
                  use or  occupation of the  Premises.  Except for  pre-existing
                  obligations  and those  obligations  placed on the Landlord by
                  this Lease Agreement,  Tenant shall, at Tenant's sole expense,
                  strictly comply with all Regulations now in force or which may
                  hereafter be in force  relating to the Premises and the use of
                  the  Premises  and/or  the  use,   storage  or  generation  of
                  Hazardous  Materials  in, on and under  the  Premises.  Tenant
                  shall at its sole cost and expense obtain any and all licenses
                  or permits necessary for Tenant's use of the Premises.  Tenant
                  shall  comply  with  the  requirements  of any  board  of fire
                  underwriters   or  other   similar   body  now  or   hereafter
                  constituted. Tenant shall be solely responsible for compliance
                  with any  requirements  for  modification  to the  Premises to
                  provide for fire  prevention or  suppression  improvements  or
                  modifications,  including  sprinkler  requirements,  as public
                  officials  or law may  require.  Tenant shall not do or permit
                  anything to be done in, on, or about the  Premises or bring or
                  keep  anything  which will in any way increase the rate of any
                  insurance upon the Premises,  Building or Project, or upon any
                  contents  therein,  or cause a cancellation of said insurance.
                  Tenant  shall  indemnify,  defend,  protect and hold  Landlord
                  harmless  from and against any loss,  cost,  expense,  damage,
                  attorneys'  fees or  liability  arising  out of the failure to
                  Tenant to comply  with any  applicable  law or  regulation  or
                  comply with the  requirements as set forth herein.  The taking
                  of  possession of the Premises  shall be  conclusive  evidence
                  that Tenant accepts the Premises and that the Premises were in
                  good condition at the time  possession was taken.  Despite any
                  provision herein to the contrary,  if any asbestos  containing
                  materials  (ACM) is found to exist in the Premises,  which ACM
                  is either (i) friable or  otherwise  dangerous in its existing
                  condition,  or (ii)  necessary  to remove  for the  purpose of
                  completing the tenant  improvement work, then Landlord will be
                  obligated  to  remove  the  ACM  at  its  own  cost,  up  to a
                  cumulative total of $50,000. If the ACM abatement costs exceed
                  $50,000  for  the  total  of all  property  leased  hereunder,
                  Landlord  shall  have the right to  terminate  this lease with
                  respect to any suite where the $50,000 cap would be  exceeded;
                  Tenant shall have the right to any amount in excess of $50,000
                  at its written election within fifteen (15) days of notice; if
                  either  Landlord or Tenant  elect not to proceed  with payment
                  for ACM  abatement  in  excess  of  $50,000  they  shall do so
                  without liability to the other for such election

                  D.  Hazardous  Wastes  Materials.  Excepting  those  chemicals
                  consistent with normal office use ( office cleaning solutions,
                  white out),  Tenant shall not cause,  or allow any of Tenant's
                  Parties  to  cause,  any  Hazardous   Materials  to  be  used,
                  generated, stored or disposed of on or about the Premises, the
                  Building or the  Project.  As used in this  Lease,  "Hazardous
                  Materials"  shall include,  but not be limited to,  "hazardous
                  materials,"  "hazardous  wastes," "toxic substances," or other
                  similar  designations  in any  federal,  state or  local  law,
                  regulation,  or ordinance.  Landlord  shall have the right but
                  not the  obligation  at all  reasonable  times to inspect  the
                  Premises and to conduct tests and  investigations to determine
                  whether Tenant is in compliance with the foregoing provisions,
                  the costs of all such inspections, tests and investigations to
                  be borne by Tenant.  Tenant shall indemnify,  defend,  protect
                  and hold Landlord  harmless from and against all  liabilities,
                  losses, costs and expenses,  demands, causes of action, claims
                  or judgments  directly or  indirectly  arising out of the use,
                  generation,  storage or disposal  of  Hazardous  Materials  by
                  Tenant  or any of  Tenant's  Parties,  which  indemnity  shall
                  include,  without  limitation,  the  cost of any  required  or
                  necessary   repair,   cleanup  or   detoxification,   and  the
                  preparation  of any closure or other required  plans,  whether
                  such action is required or necessary prior to or following the
                  termination  of this Lease.  Neither  the  written  consent by
                  Landlord  to the  use,  generation,  storage  or  disposal  of
                  Hazardous  Materials  nor the strict compliance by Tenant with
                  all laws pertaining to Hazardous Materials shall excuse Tenant
                  from Tenant's  obligation of indemnification  pursuant to this
                  Lease.   Tenant's   obligations   pursuant  to  the  foregoing
                  indemnity shall survive the termination of this Lease.  Tenant
                  shall not be held liable in any manner for the presence of any
                  Hazardous   Materials  existing  on  or  about  the  Premises,
                  Buildings or the Project prior to the first  Commencement Date
                  of the Lease.

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


       RENT   6.  A. Base Rent.  Tenant  shall pay to Landlord,  without  demand
                  throughout the Term, Base Rent as specified in the Basic Lease
                  Information,  payable in monthly installments in advance on or
                  before the first day of each calendar  month,  in lawful money
                  of the United States,  without deduction or offset whatsoever,
                  at the address  specified in the Basic Lease Information or to
                  such other place as Landlord  may from time to time  designate
                  in writing.  Base Rent and estimated  monthly Basic  Operating
                  Cost for the  first  full  month of the Term  shall be paid by
                  Tenant upon

                                        2

                                       APPROVAL INITIALS: [??] Landlord     [??]
                                       Tenant

<PAGE>




                 Tenant's execution of this Lease. If the obligation for payment
                 of Base Rent  commences on other than the first day of a month,
                 then Base Rent and the estimated  monthly Basic  Operating Cost
                 payment shall be prorated and the prorated installment shall be
                 paid on the first day of the calendar month next succeeding the
                 Term Commencement Date.

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

      BASIC   7. A. Basic  Operating Cost. In addition to the Base Rent required
  OPERATING      to be paid  hereunder,  Tenant  shall pay as  Additional  Rent,
       COST      Tenant's  Proportionate  Share,  as defined in the Basic  Lease
                 Information,  of Basic  Operating  Cost in the manner set forth
                 below.  Landlord shall account for each item of Basic Operating
                 Cost as either a cost  attributable  to the  Building or to the
                 Project,   as  determined   by  Landlord  in  Landlord's   sole
                 discretion,  and unless provided to the contrary in this Lease,
                 Tenant shall pay the applicable Tenant's Proportionate Share of
                 each such Basic Operating Cost, as set forth in the Basic Lease
                 Information.  Basic  Operating Cost shall mean all expenses and
                 costs of every  kind and  nature  which  Landlord  shall pay or
                 become  obligated to pay,  because of or in connection with the
                 management,  maintenance,  preservation  and  operation  of the
                 Project and its supporting facilities (determined in accordance
                 with generally  accepted  accounting  principles,  consistently
                 applied) including but not limited to the following:           
              
                 (1) Taxes. All real property taxes,  possessory interest taxes,
                 business or license taxes or fees,  service payments in lieu of
                 such  taxes or fees,  annual or  periodic  license or use fees,
                 excises, transit charges, housing fund assessments,  open space
                 charges,  assessments,  levies,  fees or  charges  general  and
                 special,  ordinary  and  extraordinary,  unforeseen  as well as
                 foreseen, of any kind (including fees "in-lieu" of any such tax
                 or assessment) which are assessed, levied, charged,  confirmed,
                 or  imposed  by any  public  authority  upon the  Project,  its
                 operations  or the Rent (or any portion or  component  thereof)
                 (all of the foregoing being hereinafter  collectively  referred
                 to  as  "real   property   taxes"),   or  any  tax  imposed  in
                 substitution,  partially  or  totally,  of any  tax  previously
                 includcd  within the definition of real property  taxes, or any
                 additional  tax the  nature  of which was  previously  included
                 within  the  definition  of real  property  taxes,  except  (a)
                 inheritance  or estate taxes  imposed upon or assessed  against
                 the Project,  or any part thereof or interest therein,  and (b)
                 taxes  computed upon the basis of net income of Landlord or the
                 owner of any interest therein,  except as otherwise provided in
                 the following sentence. Basic Operating Cost shall also include
                 any taxes, assessments, or any other fees imposed by any public
                 authority  upon or  measured  by the  monthly  rental  or other
                 charges payable hereunder,  including,  without limitation, any
                 gross income tax or excise tax levied by the local governmental
                 body with  respect  to receipt of such  rental,  or upon,  with
                 respect  to  or  by  reason  of  the  development,  possession,
                 leasing,  operation,   management,   maintenance,   alteration,
                 repair,  use or  occupancy  by  Tenant of the  Premises  or any
                 portion  thereof,  or upon this  transaction or any document to
                 which Tenant is a party creating or transferring an interest or
                 an estate in the  Premises.  In the event  that it shall not be
                 lawful for Tenant to reimburse  Landlord for all or any part of
                 such taxes,  the monthly  rental payable to Landlord under this
                 Lease  shall be revised to net to  Landlord  the same total net
                 rental after  imposition of any such taxes by Landlord as would
                 have been payable to Landlord  prior to the payment of any such
                 taxes.

