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FIRST AMERICAN TITLE
ESCROW No, 512581

      RECORDING REQUESTED BY, AND    DOCUMENT     13993076        Titles:  / Pages: 9
      WHEN RECORDED, MAIL TO:            [BAR CODE}
                                        0013993076                Fees ....        51.00*
WATKINS-JOHNSON COMPANY                                           Taxes.... **Conf **
c/o HOPKINS & CARLEY                                              Copies...
TEN ALMADEN BLVD.                                                 AMT PAID         51.00
EIGHT FLOOR                          ---------------------------------------------------
SAN JOSE, CA 95111                   BRENDA DAVIS                             RDE # 002
ATTN: GARTH E. PICKETT               SANTA CLARA COUNTY RECORDER              12/30/1997
                                     Recorded at the request of               8:00 AM
                                     First American Title Company
                                                       FOR RECORDER USE ONLY
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                                  Exhibit 10.Z

                              ASSIGNMENT OF LEASES



         THIS ASSIGNMENT OF LEASES ("Assignment") is  made as of the 30th day of
December,  1997, by and between Taylor Woodrow  Property  Company  (California),
Inc., a California  corporation  ("Assignor")  and  Watkins-Johnson  Company,  a
California corporation ("Assignee"), and shall become effective upon the date of
recordation  hereof.  This  Assignment  is  entered  into  on the  basis  of the
following facts, understandings and intentions of the parties:

                                 R E C I T A L S:

         A. The Board of  Trustees  of The  Leland  Stanford  Junior  University
("Stanford"), as Lessor, and Kern County Land Company, as Lessee, entered into a
Lease  ("Stanford  Lease"),  dated as of November 1, 1959, a memorandum of which
was recorded on December 8, 1959 in Book 4630, Page 286 of the Official  Records
of Santa Clara County.

         B. The Stanford Lease has been amended by amendments dated as of August
1, 1963,  April 22, 1969,  May 31, 1984,  and two  amendments,  each dated as of
September 15, 1997, as more fully described in Recital C below.

         C. Pursuant to the Agreement  Amending  Ground Lease (Property 1) dated
September 15, 1997, recorded on October 8, 1997 under Series No. 13890986 of the
Official  Records of Santa Clara County and the Agreement  Amending Ground Lease
(Property 2) dated September 15, 1997,  recorded on October 8, 1997 under Series
No. 13890987 of the Official  Records of Santa Clara County,  the Stanford Lease
was divided into two separate  leases,  defined  therein and referred to in this
Assignment as the Property 1 Ground Lease and the Property 2 Ground  Lease.  The
Property 2 Ground Lease covers that certain real property  described as Property
2 ("Property 2") in Exhibit A attached  hereto and  incorporated  herein by this
reference.

       D. By mesne assignments, Assignor is the lessee under the Stanford Lease,
as so amended.


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         E. Pursuant to a Lease and Agreement  ("Watkins-Johnson  Lease"), dated
as of April 22, 1969, Lindco Properties  Company,  as successor lessee under the
Stanford Lease, subleased all of the real property covered by the Stanford Lease
to Assignee.  The  Watkins-Johnson  Lease has been amended by  amendments  dated
August 15, 1969 and October 31, 1994.

         F.  By  mesne   assignments,   Assignor   is  the   lessor   under  the
Watkins Johnson Lease, as amended.

         G.  Pursuant  to that  certain  Lease  Termination  and  Assignment  of
Leasehold   Interest   Agreement  and  Joint  Escrow   Instructions   ("Transfer
Agreement"), between Assignor and Assignee, dated as of March 31, 1997, Assignor
agreed to assign to Assignee  (i) its  interest as lessee  under the  Property 2
Ground Lease and (ii) its interest as lessor under the Watkins-Johnson Lease, as
amended,  to the extent the same  relates  to  Property 2 (the  "Watkins-Johnson
Property 2 Lease"),  and Assignee  agreed to accept such  assignments,  and such
assignment is pursuant to an exchange of leasehold interests between the parties
and payment of additional Consideration to Assignee.

         NOW,  THEREFORE,  in consideration of the mutual covenants and promises
of the parties  provided for in the Transfer  Agreement and herein,  the parties
agree as follows:

         1. Assiqnment and Assumption. Assignor hereby assigns all of its right,
title and  interest  in the  Property  2 Ground  Lease  and the  Watkins-Johnson
Property 2 Lease to Assignee,  and Assignee hereby accepts such  assignments and
agrees to be bound by the terms,  covenants  and  conditions  of the  Property 2
Ground  Lease and the  Watkins-Johnson  Property  2 Lease,  and  assumes  all of
Assignor's  obligations  and duties  under the  Property 2 Ground  Lease and the
Watkins-Johnson Property 2 Lease.

         2. No  Assignments.  Except for the  easements,  access  agreements and
other  encumbrances  which have been  recorded (or  memoranda of which have been
recorded) in the Official Records of Santa Clara County, Assignor represents and
warrants  to  Assignee  that:  Assignor  has  not  sublet,  assigned,  conveyed,
encumbered or otherwise  transferred  all or any portion of its right,  title or
interest  under the  Property 2 Ground Lease or the  Watkins-Johnson  Property 2
Lease or any claim,  demand,  obligation,  liability,  action or cause of action
arising thereunder.

         3. No Merqer.  The  parties do not intend any merger of the  Property 2
Ground  Lease  and  the  Watkins-Johnson  Property  2  Lease  by  virtue  of the
assignments set forth herein. Further,  Assignee's  indemnification  obligations
pursuant to Paragraph 10 of the  Watkins-Johnson  Property 2 Lease shall survive
this Assignment with respect to acts, events, conditions (including without


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limitation environmental conditions) or circumstances occurring or arising prior
to the date hereof.

         4. Attorneys'  Fees. If any party commences an action against the other
party arising out of or in connection with this Assignment, the prevailing party
shall be entitled  to recover  from the losing  party the costs and  expenses of
such action, including reasonable attorneys' fees and court costs.

         5. Time. Time is of the essence of every provision of this Assignment.

         6. Applicable Law. This Assignment shall be construed in accordance and
governed by the laws of the State of California.

         7.  Successors  and  Assiqns.  The  terms,   covenants  and  conditions
contained in this  Assignment  shall be binding upon and inure to the benefit of
the heirs, successors and assigns of the parties hereto.

         8. Authority.  Each party  represents and warrants to the other that it
has full  right,  power and  authority  to enter into this  Assignment,  and has
obtained all necessary  consents and  resolutions  required  under the documents
governing its affairs in order to consummate this  transaction,  and the persons
executing this Assignment have been duly authorized to do so.


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         9.   Counterparts.   This   Assignment  may  be  executed  in  multiple
counterparts,  each of which  shall be deemed a duplicate  original,  but all of
which taken together shall constitute one and the same instrument.

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

                                             "Assignor"

                                             TAYLOR WOODROW PROPERTY
                                             COMPANY (CALIFORNIA), INC.,
                                             a California corporation

                                             By: /s/ Tom Redwitz
                                                --------------------------------
                                                Tom Redwitz
                                                --------------------------------
                                                  (type or print name)

                                             Its: Vice President
                                                --------------------------------


                                             "Assignee"

                                             WATKINS-JOHNSON COMPANY,
                                             a California corporation

                                             By: /s/ W. Keith Kennedy
                                                --------------------------------
                                                     W. Keith Kennedy
                                                --------------------------------
                                                  (type or print name)

                                             Its: President and CEO
                                                --------------------------------


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