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                                                                    EXHIBIT 10.5

                                     Page 14

                               SUBLEASE AGREEMENT

DATED:  July 23, 2002

ARTICLE 1:  FUNDAMENTAL SUBLEASE PROVISIONS.

1.1      PARTIES: "SUBLESSOR"       Adaptec, Inc., a Delaware corporation

                  "SUBLESSEE"      HomeDirector, Inc., a Delaware corporation

                  "MASTER LESSOR"  Shea Center Livermore, LLC, a California
                                   limited liability company

1.2  MASTER LEASE: (Article 3): Sublessor, as tenant, is leasing from Master
     Lessor, as landlord, approximately 36,400 rentable square feet located at
     2501 Collier Canyon Road in the City of Livermore, California 94550 (the
     "PREMISES") on the terms and subject to the conditions of that certain
     Triple Net Lease dated as of October 26, 2000 (the "MASTER LEASE"). A copy
     of the Master Lease is attached hereto as EXHIBIT A. The Premises are
     located within a four building project within the Complex ("PHASE ONE")
     containing a total of approximately 189,200 rentable square feet, together
     with associated parking areas, driveways and other common areas, which
     complex is known as the Shea Center (the "COMPLEX").

1.3  SUBLEASE PREMISES: (Article 2): The premises subleased hereby (the
     "SUBLEASE PREMISES") constitutes a portion of the Premises, contains
     approximately 11,470 rentable square feet, is commonly known as 2525
     Collier Canyon Road, and is shown as "Suite 2" on the floor plan attached
     hereto as EXHIBIT B.

1.4  SUBLEASE TERM: (Article 4): The term of this Sublease (the "SUBLEASE TERM")
     is sixty-seven (67) calendar months, beginning on the Commencement Date and
     ending on the Termination Date described below, unless commenced later or
     terminated earlier pursuant to the terms of this Sublease.

1.5  SCHEDULED COMMENCEMENT DATE: (Article 4.1): August 1, 2002

1.6  TERMINATION DATE: (Article 4.1): February 28, 2008

1.7  MINIMUM MONTHLY RENT: (Article 5.2):
<TABLE>
<CAPTION>

<S>                                 <C>                        <C>               <C>
         August 1, 2002       -     January 31, 200           $0.00/NNN/rsf     $0.00/month
         February 1, 2003     -     January 31, 2004          $1.30/NNN/rsf     $14,911.00/month
         February 1, 2004     -     January 31, 2005          $1.34/NNN/rsf     $15,370.00/month
         February 1, 2005     -     January 31, 2006          $1.38/NNN/rsf     $15,829.00/month
         February 1, 2006     -     January 31, 2007          $1.42/NNN/rsf     $16,287.00/month
         February 1, 2007     -     February 28, 2008         $1.46/NNN/rsf     $16,746.00/month
</TABLE>
         RENT COMMENCEMENT DATE: (Article 4.2): February 1, 2003

1.8  PREPAID RENT: (Article 5.4): $17,893.00 (which includes Minimum Monthly
     Rent, and estimated Additional Rent)

1.9  ADDITIONAL RENT COMMENCEMENT DATE: (Article 5.3): August 1, 2002

1.10 SECURITY DEPOSIT: (Article 6): $39,456.00 (which includes the last two
     month's of Minimum Monthly Rent, and estimated Additional Rent)

1.11 PERMITTED USE: (Article 7): General office, administrative, sales and
     customer service, in strict compliance with the Master Lease.

1.12 SUBLESSEE'S PRO RATA SHARE: (Article 5.3): 31.51% of the Premises.

1.13 ADDRESSES FOR NOTICES: (Article 11):

                  Master Lessor:    Shea Center Livermore, LLC
                                    2155 Las Positas Court, Suite U
                                    Livermore, CA 94550
                                    Attn: Robert M. Burke
                                    (925) 373-2235 phone
                                    (925) 373-2555 fax

                  Sublessor:        Adaptec, Inc.
                                    691 South Milpitas Boulevard
                                    Milpitas, CA 95035
                                    Attn: Bob Kraiss
                                    (408) 957-4832 phone
                                    (408) 957-6600 fax

                  Sublessee:        HomeDirector, Inc.

                                    PRIOR TO THE COMMENCEMENT DATE:
                                    7132 Santa Theresa Blvd.
                                    San Jose, CA 95139
                                    Attn: Robert Wise, President
                                    (408) 226-6297    phone
                                    (408) 226-6299   fax

                                    FOLLOWING THE COMMENCEMENT DATE:
                                    2525 Collier Canyon Road
                                    Livermore, CA 94550
                                    Attn: Robert Wise, President
                                    (408) 226-6297    phone
                                    (408) 226-6299   fax

1.14 MAXIMUM VEHICLE PARKING: (Article 19): 43 unreserved spaces (3.8/1000 RSF).

1.15 SUBLESSOR'S BROKER: (Article 21.4): Jim Peterson and Paul Sheehan, Cornish
     & Carey

1.16 SUBLESSEE'S BROKER: (Article 21.4): Michael K. Lloyd, Mike Rosendin and Dan
     Bergen, Colliers International

1.17 EXHIBITS AND ADDENDA: The following exhibits are annexed to this Sublease:

                  Exhibit A  - Master Lease
                  Exhibit B  - Floor Plan of the Premises
                  Exhibit C  - Consent to Sublease
                  Exhibit D  - Sign Criteria
                  Exhibit E  - Furniture Layout

Each  reference in this  Sublease  Agreement  ("SUBLEASE")  to any  provision in
Article  1 shall be  construed  to  incorporate  all of the  terms of each  such
provision.  In the event of any conflict  between this Article 1 and the balance
of the Sublease,  the balance of the Sublease shall control.  Capitalized  terms
that are not  defined  in this  Sublease  shall have the  meanings  given in the
Master Lease.

ARTICLE 2:  SUBLEASE PREMISES.

2.1 SUBLEASE. Sublessor hereby subleases the Sublease Premises to Sublessee, and
Sublessee hereby subleases the Sublease Premises from Sublessor,  upon the terms
and conditions  hereinafter set forth.  Sublessee acknowledges that the rentable
area of the Sublease  Premises as specified in Article 1 is an estimate and that
Sublessor does not warrant the exact rentable area of the Sublease Premises.  By
taking possession of the Sublease Premises,  Sublessee accepts the rentable area
of the Sublease Premises as that specified in Article 1.

2.2  CONDITION OF THE SUBLEASE  PREMISES:  "AS IS."  Sublessee  hereby agrees to
accept possession of the Sublease  Premises in its "As Is" condition.  Sublessee
acknowledges  that except as expressly  stated in this  Sublease:  (i) Sublessor
makes no warranties or  representations  regarding the physical condition of the
Sublease Premises; (ii) Sublessee has had an opportunity to inspect the Sublease
Premises;  and the environmental  condition of the Sublease Premises and related
common areas; and to hire experts to conduct such inspections on its behalf; and
(iii) Sublessee is leasing the Sublease  Premises based on its own inspection of
the  Sublease  Premises  and  those of its  agents,  and is not  relying  on any
statements,  representations  or warranties of Sublessor or  Sublessor's  agents
regarding the physical condition of the Sublease Premises.

2.3      IMPROVEMENTS TO THE SUBLEASE PREMISES.

         2.3.1 CONSTRUCTION OF SUBLESSEE  IMPROVEMENTS.  Sublessee may construct
certain interior  improvements  ("SUBLESSEE  IMPROVEMENTS")  within the Sublease
Premises, subject to all the terms and conditions contained in this Sublease and
Section 10 of the Master Lease. The Sublessee  Improvements may include, but not
be limited  to,  reconfiguring  the  Furniture  (as  defined  in Article  21) to
Sublessee's  needs,  construction  of  demising  of walls for a  training  room,
demising of walls for an area for inventory and a demonstration  room,  demising
of walls for a  conference  room,  and all  related  electrical  work,  lighting
fixtures  and  mechanical  work.  Sublessor  shall  have  no  responsibility  to
Sublessee or to any other parties for the  construction  or  installation of the
Sublessee  Improvements.  To the  extent  that  Master  Lessor  consents  to the
Sublessee  Improvements,  Sublessor  shall  not  withhold  its  consent  to such
improvements.

         2.3.2    ALLOWANCE FOR IMPROVEMENTS TO THE SUBLEASE PREMISES.

                  2.3.2.1  AMOUNT.  Sublessor shall provide an allowance for the
Improvement  Costs  (defined  below)  incurred by  Sublessee in  completing  the
Sublessee  Improvements  in an amount of up to $4.00 per  rentable  square foot,
which is equivalent to $44,880 (the "IMPROVEMENT ALLOWANCE"). To the extent that
the costs for the  Sublessee  Improvements  exceed  the  Improvement  Allowance,
Sublessee shall be responsible for such excess costs.

                  2.3.2.2  PAYMENT  TERMS.  Concurrently  with its  request  for
payment of the Improvement Allowance ("PAYMENT REQUEST"), Sublessee shall submit
to Sublessor (i) original lien waivers from all contractors and  subcontractors,
and (ii) such  other  documentation  as  Sublessor  may  reasonably  require  to
evidence  completion of the work pertaining to such payment  (collectively,  the
"REQUEST PACKAGE"). Within thirty (30) days following Sublessor's receipt of the
Request Package,  Sublessor shall deliver to Sublessee:  (i) a written notice of
any amounts  included in the Payment  Request  that are disputed by Sublessor as
outside  of the scope of  Improvement  Costs (as  defined  in  Section  2.3.2.3)
("DISPUTED  AMOUNTS")  (if any),  and (ii) payment of the balance of the Payment
Request (the "UNDISPUTED AMOUNTS").  If Sublessor delivers an notice of Disputed
Amounts,  then the parties  shall  confer and  negotiate  in good faith to reach
agreement as to whether the Disputed Amounts are within the scope of Improvement
Costs.  Sublessee  shall have a right to offset  the  Disputed  Amounts  against
future Rent payable under this  Sublease,.  If a Disputed Amount is not resolved
by the parties in a reasonably  acceptable  manner within 30 days,  either party
may refer the  matter to an  expedited  arbitration  procedure,  for  resolution
within 90 days. The unsuccessful party would be responsible for the costs of the
arbitration  process. If it is determined that the amount contested is not to be
covered by the  Improvement  Allowance,  Sublessor shall not be required to make
such payment to Sublessee  and Sublessee  shall  promptly pay the amount that it
has offset  against rent, if any. If Sublessor  fails to deliver  payment of any
Undisputed Amounts within such thirty (30) day period, then Sublessee shall have
the right to offset the total of such  Undisputed  Amounts  against  future Rent
payable under this Sublease.