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

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

                 (4) Services.  Except as otherwise  provided in this Section 7,
                 all expenses  relating to maintenance,  and service  agreements
                 and  services,  and costs of  supplies  and  equipment  used in
                 maintaining   the  Premises,   Building  and  Project  and  the
                 equipment  therein  and  the  adjacent  sidewalks,   driveways,
                 parking and service areas, including, without limitation, alarm
                 service,  window  cleaning,   elevator  maintenance,   Building
                 exterior maintenance and landscaping.

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

                 (6) Management  Fee. A management and accounting  cost recovery
                 fee equal to five percent (5%) of the Basic Operating Cost.

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

                                        3
                                          APPROVAL INITIALS:  ????? Landlord ???
                                          Landlord

<PAGE>

                 certified  public  accountants.  Legal and accounting  expenses
                 shall  be  reasonable and shall  not  include  the  cost of any
                 enforcement or eviction  action  against  another tenant at the
                 Project.

                 In the event that the Building is not fully occupied during any
                 fiscal year of the as  determined  by Landlord,  an  adjustment
                 shall be made in computing  the Basic  Operating  Cost for such
                 year so that Tenant pays an  equitable  portion of all variable
                 items of Basic  Operating  Cost,  as  reasonably  determined by
                 Landlord.

                 In calculating the Basic  Operating Cost,  Landlord shall apply
                 the following provision:

                     Any  category  of  costs  allocated  to  the  Buildings  in
                 question,  the other  Buildings of the Project  shall also bear
                 the burden for those  categories  of costs,  so that such costs
                 will be  uniformly  treated as Building  costs  throughout  the
                 Project, on a consistent and non-discriminatory basis. The same
                 shall apply for categories of costs allocated as Project costs.

                     Insurance   deductibles   in  excess  of  $5,000  shall  be
                 amortized  over  the  useful  life  of  the  item  repaired  or
                 replaced.  Tenant  shall not be required  to pay the  insurance
                 deductible if the damage  results from the gross  negligence or
                 willful misconduct of Landlord or Landlord's agents,  employees
                 or contractors.

                 Basic Operating Cost shall not include  specific costs incurred
                 for the account of,  separately  billed to and paid by specific
                 tenants.  Notwithstanding  anything herein to the contrary,  in
                 any instance wherein  Landlord,  in Landlord's sole discretion,
                 deems  Tenant to be  responsible  for any amounts  greater than
                 Tenant's  Proportionate Share, Landlord shall have the right to
                 allocate costs in any manner Landlord deems appropriate.

                 The  following  items  shall be excluded  from Basic  Operating
                 Costs:  loan  payments;  brokers'  and  finders'  fees or other
                 commissions;  leasing expenses; depreciation on improvements or
                 equipment  and  machinery;  expenses  for  items  which are not
                 generally of use to all  tenants;  advertising  or  promotional
                 expenses; wages, salaries,  employee benefits and payroll taxes
                 for Landlord's  personnel  (except to the extent such personnel
                 are  employed  to operate  or repair the  Project or the common
                 area);  costs  incurred  by  Landlord  in  connection  with the
                 clean-up or removal of any Hazardous  Materials  existing prior
                 to the  respective  Commencement  Dates of the Lease  Term:  or
                 costs or expenses  incurred due to violation by Landlord of any
                 term or condition of the Lease.  In addition,  Basic  Operating
                 Costs shall be reduced by insurance or other recoveries or user
                 fees.

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

                 C. Computation of  Basic  Operating  Cost  Adjustment.   "Basic
                 Operating Cost  Adjustment"  shall mean the difference  between
                 Estimated Basic Operating Cost and Basic Operating Cost for any
                 fiscal year  determined  as  hereinafter  provided.  Within one
                 hundred twenty (120) days after the end of each fiscal year, as
                 determined by Landlord,  or as soon  thereafter as practicable,
                 Landlord shall deliver to Tenant a statement of Basic Operating
                 Cost  for  the  fiscal  year  just  ended,   accompanied  by  a
                 computation  of Basic  Operating  Cost  Adjustment.  Landlord's
                 statement of Basic  Operating Costs should include a reasonable
                 line-item  breakdown and  reasonable  supporting  data. If such
                 statement  shows that  Tenant's  payment  based upon  Estimated
                 Basic Operating Cost is less than Tenant's  Proportionate Share
                 of Basic  Operating Cost, then Tenant shall pay to Landlord the
                 difference  within  twenty  (20)  days  after  receipt  of such
                 statement.  If such statement  shows that Tenant's  payments of
                 Estimated Basic  Operating Cost exceed  Tenant's  Proportionate
                 Share of Basic  Operating  Cost,  then (provided that Tenant is
                 not in default under this Lease)  Landlord  shall pay to Tenant
                 the  difference  within twenty (20) days after delivery of such
                 statement to Tenant.  If this Lease has been  terminated or the
                 Term  hereof has expired  prior to the date of such  statement,
                 then the Basic Operating Cost  Adjustment  shall be paid by the
                 appropriate  party  within  twenty  (20) days after the date of
                 delivery  of the  statement.  Should  this  Lease  commence  or
                 terminate  at any time  other  than the first day of the fiscal
                 year, Tenant's  Proportionate Share of the Basic Operating Cost
                 adjustment  shall be prorated by  reference to the exact number
                 of calendar  days during such fiscal year that this Lease is in
                 effect.

                 D. Net Lease.  This shall be a net Lease and Base Rent shall be
                 paid to  Landlord  absolutely  net of all costs  and  expenses,
                 except as specifically  provided to the contrary in this Lease.
                 The  provisions  for  payment of Basic  Operating  Cost and the
                 Basic  Operating  Cost  Adjustment  are  intended to pass on to
                 Tenant and reimburse Landlord

                                        4
                                           APPROVAL INITIALS: ???? Landlord ???
                                           Tenant

<PAGE>

                 for all costs and expenses of the nature described in Paragraph
                 7.A. incurred in connection with the ownership, maintenance and
                 operation  of the  Building  or  Project  and  such  additional
                 facilities now and in subsequent  years as may be determined by
                 Landlord to the be necessary to the Building or Project.

                 E. Janitorial  Service.  Tenant shall be solely responsible for
                 all interior janitorial maintenance of the Premises.

                 F. Tenant  Audit.  In the event that Tenant  shall  dispute the
                 amount set forth in any  statement  provided by Landlord  under
                 Paragraph 7.B or 7.C. above,  Tenant shall have the right,  not
                 later  than  thirty  (30)  days following  the  receipt of such
                 statement  and upon  the  condition  that  Tenant  shall  first
                 deposit  with  Landlord  the full amount in  dispute,  to cause
                 Landlord's  books and records with  respect to Basic  Operating
                 Cost for such  fiscal  year to be audited by  certified  public
                 accountants  selected  by  Tenant  and  subject  to  Landlord's
                 reasonable   right  of  approval.   The  Basic  Operating  Cost
                 Adjustment shall be appropriately adjusted on the basis of such
                 audit.  If such audit  discloses  a  liability  for a refund in
                 excess  of  seven  and one  half  percent  (7.5%)  of  Tenant's
                 Proportionate  Share of the  Basic  Operating  Cost  Adjustment
                 previously  reported,  the cost of such audit shall be borne by
                 Landlord;  otherwise  the cost of  such audit shall  be paid by
                 Tenant. If Tenant shall not request an audit in accordance with
                 the provisions of this  Paragraph 7.E.  within twenty (20) days
                 after  receipt of  Landlord's  statement  provided  pursuant to
                 Paragraph  7.8.  or 7.C.,  such  statement  shall be final  and
                 binding for all purposes hereof.

                 G. Three Day  Notice.  In the event  Tenant  fails to pay Basic
                 Operating  Costs when due as Additional  Rent,  Tenant shall be
                 subject to a three (3) day notice to pay rent or quit.

   INSURANCE  8. A.  Landlord's   Insurance.   Landlord  agrees  to  the  extent
AND INDEMNI-     reasonably   available  to  maintain   insurance  insuring  the
    FICATION     Building  against  fire,  lightning,  vandalism  and  malicious
                 mischief  (including,  if Landlord elects, "All Risk" coverage,
                 earthquake, and/or flood insurance), in an amount not less than
                 eight  percent  (80%) of the  replacement  cost  thereof,  with
                 deductibles  and the form and  endorsements of such coverage as
                 selected  by  Landlord.  Any cost  associated  with  Landlord's
                 procurement of "All Risk"  coverage,  earthquake,  and/or flood
                 insurance  shall  be  passed  through  to  Tenant  as  a  Basic
                 Operating Cost if such  insurance is available at  commercially
                 reasonable  rates. In addition Landlord shall procure insurance
                 against  loss of Base Rent and  Additional  Rent,  in an amount
                 equal to the amount of Base Rent and Additional Rent payable by
                 Tenant for a period of at least  twelve (12) months  commencing
                 on  the  date  of  loss  if  such  insurance  is  available  at
                 commercially  reasonable rates. Such insurance shall be for the
                 sole benefit of Landlord  and under  Landlord's  sole  control.
                 Landlord  shall  not be  obligated  to  insure  any  furniture,
                 equipment,  machinery,  goods or supplies which Tenant may keep
                 or maintain in the  Premises,  or any  leasehold  improvements,
                 additions or alterations within the Premises. Landlord may also
                 carry such other  insurance  as  Landlord  may deem  prudent or
                 advisable,  including, without limitation,  liability insurance
                 in such amounts and on such terms as Landlord shall determine. 
                                                                                
