Document:

SUBLEASE

     THIS SUBLEASE (this "Sublease") is dated as of May 31, 2000, and is made by
and  between   AMERICAN   MICROWAVE   TECHNOLOGY,   a   California   corporation
("Sublessor"),    and   SPECTRIAN   CORPORATION,    a   California   corporation
("Sublessee"). Sublessor and Sublessee hereby agree as follows:

     1. Recitals:  This Sublease is made with reference to the fact that Sunrise
Gold , as landlord ("Master  Lessor"),  and Sublessor,  as tenant,  entered into
that certain Standard Industrial Lease (the "Master Lease") dated as of February
20, 1998,  with respect to premises  consisting  of  approximately  3,600 square
feet, located at 11315 Sunrise Gold Circle, Suite I, Rancho Cordova,  California
(the "Premises"). A copy of the Master Lease is attached hereto as Exhibit A and
incorporated by reference herein.

     2. Premises:  Sublessor hereby subleases to Sublessee, and Sublessee hereby
subleases  from  Sublessor,  all of the Premises on the terms set forth  herein.
Sublessor  represents  that,  as of  the  Commencement  Date,  to  the  best  of
Sublessor's  knowledge:  (i) the Premises and the Building  will comply with all
applicable  laws,   rules,   regulations,   codes,   ordinances,   underwriters'
requirements, covenants, conditions and restrictions ("Laws"), (ii) the Premises
will be in good and clean operating condition and repair,  (iii) the electrical,
mechanical,  HVAC,  plumbing,  sewer,  elevator  and other  systems  serving the
Premises and the Building will be in good  operating  condition and repair,  and
(iv)  the  roof of the  Building  will be in good  condition  and  water  tight.
Sublessor  shall,  promptly after receipt of notice from  Sublessee,  remedy any
non-compliance  with such  representations at Sublessor's sole cost and expense,
or cause Master Lessor to remedy any such non-compliance. Sublessee's acceptance
of the  Premises  shall not be  deemed a waiver  of the  above  representations.
Sublessee  shall not be required to comply with or cause the  Premises to comply
with any Laws unless such compliance is  necessitated  solely due to Sublessee's
particular use of the Premises.

     3. Term: The term (the "Term") of this Sublease shall commence on the later
of (i) May 22, 2000, or (ii) (unless waived by Sublessee in writing) the date by
which  Sublessor  has  delivered  possession of the Premises to Sublessee in the
condition  required  herein,  or (iii) the date on which Master Lessor's written
consent to this Sublease has been obtained (the "Commencement  Date"), and shall
expire on March 29, 2001, (the "Expiration Date") unless this Sublease is sooner
terminated  pursuant  to its  terms or the  Master  Lease is  sooner  terminated
pursuant to its terms. If the Commencement  Date has not occurred for any reason
on or before  July 1, 2000,  then in  addition to  Sublessee's  other  rights or
remedies,  Sublessee may terminate this Sublease by written notice to Sublessor,
whereupon  any  monies  previously  paid by  Sublessee  to  Sublessor  shall  be
reimbursed to Sublessee,  or, at  Sublessee's  election,  the date  Sublessee is
otherwise  obliged to  commence  payment of rent shall be delayed by one (1) day
after the Commencement  Date for each day that the Commencement  Date is delayed
beyond  such  date.  Sublessor  shall  deliver  possession  of the  Premises  to
Sublessee on May 22, 2000 in good, vacant, broom clean condition,  and otherwise
in the condition as of the date hereof.

     4. Rent:

        A. Base  Rent.  Sublessee  shall pay to  Sublessor  as base rent for the
Premises  for each month  during the Term the amount of Two Thousand Two Hundred
Forty-Nine  Dollars  ($2,249) per month ("Base  Rent").  Base Rent and any other
amounts due under this Sublease shall be paid directly to Sublessor at 2570 East
Cerritos Avenue, Anaheim, California 92806, Attention:______________________, or
such other address as may be designated in writing by Sublessor.

        B. Additional Rent.  Sublessee shall also pay to Sublessor the costs for
taxes,   insurance   premiums  and  expenses  for  the  operation,   management,
maintenance  and  repair of the  Premises  due under  Section  4.2 of the Master
Lease, which shall not exceed One Hundred Seventy-Five Dollars ($175) per month.

<PAGE>

Sublessee  shall pay such  amounts  as and when the same are due and  payable to
Master  Lessor  under the  Master  Lease.  Sublessee  shall be  entitled  to all
credits, if any, given by Master Lessor to Sublessor for Sublessor's overpayment
of such amounts.  Notwithstanding the foregoing, Sublessee shall not be required
to pay any  Additional  Rent  or  perform  any  obligation  that  is (i)  fairly
allocable to any period of time prior to the  Commencement  Date of the Sublease
or  following  the  expiration  or sooner  termination  of the  Sublease or (ii)
payable as a result of a default by  Sublessor of any of its  obligations  under
the Master Lease.

        C. Rent Abatement. Sublessee shall be entitled to, and benefit from, any
rental abatement granted Sublessor under the Master Lease for whatever reason to
the extent that such abatement relates to the Sublease term.

        D.  Prepayment of Rent.  Upon execution  hereof by Sublessee,  Sublessee
shall pay to Sublessor  the sum of Two Thousand Two Hundred  Forty-Nine  Dollars
($2,249),  which  shall  constitute  Base Rent for the first  (1st) month of the
Term.

     5.  Security  Deposit:  Prior to the  Commencement  Date,  Sublessee  shall
deposit with  Sublessor  the sum of Two Thousand Five Hundred  Dollars  ($2,500)
(the "Security Deposit"),  in cash, as security for the performance by Sublessee
of the terms and conditions of this Sublease. The Security Deposit shall be held
by Sublessor in accordance with the provisions of Section 5 of the Master Lease.

     6. Indemnity:  Sublessee shall indemnify  Sublessor as set forth in Section
8.7 of the  Master  Lease.  Notwithstanding  anything  to the  contrary  herein,
Sublessor  shall not be  released  or  indemnified  from,  and shall  indemnify,
defend,  protect and hold harmless  Sublessee  from,  all damages,  liabilities,
losses, claims,  attorneys' fees, costs and expenses arising from the negligence
or willful  misconduct  of  Sublessor or its agents,  contractors,  licensees or
invitees or a breach of Sublessor's  obligations or  representations  under this
Sublease or the Master Lease.

     7.  Incorporation  By Reference.  Except as set forth below,  the terms and
conditions of this  Sublease  shall include all of the terms of the Master Lease
and such terms are incorporated into this Sublease as if fully set forth herein,
except that: (a) each reference in such  incorporated  sections to "Lease" shall
be deemed a reference to "Sublease"; (b) each reference to "Lessor" and "Lessee"
shall be deemed a reference to "Sublessor" and "Sublessee", respectively, except
as otherwise expressly set forth herein; (c) the following  provisions shall not
be  included:  Sections  1, 3, 4.1,  10.1  (except  for the first  line and last
sentence  only),  12.5,  56,  58, 59,  65,  and 67;  and (d)  references  in the
following  provisions  to "Lessor"  shall mean "Master  Lessor"  only:  Sections
2.2-2.6, 4.2(b), 4.2(d), 9, 10, 14, 16(c), 17, 40, 41, 52, 61, 68, Exhibit A and
C. In the event of a conflict  between the  provisions  of this Sublease and the
Master  Lease,  as between  Sublessor  and  Sublessee,  the  provisions  of this
Sublease shall control.

     8.  Sublessor's  Obligations:  Sublessor  shall  fully  perform  all of its
obligations  under the Master Lease to the extent  Sublessee  has not  expressly
agreed to perform such  obligations  under this  Sublease.  Sublessor  shall not
terminate  the  Master  Lease or take any  actions  which  could  give rise to a
termination of the Master Lease,  amend or waive any provisions under the Master
Lease or make any elections, exercise any right or remedy or give any consent or
approval under the Master Lease without,  in each  instance,  Sublessee's  prior
written  consent.  Sublessor,  with respect to the  obligations of Master Lessor
under the Master  Lease,  shall use  Sublessor's  diligent good faith efforts to
cause Master  Lessor to perform such  obligations  for the benefit of Sublessee.
Such diligent good faith efforts shall  include,  without  limitation:  (a) upon
Sublessee's  written  request,   immediately  notifying  Master  Lessor  of  its
nonperformance under the Master Lease, and requesting that Master Lessor perform
its obligations under the Master Lease; and (b) permitting Sublessee to commence
a lawsuit or other action in Sublessor's name to obtain the performance required
from Master Lessor under the Master Lease; provided,  however, that if Sublessee
commences a lawsuit or other action,  Sublessee shall pay all costs and expenses
incurred in  connection  therewith,  and  Sublessee  shall  indemnify

                                      -2-
<PAGE>

Sublessor  against,  and hold Sublessor  harmless from, all reasonable costs and
expenses incurred by Sublessor in connection therewith.

     9. Quiet  Enjoyment:  Sublessee shall  peacefully  have, hold and enjoy the
Premises,  subject to the terms and conditions of this  Sublease,  provided that
there is not an event of  default by  Sublessee.  In the  event,  however,  that
Sublessor  defaults  in the  performance  or  observance  of any of  Sublessor's
remaining  obligations  under the Master  Lease or fails to perform  Sublessor's
stated  obligations  under this Sublease,  then  Sublessee  shall give Sublessor
notice  specifying in what manner  Sublessor has defaulted,  and if such default
shall not be cured by Sublessor within thirty (30) days thereafter  (except that
if such default cannot be cured within said thirty (30) day period,  this period
shall be extended for an additional  reasonable  time,  provided that  Sublessor
commences to cure such  default  within such thirty (30) day period and proceeds
diligently  thereafter  to  effect  such  cure as  quickly  as  possible),  then
Sublessee  shall be entitled  to cure such  default and  promptly  collect  from
Sublessor  Sublessee's  reasonable  expenses  in so  doing  (including,  without
limitation,  reasonable  attorneys'  fees and court costs),  or, at  Sublessee's
option,  to offset such reasonable  expenses against all future payments of rent
due under this Sublease.  Sublessee shall not be required,  however, to wait the
entire cure period described herein if earlier action is required to comply with
the Master Lease or with any applicable governmental law, regulation or order.

     10. Termination of Master Lease: Without limiting any other right or remedy
of Sublessee under this Sublease, if Master Lessor seeks to terminate the Master
Lease  because  of an event of  default by  Sublessor  under the  Master  Lease,
Sublessor  shall use its  reasonable  good faith  efforts to maintain the Master
Lease in full force and effect for the benefit of Sublessee, and Sublessor shall
take all action  required  to  reinstate  the Master  Lease  and/or to claim and
pursue any right of  redemption  or relief from  forfeiture  of the Master Lease
(and as a  consequence  thereof  any  forfeiture  of  this  Sublease)  to  which
Sublessor  may be  entitled  at law or in equity.  To the extent that the Master
Lease gives  Sublessor any right to terminate the Master Lease in the event of a
casualty or condemnation  affecting the Premises,  Sublessor shall not cancel or
terminate the Master Lease without the prior  written  consent of Sublessee,  in
Sublessee's  sole  discretion.  Sublessee  shall have the right to terminate the
Sublease  hereunder  if Sublessor  has the right to  terminate  the Master Lease
thereunder.

     11.  Sublessor's  Representations  and  Warranties:  As  an  inducement  to
Sublessee to enter into this  Sublease,  Sublessor  represents and warrants that
(a) the Master  Lease is in full force and effect,  and there  exists  under the
Master  Lease  no  default  or event of  default  by  either  Master  Lessor  or
Sublessor,  nor has there occurred any event which, with the giving of notice or
passage of time or both, could constitute such a default or event of default and
(b) the copy of the Master Lease attached hereto as Exhibit A is a true, correct
and complete copy of the Master Lease.

     12.  Authorization  to Direct Sublease  Payments:  Sublessee shall have the
right to pay all rent and other sums owing by Sublessee  to Sublessor  hereunder
for those  items which also are owed by  Sublessor  to Master  Lessor  under the
Master  Lease  directly to Master  Lessor,  provided  (a)  Sublessee  reasonably
believes that  Sublessor  has failed to make any payment  required to be made by
Sublessor to Master Lessor under the Master Lease and Sublessor fails to provide
adequate proof of payment within two (2) business days after Sublessee's written
demand  requesting  such  proof,  or  (b)  Sublessee  reasonably  believes  that
Sublessor  shall fail to make any payment  required to be made by  Sublessor  to
Master Lessor under the Master Lease and Sublessor fails to provide assurance of
future  performance in form reasonably  satisfactory to Sublessee within two (2)
business  days after  Sublessee's  written  demand  requesting  such  assurance.
Sublessee  shall  provide to Sublessor  concurrently  with any payment to Master
Lessor reasonable evidence of such payment.  Any sums paid directly by Sublessee
to Master Lessor in accordance  with this paragraph shall be credited toward the
amounts  payable by  Sublessee to Sublessor  under this  Sublease.  In the event
Sublessee  tenders  payment  directly to Master Lessor in  accordance  with this
paragraph and Master Lessor refuses to accept such payment,

                                      -3-
<PAGE>

Sublessee  shall  have the right to  deposit  such  funds in an  account  with a
national bank for the benefit of Master Lessor and Sublessor, and the deposit of
said funds in such account shall  discharge  Sublessee's  obligation  under this
Sublease to make the payment in question.

     13.  Hazardous  Materials.  To the  best  knowledge  of  Sublessor,  (a) no
Hazardous  Material  is present in the  Building or the soil,  surface  water or
groundwater  thereof,  (b) no  underground  storage  tanks  are  present  on the
Industrial  Center,  and (c) no  action,  proceeding  or  claim  is  pending  or
threatened  regarding the Building concerning any Hazardous Material or pursuant
to any environmental  Law. Under no circumstance  shall Sublessee be liable for,
and Sublessor shall indemnify,  defend, protect and hold harmless Sublessee, its
agents, contractors,  stockholders, directors, successors,  representatives, and
assigns from and against,  all losses,  costs,  claims,  liabilities and damages
(including attorneys' and consultants' fees) of every type and nature,  directly
or  indirectly  arising  out of or in  connection  with any  Hazardous  Material
present at any time in, on or about the Building,  the Industrial Center, or the
soil, air, improvements,  groundwater or surface water thereof, or the violation
of any  environmental  Law,  except  to the  extent  that  any of the  foregoing
actually results from the release or emission of Hazardous Material by Sublessee
or Sublessee's Parties in violation of applicable environmental Laws.

     14.  Assignment  of  Rights:  Sublessor  hereby  assigns to  Sublessee  all
warranties  given and  indemnities  made by Master Lessor to Sublessor under the
Master Lease which would reduce  Sublessee's  obligations  hereunder,  and shall
cooperate with Sublessee to enforce all such warranties and indemnities.

     15.  Conditions  Precedent:  This Sublease and  Sublessor's and Sublessee's
obligations  hereunder are conditioned upon the written consent of Master Lessor
in a form  reasonably  satisfactory  to Sublessee.  If Sublessor fails to obtain
Master Lessor's consent within thirty (30) days after execution of this Sublease
by Sublessor,  then  Sublessee may terminate  this Sublease by giving  Sublessor
written  notice  thereof,  and Sublessor  shall return to Sublessee the Security
Deposit and any other amounts previously paid by Sublessee.

     16.  Authority to Execute:  Sublessee  and  Sublessor  each  represent  and
warrant to the other that each person  executing this Sublease on behalf of each
party is duly  authorized to execute and deliver this Sublease on behalf of that
party.

     17.  Counterparts:  This Sublease may be executed in  counterparts  each of
which shall be deemed an original,  but all of which together  shall  constitute
one and the same document.

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

SUBLESSOR:                              SUBLESSEE:

AMERICAN MICROWAVE                      SPECTRIAN CORPORATION
TECHNOLOGY, INC.                        a California corporation
a California corporation

                                       -4-

<PAGE>

By:   /s/ Peter Manno                     By: /s/ Michael Angel
      -----------------------------           ------------------------------
Name: Peter L. Manno                    Name: Michael Angel
      -----------------------------           ------------------------------
Its:  President and CEO                  Its: CFO
      -----------------------------           ------------------------------

Address: 2570 East Cerritos Ave.        Address: 350 W. Java Drive
         Anaheim, CA 92806                       Sunnyvale, California 94089
         Attn: President and CEO                 Attn: Director of Facilities

                                       -5-

<PAGE>
                               CONSENT TO SUBLEASE

     Master Lessor hereby acknowledges  receipt of a copy of this Sublease,  and
consents to the terms and conditions of this Sublease.  By this consent,  Master
Lessor  shall not be deemed in any way to have  entered the  Sublease or to have
consented to any further assignment or sublease.

     Master Lessor further agrees that, notwithstanding anything to the contrary
in the Master Lease:

          (a) Master  Lessor shall deliver to Sublessee at the address set forth
in the Sublease  notices of any defaults under the Master Lease at the same time
such  notices are sent to  Sublessor  as set forth in the Master Lease and shall
permit Sublessee to cure such defaults.

          (b) Master Lessor agrees that the waiver of subrogation in Section 8.6
of the Master Lease shall apply as between Master Lessor and Sublessee.

          (c) In the  event  that  the  Master  Lease  terminates  prior  to the
expiration of the term thereof, the Sublease will not terminate but will instead
continue in full force and effect as a direct lease  between  Master  Lessor and
Sublessee upon all of the terms, covenants and conditions of the Sublease.

          (d) Master Lessor hereby agrees that  Sublessee may assign or sublease
the  Premises  without  Master  Lessor's  consent  to an  entity as set forth in
Section 12 of the Master Lease.

MASTER LESSOR:

CTL MANAGEMENT, INC.
A Randall Apartment Community

By:   /s/ Robert Ortega Jr.
      -----------------------------------
Name: Robert Ortega, Jr.
      -----------------------------------
Its:  Property Manger
      -----------------------------------

Address: 11285 Sunrise Gold Circle, Suite B
         Rancho Cordova, CA. 95742

                                       -6-

<PAGE>

                    STANDARD INDUSTRIAL LEASE--MULTI-TENANT
                  AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

                                [OMIT GRAPHIC]

1. Parties. This Lease, dated for reference purposes only, February 20, 1998, is
made by and between SUNRISE GOLD  ASSOCIATES, A California  Limited  Partnership
(herein called "LESSOR") and AMERICAN MICROWAVE  TECHNOLOGY,  Inc., A California
Corporation (herein called "LESSEE").

2. Premises, Parking and Common Areas.

     2.1 Premises.  Lessor hereby leases to Lessee and Lessee leases from Lessor
for the term, at the rental,  and upon all of the  conditions  set forth herein,
real property situated in the County of Sacramento, State of California commonly
known as 11315  Sunrise  Gold  Circle,  Suite I,  Rancho  Cordova,  CA 95742 and
described as office/warehouse space herein referred to as the "Premises", as may
be outlined on a Exhibit attached  hereto,  including rights to the Common Areas
as  hereinafter  specified  but not  including  any  rights  to the  roof of the
Premises or to any Building in the Industrial  Center.  The Premises are portion
of a building, herein referred to as the "Building". The Premises, the Building,
the Common  Areas the land upon which the same are located  along with all other
buildings and improvements  thereon, are herein collectively  referred to as the
"Industrial Center"

     2.2 Vehicle  Parking.  Lessee shall be entitled to common  vehicle  parking
spaces,  unreserved  and  unassigned,  on those  portions  of the  Common  Areas
designated by Lessor for parking.  Lessee shall not use more parking spaces than
said number.  Said parking  spaces shall be used only for parking by vehicles no
larger than full size  passenger  automobiles or pick-up  trucks,  herein called
"Permitted  Size  Vehicles."  Vehicles  other than  Permitted  Size Vehicles are
herein referred to as "Oversized Vehicles."