                  2.3.2.3  DEFINITION OF IMPROVEMENT  COSTS. As used herein, the
term "IMPROVEMENT  COSTS" shall mean and include all hard and soft costs related
to the design and  construction  of the Sublessee  Improvements,  as approved by
Sublessor  and Master  Lessor (as  required by Section 10 of the Master  Lease),
including without  limitation (i) engineering and  architectural  fees; (ii) the
cost of  processing  applications  for all required  governmental  approvals and
permits, and all fees, taxes or other charges levied by governmental authorities
in connection therewith; (iii) all labor and supervision costs; (iv) the cost of
acquiring  materials,  supplies and equipment rental; (v) the contract price for
all  construction  work undertaken by general  contractors and  sub-contractors,
including  fees,  general  conditions  and  overhead  of  the  contractors,   as
applicable;  (vi) the cost of procuring and installing  Sublessee's signage; and
(vii) any overhead fee or supervisory fee charged under the Master Lease.

                  2.3.2.4  EXCLUSIONS FROM  IMPROVEMENT  COSTS.  The Improvement
Costs shall not include any costs  incurred by Sublessee in completing  any work
or  installations  that are not approved by Sublessor  and Master Lessor or that
are needed for Sublessee's special use of the Sublease Premises or the operation
of Sublessee's  business in the Sublease Premises,  including without limitation
(i) the cost of procuring and installing Sublessee's trade fixtures,  equipment,
cabling, workstations, cubicles, furniture and other personal property necessary
or incidental to the operation of Sublessee's  business;  and (ii) taxes,  fees,
charges and levies by governmental  authorities for the foregoing.  In addition,
the conceptual space planning provided by Sublessor shall be at Sublessor's sole
cost and expense (with up to a maximum of two revisions), and is not included as
part of the Improvement Allowance.

         2.3.3 SUBLESSOR'S  APPROVAL.  Sublessor's approval of Sublessee's plans
for the Sublessee  Improvements  shall in no way be deemed  assurances  that the
Sublessee  Improvements comply with applicable laws, ordinances or codes, or any
implied  warranty of the adequacy or sufficiency of the design or quality of any
items shown  therein.  Sublessor  shall  cooperate with Sublessee by signing any
documents  required to enable  Sublessee to obtain whatever  authorizations  are
required to proceed with the Sublessee Improvements when requested by Sublessee.

2.4      COMPLIANCE WITH LAWS.

         2.4.1 SUBLESSOR'S  OBLIGATIONS.  Sublessor represents and warrants that
to  Sublessor's  Knowledge  (as defined in Article  22.6  below),  the  Sublease
Premises  as they  exist  on the  date  of  this  Sublease  do not  violate  any
ordinance,  rule, code, or regulation of any governmental  agency, and Sublessor
has not received  any notice of such  violation.  Sublessor  agrees to cure such
violations  existing as of the date of this Sublease (to the extent such cure is
the  responsibility  of  Sublessor  under the terms of the  Master  Lease) or to
request  Master  Lessor to cure such  violations  (if  applicable)  which either
prevent  Sublessee  from  obtaining  permits for the Sublessee  Improvements  or
interfere with Sublessee's ability to use and occupy the Sublease Premises.  For
each day that there is a delay in Sublessee's  ability to obtain its permits for
the  Sublessee  Improvements  or to use  the  Sublease  Premises  because  of an
existing  violation,  the Rent  Commencement  Date shall be  delayed;  provided,
however,  if Sublessee is occupying and  conducting its business in the Sublease
Premises, then the Rent Commencement Date shall not be subject to any delay.

         2.4.2  SUBLESSEE'S  OBLIGATIONS.  Sublessee  shall, at Sublessee's sole
cost and  expense,  be  responsible  for bringing  the  Sublease  Premises  into
compliance  with any  statutes,  rules,  regulations,  ordinances,  requirements
(whether presently existing or hereinafter  enacted),  insurance  regulations or
otherwise,   including  but  not  limited  to  compliance  with  Americans  with
Disabilities Act and Title 24 requirements (collectively,  "APPLICABLE LAWS") to
the extent that  compliance  with such Applicable Laws is "triggered" by (i) the
demising of the Sublease  Premises as  contemplated  by this  Sublease,  or (ii)
Sublessee's  specific and unique use or occupancy of the Sublease  Premises;  or
(iii) the Sublessee Improvements or other work to the Sublease Premises, or (iv)
Sublessee's  application  for  a  building  permit  or  any  other  governmental
approval.  Notwithstanding  the  foregoing,  if  Sublessee's  application  of  a
building permit or other  governmental  approval is denied or conditioned on the
correction of violations of Applicable  Laws  pertaining to the condition of the
Premises prior to such submission by Sublessee, then the cost of correcting such
violations of Applicable Laws shall not be the responsibility of Sublessee.

2.5 PERSONAL PROPERTY.  Except as specifically provided in Article 21, Sublessee
acknowledges  that  the  Sublease  Premises  shall  not  include  any  fixtures,
equipment,  cabling,  security  systems,  furniture,  or other personal property
belonging to Sublessor.

2.6  ALTERATIONS  TO  PREMISES.   Sublessee  shall  not  make  any  alterations,
additions,  or improvements to the Sublease  Premises  without the prior written
consent of Sublessor,  which consent shall not be unreasonably withheld, delayed
or conditioned.

ARTICLE 3:  TERMS OF THE MASTER LEASE.

3.1 SUBLEASE SUBORDINATE. This Sublease is subordinate and subject to all of the
terms and conditions of the Master Lease. If the Master Lease terminates for any
reason whatsoever,  this Sublease shall terminate concurrently,  and the parties
hereto  shall be  relieved  of any  liability  thereafter  accruing  under  this
Sublease,  except for the  liabilities of the parties which by the terms of this
Sublease survive the expiration or earlier termination of this Sublease.

3.2  SUBLESSEE'S  OBLIGATIONS.  For the benefit of Master Lessor and  Sublessor,
Sublessee  hereby  expressly  agrees  from and  after the  Commencement  Date to
assume,  to be bound by, and to perform all the terms,  conditions and covenants
of the Master Lease to be  fulfilled,  performed  or observed by Sublessor  with
respect to the Sublease Premises and/or Sublessee's  activities in, on or around
the Sublease  Premises and the Complex.  Sublessee shall not commit or suffer at
any time any act or  omission  that would  violate any  provision  of the Master
Lease.  PLEASE ADD A DEFAULT  PROVISION WITH NOTICE AND  OPPORTUNITY TO CURE, OR
INCORPORATE BY REFERENCE THE ONE THAT IS INCLUDED IN THE MASTER LEASE IN SECTION
19.

3.3 SUBLESSOR'S  OBLIGATIONS.  So long as Sublessee is not in default under this
Sublease  (beyond any applicable  notice and cure period),  Sublessor  shall not
commit  any act or  omission  during  the  Sublease  Term that would lead to the
termination  of the Master Lease by Master Lessor.  However,  if Sublessee is in
default under this Sublease (beyond any applicable  notice and cure period or if
no cure period is specified  in either this  Sublease or the Master  Lease,  and
Sublessee  does not cure  such  default  within  five (5) days  after  receiving
written  notice of such  default),  then  Sublessor  shall have no obligation to
Sublessee to maintain the Master Lease for Sublessee's benefit.

3.4 MASTER LESSOR'S OBLIGATIONS. Sublessor shall not be responsible to Sublessee
for furnishing any service, maintenance or repairs to the Sublease Premises that
are the  obligation  of the  Master  Lessor  under the  Master  Lease,  it being
understood  that Sublessee shall look solely to Master Lessor for performance of
any such service,  maintenance or repairs.  However, if Master Lessor shall fail
to perform its obligations  under the Master Lease,  Sublessor,  upon receipt of
written notice from  Sublessee,  shall use  commercially  reasonable  efforts to
attempt to enforce the  obligations  of Master  Lessor  under the Master  Lease;
provided,  however,  that Sublessor  shall not be required to incur any material
costs or expenses in connection  therewith  unless Sublessee agrees to reimburse
Sublessor for any such costs and expenses as Additional Rent hereunder.

3.5 SUBLESSOR'S RIGHTS AND REMEDIES.  In addition to all the rights and remedies
provided to  Sublessor at law, in equity,  or under the terms of this  Sublease,
(a) in the event of any breach by Sublessee of any of its obligations under this
Sublease  (beyond any applicable  notice and cure period),  Sublessor shall have
all of the rights and remedies  with respect to such breach which are  available
to Master Lessor in the event of any breach under the Master Lease; and (b) as a
further  remedy,  if  Sublessee  fails  to  perform  any  act on its  part to be
performed  pursuant  to the  requirements  of the Master  Lease or as  otherwise
required by this Sublease,  within any applicable grace periods provided herein,
then Sublessor  may, but shall not be obligated to, fulfill such  obligations of
Sublessee, including entering the Sublease Premises to perform any such act, and
all  costs  and  expenses  incurred  by  Sublessor  in doing so shall be  deemed
Additional Rent payable by Sublessee to Sublessor upon demand.

