Document:

<PAGE>

                                      Document is copied.
                                                                   EXHIBIT 10.11

                                     IBM
--------------------------------------------------------------------------------
                                     International Business Machines Corporation
                                     Hudson Valley Research Park
                                     20700 Route 52
                                     Hopewell Junction, NY 12533-6531

Mr. Gary Jones
President and Chief Executive Officer
eMagin Corporation
Hudson Valley Research Park
2070 Route 52
Hopewell Junction, NY 12533-6531

                                            January 29, 2001

     Subject:  Second  Amendment to the Lease executed on May 28, 1999,  between
     International Business Machines Corporation (IBM) and FED Corporation (FED)

Dear Mr. Jones:

     This letter, upon your signed acceptance, amends the above referenced Lease
between IBM and FED  Corporation for space located at the Hudson Valley Research
Park in Hopewell Junction, New York. The Lease shall be amended as follows:

     1. In all occurrences  within the above referenced  Lease, of the name "FED
Corporation", it is to be replaced with "eMagin Corporation".

     2. In PARAGRAPH 4, TERM,  EXTENSION,  AND BUILD-OUT.  (c) EXTENSION OPTION,
(1): replace "...for one period of one year..." with "...for five periods of one
year...".

     Except as amended  herein,  all the terms and conditions of the Lease shall
remain in full force and be effective. Please inciate your acceptance by signing
two (2) copes of this letter and  returning  them to IBM for counter  signature.
Thank you.

Accepted and agreed to:

INTERNATIONAL BUSINESS
MACHINES CORPORATION                   eMagin Corporation

By: /s/Raymond J. Wagner               By: /s/ Gary Jones
   -------------------------              --------------------------------------
    Raymond J. Wagner                      Gary Jones
    Senior Program Manager,                President and Chief Executive Officer
    North Region Real Estate

Date:  1/30/01                         Date:  1/31/01
     -----------------------                -----------------------<PAGE>

                                        Document is copied.
                                                                   EXHIBIT 10.12

LEASE AGREEMENT

1. SPECIFIC INFORMATION:

     1.1. The  "Landlord" is Redson  Building  Partnership a Washington  general
partnership.

     1.2. The "Tenant" is Vision Newco, a Delaware corporation.

     1.3.  Location  of  Premises:  The  "Premises"  are the  portion,  which is
crosshatched  on the  attached  floor  plan,  of the  building  location  on the
property ("Property") which is legally described on schedule 1.3.

     1.4.  Lease  Duration:

          1.4.1. The "Commencement Date" of this Lease is December 15, 1995.

          1.4.2. The "Termination Date" of this Lease is February 15, 2001.

     1.5. The "Basic  Monthly  Rent:  at the  commencement  of this Lease is Ten
Thousand  Four  Hundred  Fifty One Dollars  ($10,451)  (which  shall be adjusted
periodically in accordance with schedule 1.5, if attached).

     1.6.  The  "Allowed  Use" of the  Premises  is  assemblage  and  storage of
electronic components and related general office use.

     1.7. On signing this Lease,  Tenant  shall pay  Landlord Ten Thousand  Four
Hundred Fifty One Dollars  ($10,451) to be applied  toward  payment of the first
month of the term of this Lease ("Advance  Rent") and shall deposit Ten Thousand
Five Hundred ($10,500) Dollars to be held as the "Security Deposit."

     1.8. Tenant's Pro Rata Share of Operating Expenses is forty eight and 30/00
percent (48.30%)

     1.9.  Notice  Address of Tenant:
           Vision  Newro, Inc.
           7659 178th PI NE

           REDMOND, WA  98052

     1.10. Notice Address of Landlord:
           c/o Anderson-Chamberlin, Attn:Spike Anderson
           15395 SE 30th Place
           Suite 120
           Bellevue, WA  98007

     1.11.  Date.  This Lease is dated,  for  reference  purposes,  only,  as of
December 1, 1995.

     1.12. Agency Disclosure:

          1.12.1. At the time of the signing of this Agreement, Kidder Mathews &
Segner represented :Landlord.

          1.12.2.  Landlord  and  Tenant  confirm  that  prior  oral or  written
disclosure of agency was provided to them in this transaction.

2.  PREMISES.  Landlord  hereby leases to Tenant and Tenant leases from Landlord
for the term,  at the  rental,  and on all of the terms and  conditions  of this
Lease, the Premises.

3. TERM.

     3.1. TERM. The term of this Lease is from the  Commencement  Date until the
Termination Date, unless sooner terminated pursuant to any provision hereof.

     3.2.  DELAY IN  COMMENCEMENT.  Despite the stated  Commencement  Date,  the
Landlord  shall not be liable to Tenant  and this  Lease  (including  the stated
Termination  Date)  and  the  Tenant  obligations  under  this  Lease  shall  be
unaffected  if for any  reason  Landlord  does  not  deliver  possession  of the
Premises to Tenant on the Commencement  Date, but in such case Tenant shall have

<PAGE>

no obligation to pay rent until Landlord delivers  possession of the Premises to
Tenant.  If Landlord  has not  delivered  possession  to the Premises to Tenant,
Tenant  may elect by  written  notice to  Landlord  cancel  this  Lease.  If the
Landlord shall not have delivered possession of the Premises within one (1) year
from the Commencement  Date,  Landlord may by notice in writing to Tenant cancel
this Lease. If either party elects to so cancel the Lease, Landlord shall return
any money  previously  deposited by Tenant and the parties  shall be  discharged
from all  obligations  hereunder.  In no event,  however,  shall Tenant have the
right to cancel this Lease because of any delay in delivering  possession of the
Premises because of any act of God or the elements;  shortage or  unavailability
of necessary  materials,  supplies,  or labor;  shortage of or  interruption  on
transportation  of facilities;  regulations or  restriction;  or any other cause
beyond Landlord's reasonable control. In the event delivery of possession of the
Premises is delayed beyond the stated Commencement Date, the stated Commencement
Date and the stated  Termination  Date each shall be  extended  by the number of
days of such delay.

     3.3.  EARLY  POSSESSION.   If  Tenant  occupies  the  Premises  before  the
Commencement  Date of the term,  all of Tenant's  Lease  obligations  (including
payment  of  Operating  Expenses,  but not  Basic  Monthly  Rent)  shall  become
effective  immediately  although such early  possession shall not accelerate the
Termination Date of this Lease.

     3.4 FIRST OPPORTUNITY TO LEASE.  Tenant shall have the first opportunity to
lease other space  adjacent to its Premises if such space becomes  available for
lease. In such case,  Landlord shall advise Tenant of its  availability  and the
terms on which  Landlord  would  lease  such  space.  Tenant  acknowledges  that
Landlord is negotiating  for the lease of the remainder of the building (as well
as the  Premises  following  expiration  of  Tenant's  Lease)  with Mr. And Mrs.
Christopher  Starling and such Tenant's  first  opportunity  to lease will apply
only if such other lease is not finalized or if such Lease is terminated  during
the term of Tenant's Lease.  On any such notice,  Tenant shall have the right to
lease such adjacent space (for a term equal to Tenant's  unexpired  term) at the
rent and  condition  stated in  Landlord's  notice or upon such  other  terms as
Tenant and Landlord may agree in their individual directions.  Tenant shall have
thirty (30) days after  receipt of such notice to not Lessor that Tenant  elects
to lease the adjacent  space. If Tenant does not exercise its right to lease the
adjacent  space to a third party on such terms as may be  acceptable to Landlord
and such other party. Tenant does not have any right of renewal of this Lease.

4. RENT

     4.1.  Basic  Monthly  Rent.  Tenant  shall pay to  Landlord as rent for the
Premises the Basic Monthly Rent, in advance,  on the first day of each on the of
the term  hereof.  Rent for any period  during the term hereof which is for less
than one (1) month shall be a pro-rata portion of the monthly installment.  Rent
shall be payable  without  notice or demand and without  deduction,  offset,  or
abatement,  in lawful money of the United  States of America to Landlord at such
address  and to such  other  persons  or at such other  places as  Landlord  may
designate in writing.

     4.2 OPERATING EXPENSES

          4.2.1 In  addition to the Basic  Monthly  Rent and  commencing  on the
earlier of Tenant's  occupancy  or the  Commencement  Date,  Tenant shall pay to
Landlord monthly tenant's Pro Rata Share of Operating  Expenses of the Property.
Periodically  Landlord  shall  submit to Tenant a statement  of the  anticipated
monthly  amount of Tenant's  Pro Rata Share of  Operating  Expenses,  and tenant
shall pay the same and all subsequent  monthly  payments  concurrently  with the
payment of Basic  Monthly Rent or if no Basic Monthly Rent is due and payable on
or before the first day of each month, in advance without  adjustment or offset.
Tenant shall  continue to make said monthly  payments until notified by Landlord
of a change  thereof.  In the  event  that a Lender  requires  Landlord  to make
monthly or periodic deposits to an account for the payment of Insurance Premiums
or Taxes, the amount of such required  deposits to an account for the payment of
Insurance  rather  than  being  due on the date  when  such  Taxes or  Insurance
Premiums  are paid.  Each year when  available,  Landlord  shall  give  Tenant a
statement  showing the total Operating  Expenses and other charges,  if any, for
the Property actually incurred for the prior calendar year and Tenant's Pro Rata
Share  thereof.  In the event  that the term of this Lease does not begin or end
coincident with the calendar year, the statement for such year shall be prorated
appropriately.  In the event the total of monthly payments which Tenant has made
for the prior calendar year shall be less than Tenant's actual Pro Rata Share of
Operating  Expenses,  then Tenant shall pay the  difference in a lump sum within
thirty (30) days after  receipt of such  statement  from Landlord when the final

<PAGE>

determination  is made of Tenant's  Pro Rata Share of Operating  Expenses,  even
though the Term may have expired or been terminated.  Any overpayment made shall
be refunded to Tenant or, at Landlord's option,  credited towards the next Basic
Monthly  Rent  payments  coming  due. In the case of the year in which the Lease
expires or  terminates  any  overpayment  will be refunded.  In the event of any
adjustment by Landlord of the estimated amount of the Operating Expenses, Tenant
shall immediately commence paying the adjusted estimated amount.