         2.2.1 Lessee  shall not permit or allow any vehicles  that belong to or
are controlled by Lessee or Lessee's employees,  suppliers, shippers, customers,
or invitees  to be loaded,  or parked in areas  other than those  designated  by
Lessor for such activities.

         2.2.2 If Lessee  permits  or allows  any of the  prohibited  activities
described  in  paragraph  2.2 of this Lease,  then Lessor  shall have the right,
without notice,  in addition to such other rights and remedies that it may have,
to remove or tow away the vehicle involved and charge the cost to Lessee,  which
cost shall be immediately payable upon demand by Lessor.

     2.3 Common Areas --  Definition.  The term "Common Areas" is defined as all
areas and facilities  outside the Premises and within the exterior boundary line
of the  Industrial  Center that are provided and  designated  by the Lessor from
time to time  for  general  non-exclusive  use of  Lessor,  Lessee  and of other
lessees of the  Industrial  Center and their  respective  employees,  suppliers,
shippers customers and invitees,  including parking areas, loading and unloading
areas,  trash areas,  roadways,  sidewalks,  walkways,  parkways,  driveways and
landscaped areas.

     2.4 Common Areas -- Lessee's  Rights.  Lessor hereby grants to Lessee,  for
the benefit of Lessee and its  employees,  suppliers,  shippers,  customers  and
invitees,  during the term of this  Lease,  the  non-exclusive  right to use, in
common with others  entitled  to such use,  the Common  Areas as they exist from
time to time, subject to any rights,  powers, and privileges  reserved by Lessor
under the terms  hereof  or under  the  terms of any  rules and  regulations  or
restrictions  governing the use of the Industrial  Center Under no circumstances
shall the right herein  granted to use the Common Areas be deemed to include the
right to store any property,  temporarily or  permanently,  in the Common Areas.
Any such storage shall be permitted only by the prior written  consent of Lessor
or Lessor's  designated agent,  which consent may be revoked at any time. In the
event that any  unauthorized  storage  shall  occur then  Lessor  shall have the
right, without notice, in addition to such other rights and remedies that it may
have, to remove the property and charge the cost to Lessee,  which cost shall be
immediately payable upon demand by Lessor.

     2.5 Common Areas -- Rules and  Regulations.  Lessor or such other person(s)
as Lessor may appoint  shall have the  exclusive  control and  management of the
Common Areas and shall have the right, from time to time, to establish,  modify,
amend and enforce reasonable rules and regulations with respect thereto.  Lessee
agrees to abide by and conform to all such rules and  regulations,  and to cause
its  employees,  suppliers,  shippers,  customers,  and invitees to so abide and
conform.  Lessor shall not be responsible to Lessee for the non-compliance  with
said rules and regulations by other lessees of the Industrial Center.

     2.6 Common Areas -- Changes.  Lessor shall have the right, in Lessor's sole
discretion, from time to time:

         (a) To make changes to the Common Areas, including, without limitation,
changes in the location, size, shape and number of driveways, entrances, parking
spaces, parking areas, loading and unloading areas, ingress,  egress,  direction
of traffic,  landscaped areas and walkways;  (b) To close temporarily any of the
Common  Areas  for  maintenance  purposes  so long as  reasonable  access to the
Premises remains  available;  (c) To designate other land outside the boundaries
of the Industrial Center to be a part of the Common Areas; (d) To add additional
buildings  and  improvements  to the Common  Areas;  (e) To use the Common Areas
while engaged in making additional  improvements,  repairs or alterations to the
Industrial Center, or any portion thereof; (f) To do and perform such other acts
and make such other  changes  in, to or with  respect  to the  Common  Areas and
Industrial  Center as Lessor may, in the  exercise of sound  business  judgment,
deem to be appropriate.

               2.6.1  Lessor shall at all times  provide the parking  facilities
required by  applicable  law and in no event shall the number of parking  spaces
that Lessee is entitled to under paragraph 2.2 be reduced.

3. Term.

     3.1 Term.  The term of this  Lease  shall be for  thirty  six  months  (36)
commencing on April 1 1998 and ending on March 31, 2001 unless sooner terminated
pursuant to any provision hereof.

     3.2 Delay in Possession. Notwithstanding said commencement date, if for any
reason Lessor cannot deliver  possession of the Premises to Lessee on said date.
Lessor shall not be subject to any  liability  therefor,  nor shall such failure
affect the  validity of this Lease or the  obligations  of Lessee  hereunder  or
extend the term hereof,  but in such case.  Lessee shall not be obligated to pay
rent or perform any other  obligation  of Lessee  under the terms of this Lease,
except as may otherwise provided in this Lease, until possession of the Premises
is  tendered  to  Lessee;  provided,  however,  that if  Lessor  shall  not have
delivered   possession  of  the  Premises  within  sixty  (60)  days  from  said
commencement date. Lessee may at Lessee's option, by notice in writing to Lessor
within ten (10) days  thereafter;  cancel this Lease, in which event the parties
shall be discharged from all obligations hereunder;  provided further,  however,
that if such written  notice of Lessee is not received by Lessor within said ten
(10) day period,  Lessee's right to cancel this Lease  hereunder shall terminate
and be of no further force or effect.

     3.3  Early  Possession.  If  Lessee  occupies  the  Premises  prior to said
commencement  date,  such  occupancy  shall be subject to all provisions of this
Lease,  such occupancy shall not advance the termination  date, and Lessee shall
pay rent for such period at the initial monthly rates set forth below.

4. Rent.

     4.1 Base Rent.  Lessee shall pay to Lessor,  as Base Rent for the Premises,
without any offset or deduction,  except as may be otherwise  expressly provided
in this  Lease,  on the  first  day of each  month of the term  hereof,  monthly
payments in advance of $2,040.00 plus estimated Common Area Maintenance  ("CAM')
Charges in the amount of $159.00 per month.  See also paragraph 58 for Base Rent
Adjustments.  Lessee shall pay Lessor upon  execution  hereof  $8,399.00 as Base
Rent for first  month's  rent & CAM,  SEC Dep,  Sign,  TI contrib.  Rent for any
period  during the term  hereof  which is for less than one month shall be a pro
rata  portion  of the Base Rent.  Rent  shall be payable in lawful  money of the
United States to Lessor at the address stated herein or to such other persons or
at such other places as Lessor may designate in writing.

     4.2 Operating Expenses.  Lessee shall pay to Lessor during the term hereof,
in addition to the Base Rent,  Lessee's  Share, as hereinafter  defined,  of all
Operating  Expenses,  as hereinafter  defined,  during each calendar year of the
term of this Lease, in accordance with the following provisions:

         (a) "Lessee's  Share" is defined,  for purposes of this Lease, as 3.21%
percent.

         (b) "Operating Expenses" is defined, for purposes of this Lease, as all
costs incurred by Lessor, if any, for:

               (i) The operation,  repair and maintenance,  in neat, clean, good
order and condition, of the following:

                    (aa) The Common Areas,  including parking areas, loading and
unloading  areas,  trash  areas,  roadways,   sidewalks,   walkways,   parkways,
driveways,  landscaped areas,  striping,  bumpers,  irrigation systems,  Commons
Areas lighting facilities and fences and gates:

                    (bb) Trash disposal services;

                    (cc) Tenant directories;

                    (dd)  Fire  detection  systems  including  sprinkler  system
maintenance and repair;

                                                                   Initials: HGW
                                                                             BW

<PAGE>

                    (ee) Security  services:,  management,  roof repair,  HVAC -
maintenance

                    (ff) Any other  service  to be  provided  by Lessor  that is
elsewhere in this Lease stated to be an "Operating Expense."

               (ii) The cost of water, gas and electricity to service the Common
Areas.

         (c) The  inclusion  of the  improvements,  facilities  and services set
forth in paragraph  4.2(b)(i) of the definition of Operating  Expenses shall not
be deemed to impose an obligation  upon Lessor to either have said  improvements
or facilities or to provide those services unless the Industrial  Center already
has the same.  Lessor  already  provides  the  services,  or Lessor  has  agreed
elsewhere in this Lease to provide the same or some of them.

         (d)  Lessee's  Share of Operating  Expenses  shall be payable by Lessee
within ten (10) days after a reasonably detailed statement of actual expenses is
presented to Lessee by Lessor.  At Lessor's  option,  however,  an amount may be
estimated  by Lessor  from time to time of  Lessee's  Share of annual  Operating
Expenses  and the same shall be payable  monthly or  quarterly,  as Lessor shall
designate, during each twelve-month period of the Lease term, on the same day as
the Base Rent is due hereunder.  In the event that Lessee pays Lessor's estimate
of Lessee's  Share of Operating  Expenses as aforesaid,  Lessor shall deliver to
Lessee  within  sixty (60) days after the  expiration  of each  calendar  year a
reasonably  detailed  statement  showing  Lessee's Share of the actual Operating
Expenses  incurred  during the preceding  year. If Lessee's  payments under this
paragraph  4.2(d) during said preceding year exceed  Lessee's Share as indicated
on said  statement,  Lessee  shall be  entitled  to  credit  the  amount of such
overpayment  against  Lessee's Share of Operating  Expenses next falling due. If
Lessee's  payment under this paragraph during said preceding year were less than
Lessee's  Share as indicated on said  statement,  Lessee shall pay to Lessor the
amount of the deficiency within ten (10) days after delivery by Lessor to Lessee
of said statement.

5.  Security  Deposit.  Lessee shall deposit with Lessor upon  execution  hereof
$2,500.00 as security for Lessee's faithful  performance of Lessee's obligations
hereunder.  If  Lessee  fails to pay rent or other  charges  due  hereunder,  or
otherwise defaults with respect to any provision of this Lease.  Lessor may use,
apply or retain all or any  portion of said  deposit for the payment of any rent
or other  charge in default or for the payment of any other sum to which  Lessor
may become obligated by reason of Lessee's default,  or to compensate Lessor for
any loss or damage which Lessor may suffer thereby. If Lessor so uses or applies
all or any  portion of said  deposit,  Lessee  shall  within ten (10) days after
written  demand  therefor  deposit cash with Lessor in an amount  sufficient  to
restore said deposit to the full amount then required of Lessee.  If the monthly
rent shall,  from time to time,  increase during the term of this Lease,  Lessee
shall, at the time of such increase, deposit with Lessor  additional  money as a
security deposit so that the total amount of the security deposit held by Lessor
shall at all times bear the same proportion to the then current Base Rent as the
initial  security  deposit bears to the initial Base Rent set forth in paragraph
4. Lessor shall not be required to keep said security  deposit separate from its
general accounts. If Lessee performs all of Lessee's obligations hereunder, said
deposit,  or so much thereof as has not therefore been applied by Lessor,  shall
be  returned, without  payment of interest or other  increment  for its use,  to
Lessee  (or,  at  Lessor's  option,  to the last  assignee,  if any, of Lessee's
interest  herunder) at the  expiration of the term hereof,  and after Lessee has
vacated the Premises. No trust relationship is created herein between Lessor and
Lessee with respect to said Security Deposit.

6. Use.

     6.1 Use.  The  Premises  shall be used and  occupied  only for  design  and
manufacture of microwave  power  amplifiers or any other use which is reasonably
comparable and for no other purpose.

     6.2 Compliance with Law.

         (a) Lessor warrants to Lessee that the Premises,  in the state existing
on the date that the Lease term  commences,  but  without  regard to the use for
which  Lessee  will occupy the  Premises,  does not  violate  any  covenants  or
restrictions of record, or any applicable building code, regulation or ordinance
in effect on such Lease term  commencement  date.  In the event it is determined
that this  warranty has been  violated,  then it shall be the  obligation of the
Lessor, after written notice from Lessee, to promptly, at Lessor's sole cost and
expense, rectify any such violation. In the event Lessee does not give to Lessor
written notice of the violation of this warranty within six months from the date
that the Lease term commences, the correction of same shall be the obligation of
the Lessee at Lessee's  sole cost.  The  warranty  contained  in this  paragraph
6.2(a)  shall be of no  force or  effect  if,  prior to the date of this  Lease,
Lessee was an owner or occupant of the Premises and, in such event, Lessee shall
correct any such violation at Lessee's sole cost.

         (b) Except as provided in paragraph  6.2(a) Lessee  shall,  at Lessee's
expense,  promptly  comply  with all  applicable  statutes,  ordinances,  rules,
regulations,  orders,  covenants and restrictions of record, and requirements of
any fire insurance  underwriters or rating  bureaus,  now in effect or which may
hereafter come into effect,  whether or not they reflect a change in policy from
that now existing,  during the term or any part of the term hereof,  relating in
any manner to the Premises and the  occupation and use by Lessee of the Premises
and of the Common Areas. Lessee shall not use nor permit the use of the Premises
or the Common  Areas in any manner that will tend to create waste or a nuissance
or shall tend to disturb other occupants of the Industrial Center.

     6.3 Condition of Premises.

         (a) Lessor  shall  deliver  the  Premises  to Lessee  clean and free of
debris on the Lease  commencement  date (unless Lessee is already in possession)
and Lessor  warrants to Lessee that the plumbing,  lighting,  air  conditioning,
heating,  and loading doors in the Premises shall be in good operating condition
on the Lease  commencement  date. In the event that it is  determined  that this
warranty has been  violated, then it shall be the  obligation of  Lessor,  after
receipt of written notice from Lessee selling forth with  specificity the nature
of the violation,  to promptly,  at Lessor's sole cost,  rectify such violation.
Lessee's  failure to give such written  notice to Lessor within thirty (30) days
after the Lease  commencement  date shall cause the conclusive  presumption that
Lessor has complied  with all of Lessor's  obligations  hereunder.  The warranty
contained in this  paragraph  6.3(a) shall be of no force or effect if prior  to
the date of this Lease, Lessee was an owner or occupant of the Premises.

         (b) Except as otherwise  provided in this Lease,  Lessee hereby accepts
the Premises in their condition  existing as of the Lease  commencement  date or
the date that Lessee takes  possession  of the  Premises,  whichever is earlier,
subject to all applicable zoning, municipal,  county and state laws,  ordinances
and  regulations  governing  and  regulating  the use of the  Premises,  and any
covenants or restrictions of record,  and accepts this Lease subject thereto and
to all matters  disclosed thereby and by any exhibits  attached  hereto.  Lessee
acknowledges that neither Lessor nor Lessor's agent has made any  representation
or warranty  as to the present or future  suitability  of the  Premises  for the
conduct of Lessee's business.

7. Maintenance, Repairs, Alterations and Common Area Services.

     7.1  Lessor's  Obligations. Subject to the  provisions  of  paragraphs  4.2
(Operating  Expenses),  6 (Use),  7.2  (Lessee's  Obligations)  and 9 (Damage or
Destruction) and except for damage caused by any negligent or intentional act or
omission of Lessee,  Lessee's  employers,  suppliers,  shippers,  customers,  or
invitees,  in which event Lessee shall  repair the damage,  Lessor,  at Lessor's
expense,  subject to  reimbursement pursuant to paragraph 4.2 shall keep in good
condition and repair the  foundations,  exterior walls, structural  condition of
interior bearing walls,  and roof of the Premises,  as well as the parking lots,
walkways, driveways, landscaping, fences, signs and utility installations of the
Common Areas and all parts thereof,  as well as providing the services for which
there is an  Operating  Expense  pursuant  to  paragraph  4.2 Lessor  shall not,
however,  be  obligated  to paint the  exterior or interior  surface of exterior
walls,  nor shall  Lessor be required to  maintain,  repair or replace  windows,
doors or plate glass of the  Premises.  Lessor shall have no  obligation to make
repairs  under this  paragraph  7.1 until a  reasonable  time  after  receipt of
written notice from Lessee of the need for such repairs. Lessee expressly waives
the benefits of any statute now or  hereafter  in effect  which would  otherwise
afford Lessee the right to make repairs at Lessor's expense or to terminate this
Lease because of Lessor's failure to keep the Premises in good order,  condition
and repair. Lessor shall not be liable for damages or loss of any kind or nature
by reason of  Lessor's  failure to furnish any Common  Area  Services  when such
failure is caused by accident,  breakage,  repairs,  strikes,  lockout, or other
labor  disturbances  or disputes of any character,  or by any other cause beyond
the reasonable control of Lessor.

     7.2 Lessee's Obligations.

         (a) Subject to the  provisions  of  paragraphs 6 (Use),  7.1  (Lessor's
Obligations), and 9 (Damage or Destruction),  Lessee, at Lessee's expense, shall
keep in good order,  condition  and repair the  Premises  and every part thereof
(whether or not the damaged  portion of the  Premises or the means of  repairing
the same are  reasonably  or readily  accessable to Lessee)  including,  without
limiting the generality of the foregoing, all plumbing, heating, ventilating and
air  conditioning  systems  (Lessor  shall  procure  and  maintain,  at Lessee's
expense,  a  ventilating  and air  conditioning  system  maintenance  contract),
electrical and lighting facilities and equipment within the Premises,  fixtures,
interior  walls and  interior  surfaces of exterior  walls,  ceilings,  windows,
doors,  plate glass, and skylights located within the Premises.  Lessor reserves
the right to procure and maintain the  ventilating and air  conditioning  system
maintenance  contract and if Lessor so elects,  Lessee shall  reimburse  Lessor,
upon  demand for the cost  thereof.  Lessee  shall be  responsible  for all pest
control services on or about the premises, i.e., ants, rodents.

         (b)  If  Lessee  fails  to  perform  Lessee's  obligations  under  this
paragraph 7.2 or under any other paragraph of this Lease,  Lessor may enter upon
the Premises  after ten (10) days' prior written notice to Lessee (except in the
case of  emergency,  in  which  no  notice  shall  be  required),  perform  such
obligations on Lessee's behalf and put the Premises in good order, condition and
repair,  and the cost thereof together with interest thereon at the maximum rate
then  allowable  by law shall be due and  payable as  additional  rent to Lessor
together with Lessee's next Base Rent installment.

         (c) On the last day of the term hereof,  or on any sooner  termination,
Lessee shall surrender the Premises to Lessor in the same condition as received,
ordinary  wear and tear  expected,  clean  and free of  debris.  Any  damage  or
deterioration  of the Premises shall not be deemed ordinary wear and tear if the
same could have been  prevented  by good  maintenance  practices.  Lessee  shall
repair any damage to the Premises  occasioned by the  installation or removal of
Lessee's trade fixtures, alterations, furnishings and equipment. Notwithstanding
anything to the contrary otherwise stated in this Lease.  Lessee shall leave the
air lines, power panels,  electrical  distribution  systems,  lighting fixtures,
space heaters,  air  conditioning,  plumbing and fencing on the Premises in good
operating condition.