3.6 SUBLESSOR'S REPRESENTATIONS AND WARRANTIES. As an inducement to Sublessee to
enter the Sublease, to Sublessor's Knowledge,  Sublessor represents and warrants
that:

         (a) There are no pending or threatened  actions,  suits or  proceedings
before any court or  administrative  agency against  Sublessor or against Master
Lessor or third  parties which could,  in the  aggregate,  adversely  affect the
Sublease Premises or any part thereof or the ability of Master Lessor to perform
its  obligations  under  the  Master  Lease  or  of  Sublessor  to  perform  its
obligations  under the  Sublease,  and Sublessor is not aware of any facts which
might result in any such actions, suits or proceedings;

         (b)  There  is  no  pending  or  threatened   condemnation  or  similar
proceedings  affecting the Premises or any portion  thereof,  and to Sublessor's
Knowledge no such action currently is contemplated; and

         (c) There are no  defaults  under the Master  Lease,  nor has any event
occurred  that with  notice or the  passage of time would  constitute  a default
under the Master Lease.

3.7 SUBLESSEE'S REPRESENTATIONS AND WARRANTIES. As an inducement to Sublessor to
enter the Sublease, to Sublessee's actual current knowledge, Sublessee
represents and warrants that:

         (a) There are no pending or threatened  actions,  suits or  proceedings
before any court or  administrative  agency  against  Sublessee or third parties
which could,  in the aggregate,  adversely  affect the Sublease  Premises or any
part thereof or the ability of Sublessee  to perform its  obligations  under the
Sublease, and Sublessee is not aware of any facts which might result in any such
actions, suits or proceedings.

ARTICLE 4:  SUBLEASE TERM.

4.1  COMMENCEMENT AND TERMINATION  DATES.  The term of this Sublease  ("SUBLEASE
TERM") shall be for the period of time commencing on the scheduled  commencement
date  described  in  Article  1 (the  "COMMENCEMENT  DATE")  and  ending  on the
termination  date  described in Article 1 or on such earlier date of termination
as provided in this Sublease (the "TERMINATION DATE").

4.2 DELAY IN COMMENCEMENT. If for any reason possession of the Sublease Premises
has not been  delivered to Sublessee by the scheduled  Commencement  Date or any
other date,  Sublessor  shall not be liable to  Sublessee or any other person or
entity for any loss or damage resulting  therefrom.  In the event of such delay,
the Commencement  Date and the Rental  Commencement  Date shall be delayed by an
equivalent  period of time, but the Termination  Date shall not be extended.  If
Sublessor is unable to deliver  possession of the Sublease Premises to Sublessee
by August 31, 2002, then Sublessee may terminate this Sublease by giving written
notice to Sublessor at any time after that date,  and the parties  shall have no
further liability  thereafter accruing under this Sublease;  provided,  however,
that if Sublessor  tenders  possession  to Sublessee  within five (5) days after
receipt of Sublessee's notice of termination, such notice shall be void.

4.3 EARLY  OCCUPANCY.  If Sublessor and Master Lessor permit Sublessee to occupy
the Sublease  Premises prior to the  Commencement  Date, such occupancy shall be
subject  to  all  of  the  provisions  of  this  Sublease  (including,   without
limitation,  Articles 10 and 14) and the Master Lease,  including the payment of
Additional Rent. Early occupancy of the Sublease  Premises shall not advance the
Termination  Date.  Sublessee  shall,  prior to entering the Sublease  Premises,
deliver to Sublessor  certificates of insurance evidencing the policies required
of Sublessee under this Sublease.

ARTICLE 5:  RENT AND ADDITIONAL EXPENSES.

5.1 PAYMENT OF RENT. All monies  payable by Sublessee  under this Sublease shall
constitute  "RENT" for all purposes under this Sublease.  All Rent shall be paid
in lawful money of the United States,  without any deduction,  offset or demand,
to  Sublessor  at the  address  specified  in Article 1 or such  other  place as
Sublessor may  designate in writing.  No payment by Sublessee of a lesser amount
than the Rent herein  stipulated  shall be deemed to be other than on account of
the earliest  stipulated  Rent,  nor shall any  endorsement  or statement on any
check or any  letter  accompanying  any  check or  payment  of Rent be deemed an
accord and satisfaction,  and Sublessor may accept such check or payment without
prejudice  to its right to  recover  the  balance  of such Rent or to pursue any
other remedy.  Rent for any partial  calendar  months at the beginning or end of
the Sublease Term shall be prorated based on a thirty (30) day month.

5.2 MINIMUM MONTHLY RENT.  Sublessee shall pay to Sublessor the sum set forth in
Article 1 hereof as "MINIMUM MONTHLY RENT", in advance, on the first day of each
calendar  month   throughout  the  Sublease  Term,   commencing  on  the  Rental
Commencement Date.

5.3 ADDITIONAL RENT.  Commencing on the Commencement Date (or, if earlier,  upon
occupancy  of the  Sublease  Premises  by  Sublessee),  Sublessee  shall  pay to
Sublessor,  on the first  day of each  calendar  month,  as  "ADDITIONAL  RENT,"
Sublessee's  Pro Rata Share (based on the  percentage set forth in Article 1.12)
of estimated payments due under the Master Lease for Operating Expenses and Real
Property  Taxes  for the  Premises.  However,  notwithstanding  anything  to the
contrary contained in this Sublease,  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 or following the Termination Date
or earlier  expiration  of the Sublease  Term;  or (ii) payable as a result of a
default by Sublessor of any of its  obligations  under the Master Lease  (unless
such default is a result of Sublessee's default under this Sublease).  As of the
Commencement  Date,  Additional Rent is estimated to be Twenty-six cents ($0.26)
per rentable square foot per month.

         Pursuant to the terms of the Master Lease, Master Lessor is required to
reconcile  the actual  expenses  for the  Premises as compared to the  estimated
payments made  throughout  the preceding  calendar year.  Following  Sublessor's
receipt of such  reconciliation  from Master  Lessor,  Sublessor  shall promptly
forward  a copy of such  reconciliation  to  Sublessee,  and  there  shall be an
adjustment between Sublessor and Sublessee for any over or under payment of such
Additional Rent items for the preceding calendar year, with payment to Sublessor
or credit to  Sublessee  against the next  installment  of  Additional  Rent (or
refund  following the expiration of the Sublease Term), as the case may require,
within 10 days after Sublessor's delivery of such reconciliation to Sublessee.

5.4 PREPAID RENT.  Concurrently  with  Sublessee's  execution of this  Sublease,
Sublessee shall pay to Sublessor the sum specified in Article 1 as Prepaid Rent,
which  shall  be  applied  to the  installments  of  Minimum  Monthly  Rent  and
Additional Rent first coming due under this Sublease.

5.5 LATE  CHARGE.  If  Sublessee  fails to pay any Rent within five (5) business
days  following the date that such Rent is due hereunder,  then Sublessee  shall
pay Sublessor a late charge equal to ten percent (10%) of such delinquent amount
as liquidated damages for Sublessee's failure to make timely payment,  but in no
event more than the  maximum  late  charge  allowed by law;  provided,  however,
Sublessee  shall be entitled to one waiver  during the Sublease Term of the late
charges set forth in this section. Any notice given by Sublessor pursuant to any
statute  governing  unlawful  detainer  actions shall be deemed to be concurrent
with, and not in addition to, the notice required  herein.  This provision for a
late charge  shall not be deemed to grant  Sublessee a grace period or extension
of time for performance.  If any Rent remains  delinquent for a period in excess
of fifteen (15) days then, in addition to such late charge,  Sublessee shall pay
to Sublessor interest on the delinquent amount from the date such amount was due
until the date such amount is paid in full,  at the Interest Rate (as defined in
Section 1.12 of the Master Lease).

5.6 RENT ABATEMENT.  If Sublessor receives an abatement of Rent under the Master
Lease pertaining to the Sublease  Premises,  then Sublessee shall be entitled to
an abatement of Rent for the same period in the proportion  that rentable square
feet of the Sublease  Premises that Sublessee is prevented from using,  and does
not use,  bears to the total  rentable  square  feet of the  Sublease  Premises.
Notwithstanding  the  foregoing  to the  contrary,  if the  damage is due to the
negligence   or  willful   misconduct  of  Sublessee  or   Sublessee's   agents,
contractors,  licensees,  subtenants,  employees or invitees,  there shall be no
abatement of Rent to the extent there are insufficient rent loss proceeds.

ARTICLE 6:  SECURITY DEPOSIT.

6.1 SECURITY DEPOSIT.  Upon execution of this Sublease,  Sublessee shall deposit
with  Sublessor  in cash the sum  specified  in  Article 1 hereof as a  security
deposit,  and not as prepayment of rent (the "SECURITY  DEPOSIT").  The Security
Deposit  shall  be  held by  Sublessor  as  security  for  Sublessee's  faithful
performance under this Sublease.  If Sublessee fails to pay any Rent as and when
due under this Sublease or otherwise fails to perform its obligations hereunder,
then  Sublessor  may, at its option and without  prejudice  to any other  remedy
which  Sublessor  may have,  apply,  use or  retain  all or any  portion  of the
Security Deposit toward the payment of delinquent Rent or for any loss or damage
sustained  by Sublessor  due to such  failure by Sublessee  and, in this regard,
Sublessee  hereby  waives  any  restriction  on the uses to which  the  Security
Deposit may be put contained in any applicable law.  Sublessee shall upon demand
restore the Security Deposit to the original sum deposited. The Security Deposit
shall  not bear  interest  nor  shall  Sublessor  be  required  to keep such sum
separate from its general funds.  If Sublessor  transfers the Sublease  Premises
during  the  Sublease  Term,  Sublessor  may pay  the  Security  Deposit  to any
transferee  of  Sublessor's  interest  in  conformity  with  the  provisions  of
applicable law, in which event the transferring  Sublessor will be released from
all liability for the return of the Security  Deposit  provided such  transferee
assumes Sublessor's  obligations under this Sublease.  Provided Sublessee is not
in default beyond any applicable notice and cure period,  then to the extent not
otherwise applied by Sublessor as provided herein, the Security Deposit shall be
returned  to  Sublessee  within  thirty (30) days after the  termination  of the
Sublease Term. In the event of bankruptcy or other  debtor-creditor  proceedings
filed by or  against  Sublessee,  such  Security  Deposit  shall be deemed to be
applied first to the payment of Rent due  Sublessor  for the period  immediately
prior to the filing of such proceedings.