                 B. Tenant's Insurance.

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

                 (2)Liability  Insurance.  Tenant shall procure at Tenant's sole
                 cost and expense and keep in effect from the date of this Lease
                 and  at  all  times   until   the   end  of  the  Term   either
                 Comprehensive General Liability Insurance or Commercial General
                 Liability  insurance  applying to the use and  occupancy of the
                 Premises  and the  Building,  and any part of  either,  and any
                 areas adjacent thereto, and the business operated by Tenant, or
                 by any other  occupant on the Premises.  Such  insurance  shall
                 include Broad Form  Contractual  Liability  insurance  coverage
                 insuring Tenant's indemnity  obligations under this Lease. Such
                 coverage  shall  have  a  minimum   combined  single  limit  of
                 liability of at least One Million Dollars ($1,000,000.00),  and
                 a  general   aggregate   limit  of  One   Million   Dollars  ($
                 1,000,000.00).  All such policies  shall be written to apply to
                 bodily injury,  property  damage or loss,  personal  injury and
                 other covered loss,  however  occasioned,  occurring during the
                 policy  term,  shall be endorsed to add  Landlord and any party
                 holding an interest to which this Lease may be  subordinated as
                 an  additional  insured,  and shall  provide that such coverage
                 shall be primary and that any insurance  maintained by Landlord
                 shall be  excess  insurance  only.  Such  coverage  shall  also
                 contain  endorsements:  (i)  including  employees as additional
                 insureds;  (ii) deleting any liquor  liability  exclusion;  and
                 (iii)   providing   for  coverage  of   employer's   automobile
                 non-ownership  liability.  All such insurance shall provide for
                 severability  of interests;  and shall afford  coverage for all
                 claims  based on acts,  omissions,  injury  and  damage,  which
                 claims  occurred  or arose (or the onset of which  occurred  or
                 arose)  in whole or in part  during  the  policy  period.  Said
                 coverage  shall  be  written  on  an  "occurrence"   basis,  if
                 available.  If an  "occurrence"  basis  form is not  available,
                 Tenant must  purchase  "tail"  coverage  for the most number of
                 years available,  and tenant must also purchase "tail" coverage
                 if the  retroactive  date of a policy  form is changed so as to
                 leave  a gap  in  coverage  for  occurrences  that  might  have
                 occurred  in prior  years.  If a "claims  made"  policy is ever
                 used, the policy must be endorsed so that Landlord is given the
                 right to purchase  "tail" coverage should Tenant for any reason
                 not do so or if the policy is to be canceled for  nonpayment of
                 premium, provided such endorsement is available at commercially
                 reasonable rates.

                     (3) General Insurance Requirements. All coverages described
                 in this Paragraph  8.B.  shall be endorsed to provide  Landlord
                 with  thirty  (30) days'  notice of  cancellation  or change in
                 terms. If at any time during the Term the amount or coverage of
                 insurance   which  Tenant  is  required  to  carry  under  this
                 Paragraph 8.B. is, in Landlord's

                                        5
                                          APPROVAL INITIALS:  ???? Landlord ???
                                          Tenant

<PAGE>

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

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

  WAIVER OF   9.     To the extent  permitted by law and without  affecting  the
   SUBROGA-      coverage  provided by  insurance  to be  maintained  hereunder,
       TION      Landlord and Tenant each waive any right to recover against the
                 other for:  (a) damages for injury to or death of persons;  (b)
                 damages to  property;  (c) damages to the  Premises or any part
                 thereof,  and (d) claims arising by reason of the foregoing due
                 to hazards  covered  by  insurance  to the  extent of  proceeds
                 recovered therefrom. This provision is intended to waive fully,
                 and for the benefit of each  party,  any rights  and/or  claims
                 which might give rise to a right of subrogation in favor of any
                 insurance carrier. The coverage obtained by each party pursuant
                 to this Lease shall include,  without  limitation,  a waiver of
                 subrogation  by the carrier which conforms to the provisions of
                 this paragraph.                                                
              
 LANDLORD'S   10.    Landlord   shall  at   Landlord's   expense   maintain  the
REPAIRS AND      structural  soundness of the  structural  portions of the roof,
   SERVICES      foundations  and exterior walls of the Building in good repair,
                 reasonable wear and tear excepted. The term "exterior walls" as
                 used herein  shall not include  windows,  glass or plate glass,
                 doors,  special store fronts or office entries.  Landlord shall
                 perform on behalf of Tenant and other  tenants of the  Project,
                 as an item or office entries.  Landlord shall perform on behalf
                 of Tenant and other tenants of the Project, as an item of Basic
                 Operating Cost, the maintenance of the Building,  Project,  and
                 public  and  common  areas of the  Project,  including  but not
                 limited to the roof, pest extermination,  the landscaped areas,
                 parking  areas,  driveways,   the  truck  staging  areas,  fire
                 sprinkler   systems,    sanitary   and   storm   sewer   lines,
                 non-structural  portions of the roof,  roof  membrane,  utility
                 services,   electric  and  telephone  equipment  servicing  the
                 Building(s)  exterior lighting,  and anything which affects the
                 operation  and  exterior  appearance  of  the  Project,   which
                 determination  shall be at Landlord's sole  discretion.  Except
                 for the  expenses  directly  involving  the items  specifically
                 described in the first  sentence of this  Paragraph  10, Tenant
                 shall  reimburse  Landlord  for all  costs in  accordance  with
                 Paragraph 7. Any damage  caused by or repairs  necessitated  by
                 any act of Tenant may be repaired  by  Landlord  at  Landlord's
                 option and at Tenant's  expense.  Tenant shall immediately give
                 Landlord  written notice of any defect or need of repairs after
                 which  Landlord  shall have a reasonable  opportunity to repair
                 same.   Landlord's  liability  with  respect  to  any  defects,
                 repairs, or maintenance for which Landlord is responsible under
                 any of the  provisions  of this  Lease  shall be limited to the
                 cost of such repairs or maintenance.
              
   TENANT'S   11.    Tenant shall at Tenant's  expense maintain all parts of the
    REPAIRS      Premises in a good clean and secure condition and promptly make
                 all  necessary  repairs  and  replacements,  including  but not
                 limited to all windows,  glass, doors, walls and wall finishes,
                 floor  covering,  heating,  ventilating  and  air  conditioning
                 systems,  truck doors, dock bumpers,  dock plates and levelers,
                 plumbing work and fixtures, downspouts, electrical and lighting
                 systems, and fire sprinklers.  Tenant shall at Tenant's expense
                 also perform regular removal of trash and debris. Tenant shall,
                 at  Tenant's  own  expense,  enter into a  regularly  scheduled
                 preventative  maintenance/service  contract  with a maintenance
                 contractor  for  servicing  all  hot  water,  heating  and  air
                 conditioning  systems  and  equipment  within  or  serving  the
                 Premises.  The maintenance  contractor and the contract must be
                 approved by  Landlord.  The service  contract  must include all
                 services  suggested by the  equipment  manufacturer  within the
                 operation/maintenance  manual and must become  effective  and a
                 copy  thereof  delivered  to Landlord  within  thirty (30) days
                 after the Term  Commencement  Date. Tenant shall not damage any
                 demising wall or disturb the integrity and support  provided by
                 any demising  wall and shall,  at its own expense,  immediately
                 repair  any  damage to any  demising  wall  caused by Tenant or
                 Tenant's Parties.
              
                                        6
                                           APPROVAL INITIALS: ????  Landlord ???
                                           Tenant