          4.2.2.  DEFINITION of Operating Expenses.  "Operating  Expenses" shall
mean the total costs and  expenses  paid or  incurred by Landlord in  connection
with the ownership,  operation,  maintenance and repair of the Property which in
accordance  with  reasonable  accounting and management  practices  consistently
applied,  including , without  limitation (1) Taxes; (2) Insurance  Premiums (3)
the cost of utilities consumed on the Property if paid for by Landlord;  (4) the
cost of any governmentally required license, permit, or inspection for or of the
Property; (5) personal property taxes on any personal property owned by Landlord
and located on the  Property  and used for the  maintenance  or operation of the
Property;  (6) and any other costs and  expenses  of  Property;  (7)  reasonable
property  management  fees not  exceeding  three  percent  (3%) of total  rental
charges and (8) any other  expense  designated  by this Lease to be an Operating
Expense.  In the event of the failure of a compressor  or other major element of
the heating and air conditioning  system of the Property (which element is not a
consumable  or designed  and  intended to be  replaced  periodically)  requiring
replacement  rather than maintenance,  only fifty percent(50%) of the expense of
such  replacement  shall be included  within the meaning of Operating  Expenses.
Operating  Expenses  shall be "net"  only and for that  purpose  shall be deemed
reduced by the amounts of any  insurance  reimbursement  or other  reimbursement
received by Landlord in connection  with such expenses.  The following shall not
be  Operating  Expenses  (1)  repairs or other  W???????  occasioned  by insured
casualty  except for the deductible  portion of any insured  casualty loss; "(2)
leasing commissions;  (3) depreciation and amortization;  (4) costs of a capital
improvement  nature;  (5) interest on debt or principal  payments to a Lender or
rental under a ground lease (other than leasehold  excise tax); and (6) costs of
Landlord's general overhead.

5. SECURITY  DEPOSIT.  The Security  Deposit shall be security for Tenant's full
performance  of Tenant's lease  obligations.  If Tenant fails to pay rent or any
other charges due from Tenant under this Lease,  Landlord may elect to apply the
Security  Deposit  toward the payment of such default.  If Landlord  applies any
portion of the Security Deposit,  Tenant shall, on ten (10) days written notice,
deposit  cash with  Landlord in an amount  sufficient  to restore  the  Security
Deposit to the full amount stated in Section 1; Tenant's  failure to do so shall
be a default.  Landlord may commingle the security  Deposit.  If Tenant performs
all of Tenant's lease  obligations,  the Security Deposit (or so much as has not
been applied by Landlord) shall be returned to Tenant (or, at Landlord's option,
to the last  assignee,  if any, or Tenant's  interest  under the Lease) within a
reasonable time.  Landlord may transfer the security deposit to the purchaser of
his interest in the event of sale and Tenant shall look solely to such purchaser
for return of the deposit.

6. USE.

     6.1.  Allowed  use. The  Premises  shall be used and occupied  only for the
Allowed Use and for no other purpose  without prior written consent of Landlord,
which consent may be withheld or conditioned as Landlord deem appropriate within
its sole, unrestricted discretion. The designation of Tenant's Allowed Use shall
not be deemed to be an  agreement  by Landlord  to refrain  from  leasing  other
property to others for a similar use.

     6.2.  COMPLIANCE  WITH LAW.  Tenant  shall,  at  Tenant's  expense,  comply
promptly with all present and future laws and requirements regulating the use of
the  Premises by Tenant or Tenant's  business.  Landlord  shall,  at  Landlord's
expense,  comply  promptly  with all present  and future  laws and  requirements
regulating the physical condition of the building  containing the Premises which
are not  related  to the use of the  Premises  by Tenant or  Tenant's  business.
Tenant and  Landlord  are not  related to the use of the  Premises  by Tenant or
Tenant's business.  Tenant and Landlord agree that requirements  arising from or
based on the  federal  Americans  With  Disabilities  Act due to the  present of
employees  or members of the public in Tenant's  Premises are to be deemed to be
elsewhere  in this Lease.  Tenant shall not create or allow waste or a nuisance,
or unreasonably disturb any other tenant or person.

     6.3 INSURANCE  CANCELLATION.  Despite any other provision of this Lease, no
use of the Premises may be made or permitted nor acts done which will  adversely
affect or increase the cost of any insurance policy maintained by Landlord.

<PAGE>

     6.4. LANDLORD'S RULES AND REGULATIONS.  Tenant shall comply with reasonable
regulations  made  or  changed  by  Landlord  shall  from  time  to  time  which
regulations shall not conflict with any express provision of this Lease.

     6.5.  OTHER  TENANTS.  Landlord  shall not be responsible to Tenant for the
acts or, omissions of the other tenant or occupant of the Property.

7. MAINTENANCE, REPAIRS AND ALTERATION.

     7.1. LANDLORD'S  OBLIGATION.  Except for damage caused or allowed by Tenant
and its employees or invitees,  Landlord shall maintain,  at Landlord's  expense
and not as Operating Expense the structural  foundations of the Premises and the
exterior  roof(s) of the Premises.  The term "Common  Areas" refers to all areas
within the Property which are made available, from time to time, for general use
of all tenants and Landlord,  which areas shall include,  but not necessarily be
limited to, parking areas, driveways,  sidewalks,  landscaped and planted areas,
common  lobbies and loading docks and the like. The Landlord shall keep or cause
to be kept the Common Areas in a neat,  clean, and orderly  condition,  properly
lighted and landscaped  and planted areas,  common lobbies and loading docks and
the like.  The  Landlord  shall keep or cause to be kept the  Common  Areas in a
neat,  clean, and orderly  condition,  properly lighted and landscaped and shall
repair any damage to the facilities thereof, and all expenses in connection with
the common areas shall be  Operating  Expenses for which Tenant will pay its Pro
Rata Share. Operating Expenses for Common Areas general maintenance and repairs,
relocation of facilities, resurfacing, painting, striping, re-striping, cleaning
snow  removal,  sweeping  and  janitorial  services,  maintenance  and repair of
sidewalks,  curbs and Property signage,  landscaping;  irrigation, or sprinkling
systems,  planting and  maintenance  (other than  exterior  roof and  structural
foundations of the Premises) including but not limited to patching,  resurfacing
and  preventative  maintenance  and painting or renovation of the ????  heating,
ventilation and air  conditioning  system serving more of the Property than just
the ???? cost or expenses  incurred by reason of any repairs or modifications to
the  Property  for  energy or  reserves  for  replacement  of  existing  capital
improvements  in the Common Areas in amounts as required by  Landlord.  Landlord
may  cause  any  or  all of  said  services  to be  provided  by an  independent
contractor or contractors.  Landlord shall have no such repairs.  Landlord shall
have no obligation to make any repair,  change or  improvement  of the number of
the Premises.

     7.2. TENANT'S OBLIGATIONS.  Tenant, at Tenant's expense,  shall maintain in
good  condition and  appearance  all and every part of the Premises  (regardless
whether the damaged  portion of the Premises or the means of repairing  the same
are directly  accessible  form the interior of the Premises).  Without  limiting
Tenants duty,  Tenant shall so maintain  (including  repainting  when seasonably
needed) all interior walls, any heating  ventilation and air conditioning system
serving Premises, fixtures, walls, ceilings, doors, glass, and skylights located
within the  agreement to maintain  the Premises  includes the duty to replace as
well as repair.  If and as in writing by  Landlord,  Tenant shall  contract,  at
Tenant's  expense,  for third  party  periodic  representative  maintenance  and
servicing of heating,  air  conditioning and ventilating  equipment  serving the
Premises.

     7.3.  INITIAL  CONDITION  OF PREMISES.  Tenant  accepts the Premises in the
condition existing when this Lease is signed.  Tenant  acknowledges that neither
Landlord  nor the Broker has made nay  representation  or warranty as to (I) the
physical condition of the Premises other than Landlord  represents that Landlord
is not presently aware of any existing physical  condition of the Premises which
presently  is  legally  required  to  be  rectified  or  altered,  or  (ii)  the
suitability  or  zoning  improvements  or  changes  to the  Premises;  provided,
Landlord  agrees to  reimburse  Tenant,  upon  completion  of the work,  for the
expense of the  following  work to be  performed  by tenant's  contractor  under
Tenant's supervision:

          7.3.1  Construction  of a  wall  between  Tenant's  Premises  and  the
remainder of the building.

          7.3.2.  Installation  of  separate  electrical  (and  gas  if  already
installed)  meters for the  Premises and  separation  of  electrical  wiring and
plumbing from the balance of the building.