6.2 REDUCTION IN THE SECURITY DEPOSIT. Provided that Sublessee has not paid Rent
later  than the fifth  (5th) day of any month and has not been in default of any
Sublease  provisions  more than once during each Sublease Year (other than those
pertaining  to the payment of Rent,  which are  governed by the first  clause of
this  paragraph),  Sublessor shall apply $18,811.00 from the Security Deposit to
the  installment  of Minimum  Monthly Rent and  Additional  Rent payable for the
thirty-first (31st) month of the Sublease Term. Following the application of the
Security  Deposit to Rent as described in the  preceding  sentence,  Sublessee's
Security Deposit requirement under the terms of the Sublease shall be reduced by
such  amount(s) for the balance of the Sublease  Term. As used herein,  the term
"Sublease  Year"  shall mean each  12-month  period  during the  Sublease  Term,
beginning on the Commencement Date.

ARTICLE 7:  USE.

7.1 USE OF THE SUBLEASE  PREMISES.  Sublessee  shall use the  Sublease  Premises
solely for the purposes  specified in Article 1 in strict  conformance  with the
applicable   requirements  of  the  Master  Lease,  and  for  no  other  purpose
whatsoever.

7.2 SUITABILITY. Sublessee acknowledges that, except as may be explicitly stated
in this  Sublease,  neither  Sublessor  nor any agent of Sublessor  has made any
representation or warranty with respect to the Sublease Premises,  the permitted
uses that can be made of the  Sublease  Premises  under  existing  laws,  or the
suitability of the Sublease  Premises for the conduct of  Sublessee's  business,
nor  has  Sublessor  agreed  to  undertake  any   modification,   alteration  or
improvement to the Sublease Premises.

7.3      HAZARDOUS MATERIALS.

         7.3.1 DEFINITIONS.  As used herein, the term "HAZARDOUS MATERIAL" shall
mean any  hazardous  or toxic  substance,  material or waste which is or becomes
regulated  by any  state,  federal,  or local  government  authority,  including
without limitation all of those materials and substances designated as hazardous
or toxic by the Environmental  Protection  Agency,  the Department of Labor, the
Department of Transportation,  the Department of Agriculture,  the Department of
Health Services or the Food and Drug Agency.  Without limiting the generality of
the foregoing,  the term  "Hazardous  Material" shall include (i) any substance,
product, waste or other material of any nature whatsoever which may give rise to
liability  under  any  statutory  or  common  law  theory  based on  negligence,
trespass,  intentional tort,  nuisance or strict liability or under any reported
decisions of a state or federal  court;  (ii)  gasoline,  diesel fuel,  or other
petroleum   hydrocarbons;   (iii)  polychlorinated   biphenyls;   (iv)  asbestos
containing materials; (v) urea formaldehyde foam insulation; and (vi) radon gas.
As used herein,  the term  "Hazardous  Material  Law" shall mean any  applicable
statute, law, ordinance,  or regulation of any governmental body or agency which
regulates the use, storage, generation,  discharge,  treatment,  transportation,
release, or disposal of any Hazardous Material.

         7.3.2  USE  RESTRICTION.  Sublessee  shall  not  cause  or  permit  any
Hazardous  Material  to  be  used,  stored,  generated,   discharged,   treated,
transported to or from,  released or disposed of in, on, over, through, or about
the Sublease Premises,  or any other land or improvements in the vicinity of the
Sublease  Premises,  without  the prior  written  consent  of Master  Lessor and
Sublessor,  which consent may be withheld in the sole and absolute discretion of
Master Lessor and/or Sublessor;  provided, however, that subject to the terms of
Section 8.4 of the Master Lease, Sublessee may use small quantities of household
cleaners and office  supplies  typically  used in connection  with  professional
offices so long as such use is in strict compliance with all Hazardous  Material
Law. In addition,  concurrently  with the execution of this Sublease,  Sublessee
shall  complete  and deliver to  Sublessor  and Master  Lessor an  Environmental
Questionnaire  in the form  attached as EXHIBIT "H" to the Mater Lease.  Without
limiting the  generality of the  foregoing,  (a) any use,  storage,  generation,
discharge, treatment, transportation, release, or disposal of Hazardous Material
by Sublessee shall strictly comply with all applicable  Hazardous Material Laws,
and (b) if the presence of Hazardous Material on the Sublease Premises caused or
permitted  by  Sublessee  or  its  agents,  employees,   invitees,  visitors  or
contractors  results in contamination of the Sublease Premises or any soil, air,
ground or surface  waters  under,  through,  over,  on, in or about the Sublease
Premises,  Sublessee,  at its expense, shall promptly take all actions necessary
to remediate such condition in accordance with all applicable Hazardous Material
Laws.

         7.3.3  SUBLESSOR'S  REPRESENTATION.  Except as previously  disclosed to
Sublessee, to Sublessor's Knowledge,  (i) no Hazardous Material is present on or
about the Sublease Premises or the soil,  surface water or groundwater  thereof;
(ii) no underground storage tanks are present on or about the Sublease Premises;
and (iii) no action,  proceeding or claim is pending or threatened regarding the
Sublease Premises concerning any Hazardous Material or pursuant to any Hazardous
Material Law.

         7.3.4  EXEMPTION OF  SUBLESSEE.  Sublessee  shall have no obligation or
liability  with  respect  to any  Hazardous  Materials  placed  on or about  the
Sublease Premises prior to the Commencement Date, except to the extent that such
contamination   has  been  exacerbated  by  Sublessee  or  Sublessee's   agents,
employees,  invitees,  visitors  or  contractors  or by  Sublessee's  failure to
perform its obligations under this Section 7.

ARTICLE 8:  SURRENDER.

8.1  CONDITION  OF THE  SUBLEASE  PREMISES.  Subject to the  provisions  of this
Sublease and the Master Lease regarding damage or destruction due to casualty or
condemnation,  upon the  expiration  or earlier  termination  of this  Sublease,
Sublessee  shall,  at its sole cost and expense,  deliver the Sublease  Premises
broom clean and in as good order,  condition  and repair as when  received or as
improved by  Sublessee,  with all of  Sublessee's  personal  property  and those
items, if any, of Sublessee  Improvements or alterations identified by Sublessor
pursuant to Section 8.3 removed..  Furthermore,  Sublessee  agrees to repair any
damage to the Sublease Premises,  or the building of which the Sublease Premises
are a part,  caused by or related to the  removal of any  articles  of  personal
property, business or trade fixtures, machinery, equipment,  cabinetwork, signs,
furniture,  movable  partitions  or permanent  improvements  or additions  which
Sublessor  allows or  requires  Sublessee  to remove  pursuant  to Section  8.3,
including, without limitation,  repairing the floor and patching and/or painting
the  walls  where  required  by  Sublessor  to the  reasonable  satisfaction  of
Sublessor  and/or  Master  Lessor,  all at  Sublessee's  sole cost and  expense.
Sublessee shall indemnify Sublessor against any loss or liability resulting from
delay by Sublessee in so surrendering the Sublease Premises,  including, without
limitation,  any claims made by the Master Lessor and/or any  succeeding  tenant
founded on such delay. Such indemnity obligation shall survive the expiration or
earlier termination of this Sublease.

8.2 SUBLESSOR'S RIGHT TO ACCESS. In the thirty (30) days prior to the expiration
of this  Sublease,  or such longer time as is  reasonably  necessary,  Sublessor
shall have the right,  upon at least  twenty-four  (24) hours prior  notice,  to
enter the Sublease Premises to remove personal property  belonging to Sublessor,
if any (including without limitation any business or trade fixtures,  machinery,
equipment,  cabinetwork,  signs,  furniture,  and  movable  partitions  owned by
Sublessor  and  located  within  the  Sublease   Premises)  and  to  remove  any
improvements or additions, if any, that Sublessor is required to remove prior to
surrender of the  Premises  pursuant to the Master  Lease (not  including  those
items to be removed by Sublessee pursuant to Article 8.1 of this Sublease).  Any
work  performed by  Sublessor  pursuant to the terms of the  preceding  sentence
shall be done in a reasonable manner to minimize the amount of inconvenience and
interference  to  Sublessee's  use  and  occupancy  of  the  Sublease  Premises;
provided,  however,  Sublessor  shall not be liable  to  Sublessee  for any such
inconvenience  or  interference  caused by  Sublessor's  exercise  of its rights
pursuant to this provision.

8.3 REMOVAL OF SUBLESSEE  IMPROVEMENTS AND  ALTERATIONS.  Sublessee shall not be
required to remove any of the Sublessee Improvements or alterations installed by
or on behalf of Sublessee  unless  Sublessee  is  notified,  at the time that it
requests  consent to such  improvements or alterations,  that such  improvements
and/or  alterations must be removed at the end of the Sublease Term. In no event
will Sublessee be required to remove any alterations and/or  improvements in the
Sublease  Premises  which were not  installed  by or on behalf of  Sublessee  or
Sublessee's licensees or subtenants.