<PAGE>


ALTERATIONS  12.     Excepting   non-structural   alterations  to  the  Premises
                 costing less than five  thousand  dollars  ($5,000.00),  Tenant
                 shall  not  make,  or  allow  to be made,  any  alterations  or
                 physical  additions  in,  about  or  to  the  Premises  without
                 obtaining the prior written consent of Landlord,  which consent
                 shall not be  unreasonably  withheld  with  respect to proposed
                 alterations and additions which: (a) comply with all applicable
                 laws, ordinances,  rules and regulations; (b) are in Landlord's
                 opinion   compatible  with  the  Project  and  its  mechanical,
                 plumbing,  electrical,   heating/ventilation/air   conditioning
                 systems;  and (c) will not interfere with the use and occupancy
                 of any other  portion of the  Building  or Project by any other
                 tenant or its invitees.  Specifically, but without limiting the
                 generality of the  foregoing,  Landlord shall have the right of
                 written  consent  for  all  plans  and  specifications  for the
                 proposed  alterations  or  additions,  construction  means  and
                 methods,  all appropriate permits and licenses,  any contractor
                 or  subcontractor  to be employed on the work of alterations or
                 additions,  and the time for  performance of such work.  Tenant
                 shall also supply to Landlord  any  documents  and  information
                 reasonably  requested by Landlord in connection with Landlord's
                 consideration of a request for approval hereunder. Tenant shall
                 reimburse  Landlord  for all costs which  Landlord may incur in
                 connection  with the  granting  approval to Tenant for any such
                 alterations  and  additions,  including  any costs or  expenses
                 which Landlord may incur in electing to have outside architects
                 and engineers  review said plans and  specifications.  All such
                 alterations,  physical  additions or improvements  shall remain
                 the  property of Tenant  until  termination  of this Lease,  at
                 which time they shall be and become the property of Landlord if
                 Landlord so elects;  provided,  however,  that Landlord may, at
                 Landlord's  option,  require that Tenant,  at Tenant's expense,
                 remove  any or all  alterations,  additions,  improvements  and
                 partitions  made by Tenant  and  restore  the  Premises  by the
                 termination  of this  Lease,  whether  by  lapse  of  time,  or
                 otherwise,   to   their   condition   existing   prior  to  the
                 construction of any such alterations,  additions, partitions or
                 leasehold improvements. All such removals and restoration shall
                 accomplished  in a good  and  workmanlike  manner  so as not to
                 cause any  damage to the  Premises  or Project  whatsoever.  If
                 Tenant  fails  to  so  remove  such   alterations,   additions,
                 improvements  and  partitions  or  Tenant's  trade  fixtures or
                 furniture, Landlord may keep and use them or remove any of them
                 and  cause  them  to be  stored  or  sold  in  accordance  with
                 applicable  law, at Tenant's sole  expense.  In addition to and
                 wholly  apart  from  Tenant's   obligations   to  pay  Tenant's
                 Proportionate  Share of Basic Operating  Cost,  Tenant shall be
                 responsible for and shall pay prior to delinquency any taxes or
                 governmental  service fees,  possessory interest taxes, fees or
                 charges in lieu of any such  taxes,  capital  levies,  or other
                 charges  imposed  upon,  levied  with  respect  to or  assessed
                 against its personal property, on the value of the alterations,
                 additions or improvements within the Premises,  and on Tenant's
                 interest  pursuant to this  Lease.  To the extent that any such
                 taxes are not separately  assessed or billed to Tenant,  Tenant
                 shall pay the amount thereof as invoiced to Tenant by Landlord.
                 Tenant,  at its own cost and  expense  and  without  Landlord's
                 prior  approval may erect such  shelves,  bins,  machinery  and
                 trade fixtures  (collectively "Trade Fixtures") in the ordinary
                 course  of its  business  provided  that  such do not alter the
                 basic character of the Premises,  do not overload or damage the
                 Premises,  and may be removed  without  injury to the Premises,
                 and  the  construction,   erection,  and  installation  thereof
                 complies  with  all  Legal  Requirements  and  with  Landlord's
                 requirements  set forth  above.  Tenant  shall remove its Trade
                 Fixtures and shall repair any damage caused by such removal.

SIGNS        13.     Landlord  shall allow at Tenant's sole cost and expense the
                 installation of building  signage subject to Landlord's and the
                 City of San  Carlos's  approval  and  consistent  with  the San
                 Carlos  Business  Park's current signage program as outlined by
                 the Project's Sign Criteria,  attached  hereto as Exhibit D and
                 incorporated  by this reference.  Any  installation of signs or
                 graphics on or about the Premises and Project  shall be subject
                 to any applicable  governmental laws,  ordinances,  regulations
                 and to any other requirements imposed by Landlord. Tenant shall
                 remove all such signs and graphics prior to the  termination of
                 this Lease.  Such  installations  and removals shall be made in
                 such manner as to avoid injury or  defacement  of the Premises,
                 Building  or Project  and any other  limitation,  discoloration
                 caused by such installation or removal.

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

UTILITIES    15.     Tenant  shall pay directly for all water,  gas,  heat,  air
                 conditioning, light, power, telephone, sewer, sprinkler charges
                 and other  utilities and services used on or from the Premises,
                 together  with any  taxes,  penalties,  surcharges  or the like
                 pertaining  thereto,  and maintenance charges for utilities and
                 shall furnish all electric light bulbs,  ballasts and tubes. If
                 any such services are not separately metered to Tenant,  Tenant
                 shall pay a reasonable  proportion,  as determined by Landlord,
                 of all charges jointly  serving other premises.  Landlord shall
                 not be liable for any damages directly or indirectly  resulting
                 from nor shall the Rent or any monies owed Landlord  under this
                 Lease  herein   reserved  be  abated  by  reason  of:  (a)  the
                 installation,  use or interruption of use of any equipment used
                 in  connection  with the  furnishing  of any such  utilities or
                 services; (b) the failure to furnish or delay in furnishing any
                 such utilities or

                                       7

                                         APPROVAL INITIALS: ????? Landlord ????
                                         Tenant

<PAGE>

                 services when such failure or delay is caused by acts of God or
                 the elements, labor disturbances of any character, or any other
                 accidents or other conditions beyond the reasonable  control of
                 Landlord;  or (c) the  limitation,  curtailment,  rationing  or
                 restriction on use of water, electricity, gas or any other form
                 of energy or any other  service or utility  whatsoever  serving
                 the  Premises  or  Project.   Landlord  shall  be  entitled  to
                 cooperate  voluntarily and in a reasonable  manner with efforts
                 of national,  state or local  governmental  agencies or utility
                 suppliers in reducing energy or other resource consumption. The
                 obligation  to  make  services  available  hereunder  shall  be
                 subject to the  limitations of any such  voluntary,  reasonable
                 program.  Notwithstanding  the  foregoing,  in  the  event  any
                 interruption  of  utilities or Building  services  specified in
                 this Paragraph 15 continues for more than seven (7) consecutive
                 days,  and the  Premises  are  rendered  unusable  for Tenant's
                 proposed  use, then Rent shall be abated for the time period of
                 such interruption.

 SUBORDI-   16.      Without the  necessity  of any  additional  document  being
   NATION        executed   by  Tenant   for  the   purpose   of   effecting   a
                 subordination,  the Lease shall be subject and  subordinate  at
                 all times to: (a) all ground leases or underlying  leases which
                 may now exist or hereafter be executed  affecting  the Premises
                 and/or  the land  upon  which  the  Premises  and  Project  are
                 situated,  or both; and (b) any mortgage or deed of trust which
                 may now exist or be  placed  upon said  Project,  land,  ground
                 leases or underlying  leases, or Landlord's  interest or estate
                 in  any  said   items   which   is   specified   as   security.
                 Notwithstanding the foregoing, Landlord shall have the right to
                 subordinate or cause to be subordinated  any such ground leases
                 or  underlying  leases or any such liens to this Lease.  In the
                 event that any ground lease or underlying  lease terminates for
                 any reason or any mortgage or deed of trust is  foreclosed or a
                 conveyance  in lieu of  foreclosure  is  made  for any  reason,
                 Tenant shall, notwithstanding any subordination,  attorn to and
                 become the Tenant of the  successor  in interest to Landlord at
                 the option of such successor in interest.  Within ten (10) days
                 after request by Landlord, Tenant shall execute and deliver any
                 additional  documents  evidencing  Tenant's  attornment  or the
                 subordination  of this  Lease with  respect to any such  ground
                 leases or  underlying  leases or any such  mortgage  or deed of
                 trust,  in the form  requested  by  Landlord  or by any  ground
                 landlord,  mortgagee,  or  beneficiary  under a deed of  trust.
                 Landlord shall use its best efforts to obtain a non-disturbance
                 agreement  for Tenant's  benefit but shall have no liability if
                 its lender fails to do so. Landlord's equity in the property is
                 several million dollars.


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

   ESTOPPEL  18.     Tenant agrees from time to time, within ten (10) days after
CERTIFICATE      request of  Landlord,  to deliver to  Landlord,  or  Landlord's
                 designee, an estoppel certificate stating that this Lease is in
                 full  force and  effect,  the date to which Rent has been paid,
                 the  unexpired  portion of this Lease,  and such other  matters
                 pertaining  to this  Lease as may be  reasonably  requested  by
                 Landlord.  Failure  by  Tenant  to  execute  and  deliver  such
                 certificate  shall constitute an acceptance of the Premises and
                 acknowledgment by Tenant that the statements  included are true
                 and correct without exception.  Landlord and Tenant intend that
                 any  statement  delivered  pursuant  to this  Paragraph  may be
                 relied  upon  by  any  mortgagee,  beneficiary,   purchaser  or
                 prospective  purchaser of the Project or any interest  therein.
                 The parties  agree that  Tenant's  obligation  to furnish  such
                 estoppel  certificates  in  a  timely  fashion  is  a  material
                 inducement for Landlord's  execution of the Lease, and shall be
                 an event of default  if Tenant  fails to fully  comply.  Tenant
                 shall indemnify  Lessor for any loss caused by Tenant's failure
                 to  timely   execute   an   estoppel   certificate,   including
                 consequential  damages such as loss of financing or refinancing
                 or  loss of a  potential  sale of the  Property,  all of  which
                 events are deemed foreseeable by the parties to this Lease.
              