     7.3 Alterations and Additions.

         (a) Lessee shall not,  without  Lessor's prior written consent make any
alterations,  improvements,  additions, or Utility Installations in, on or about
the Premises, or the Industrial Center, except for nonstructural  alterations to
the Premises not exceeding $2,500 in cumulative  costs,  during the term of this
Lease.  In any  event,  whether or not in excess of $2,500 in  cumulative  cost,
Lessee  shall make no change or  alteration  to the exterior of the Premises nor
the exterior of the Building nor the Industrial  Center  without  Lessor's prior
written consent.  As used in this paragraph 7.3 the term "Utility  Installation"
shall mean carpeting,  window  coverings,  air lines,  power panels,  electrical
distribution  systems,  lighting  fixtures,  space  heaters,  air  conditioning,
plumbing, and fencing.  Lessor may require that Lessee remove any or all of said
alterations, improvements,

                                                                  Initials:  HGW

                                                                             BW

                                      -2-
<PAGE>

additions or Utility  Installations  at the  expiration of the term, and restore
the  Premises and the  Industrial  Center to their prior  condition.  Lessor may
require Lessee to provide Lessor, at Lessee's sole cost and expense,  a lien and
completion  bond in an amount equal to one and one-half times the estimated cost
of such improvements,  to insure Lessor against any liability for mechanic's and
materialmen's liens and to insure completion of the work. Should Lessee make any
alterations,  improvements, additions or Utility Installations without the prior
approval  of Lessor,  Lessor  may,  at any time  during the term of this  Lease,
require that Lessee remove any or all of the same.

         (b) Any alterations,  improvements,  additions or Utility Installations
in or about the  Premises or the  Industrial  Center that Lessee shall desire to
make and which  requires  the consent of the Lessor shall be presented to Lessor
in written form, with proposed detailed plans. If Lessor shall give its consent,
the consent shall be deemed  conditioned upon Lessee acquiring a permit to do so
from  appropriate  governmental  agencies,  the furnishing  of a copy thereof to
Lessor prior to the  commencement  of the work and the  compliance  by Lessee of
all conditions of said permit in a prompt and expeditious manner.

         (c) Lessee  shall  pay,  when due,  all  claims for labor or  materials
furnished  or alleged to have been  furnished  to or for Lessee at or for use in
the  Premises,  which  claims  are or  may  be  secured  by  any  mechanic's  or
materialmen's  lien  against the  Premises,  or the  Industrial  Center,  or any
interest  therein.  Lessee  shall give Lessor not less than ten (10) days notice
prior to the commencement of any work in the Premises, and Lessor shall have the
right  to  post  notices  of  non-responsibility  in or on the  Premises  or the
Building  as  provided  by law.  If Lessee  shall,  in good  faith,  contest the
validity  of any such lien,  claim or demand,  then  Lessee  shall,  at its sole
expense  defend itself and Lessor against the same and shall pay and satisfy any
such  adverse  judgment  that may be  rendered  thereon  before the  enforcement
thereof  against the Lessor or the Premises or the Industrial  Center,  upon the
condition that if Lessor shall require,  Lessee shall furnish to Lessor a surety
bond  satisfactory  in Lessor in an amount equal to such contested lien claim or
demand  indemnifying  Lessor  against  liability  for the same and  holding  the
Premises and the  Industrial  Center free from the effect of such lien or claim.
In addition,  Lessor may require Lessee to pay Lessor's attorneys fees and costs
in  participating  in such action if Lessor shall decide it is to Lessor's  best
interest to do so.

         (d) All alterations,  improvements, additions and Utility Installations
(whether or not such Utility Installations constitute trade fixtures of Lessee),
which may be made on the  Premises,  shall be the  property  of Lessor and shall
remain upon and be surrendered  with the Premises at the expiration of the Lease
term,  unless  Lessor  requires  their  removal  pursuant to  paragraph  7.3(a).
Notwithstanding the provisions of this paragraph  7.3(d), Lessee's machinery and
equipment, other than that which is affixed to the Premises so that it cannot be
removed  without  material  damage  to the  Premises,  and  other  than  Utility
Installations,  shall remain the property of Lessee and may be removed by Lessee
subject to the provisions of paragraph 7.2.

     7.4  Utility  Additions.  Lessor  reserves  the  right  to  install  new or
additional utility  facilities  throughout the Building and the Common Areas for
the benefit of Lessor or Lessee,  or any other lessee of the Industrial  Center,
including, but not by way of limitation, such utilities as plumbing,  electrical
systems,  security  systems,  communication  systems,  and fire  protection  and
detection systems,  so long as such installations do not unreasonably  interfere
with Lessee's use of the Premises.

8. Insurance; Indemnity.

     8.1  Liability  Insurance -- Lessee.  Lessee shall,  at Lessee's  expenses,
obtain  and keep in force  during  the term of this  Lease a policy of  Combined
Single Limit Bodily Injury and Property  Damage  insurance  insuring  Lessee and
Laverty Property  Management and Lessor against any liability arising out of the
use,  occupancy or maintenance of the Premises and the Industrial  Center.  Such
insurance  shall be in an amount not less than  $1,000,000 per  occurrence.  The
policy shall insure  performance  by Lessee of the indemnity  provisions of this
paragraph  8. The  limits  of said  insurance  shall  not,  however,  limit  the
liability of Lessee hereunder.

     8.2  Liability  Insurance -- Lessor.  Lessor shall obtain and keep in force
during the term of this Lease a policy of Combined  Single Limit  Bodily  Injury
and Property Damage  Insurance,  insuring  Lessor,  but not Lessee,  against any
liability  arising out of the  ownership  use,  occupancy or  maintenance of the
Industrial Center in an amount not less than $500,000.00 per occurence.

     8.3  Property  Insurance.  Lessor shall obtain and keep in force during the
term of this Lease a policy or policies of insurance  covering loss or damage to
the  Industrial  Center  improvements,   but  not  Lessee's  personal  property,
fixtures, equipment or tenant improvements,  in an amount not to exceed the full
replacement  value thereof,  as the same may exist from time to time,  providing
protection  against  all  perils  included  within the  classification  of fire,
extended coverage,  vandalism,  malicious mischief,  flood (in the event same is
required by a lender  having a lien on the  Premises)  special  extended  perils
("all  risk",  as such  term is used in the  insurance  industry),  plate  glass
insurance  and such other  insurance  as Lessor  deems  advisable.  In addition,
Lessor shall obtain and keep in force,  during the term of this Lease,  a policy
of rental value  insurance  covering a period of one year,  with loss payable to
Lessor, which insurance shall also cover all Operating Expenses for said period.

     8.4 Payment of Premium Increase.

         (a) After the term of this  Lease has  commenced.  Lessee  shall not be
responsible for paying Lessee's Share of any increase in the property  insurance
premium for the Industrial  Center  specified by Lessor's  insurance  carrier as
being caused by the use, acts or omissions of any other lessee of the Industrial
Center,  or by the  nature of such  other  lessee's  occupancy  which  create an
extraordinary or unusual risk.

         (b) Lessee,  however,  shall pay the  entirety  of any  increase in the
property   insurance  premium  for  the  Industrial  Center  over  what  it  was
immediately  prior to the commencement of the term of this Lease if the increase
is  specified  by Lessor's  insurance  carrier as being  caused by the nature of
Lessee's occupancy or any act or omission of Lessee.

         (c) Lessee shall pay to Lessor,  during the term hereof, in addition to
the rent,  Lessee's Share (as defined in paragraph  4.2(a)) of the amount of any
increase in premiums for the insurance required under Paragraph 8.2 and 8.3 over
and above such premiums  paid during the Base Period,  as  hereinafter  defined,
whether  such  premium  increase  shall be the result of the nature of  Lessee's
occupancy,  any act or  omission  of  Lessee,  requirements  of the  holder of a
mortgage or deed of trust  covering  the  Premises,  increased  valuation of the
Premises,  or general rate  increases.  In the event that the Premises have been
occupied  previously,  the words "Base Period" shall mean the last twelve months
of the prior occupancy.  In the event that the Premises have never been occupied
previously,  the  premiums  during the "Base  Period"  shall be deemed to be the
lowest  premiums  reasonably  obtainable  for said  insurance  assuming the most
nominal use of the Premises.  Provided, however, in lieu of the Base Period, the
parties  may insert a dollar  amount at the end of this  sentence  which  figure
shall be considered as the insurance premium for the Base Period: $____________.
In no event, however, shall Lessee be responsible for any portion of the premium
cost attributable to liability insurance coverage in excess of $500,000 procured
under paragraph 8.2.

         (d) Lessee  shall pay any such premium  increases  to Lessor  within 30
days  after  receipt  by  Lessee  of a copy of the  premium  statement  or other
satisfactory  evidence of the amount due. If the insurance  policies  maintained
hereunder  cover other  improvements  in addition to the Premises,  Lessor shall
also deliver to Lessee a statement of the amount of such  increase  attributable
to the  Premises  and  showing in  reasonable  detail,  the manner in which such
amount was  computed.  If the term of this Lease  shall not expire  concurrently
with the expiration of the period covered by such insurance,  Lessee's liability
for premium increases shall be prorated on an annual basis.

     8.5 Insurance Policies.  Insurance required hereunder shall be in companies
holding a  "General  Policyholders  Rating"  of at least B plus,  or such  other
rating as may be  required  by a lender  having a lien on the  Premises,  as set
forth in the most current issue of "Best's Insurance Guide." Lessee shall not do
or permit to be done anything  which shall  invalidate  the  insurance  policies
carried by Lessor Lessee shall  deliver to Lessor copies of liability  insurance
policies  required under paragraph 8.1 or certificates  evidencing the existence
and amounts of such insurance within seven (7) days after the commencement  date
of this Lease.  No such policy shall be  cancellable  or subject to reduction of
coverage or other  modification  except  after  thirty  (30) days prior  written
notice  to  Lessor.  Lessee  shall,  at  least  thirty  (30)  days  prior to the
expiration of such policies, furnish Lessor with renewals or "binders" thereof.

     8.6 Waiver of  Subrogation.  Lessee  and Lessor  each  hereby  release  and
relieve the other,  and waive their entire  right of recovery  against the other
for loss or damage  arising  out of or incident  to the perils  insured  against
which perils occur in, on or about the Premises,  whether due to the  negligence
of Lessor or Lessee or their agents,  employees,  contractors  and/or  invitees.
Lessee and Lessor  shall,  upon  obtaining  the policies of  insurance  required
hereunder,  give notice to the insurance  carrier or carriers that the foregoing
mutual waiver of subrogation is contained in this Lease.

     8.7  Indemnity.  Lessee shall  indemnify and hold harmless  Lessor from and
against any and all claims arising from Lessee's use of the  Industrial  Center,
or from the conduct of Lessee's  business or from any  activity,  work or things
done,  permitted or suffered by Lessee in or about the Premises or elsewhere and
shall further  indemnify  and hold harmless  Lessor from and against any and all
claims  arising from any breach or default in the  performance of any obligation
on Lessee's part to be performed  under the terms of this Lease, or arising from
any act or  omission  of Lessee,  or any of  Lessee's  agents,  contractors,  or
employees,  and from and  against  all  costs,  attorney's  fees,  expenses  and
liabilities  incurred  in the  defense  of any  such  claim  or  any  action  or
proceeding  brought  thereon;  and in case any action or  proceeding  be brought
against  Lessor by reason of any such  claim,  Lessee upon  noticed  from Lessor
shall defend the same at Lessee's expense by counsel reasonably  satisfactory to
Lessor and Lessor shall  cooperate  with Lessee in such  defense,  Lessee,  as a
material part of the consideration to Lessor,  hereby assumes all risk of damage
to  property of Lessee or injury to  persons,  in, upon or about the  Industrial
Center  arising  from any cause and Lessee  hereby  waives all claims in respect
thereof against Lessor.

     8.8  Exemption of Lessor from  Liability.  Lessee hereby agrees that Lessor
shall  not be  liable  for  injury to  Lessee's  business  or any loss of income
therefrom or for damage to the goods,  wares,  merchandise  or other property of
Lessee, Lessee's employees, invitees, customers, or any other person in or about
the Premises or the Industrial  Center, nor shall Lessor be liable for injury to
the person of Lessee,  Lessee's employees,  agents or contractors,  whether such
damage or injury is caused by or results  from fire,  steam,  electricity,  gas,
water or rain, or from the breakage,  leakage,  obstruction  or other defects of
pipes,  sprinklers,  wires,  appliances,  plumbing, air conditioning or lighting
fixtures,  or from any other cause,  whether said damage or injury  results from
conditions  arising upon the Premises or upon other  portions of the  Industrial
Center,  or from other sources or places and  regardless of whether the cause of
such  damage or injury or the means of  repairing  the same is  inaccessible  to
Lessee.  Lessor  shall not be liable  for any  damages  arising  from any act or
neglect of any other lessee, occupant or user of the Industrial Center, nor from
the  failure  of Lessor to  enforce  the  provisions  of any other  lease of the
Industrial Center.

9. Damage or Destruction.

     9.1 Definitions.

         (a) "Premises Partial Damage" shall mean if the Premises are damaged or
destroyed  to the extent  that the cost of repair is less than fifty  percent of
the then replacement cost of the Premises.

                                                                   Initials: HGW
                                                                             BW

                                      -3-
<PAGE>

         (b) "Premises Total Destruction" shall mean if the Premises are damaged
or destroyed  to the extent that the cost of repair is fifty  percent or more of
the then replacement cost of the Premises.

         (c) "Premises  Building  Partial  Damage" shall mean if the Building of
which the  Premises  are a part is damaged or  destroyed  to the extent that the
cost to repair is less than fifty  percent of the then  replacement  cost of the
Building.

         (d) "Premises Building Total Destruction" shall mean if the Building of
which the  Premises  are a part is damaged or  destroyed  to the extent that the
cost to  repair is fifty  percent  or more of the then  replacement  cost of the
Building.

         (e) "Industrial Center Building" shall mean all of the buildings on the
Industrial Center site.

         (f) "Industrial  Center Buildings Total  Destruction" shall mean if the
Industrial Center Buildings are damaged or destroyed to the extent that the cost
of  repair  is  fifty  percent  or  more  of the  then  replacement  cost of the
Industrial Center Buildings.

         (g) "Insured Loss" shall mean damage or destruction which was caused by
an event  required to be covered by the  insurance  described in paragraph 8 The
fact that an insured  Loss has a  deductible  amount  shall not make the loss an
uninsured loss.

         (h)  "Replacement  Cost" shall mean the amount of money necessary to be
spent in order to repair or  rebuild  the  damaged  area to the  condition  that
existed  immediately  prior to the damage  occurring  excluding all improvements
made by lessees.

     9.2 Premises Partial Damage; Premises Building Partial Damage.

         (a) Insured Loss:  Subject to the  provisions of paragraph 9.4 and 9.5,
if at any time during the term of this Lease there is damage which is an Insured
Loss and which falls into the  classification  of either Premises Partial Damage
or Premises  Building  Partial Damage,  then Lessor shall, at Lessor's  expense,
repair such damage to the  Premises,  but not  Lessee's  fixtures,  equipment or
tenant  improvements,  as soon as  reasonably  possible  and  this  Lease  shall
continue in full force and effect.

         (b) Uninsured  Loss:  Subject to the  provisions of paragraphs  9.4 and
9.5, if at any time  during the term of this Lease there is damage  which is not
an Insured Loss and which falls within the  classification  of Premises  Partial
Damage or Premises  Building  Partial  Damage,  unless  caused by a negligent or
willful act of Lessee (in which event  Lessee shall make the repairs at Lessee's
expense),  which damage prevents  Lessee from using the Premises,  Lessor may at
Lessor's option either (i) repair such damage as soon as reasonably  possible at
Lessor's  expense,  in which event this Lease  shall  continue in full force and
effect,  or (ii) give written notice to Lessee within thirty (30) days after the
date of the  occurrence  of such  damage of  Lessor's  intention  to cancel  and
terminate  this Lease as of the date of the  occurrence  of such damage.  In the
event Lessor elects to give notice to give written  notice to Lessor of Lessee's
intention to repair such damage at Lessee's expense,  without reimbursement from
Lessor,  in which event this Lease shall continue in full force and effect,  and
Lessee shall  proceed to make such repairs as soon as  reasonably  possible.  If
Lessee does not give such notice  within such 10-day  period this Lease shall be
cancelled and terminated as of the date of the occurrence of such damage.

     9.3  Premises  Total  Destruction;  Premises  Building  Total  Destruction;
Industrial Center Buildings Total Destruction.

         (a) Subject to the provisions of paragraphs 9.4 and 9.5, if at any time
during the term of this Lease  there is damage,  whether or not it is an Insured
Loss,  and which falls into the  classifications  of either (i)  Premises  Total
Destruction,  or (ii) Premises Building Total  Destruction,  or (iii) Industrial
Center  Buildings Total  Destruction,  then Lessor may at Lessor's option either
(i) repair such damage or destruction,  but not Lessee's fixtures,  equipment or
tenant  improvements,  as soon as reasonably  possible at Lessor's expense,  and
this Lease shall continue in full force and effect,  or (ii) give written notice
to Lessee within thirty (30) days after the date of occurrence of such damage of
Lessor's  intention to cancel and terminate this Lease, in which case this Lease
shall be  cancelled  and  terminated  as of the date of the  occurrence  of such
damage.

     9.4 Damage Near End of Term.

         (a) Subject to paragraph 9.4(b), if any time during the last six months
of the term of this Lease there is substantial damage, whether or not an Insured
Loss, which falls within the  classification of Premises Partial Damage,  Lessor
may at  Lessor's  option  cancel  and  terminate  this  Lease  as of the date of
occurrence  of such  damage by  giving  written  notice  to  Lessee of  Lessor's
election to do so within 30 days after the date of occurrence of such damage.

         (b)  Notwithstanding  paragraph 9.4(a), in the event that Lessee has an
option to extend or renew this Lease,  and the time within which said option may
be exercised has not yet expired, Lessee shall exercise such option, if it is to
be exercised at all, no later than twenty (20) days after the  occurrence  of an
Insured Loss falling within the classification of Premises Partial Damage during
the last six months of the term of this  Lease.  If Lessee duly  exercises  such
option during said twenty (20) day period,  Lessor shall,  at Lessor's  expense,
repair such damage, but not Lessee's fixtures, equipment or tenant improvements,
as soon as reasonably  possible and this Lease shall  continue in full force and
effect.  If Lessee  fails to exercise  such  option  during said twenty (20) day
period, then Lessor may at Lessor's option terminate and cancel this Lease as of
the expiration of said twenty (20) day period by giving written notice to Lessee
of Lessor's  election to do so within ten (10) days after the expiration of said
twenty (20) day period,  notwithstanding  any term or  provision in the grant of
option to the contrary.

     9.5 Abatement of Rent; Lessee's Remedies.

         (a) In the event Lessor  repairs or restores  the Premises  pursuant to
the  provisions of this  paragraph 9, the rent payable  hereunder for the period
during which such damage,  repair or  restoration  continues  shall be abated in
proportion  to the degree to which  Lessee's  use of the  Premises is  impaired.
Except for abatement of rent, if any,  Lessee shall have no claim against Lessor
for any damage  suffered by reason of any such  damage,  destruction,  repair or
restoration.