ARTICLE 9:  CONSENT.  Whenever  the  consent  or  approval  of Master  Lessor is
required  pursuant to the terms of the Master  Lease,  for the  purposes of this
Sublease,  Sublessee,  in each such  instance,  shall be  required to obtain the
written  consent or  approval  of both Master  Lessor and  Sublessor.  If Master
Lessor  refuses to grant its consent or  approval,  Sublessor  may  withhold its
consent or approval and Sublessee  agrees that such action by Sublessor shall be
deemed reasonable.

ARTICLE 10: INSURANCE. All insurance policies required to be carried by "Tenant"
under the Master Lease shall be maintained by Sublessee pursuant to the terms of
the Master Lease; provided,  however, that Subtenant shall not have a deductible
amount  exceeding Five Thousand  Dollars  ($5,000.00).  Such policies shall name
Sublessor  and  Master  Lessor  (and such  other  lenders,  persons,  firms,  or
corporations  as are  designated  by Sublessor or Master  Lessor) as  additional
insureds by endorsement.  All policies shall be written as primary policies with
respect  to the  interests  of  Master  Lessor  and  Sublessor  and  such  other
additional  insureds  and shall  provide  that any  insurance  carried by Master
Lessor  or  Sublessor  or such  other  additional  insureds  is  excess  and not
contributing  insurance with respect to the insurance  required  hereunder.  All
policies  shall also contain  "cross  liability" or  "severability  of interest"
provisions  and shall  insure  the  performance  of the  indemnity  set forth in
Article 14 of this Sublease. Sublessee shall provide Master Lessor and Sublessor
with copies or  certificates  of all  policies,  including  in each  instance an
endorsement  providing  that such  insurance  shall not be  cancelled or amended
except  after  thirty  (30) days  prior  written  notice to  Master  Lessor  and
Sublessor.  All  certificates  delivered to Master  Lessor and  Sublessor  shall
specify the limits of the policy and all deductibles thereunder.

ARTICLE 11:  NOTICES.

11.1 NOTICE REQUIREMENTS.  All notices,  demands,  consents, and approvals which
may or are required to be given by either party to the other under this Sublease
shall be in writing and may be given by (i) personal  delivery,  (ii) nationally
recognized   overnight   courier  such  as  Federal  Express,   (iii)  facsimile
transmission,  or (iv) United States  registered or certified  mail addressed as
shown in  Article  1. Any  notice  or  demand  so given  shall be  deemed  to be
delivered or made on (i) the date  personal  service is effected,  (ii) the next
business day if sent by overnight  courier,  (iii) the same day as given if sent
by facsimile transmission which is received by 5:00 p.m. Pacific time so long as
a copy is concurrently  deposited in the United States mail, postage prepaid, or
(iv) the second  business day after the same is  deposited in the United  States
Mail as registered  or certified  and  addressed as above  provided with postage
thereon fully prepaid. Either party hereto may change its address at any time by
giving written  notice of such change to the other party in the manner  provided
herein at least ten (10)  calendar days prior to the date such change is desired
to be effective.

11.2 NOTICES FROM MASTER  LESSOR.  Each party shall provide to the other party a
copy of any notice or demand  received from or delivered to Master Lessor within
one (1) business day of receiving or delivering such notice or demand.

ARTICLE 12:  DAMAGE,  DESTRUCTION,  CONDEMNATION.  To the extent that the Master
Lease  gives  Sublessor  any rights  following  the  occurrence  of any  damage,
destruction or  condemnation to terminate the Master Lease, to repair or restore
the Sublease Premises,  to contribute toward such repair or restoration costs to
avoid termination,  to obtain and utilize insurance or condemnation  proceeds to
repair or restore the  Sublease  Premises,  or any similar  rights,  such rights
shall be  reserved  to and  exercisable  solely  by  Sublessor,  in its sole and
absolute  discretion,  and not by  Sublessee.  The exercise of any such right by
Sublessor shall under no circumstances constitute a default or breach under this
Sublease or subject Sublessor to any liability therefor.

ARTICLE 13: ENTRY BY SUBLESSOR.  Sublessee shall permit Sublessor and its agents
to enter the Sublease  Premises at any  reasonable  time during  business  hours
(i.e.,  between 8:00 a.m. and 5:00 p.m.) for the purpose of inspecting  the same
or posting a notice of non-responsibility for alterations, additions or repairs,
provided that Sublessor  provides at least  twenty-four  (24) hours prior notice
(except that no notice shall be required in the case of emergency).

ARTICLE 14:  INDEMNITY; EXEMPTION OF SUBLESSOR FROM LIABILITY.

14.1  SUBLESSEE  INDEMNITY.  Sublessee  shall  indemnify,  defend (with  counsel
reasonably  satisfactory to Sublessor),  protect and hold harmless Sublessor and
its  agents,  employees,   contractors,   stockholders,   officers,   directors,
successors  and assigns from and against any and all claims,  demands,  actions,
suits, proceedings, liabilities, obligations, losses, damages, judgments, costs,
penalties,  fines,  and  expenses  (including,  but not limited to,  attorneys',
consultants' and expert witness fees) arising out of, resulting from, or related
to (i) any injury or death to any person or injury or damage to property  caused
by, arising out of, or involving any of the following:  (A)  Sublessee's  use of
the Sublease  Premises,  the conduct of  Sublessee's  business  therein,  or any
activity, work or thing done, permitted or suffered by Sublessee in or about the
Sublease Premises or the common areas of the Building, (B) a breach by Sublessee
in the  performance  in a timely  manner of any  obligation  of  Sublessee to be
performed  under this Sublease,  or (C) the negligence or willful  misconduct of
Sublessee or Sublessee's agents, contractors,  employees, subtenants, licensees,
or invitees,  and/or (ii) the storage,  use, generation,  discharge,  treatment,
transportation,  presence,  release or  disposal  of any  Hazardous  Material by
Sublessee or its agents,  employees,  invitees,  visitors or contractors in, on,
over,  through,  from,  about,  or beneath the  Sublease  Premises or any nearby
premises.  This indemnity shall survive the expiration or earlier termination of
this Sublease.

14.2  SUBLESSOR  INDEMNITY.  Sublessor  shall  indemnify,  defend (with  counsel
reasonably satisfactory to Sublessee),  protect and hold Sublessee harmless from
and  against  any  and  all  claims,  demands,   actions,  suits,   proceedings,
liabilities,   obligations,   losses,   damages,   judgments,   costs,  expenses
(including,  but not limited to,  attorneys',  consultants'  and expert  witness
fees) arising out of,  resulting  from, or related to any injury or death to any
person or injury or damage to property  caused by, arising out of, or involving:
(i) the active  negligence  or willful  misconduct  of Sublessor or  Sublessor's
agents, contractors,  employees, subtenants, licensees, or invitees, or (ii) any
breach or any  representation or warranty of Sublessor made under this Sublease,
or (iii) any breach under the Master Lease by Sublessor.  This  indemnity  shall
survive the expiration or earlier termination of this Sublease.

14.3 SUBLESSEE  WAIVER.  Sublessee,  as a material part of the  consideration to
Sublessor,  hereby  assumes  all risk of damage to property or injury to persons
in, upon or about the Sublease  Premises  arising  from any cause and  Sublessee
hereby  waives  all  claims in  respect  thereof  against  Sublessor,  except in
connection  with  damage or injury  caused  solely  by the gross  negligence  or
willful  misconduct of Sublessor or its authorized  agents;  provided,  however,
that in no event  shall  Sublessor  be  liable  for any loss of  profits  or any
special, indirect, incidental, consequential or punitive damages, however caused
and on any theory of  liability.  This waiver shall  survive the  expiration  or
earlier termination of this Sublease.

14.3  MUTUAL  WAIVER OF  SUBROGATION.  Each party  (the  "FIRST  PARTY")  hereby
releases  the other party (the  "SECOND  PARTY"),  and its  partners,  officers,
agents,  employees,  and  servants,  from  any and all  claims,  demands,  loss,
expense,  or injury to the Sublease  Premises or to the  furnishings,  fixtures,
equipment,  inventory,  or  other  property  in,  about,  or upon  the  Sublease
Premises, which is caused by or results from perils, events, or happenings which
are the subject of fire or other casualty  insurance  carried by the First Party
at the time of such loss or which  would have been in force had the First  Party
carried the insurance required  hereunder or by the Master Lease  (collectively,
the  "EFFECTIVE  COVERAGE")  irrespective  of any  negligence on the part of the
Second Party that may have  contributed  to or caused such loss;  subject to the
following  limitations:  (i) the Second  Party  shall not be  released  from any
liability  to the extent  that such  damages  are not  covered by the  insurance
recovery  under the Effective  Coverage or are the result of willful acts by the
Second Party, and (ii) the Second Party shall be responsible for reimbursing the
First  Party for any  deductible  owed as a result of such  damages.  Each party
shall use  commercially  reasonable  efforts to obtain,  if needed,  appropriate
endorsements  to its  policies  of  insurance  with  respect  to  the  foregoing
releases;  provided, however, that failure to obtain such endorsements shall not
affect the releases hereinabove given.