   SECURITY  19.     Tenant agrees to deposit with  Landlord  upon  execution of
    DEPOSIT      this  Lease,  a Security  Deposit as stated in the Basic  Lease
                 Information,  which  sum  shall  be held by  Landlord,  without
                 obligation  for interest,  as security for the  performance  of
                 Tenant's  covenants  and  obligations  under  this  Lease.  The
                 Security  Deposit is not an advance rental deposit or a measure
                 of damages  incurred by  Landlord in case of Tenant's  default.
                 Upon the occurrence of any event of default by Tenant, Landlord
                 may, from time to time,  without  prejudice to any other remedy
                 provided herein or provided by law, use such fund to the extent
                 necessary  to make good any  arrears of Rent or other  payments
                 due to  Landlord  hereunder,  and  any  other  damage,  injury,
                 expense  or  liability  caused by such  event of  default,  and
                 Tenant shall pay to Landlord,  on demand, the amount so applied
                 in  order to  restore  the  Security  Deposit  to its  original
                 amount.  Although  the  Security  Deposit  shall be deemed  the
                 property of  Landlord,  any  remaining  balance of such deposit
                 shall be  returned  by  Landlord  to Tenant at such time  after
                 termination  of this  Lease  that all of  Tenant's  obligations
                 under  this  Lease have been  fulfilled.  Landlord  may use and
                 commingle the Security Deposit with other funds of Landlord.
                                                                                
   TENANT'S  20.     The  liability  of  Landlord  to Tenant for any  default by
   REMEDIES      Landlord  under  the  terms  of this  Lease  are  not  personal
                 obligations  of the  individual or other  partners,  directors,
                 officers and  shareholders  of Landlord,  and Tenant  agrees to
                 look  solely to  Landlord's  interest  in the  Project  for the
                 recovery  of any amount  from  Landlord,  and shall not look to
                 other assets of Landlord nor seek  recourse  against the assets
                 of the  individual or other  partners,  directors  officers and
                 shareholders of Landlord. Any lien obtained to enforce any such
                 judgment and any levy of execution thereon shall be subject and
                 subordinate  to any  lien,  mortgage  or deed of  trust  on the
                 Project.
 
    ASSIGN-  21. A.  General.  Tenant shall not assign or sublet the Premises or
   MENT AND      any part thereof  without  Landlord's  prior written  approval,
 SUBLETTING      such approval not to be unreasonably  withheld,  conditioned or
                 delayed except as provided herein.  If Tenant desires to assign
                 this Lease or sublet any or all of the  Premises,  Tenant shall
                 give Landlord written notice  forty-five (45) days prior to the
                 anticipated  effective  date  of the  assignment  or  sublease.
                 Landlord  shall  then  have  a  period  of  fifteen  (15)  days
                 following  receipt of such  notice to notify  Tenant in writing
                 that Landlord elects either:
              
                                        8
                                          APPROVAL INITIALS: ???? Landlord ???
                                          Tenant
<PAGE>

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

                 B. Bonus  Rent.  Any Rent or other  consideration  realized  by
                 Tenant under any such  sublease or  assignment in excess of the
                 Rent  payable  hereunder,  after  amortization  of a reasonable
                 brokerage  commission  shall be  divided and paid, ten  percent
                 (10%) to  Tenant,  ninety  percent  (90%) to  Landlord.  In any
                 subletting  or assignment  undertaken  by Tenant,  Tenant shall
                 diligently  seek to obtain the maximum rental amount  available
                 in the marketplace for such subletting or assignment.

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

                 Landlord's   prior  consent  shall  not  be  required  for  any
                 assignment or sublease of Tenant's  interest in the Premises or
                 the Lease to any  corporation  with  which  Tenant may merge or
                 consolidate  or  become  affiliated  as a  parent,  subsidiary,
                 holding  company or otherwise,  or to an entity in which Tenant
                 has a  controlling  interest  provided  such entity's net worth
                 exceeds Tenant's net worth.

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

                 E. Liability.  Except as otherwise  provided,  no assignment or
                 subletting  by Tenant shall  relieve  Tenant of any  obligation
                 under this Lease.  Any assignment or subletting which conflicts
                 with the provisions hereof shall be void.

  AUTHORITY  22.        Landlord  represents  and  warrants  that  it  has  full
 OF PARTIES      right and  authority  to enter into this  Lease  and to perform
                 all of Landlord's obligations hereunder.  Tenant represents and
                 warrants  that it has full  right and  authority  to enter into
                 this  Lease  and  to  perform  all  of   Tenant's   obligations
                 hereunder.
               
    CONDEM-  23. A. Condemnation  Resulting in Termination.  If the whole or any
     NATION      substantial  part of the  Project of which the  Premises  are a
                 part  should be taken or  condemned  for any  public  use under
                 governmental  law,  ordinance  or  regulation,  or by  right of
                 eminent domain, or by private purchase in lieu thereof, and the
                 taking would prevent or materially interfere with the Permitted
                 Use of the  Premises,  this Lease shall  terminate and the Rent
                 shall be abated  during the  unexpired  portion of this  Lease,
                 effective when the physical  taking of said Premises shall have
                 occurred.
           
                 B.  Condemnation Not Resulting in Termination.  If a portion of
                 the  Project of which the  Premises  are a part should be taken
                 orcondemned  for any  public  use under any  governmental  law,
                 ordinance, or regulation,  or by right of eminent domain, or by
                 private  purchase  in  lieu  thereof,  and  this  Lease  is not
                 terminated  as provided in Paragraph  23.A.  above,  this Lease
                 shall not terminate,  but the Rent payable hereunder during the
                 unexpired  portion of the Lease shall be reduced,  beginning on
                 the date when the physical taking shall have occurred,  to such
                 amount  as  may  be  fair  and  reasonable  under  all  of  the
                 circumstances.

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

                                        9

                                          APPROVAL INITIALS: ???? Landlord ????
                                          Tenant

<PAGE>

                 conveyance  under this  Section 23 Tenant  shall be entitled to
                 compensation  for the  value of any of the  unamortized  tenant
                 improvements   to  the   extent   Tenant   paid  for  any  such
                 improvements.

   CASUALTY  24. A.  General.  If the Premises or Building  should be damaged or
     DAMAGE      destroyed by fire, tornado or other casualty, Tenant shall give
                 immediate  written  notice  thereof to Landlord.  Within thirty
                 (30) days after  Landlord's  receipt of such  notice,  Landlord
                 shall notify Tenant whether in Landlord's  opinion such repairs
                 can  reasonably  be made  either:  (1) within one  hundred  and
                 eighty  (180) days;  or (2) in more than one hundred and eighty
                 (180)   days   from  the  date  of  such   notice.   Landlord's
                 determination shall be binding on Tenant.
              
                 B. Less Than 180 Days.  If the  Premises or Building  should be
                 damaged  by fire,  tornado or other  casualty  but only to such
                 extent that rebuilding or repairs can in Landlord's  estimation
                 be  reasonably  completed  within one hundred and eighty  (180)
                 days  after  the date of such  damage,  this  Lease  shall  not
                 terminate, and Landlord shall proceed to rebuild and repair the
                 Premises  in the manner  determined  by  Landlord,  except that
                 Landlord  shall not be required  to rebuild,  repair or replace
                 any  part  of the  partitions,  fixtures  additions  and  other
                 leasehold  improvements  which may have been  placed  in, on or
                 about the Premises.  If the Premises are  untenantable in whole
                 or in part  following such damage,  the Rent payable  hereunder
                 during  the  period  in which  they are  untenantable  shall be
                 abated  proportionately,  but  only  to the  extent  of  rental
                 abatement  insurance  proceeds  received by Landlord during the
                 time and to the extent the Premises are unfit for occupancy. If
                 Landlord's  insurer fails to make timely  payment of an insured
                 loss,  Landlord's  obligation will be abated for such period of
                 delay, not to exceed thirty (30) days.

                 C. Greater than 180 Days. If the Premises or Building should be
                 damaged  by fire,  tornado or other  casualty  but only to such
                 extent that rebuilding or repairs can in Landlord's  estimation
                 be  reasonably  completed  in more than one  hundred and eighty
                 (180) days, then Landlord shall have the option of either:  (1)
                 terminating the Lease effective upon the date of the occurrence
                 of such damage,  in which event the Rent shall be abated during
                 the unexpired  portion of the Lease; or (2) electing to rebuild
                 or repair the Premises to substantially  the condition in which
                 they existed  prior to such  damage,  provided  that  insurance
                 proceeds are available, to fully repair the damage, except that
                 Landlord  shall not be required  to rebuild,  repair or replace
                 any  part of the  partitions,  fixtures,  additions  and  other
                 improvements  which  may have been  placed  in, on or about the
                 Premises.  If the Premises are untenantable in whole or in part
                 following such damage,  the Rent payable  hereunder  during the
                 period  in  which  they  are   untenantable   shall  be  abated
                 proportionately,  but only to the  extent of  rental  abatement
                 insurance  proceeds received by Landlord during the time and to
                 the extent the Premises are unfit for  occupancy.  In the event
                 that  Landlord   should  fail  to  complete  such  repairs  and
                 rebuilding  within one hundred  eight (180) days after the date
                 upon which Landlord is notified by Tenant of such damage,  such
                 period of time to be extended for delays caused by the fault or
                 neglect  of Tenant or  because  of acts of God,  acts of public
                 agencies,  labor disputes,  strikes,  fires, freight embargoes,
                 rainy or story weather, inability to obtain materials, supplies
                 or fuels, or delays of the contractors or subcontractors or any
                 other causes or contingencies  beyond the reasonable control of
                 Landlord,  Tenant may at Tenant's  option  within ten (10) days
                 after  the  expiration  of such one  hundred  eighty  (180) day
                 period  (as  such may be  extended),  terminate  this  Lease by
                 delivering   written  notice  of  termination  to  Landlord  as
                 Tenant's exclusive remedy, whereupon all rights hereunder shall
                 cease and terminate thirty (30) days after  Landlord's  receipt
                 of such termination notice.