         (b) If Lessor  shall be  obligated  to repair or restore  the  Premises
under the  provisions of this  paragraph 9 and shall not commence such repair or
restoration  within ninety (90) days after such obligation shall accrue.  Lessee
may at Lessee's  option cancel and terminate this Lease by giving Lessor written
notice of Lessee's  election to do so at any time prior to the  commencement  of
such repair or  restoration.  In such event this Lease shall terminate as of the
date of such notice.

     9.6  Termination  --  Advance  Payments.  Upon  termination  of this  Lease
pursuant to this paragraph 9, an equitable  adjustment  shall be made concerning
advance rent and any advance payments made by Lessee to Lessor. Lessor shall, in
addition,  return to  Lessee so much of  Lessee's  security  deposit  as has not
theretofore been applied by Lessor.

     9.7 Waiver.  Lessor and Lessee waive the  provisions  of any statute  which
relate to termination of leases when leased property is destroyed and agree that
such event shall be governed by the terms of this Lease.

10. Real Property Taxes.

     10.1 Payment of Tax  Increase.  Lessor shall pay the real  property tax, as
defined in  paragraph  10.3,  applicable  to the  Industrial  Center;  provided,
however,  that Lessee shall pay, in addition to rent, Lessee's Share (as defined
in  paragraph  4.2(a))  of the  amount,  if any,  by which real  property  taxes
applicable  to the  Premises  increase  over the  fiscal  real  estate  tax year
1997-1998.  Such payment  shall be made by Lessee  within thirty (30) days after
receipt of Lessor's written  statement setting forth the amount of such increase
and the  computation  thereof.  If the  term  of this  Lease  shall  not  expire
concurrently with the expiration of the tax fiscal year,  Lessee's liability for
increased  taxes for the last partial  lease year shall be prorated on an annual
basis.

     10.2  Additional  Improvements.  Lessee shall not be responsible for paying
Lessee's  Share  of any  increase  in real  property  tax  specified  in the tax
assessor's  records and work sheets as being caused by  additional  improvements
placed  upon  the  Industrial  Center  by other  lessees  or by  Lessor  for the
exclusive enjoyment of such other lessees.  Lessee shall, however, pay to Lessor
at the time that  Operating  Expenses  are payable  under  paragraph  4.2(c) the
entirety of any increase in real  property  tax if assessed  solely by reason of
additional  improvements  placed  upon the  Premises  by Lessee  or at  Lessee's
request.

     10.3  Definition  of "Real  Property  Tax." As used herein,  the term "real
property tax" shall include any form of real  estate tax or assessment, general,
special, ordinary or extraordinary,  and any license fee, commercial rental tax,
improvement bond or bonds, levy or tax (other than inheritance,  personal income
or estate taxes) imposed on the Industrial  Center or any portion thereof by any
authority  having  the  direct or  indirect  power to tax,  including  any city,
county,  state or federal  government,  or any school,  agricultural,  sanitary,
fire,  street,  drainage or other improvement  district thereof,  as against any
legal or equitable interest of Lessor in the Industrial Center or in any portion
thereof,  as against  Lessor's  right to rent or other income therefrom,  and as
against  Lessor's  business of leasing  the  Industrial  Center.  The term "real
property tax" shall also include any tax, fee, levy, assessment or charge (i) in
substitution of,  partially or totally,  any tax, fee, levy assessment or charge
hereinabove  included  within the definition of "real property tax," or (ii) the
nature  of which  was  hereinbefore  included  within  the  definition  of "real
property  tax," or (iii)  which is imposed  for a service  or right not  charged
prior to June 1, 1978, or, if previously charged,  has been increased since June
1, 1978, or (iv) which is imposed as a result of a transfer,  either  partial or
total, of Lessor's  interest in the Industrial Center or which is added to a tax
or charge  hereinbefore  included  within the definition of real property tax by
reason of such transfer,  or (v) which is imposed by reason of this transaction,
any modifications or changes hereto, or any transfers hereof.

     10.4 Joint Assessment. If the Industrial Center is not separately assessed,
Lessee's  Share  of the  real  property  tax  liability  shall  be an  equitable
proportion  of the real  property  taxes  for all of the  land and  improvements
included  within  the tax parcel  assessed,  such proportion to be determined by
Lessor from the respective  valuations assigned in the assessor's work sheets or
such other  information  as may be  reasonably  available.  Lessor's  reasonable
determination thereof, in good faith, shall be conclusive.

     10.5 Personal Property Taxes.

         (a) Lessee shall pay prior to delinquency  all taxes  assessed  against
and levied upon trade  fixtures,  furnishings,  equipment and all other personal
property of Lessee contained in the Premises or elsewhere. When possible, Lessee
shall cause said trade fixtures,  furnishings,  equipment and all other personal
property to be assessed and billed separately from the real property of Lessor.

         (b) If any of Lessee's  said personal  property  shall be assessed with
Lessor's real  property,  Lessee shall pay to Lessor the taxes  attributable  to
Lessee within ten (10) days after receipt of a written  statement  setting forth
the taxes applicable to Lessee's property.

11.  Utilities.  Lessee  shall  pay for all  water,  gas,  heat,  light,  power,
telephone and other  utilities and services  supplied to the Premises,  together
with any taxes thereon.  If any such services are not separately  metered to the
Premises,  Lessee  shall pay at  Lessor's  option,  either  Lessee's  Share or a
reasonable  proportion to be determined by Lessor of all charges jointly metered
with other premises in the Building.

                                                                  Initials:  HGW
                                                                             BW

                                      -4-

<PAGE>

12. Assignment and Subletting.

     12.1  Lessor's  Content  Required.  Lessee   shall  not  voluntarily  or by
operation of law assign,  transfer,  mortgage,  sublet, or otherwise transfer or
encumber all or any part of Lessee's  Interest in the Lease or in the  Premises,
without Lessor's prior written  consent,  which Lessor shall not encumber all or
any part of Lessee's interest in the Lease or in the Premises,  without Lessor's
prior written  consent,  which Lessor shall not  unreasonably  withhold.  Lessor
shall respond to Lessee's  request for consent  hereunder in a timely manner and
any attempted assignment,  transfer, mortgage, encumbrance or subletting without
such consent shall be void, and shall  constitute a breach of this Lease without
the need for notice to Lessee under paragraph 13.1.

     12.2 Lessee  Affiliate.  Notwithstanding  the  provisions of paragraph 12.1
hereof,  Lessee may  assign or sublet  the  Premises,  or any  portion  thereof,
without Lessor's consent, to any corporation which controls, is controlled by or
is under common control with Lessee,  or to any  corporation  resulting from the
merger or consolidation  with Lessee,  or to any person or entity which acquires
all the  assets of  Lessee  as a going  concern  of the  business  that is being
conducted on the Premises,  all of which are referred to as "Lessee  Affiliate,"
provided that before such  assignment  shall be effective  said  assignee  shall
assume, in full, the obligations of Lessee under this Lease. Any such assignment
shall not, in any way,  affect or limit the  liability of Lessee under the terms
of this Lease  even if after such  assignment  or  subletting  the terms of this
Lease are  materially  changed or altered  without  the  consent of Lessee,  the
consent of whom shall not be necessary.

     12.3 Terms and conditions of Assignment. Regardless of Lessor's consent, no
assignment shall release Lessee of Lessee's  obligations  hereunder or alter the
primary liability of Lessee to pay the Base Rent and Lessee's Share of Operating
Expenses,  and to  perform  all  other  obligations  to be  performed  by Lessee
hereunder  Lessor may  accept  rent from any person  other than  Lessee  pending
approval or  disapproval of such  assignment. Neither a delay in the approval or
disapproval of such  assignment  nor the  acceptance of rent shall  constitute a
waiver or estoppel of Lessor's  right to exercise its remedies for the breach of
any of their terms or conditions of this paragraph 12 or this Lease.  Consent to
one assignment  shall not be deemed consent to any subsequent  assignment in the
event of default by any assignee of Lessee or any  successor  of Lessee,  in the
performance  of any of the terms  hereof.  Lessor may proceed  directly  against
Lessee  without the  necessity of  exhausting  remedies  against said  assignee.
Lessor may consent to  subsequent  assignments  of this Lease or  amendments  or
modifications to this Lease with assignees of Lessee,  without notifying Lessee,
or any successor of Lessee,  and without  obtaining its or their consent thereto
and such action shall not relieve Lessee of liability under this Lease.

     12.4 Terms and Conditions Applicable to Subletting.  Regardless of Lessor's
consent,  the following  terms and  conditions  shall apply to any subletting by
Lessee of all or any part of the Premises and shall be included in subleases:

         (a) Lessee  hereby  assigns  and  transfers  to Lessor all of  Lessee's
interest in all rentals  and income  arising  from any  sublease  heretofore  or
hereafter made by Lessee,  and Lessor may collect such rent and income and apply
same toward Lessee's obligations under this Lease; provided, however, that until
a default  shall occur in the  performance  of Lessee's  obligations  under this
Lease,  Lessee may  receive,  collect  and enjoy the rents  accruing  under such
sublease.  Lessor shall not, by reason of this or any other  assignment  of such
sublease  to  Lessor  nor by  reason  of the  collection  of  the  rents  from a
sublessee,  be  deemed  liable to the  sublessee  for any  failure  of Lessee to
perform and comply with any of Lessee's obligations to such sublessee under such
sublease.  Lessee hereby irrevocably  authorizes and directs any such sublessee,
upon receipt of a written  notice from Lessor  stating that a default  exists in
the performance of Lessee's  obligations  under this Lease, to pay to Lessor the
rents  due and to  become  due  under  the  sublease.  Lessee  agrees  that such
sublessee  shall have the right to rely upon any such statement and request from
Lessor,  and that such  sublessee  shall pay such  rents to Lessor  without  any
obligation  or  right  to  inquire  as  to  whether  such  default   exists  and
withstanding any notice from or claim from Lessee to the contrary.  Lessee shall
have no right or claim  against  such  sublessee or Lessor for any such rents so
paid by said sublessee to Lessor.

         (b) No sublease  entered into by Lessee  shall be effective  unless and
until has been  approved in writing by Lessor.  In entering  into any  sublease,
Lessee shall use only such form of sublease as is  satisfactory  to Lessor,  and
once approved by Lessor,  such sublease shall not be changed or modified without
Lessor's prior written consent.  Any sublessee shall, by reason of entering into
a sublease  under this  Lease,  be deemed,  for the  benefit of Lessor,  to have
assumed and agreed to conform and comply with each and every  obligation  herein
to be  performed  by Lessee  other than such  obligations  as are contrary to or
inconsistent  with  provisions  contained  in a  sublease  to which  Lessor  has
expressly consented in writing.

         (c) If Lessee's  obligations  under this Lease have been  guaranteed by
third  parties,  then a sublease,  and Lessor's  consent  thereto,  shall not be
effective unless said guarantors give their written consent to such sublease and
the terms thereof.

         (d) The consent by Lessor to any  subletting  shall not release  Lessee
from its  obligations  or alter the primary  liability of Lessee to pay the rent
and  perform and comply with all of the  obligations  of Lessee to be  performed
under this Lease.

         (e) The  consent by Lessor to any  subletting  shall not  constitute  a
consent  to  any  subsequent  subletting  by  Lessee  or to  any  assignment  or
subletting  by  the  sublessee.   However,  Lessor  may  consent  to  subsequent
sublettings and  assignments of the sublease or any amendments or  modifications
thereto without  notifying Lessee or anyone else liable on the Lease or sublease
and without  obtaining  their  consent and such  action  shall not relieve  such
persons from liability.

         (f) In the event of any default  under this  Lease,  Lessor may proceed
directly  against  Lessee,  any  guarantors or anyone else  responsible  for the
performance  of this Lease,  including the sublessee,  without first  exhausting
Lessor's  remedies  against any other person or entity  responsible  therefor to
Lessor, or any security held by Lessor or Lessee.

         (g) In the  event  Lessee  shall  default  in the  performance   of its
obligations  under this Lease,  Lessor, at its option and without any obligation
to do so, may require any  sublessee to attorn to Lessor,  in which event Lessor
shall  undertake the  obligations of Lessee under such sublease from the time of
the  exercise  of said option to the  termination  of such  sublease;  provided,
however,  Lessor shall not be liable for any prepaid  rents or security  deposit
paid by such sublessee to Lessee or for any other prior defaults of Lessee under
such sublease.

         (h) Each and every  consent  required of Lessee under a sublease  shall
also require the consent of Lessor.

         (i) No sublessee  shall further assign or sublet all or any part of the
Premises without Lessor's prior written consent.

         (j)  Lessor's  written  consent to any  subletting  of the  Premises by
Lessee shall not constitute an acknowledgment  that no default then exists under
this Lease of the  obligations  to be performed by Lessee nor shall such consent
be  deemed a waiver of any then  existing  default,  except as may be  otherwise
stated by Lessor at the time.

         (k) With  respect to any  subletting  to which  Lessor  has  consented,
Lessor  agrees to  deliver  a copy of any  notice  of  default  by Lessee to the
sublessee.  Such  sublessee  shall  have the right to cure a  default  of Lessee
within  ten (10)  days  after  service  of said  notice  of  default  upon  such
subelessee,  and the sublessee shall have the right of reimbursement  and offset
from and against Lessee for any such defaults cured by the sublessee.

     12.5  Attorney's  Fees.  In the event  Lessee  shall  assign or sublet  the
Premises or request the consent of Lessor to any  assignment or subletting or if
Lessee  shall  request the  consent of Lessor for any act Lessee  proposes to do
then Lessee shall pay Lessor's reasonable  attorneys fees incurred in connection
therewith, such attorneys fees not to exceed $350.00 for each such request.

13. Default; Remedies.

     13.1  Default.  The  occurence of any one or more of the  following  events
shall constitute a material default of this Lease by Lessee:

         (a) The vacating or abandonment of the Premises by Lessee.

         (b) The  failure  by  Lessee to make any  payment  of rent or any other
payment required to be made by Lessee  hereunder,  as and when due, where such a
failure  shall  continue  for a period of three (30) days after  written  notice
thereof  form Lessor to Lessee.  In the event that Lessor  serves  Lessee with a
Notice to Pay Rent or Quit pursuant to  applicable  Unlawful  Detainer  statutes
such  Notice to Pay Rent or Quit shall also  constitute  the notice  required by
this subparagraph.

         (c) Except as otherwise  provided in this Lease,  the failure by Lessee
to observe or perform any of the  covenants,  conditions  or  provisions of this
Lease to be observed or performed by Lessee,  other than  described in paragraph
(b) above,  where such  failure  shall continue for a period of thirty (30) days
after written notice thereof from Lessor to Lessee;  provided,  however, that if
the nature of Lessee's noncompliance is such that more than thirty (30) days are
reasonably  required  for its  cure,  then  Lessee  shall not be deemed to be in
default if Lessee  commenced such cure  within  said  thirty (30) day period and
thereafter  dilligently  prosecutes  such  cure  to  completion.  To the  extent
permitted  by law,  such thirty (30) day notice  shall  constitute  the sole and
exclusive  notice  required  to be given to  Lessee  under  applicable  Unlawful
Detainer statutes.

         (d) (i) The  making by Lessee of any  general  arrangement  or  general
assignment  for the  benefit of  creditors:  (ii)  Lessee  becomes a "debtor" as
defined in 11 U.S.C. s.s. 101 or any successor statute thereto  (unless,  in the
case of a petition filed against Lessee, the same is dismissed within sixty (60)
days);  (iii) the  appointment  of a trustee or receiver to take  possession  of
substantially  all of  Lessee's  assets  located at the  Premises or of Lessee's
interest in this Lease, where possession is not restored to Lessee within thirty
(30)  days;  or (iv) the  attachment,  execution  or other  judicial  seizure of
substantially  all of  Lessee's  assets  located at the  Premises or of Lessee's
interest in this Lease,  where such seizure is not discharged within thirty (30)
days. In the event that any provision of this  paragraph  13.1(d) is contrary to
any applicable law, such provision shall be of no force or effect.

         (e) The  discovery  by Lessor  that any  financial  statement  given to
Lessor by Lessee, any assignee of Lessee, any subtenant or Lessee, any successor
in interest of Lessee or any  guarantor of Lessee's  obligation  hereunder,  was
materially false.

     13.2 Remedies.  In the event of any such material default by Lessee, Lessor
may at any time  thereafter,  with or  without  notice  or  demand  and  without
limiting  Lessor in the exercise of any right or remedy which Lessor may have by
reason of such default:

         (a)  Terminate  Lessee's  right to  possession  of the  Premises by any
lawful  means,  in which case the Lease and the term hereof shall  terminate and
Lessee shall immediately surrender possession of the Premises to Lessor. In such
event Lessor  shall be entitled to recover  from Lessee all damages  incurred by
Lessor by reason of Lessee's default including,  but not limited to, the cost of
recovering  possession  for  the  Premises;  expenses  of  reletting,  including
necessary renovation and alteration of the Premises, reasonable attorney's fees,
and any real estate commission  actually paid; the worth at the time of award by
the court having jurisdiction thereof of the amount by which the unpaid rent for
the balance of the term after the time of such award  exceeds the amount of such
rental loss for the same period that Lessee proves could be reasonably  avoided;
that portion of the leasing  commission  paid by Lessor pursuant to paragraph 15
applicable to the unexpired term of this Lease.

                                                       Initials:  HGW
                                                                  BW

                                      -5-
<PAGE>

         (b)  Maintain  Lessee's  right to  possession  in which case this Lease
shall  continue in effect  whether or not Lessee shall have vacated or abandoned
the Premises.  In such event Lessor shall be entitled to enforce all of Lessor's
rights and remedies under this Lease, including the right to recover the rent as
it becomes due hereunder.

         (c) Pursue any other remedy now or hereafter  available to Lessor under
the laws or judicial  decisions  of the state where in the Premises are located.
Unpaid  installments  of rent and other unpaid  monetary  obligations  of Lessee
under the  terms of this  Lease  shall  bear  interest  from the date due at the
maximum rate then allowable by law.

     13.3 Default by Lessor.  Lessor shall not be in default unless Lessor fails
to perform  obligations  required of Lessor within a reasonable  time, but in no
event later than thirty (30) days after  written  notice by Lessee to Lessor and
to the holder of any first mortgage or deed of trust covering the Premises whose
name and address shall have  theretofore  been  furnished  to Lessee in writing,
specifying  wherein  Lessor  has failed to perform  such  obligation;  provided,
however, that if the nature of Lessor's obligation is such that more than thirty
(30) days are  required for  performance  then Lessor shall not be in default if
Lessor commences  performance  within such thirty (30) day period and thereafter
dilligently prosecutes the same to completion.