ARTICLE 15:  ASSIGNMENT AND  SUBLETTING.  Sublessee  shall not voluntarily or by
operation  of law  assign  this  Sublease  or enter into  license or  concession
agreement,  sublet  all or any  part  of the  Sublease  Premises,  or  otherwise
transfer,  mortgage,  pledge,  hypothecate  or  encumber  all  or  any  part  of
Sublessee's  interest in this  Sublease or in the Sublease  Premises or any part
thereof,  without the prior written  consent of Master  Lessor  (pursuant to the
terms  of  the  Master  Lease)  and  Sublessor   (whose  consent  shall  not  be
unreasonably  withheld,  conditioned  or delayed).  Any attempt to do so without
such  consent  being  first  had and  obtained  shall be  wholly  void and shall
constitute  a  default  by  Sublessee  under  this  Sublease.  Sublessee  hereby
irrevocably assigns to Sublessor all Rent and other sums or consideration in any
form, from any subletting or assignment,  and agrees that Sublessor, as assignee
and as  attorney-in-fact  for Sublessee,  or a receiver for Sublessee  appointed
upon Sublessor's application, may collect such Rent and other sums and apply the
same against  amounts  owing to Sublessor in the event of  Sublessee's  default;
provided,  however, that until the occurrence of any act of default by Sublessee
or Sublessee's  subtenant,  Sublessee shall have the right to collect such sums,
provided  that all sums in excess of the Minimum  Monthly  Rent set forth herein
which any  subtenant  covenants to pay shall belong  solely and  exclusively  to
Sublessor and be paid to Master  Lessor in  accordance  with Section 18.5 of the
Master Lease. Notwithstanding any assignment or subletting,  Sublessee shall not
be relieved of its  obligations  hereunder,  and a consent to one  assignment or
subletting  shall not constitute a consent to any other assignment or subletting
or a waiver of the provisions of this section.

ARTICLE  16:  DELIVERY OF  DOCUMENTS.  Sublessee  shall  execute and deliver any
document or other instrument  required by Master Lessor or Sublessor pursuant to
the Master Lease  within five (5) days  following  receipt of a written  request
from Master Lessor or  Sublessor.  Failure to comply with this  provision  shall
constitute a default by Sublessee under this Sublease without any further notice
to Sublessee.

ARTICLE 17: HOLDING OVER. Any holding over by Sublessee after the termination of
the Sublease Term shall  constitute a tenancy at sufferance and not a renewal or
extension of this  Sublease or give  Sublessee  any rights in or to the Sublease
Premises. In the event of any such holding over, Sublessor and Master Lessor may
seek any and all remedies  available to Sublessor and/or Master Lessor at law or
in equity, and Sublessee shall pay Sublessor upon demand, (i) an amount equal to
the greater of : (A) One Hundred  Seventy Five Percent (175%) of the most recent
applicable  Minimum  Monthly  Rent,  or (B) fair market  value for the  Sublease
Premises at such time,  computed  on a daily basis for each day of the  holdover
period,  plus (ii) all other amounts due and payable  under the  Sublease,  plus
(iii) all other  amounts that  Sublessor  may become liable for under the Master
Lease;  provided  nothing  herein shall be construed to require  Sublessee to be
responsible for consequential damages.

ARTICLE 18:  OPTIONS.  Any right of Sublessor to extend or renew the term of the
Master  Lease or to expand  the  Premises  (if any),  shall be  reserved  to and
exercisable solely by Sublessor,  in its sole discretion,  and not by Sublessee.
Sublessor  agrees to exercise  such  rights to extend or renew the Master  Lease
only to the extent necessary to fulfill its obligations under this Sublease.

ARTICLE  19:  PARKING.  Subject  to the  terms  of the  Master  Lease  and  such
reasonable rules and regulations that may be promulgated by Master Lessor and/or
Sublessor from time to time,  Sublessee  shall have the  non-exclusive  right in
common  with other  tenants and  occupants  of the  Building  to use,  free of a
monthly fee during the Sublease Term, the number of parking spaces referenced in
Article 1, located in the Phase One common areas.

ARTICLE 20:  SIGNAGE.  Subject to the terms and conditions of Section 8.3 of the
Master Lease, Sublessee shall have the right to place up to two (2) signs on the
two (2) building facades (an example of which is shown on one of the attachments
to  EXHIBIT  D) closest to the  Southwest  corner of the  building  of which the
Sublease  Premises  are a part.  Such two (2)  signs  shall  not  exceed  in the
aggregate  Thirty (30) square feet and shall  otherwise be in strict  compliance
with the sign criteria attached hereto as EXHIBIT D.

ARTICLE  21:  FURNITURE.  For the  Sublease  Term and  subject  to the  terms of
Paragraph  14,  Sublessee  shall  be  entitled  to use  all  existing  furniture
currently  located at the  Sublease  Premises,  which is shown on the  furniture
layout  attached  as EXHIBIT E (the  "Furniture").  In the event that  Sublessee
requires additional  furniture,  fixtures or equipment,  Sublessee shall acquire
such  furniture,  fixtures or equipment at its sole cost and expense.  Sublessee
agrees to take  possession  of the  Furniture  "AS IS",  without  relying on any
representation  or warranty by Sublessor as to the  condition of the  Furniture.
Sublessee  further  acknowledges that neither Sublessor nor its agents have made
any representations or warranties,  express or implied, as to the suitability or
fitness of the  Furniture  for the  conduct of  Sublessee's  business or for any
other purpose.  Sublessee agrees, at its sole cost and expense,  to maintain the
Furniture in the same  condition and repair,  allowing for  reasonable  wear and
tear.  In accordance  with the terms of Section 12 the Master  Lease,  Sublessee
shall maintain  insurance on the Furniture during the Sublease Term in an amount
not less than the full replacement cost thereof. In the event that the Furniture
is damaged  during the Sublease  Term,  Sublessor  shall be given the  insurance
proceeds for the replacement cost of the Furniture damaged;  provided,  however,
Sublessor  shall be under no  obligation to replace the damaged  Furniture.  Any
installations,  replacements,  and  substitutions  of parts or accessories  with
respect  to any of the  Furniture  shall  be paid  for by  Sublessee  and  shall
constitute  accessions  and shall become part of the  Furniture and shall be the
property of Sublessor.  Sublessor shall not be under any liability or obligation
in any manner to provide service,  maintenance,  replacements or repairs for the
Furniture.  The  Furniture  shall remain at all times the property of Sublessor,
and  shall  be used by  Sublessee  during  the  Sublease  Term  free of  charge;
provided,  however,  if during  the entire  Sublease  Term  Sublessee  fully and
faithfully performs every provision of this Sublease to be performed by it, then
following  Sublessee's  surrender  of the  Sublease  Premises  in the  condition
required  by this  Sublease,  Sublessor  shall  transfer  all  right,  title and
interest in the Furniture to Sublessee for no additional consideration and shall
execute a bill of sale  acknowledging  such transfer (with all transfer taxes to
by paid by Sublessee).

ARTICLE 22: GENERAL PROVISIONS.

22.1  SEVERABILITY.  If any term or provision  of this  Sublease  shall,  to any
extent,  be  determined  by a court of competent  jurisdiction  to be invalid or
unenforceable, the remainder of this Sublease shall not be affected thereby, and
each term and provision of this Sublease  shall be valid and  enforceable to the
fullest extent permitted by law.

22.2 ATTORNEYS'  FEES;  COSTS OF SUIT. If Sublessee or Sublessor shall bring any
action or proceeding for any relief against the other, declaratory or otherwise,
arising out of this  Sublease,  including any suit by Sublessor for the recovery
of Rent or possession of the Sublease  Premises,  the prevailing  party shall be
entitled to recover its reasonable  attorneys'  fees,  expert witness' fees, and
costs.

22.3 WAIVER.  No covenant,  term or  condition  or the breach  thereof  shall be
deemed waived, except by written consent of the party against whom the waiver is
claimed,  and any waiver of the breach of any covenant,  term or condition shall
not be deemed to be a waiver of any other  covenant,  term or  condition  or any
subsequent  failure to perform  the same or any other  such  term,  covenant  or
condition.  Acceptance by Sublessor of any  performance  by Sublessee  after the
time the same shall have become due shall not  constitute  a waiver by Sublessor
of the breach or default of any  covenant,  term or condition  unless  otherwise
expressly agreed to by Sublessor in writing.

22.4 BROKERAGE COMMISSIONS. The parties represent and warrant to each other that
they have dealt with no brokers,  finders,  agents or other person in connection
with the transaction contemplated hereby to whom a brokerage or other commission
or fee may be  payable,  except for the  brokers  named in Article 1, whose fees
shall be paid pursuant to a separate written agreement by Sublessor.  Each party
shall indemnify, defend and hold the other harmless from any claims arising from
any breach by the indemnifying  party of the representation and warranty in this
Section 22.4.

22.5 BINDING  EFFECT.  Preparation  of this Sublease by Sublessor or Sublessor's
agent and  submission  of the same to Sublessee  shall not be deemed an offer to
lease. This Sublease shall become binding upon Sublessor and Sublessee only when
fully executed by Sublessor and Sublessee.  Sublessor and Sublessee  acknowledge
and agree that this Sublease is expressly conditioned upon obtaining the consent
of  Master  Lessor  hereto  following  such  full  execution  by  Sublessor  and
Sublessee, which consent may be in the form attached as EXHIBIT C hereto or such
other form as Master  Lessor may  require.  In the event such  consent is not so
obtained within  forty-five (45) days following the date of this Sublease,  then
this Sublease  shall  automatically  terminate  and be without  further force or
effect. In such event,  Sublessor shall promptly return to Sublessee any Prepaid
Rent and  Security  Deposit  paid by  Sublessee  to  Sublessor  pursuant to this
Sublease,  and  neither  party  shall  have any  liability  to the  other  party
thereafter accruing.

22.6  SUBLESSOR'S  KNOWLEDGE.  As used in this Sublease,  the term  "Sublessor's
Knowledge" or words of similar import shall mean the actual current knowledge of
Robert  W.  Kraiss  and/or  Catherine  Eckerman,  without  the  duty of  further
investigation  or  inquiry  with  respect  to the  matter to which  such  actual
knowledge pertains; provided, however, in no event shall this Sublease give rise
to any  personal  obligation,  liability or duty on the part of Robert W. Kraiss
and/or  Catherine  Eckerman,  or any other trustee,  officer,  director,  agent,
representative or employee of Sublessor.  Neither Robert W. Kraiss nor Catherine
Eckerman shall not be charged with  constructive or inquiry notice or knowledge,
or imputed knowledge of any agents, contractors, or employees.