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

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

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

    HOLDING  25. If   Tenant  shall  retain   possession   of  the  Premises  or
       OVER      any portion thereof without  Landlord's  consent  following the
                 expiration of the Lease or sooner  termination  for any reason,
                 then  Tenant  shall  pay to  Landlord  for  each  day  of  such
                 retention  triple the amount of the daily rental as of the last
                 month prior to the date of  expiration or  termination.  Tenant
                 shall  also  indemnify,   defend,  protect  and  hold  Landlord
                 harmless from any loss, liability or cost, including reasonable
                 attorneys' fees, resulting form delay by tenant in surrendering
                 the Premises, including, without limitation, any claims made by
                 any succeeding tenant founded on such delay. Acceptance of Rent
                 by  Landlord  following  expiration  or  termination  shall not
                 constitute  a renewal of this Lease,  and nothing  contained in
                 this  Paragraph 25 shall waive  Landlord's  right or reentry or
                 any  other  right.  Unless  Landlord  consents  in  writing  to
                 Tenant's  holding  over,  Tenant  shall  be  only a  Tenant  at
                 sufferance,  whether  or not  Landlord  accepts  any Rent  from
                 Tenant while Tenant is holding over without  Landlord's written
                 consent.  Additionally,  in the event that upon  termination of
                 the Lease, Tenant has not fulfilled its obligation with respect
                 to repairs and cleanup of the Premises or any other Tenant     
              
                                       10
                                           APPROVAL INITIALS: ???? Landlord ???
                                           Tenant

<PAGE>

                 obligations  as set forth in this Lease,  then  Landlord  shall
                 have the  right to  perform  any such  obligations  as it deems
                 necessary  at  Tenant's  sole  cost and  expense,  and any time
                 required  by Landlord to  complete  such  obligations  shall be
                 considered  a period  of  holding  over  and the  terms of this
                 Paragraph 25 shall apply.

   DEFAULT  26.  A. Events of Default.  The  occurrence  of any of the following
                 shall constitute an event of default on the part of Tenant:

                 (1) Abandonment.  Abandonment  of the Premises for a continuous
                 period in excess of five (5) days "unless  Tenant  continues to
                 pay rent and perform all other  obligations of Tenant  required
                 under  this  Lease,  in  which  case  Tenant  shall  not  be in
                 default."  Tenant  waives  any right to notice  Tenant may have
                 under  Section  1951.3  of  the  Civil  Code  of the  State  of
                 California, the terms of this Paragraph 26.A. being deemed such
                 notice to Tenant as required by said Section 1951.3.

                 (2)  Nonpayment of Rent.  Failure to pay any instalment of Rent
                 or any other  amount due and  payable  hereunder  upon the date
                 when said  payment is due, and such failure is not cured within
                 five (5) days notice from Landlord specifying such failure.

                 (3) Other  Obligations.  Failure  to  perform  any  obligation,
                 agreement or covenant under this Lease other than those matters
                 specified in subparagraphs  (1) and (2) of this Paragraph 26.A,
                 such failure  continuing  for fifteen  (15) days after  written
                 notice of such failure,  provided,  however, that if the nature
                 of Tenant's  default is such that more than  fifteen  (15) days
                 are reasonably  required for its cure, then Tenant shall not be
                 deemed  to be in  default  under  this  Lease if  Tenant  shall
                 commence the cure of such default  within said fifteen (15) day
                 period  and use his  best  efforts  to  prosecute  the  same to
                 completion.

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

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

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

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

                 B. Remedies Upon Default.

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

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

                 C. Damages After Default.  Should Landlord terminate this Lease
                 pursuant  to the  provisions  of  Paragraph  26.B  (1)  hereof,
                 Landlord  shall  have the  rights  and  remedies  of a Landlord
                 provided  by  Section  1951.2 of the Civil Code of the State of
                 California,  or successor code sections. Upon such termination,
                 in addition to any other rights and remedies to which  Landlord
                 may  be  entitled  under  applicable  law,  Landlord  shall  be
                 entitled to recover from  Tenant:  (1) the worth at the time of
                 award of the  unpaid  Rent and  other  amounts  which  had been
                 earned at the time of

                                       11
                                           APPROVAL INITIALS: ???? Landlord ???
                                           Tenant

<PAGE>

                 termination,  (2) the worth at the time of award of the  amount
                 by which the unpaid  Rent which  would have been  earned  after
                 termination  until the time of award exceeds the amount of such
                 Rent  loss  that  Tenant  proves  could  have  been  reasonably
                 avoided;  (3) the  worth at the time of award of the  amount by
                 which the  unpaid  Rent for the  balance  of the Term after the
                 time of award  exceeds the amount of such Rent loss that Tenant
                 proves could be  reasonably  avoided;  and (4) any other amount
                 necessary  to   compensate   Landlord  or  all  the   detriment
                 proximately  caused by  Tenant's  failure to  perform  Tenant's
                 obligations  under this Lease or which,  in the ordinary course
                 of things,  would be likely to result therefrom.  The "worth at
                 the time of award" of the  amounts  referred  to in (1) and (2)
                 above  shall be  computed  by  discounting  such  amount at the
                 Federal  Discount  Rate  of the  Federal  Reserve  Bank  of San
                 Francisco at the time of the award.  If this Lease provides for
                 any periods during the Term during which Tenant is not required
                 to  pay  Base  Rent  or if  Tenant  otherwise  receives  a Rent
                 concession,  then upon the  occurrence  of an event of  default
                 Tenant  shall owe to Landlord the full amount of such Base Rent
                 or  value  of  such  Rent  concession,  plus  interest  at  the
                 Applicable  Interest Rate,  calculated  from the date that such
                 Base Rent or Rent concession would have been payable.

                 D. Late Charge. If any installment of Rent is not paid promptly
                 when due, and such failure is not cured prior to the expiration
                 of the  applicable  cure period  provided  herein,  such amount
                 shall bear  interest at the  Applicable  Interest Rate from the
                 date on which said payment shall be due until the date on which
                 Landlord  shall receive said payment. In addition, Tenant shall
                 pay  Landlord a late charge  equal to five  percent (5%) of the
                 delinquency,  to compensate Landlord for the loss of the use of
                 the amount not paid and the administrative  costs caused by the
                 delinquency,  the parties  agreeing that  Landlord's  damage by
                 virtue of such delinquencies  would be difficult to compute and
                 the amount  stated  herein  represents  a  reasonable  estimate
                 thereof. This  provision  shall not relieve  Tenant of Tenant's
                 obligation  to pay Rent at the time  and in the  manner  herein
                 specified.

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

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

 TRANSFERS   28.     In the event of a sale or  conveyance  by  Landlord  of the
        BY       Building or a foreclosure by any creditor of Landlord, the same
  LANDLORD       shall operate to release  Landlord from any liability  upon any
                 of the  covenants  or  conditions,  express or implied,  herein
                 contained  in favor of  Tenant,  to the extent  required  to be
                 performed   after   the   passing   of  title   to   Landlord's
                 successor-in-interest.  In such  event,  Tenant  agrees to look
                 solely to the  responsibility of the  successor-in-interest  of
                 Landlord  under this Lease with respect to the  performance  of
                 the covenants  and duties of  "Landlord" to be performed  after
                 the passing of title to Landlord's successor-in-interest.  This
                 Lease shall not be affected by any such sale and Tenant  agrees
                 to   attorn   to  the   purchaser   or   assignee.   Landlord's
                 successor(s)-in-interest  shall  not have  liability  to Tenant
                 with  respect to the failure to perform all of the  obligations
                 of "Landlord",  to the extent required to be performed prior to
                 the date such successor(s)-in-interest  became the owner of the
                 Building.                                                      
 
   RIGHT OF   29.    All  covenants  and  agreements  to be  performed by Tenant
LANDLORD TO      under  any of the terms of this  Lease  shall be  performed  by
    PERFORM      Tenant  at  Tenant's  sole cost and  expense  and  without  any
   TENANT'S      abatement  of  Rent.  If  Tenant  shall  fail to pay any sum of
  COVENANTS      money, other than Base Rent and Basic Operating Cost,  required
                 to be paid by Tenant  hereunder  or shall fail to  perform  any
                 other act on Tenant's part to be performed hereunder,  and such
                 failure shall  continue for five (5) days after notice  thereof
                 by Landlord, Landlord may, but shall not be obligated to do so,
                 and without waiving or releasing Tenant from any obligations of
                 Tenant,  make  any  such  payment  or  perform  any such act on
                 Tenant's  part to be made or  performed.  All sums,  so paid by
                 Landlord  and all  necessary  incidental  costs  together  with
                 interest thereon at the Applicable  Interest Rate from the date
                 of such  payment by  Landlord  shall be payable to  Landlord on
                 demand,  and Tenant  covenants  to pay such sums,  and Landlord
                 shall  have,  in  addition  to any  other  right or  remedy  of
                 Landlord,  the same  right  and  remedies  in the  event of the
                 non-payment  thereof  by  Tenant as in the case of  default  by
                 Tenant in the payment of Base Rent and Basic Operating Cost.   
              