     13.4 Late Charges.  Lessee hereby  acknowledges that late payment by Lessee
to Lessor of Base Rent,  Lessee's Share of Operating  Expenses or other sums due
hereunder will cause Lessor to incur costs not  contemplated by this Lease,  the
exact  amount of which will be  extremely  difficult  to  ascertain.  Such costs
include,  but are not limited to,  processing and accounting  charges,  and late
charges  which may be  imposed on Lessor by the terms of any  mortgage  or trust
deed covering the Industrial  Center.  Accordingly,  if any  installment of Base
Rent, Operating Expenses, or any other sum due from Lessee shall not be received
by Lessor or Lessor's  designee  within five (5) days after such amount shall be
due, then,  without any  requirement  for notice to Lessee,  Lessee shall pay to
Lessor a late charge  equal to 6% of such  overdue  amount.  The parties  hereby
agree that such late charge  represents  a fair and  reasonable  estimate of the
costs Lessor will incur by reason of late payment by Lessee.  Acceptance of such
late charge by Lessor shall in no event  constitute a waiver of Lessee's default
with respect to such overdue amount,  nor  prevent Lessor from exercising any of
the other rights and remedies granted hereunder. In the event that a late charge
is  payable  hereunder,  whether  or not  collected,  for three (3)  consecutive
installments of any of the aforesaid monetary  obligations of Lessee,  then Base
Rent shall  automatically  become due and payable  quarterly in advance,  rather
than monthly, notwithstanding paragraph 4.1 or any other provision of this Lease
to the contrary.

14.  Condemnation.  If the  Premises  or any portion  thereof or the  Industrial
Center are taken under the power of eminent domain,  or sold under the threat of
the exercise of said power (all of which are herein called "condemnation"), this
Lease  shall  terminate  as to the part so  taken as of the date the  condemning
authority takes title or possession,  whichever  first occurs.  If more than ten
percent of the floor area of the Premises,  or more than twenty-five  percent of
that portion of the Common Areas designated as parking for the Industrial Center
is taken by  condemnation,  Lessee may, at Lessee's  option,  to be exercised in
writing only within ten (10) days after  Lessor shall have given Lessee  written
notice of such  taking (or in the absence of such  notice,  within ten (10) days
after the condemning authority shall have taken possession) terminate this Lease
as of the date the condemning  authority takes such  possession.  If Lessee does
not terminate  this Lease in  accordance  with the  foregoing,  this Lease shall
remain in full force and effect as to the  portion  of the  premises  remaining,
except that the rent shall be reduced in the  proportion  that the floor area of
the Premises  taken bears to the total floor area of the Premises.  No reduction
of rent  shall  occur if the only  area  taken is that  which  does not have the
Premises  located  thereon.  Any award for the  taking of all or any part of the
Premises  under the power of eminent  domain or any payment made under threat of
the exercise of such power shall be the  property of Lessor,  whether such award
shall be made as  compensation  for  diminution in value of the leasehold or for
the taking of the fee, or as severance damages;  provided,  however, that Lessee
shall be entitled to any award for loss of or damage to Lessee's  trade fixtures
and removable personal property.  In the event that this Lease is not terminated
by reason of such condemnation,  Lessor shall to the extent of severance damages
received by Lessor in connection  with such  condemnation,  repair any damage to
the Premises  caused by such  condemnation  except to the extent that Lessee has
been  reimbursed  therefor by the  condemning  authority.  Lessee  shall pay any
amount in excess of such severance damages required to complete such repair.

16. Estoppel Certificate.

     (a) Each party (as "responding party") shall at any time upon not less than
ten (10) days' prior  written notice from the other party  ("requesting  party")
execute,  acknowledge and deliver to the requesting party a statement in writing
(i)  certifying  that this Lease is unmodified and in full force and effect (or,
if modified,  stating the nature of such  modification  and certifying that this
Lease,  as so  modified,  is in full force and effect) and the date to which the
rent and other charges are paid in advance,  if any, and (ii) acknowledging that
there are not, to the responding party's  knowledge, any uncured defaults on the
part of the requesting  party,  or specifying  such defaults if any are claimed.
Any such statement may be conclusively relied upon by any prospective  purchaser
or encumbrancer of the Premises or of the business of the requesting party.

     (b) At the requesting party's option, the failure to deliver such statement
within  such time shall be a material  default of this Lease by the party who is
to respond,  without any further notice to such party, or it shall be conclusive
upon  such  party  that (i) this  Lease is  in full force  and  effect,  without
modification  except as may be represented by the requesting  party,  (ii) there
are no uncured  defaults in the  requesting  party's  performance,  and (iii) if
Lessor is the requesting  party, not more than one month's rent has been paid in
advance.

     (c) If Lessor desires to finance, refinance, or sell the Industrial Center,
or any part thereof,  Lessee hereby agrees to deliver to any lender or purchaser
designated  by Lessor such  financial  statements of lessee as may be reasonably
required by such lender or  purchaser.  Such  statements  shall include the past
three (3) years' financial  statements of Lessee. All such financial  statements
shall be received by Lessor and such lender or purchaser in confidence and shall
be used only for the purposes herein set forth.

17.  Lessor's  Liability.  The term  "Lessor" as used herein shall mean only the
owner  or  owners,  at the time in  question,  of the fee  title  or a  lessee's
interest in a ground  lease of the  Industrial  Center,  and except as expressly
provided  in  paragraph  15,  in the  event  of any  transfer  of such  title or
interest,  Lessor herein named (and in case of any subsequent transfers then the
grantor)  shall be  relieved  from and  after the date of such  transfer  of all
liability as respects Lessor's obligations thereafter to be performed,  provided
that any funds in the hands of Lessor or the then  grantor  at the time for such
transfer,  in which Lessee has an  interest,  shall be delivered to the grantee.
The obligations contained in this Lease to be performed by Lessor shall, subject
as aforesaid,  be binding on Lessor's successors and assigns,  only during their
respective periods of ownership.

18. Severability. The invalidity of any provision of this Lease as determined by
a court of  competent  jurisdiction,  shall in no way affect the validity of any
other provision hereof.

19. Interest on Past-due Obligations.  Except as expressly herein provided,  any
amount due to Lessor not paid when due shall bear  interest at the maximum  rate
then  allowable  by law from the date due.  Payment of such  interest  shall not
excuse or cure any default by Lessee under this Lease;  provided,  however, that
interest  shall not be payable  on late  charges  incurred  by Lessee nor on any
amounts upon which late charges are paid by Lessee.

20. Time of Essence.  Time if of the essence with respect to the  obligations to
be performed under this Lease.

21.  Additional  Rent.  All monetary  obligations  of Lessee to Lessor under the
terms of this Lease,  including  but not limited to lessee's  Share of Operating
Expenses and insurance and tax expenses payable shall be deemed to be rent.

22.  Incorporation  of Prior  Agreements;  Amendments.  This Lease  contains all
agreements of the parties with respect to any matter mentioned  herein. No prior
or  contemporaneous  agreement or  understanding  pertaining  to any such matter
shall be effective.  This Lease may be modified in writing  only,  signed by the
parties in interest at the time of the modification.  Except as otherwise stated
in this Lease.  Lessee hereby  acknowledges  that neither the real estate broker
listed in paragraph 15 hereof nor any cooperating broker on this transaction nor
the Lessor or any employee or agents of any of said persons has made any oral or
written warranties or representations to Lessee relative to the condition or use
by Lessee of the Premises or the Industrial Center and Lessee  acknowledges that
Lessee assumes all responsibility  regarding the Occupational Safety Health Act,
the legal use and  adaptability of the Premises and the compliance  thereof with
all  applicable  laws and  regulations  in effect  during the term of this Lease
except as otherwise specifically stated in this Lease.

23. Notices.  Any notice required or permitted to be given hereunder shall be in
writing and may be given by personal delivery or by certified mail, and if given
personally or by mail, shall be deemed sufficiently given if addressed to Lessee
or to Lessor at the address noted below the signature of the respective parties,
as the case may be.  Either party may by notice to the other specify a different
address for notice purposes  except that upon Lessee's taking  possession of the
Premises,  the Premises shall constitute Lessee's address for notice purposes. A
copy of all notices required or permitted to be given to Lessor  hereunder shall
be concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate by notice to Lessee.

                                                       Initials:  HGW
                                                                  BW

                                      -6-
<PAGE>

24.  Waivers.  No waiver by Lessor  or any  provision  hereof  shall be deemed a
waiver of any other  provision  hereof or of any subsequent  breach by Lessee of
the same or any other  provision.  Lessor's  consent to, or approval of, any act
shall not be deemed to render  unnecessary the obtaining of Lessor's  consent to
or approval of any subsequent act by Lessee. The acceptance of rent hereunder by
Lessor shall not be a waiver of any preceding  breach by Lessee of any provision
hereof, other than the failure of Lessee to pay the particular rent so accepted,
regardless  of  Lessor's  knowledge  of such  preceding  breach  at the  time of
acceptance of such rent.

25.  Recording.  Either  Lessor or Lessee  shall,  upon  request  of the  other,
execute,  acknowledge and deliver to the other a "short form" memorandum of this
Lease for recording purposes.

26. Holding Over. If Lessee, with Lessor's consent, remains in possession of the
Premises or any part  thereof  after the  expiration  of the term  hereof,  such
occupancy shall be a tenancy from month to month upon all the provisions of this
Lease pertaining to the obligations of Lessee, but all Options,  if any, granted
under the terms of this Lease  shall be deeded  terminated  and be of no further
effect during said month to month tenancy.

27.  Cumulative  Remedies.  No  remedy  or  election  hereunder  shall be deemed
exclusive but shall,  whatsoever possible, be cumulative with all other remedies
at law or in equity.

28. Covenants and Conditions. Each provision of this Lease performable by Lessee
shall be deemed both a covenant and a condition.

29. Binding Effect;  Choice of Law. Subject to any provisions hereof restricting
assignment or  subletting  by Lessee and subject to the  provisions of paragraph
17,  this  Lease  shall  bind  the  parties,  their  personal   representatives,
successors  and  assigns.  This Lease shall be governed by the laws of the State
where the Industrial Center is located and any litigation  concerning this Lease
between  the  parties  hereto  shall be  initiated  in the  county  in which the
Industrial Center is located.

30. Subordination.

     (a) This Lease, and any Option granted hereby, at Lessor's option, shall be
subordinate  to any  ground  lease,  mortgage,  deed  of  trust,  or  any  other
hypothecation or security now or hereafter placed upon the Industrial Center and
to any and  all  advances  made on the  security  thereof  and to all  renewals,
modifications,    consolidations,    replacements   and   extensions    thereof.
Notwithstanding  such  subordination,  Lessee's right to quiet possession of the
Premises  shall not be  disturbed  if Lessee  is not in  default  and so long as
Lessee shall pay the rent and observe and perform all of the  provisions of this
Lease,  unless this Lease is otherwise  terminated pursuant to its terms. If any
mortgage,  trustee  or ground  lessor  shall  elect to have  this  Lease and any
Options  granted  hereby  prior  to the lien of its  mortgage,  deed of trust or
ground lease,  and shall give written  notice thereof to Lessee,  this Lease and
such  Options  shall be deemed  prior to such  mortgage, deed or trust or ground
lease,  whether this Lease or such Options are dated prior to  subsequent to the
date of said  mortgage,  deed of trust or ground  lease or the date of recording
thereof.

     (b) Lessee  agrees to execute  any  documents  required  to  effectuate  an
attornment,  a subordination  or to make this Lease or any Option granted herein
prior to the lien of any mortgage,  deed of trust or ground  lease,  as the case
may be.  Lessee's  failure to execute such documents  within ten (10) days after
written demand shall constitute a material  default by Lessee hereunder  without
further  notice to Lessee or, at Lessor's  option,  Lessor  shall  execute  such
documents  on behalf of Lessee as Lessee's attorney-in-fact,  Lessee does hereby
make, constitute and irrevocably appoint Lessor as Lessee's attorney-in-fact and
in Lessee's name,  place and stead, to execute such documents in accordance with
this paragraph 30(b).

31.  Attorney's  Fees.  If either party or the  broker(s)  named herein bring an
action to enforce the terms hereof or declare rights  hereunder,  the prevailing
party  in any  such  action,  on  trial or  appeal,  shall  be  entitled  to his
reasonable attorney's fees to be paid by the losing party as fixed by the court.
The provisions of this paragraph  shall inure to the benefit of the broker named
herein who seeks to enforce a right thereunder.

32.  Lessor's  Access.  Lessor and Lessor's agents shall have the right to enter
the Premises at reasonable times for the purpose of inspecting the same, showing
the same to  prospective  purchasers,  lenders,  or  lessees,  and  making  such
alterations,  repairs,  improvements  or  additions  to the  Premises  or to the
Industrial  Center as Lessor may deem necessary or desirable.  Lessor may at any
time place on or about the  Premises or the  Building  any  ordinary  "For Sale"
signs and  Lessor may at any time  during  the last 120 days of the term  hereof
place on or about the Premises any ordinary "For Lease" signs. All activities of
Lessor pursuant to this paragraph shall be without  abatement of rent, nor shall
Lessor have any liability to Lessee for the same.

33.  Auctions.  Lessee shall not  conduct,  nor permit to be  conducted,  either
voluntarily or  involuntarily, any auction upon the Premises or the Common Areas
without first having obtained  Lessor's prior written  consent.  Notwithstanding
anything  to the  contrary  in this  Lease,  Lessor  shall not be  obligated  to
exercise any standard of  reasonableness  in  determining  whether to grant such
consent.

34.  Signs.  Lessee shall not place any sign upon the Premises or the Industrial
Center without  Lessor's prior written  consent.  Under no  circumstances  shall
Lessee place a sign on any roof of the Industrial Center.

35.  Merger.  The  voluntary or other  surrender  of this Lease by Lessee,  or a
mutual  cancellation  thereof,  or a  termination  by  Lessor,  shall not work a
merger,  and  shall,  at the  option of Lessor,  terminate  all or any  existing
subtenancies or may, at the option of Lessor, operate as an assignment to Lessor
of any or all of such subtenencies.

36. Consents. Except for paragraph 33 hereof, wherever in this Lease the consent
of one party is required to an act of the other party such consent  shall not be
unreasonably withheld or delayed.

37.  Guarantor.  In the event  that there is a  guarantor  of this  Lease,  said
guarantor shall have the same obligations as Lessee under this Lease.

38. Quiet Possession. Upon Lessee paying the rent for the Premises and observing
and performing all of the covenants,  conditions and provisions on Lessee's part
to be observed an performed hereunder, Lessee shall have quiet possession of the
Premises  for the entire term hereof  subject to all of the  provisions  of this
Lease.  The individuals  executing this Lease on behalf of Lessor  represent and
warrant  to  Lessee  that they are  fully  authorized  and  legally  capable  of
executing this Lease on behalf of Lessor and that such execution is binding upon
all parties holding an ownership interest in the Industrial Center.

39. Options.

     39.1  Definition.  As used in this  paragraph  the  word  "Option"  has the
following  meaning:  (1) the right or option to extend the term of this Lease or
to renew  this  Lease or to extend or renew any Lease  that  Lessee has on other
property  of  Lessor,  (2) the  option  or right of first  refusal  to lease the
Premises or the right of first offer to lease the Premises or the right of first
refusal to lease other space within the  Industrial  Center or other property of
Lessor or the right of first offer to lease other  space  within the  Industrial
Center or other  property  of Lessor,  (3) the right or option to  purchase  the
Premises or the Industrial Center, or the right of first refusal to purchase the
Premises or the Industrial  Center,  or the right of first offer to purchase the
Premises  or the  Indudtrial  Center or the right of  option to  purchase  other
property of Lessor or the right of first refusal to purchase  other  property of
Lessor or the right of first offer to purchase other property.

     39.2  Options  Personal.  Each  Option  granted  to Lessee in this Lease is
personal to the original Lessee and may be exercised only by the original Lessee
while  occupying  the  Premises  who does so without  the  intent of  thereafter
assigning this Lease or subletting the Premises or any portion thereof,  and may
not be exercised  or be assigned,  voluntarily  or  involuntarily,  by or to any
person or entity other than  Lessee,  provided,  however,  that an Option may be
exercised by or assigned to any Lessee Affiliate as defined in paragraph 12.2 of
this Lease.  The Options,  if any,  herein  granted to Lessee are not assignable
separate and apart from this Lease,  nor may any Option be  separated  from this
Lease in any manner, either by reservation or otherwise.

     39.3 Multiple Options. In the event that Lessee has any multiple options to
extend or renew this Lease a later option  cannot be exercised  unless the prior
option to extend or renew this Lease has been so exercised.

     39.4 Effect of Default on Options.

     (a) Lessee shall have no right to exercise an Option,  notwithstanding  any
provision in the grant of Option to the contrary, (i) during the time commencing
from the date Lessor  gives to Lessee a notice of default  pursuant to paragraph
13.1(b) or 13.1(c) and continuing until the noncompliance alleged in said notice
of default is cured,  or (ii) during the period of time  commencing  on the date
after a monetary obligation to Lessor is due from Lessee and unpaid (without any
necessity for notice thereof to Lessee) and  continuing  until the obligation is
paid,  or (iii) at any time after the event of default  described in  paragraphs
13.1(a),  13.1(d), or 13.1(e) (without any necessity of Lessor to give notice of
such  default to  Lessee),  or (iv) in the event that Lessor has given to lessee
three or more notices of default under paragraph 13.1(b),  or paragraph 13.1(c),
whether  or not the  defaults  are  cured,  during  the 12 month  period of time
immediately  prior to the time that  Lessee  attempts  to  exercise  the subject
Option.

     (b) The period of time within which an Option may be exercised shall not be
extended  or  enlarged  by reason of  Lessee's  inability  to exercise an Option
because of the provisions of paragraph 39.4(a).

     (c) All rights of Lessee under the provisions of an Option shall  terminate
and be of no further  force or effect,  notwithstanding  Lessee's due and timely
exercise  of the Option,  if,  after such  exercise  and during the term of this
Lease,  (i) Lessee fails to pay to Lessor a monetary  obligation of Lessee for a
period of thirty  (30) days after  such  obligation  becomes  due  (without  any
necessity of Lessor to give notice  thereof to Lessee),  or (ii) Lessee fails to
commence to cure a default  specified in paragraph  13.1(c)  within  thirty (30)
days after the date that Lessor gives  notice to Lessee of such  default  and/or
Lessee fails  thereafter to diligently  prosecute  said cure to  completion,  or
(iii) Lessee  commits a default  described  in   paragraph  1.31(a),  13.1(d) or
13.1(e)  (without  any  necessity  of Lessor to give  notice of such default  to
Lessee),  or (iv) Lessor gives to Lessee three or more notices of default  under
paragraph 13.1(b), or paragraph 13.1(c), whether or not the defaults are cured.

40.  Security  Measures.  Lessee hereby  acknowledges  that Lessor shall have no
obligation  whatsoever to provide guard service or other  security  measures for
the  benefit of the  Premises  or the  Industrial  Center.  Lessee  assumes  all
responsibility  for the protection of Lessee,  its agents,  and invitees and the
property  of Lessee  and of  Lessee's  agents  and  invitees  from acts of third
parties. Nothing herein contained shall prevent Lessor, at Lessor's sole option,
from  providing  security  protection  for the  Industrial  Center  or any  part
thereof, in which event the cost thereof shall be included within the definition
of Operating Expenses, as set forth in paragraph 4.2(b);

                                                  Initials: HGW
                                                            BW

                                      -7-
<PAGE>

41. "Easements" Lessor reserves to itself the right, from time to time, to grant
such easements, rights and dedications that lessor deems necessary or desirable,
and to cause the  recordation of Parcel Maps and  restrictions,  so long as such
easements,  rights,  dedications,  Maps  and  restrictions  do not  unreasonably
interfere  with the use of the Premises by Lessee.  Lessee shall sign any of the
aforementioned  documents  upon  request  of Lessor  and  failure to do so shall
constitute  a  material  default of this  Lease by Lessee  without  the need for
further notice to Lessee.