          7.3.3.  Servicing  of  HVAC  units  as  may be  necessary  so as to be
operational on the Commencement Date.

          7.3.4.  Improve  front  entrance  of  Premises  to  building  standard
appearance.

<PAGE>

          7.3.5.  Construction  of two restrooms in accordance  with  applicable
code requirements.

          7.3.6.  Install fire  sprinkler  system as required  under  applicable
building code.

          7.3.7.  Re-key  locks in doors in the  portions  of the  building  not
included in the premises.

          7.3.8. Tenant and Landlord will reasonably  cooperate with one another
to prepare  plans and  specifications  for the  foregoing  work and to negotiate
acceptable  financial  arrangements  with the  contractor  who is to perform the
work; if Tenant and Landlord are unable to agree on such financial  arrangements
with the  contractor,  Landlord may elect to perform such work with a contractor
and on terms which are acceptable to Landlord.

     7.4.  SURRENDER.  On the  Termination  Date of this Lease, or on any sooner
termination  of this Lease,  Tenant shall  surrender the Premises to Landlord in
good condition and in accordance with Tenant's maintenance  obligation and broom
clean,  ordinary wear and tear excepted.  Tenant shall patch, fill and paint any
holes resulting from  attachment of any of Tenant's trade fixtures,  furnishings
and  equipment.  Tenant shall remove any  alterations  or  improvements  made by
Tenant without the prior written approval of Landlord.

     7.5.  LANDLORD  RIGHTS.  If Tenant  fails to perform  Tenant's  maintenance
obligations,  Landlord  may, at its option (but shall not be required  to) enter
the  Premises  after ten (10) days prior  written  notice to Landlord or with no
prior  written  notice  in an  emergency,  and  perform  Landlord's  maintenance
obligations  and Landlord shall  immediately,  fully  reimburse  Tenant for such
expense  together with interest  thereon at the rate of twelve percent (12%) per
annum and pay to Landlord an  administrative  surcharge equal to fifteen percent
(15%) of the  costs so  incurred  by  Landlord.  If  Landlord  fails to  perform
Landlord's  maintenance  obligations  hereunder,  Tenant may, at its option (but
shall not bee required to),  after ten (1) days prior written notice to Landlord
or  with no  prior  written  notice  in an  emergency,  and  perform  Landlord's
maintenance  obligations and Landlord shall immediately,  fully reimburse Tenant
for such expense  together with interest  thereon at the rate of twelve  percent
(12%) per annum and pay to Tenant an  administrative  surcharge equal to fifteen
percent (15%) of the costs so incurred by Tenant.

     7.6. ALTERATIONS AND ADDITIONS.

          7.6.1. Without Landlord's prior written consent, Tenant shall not make
any  alteration,   improvements  or  additions  to  the  Premises,   except  for
non-permanent  changes costing less than Five Thousand  Dollars  ($5,000) in the
aggregate  per year. As a condition of consent,  additions at the  expiration of
the term,  and to restore the  Premises  to the prior  condition;  Landlord  may
impose such other  conditions as are  reasonable;  provided  Tenant shall not be
required  to remove  any of the  improvements  listed in  Section  7.3 for which
Landlord is to reimburse  Tenant.  Tenant shall secure all governmental  permits
required in  connection  with any such work.  Landlord  may, at its sole option,
require Tenant, at Tenant's expense,  to obtain for Landlord's  benefit a surety
against any liability for liens arising from such work and to insure  completion
of the work. In performing any  construction  on the Premises,  Tenant agrees to
select a contractor  from a list of contractors  to be provided by Landlord,  so
long as such contractor's pricing to Tenant is reasonable and competitive.

          7.6.2.  Before commencing any work relating to alterations,  additions
and improvements  affecting the Premises (non of which are required or requested
by Landlord, nor any obligation of Tenant under this Lease), Tenant shall notify
Landlord in writing of the expected date of commencement thereof. Landlord shall
then have the right at any time to maintain  on the  Premises  such  notices a s
Landlord  reasonably  deems  necessary to protect the Premises and Landlord from
any lien. In any event, Tenant shall not permit any lien to be asserted, against
the  Premises  or  Property  for any  charge  incurred  or  alleged to have been
incurred by Tenant,  and Tenant shall indemnify,  defend Landlord  against,  and
hold Landlord harmless from any and all liability, costs, damages therefrom.

          7.6.3. Unless Landlord requires removal, as provided elsewhere in this
Lease,  all  alterations,  improvements  or  additions  which may be made on the
Premises  shall  become  the  property  of  Landlord  and  remain  upon  and  be
surrendered  with the Premises at the  expiration of the affixed to the Premises
so that it cannot be removed  without  material  damage to the  Premises,  shall

<PAGE>

remain the  property of Tenant and may be removed by Tenant  prior to the end of
the term of the Lease and  subject  to  Tenant's  obligations  to  maintain  the
Premises.

8. HAZARDOUS SUBSTANCES.

     8.1 As  used  in the  Lease,  the  term  "Hazardous  Substance"  means  any
substance  or  material,  the  storage,  use or  disposal of which is or becomes
regulated under any law, now or hereafter in effect.

     8.2.  Landlord  warrants  to  Tenant  that  Landlord  has not  released  or
deposited on the Premises or Property Common Areas any Hazardous Substance,  and
Landlord  has no knowledge  of the  presence of any  hazardous  substance on the
Premises.

     8.3. Without  Landlord's  prior written consent,  Tenant shall not receive,
store or otherwise allow any Hazardous Substance on the Premises or Property. In
the event of any release or presence of any Hazardous Substances on or about the
Premises or Property  occurring on or after the Commencement Date of this Lease,
Tenant agrees to  immediately,  fully and  completely  remove (and to dispose of
such in accordance with  applicable  law) all of such Hazardous  Substance would
not require  remediation  under the provisions of law.  Tenant further agrees to
defend,  indemnify,  and hold  harmless  Landlord,  its  employees,  agents  and
contractors and Lender from and against any and all losses, claims, liabilities,
damages,  demands,  fines, costs, and expenses (including  reasonable attorneys'
fees) arising out of or resulting  from any release or presence of any Hazardous
Substances on or about the  Premises;  the  provisions  of this  sentence  shall
survive (and be enforceable  thereafter)  the  termination or expiration of this
Lease and the  surrender of the Premises by Tenant.  If Tenant  becomes aware of
the release or presence on the Premises or Property of any Hazardous  Substance,
Tenant shall immediately advise Landlord of such release or presence, and Tenant
further   shall  provide   Landlord   with  copies  of  any  reports,   studies,
recommendations  or  requirements  received  by  Tenant  from any  third  person
including a governmental agency.

9. INSURANCE; INDEMNITY.

     9.1.  PAYMENT OF PREMIUM.  "Insurance  Premiums" are the actual cost of the
insurance  applicable to improvements on the Property and required to be carried
by Landlord by this Lease and include,  but are not limited to , requirements of
a Lender.  The cost of Insurance  Premiums shall be included as a portion of the
Operating  Expenses of which  Tenant  shall pay its Pro Rata Share of  Operating
Expenses.

     9.2. LIABILITY INSURANCE CARRIED BY TENANT. Tenant shall obtain and keep in
force  during  the term of this  Lease a  commercial  (comprehensive)  liability
insurance policy protecting Tenant,  Landlord and any Lender(s) whose names have
been provided to Tenant in writing (as additional  insureds)  against claims for
bodily  injury,  personal  injury and property  damage based upon,  involving or
arising out of the ownership,  use, occupancy or maintenance of the Premises and
all areas appurtenant  thereto.  For the purposes of this Lease, a "Lender" is a
mortgagee  under a mortgage or a  beneficiary  under a deed of trust  granted by
Landlord or Landlord's  predecessor  and which is a lien on the  Premises.  Such
insurance shall be on an occurrence basis providing single Managers or Landlords
of Premises"  endorsement and contain the "Amendment of the Pollution Exclusion"
endorsement  for damage caused by heat,  smoke or fumes from a hostile fire. The
policy shall  include  coverage  for  liability  assumed  under this Lease as an
"insured contract" for the performance of Tenant's  indemnity  obligations under
this Lease. The limits of said insurance required by this Lease or as carried by
Tenant shall not,  however,  limit the liability of Tenant nor relieve Tenant of
any  obligation  hereunder  all  insurance  to be carried  by Tenant  shall not,
however,  limit the  liability  of Tenant nor relieve  Tenant of any  obligation
hereunder.   All  insurance  carried  by  Landlord,  whose  insurance  shall  be
considered excess insurance only.

     9.3. PROPERTY INSURANCE - BUILDING, IMPROVEMENTS AND RENTAL VALUE.

          9.3.1.  BUILDING AND  IMPROVEMENTS.  Landlord shall obtain and keep in
force  during  the  term of this  Lease a  policy  or  policies  in the  name of
Landlord,  with loss payable to Landlord and to any Lender(s),  insuring against
loss or damage to the  Property  with such  deductible  amount as is selected by
Landlord.  Such insurance shall be for full replacement  cost, as the same shall
exist from time to time,  or the amount  required  by any  Lender(s),  but in no
event  more than the  commercially  reasonable  and  available  insurable  value
thereof if, by reason of the unique nature or age of the improvements  involved,

<PAGE>

such  latter  amount is less than full  replacement  cost.  If the  coverage  is
available and commercially reasonable,  Landlord's policy or policies may insure
against all risks of direct  physical loss or damage (except the perils of flood
and/or  earthquake),  including coverage for the enforcement of any ordinance or
law regulating the  reconstruction  or replacement of any undamaged  sections of
the Premises  required to be demolished or removed by reason of the  enforcement
of any  building,  zoning,  safety  or land use laws as the  result of a covered
loss.  Such policies may also contain an agreed  valuation  provision in lieu of
any co-insurance clause,  waiver of subrogation,  and inflation guard protection
causing an increase in the annual property insurance coverage amount by a factor
selected by the insurer.