WAIVER        30.    If either  Landlord or Tenant waives the performance of any
                 term,  covenant or  condition  contained  in this  Lease,  such
                 waiver  shall not be  deemed  to be a waiver of any  subsequent
                 breach of the same or any other  term,  covenant  or  condition
                 contained herein.  The acceptance of Rent by Landlord shall not
                 constitute  a waiver of any  preceding  breach by Tenant of any
                 term,  ccvenant  or  condition  of this  Lease,  regardless  of
                 Landlord's  knowledge  of such  preceding  breach  at the  time
                 Landlord accepted such Rent. Failure by Landlord to enforce any
                 of the terms,  covenants  or  conditions  of this Lease for any
                 length of time shall not be deemed to waive or to decrease  the
                 right of Landlord to insist thereafter upon strict  performance
                 by Tenant. Waiver by Landlord of any term, covenant or

                                       12
                                           APPROVAL INITIALS: ???? Landlord ???
                                           Tenant
<PAGE>

                 condition contained in this Lease may only be made by a written
                 document signed by Landlord.

    NOTICES  31.       Each  provision  of  this  Lease  or  of  any  applicable
                 governmental   laws,   ordinances,    regulations   and   other
                 requirements with reference to sending,  mailing or delivery of
                 any notice or the making of any  payment by  Landlord or Tenant
                 to the other  shall be deemed to be  compiled  with when and if
                 the following steps are taken:

                 A. Rent.  All Rent and other  payments  required  to be made by
                 Tenant to  Landlord  hereunder  shall be payable to Landlord at
                 the  address set forth in the Basic  Lease  Information,  or at
                 such other address as Landlord may specify from time to time by
                 written  notice  delivered  in  accordance  herewith.  Tenant's
                 obligation to pay Rent and any other amounts to Landlord  under
                 the terms of this  Lease  shall not be deemed  satisfied  until
                 such Rent and other  amounts  have been  actually  received  by
                 Landlord.

                 B. Other.  All notices,  demands,  consents and approvals which
                 may or are  required  to be given by either  party to the other
                 hereunder shall be in writing and either personally  delivered,
                 sent by commercial  overnight courier, or mailed,  certified or
                 registered,  postage prepaid,  and addressed to the other party
                 to be notified at the  address for such party as  specified  in
                 the Basic Lease Information or to such other place as the party
                 to be  notified  may from  time to time  designate  by at least
                 fifteen (15) days notice to the notifying party.

                 Notices  shall be deemed  served  upon  receipt  or  refusal to
                 accept  delivery.  Tenant  appoints as its agent to receive the
                 service of all default  notices and notice of  commencement  of
                 unlawful  detainer  proceedings  the  person  in  charge  of or
                 apparently  in charge of  occupying  the  Premises at the time,
                 and, if there is no such person,  then such service may be made
                 by attaching  the same on the main entrance of the Premises and
                 a copy of such  notice  being  sent  via  commercial  overnight
                 carrier or mailed, certified or registered,  postage prepaid to
                 the address listed for Tenant in the Basic Lease Information.

 ATTORNEYS'  32.     In the event that either  Landlord or Tenant  should  bring
       FEES      suit for the  possession of the  Premises,  for the recovery of
                 any sum due under this  Lease,  or because of the breach of any
                 provision of this Lease,  or for any other  relief  against the
                 other party hereunder,  then all costs and expenses,  including
                 reasonable  attorneys'  fees,  incurred by the prevailing party
                 therein shall be paid by the other party,  which  obligation on
                 the part of the other party shall be deemed to have  accrued on
                 the  date of the  commencement  of such  action  and  shall  be
                 enforceable   whether  or  not  the  action  is  prosecuted  to
                 judgment.                                                      
 
 SUCCESSORS  33.     This Lease  shall be binding  upon and inure to the benefit
AND ASSIGNS      of Landlord,  its successors and assigns,  and shall be binding
                 upon and inure to the benefit of Tenant, its successors, and to
                 the  extent  assignment  is  approved  by  Landlord  hereunder,
                 Tenant's  assigns.  Landlord may transfer its obligations under
                 this Lease to its  successors  in title,  in which event Lessor
                 shall be  relieved  of all  obligations  under  this  Lease and
                 Tenant   shall  look  solely  to   Landlord's   successor   for
                 performance of this Lease.                                     

      FORCE  34.      Whenever a period of time is herein  prescribed for action
    MAJEURE      to be  taken by  Landlord,  Landlord  shall  not be  liable  or
                 responsible   for,  and  there  shall  be  excluded   from  the
                 computation  for any such  period of time,  any  delays  due to
                 strikes,  riots, acts of God,  shortages of labor or materials,
                 war,  governmental  laws,  regulations or  restrictions  or any
                 other  causes  of any kind  whatsoever  which  are  beyond  the
                 control of Landlord.                                           
 
  BROKERAGE  35.      Landlord shall pay a full brokerage  commission to Brokers
 COMMISSION      in accordance with CB Commercial's listing Agreement (Brokerage
                 Commission).  Each Broker named in the Basic Lease  Information
                 (Brokers)   shall   receive  fifty  percent  of  the  Brokerage
                 Commission  based on the terms and conditions  provided in this
                 Lease,  including  expansion space. Tenant warrants to Landlord
                 that  Tenant's  sole contact with Landlord or with the Premises
                 in  connection  with this  transaction  has been  directly with
                 Landlord  and  Brokers,  and that no other broker or finder can
                 properly  claim a right to a commission or a finder's fee based
                 upon  contacts  between the claimant and Tenant with respect to
                 Landlord or the  Premises.  Tenant shall  indemnify,  defend by
                 counsel  acceptable  to  Landlord,  protect  and hold  Landlord
                 harmless from and against any loss, cost or expense, including,
                 but not limited to attorneys'  fees and costs,  resulting  from
                 any claim for a fee or  commission  by any  broker or finder in
                 connection with the Premises and this Lease other than broker. 
 
  MISCELLA-  36. A.  General.  The term  "Tenant" or any  pronoun  used in place
      NEOUS      thereof  shall  indicate and include the masculine or feminine,
                 the   singular  or  plural   number,   individuals,   firms  or
                 corporations,  and  their  respective  successors,   executors,
                 administrators and permitted assigns,  according to the context
                 hereof.                                                        

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

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

                 D. Entire  Agreement.  This Lease,  together with its Exhibits,
                 contains  all  the   agreements  of  the  parties   hereto  and
                 supersedes  any  previous  negotiations.  There  have  been  no
                 representations  made by the  Landlord or  understandings  made
                 between  the  parties  other than those set forth in this Lease
                 and its exhibits.

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

                 F.  Severability.  If,  for any reason  whatsoever,  any of the
                 provisions hereof shall be unenforceable or ineffective, all of
                 the other  provisions  shall be and  remain  in full  force and
                 effect. 
                                       13
                                           APPROVAL INITIALS: ???? Landlord ???
                                           Tenant

<PAGE>

                 G.  Recordation.  Tenant shall not record this Lease or a short
                 form memorandum hereof.

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

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

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

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

                 L.  Exhibits.  Exhibits  A and B  attached  hereto  are  hereby
                 incorporated herein by this reference.

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

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

                 O. Security,  Release and Indemnity.  Tenant  acknowledges  and
                 agrees  that,  while  Landlord may elect to patrol the Project,
                 Landlord is not providing any security services with respect to
                 the  Premises and that  Landlord  shall not be liable to Tenant
                 for, and Tenant waives any claim against  Landlord with respect
                 to, any loss by theft or any other damage to person or property
                 suffered  or  incurred  by  Tenant,   Tenant's   employees  and
                 invitees,  including but not limited to, in connection with any
                 unauthorized  entry into the  Premises  or any other  breach of
                 security with respect to the Premises.

                 Tenant shall be responsible  for provisions of security for its
                 premises.  Tenant shall  defend,  indemnify  and hold  Landlord
                 harmless  with respect to the  Premises and any claims  arising
                 from or related to a purported breach of security or failure to
                 provide security.

 ADDITIONAL   38.    Paragraphs 39 through 46, and Exhibits A and B are attached
 PROVISIONS       hereto and made apart thereof.                                
<TABLE>
              
              39.          Base Rent: Rent for the Premises shall be as follows.
<CAPTION>

              Suite Numbers              Sq. Ft+/-     Period              Base NN Rent per Sq. Ft.
              -------------              ---------     ------              ------------------------   
                                                                                                 

<S>                                      <C>           <C>                          <C>  
              981 Ind. Ste. B & D        11,941        5/15/97-5/31/98              $1.05
                                                       6/0l/98-5/31/95              $1.10
                                                       6/01/99-5/31/00              $1.15
                                                       6/0l/00-5/31/0l              $1.20
                                                       6/01/01-5/31/02              $1.25

              957 Ind. Ste. D, F, J & L  8,217         6/01/97-5/31/98              $1.05
                                                       6/01/98-5/31/99              $1.10
                                                       6/01/99-5/31/00              $1.15
                                                       6/01/00-5/31/01              $1.20
                                                       6/0l/02-5/31/02              $1.25

              957 Ind. Ste. P            4,380         When vacated by existing tenant leasee shall
                                                       have 30 days of  free  rent  thereafter  per
                                                       rent amounts for 957 Ind. Ste. D, F, J & L.
</TABLE>

                                       14
                                           APPROVAL INITIALS: ???? Landlord ???
                                           Tenant

<PAGE>

               40.     A. Tenant Improvement Allowance. Tenant shall be entitled
                 to  a  one-time  tenant  improvement   allowance  (the  "Tenant
                 Improvement  Allowance") in the amount of five dollars  ($5.00)
                 for each of the useable  square feet of the Premises  listed in
                 the Basic Lease  Information  for the direct and indirect costs
                 relating to the initial designing, procuring,  constructing and
                 installing  of  Tenant's  improvements  which  are  permanently
                 affixed to the Premises (the "Tenant Improvements"). Subject to
                 Landlord's  review and approval of Tenant's proposed space plan
                 for the  Premises,  Tenant  will use its  architect  for design
                 services  and Tenant's  own general  contractor  to perform any
                 tenant improvement work. Landlord reserves the right to approve
                 Tenant's   construction    management   company   and   general
                 contractor.  In no event shall  Landlord be  obligated  to make
                 disbursements  in a  total  amount  which  exceeds  the  Tenant
                 Improvement Allowance.