22.7 ENTIRE  AGREEMENT.  This  instrument,  along with any  exhibits and addenda
hereto,  constitutes  the  entire  agreement  between  Sublessor  and  Sublessee
relative to the Sublease  Premises.  This  Sublease  may be altered,  amended or
revoked only by an instrument in writing signed by both Sublessor and Sublessee.
There are no oral agreements or  representations  between the parties  affecting
this  Sublease,  and this Sublease  supersedes  and cancels any and all previous
negotiations,   arrangements,   brochures,   agreements,   representations   and
understandings, if any, between the parties hereto.

22.8 EXECUTION. This Sublease may be executed in one or more counterparts,  each
of which shall be considered an original counterpart,  and all of which together
shall  constitute  one and the  same  instrument.  Each  person  executing  this
Sublease represents that the execution of this Sublease has been duly authorized
by the party on whose behalf the person is executing this Sublease.

22.9  CONFLICT.  In the event of any  inconsistencies  or conflicts  between the
terms of the Master Lease and this Sublease,  as between Sublessor and Sublessee
the terms of this Sublease shall control.

SUBLESSEE:

HOMEDIRECTOR, INC.
a Delaware corporation

By:      __________________________________

Name:    __________________________________

Title:   __________________________________

SUBLESSOR:

ADAPTEC, INC.,
a Delaware corporation

By:      __________________________________

Name:    __________________________________

Title:   __________________________________

<PAGE>

                                    EXHIBIT A

                              COPY OF MASTER LEASE

                                [TO BE ATTACHED]

<PAGE>

                                    EXHIBIT B

                                   FLOOR PLAN

                                [TO BE ATTACHED]

<PAGE>

                                    EXHIBIT C

                               CONSENT TO SUBLEASE

                  This  Consent to Sublease  ("CONSENT")  is made by Shea Center
Livermore, LLC, a California limited liability company ("MASTER LESSOR") for the
benefit of Adaptec, Inc., a Delaware corporation ("SUBLESSOR") and HomeDirector,
a Delaware corporation ("SUBLESSEE"), in the context of the following facts:

         A.  Sublessor  is  leasing  from  Master  Lessor  approximately  36,400
rentable  square  feet  located  at 2501  Collier  Canyon  Road  in the  City of
Livermore,  California 94550 (the  "PREMISES"),  on the terms and subject to the
conditions  of that  certain  Triple Net Lease dated as of October 26, 2000 (the
"MASTER LEASE").

         B. Sublessor desires to sublease to Sublessee a portion of the Premises
consisting  of   approximately   11,470  rentable  square  feet  (the  "SUBLEASE
PREMISES"),  and  Sublessee  desires to  sublease  the  Sublease  Premises  from
Sublessor,  on the terms and conditions  set forth in the Sublease  Agreement to
which this Consent is attached (the "SUBLEASE").

         C. Sublessor and Sublessee now desire to obtain the consent of Master
Lessor to the Sublease as required by the Master Lease.

         NOW,  THEREFORE,  Master  Lessor  hereby  consents to the execution and
delivery of the  Sublease  by and between  Sublessor  and  Sublessee  and to the
subletting  of a portion of the Premises by Sublessor to  Sublessee,  subject to
the following terms and conditions:

                  1.  Sublessee  shall not assign  the  Sublease  Agreement  nor
sublet the Sublease Premises in whole or part, and shall not permit  Sublessee's
interest in the  Sublease to be vested in any third party by operation of law or
otherwise,  without Master Lessor's prior written  consent,  which consent shall
not be unreasonably  withheld provided that Sublessee fully complies with all of
the applicable requirements of the Master Lease.

                  2. This  Consent  shall  not be deemed to be a consent  to any
subsequent  assignment or subletting.  Master Lessor shall not be deemed to have
waived any rights under the Master Lease by virtue of this Consent.

                  3. The Sublease is in all respects  subject and subordinate at
all times to the terms of the Master Lease. Insofar as the specific terms of the
Sublease  purport to amend or modify or are in conflict with the specific  terms
of the Master Lease, the terms of the Master Lease shall control.  Master Lessor
assumes  no  liability  whatsoever  on  account  of  anything  contained  in the
Sublease.

                  4. Neither the Sublease nor Master  Lessor's  consent  thereto
shall release or discharge  Sublessor from any liability under the Master Lease,
and Sublessor shall remain liable and  responsible for the full  performance and
observance of all of the  provisions,  covenants and conditions set forth in the
Master Lease on the part of Sublessee to be performed and observed.

                  5. Any rights of Sublessee  under the Sublease may be enforced
only  against  Sublessor,  and  Sublessee  shall have no right to enforce any of
Sublessor's rights under the Master Lease against Master Lessor by virtue of the
Sublease, this Consent, or otherwise.

                  6. Master Lessor  consents to Sublessee  placing up to two (2)
signs on the two (2) building  facades  closest to the  Southwest  corner of the
building of which the Sublease Premises are a part. Such two (2) signs shall not
exceed in the aggregate Thirty (30) square feet and shall otherwise be in strict
compliance with the sign criteria applicable to the Premises.

<PAGE>

MASTER LESSOR

Shea Center Livermore, LLC,
a California limited liability company

By:      __________________________________

Name:    __________________________________

Title:   __________________________________

<PAGE>

                                    EXHIBIT D

                                SIGNAGE CRITERIA

                                [To be attached.]

<PAGE>

                                    EXHIBIT E

                                FURNITURE LAYOUT

                                [To be attached.]

<PAGE><PAGE>

                                                                  EXHIBIT 10.6

NORTH CAROLINA                                        LEASE AGREEMENT
WAKE COUNTY                                      SINGLE STORY FLEX BUILDING

THIS LEASE AGREEMENT ("Lease"),  made and entered into as of the day of the 19th
day of April, 2000, by and between

                   SOUTHPORT BUSINESS PARK LIMITED PARTNERSHIP
                     Hereinafter referred to as "Landlord,"
                                      AND:

                               HOME DIRECTOR, INC.

          a Delaware corporation, hereinafter referred to as "Tenant;"

                              STATEMENT OF PURPOSES
                              ---------------------

Landlord is the owner of  Southport,  an office,  research and  development  and
distribution park located in Wake County, North Carolina ("Property").  Landlord
and Tenant  have  agreed that  Landlord  shall lease to Tenant and Tenant  shall
lease from Landlord  certain space at 1015 Aviation  Parkway,  Suites 100 --500,
Morrisville, North Carolina and have agreed to enter into this Lease to evidence
the tern and conditions of the leasing of space by Landlord to Tenant.

NOW,  THEREFORE,  in  consideration  of the foregoing and the mutual  covenants,
conditions  and  agreements   herein  contained  and  other  good  and  valuable
consideration  the receipt and  sufficiency of which are mutually  acknowledged,
Landlord and Tenant hereby agree as follows:

                                   ARTICLE 1
                                BASIC PROVISIONS

SECTION 1.01 -    THE DEMISED PREMISES

Subject in all respects to the terms, conditions,  agreements and limitations of
this Lease,  the Landlord  hereby leases to Tenant and Tenant hereby leases from
Landlord the following described space,  hereinafter referred to as the "Demised
Premises":

Approximately  THIRTY-ONE  THOUSAND THREE HUNDRED EIGHT (31,308) SQUARE FEET (as
measured  from the  centerline  of all  demising  and  exterior  walls) of space
located in the  building  located at 1015  AVIATION  PARKWAY,  SUITES  100--500,
MORRISVILLE,  NORTH  CAROLINA  (such  building  in the lot or lots in  which  is
located collectively, hereinafter referred to as the "Building") in Morrisville,
Wake County,  North  Carolina.  The location of the Demised  Premises within the
Building  shall be as shown on EXHIBIT A attached  hereto and hereby made a part
hereof.  The Demised  Premises shall consist  of3l,000  rentable  square feet of
space  within  Suites  100-500,  and 308  rentable  square feet of the  Interior
Hallway (as described in EXHIBIT C allocated to Tenant.

                                       1
<PAGE>

SECTION 1.02 -    TERM OF THE LEASE

Subject in all respects to the terms,  limitations,  conditions  and  agreements
contained  herein,  the term of this Lease  (herein  referred  to as the "Term")
shall  commence on the earlier of the date that the Tenant takes  possession  of
any part of the  Demised  Premises  or JULY 1, 2000  provided  that the  Demised
Premises are "ready for occupancy" (as defined in Section 3.03 below), whichever
first  occurs,  and shall  terminate  (unless  extended as herein  provided)  at
midnight  on JUNE 30, 2005  Landlord  and Tenant each agrees to sign a statement
confirming the actual date on which the Term begins  (herein  referred to as the
"Commencement  Date")  as  soon  as it  is  determined.  If  Tenant  remains  in
possession of the Demised  Premises  after the end of the Term or any renewal or
extension  thereof with  Landlord's  consent but without a new lease  reduced to
writing and duly  executed,  Tenant shall be deemed to be occupying  the Demised
Premises as a tenant from month- to-month only, but otherwise subject to all the
covenants, conditions, and agreements of this Lease.

SECTION 1.03 -    USE OF THE DEMISED PREMISES

Subject  to  the  general   limitations  of  Section  4.01  and  to  the  terms,
limitations,  conditions and  agreements  contained  herein,  Tenant may use the
Demised  Premises  for  the  following  purposes  but  for  none  other  without
Landlord's  prior written  consent:  TENANT MAY OCCUPY THE PREMISES FOR OFFICES,
SALES,  DISPLAY,  STORAGE,  SERVICE,  REPAIR AND USE OF  TENANT'S  PRODUCTS  AND
EQUIPMENT,  ENGINEERING,  TRAINING OF TENANT'S  CUSTOMERS  AND  EMPLOYEES  FOR A
COMPUTER, OFFICE ELECTRONICS AND TELECOMMUNICATIONS COMPANY.