          9.3.2.  RENTAL  VALUE.  Landlord  shall also  obtain and keep in force
during the term of this Lease a policy or policies in the name of Landlord, with
loss payable to Landlord and any Lender(s), insuring the loss of the full rental
and other charges (including  Operating  Expenses) payable by all tenants of the
Premises to Landlord for one year.  Said  insurance may provide that in coverage
shall be extended beyond the date of the completion of repairs or replacement of
the  Premises,  to provide for one full year's loss of rental  revenues from the
date of any  such  loss.  Said  insurance  shall  contain  an  agreed  valuation
provision in lieu of any co-insurance  clause,  and the amount of coverage shall
be adjusted annually to reflect the projected payments payable by Tenant for the
next 12-month period.

          9.3.3.  INCREASES CAUSED BY TENANT.  Tenant shall pay for any increase
in the  premiums  charged to Landlord  for the  Property or Common Areas if said
increase  is  caused  by  Tenant's  acts,  omissions,  use or  occupancy  of the
Premises.

     9.4.  TENANT'S  PROPERTY  INSURANCE.  Tenant at its own cost shall maintain
insurance  coverage on all of Tenant's  personal  property,  trade  fixtures and
Tenant-owned alterations and improvements in the Premises similar in coverage to
that required by this Lease to be carried by Landlord.  Such insurance  shall be
full  replacement  cost coverage  with a deductible  not to exceed Five Thousand
Dollars  ($5,000) per occurrence.  The proceeds from any such insurance shall be
used by Tenant for the replacement of personal property,  trade fixtures and the
restoration of any Tenant owned improvements. Upon request from Landlord, Tenant
shall provide Landlord with written evidence that such insurance is in force.

     9.5. INSURANCE POLICIES. Insurance required hereunder shall be in companies
duly licensed to transact  business in the state where the Premises are located,
and maintaining  during the policy term a "General  Policyholders  Rating" of at
least B+, V or such other rating as may be required by a Lender, as set forth in
the most current  issue of "Best's  Insurance  policies  maintained by Landlord.
Tenant shall cause to be delivered to Landlord,  within seven (7) days after the
earlier of the Early Possession Date or the Commencement Date,  certified copies
of, or  certificates  evidencing  the  existence  and amounts of , the insurance
required of Tenant by this Lease.  No such policy shall be cancelable or subject
to modification except after thirty (30) days' prior written notice to Landlord.
At least thirty (30) days prior to the expiration policies, Tenant shall furnish
Landlord  with evidence or renewals or "insurance  binders"  evidencing  renewal
thereof,  or Landlord may obtain such  insurance  and charge the cost thereof to
Tenant, which amount shall be payable by Tenant to Landlord upon demand.

     9.6. WAIVER OF SUBROGATION. Without affecting any other rights or remedies,
Tenant and Landlord each hereby  release and relieve the other,  and waive their
entire  right to recover  damages  (whether in contract or in tort)  against the
other,  for loss or damage to their  property  arising out of or incident to the
perils  required to be insured  against under this Lease to the actual extent of
the  insurance  actually  maintained.  Landlord  and Tenant  agree to have their
respective insurance may have against Landlord or Tenant, as the case may be, so
long as the insurance is not invalidated thereby.

     9.7. INDEMNITY.

          9.7.1.  BY  TENANT.  Except to the  extent of  Landlord's  comparative
negligence  or  breach of an  express  provision  of this  Lease,  Tenant  shall
indemnify,  protect,  defend and hold harmless the Landlord and its Lenders from
and  against  claims,  loss of  rents  and  damages,  costs,  liens,  judgments,
penalties,  loss of permits,  attorneys'  and  consultants'  fees,  expenses and
liabilities  arising out of, involving,  or in connection with, the occupancy of
the Premises or Property by Tenant, the conduct of Tenant's  business,  any act,
omission or neglect of Tenant, its agents,  contractors,  employees or invitees,
and out of any Default or Brach by Tenant in the  performance in a timely manner
of any  obligation  on  Tenant's  part to be  performed  under this  Lease.  The

<PAGE>

foregoing  shall  include,  but not be limited to, the defense or pursuit of any
claim or any action or proceeding  involved therein,  and whether or not (in the
case of claims made against Landlord) litigated or reduced to judgment.  In case
any action or  proceeding  be brought  against  Landlord by reason of any of the
foregoing  matters,  Tenant upon notice from  Landlord  shall defend the same at
Tenant's  expense by counsel  reasonably  satisfactory  to Landlord and Landlord
shall  cooperate with Tenant in such defense.  Landlord need not have first paid
any  such  claim  in  order to be so  indemnified.  In the  event of  concurrent
negligence  of Landlord and Tenant,  resulting in injury or damage to persons or
property and which relates to the construction,  alterations,  repair,  addition
to,  subtraction  from,  improvement,  to or  maintenance  of the Premises,  the
indemnifying  party's  subtraction  from,  improvement  to or maintenance of the
Premises,  the indemnifying  party's  obligation to indemnify the other party as
set forth in the  Section  shall be limited  to the  extent of the  indemnifying
party's  negligence,  and that of its agents,  employees,  subleases,  invitees,
licensees or contractors.

          9.7.2.  BY  LANDLORD.  Except to the  extent of  Tenant's  comparative
negligence  or breach of an express  provision  of this  Lease,  Landlord  shall
indemnify,  protect,  defend and hold  harmless  the Tenant from and against all
claims, loss of rents and damages, costs, liens, judgments,  penalties,  loss of
permits,  attorneys' and consultants' fees, expenses and liabilities arising out
of,  involving,  or in connection  with,  the wrongful acts of act,  omission or
neglect  of  Landlord,  and out of any  Default  or  Breach by  Landlord  in the
performance  in a timely  manner  of any  obligation  on  Landlord's  part to be
performed under this Lease. The foregoing shall include,  but not be limited to,
the  defense  or  pursuit  of any  claim or any  action or  proceeding  involved
therein,  and  whether  or not  (in the  case of  claims  made  against  Tenant)
litigated or reduced to judgment.  In case any action or  proceeding  be brought
against Tenant by reason, of any of the foregoing matters,  Landlord upon notice
from Tenant shall defend the same at  Landlord's  expense by counsel  reasonably
satisfactory to Tenant and Tenant shall cooperate with Landlord in such defense.
Tenant need not have first paid any such claim in order to be so indemnified. In
the event of concurrent negligence of Tenant and Landlord resulting in injury or
damage  to  persons  or  property  and  which   relates  to  the   construction,
alterations,   repair,   addition  to,  subtraction  from,   improvement  to  or
maintenance of the Premises,  the indemnifying  party's  obligation to indemnify
the other party as set forth in this  Section  shall be limited to the extent of
the  indemnifying  party's  negligence,  and  that  of  its  agents,  employees,
subleases, invitees, licensees or contractors.

     9.8.  EXEMPTION OF LANDLORD from Liability.  Landlord shall.  not be liable
for injury or damage to the person or  property of Tenant,  Tenant's  employees,
contractors,  invitees,  customers, or any other person in or about the Premises
or  Property,  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,  fire  sprinklers,  wires,  appliances,
plumbing,  air  conditioning  or  lighting  fixtures,  or from any other  cause,
whether said injury or damage results from conditions  arising upon the Premises
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  accessible  or not.
Notwithstanding  Landlord's  negligence or breach of this Lease,  Landlord shall
under no  circumstances  be liable for any loss of income or profit of  Tenant's
business or any other consequential damage.

10. Damage OR Destruction.

     10.1.  PARTIAL DAMAGE - INSURED.  If the Premises or Property are Partially
Damaged  and such  damage was caused by a casualty  covered  under an  insurance
policy  required to be maintained by Tenant or Landlord  pursuant to this Lease,
Landlord  shall.  repair such damage as soon as  reasonably  possible,  and this
Lease shall  continue in full force and effect.  If,  however,  if the insurance
proceeds  actually  available  to  Landlord  (after  deduction  of any  proceeds
required  by a Lender  to be  applied  to  reduction  of  indebtedness)  are not
sufficient to effect such repair,  Landlord  shall not be obligated to make such
repairs  unless  Tenant  elects,  without  obligation  to do so, to  contribute,
without right of reimbursement,  the required amount. In the event that Landlord
is not obligated and does not  voluntarily  agree to repair such damage,  either
Tenant or Landlord may declare this Lease terminated by thirty (30) days written
notice to the other party.

     10.2.  DAMAGE -  UNINSURED.  In the  event  the  Premises  are  damaged  or
destroyed by a casualty which is not covered under an insurance  policy required
to be  maintained  by Tenant or Landlord,  the Landlord may elect to repair such
damage as soon as  reasonably  possible,  and this Lease shall  continue in full

<PAGE>

force and effect. If Landlord does not so elect within sixty (60) days after the
occurrence of the casualty to repair, either Tenant or Landlord may declare this
Lease  terminated by ten (10) days written  notice to the other party;  provided
Tenant may avoid termination of this Lease if Tenant  voluntarily agrees to pay,
without right of reimbursement, all of the costs of such repairs by Landlord.