                     B. Disbursement of the Tenant Improvement Allowance. Except
                 as otherwise  set forth in any Tenant Work  Letter,  the Tenant
                 Improvement  Allowance  shall be disbursed by Landlord (each of
                 which  disbursements  shall  be  made  pursuant  to  Landlord's
                 disbursement  process) for costs related to the construction of
                 the Tenant  Improvements  and for the following items and costs
                 (collectively,  the "Tenant Improvement  Allowance Items"): (i)
                 payment of the fees of  Tenant's  architect  and/or  engineers;
                 (ii) the cost of construction of the Tenant  Improvements (iii)
                 the cost of  procuring  and  installing  fixtures  in or on the
                 Premises;  and  (iv) the cost of  other  items  related  to the
                 design  and   construction   of  the  Tenant   Improvements  as
                 designated by Tenant.

              41.    Landlord's  Obligations Prior to Occupancy.  Landlord shall
                 be responsible, at its sole cost and expense, prior to Tenant's
                 occupancy,  for providing the following:  (i) men's and women's
                 restrooms  are complete and  operable,  and include all exhaust
                 and supply HVAC, lighting,  water heaters,  partitions,  doors,
                 fixtures,  and finishes in compliance with the  requirements of
                 the Americans With  Disabilities Act of 1990; (ii) all building
                 systems,  including existing electrical,  mechanical,  HVAC and
                 plumbing shall be in good working condition and are not subject
                 to deferred maintenance or in need of immediate replacement. In
                 addition  Landlord,  prior to Tenant's  occupancy,  shal supply
                 Tenant with any existing  floor plans for the Premises known as
                 Suites  B & D of 981  Industrial  Road.  The  Premises  will be
                 provided  to  Tenant  in  "broom  clean"  condition.  The  roof
                 membrane shall be free of known leaks and in good condition.

              42.    Early  Occupancy:   To  the  extent  suites  to  be  rented
                 hereunder are available and occupancy  will not interfere  with
                 tenant  improvement  construction,  prior to the Estimated Term
                 Commencement  Dates set forth in the  Basic  Lease  Information
                 section  above,  Tenant shall be allowed to occupy the Premises
                 provided it pays Base Rent and Basic  Operating  Costs.  Tenant
                 shall perform all duties and obligations imposed by this Lease,
                 including,  but not  limited to, those  provisions  relating to
                 insurance and indemnification.

              43.    Renewal  Option:  While  this  Lease is in full  force  and
                 effect,  provided that Tenant is not in default, nor has Tenant
                 been in default  more than  three (3) times  during the Term of
                 the Lease of any terms,  covenants and conditions  hereof,  and
                 this Lease has not been  assigned  or the  Premises  (or a part
                 thereof), Tenant shall have one (1) option to renew this lease,
                 under the same terms and conditions prior to then expiration of
                 this Lease for one (1) sixty (60) month period.  Such extension
                 of the original term shall be on the same terms,  covenants and
                 conditions  as provided  for in the original  term,  except the
                 beginning monthly rental rate, for the option period,  shall be
                 at rate  equal  to the  then  prevailing  fair  market  rate of
                 comparable  R&D  buildings  in the market.  Tenant's  desire to
                 exercise the option must be given to Landlord,  in writing, not
                 less than one-hundred eighty (180) days prior to the expiration
                 of the term or this option shall terminate and be of no further
                 effect.

              44.    Expansion  Space.  Landlord  will use its best  efforts  to
                 inform Tenant of any and all available  contiguous space to the
                 Premises  available in the  Buildings  known as 981  Industrial
                 Road and 957 Industrial Road, San Carlos.

              45.    Asbestos/Hazardous  Materials.  To the  best of  Landlord's
                 knowledge,  there is no asbestos or any hazardous  materials on
                 about or within the Building(s), Project or Premises.

              46.    Indemnity.  Despite any  provision  herein to the contrary,
                 Tenant agrees to fully and complete indemnify,  protect, defend
                 and hold Landlord, its partners, members, managers,  directors,
                 officers, employees, attorneys, agents, successors, assigns and
                 lenders harmless from and against all claims, actions,  losses,
                 damages,  costs expenses and liabilities relating to or arising
                 out of all Property  uses by Tenant,  including but not limited
                 to  claims  of  Petroleum   Products  and  Hazardous   Material
                 contamination  on site (except  those claims  caused  solely by
                 willful  acts  or   omissions  of  Landlord  or   environmental
                 conditions pre-existing Tenant's tenancy) or arising out of any
                 other  actual or alleged  injury to or death of any  persons or
                 loss  of or  damages  to  property  in  or  upon  the  Project,
                 including  the person and property of Landlord,  its  partners,
                 members, managers,  directors,  officers,  employees, agents or
                 others  arising from or related to Tenant's use or occupancy of
                 the Premises.

                                       15
                                           APPROVAL INITIALS: ???? Landlord ???
                                           Tenant

<PAGE>

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



                                          "Landlord"

                                                 Three Sisters Ranch Enterprises



                                          By:    /s/ Martin E. Ruberry
                                              ----------------------------------
                                                 Martin E. Ruberry
                                                 General Manager


                                          "Tenant"
                                                 Conceptus, Inc.



                                          By: /s/ ?????????????
                                              ----------------------------------

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

                                       16
                                           APPROVAL INITIALS: ???? Landlord ???
                                           Tenant

<PAGE>

                                   Exhibit A

                               [GRAPHIC OMITTED]



                            San Carlos Business Park

                                                                  Initial
                                                                  ???/???

<PAGE>

                                   EXHIBIT A


                               [GRAPHIC OMMITTED]


                            SAN CARLOS BUSINESS PARK
                            981 INDUSTRIAL ROAD  SUITE D
                            SAN CARLOS, CA.

                                                                  Initial
                                                                  ???/???
<PAGE>

                                   EXHIBIT A


                               [GRAPHIC OMMITTED]


                            SAN CARLOS BUSINESS PARK
                            981 INDUSTRIAL ROAD  SUITE B
                            SAN CARLOS, CA.
                                                                  Initial
                                                                  ???/???


<PAGE>

                                    Exhibit D

                     Sign Criteria for San Carlos Business Park



Wall Signs
Tenant allowed one or two wall signs at discretion of landlord. Letters shall be
manufactured by Gemini Incorporated,  1-800-538-8377. Letters to be 10" high, 1"
deep injection  molded plastic  ("Minnesota  Letters"),  gloss black,  Helvetica
typeface,  all  capital  letters,  mounted  with #2 pads,  glued  flush to wall.
Company name only (no divisions,  phone  numbers,  tag lines,  etc.).  Up to two
lines allowed,  justified either left or right margin based on nearest corner of
building.  If two lines,  allow 5" space  between  lines.  Conform  to  vertical
placements used on existing signs.

Window Signs
Tenant  allowed  one  window  or door  sign  at main  entrance.  Sign  shall  be
computer-cut  white vinyl,  placed on exterior of glass.  Tenant may use door or
window,  but not both.  Message may contain company name,  logo,  division,  tag
line, and up to three services  provided,  at discretion of tenant. No lettering
to exceed 3" in height, no logo or trademark to exceed 6" in height.  Total sign
area not to exceed 16" high  by 30" wide.  Center all  graphics 60" above ground
level.  Landlord  to  provide  4" high  white  address  number  at top of  door,
Helvetica Medium, 2" down from top of door.

Rear Door Signs
Tenant  allowed  one sign on rear man door.  Sign  shall be  computer-cut  black
vinyl,  placed on exterior of door.  Text only,  no logos  allowed.  Message may
contain  company name and  shipping/receiving  hours and  information  only,  at
discretion of tenant. Lettering to be Helvetica Medium, upper and lower case, 2"
high, with 1" space between lines,  centered.  Up to four lines maximum allowed.
Top line to be placed 2" below small window in door. Landlord to provide 4" high
black address number at top of door, Helvetica Medium, 2" down from top of door.

Tenant Directory Monument Signs
Landlord  shall provide  lettering for tenant  directory  monument,  at tenant's
expense.  Tenant shall  provide to landlord  exact name that will be used on the
appropriate  sign. Name shall appear on both sides of one sign, as determined by
landlord.  Long company names may be edited or abbreviated as required to fit on
the sign, subject to approval of tenant.  Lettering shall be 3 5/8" high Univers
Light Condensed, upper and lower case, white.


                                                                  Initial
                                                                  ???/???