42.  Performance  Under Protest.  If at any time a dispute shall arise as to any
amount or sum of money to be paid by one party to the other under the provisions
hereof, the party against whom the obligation to pay the money is asserted shall
have the right to make payment  "under  protest"  and such payment  shall not be
regarded as a voluntary  payment,  and there shall survive the right on the part
of said  party  to  institute  suit for  recovery  of such  sum.  If it shall be
adjudged  that  there was no legal  obligation  on the part to said party to pay
such sum or any part  thereof,  said party shall be entitled to recover such sum
or so much thereof as it was not legally required to pay under the provisions of
this Lease.

43.  Authority.  If  Lessee is a  corporation,  trust,  or  general  or  limited
partnership,  each  individual  executing  this  Lease on behalf of such  entity
represents and warrants that he or she is duly authorized to execute and deliver
this  Lease on behalf of said  entity.  If  Lessee  is a  corporation,  trust or
partnership,  Lessee  shall,  within  thirty (30) days after  execution  of this
Lease, deliver to Lessor evidence of such authority satisfactory to Lessor.

44. Conflict. Any conflict between  the printed provisions of this Lease and the
typewritten  or  handwritten  provisions,  if any,  shall be  controlled  by the
typewritten or handwritten provisions.

45. Offer.  Preparation of this Lease by Lessor or Lessor's agent and submission
of same to Lessee shall not be deemed an offer to lease. This Lease shall become
binding upon Lessor and Lessee only when fully executed by Lessor and Lessee.

46. Addendum. Attached hereto is an addendum or addends containing paragraphs 47
through 66 which constitute a part of this Lease.

LESSOR AND LESSEE HAVE  CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION  CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED
AND VOLUNTARY  CONSENT THERETO.  THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS
LEASE IS  EXECUTED,  THE TERMS OF THIS  LEASE ARE  COMMERCIALLY  REASONABLE  AND
EFFECTUATE  THE INTENT AND  PURPOSE  OF LESSOR  AND LESSEE  WITH  RESPECT TO THE
PREMISES.

         THIS  LEASE HAS BEEN  PREPARED  FOR  SUBMISSION  TO YOUR  ATTORNEY  FOR
         APPROVAL,  NO  REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN
         INDUSTRIAL REAL ESTATE  ASSOCIATION OR BY THE REAL ESTATE BROKER OR ITS
         AGENTS OR EMPLOYEES AS TO THE LEGAL  SUFFICIENCY,  LEGAL EFFECT, OR TAX
         CONSEQUENCES OF THIS LEASE OR THE  TRANSACTION  RELATING  THERETO:  THE
         PARTIES SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN LEGAL COUNSEL AS
         TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.

                    LESSOR                              LESSEE

SUNRISE GOLD ASSOCIATES, A California      AMERICAN MICROWAVE TECHNOLOGIES, A
Limited Partnership                        California Corporation

By /s/ Barry K. Williams                   By /s/ Hans Gregory Wood
   -----------------------------------        ---------------------------------
   Barry K. Williams, General Partner         Hans Gregory Wood, Vice President
                                              & Chief Financial Officer

By                                         By
   -----------------------------------        ---------------------------------

Executed on 3/3/98                         Executed on 2-26-98
            --------------------------                 ------------------------
                      (Corporate Seal)                         (Corporate Seal)

    ADDRESS FOR NOTICES AND RENT                       ADDRESS

1601 Dove Street, Suite 190                2570 East Cerritos Avenue
--------------------------------------     ------------------------------------

Newport Beach, CA  92660                   Anaheim, CA  92806
--------------------------------------     ------------------------------------

--------------------------------------     ------------------------------------

   American Industrial Real Estate Association, Los Angeles, CA (213)687-8777

<PAGE>

47.  Outside  Storage.  No items  shall be  allowed  to be left  outside  of the
building or on any of the common  areas as pertains to  landscaping,  driveways,
parking lots,  fences and all  sidewalks and parkways  adjacent to the Premises.
This  includes,  but is not limited to,  supplies,  materials,  goods,  pallets,
dunnage and equipment. No vehicles,  including boats and trailers, may be parked
or stored  outside the building  overnight.  Violation of this  Paragraph  shall
constitute a material breach of this Lease.

48. Outside Work. No work shall be permitted on the sidewalks,  roofs,  streets,
driveways,  parking,  outside roll up doors, or landscaped areas. This includes,
but is not  limited  to,  assembly,  construction,  mechanical  work,  painting,
drying,  layout,  cleaning,  or repair of goods or materials.  Violation of this
Paragraph shall constitute a material breach of this Lease.

49. Service Fees.  Without altering  Paragraph 13.1,  Lessee agrees to reimburse
Lessor Fifty Dollars  ($50.00) each time Lessor serves Lessee a Three Day Notice
to Pay Rent or Quit,  an amount  acknowledged  as a reasonable  minimum  charge.
Further,  in addition to the remedies  outlined in Paragraph 13.2, Lessee agrees
to pay to Lessor Thirty Five Dollars ($35.00) each time a payment is returned by
his bank for any reason, such as insufficient funds.

50.  Occupancy Type.  Should any governmental  authority  require any additional
improvements,  modifications, licenses and/or permits of any kind, including but
not limited to, a conditional use permit due to Lessee's use and/or occupancy of
the Premises,  it shall be provided by Lessee,  at Lessee's sole expense.  It is
Lessor's  understanding  that  Lessee  will not be using  flammable  solvents or
utilizing  the  Premises in any way that would cause  Lessee's  occupancy  to be
considered anything other than a B-1 or B-2 type occupant.

In the event that Lessee is classified  under any other  occupancy type (such as
an H-2 or H-3 type for example) which requires any  additional  improvements  to
the space (i.e.,  additional fire sprinkler drops,  ventilation equipment and/or
ducting,  additional  Sheetrock,  etc.),  or by  Lessee's  use of the  Premises,
increases  the  fire  insurance  premiums  on  the  building,  Lessee  shall  be
responsible to pay for and/or provide the same.

51.  Asphalt/Concrete.  Lessee  agrees  to  use  only  forklifts  equipped  with
pneumatic  tires in order to minimize  the wear and tear on asphalt  areas.  Any
wear and tear to the asphalt or concrete areas inside or outside of roll up door
area shall be maintained and repaired at Lessee's sole cost and expense.

52. Re-keying of Locks.  Lessee acknowledges that the Trade Center Associates is
set up on a "Master Key" lock system.  In the event Lessee desires to re-key the
locks after lease execution,  then Lessee shall use only  Professional  Lock and
Safe, Fair Oaks, (916) 929-5595, to perform said locksmith service. Lessee shall
have all locks keyed to Lessor's master key system and pay all costs  associated
herein  directly to  Professional Lock and Safe. Lessor shall not incur any cost
related  thereto.  At the end of the Lease term,  Lessor shall have the premises
rekeyed at Lessee's expense.

53.  Telephone  Line  Capacity.  Lessee  shall not be  entitled to more than his
proportionate  share,  (see  paragraph  1.6(b))  for  share)  of the  building's
telephone line capacity.

54.  Application  of Late  Payments.  In the event  Lessee is late on any rental
payments  required under the terms of this Lease,  Lessor shall apply any moneys
received by Lessee first to any  outstanding  payments due,  including,  but not
limited to, any legal fees,  court costs,  late charges,  CAM charges,  etc. The
balance of said funds shall be applied to rent.

If Lessor receives two (2) late payments,  or one (1) Non-Sufficient  Fund check
throughout  the lease  term,  then  Lessor may elect to have all  future  rental
payments  paid by Cash,  Cashier's  Check or Money  Order for the balance of the
lease term.

55. Smoke Free Environment.  Lessee acknowledges that the building, in which the
premises is a part, has been designated a "smoke free environment" in accordance
with Sacramento County Smoking Pollution Control Ordinance.

56.  Tenant  Improvements.  Lessor,  at Lessor's  expense,  shall  complete  the
following tenant improvements prior to the commencement date:

     A. Install standard grade industrial carpet, color to be selected by Tenant
     (See Exhibit A)

     B. Install new VCT, color to be selected by Tenant (See Exhibit B)

     C. Paint throughout (See Exhibit C)

     D. Replace any stained ceiling tiles

     E. Modify existing layout (See Exhibit D)

     F. Clean & paint all HVAC covers

Upon lease execution Lessee shall submit to Lessor,  three thousand four hundred
and no/100  dollars  ($3,400.00)  as  Lessee's  contribution  towards the Tenant
Improvements shown above.

                                      10A
                                                                   Initials: HGW
                                                                             BW

<PAGE>

57.  Tenant  Improvement  Construction   Specifications.   Subject  to  Lessor's
improvements  per Paragraph 56, Lessee hereby accepts the premises in an "AS IS"
condition. Lessee may do construction,  within in the Premises, upon obtaining a
building  permit,  submission of a plan, and written  approval from Lessor.  Any
alterations,  improvements,  and additions shall be according to all appropriate
governmental  agencies,  at Lessee's sole expense. Any Tenant Improvements shall
conform  to  Lessor's  existing  standard.  All  alterations,  improvements  and
additions  shall  become the property of Lessor at the  expiration  of the Lease
term or  earlier  termination  of the Lease and  shall be  surrendered  with the
Premises.

     A. Office  partitions shall be metal or wood studs 2" X 4" at 16" on center
     covered  each side with 5/8"  thick  drywall.  Taped,  light  texture,  and
     painted to match existing. All concrete walls shall be furred out.

     B. All walls shall have R-11  insulation  and all  ceiling  shall have R-19
     insulation throughout.

     C. Doors shall be 3'0" X 6'8" hollow core to match existing.

     D. Ceiling shall be a suspended T-Bar system;  using 2' X 4' white acoustic
     tile with black grids throughout office areas.

     E. Ceiling height to be 8'0 in private offices and general office areas.

     F. Electrical and telephone  outlets shall be installed in metal conduit at
     a minimum of one (1) pair per wall  section or every 8'  whichever is less.
     No  electrical or telephone  outlets  shall be surface  mounted on interior
     office/bathroom walls.

     G. Floor coverings in office areas shall be carpeted with Lessor's standard
     Light Gray, 4' Rubber Base shall be light gray to match.

     H.  Lessee  acknowledges  that window and door  coverings  can have a major
     impact on how a business is perceived by  customers  and other  visitors to
     surrounding   businesses,   therefore,   Lessee  agrees  to  the  following
     conditions:

         1. Lessee must have Lessor's  prior written  approval of all window and
         door coverings prior to installation.

         2. Window and door coverings shall be 1" mini-blinds  installed  inside
         each individual window section;  color to match existing or light beige
         only.  no wrought iron shall be added to the exterior of the  building,
         nor mounted into any interior or exterior window frame (mullion).

         3. Any windows  installed shall be 4' wide X 3' tall (tempered  glass),
         installed at 42" above finished floor. The opening shall be drywall and
         textured  to  match  the  existing  drywall  surfaces  with a 1"  black
         aluminum frame installed in the middle of the window opening.

         4. Office shall have a Central HVAC system.  HVAC unit is to be located
         on roof in a location approved by Lessor.

58.  Base Rent  Adjustments.  The  minimum  monthly  Base Rent during the second
twelve (12) months of this lease shall be two thousand one hundred forty two and
no/100 dollars  (2,142.00),  plus Common Area Maintenance Charges ("CAM") not to
exceed the amount of one hundred sixty seven and no/100 dollars ($167.00).

The minimum  monthly Base Rent during the third twelve (12) months of this lease
shall be two thousand  two hundred  forty nine and no/100  dollars  ($2,249.00),
plus Common  Area  Maintenance  Charges  ("CAM") not to exceed the amount of one
hundred seventy five and no/100 dollars ($175.00).

59.  Option to  Extend.  If Lessee is not in default  in  performing  any of its
obligations  under the Lease,  Lessee shall have and is hereby granted an option
to extend the term of this Lease for one additional three year period,  to begin
upon the  expiration  of the term of this Lease upon the same terms,  provisions
and conditions as contained in this Lease, except the rental payable during such
option  period.  Notice of the  exercise  of any  options to extend  shall be in
writing and shall be given in the manner provided in the Lease for the giving of
notices not less than three (3) months prior to the  expiration of the then term
in effect.

The  rental to be paid by Lessee  during  the first  twelve  (12)  months of the
option term shall be two thousand  three  hundred  sixty one and no/100  dollars
($2,361.00) commencing April 1, 2001 and ending March 31, 2002.

                                      10B
                                                                   Initials: HGW
                                                                             BW

<PAGE>

The  rental to be paid by Lessee  during the second  twelve  (12)  months of the
option term shall be two thousand four hundred  seventy nine and no/100  dollars
($2,479.00) commencing April 1, 2002 and ending March 31, 2003.

The  rental to be paid by Lessee  during  the third  twelve  (12)  months of the
option  term  shall  be two  thousand  six  hundred  three  and  no/100  dollars
($2,603.00) commencing April 1, 2003 and ending March 31, 2004.

60. Overhead Doors. Lessor warrants overhead doors to be in proper working order
at the time of occupancy.  Notwithstanding  any  warranties by the overhead door
manufacturer,  Lessee hereby agrees to maintain,  in proper working order during
the term of the lease, the overhead doors, and all associated hardware, brackets
and  mechanisms   associated  with  their   operation.   Lessor  shall  have  no
responsibility  to repair,  replace or maintain the overhead doors.  Lessee also
warrants that said overhead  doors shall be in proper working order at such time
as Lessee vacates the Premises.

61.  Lessor  Partnership.   Lessor  hereby  advises  Lessee  that  Lessor  is  a
partnership  (the  "Partnership").  Lessee hereby agrees that, if a claim of any
kind  arising out of this Lease or Lessee's  use or occupancy of the Premises is
made by or on behalf of Lessee, Lessee will (a) look solely to the assets of the
Partnership  and not the  assets of the  partners  of the  Partnership,  for the
satisfaction  of  the  claim  and  (b)  not  name  any of  the  partners  of the
Partnership in any litigation arising out of any such claim. The word "claim" is
used herein in its broadest sense and shall cover (a) assertion of damages based
on any acts or omissions of Lessor or the partners of the  Partnership,  (b) all
types of damages including, but not limited to, compensatory,  consequential and
exemplary  (punitive) damages and (c) all nature of damages,  whether to persons
or  property.  Lessor has entered  into this Lease in  specific  reliance on the
foregoing agreements by Lessee.

62. No Warranty As To Use or Zoning.  Lessee hereby acknowledges that lessor has
not made any representation or warranty to Lessee with regard to the suitability
of the Premises for Lessee's intended use, or the applicability of any zoning or
other land use law,  regulation or other restrictions which may be applicable to
Lessee's intended use of the Premises.

This Lease, and Lessee's leasehold interest in the Premises,  are subject to all
easements and other matters of record as of the date of this Lease.

63. Hazardous Substances. Lessee agrees to comply, at Lessee's expense, with all
laws and regulations (Federal,  State and Local) relating to Lessee's storage or
use of hazardous substances,  materials, waste and toxic substances (as such are
described,  defined and  identified in the laws and  regulations  regarding such
substances  now or in force during any portion of the Lease Term).  "Compliance"
includes  obtaining and  maintaining  all required  permits from the appropriate
authorities.

Upon termination of this Lease,  Lessee agrees, at Lessee's  expense,  to remove
and, if necessary,  transport all such material from the Premises, conforming in
such removal to the requirements of the applicable laws and regulations.  Lessee
shall  not take any  remedial  action  (including  consent  decrees,  settlement
agreements or compromises) without giving reasonable written notice to Lessor to
afford Lessor the opportunity to protect  Lessor's  interest.  Lessee shall give
Lessor  prompt  written  notice  of  any  enforcement  activity  (threatened  or
otherwise) by and enforcement  agency; any claim for damages made against Lessee
and any report to any environmental  agency regarding Lessee's activities or use
of these substances.

Lessee will  indemnify and defend (by counsel  reasonably  acceptable to Lessor)
Lessor,  Lessor's  partners,  employees,  agents,  attorneys' and successors and
assigns,  and to hold  them  free and  harmless  from all  claims  for  damages,
penalties and forfeitures for Lessee's violation,  or alleged,  violation of any
such law or regulation.  Indemnification  shall include the cost of any required
or necessary repair, cleanup, removal,  detoxification or decontamination of the
Premises to  completion.  The acts of  omissions of Lessee's  agent,  employees,
assignees,   contractors  or  subcontractors  (of  Lessee  or  others),  whether
negligent, intentional or unlawful, shall be strictly attributable to Lessee.

The provisions of this Paragraph  shall survive the expiration or termination of
this Lease.  Lessor shall have the right to require Lessee to provide reasonable
security for the performance of Lessee's obligations under this Paragraph.

64. Mezzanine Storage.  The Premises consists of office and warehouse areas. The
stairs and upstairs office area (the "Mezzanine")  above the ground level office
area, was designed and constructed by a previous tenant. Lessee has asked Lessor
for it's consent to utilize the Mezzanine in connection with Lessee's use of the
Premises without additional charge and Lessor has agreed to do so in reliance on
the following acknowledgments and agreements by Lessee:

     A. Lessee  acknowledges  that Lessor has made no  representation  as to the
     suitability of the Mezzanine for any potential use thereof by Lessee.

     B. Lessee acknowledges that Lessor has made no investigation concerning the
     load capacity

                                      10C
                                                                   Initials: HGW
                                                                             BW

<PAGE>

     of the Mezzanine. Lessee agrees to use discretion and care in the selection
     and distribution of items to be stored on the Mezzanine.  Heavy loads shall
     not be permitted.

     C.  Lessee  assumes all  responsibility  for the use of the  Mezzanine  and
     agrees to  indemnify  and hold  Lessor free and  harmless  from any and all
     costs,  liabilities and claim, whether to persons or property,  arising out
     of or  connected  with Lessee's  use of the  Mezzanine or the stairs to the
     Mezzanine.

65.  First Right of First Offer.  At any time during the term of this Lease,  so
long as Lessee is not in default  under the terms and  conditions  thereof,  and
additional space in 11315  Sunrise Gold Circle should become available, adjacent
to Lessee's existing space, then, and in that event,  Lessor shall advise Lessee
of said  availability.  Said notice shall contain the terms and conditions under
which said space is, or will become  available,  at which time Lessee shall have
five (5) business days within which to advise Lessor of its intent to lease said
space.  In the event Lessee  chooses not to lease said space,  the space will be
made available  through Lessor's  marketing program and Lessee shall continue to
have the same rights as any other potential tenant to lease said space.

66. Maintenance, Repairs, Utility Installations, Trade Fixtures and Alterations.
Paragraph  7.1 shall be modified  as follows  regarding  the HVAC units.  Lessor
shall be responsible for the replacement of condensers,  compressors or new HVAC
units.  Lessee shall be responsible  for all other repair and maintenance of the
units not covered by Lessor's HVAC Maintenance contract.