     10.3.  TOTAL  DESTRUCTION.  If the  Premises  are  Totally  Destroyed  by a
casualty  covered under an insurance  policy required to be maintained by Tenant
or Landlord pursuant to this Lease, this Lease shall automatically  terminate as
of the date of such total destruction.

     10.4. DAMAGE NEAR END OF TERM. If the premises are Partially Damaged during
the last two (2) years of the term of this Lease,  Landlord  may, at  Landlord's
option,  cancel and  terminate  this Lease as of the date of  occurrence of such
damage by giving written notice to Tenant of Landlord's election to do so within
thirty (30) days after  Landlord  receives  notice of occurrence of such damage;
provided  Landlord  shall continue to have all rights to receive the proceeds of
any insurance policy required by the Lease to be maintained by Tenant.

     10.5.  ABATEMENT OF RENT. If the Premises are Partially  Damaged,  the rent
payable while such damage,  repair or restoration  continues  shall be abated in
proportion  to the degree to which  Tenant's  reasonable  use of the Premises is
substantially impaired.  Except for abatement of rent, if any, Tenant shall have
no claim  against  Landlord  for any  damage  suffered  , by  reason of any such
damage, destruction, repair or restoration.

     10.6  DEFINITIONS.  For purposes of this Lease, the term Partially  Damaged
shall be deemed to mean damage to the Premises or Property (excluding any damage
to Tenant owned property or alterations)  which is reasonably  estimated to cost
to repair less than fifty percent (50%) and Totally Destroyed shall be deemed to
mean damage to the  Premises or Property  (excluding  any damage to Tenant owned
property or  alterations)  which is reasonably  estimated to cost to repair more
than fifty percent (50%) of the reasonable fair market value of the improvements
constituting the Premises or Property (but not the land) calculated  immediately
prior to the  occurrence  of the damage.  Cost shall include the cost to rebuild
all of the damaged improvements owned by Landlord including  demolition,  debris
removal,  requirements of applicable  building codes and other laws,  mitigation
requirements and without regard for depreciation.

11. TAXES.

     11.1. TAXES.  Landlord shall pay all Taxes applicable to the Property,  the
amount  of  which  shall be  included  In  calculating  the  total of  Operating
Expenses. If any Taxes cover any period of the time prior to or after expiration
of the term hereof,  Tenant's share of such taxes shall be equitably prorated to
cover only the period of time  within  which this Lease  shall be in effect.  As
used  herein,  the  term  Taxes  shall  include  any form of  required  payment,
assessment,  license  fee,  tax on  rent,  levy,  penalty,  or tax  (other  than
Landlord's  net  income  tax and  inheritance  or estate  taxes)  imposed by any
authority  having the  direct or  indirect  power to tax any legal or  equitable
interest of Landlord in the Property or Landlord's right to rent or other income
therefrom. If Landlord deems such action to be warranted, the cost of contesting
any Taxes or assessment affecting the Property shall be an Operating Expense.

     11.2.  PERSONAL  PROPERTY TAXES.  Tenant shall pay prior to delinquency all
taxes  assessed  against  and levied on any  leasehold  improvements,  fixtures,
furnishings,  equipment  and other  property of Tenant.  Tenant shall cause such
Tenant property to be assessed  separately from Landlord's Property or reimburse
Landlord for the taxes attributable to Tenant within ten (10) days after receipt
of a written  statement  from  Landlord  setting  forth the taxes  applicable to
Tenant's property.

12. TENANT'S COMMON AREA RIGHTS AND OBLIGATIONS.  During the Lease term,  Tenant
has a  non-exclusive  license to use the Common  Areas as they from time to time
exist, subject to the rights reserved by Landlord.  Storage, either permanent or
temporary,  of any  materials,  supplies  or  equipment  in the Common  Areas is
prohibited.  Landlord  shall have the right to  designate  one or more areas for
parking of  employees of Tenant and other  tenants and to  establish  reasonable
parking regulations,  weight limits and access routes to be used by trucks. When
requested by Landlord,  Tenant shall.  furnish a list of the license  numbers of
its motor vehicles and of Its  employees'.  Tenant shall not at any time park or
permit  the paring of motor  vehicles,  belonging  to it or to others,  so as to
interfere with the pedestrian  sidewalks,  roadways and loading areas, or in any
portion of the parking areas not  designated by Landlord for such use by Tenant.
Tenant shall repair,  at its cost, all  deterioration of or damage to the Common

<PAGE>

Areas  occasioned by its lack of ordinary care or violation of Landlord's  rules
or instructions.

13. UTILITIES.  Tenant shall pay for all water,  gas,  drainage  service,  sewer
service,  garbage service, 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 Tenant,  Tenant shall pay its Pro Rata
Share of such utilities as Operating Expenses.  If the Landlord shall determine,
the exercise of Landlord's good faith review, that the Tenant's use of utilities
is in excess of that normally used by a tenant  occupying  similar  space,  then
Tenant  shall pay  Landlord  upon demand as  additional  rent,  the cost of such
excess  utility  usage in  addition  to any other rent or charge due from Tenant
under this Lease.  In no event shall Landlord be liable for an  interruption  or
failure in the supply of any such utilities to the Premises.

14. ASSIGNMENT AND SUBLETTING.

     14.1.  Landlord's  Consent  Required.  Tenant shall not  voluntarily  or by
operation of law assign,  transfer,  mortgage,  sublet, or otherwise transfer or
encumber  all or any part of  Tenant's  interest  in this lease or the  Premises
without Landlord's prior written consent,  which consent may be conditioned,  in
addition to any other  reasonable  conditions,  on a written  assumption  by the
assignee or  sublessee  of the  obligations  of Tenant,  a written  guarantee of
payment  and  performance  by  Tenant  and a  consent  or  reaffirmation  of any
guarantor of Tenant. Any purported assignment,  transfer, mortgage, encumbrance,
or  subletting  without  consent  shall be void and  constitute a breach of this
Lease. In the event that Tenant is not a natural  person,  then any transfer (or
the aggregate of a series of  transfers) of thirty  percent (30%) or more of the
beneficial ownership of Tenant shall be deemed a prohibited  assignment;  in the
event of the sale of one hundred  percent (100%) of the beneficial  ownership of
Tenant,  Landlord  agrees  to not  unreasonably  withhold  its  consent  to such
assignment provided Landlord is provided with reasonably acceptable  information
regarding  the  creditworthiness  of the assignee,  the assignee  assumes all of
Tenant's  obligations under this Lease and Tenant and Tenant's  guarantor remain
fully obligated to pay or perform all of Tenant's  obligations under this Lease.
No option to renew or extend,  if any, may be assigned by Tenant and no assignee
or subtenant shall have any right to exercise any such option. The acceptance of
rent by Landlord  from a person  other than  Tenant  shall not be deemed to be a
waiver by  Landlord  of any  provision  hereof.  Consent  to one  assignment  or
subletting  shall  not  be  deemed  consent  to  any  subsequent  assignment  or
subletting.

     14.2. NO RELEASE OF TENANT. Regardless of Landlord's consent, no subletting
or assignment shall release  Tenant's  primary  obligation to pay or perform any
obligation under this Lease.

     14.3.  Assignment  Fee.  In the event  that  Landlord  shall  consent  to a
sublease or assignment under Article 14.1,  Tenant agrees to reimburse  Landlord
for the  reasonable  out-of pocket  expenses  incurred by Landlord in connection
with such consent.

     14.4. Assignment by Landlord.  Landlord shall be permitted freely to assign
all of its rights  and  obligations  hereunder.  In the event of a sale or other
transfer of the Premises, whether by foreclosure or otherwise, the Tenant agrees
to attorn to the new owner and to  recognize  such owner as the  Landlord  under
this  Lease and Tenant  shall  thereafter  look  solely to such  transferee  for
performance of this Lease

15. DEFAULTS; REMEDIES.

     15.1.  Defaults.  The occurrence of any one or more of the following events
shall constitute a default and breach of this Lease by Tenant-

          15.1.1. The vacation or abandonment of the Premises by Tenant.

          15.1.2.  The failure by Tenant to make any payment required to be made
by Tenant  hereunder,  as and when due where such failure  shall  continue for a
period of three (3) days after written notice thereof from Landlord to Tenant.

          15.1.3.  The  failure  by  Tenant to  observe  or  perform  any of the
provisions  of this Lease  (other  than the  payment of money) to be observed or
performed by Tenant where such failure  shall  continue for a period of ten (10)
days after written  notice thereof from Landlord to Tenant;  provided,  however,
that if the nature of  Tenant's  default is such that more than thirty (30) days
are reasonably  required for its cure,  then Tenant shall not be deemed to be in

<PAGE>

default if Tenant  commenced  such cure  within  said thirty (30) day period and
thereafter diligently prosecutes such cure to completion.

          15.1.4. The making by Tenant or any guarantor of Tenant of any general
assignment,  or general assignment for the benefit of creditors; (ii) the filing
by or against  Tenant or any  guarantor  of Tenant of a petition  to have Tenant
adjudged a bankrupt or petition for  reorganization or arrangement under any law
relating to bankruptcy  (unless, in the case of a petition filed against Tenant,
the same is dismissed within sixty (60) days; (iii) the appointment of a trustee
or receiver to take possession of  substantially  all of Tenant's assets located
at the Premises or of Tenant's  interest in this Lease,  where possession is not
restored to Tenant  within ten (10) days; or (iv) the  attachment,  execution or
other judicial  seizure of  substantially  all of Tenant's assets located at the
Premises  or of  Tenant's  interest  in this  Lease,  where such  seizure is not
discharged within ten (10) days

     15.2  Remedies  in  Default.  Upon the  occurrence  of a Default by Tenant,
Landlord, without notice to Tenant (except where expressly ;provided for in this
Lease or by applicable law) may do any one or more of the following:

          15.2.1 Elect to terminate this Lease and the tenancy created hereby by
giving notice of such election to Tenant, and reenter the Premises,  without the
necessity  of legal  proceedings,  and remove  Tenant and all other  persons and
property from the Premises, and may store such property in a public warehouse or
elsewhere at the cost of and for the account of Tenant  without  resort to legal
process and without  Landlord being deemed guilty of trespass or becoming liable
for any loss or damage occasioned thereby; and

          15.2.2  Exercise any other legal or equitable right or remedy which it
may have.

     15.3  Damages.  If this Lease is  terminated  by Landlord  pursuant to this
section,  Tenant  nevertheless  shall remain liable for (a) an rents and damages
which may be due or sustained prior to such  termination,  all reasonable costs,
Ls and expenses including, but not limited to, reasonable attorneys' fees, costs
and expenses  incurred by Landlord in pursuit or its remedies  hereunder,  or in
renting the Premises to others from time to time until the original  Termination
Date of this Lease (all such rents,  damages,  costs,  fees and  expenses  being
referred  to  herein  as  "Termination  Damages"),  and (b)  additional  damages
("Post-Termination Damages"), which Post-Termination Damages, at the election of
Landlord, shall be either:

          15.3.1.  an amount equal to the rents which,  but for  termination  of
this Lease,  would have become due during the  remainder  of the Term,  less the
amount of rents,  If any,  which  Landlord shall receive during such period from
others to whom the Premises may be rented,  in which case such  Post-Termination
Damages shall be computed and payable in monthly  installments,  in advance,  on
the first day of each  calendar  month  following  termination  of the Lease and
continuing  until the date on which the Term  would  have  expired  but for such
termination,  and it or action  brought  to  collect  any such  Post-Termination
Damages for any month shall not in any manner prejudice the right of Landlord to
collect  any  Post-Termination  Damages  for any  subsequent  month by a similar
proceeding; or

          15.3.2.  an amount equal to the present  worth (as of the date of such
termination)  of rents  which,  but for  termination  of this Lease,  would have
become due during the  remainder of the Term,  less the fair rental value of the
Premises,  as  determined  by an  independent  real  estate  appraiser  named by
Landlord,  in which  case such  Post-Termination  Damages  shall be  payable  to
Landlord in one lump sum on demand and shall bear  interest at the Default  Rate
until paid. For purposes of this section,  "present  worth" shall be computed by
discounting  such  amount  to  present  worth at a  discount  rate  equal to one
percentage  point above the discount rate then in effect at the Federal  Reserve
Bank nearest to the Premises;  provided that Tenant may avoid the application of
this section so long as Tenant  voluntarily  agrees to pa and, in fact, does pay
all sums due to date under the immediately  preceding  section within forty-five
(45) days of receipt of notice of Landlord's  declaration of the  termination of
this Lease and Tenant continues thereafter to pay such amounts monthly until the
Termination Date.

     15.4.  Miscellaneous.  If Landlord elects to terminate this Lease following
the default of Tenant,  Landlord  may relet the  Premises  or any part  thereof,
alone or  together  with other  premises,  for such term or terms  (which may be
greater or less than the period  which  otherwise  would  have  constituted  the
balance  of the  Term) and on such  terms  and  conditions  (which  may  include

<PAGE>

concessions or free rent, alterations of the Premises and payment of brokers) as
Landlord, in its sole in the total of Landlord's discretion,  may determine, and
the costs thereof shall be included  Termination  Damages which shall be paid by
Tenant.  Nothing  contained in this Lease shall limit or prejudice  the right of
Landlord to prove for and obtain,  in  proceedings  for the  termination of this
Lease by reason of  bankruptcy  or  insolvency,  an amount  equal to the maximum
allowed by any statute or rule of law in effect at the time when,  and governing
the  proceedings  in which,  the  damages  are to be proved,  whether or not the
amount be  greater,  equal to,  or less than the  amount of the loss or  damages
referred to above.  The failure or refusal of Landlord to relet the  Premises or
any part or parts  thereof  shall not release or affect  Tenant's  liability for
damages.

     15.5. Default by Landlord. Landlord shall not be in default unless Landlord
fails to perform obligations  required of Landlord within a reasonable time, but
in no event  sooner  than  thirty  (30) days after  written  notice by Tenant to
Landlord and any Lender whose name and writing,  specifying wherein Landlord has
failed to perform such  obligation;  provided,  however,  that the nature of the
Landlord's  obligation  is such  that  more  than  (30)  days are  required  for
performance,  then  Landlord  shall  not be in  default  if  Landlord  commences
performances  within  such  thirty  (30) day  period and  thereafter  diligently
prosecutes the same to completion.

     15.6.  Late Charges and  Interest.  Tenant  hereby  acknowledges  that late
payment  by Tenant to  Landlord  of any sum due  tinder  this  Lease  will cause
Landlord to incur costs not  contemplated  by this Lease and the amount of which
is  difficult  to predict in  advance.  Accordingly,  if any sum due from Tenant
shall not be received by Landlord within ten (10) days after that said amount is
due,  then Tenant  shall pay to Landlord a late charge of five  percent  (5%) of
such overdue amount.  In addition,  any amount due to Landlord not paid when due
shall bear interest at twelve percent (12%) per annum ("Default  Rate") from the
due date.  Payment of such  interest or late charge shall not excuse or cure any
default by Tenant  under this  Lease.  In the event that a check from  Tenant is
returned unpaid by Tenant's bank, Tenant shall pay an additional  returned check
charge of twenty five dollars ($25) which Tenant agrees is reasonable  and which
is in addition to a late charge and interest charges if otherwise applicable.

     15.7  Cure by  Landlord.  Landlord,  at any time  after  Tenant  commits  a
default, may cure the default at Tenant's cost. If Landlord at any time pays any
sum or does any act that  requires the payment of any sum,  repayment of the sum
paid by Landlord shall be due immediately  from Tenant together with interest at
the Default Rate.

     15.8.  Condemnation.  If all of the Premises or any portion of the Premises
which is reasonably necessary for the reasonably  convenient use of the Premises
are taken  under the power of  eminent  domain,  or sold by  Landlord  under the
threat of the  exercise  of said power (all of which is in  referred  to in this
Lease as "condemnation") or if more than twenty-five  percent (25%) of the floor
area of all  buildings  constituting  the  Property,  or more than fifty percent
(50%) of the  parking  areas on the  Property is taken by  condemnation,  either
Landlord  or  Tenant  may  terminate  this  Lease as of the date the  condemning
authority  takes  possession by notice in writing of such election within twenty
(20) days after  Landlord shall have notified  tenant of the taking,  or, in the
absence of such  notice,  then  within  twenty  (20) days  after the  condemning
authority shall have taken  possession;  provided Landlord may avoid termination
of the Lease by Tenant by providing,  within a reasonable  time, a substantially
similar replacement for the facilities so taken. If this Lease is not terminated
by either Landlord or Tenant then it shall remain in full force and effect as to
the portion of the Premises remaining, provided the Basic, Monthly Rent shall be
reduced  by  the  proportion  to  the  floor  area  of  the  Premises  taken  by
condemnation  bears to the total floor area of the Premises.  All awards for the
taking of any part of the  Premises or any payment  made under the threat of the
exercise of power of eminent  domain shall be the property of Landlord,  whether
made as compensation  for diminution of value of the leasehold or for the taking
of the fee or as  severance  damages;  provided,  however,  that Tenant shall be
entitled to any  separately  made award for loss of or damage to Tenant's  trade
fixtures and removable personal property.

16. General Provisions

     16.1. Reasonableness of Consent. Whenever the consent of Landlord or Tenant
is required by the terms of this Lease,  such consent shall not be  unreasonably
withheld or delayed although it may be subject to reasonable conditions.

     16.2.  Payments Are Rent. All payments due to Landlord from Tenant shall be
deemed to be rent due under this Lease.

<PAGE>

     16.3. ESTOPPEL CERTIFICATE.

          16.3.1.  Tenant  shall,  at any  time,  on not less than ten (10) days
prior written notice from Landlord,  sign and deliver to Landlord 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, security deposit, and other charges are paid in advance, if any,
and (ii)  acknowledging  that there are not, to Tenant's  knowledge,  my uncured
defaults on tile part of Landlord or Tenant under this lease, or specifying such
defaults,  if any, which are claimed,  and agreeing to give  reasonable  written
notice to a Lender of any future default. Any such statement may be conclusively
relied upon by any prospective purchaser or encumbrancer of the Premises

          16.3.2.  Tenant's  failure to deliver such statement  within such time
period shall be conclusive  upon Tenant that (i) this Lease is in full force and
effect,  without  modification  except as may be represented  by Landlord,  (ii)
there are no uncured defaults in Landlord's performance, and (iii) not more than
one (1) month's rent has been paid in advance.

          16.3.3.  If  Landlord  desires  to  sell,  finance  or  refinance  the
Property,  or any part  thereof,  Tenant  hereby agrees to deliver to any Lender
designated by Landlord such financial  statements of Tenant as may he reasonably
required by such Lender.  Such statements shall include the past three (3) years
financial  statements of Tenant. All such financial statements shall be received
by Landlord in  confidence  and shall be used only for the  purposes  herein set
forth.