                                                                   Initials: HGW
                                                                             BW

<PAGE>

                                      10D

                     SIGN CRITERIA - SUNRISE BUSINESS PARK
--------------------------------------------------------------------------------

This Sign Criteria has been  established  for the mutual  benefit of all Lessees
and to maintain a professional  business complex appearance.  Compliance will be
strictly  enforced.  Any non-conforming or unapproved signs must be brought into
conformance with this Criteria, at the Lessee's expense.

1.   All costs  incurred  in the  making,  installation  and removal of Lessee's
     initial sign lettering  shall be at Lessee's  expense,  which is  currently
     $300, and which shall be due upon execution of this Lease.

2.   As outlined in Paragraph 34, sign  dimensions,  color,  location and design
     shall  be  determined  by  Lessor  and may be  changed  at any  time at the
     discretion and sole cost of Lessor.  Lessee shall be  responsible  only for
     the initial cost of installing  sign and any cost of alterations  initiated
     by Lessee.

3.   Any damage caused to the sign will be repaired by Lessee. If Lessee refuses
     to make repairs  upon notice by Lessor,  Lessor may make repairs and change
     Lessee the cost, in accordance with Paragraph 13.1.c.

4.   The sign canister and sign blank shall remain the property of Lessor.

5.   Except as provided  herein,  no advertising  placards,  banners,  pennants,
     names,  insignias or  trademarks  or other  descriptive  material,  nor any
     security insignias or decals, shall be affixed or maintained upon the glass
     panes or  exterior  walls or doors  of the  building  or in the  landscaped
     areas, or affixed to automobiles,  trucks or trailers in the parking areas.
     This restriction does not apply to magnetic or painted identification signs
     placed on  company  or private  vehicles  for use in the  normal  course of
     business.

                     --------------------------------------

                         AMERICAN MICROWAVE TECHNOLOGY

                     --------------------------------------

                                   EXHIBIT A

                                                                   Initials: HGW
                                                                             BW

<PAGE>

                               [GRAPHIC OMITTED]

                                   EXHIBIT B

                                                                   Initials: HGW
                                                                             BW

<PAGE>

                             RULES AND REGULATIONS
                       (SUPPLEMENTAL TO LEASE PROVISIONS)

1.   No  sign,  placard,  picture,  advertisement,   name  or  notice  shall  be
     inscribed, displayed or printed or affixed on or to any part of the outside
     or inside of the  Building  without the written  consent of Lessor.  Lessor
     shall  have  the  right  to  remove  any  such  sign,   placard,   picture,
     advertisement,  name or  notice  without  notice to and at the  expense  of
     Lessee.

2.   All approved signs or lettering on doors shall be printed, painted, affixed
     or  inscribed  at the expense of Lessee by a person  approved of by Lessor.
     Lessee  shall not place  anything  or allow  anything to be placed near the
     glass of any window,  door,  partition  or wall which may appear  unsightly
     from outside the Premises as determined by Lessor; provided,  however, that
     Lessor may furnish and install a Building  Standard  window covering at all
     exterior windows.  Lessee shall not without prior written consent of Lessor
     cause or otherwise sunscreen any window.

3.   To keep common area maintenance  charges ("CAM") to a minimum,  there is no
     window  washing  service   provided.   It  is,   therefore,   the  Tenant's
     responsibility to keep windows clean, both inside and out.

4.   The sidewalks,  exits, entrances,  and driveways shall not be obstructed by
     any of the Lessees,  or used by them for any purpose other than for ingress
     and egress from their respective Premises.  No work related to the Tenant's
     business shall be performed  outside of Tenant's space. Do not park cars or
     dumpsters in these areas. Automobiles illegally parked will be towed at the
     Owner of the vehicle's sole cost and expense.

5.   Lessee shall not alter any lock or install any new or  additional  locks or
     any bolts on any  doors or  windows  of the  Premises.  Should  you need to
     rekey, please call the management.

6.   The toilet rooms, urinals, wash bowls and other apparatus shall not be used
     for any  purpose  other  than that for which they were  constructed  and no
     foreign  substance of any kind  whatsoever  shall be thrown therein and the
     expense of any breakage, stoppage or damage resulting from the violation of
     this rule shall be borne by the Lessee, who, or whose employees or invitees
     shall have caused it.

7.   Lessee shall not in any way deface the Premises or any part thereof.

8.   Lessee shall not use; keep or permit to be used or kept any foul or noxious
     gas or  substance in the  Premises,  or permit or suffer the Premises to be
     occupied or used in a manner  offensive or  objectionable  to the Lessor or
     other  occupants  of  the  Building  by  reason  of  noise,  odors,  and/or
     vibrations,  or  interfere  in any way with other  Lessees or those  having
     business  therein,  nor shall any animals or birds to brought in or kept in
     or about the Premises of the Building.

9.   Lessee  shall not use or keep in the  Premises  or Building  any  kerosene,
     gasoline or inflammable or combustible fluid or material, or use any method
     of heating or air conditioning other than that supplied by Lessor.

10.  Lessor  reserves the right to exclude or expel from the Premises any person
     who, in the judgment of Lessor,  is  intoxicated  or under the influence of
     liquor or drugs,  or who shall in any manner do any act in violation of any
     of these Rules and Regulations.

11.  Lessor  shall  have the  right,  exercisable  without  notice  and  without
     liability  to Lessor to change the name and street  address of the Building
     of which the Premises are a part.

12.  Lessee shall not disturb,  solicit, or canvass any occupant of the Building
     and shall cooperate to prevent same.

13.  Without the written consent of Lessor, Lessee shall not use the name of the
     Building in connection  with or in promoting or advertising the business of
     Lessee except as Lessee's address.

14.  Dumpsters are available for Lessee's office-related garbage, and are not be
     used for Lessee's business related garbage,  i.e., a landscaper may not use
     the  dumpster  to  dispose  of lawn and grass  clippings  generated  by his
     business.  All garbage and refuse,  generated by Lessee's office use, shall
     be placed by Lessee in containers or dumpsters.  To keep the dumpster areas
     clean,  all  cardboard  boxes  must be broken  down and  placed  inside the
     dumpster with the lids closed.  If the dumpster is full,  management should
     be notified. Do not leave anything outside of the dumpster. All tenants are
     expected to assist in keeping the dumpster areas clean.

15.  No  aerial,  satellite  dish or  antenna  shall be  erected  on the roof or
     exterior walls of the Leased Premises, or on the grounds,  without, in each
     instance, the written consent of Lessor first being obtained. Any aerial or
     antenna so  installed  without  such  written  consent  shall be subject to
     removal by lessor at any time without notice.

16.  No loud speakers, television, phonographs, radios or other devices shall be
     used in a manner so as to be heard or seen  outside of the Leased  Premises
     without the prior written consent of Lessor.

17.  The outside areas  immediately  adjoining the Leased Premises shall be kept
     clean and free from dirt and rubbish by Lessee,  to the satisfaction of the
     Lessor,  and Lessee shall not place or permit any  obstruction or materials
     in such areas.  No exterior  storage  shall be allowed  including,  without
     limitation,  the  storage  of  motor  vehicles,  trucks,  boats,  trailers,
     pallets,  drums,  or  equipment  of any kind or nature,  without  the prior
     written consent of Lessor.

18.  Lessee shall use, at Lessee's cost, such pest  extermination  contractor as
     Lessor may direct and at such intervals as Lessor may require.

19.  Lessee  shall  not burn any  trash or  garbage  of any kind in or about the
     Leased Premises or the Project.

20.  No  residential  uses,  including,  without  limiting the generality of the
     foregoing,  residing,  sleeping or cooking are permitted on the premises or
     anywhere on the Project.

21.  No animals of any type,  including,  without limiting the generality of the
     foregoing,  pets,  guard  dogs,  exotic  animals,  reptiles  or birds,  are
     permitted on the Premises or anywhere on the Project.

22.  As a  courtesy  to your  neighbors  who wish to leave  the  parking  spaces
     directly in front of their premises open for their  customers,  we ask that
     you and your  employees  use only those  parking areas that are directly in
     front of your own space. Should you need additional parking there is always
     plenty of additional parking behind the buildings.

                                  EXHIBIT C-1
                                                                   Initials: HGW
                                                                             BW

<PAGE>

Sunrise Gold Business Park

                                 EXISTING LAYOUT

                             MAP OF EXISTING LAYOUT

                       11315 Sunrise Gold Circle Suite I

                                   EXHIBIT D
                                                                   Initials: HGW
                                                                             BW

<PAGE>
                                                                  EXHIBIT A

                                                              TENANT IMPROVEMENT

Sunrise Gold Business Park

                               MAP OF NEW CARPET

                       11315 Sunrise Gold Circle Suite I

                                                                   Initials: HGW
                                                                             BW

<PAGE>
                                                                  EXHIBIT B

                                                              TENANT IMPROVEMENT

Sunrise Gold Business Park

                             MAP OF NEW VCT FLOORING

                       11315 Sunrise Gold Circle Suite I

                                                                   Initials: HGW
                                                                             BW

<PAGE>
                                                                  EXHIBIT C

                                                              TENANT IMPROVEMENT

Sunrise Gold Business Park

                                MAP OF NEW PAINT

                       11315 Sunrise Gold Circle Suite I

                                                                   Initials: HGW
                                                                             BW

<PAGE>

                                                                  EXHIBIT D

                                                              TENANT IMPROVEMENT

Sunrise Gold Business Park

                             MAP OF PROPOSED LAYOUT

                       11315 Sunrise Gold Circle Suite I

                                                                   Initials: HGW
                                                                             BWExhibit 10.3

                              AMENDED AND RESTATED
                                 1999 STOCK PLAN

                                       OF

                              PURCHASEPRO.COM, INC.

                     (Adopted by the Board on July 21, 2000)

<PAGE>

                                TABLE OF CONTENTS
                                -----------------

                                                                           Page
                                                                           ----

SECTION 1.   ESTABLISHMENT AND PURPOSE.........................................1

SECTION 2.   DEFINITIONS.......................................................1
   (a)   "Board of Directors"..................................................1
   (b)   "Change in Control"...................................................1
   (c)   "Code"................................................................2
   (d)   "Committee"...........................................................2
   (e)   "Company".............................................................2
   (f)   "Employee"............................................................2
   (g)   "Exchange Act"........................................................2
   (h)   "Exercise Price"......................................................2
   (i)   "Fair Market Value"...................................................2
   (j)   "ISO".................................................................2
   (k)   "Nonstatutory Option".................................................2
   (l)   "Offeree".............................................................2
   (m)   "Option"..............................................................2
   (n)   "Optionee"............................................................2
   (o)   "Outside Director"....................................................2
   (p)   "Plan"................................................................2
   (q)   "Purchase Price"......................................................3
   (r)   "Service".............................................................3
   (s)   "Share"...............................................................3
   (t)   "Stock"...............................................................3
   (u)   "Stock Option Agreement"..............................................3
   (v)   "Stock Purchase Agreement"............................................3
   (w)   "Subsidiary"..........................................................3
   (x)   "Total and Permanent Disability"......................................3

SECTION 3.   ADMINISTRATION....................................................3
   (a)   Committee Procedures..................................................3
   (b)   Committee Responsibilities............................................3

SECTION 4.   ELIGIBILITY.......................................................5
   (a)   General Rule..........................................................5
   (b)   Outside Directors.....................................................5
   (c)   Limitation On Grants..................................................5
   (d)   Ten-Percent Stockholders..............................................5
   (e)   Attribution Rules.....................................................5
   (f)   Outstanding Stock.....................................................5

                                      -i-

<PAGE>

SECTION 5.   STOCK SUBJECT TO PLAN.............................................6
   (a)   Basic Limitation......................................................6
   (b)   Additional Shares.....................................................6

SECTION 6.   TERMS AND CONDITIONS OF AWARDS OR SALES...........................6
   (a)   Stock Purchase Agreement..............................................6
   (b)   Duration of Offers and Nontransferability of Rights...................6
   (c)   Purchase Price........................................................6
   (d)   Withholding Taxes.....................................................6
   (e)   Restrictions on Transfer of Shares....................................6

SECTION 7.   TERMS AND CONDITIONS OF OPTIONS...................................7
   (a)   Stock Option Agreement................................................7
   (b)   Number of Shares......................................................7
   (c)   Exercise Price........................................................7
   (d)   Withholding Taxes.....................................................7
   (e)   Exercisability and Term...............................................7
   (f)   Nontransferability....................................................7
   (g)   Exercise of Options Upon Termination of Service.......................7
   (h)   Leaves of Absence.....................................................8
   (i)   No Rights as a Stockholder............................................8
   (j)   Modification, Extension and Renewal of Options........................8
   (k)   Restrictions on Transfer of Shares....................................8

SECTION 8.   PAYMENT FOR SHARES................................................8
   (a)   General Rule..........................................................8
   (b)   Surrender of Stock....................................................8
   (c)   Services Rendered.....................................................8
   (d)   Cashless Exercise.....................................................8

SECTION 9.   ADJUSTMENT OF SHARES..............................................9
   (a)   General...............................................................9
   (b)   Reorganizations.......................................................9
   (c)   Reservation of Rights.................................................9

SECTION 10.  LEGAL AND REGULATORY REQUIREMENTS.................................9

SECTION 11.  NO EMPLOYMENT RIGHTS.............................................10

SECTION 12.  DURATION AND AMENDMENTS..........................................10
   (a)   Term of the Plan.....................................................10
   (b)   Right to Amend or Terminate the Plan.................................10
   (c)   Effect of Amendment or Termination...................................10

SECTION 13.  EXECUTION........................................................10

                                      -ii-

<PAGE>

                               1999 STOCK PLAN OF
                               ------------------

                              PURCHASEPRO.COM, INC.
                              ---------------------

                     (Adopted by the Board on July 21, 2000)

SECTION 1.  ESTABLISHMENT AND PURPOSE.
--------------------------------------

     The Plan was established in June 1999 to offer selected employees,
directors, advisers and consultants an opportunity to acquire a proprietary
interest in the success of the Company, or to increase such interest, by
purchasing Shares of the Company's Common Stock. The Plan provides both for the
direct award or sale of Shares and for the grant of Options to purchase Shares.
Options granted under the Plan may include Nonstatutory Options as well as ISOs
intended to qualify under Code section 422.

SECTION 2.  DEFINITIONS.
------------------------

     (a) "Board of Directors" shall mean the Board of Directors of the Company,
          ------------------
as constituted from time to time.

     (b) "Change in Control" means the occurrence of either of the following
          -----------------
events:

          (i) A change in the composition of the Board of Directors, as a result
     of which fewer than one-half of the incumbent directors are directors who
     either:

               (A) Had been directors of the Company twenty-four (24) months
          prior to such change; or

               (B) Were elected, or nominated for election, to the Board of
          Directors with the affirmative votes of at least a majority of the
          directors who had been directors of the Company twenty-four (24)
          months prior to such change and who were still in office at the time
          of the election or nomination; or

          (ii) Any "person" (as such term is used in sections 13(d) and 14(d)
     of the Exchange Act) by the acquisition or aggregation of securities is or
     becomes the beneficial owner, directly or indirectly, of securities of the
     Company representing twenty percent (20%) or more of the combined voting
     power of the Company's then outstanding securities ordinarily (and apart
     from rights accruing under special circumstances) having the right to vote
     at elections of directors (the "Base Capital Stock"); except that any
     change in the relative beneficial ownership of the Company's securities by
     any person resulting solely from a reduction in the aggregate number of
     outstanding shares of Base Capital Stock, and any decrease thereafter in
     such person's ownership of securities, shall be disregarded until such
     person increases in any manner, directly or indirectly, such person's
     beneficial ownership of any securities of the Company. For purposes of
     this Subsection (ii), the term "person" shall not include an employee
     benefit plan maintained by the Company.

                                      -1-

<PAGE>

     (c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
          ----

     (d) "Committee" shall mean the committee designated by the Board of
          ---------
Directors, which is authorized to administer the Plan under Section 3 hereof.
The Committee shall have membership composition which enables the Options or
other rights granted under the Plan to qualify for exemption under Rule 16b-3
with respect to persons who are subject to Section 16 of the Exchange Act.

     (e) "Company" shall mean PurchasePro.com, Inc., a Nevada corporation.
          -------

     (f) "Employee" shall mean (i) any individual who is a common-law employee
          --------
of the Company or of a Subsidiary, (ii) a member of the Board of Directors and
(iii) an independent contractor or advisor who performs services for the Company
or a Subsidiary. Service as a member of the Board of Directors or as an
independent contractor or advisor shall be considered employment for all
purposes of the Plan except the second sentence of Section 4(a) and Section
4(b).

     (g) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
          ------------
amended.

     (h) "Exercise Price" shall mean the amount for which one Share may be
          --------------
purchased upon exercise of an Option, as specified by the Committee in the
applicable Stock Option Agreement.

     (i) "Fair Market Value" shall mean (i) the closing price of a Share on the
          -----------------
principal exchange which the Shares are trading, on the date on which the Fair
Market Value is determined (if Fair Market Value is determined on a date which
the principal exchange is closed, Fair Market Value shall be determined on the
last immediately preceding trading day), or (ii) if the Shares are not traded on
an exchange but are quoted on the Nasdaq National Market or a successor
quotation system, the closing price on the date on which the Fair Market Value
is determined, or (iii) if the Shares are not traded on an exchange or quoted on
the Nasdaq National Market or a successor quotation system, the fair market
value of a Share, as determined by the Committee in good faith. Such
determination shall be conclusive and binding on all persons.

     (j) "ISO" shall mean an employee incentive stock option described in Code
          ---
section 422.

     (k) "Nonstatutory Option" shall mean an employee stock option that is not
          -------------------
an ISO.

     (l) "Offeree" shall mean an individual to whom the Committee has offered
          -------
the right to acquire Shares under the Plan (other than upon exercise of an
Option).

     (m) "Option" shall mean an ISO or Nonstatutory Option granted under the
          ------
Plan and entitling the holder to purchase Shares.

     (n) "Optionee" shall mean an individual who holds an Option.
          --------

     (o) "Outside Director" shall mean a member of the Board of Directors who is
          ----------------
not a common-law employee of the Company or of a Subsidiary.

     (p) "Plan" shall mean this 1999 Stock Plan of PurchasePro.com, Inc., as
          ----
amended from time to time.

                                      -2-

<PAGE>

     (q) "Purchase Price" shall mean the consideration for which one Share may
          --------------
be acquired under the Plan (other than upon exercise of an Option), as specified
by the Committee.

     (r) "Service" shall mean service as an Employee.
          -------

     (s) "Share" shall mean one share of Stock, as adjusted in accordance with
          -----
Section 9 (if applicable).

     (t) "Stock" shall mean the Common Stock of the Company.
          -----

     (u) "Stock Option Agreement" shall mean the agreement between the Company
          ----------------------
and an Optionee which contains the terms, conditions and restrictions pertaining
to his Option.

     (v) "Stock Purchase Agreement" shall mean the agreement between the Company
          ------------------------
and an Offeree who acquires Shares under the Plan which contains the terms,
conditions and restrictions pertaining to the acquisition of such Shares.

     (w) "Subsidiary" shall mean any corporation, if the Company and/or one or
          ----------
more other Subsidiaries own not less than 50 percent of the total combined
voting power of all classes of outstanding stock of such corporation. A
corporation that attains the status of a Subsidiary on a date after the adoption
of the Plan shall be considered a Subsidiary commencing as of such date.