     16.4.  Landlord's  Interest.  The term "Landlord" as used herein shall mean
only the owner or  owners at the time in  question  of the fee  title,  vendee's
interest under a real estate contract,  or a tenant's interest in a ground lease
of the  Premises.  In the  event of any  transfer  of such  title  or  interest,
Landlord herein named (and in case of any subsequent transfers the then grantor)
shall be relieved  from and after the date of such  transfer of all liability as
respects Landlord's  obligations  thereafter to be performed,  provided that any
funds in the hands of Landlord or the then grantor at the time of such transfer,
in  which  Tenant  has an  interest,  shall be  delivered  to the  grantee.  The
obligations contained in this Lease to be performed by Landlord shall be binding
upon Landlord's  successors and assigns, only during their respective periods of
ownership.

     16.5. Tenant Signage. At Tenant's own expense, Tenant may place one or more
signs on the  Property  so long as (1)  Tenant  has  obtained  Landlord's  prior
written  consent for the  specific  sign  proposed by Tenant,  (ii) such sign(s)
conform to all applicable  governmental rules and regulations,  Tenant maintains
such sign is good condition and  appearance and (1v) at the  termination of this
Lease,  Tenant shall remove alf such signs and repair any damage  caused by such
sign or its removal at Tenant's sole expense.

     16.6.  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.

     16.7. Time of Essence. Time is of the essence.

     16.8. Captions. Article and paragraph captions are for convenience only are
not a part of this Lease.

     16.9. Incorporation of Prior Agreement; Amendments. This Lease contains all
agreements of the parties with respect to any matter mentioned  herein. No prior
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.

     16.10. Waiver.  No waiver by  1andlord  of any  provision  hereof  shall be
deemed a waiver of any other  provision  hereof or of any  subsequent  breach by
Tenant of the same or any other provision.  Landlord's consent to or approval of
any act shall not be deemed to render  unnecessary  the  obtaining of Landlord's
consent to or approval of any subsequent  act by Tenant.  The acceptance of rent
hereunder by Landlord shall not be a waiver of any preceding breach by Tenant of
any  provision  hereof,  other than the failure of Tenant to pay the  particular
rent so accepted regardless of Landlord's  knowledge of such preceding breach at
the time of acceptance of such rent.

<PAGE>

     16.11. RECORDING. Tenant shall not record this Lease or allow the filing of
a UCC  financing  statement  containing  the legal  description  of the Property
without Landlord's prior written consent,  and such recordation or filing shall,
at the option of Landlord, constitute a noncurable default of Tenant hereunder.

     16.12. HOLDING OVER. If Tenant remains in possession of the premises or any
part thereof after the expiration of the term hereof without the express written
consent of Landlord,  such occupancy shall be a tenancy from month to month at a
rental equal to one hundred twenty-five percent (125%) of the Basic Monthly Rent
due for the  last  month  of the  Lease  term  plus all  other  charges  payable
hereunder, and upon the terms hereof applicable to a month to month tenancy.

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

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

     16.15. Binding Effect; Choice of Law; Proration.  Subject to any provisions
hereof  restricting  assignment  or  subletting by Tenant or as may be expressly
provided  in this  Lease,  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 Premises are located.

     16.16. Subordination.

          16.16.1. This Lease, at Landlord's option, shall be subordinate to any
ground lease,  mortgage,  deed of trust, or any other hypothecation for security
now or hereafter  placed upon the real property of which the Premises are a part
and to any and all advances  made on the security  thereof and to all  renewals,
notifications, consolidations, replacements and extensions thereof If any Lender
or  ground  lessor  shall  elect  to have  this  Lease  prior to the lien of its
mortgage,  deed of trust or ground lease,  and shall give written notice thereof
to Tenant, this Lease shall be deemed prior to such mortgage,  deed of trust, or
ground lease, regardless whether this Lease is dated prior or subsequent to such
mortgage, deed of trust or ground lease, or the late of recording thereof.

          16.16.2.  Provided that the mortgagee or beneficiary,  as the case may
be, shall agree to recognize this Lease in the event of foreclosure if Tenant is
not in  default  at  such  time  subject  to  such  provisions  relating  to the
disposition  or  application  of  insurance or  condemnation  proceeds as may be
contained in such mortgagee or  beneficiary's  loan documents,  Tenant agrees to
execute any documents  required to effectuate such subordination or to make this
Lease prior to the lien of any mortgage,  deed of trust or ground lease,  as the
case may be, and  failing to do so within  ten (10) days after  written  demand,
does  hereby  make,  constitute  and  irrevocably  appoint  Landlord is Tenant's
attorney-in-fact and in Tenant's name, place and stead, to do so.

     16.17.  ATTORNEYS  Fees. If Tenant or Landlord  brings 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  attorneys fees
to be paid by the losing party as fixed by the court.

     16.18.  LANDLORD'S  ACCESS.  Landlord and Landlord's  agents shall have the
right to enter accompanied by the Tenant's  representative except in the case of
an emergency) the Premises at reasonable times for the purpose of inspecting the
same,  showing the same to  prospective  purchasers or Lenders,  and making such
alterations,  repairs,  improvements  or  additions  to the  premises  or to the
building of which they are a part as Landlord may deem  necessary or  desirable.
landlord may at any time place on or about the Premises  signs  advertising  the
availability for sale of the Property or a portion thereof, and, during the last
one  hundred  twenty  (120) days of the term of this Lease,  Landlord  may place
signs on the Premises  advertising the availability for lease of the premises so
long  as  such  signs  do  not  unreasonably  obscure  Tenant's  existing  signs
identifying its business.

     16.19. AUCTIONS. Tenant shall not advertise or conduct any auction or going
out of business ale in the Premises.

     16.20.  CORPORATE  AUTHORITY.  If Tenant is a legal entity, each individual
executing this ease on behalf of such entity  represents and warrants that he or
she is duly authorized to execute ad deliver this Lease on behalf of such entity
and that this Lease is binding upon such entity in accordance with its terms.

<PAGE>

     16.21. LANDLORD'S LIABILITY.  Any claim by Tenant against Landlord shall be
limited to the Landlord's interest in the Property,  and Tenant expressly waives
any and all rights to proceed  against any other assets of Landlord or any owner
of Landlord.

     16.22. NOTICES. Wherever under this Lease provision is made for any demand,
notice or declaration of any kind, or where it is deemed  desirable or necessary
by either party to give or serve any such notice,  demand or  declaration to the
other  party,  it shall be in writing and served  either  personally  or sent by
United  States mail,  postage  prepaid,  addressed to the address  stated at the
beginning of this Lease or such  subsequent  address as may have been  specified
for such purpose in written notice given to the other party.

     16.23. CONFIRMATION OF TERMINATION OF PREDECESSOR LEASE. The Premises (and
other  property)  previously  have  been  lease by  Landlord  to a now  bankrupt
company,  Virtual  Vision,  from which Tenant has  obtained  some of its assets.
Tenant and  Landlord  confirm  and  warrant to each her that the prior lease has
been  fully  terminated,  and  that  Tenant  has no claim or right of use of any
portion of Landlord's  Property except the Premises as defined in this Lease and
in accordance 1h this Lease.

     16.24.  SPECIAL  ARTICLES.  The following  Schedules are attached and are a
part of this  Lease:

                     Guaranty  of Lease
                     Schedule 1.3, Floor  Plan and  Legal Description
                     Schedule 1.5, Increases of Basic Monthly Rent in Accordance
                                   with Changes in Consumer Price Index

     8.4. Guarantor has requested that Landlord agree to the terms of this Lease
and Guaranty for the benefit of Guarantor.

The individual  executing this Guaranty of Lease on behalf of Telxon Corporation
personally  represents and warrants that he or she is duly authorized to execute
and deliver  this  Guarantee of Lease on behalf of Telxon  Corporation  and that
this  Guaranty of Lease 1's  binding  upon such  entity in  accordance  with its
terms.

                                       Guarantor:

                                       Telxon Corporation,
                                       a Delaware Corporation

BY
Its

In the event  Guarantor  has paid to Landlord any sum due  hereunder,  Guarantor
shall have and be entitled to  exercise  all the rights of the Tenant  under the
Lease.  To the extent that Guarantor  brings the  obligations of Tenant current,
and maintains those  obligations,  Guarantor has the right to use and occupy the
Premises,  by  sublease,  assignment,  or  otherwise,  without the  necessity of
obtaining  consent  from  the  Landlord  but  subject  to the  other  terms  and
conditions of the Lease.

<PAGE>

GUARANTY OF LEASE

1. To induce and as consideration for Redson Building Partnership,  a Washington
general partnership, ("Landlord") to enter into the foregoing lease ("Lease") of
which this Guaranty is an exhibit, the undersigned (who is referred to herein as
"Guarantor") irrevocably guarantees to Landlord, its successors and assigns, the
full and due  performance by the Tenant,  and by its successors and assigns,  of
all the terms,  obligations,  covenants and agreements under the Lease, and each
of them, on the part of Tenant,  its  successors,  assigns and  subtenants to be
observed  or  performed,  and,  without  limiting  the  foregoing,  the full and
punctual  payment by Tenant and its  successors,  assigns and  subtenants of all
rentals,  additional rentals and other sums of money as and when they become due
and  payable  as  provided  in the Lease  throughout  the Lease,  including  any
extension  or  renewal of the Lease.  The Lease is  incorporated  herein by this
reference as though set out in full in the Guaranty.