     (x) "Total and Permanent Disability" shall mean that the Optionee is unable
          ------------------------------
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted, or can be expected to last, for a continuous period
of not less than twelve (12) months.

SECTION 3.  ADMINISTRATION.
---------------------------

     (a) Committee Procedures. The Board of Directors shall designate one of the
         --------------------
members of the Committee as chairman. The Committee may hold meetings at such
times and places as it shall determine. The acts of a majority of the Committee
members present at meetings at which a quorum exists, or acts reduced to or
approved in writing by all Committee members, shall be valid acts of the
Committee.

     (b) Committee Responsibilities. Subject to the provisions of the Plan, the
         --------------------------
Committee shall have full authority and discretion to take the following
actions:

          (i) To interpret the Plan and to apply its provisions;

          (ii) To adopt, amend or rescind rules, procedures and forms relating
     to the Plan;

          (iii) To authorize any person to execute, on behalf of the Company,
     any instrument required to carry out the purposes of the Plan;

          (iv) To determine when Shares are to be awarded or offered for sale
     and when Options are to be granted under the Plan;

                                      -3-

<PAGE>

          (v) To select the Offerees and Optionees;

          (vi) To determine the number of Shares to be offered to each Offeree
     or to be made subject to each Option;

          (vii) To prescribe the terms and conditions of each award or sale of
     Shares, including (without limitation) the Purchase Price, the vesting of
     the award (including accelerating the vesting of awards) and to specify the
     provisions of the Stock Purchase Agreement relating to such award or sale;

          (viii) To prescribe the terms and conditions of each Option,
     including (without limitation) the Exercise Price, the vesting or duration
     of the Option (including accelerating the vesting of the Option), to
     determine whether such Option is to be classified as an ISO or as a
     Nonstatutory Option, and to specify the provisions of the Stock Option
     Agreement relating to such Option;

          (ix) To amend any outstanding Stock Purchase Agreement or Stock Option
     Agreement, subject to applicable legal restrictions and to the consent of
     the Offeree or Optionee who entered into such agreement;

          (x) To prescribe the consideration for the grant of each Option or
     other right under the Plan and to determine the sufficiency of such
     consideration;

          (xi) To determine the disposition of each Option or other right under
     the Plan in the event of an Optionee's or Offeree's divorce or dissolution
     of marriage;

          (xii) To determine whether Options or other rights under the Plan
     will be granted in replacement of other grants under an incentive or other
     compensation plan of an acquired business;

          (xiii) To correct any defect, supply any omission, or reconcile any
     inconsistency in the Plan, any Stock Option Agreement or any Stock Purchase
     Agreement; and

          (xiv) To take any other actions deemed necessary or advisable for the
     administration of the Plan.

Subject to the requirements of applicable law, the Committee may designate
persons other than members of the Committee to carry out its responsibilities
and may prescribe such conditions and limitations as it may deem appropriate,
except that the Committee may not delegate its authority with regard to the
selection for participation of or the granting of Options or other rights under
the Plan to persons subject to Section 16 of the Exchange Act. All decisions,
interpretations and other actions of the Committee shall be final and binding on
all Offerees, all Optionees, and all persons deriving their rights from an
Offeree or Optionee. No member of the Committee shall be liable for any action
that he has taken or has failed to take in good faith with respect to the Plan,
any Option, or any right to acquire Shares under the Plan.

                                      -4-

<PAGE>

SECTION 4.  ELIGIBILITY.
------------------------

     (a) General Rule. Only Employees shall be eligible for designation as
         ------------
Optionees or Offerees by the Committee. In addition, only individuals who are
employed as common-law employees by the Company or a Subsidiary shall be
eligible for the grant of ISOs.

     (b) Outside Directors. Any other provision of the Plan notwithstanding, the
         -----------------
participation of Outside Directors in the Plan shall be subject to the following
restrictions:

          (i) Outside Directors shall only be eligible for the grant of
     Nonstatutory Options as described in this Section 4(b).

          (ii) Each Outside Director shall automatically be granted a
     Nonstatutory Option to purchase 15,000 Shares (subject to adjustment under
     Section 9) as a result of their appointment as an Outside Director on, if
     after, the effectiveness of the Company's initial public offering of the
     Stocks. In addition, upon the conclusion of each regular annual meeting of
     the Company's stockholders occurring after 1999 and following the meeting
     at which they were appointed, each Outside Director who will continue
     serving as a member of the Board thereafter shall receive a Nonstatutory
     Option to purchase 15,000 Shares (subject to adjustment under Section 9).
     All such Nonstatutory Options shall vest and become exercisable at the
     date of grant;

          (iii) The Exercise Price of all Nonstatutory Options granted to an
     Outside Director under this Section 4(b) shall be equal to one hundred
     percent (100%) of the Fair Market Value of a Share on the date of grant,
     payable in one of the forms described in Sections 8(a), (b) and (d).

          (iv) All Nonstatutory Options granted to an Outside Director under
     this Section 4(b) shall terminate on the earliest of (A) the 10th
     anniversary of the date of grant of such Options or (B) the date twelve
     (12) months after the termination of such Outside Director's service for
     any reason.

     (c) Limitation On Grants. No Employee shall be granted Options to purchase
         --------------------
more than Seven Hundred Fifty Thousand (750,000) Shares in any fiscal year of
the Company.

     (d) Ten-Percent Stockholders. An Employee who owns more than 10 percent of
         ------------------------
the total combined voting power of all classes of outstanding stock of the
Company or any of its Subsidiaries shall not be eligible for the grant of an ISO
unless such grant satisfies the requirements of Code section 422(c)(6).

     (e) Attribution Rules. For purposes of Subsection (d) above, in determining
         -----------------
stock ownership, an Employee shall be deemed to own the stock owned, directly or
indirectly, by or for his brothers, sisters, spouse, ancestors and lineal
descendants. Stock owned, directly or indirectly, by or for a corporation,
partnership, estate or trust shall be deemed to be owned proportionately by or
for its shareholders, partners or beneficiaries.

     (f) Outstanding Stock. For purposes of Subsection (d) above, "outstanding
         -----------------
stock" shall include all stock actually issued and outstanding immediately after
the grant. "Outstanding

                                      -5-

<PAGE>

stock" shall not include shares authorized for issuance under outstanding
options held by the Employee or by any other person.

SECTION 5.  STOCK SUBJECT TO PLAN.
----------------------------------

     (a) Basic Limitation. Shares offered under the Plan shall be authorized but
         ----------------
unissued Shares or treasury Shares. Two Million Two Hundred Fifty Thousand
(2,250,000) Shares were initially reserved for issuance under the Plan (upon
exercise of Options or other rights to acquire Shares). On July 21, 2000, at the
Annual Meeting of Stockholders, our stockholders approved an increase to this
reserve of Four Million Five Hundred Thousand (4,500,000) Shares, such that the
aggregate number of Shares which may be issued under the Plan now stands at Six
Million Seven Hundred Fifty Thousand (6,750,000) Shares. The aggregate number of
Shares which may be issued under the Plan shall at all times be subject to
adjustment pursuant to Section 9. The number of Shares which are subject to
Options or other rights outstanding at any time under the Plan shall not exceed
the number of Shares which then remain available for issuance under the Plan.
The Company, during the term of the Plan, shall at all times reserve and keep
available sufficient Shares to satisfy the requirements of the Plan.

     (b) Additional Shares. In the event that any outstanding Option or other
         -----------------
right for any reason expires or is canceled or otherwise terminated, the Shares
allocable to the unexercised portion of such Option or other right shall again
be available for the purposes of the Plan. If Shares are forfeited before any
dividends have been paid with respect to the Shares, then such Shares shall
again be available for award or sale under the Plan.

SECTION 6.  TERMS AND CONDITIONS OF AWARDS OR SALES.
----------------------------------------------------

     (a) Stock Purchase Agreement. Each award or sale of Shares under the Plan
         ------------------------
(other than upon exercise of an Option) shall be evidenced by a Stock Purchase
Agreement between the Offeree and the Company. Such award or sale shall be
subject to all applicable terms and conditions of the Plan and may be subject to
any other terms and conditions which are not inconsistent with the Plan and
which the Committee deems appropriate for inclusion in a Stock Purchase
Agreement. The provisions of the various Stock Purchase Agreements entered into
under the Plan need not be identical.

     (b) Duration of Offers and Nontransferability of Rights. Any right to
         ---------------------------------------------------
acquire Shares under the Plan (other than an Option) shall automatically expire
if not exercised by the Offeree within thirty (30) days after the grant of such
right was communicated to him by the Committee. Such right shall not be
transferable and shall be exercisable only by the Offeree to whom such right was
granted.

     (c) Purchase Price. The Purchase Price shall be determined by the Committee
         --------------
at its sole discretion. The Purchase Price shall be payable in one of the forms
described in Sections 8(a), (b) or (c).

     (d) Withholding Taxes. As a condition to the purchase of Shares, the
         -----------------
Offeree shall make such arrangements as the Committee may require for the
satisfaction of any federal, state or local withholding tax obligations that may
arise in connection with such purchase.

                                      -6-

<PAGE>

     (e) Restrictions on Transfer of Shares. Any Shares awarded or sold under
         ----------------------------------
the Plan shall be subject to such special forfeiture conditions, rights of
repurchase, rights of first refusal and other transfer restrictions as the
Committee may determine. Such restrictions shall be set forth in the applicable
Stock Purchase Agreement and shall apply in addition to any general restrictions
that may apply to all holders of Shares.

SECTION 7.  TERMS AND CONDITIONS OF OPTIONS.
--------------------------------------------

     (a) Stock Option Agreement. Each grant of an Option under the Plan shall be
         ----------------------
evidenced by a Stock Option Agreement between the Optionee and the Company. Such
Option shall be subject to all applicable terms and conditions of the Plan and
may be subject to any other terms and conditions which are not inconsistent with
the Plan and which the Committee deems appropriate for inclusion in a Stock
Option Agreement. The provisions of the various Stock Option Agreements entered
into under the Plan need not be identical.

     (b) Number of Shares. Each Stock Option Agreement shall specify the number
         ----------------
of Shares that are subject to the Option and shall provide for the adjustment of
such number in accordance with Section 9. The Stock Option Agreement shall also
specify whether the Option is an ISO or a Nonstatutory Option.

     (c) Exercise Price. Each Stock Option Agreement shall specify the Exercise
         --------------
Price. The Exercise Price of an ISO shall not be less than 100 percent of the
Fair Market Value of a Share on the date of grant, except as otherwise provided
in Section 4(d). Subject to the preceding sentence, the Exercise Price under any
Option shall be determined by the Committee at its sole discretion. The Exercise
Price shall be payable in one of the forms described in Sections 8(a), (b) and
(d).

     (d) Withholding Taxes. As a condition to the exercise of an Option, the
         -----------------
Optionee shall make such arrangements as the Committee may require for the
satisfaction of any federal, state or local withholding tax obligations that may
arise in connection with such exercise. The Optionee shall also make such
arrangements as the Committee may require for the satisfaction of any federal,
state or local withholding tax obligations that may arise in connection with the
disposition of Shares acquired by exercising an Option.

     (e) Exercisability and Term. Each Stock Option Agreement shall specify the
         -----------------------
date when all or any installment of the Option is to become exercisable. The
Stock Option Agreement shall also specify the term of the Option. The term shall
not exceed ten (10) years from the date of grant (five (5) years for Employees
described in Section 4(d)). Subject to the preceding three sentences, the
Committee at its sole discretion shall determine when all or any installment of
an Option is to become exercisable and when an Option is to expire.

     (f) Nontransferability. During an Optionee's lifetime, his Option(s) shall
         ------------------
be exercisable only by him and shall not be transferable. In the event of an
Optionee's death, his Option(s) shall not be transferable other than by will or
by the laws of descent and distribution.

     (g) Exercise of Options Upon Termination of Service. Each Stock Option
         -----------------------------------------------
Agreement shall set forth the extent to which the Optionee shall have the right
to exercise the Option following termination of the Optionee's Service with the
Company and its Subsidiaries, and the

                                      -7-

<PAGE>

right to exercise the Option of any executors or administrators of the
Optionee's estate or any person who has acquired such Option(s) directly from
the Optionee by bequest or inheritance. Such provisions shall be determined in
the sole discretion of the Committee, need not be uniform among all Options
issued pursuant to the Plan, and may reflect distinctions based on the reasons
for termination of Service.

     (h) Leaves of Absence. An Optionee's Service shall be deemed to continue
         -----------------
while the Optionee is on military leave, sick leave or other bona fide leave of
absence (as determined by the Committee). The foregoing notwithstanding, in the
case of an ISO granted under the Plan, Service shall not be deemed to continue
beyond the first ninety (90) days of such leave, unless the Optionee's
reemployment rights are guaranteed by statute or by contract.

     (i) No Rights as a Stockholder. An Optionee, or a transferee of an
         --------------------------
Optionee, shall have no rights as a stockholder with respect to any Shares
covered by his Option until the date of the issuance of a stock certificate for
such Shares. No adjustments shall be made, except as provided in Section 9.

     (j) Modification, Extension and Renewal of Options. Within the limitations
         ----------------------------------------------
of the Plan, the Committee may modify, extend or renew outstanding options or
may accept the cancellation of outstanding options (to the extent not previously
exercised), whether or not granted hereunder, in return for the grant of new
Options at the same or a different price. The foregoing notwithstanding, no
modification of an Option shall, without the consent of the Optionee, impair his
rights or increase his obligations under such Option.

     (k) Restrictions on Transfer of Shares. Any Shares issued upon exercise of
         ----------------------------------
an Option shall be subject to such special forfeiture conditions, rights of
repurchase, rights of first refusal and other transfer restrictions as the
Committee may determine. Such restrictions shall be set forth in the applicable
Stock Option Agreement and shall apply in addition to any general restrictions
that may apply to all holders of Shares.

SECTION 8.  PAYMENT FOR SHARES.
-------------------------------

     (a) General Rule. The entire Purchase Price or Exercise Price of Shares
         ------------
issued under the Plan shall be payable in lawful money of the United States of
America at the time when such Shares are purchased, except as provided in
Subsections (b), (c) and (d) below.

     (b) Surrender of Stock. To the extent that a Stock Option Agreement so
         ------------------
provides, payment may be made all or in part with Shares which have already been
owned by the Optionee or his representative for more than twelve (12) months and
which are surrendered to the Company in good form for transfer. Such Shares
shall be valued at their Fair Market Value on the date when the new Shares are
purchased under the Plan.

     (c) Services Rendered. At the discretion of the Committee, Shares may be
         -----------------
awarded under the Plan in consideration of services rendered to the Company or a
Subsidiary prior to the award. If Shares are awarded without the payment of a
Purchase Price in cash, the Committee shall make a determination (at the time of
the award) of the value of the services rendered by the Offeree and the
sufficiency of the consideration to meet the requirements of Section 6(c).

                                      -8-

<PAGE>

     (d) Cashless Exercise. To the extent that a Stock Option Agreement so
         -----------------
provides, payment may be made all or in part by delivery (on a form prescribed
by the Committee) of an irrevocable direction to a securities broker to sell
Shares and to deliver all or part of the sale proceeds to the Company in payment
of the aggregate Exercise Price.

SECTION 9.  ADJUSTMENT OF SHARES.
---------------------------------

     (a) General. In the event of a subdivision of the outstanding Stock, a
         -------
declaration of a dividend payable in Shares, a declaration of a dividend payable
in a form other than Shares in an amount that has a material effect on the value
of Shares, a combination or consolidation of the outstanding Stock (by
reclassification or otherwise) into a lesser number of Shares, a
recapitalization or a similar occurrence, the Committee shall make appropriate
adjustments in one or more of (i) the number of Shares available for future
grants under Section 5, (ii) the number of Shares available for grants under
Section 4(c), (iii) the number of Shares covered by each outstanding Option,
(iv) the Exercise Price under each outstanding Option, (v) the number of shares
covered by each outstanding award or (vi) the Purchase Price of each outstanding
award.

     (b) Reorganizations. In the event that the Company is a party to a merger
         ---------------
or other reorganization, outstanding Options shall be subject to the agreement
of merger or reorganization. Such agreement may provide for the assumption of
outstanding Options by the surviving corporation or its parent or for their
continuation by the Company (if the Company is a surviving corporation);
provided, however, that if assumption or continuation of the outstanding Options
is not provided by such agreement then the Committee shall have the option of
offering the payment of a cash settlement equal to the difference between the
amount to be paid for one Share under such agreement and the Exercise Price, in
all cases without the Optionees' consent.

     (c) Reservation of Rights. Except as provided in this Section 9, an
         ---------------------
Optionee or Offeree shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class, the payment of any dividend or
any other increase or decrease in the number of shares of stock of any class.
Any issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or
Exercise Price of Shares subject to an Option. The grant of an Option pursuant
to the Plan shall not affect in any way the right or power of the Company to
make adjustments, reclassifications, reorganizations or changes of its capital
or business structure, to merge or consolidate or to dissolve, liquidate, sell
or transfer all or any part of its business or assets.

SECTION 10.  LEGAL AND REGULATORY REQUIREMENTS.
-----------------------------------------------

     Shares shall not be issued under the Plan unless the issuance and delivery
of such Shares complies with (or is exempt from) all applicable requirements of
law, including (without limitation) the Securities Act of 1933, as amended, the
rules and regulations promulgated thereunder, state securities laws and
regulations and the regulations of any stock exchange on which the Company's
securities may then be listed, and the Company has obtained the approval or
favorable ruling from any governmental agency which the Company determines is
necessary or advisable.

                                      -9-

<PAGE>

SECTION 11.  NO EMPLOYMENT RIGHTS.
----------------------------------

     No provision of the Plan, nor any right or Option granted under the Plan,
shall be construed to give any person any right to become, to be treated as, or
to remain an Employee. The Company and its Subsidiaries reserve the right to
terminate any person's Service at any time and for any reason, with or without
notice.

SECTION 12.  DURATION AND AMENDMENTS.
-------------------------------------

     (a) Term of the Plan. The amended and restated Plan, as set forth herein,
         ----------------
shall terminate automatically on June 2, 2009 and may be terminated on any
earlier date pursuant to Subsection (b) below.

     (b) Right to Amend or Terminate the Plan. The Board of Directors may amend
         ------------------------------------
the Plan at any time and from time to time. Rights and obligations under any
Option granted before amendment of the Plan shall not be materially impaired by
such amendment, except with consent of the person to whom the Option was
granted. An amendment of the Plan shall be subject to the approval of the
Company's stockholders only to the extent required by applicable laws,
regulations or rules.

     (c) Effect of Amendment or Termination. No Shares shall be issued or sold
         ----------------------------------
under the Plan after the termination thereof, except upon exercise of an Option
granted prior to such termination. The termination of the Plan, or any amendment
thereof, shall not affect any Share previously issued or any Option previously
granted under the Plan.

SECTION 13.  EXECUTION.
-----------------------

     To record the adoption of the amended and restated Plan by the Board of
Directors effective as of July 21, 2000, the Company has caused its authorized
officer to execute the same.

                                     PURCHASEPRO.COM, INC.

                                     By
                                        ---------------------------------------
                                                 Charles E. Johnson, Jr.
                                                 Chief Executive Officer

                                      -10-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00014-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00014-of-00352.parquet"}]]