2. The  Guarantor  waives  notice of acceptance of this Guaranty and agrees that
this Guaranty shall be a continuing guaranty.

3.  Notice of any and all  defaults  on the part of Tenant,  and any  successor,
assignee or subtenant of Tenant or of the foregoing,  is waived,  and consent is
given to all  extensions  of time,  waivers  or  indulgences  of any kind,  that
Landlord,  its successors or assigns,  may grant to Tenant,  and any successors,
assignee or  subtenants  of Tenant or of the  foregoing  with  reference  to the
performance  by Tenant or any  successor,  assignee or subtenant of Tenant or of
the foregoing, of any of the terms,  obligations,  covenants or agreements in or
under the Lease.  Full  consent is also  given by the  Guarantor  to any and all
changes,  modifications or amendments in, of or to any such terms,  obligations,
covenants or agreements as well as to conditions  of, in or under the Lease that
may be made by  agreement  between  Landlord  or its  successors  or assigns and
Tenant or any successor, assignee or subtenant of Tenant or of the foregoing, or
otherwise;  and the Guarantor waives any and all requirements  whatsoever on the
part of Landlord or its successors or assigns first to exhaust or pursue its, or
their,  remedies against Tenant,  its successors or assigns,  before Landlord or
its successors or assigns shall have the right to proceed directly,  and recover
against, the Guarantor.

4. The Guarantor,  without limiting any of the provisions of this Guaranty, also
waives notice of any and all changes,  modifications  or amendments in, of or to
the Lease, that may be agreed upon between Landlord or Landlord's  successors or
assigns and Tenant,  or successors,  assigns or subtenants of Tenant's or of the
foregoing, or that may be permitted or suffered in connection with lease, or the
performance thereof, as well as notice of any waivers, indulgences or extensions
granted or  suffered by Landlord or its  successors  or assigns.  The  Guarantor
further  agrees that,  notwithstanding  any waivers,  extensions or  indulgences
granted or suffered by Landlord,  or successors or assigns,  and notwithstanding
any changes, amendments or modifications in, of or to the Lease, by agreement or
otherwise, the Guarantor shall be and remain, and absolutely and fully liable to
Landlord and its successors and assigns for the full and punctual payment of all
rentals,  additional rentals and other payments to be made, and for the full and
due performance of all the other terms, obligations,  covenants,  agreements and
conditions  of,  in or  under  the  lease,  and  in  any  change,  amendment  or
modification  thereof,  by Tenant and its  successors  and assigns,  without any
notice whatsoever.

5. Without  limiting  any of the  provisions  of this  Guaranty,  the  Guarantor
further agrees that this Guaranty,  and the  obligations of the Guarantor  under
it,  shall in no wise be  terminated,  affected  or  impaired  by  reason of the
assertion by Landlord,  its successors or assigns against Tenant, its successors
or assigns, of any rights or remedies reserved to the Landlord pursuant to or by
virtue of the provisions of the Lease or any change,  amendment or  modification
of the Lease.

6. The references in this Guaranty to Tenant's  successors and assigns shall not
be deemed a waiver by Landlord, its successors or assigns, of any prohibition or
restriction in the Lease relating to the assignment of the Lease.

7. This Guaranty is executed by the Guarantor to induce  Landlord to execute and
deliver  the Lease well  knowing  that  Landlord  would not do so  without  this
Guaranty.

<PAGE>

8.  Guarantor  represents to Landlord that all of the following  statements  are
factually true and accurate:

          8.1.  Guarantor  is  financially  interested  in  the  operation  of a
     business which is expected to be operated at the leased  Premises and seeks
     financial benefit from Landlord's agreement to lease the Premises to Tenant
     on the basis of this Lease and Guarantee.

          8.2.  Guarantor  has read and  understands  all of the  Lease and this
     Guarantee,  and  understands  that this  Guarantee  is  legally  binding on
     Guarantor regardless of any future events.

          8.3.  Guarantor  knows  that its  obligations  and  liability  on this
     Guarantee will not terminate when or if Guarantor's involvement,  financial
     or otherwise, in the leased Premises may terminate;  instead Guarantor will
     remain  liable to  Landlord  even  though the leased  Premises  are leased,
     assigned or subleased to someone  else.

Subject to the 36 month time limit set forth in #1 above.

<PAGE>

Schedule 1.3

Legal description of the Property
PARCEL A:

That portion of Lot 10, Redmond  Science  Center,  according to the plat thereof
recorded  in  Volume  124 of Plats,  pages 70 and 71,  records  of King  County,
Washington, lying Northerly of the following described line:

Beginning of the Southwest corner of said Lot 10;

Thence South  98'33'31"  East along the South line of said Lot 10, a distance of
30.39 feet; Thence North 60137'49" East, 78.10 feet;

Thence North 29'36'04" West, 16.40 feet;

Thence North 60'41'38" East, 57.06 feet;

thence North 70'58'16" East, 28.37 feet;

Thence North 60016'00" East,  65.42 feet to the Easterly line of said Lot 10 and
the terminus of this described line);

(also  known as  revised  Lot 4 in lot line  revision  City of  Redmond  No. LLR
93-004, recorded under King County Recording No. 9311309017.)

PARCEL B:

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

Easements pursuant to a cross access easement agreement dated February 24, 1994,
under Recording No. 9402241864,  and an access easement agreement dated February
24, 1994, under Recording No. 9402241865.

Both situate in the County of King, State of Washington.

Schedule 1.5

Increases of Basic Monthly Rent
in Accordance with Changes In Consumer Price Index

     The Basic Monthly Rent shall be adjusted  periodically  in accordance  with
     the terms of this Schedule 1.5:

          1. Price Index.  For purposes of calculating  adjustments of the Basic
     Monthly Rent,  "Price Index" shall mean the Consumer Price  Index-All Urban
     Consumers:  U.S.  City  Average All Items,  (1982-84=100)  published by the
     United States  Department  of Labor,  Bureau of Labor  Statistics.  If this
     index is discontinued, the parties shall select another similar index which
     reflects consumer prices; if the parties cannot agree on another index, the
     then  Presiding  Judge of the  Superior  Court  for the  count in which the
     Premises are located,  upon an  appropriate  request which either party may
     make, shall designate the replacement index.

          2.  Adjustments  to  Basic  Monthly  Rent.  On  the  first  day of the
     thirty-seventh (37th) month of the term of this lease and every twelve (12)
     months thereafter ("Rent Adjustment Date"), the Basic Monthly Rent shall be
     increased by the lower of

               2.1  Three  percent  (3%)  per  year  from  the  later of (i) the
          Commencement  Date of the  Lease or (ii) the  last  date on which  the
          amount of the Basic Monthly Rent was adjusted in accordance  with this
          Schedule ("Rent Adjustment Period"), or

               2.2 The  percentage  of increase  of the Price Index  between the
          Rent Adjustment Date and the later of (i) the Commencement Date of the
          Lease or (ii) the last date on which the  amount of the Basic  Monthly
          Rent was adjusted in accordance with this Schedule  ("Rent  Adjustment
          Period").

          3. The  percentage  of  increase, if any, in the Price  Index shall be
     calculated   using  the  Price  Index  published  for  the  calendar  month

<PAGE>

     immediately  preceding the Rent  Adjustment  Date, and the Price Index most
     recently  published  for  the  calendar  month  immediately  preceding  the
     commencement of the Rent Adjustment Period. In no event,  however shall the
     Basic Monthly Rent following the  adjustment  provided for in this Schedule
     be less than the Basic Monthly Rent payable  during the period  immediately
     preceding  the Rent  Adjustment  Date.  The Basic  Monthly Rent as adjusted
     shall be the Basic  Monthly  Rent due  under the Lease  until the next Rent
     Adjustment  Date and shall be the basis upon which the next Rent Adjustment
     shall be made.

          4.  Billing for Rent  Adjustments.  Any delay or failure of  Landlord,
     beyond the Rent  Adjustment  Date,  in  computing  or billing  for the Rent
     Adjustment  herein above  provided,  shall not constitute a waiver of or in
     any  way  impair  the  Tenant's  obligation  to pay  such  Rent  Adjustment
     hereunder.  In the event of any such delay or failure of Landlord to notify
     Tenant of the Rent Adjustment  Tenant shall continue to pay an amount equal
     to the Basic Monthly Rent payable for the last month before the latest Rent
     Adjustment  Date until the adjusted  Basic  Monthly Rent is  determined  at
     which time Tenant shall pay to Landlord the difference, if any, between the
     Basic  Monthly  Rent paid by Tenant and the  adjusted  Basic  Monthly  Rent
     determined to be payable after the Rent Adjustment Date.

AMENDMENT TO THE VIRTUAL NEWCO, INC LEASE

Add the following to Section 4 of the lease:

     4.2.3 As used herein, the term "Pro Rata Share" means:

1. as to  nonrecurring  expenses  which have a useful life in excess of the then
remaining Term; the  Proportionate  Share  multiplied by a fraction in which the
numerator is the number of months (or partial months) in the then remaining Term
as  numerator  and the  number of months  the  useful  life of the  nonrecurring
expense,   as  reasonably   determined  by  the  Landlord  and  Tenant,  as  the
denominator.  If  Landlord  and  Tenant do not agree on the  useful  life of any
nonrecurring expense, the matter shall be submitted to binding arbitration,  the
cost of said arbitration to be shared equally between Landlord and Tenant.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00023-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00023-of-00352.parquet"}]]