SECTION 1.04 -    MONTHLY MINIMUI' RENT AND ADJUSTED MONTHLY MINIMUM RENT

Rents shall be payable as follows:

         For the first twelve full months,  TWENTY SIX  THOUSAND  SEVEN  HUNDRED
FORTY-TWO  AND  25/100  DOLLARS  ($26,742.25)  (hereinafter  referred  to as the
"Monthly Minimum Rent").

         For  the  next  TWELVE  months,   TWENTY-SEVEN  THOUSAND  FIVE  HUNDRED
FORTY-FOUR  AND  52/100  DOLLARS  ($27,544.52)  (hereinafter  referred  to as an
"Adjusted Monthly Minimum Rent").

         For the next TWELVE months, TWENTY-EIGHT THOUSAND THREE HUNDRED SEVENTY
AND  86/100  DOLLARS,  ($28,370.86)  (hereinafter  referred  to as an  "Adjusted
Monthly Minimum Rent").

         For the next TWELVE months, TWENTY-NINE THOUSAND TWO HUNDRED TWENTY-ONE
AND 09/100 DOLLARS ($29,221.09) (hereinafter referred to as an "Adjusted Monthly
Minimum Rent").

         For the next TWELVE  months,  THIRTY  THOUSAND  ONE  HUNDRED  SEVEN AND
86/100 DOLLARS  ($30,107.86)  (hereinafter  referred to as an "Adjusted  Monthly
Minimum Rent").

Such Monthly Minimum Rent or the Adjusted  Monthly Minimum Rents,  together with
any Additional Rents then due as specified in Article 2 of this Lease,  shall be
payable on or before  the first day of each  calendar  month  during the Term of
this Lease.

                                    2
<PAGE>

If the Term commences on any day other than of the first day of a calendar month
then, in lieu of the Minimum Monthly Rent specified  above, the Tenant shall pay
for the initial partial month (being the period from the Commencement Date until
the end of that month) a prorated  Monthly  Minimum Rent computed based upon the
Monthly Minimum Rent specified above prorated for the number of days during such
period.

SECTION 1.05 -    SECURITY DEPOSIT

Landlord  acknowledges  receipt of the sum of SIXTY  THOUSAND  D NO/100  DOLLARS
($60,000.00)  which is the same sum  delivered to Landlord as the "Holding  Fee"
described  in  Paragraph 1 of EXHIBIT C attached  hereto.  Provided  that Tenant
satisfies the conditions set forth in EXHIBIT C and the parties proceed with the
leasing in the manner contemplated by EXHIBIT C, then Landlord shall retain such
sum as  security  for the  performance  by  Tenant  of  each of its  obligations
hereunder,  and it shall be referred to thereafter  as the  "Security  Deposit".
Such  Security  Deposit  shall be held,  applied and  refunded in the manner and
subject to the conditions hereinafter provided.

SECTION 1.06 -    RENT ABATEMENT

No  Monthly  Minimum  Rent  shall  be due for the  first  three  weeks  from the
Commencement Date (the "Abatement Period"). Tenant shall not be obligated to pay
any Additional Rent (as defined in Article 2) on the Demised Premises during the
Abatement Period.  During the Abatement Period, all terms and conditions of this
Lease,  except for payment of Monthly  Minimum Rent and Additional  Rent,  shall
apply to Tenant's use and occupancy of the Demised Premises.

                                   ARTICLE 2
                                 ADDITIONAL RENT

SECTION 2.01 - THIS SECTION HAS BEEN INTENTIONALLY DELETED.

SECTION 2.02 -    SHARE OF DIRECT EXPENSES

The Tenant agrees to pay to Landlord,  as Additional  Rent, each year,  Tenant's
proportionate  share of any Direct Expenses incurred by or accrued as an expense
of  Landlord or its agents on account of the  operation  or  maintenance  of the
Building and all  appurtenances  thereto and  including a portion of any charges
attributable to Common Areas, as hereinafter  defined,  and an allocable portion
of any and all other charges incurred by or accrued as an expense of Landlord in
connection with the operation or maintenance of the Building;  provided, however
in the cases of expenses which benefit portions of Southport Business Park other
than the  Building,  the portion  allocated to the Building  shall be based upon
sound accounting  principles adopted by the Landlord for the purpose of making a
reasonable allocation.

Attached  hereto as EXHIBIT F is the  estimated  1999  Direct  Expenses  for the
Building.

Tenant's  proportionate  share of the total of all Direct Expenses  allocable to
the  Building  shall be  calculated  by  dividing  the total  square feet of the
Demised  Premises  stated at Section  1.01 hereof by an amount which is equal to
the total net rentable  square feet of the  Building.  It is agreed that the net

                                       3
<PAGE>

rentable  square  feet of the  Building  is FORTY FIVE  THOUSAND  EIGHT  HUNDRED
(45,880) SQUARE FEET.

Notwithstanding the foregoing, in the event the usage of any utility,  equipment
or other  Direct  Expense  by  Tenant  shall be  determined  by  Landlord  to be
disproportionate  to the amount of space leased by Tenant, the Landlord reserves
the right to make an  allocation  of such  Direct  Expense to Tenant  based upon
actual usage by Tenant, as reasonably determined by the Landlord.  Tenant agrees
to pay such specially  allocated  amount in the event Landlord  determines  such
usage is disproportionate and so advises Tenant.

The term  "Direct  Expense" as used  herein,  shall  include all direct costs of
operation  and  maintenance  as  determined  by  Generally  Accepted  Accounting
Principles (GAAP) and shall include without  limitation the following:  building
supplies;  ad valorem real and personal  property  taxes and other  governmental
charges;  utility and service  charges  attributable  to Common Areas or paid by
Landlord;  property,  casualty, liability and other insurance premiums; repairs,
reserves for major repairs,  maintenance and service contracts for the Building,
Common Areas and all related mechanical equipment;  property management charges;
grounds maintenance,  security, removal of snow and ice, parking maintenance and
striping, landscaping; and all other similar costs and expenses. ATTACHED HERETO
AS EXHIBIT C ARE ITEMS EXCLUDED FROM TENANT'S SHARE OF DIRECT EXPENSES.

If the State of North  Carolina  or any  political  subdivision  thereof  or any
governmental  or quasi-  governmental  authority  having  jurisdiction  over the
Building,  should  specifically  impose  a  tax,  assessment  charge  or  fee or
specifically  increase a then  existing  tax  assessment,  charge or fee,  which
Landlord shall be required to pay, either by way of  substituting  for said real
estate taxes or assessed against the Building, or in addition thereto, or impose
an income or  franchise  tax or tax on rents in  substitution  for a general tax
levied  against the Building or in addition  thereto,  such taxes,  assessments,
charges or fees shall be deemed to  constitute a real  property tax hereunder to
the extent said taxes are in substitution  therefore or in addition  thereto.  A
copy of THE ACTUAL tax bills or assessment bills submitted by Landlord to Tenant
shall  at all  times be  sufficient  evidence  of the  amount  of  taxes  and/or
assessments  levied or assessed against the property to which such bill relates.
Landlord's  reasonable  expenditures  for  attorney's  fees,  appraiser's  fees,
consultant's fees and other costs incurred during the Term of this Lease without
regard to the tax year  involved,  in any  efforts by  Landlord  to  minimize ad
valorem personal and real property taxes, and other governmental charges,  which
rights are  reserved to  Landlord,  shall be included  in the  definition  of ad
valorem real and personal property taxes and other governmental  charges for the
purposes of this Section.  If Landlord should receive a refund of any such taxes
or charges,  the Tenant will share  proportionately in same, after deduction for
all of Landlord's expenses in obtaining any such refund. Landlord's and Tenant's
obligations  under this Section shall survive the expiration of the Term of this
Lease.

The term  "Direct  Expense"  shall not include any income tax of  Landlord,  any
depreciation on the Building or any depreciation on equipment therein, interest,
or real estate broker's commission for any sale or for securing the execution of
any Lease.

                                       4
<PAGE>

SECTION 2.03 -    ADDITIONAL RENT - CERTAIN TAXES

Tenant  shall  further  pay as  Additional  Rent any sales or use tax imposed on
rents due from Tenant (other than City, State or Federal Income Tax), and to the
fullest  extent  lawful;  any tax or  rents in lieu of ad  valorem  taxes on the
Building,  even though laws imposing  such taxes attempt to require  Landlord to
pay the same.

SECTION 2.04 -    NOTICE

Landlord shall from time to time send to Tenant, in writing,  a statement of the
amount of any Additional Rent plus any applicable  sales or use taxes payable by
Tenant under Sections 2.02, 2.03, or 2.05 hereof.

LANDLORD  SHALL PROVIDE A STATEMENT OF  RECONCILIATION  TO TENANT PRIOR TO APRIL
FIRST OF EACH YEAR, BEGINNING IN 2001, WHICH COMPARES ACTUAL TO ESTIMATED DIRECT
EXPENSES FOR THE PRIOR CALENDAR YEAR. IN THE EVENT THAT TENANT'S SHARE OF ACTUAL
DIRECT  EXPENSES FOR SUCH YEAR EXCEED  ESTIMATED  DIRECT EXPENSES PAID BY TENANT
DURING  THAT YEAR,  THEN  TENANT  SHALL HAVE  THIRTY (30) DAYS TO EITHER PAY THE
EXCESS OR TO ASK TO AUDIT THE BACKUP  INFORMATION TO SUCH  STATEMENT.  IF TENANT
ASKS TO AUDIT SUCH BACKUP  INFORMATION,  IT SHALL BE COMPLETED WITHIN SIXTY (60)
DAYS OF THE  REQUEST  AND BE  CONDUCTED  AT  LANDLORD'S  OFFICES  DURING  NORMAL
BUSINESS HOURS.  TENANT, MAY REVIEW BACKUP INFORMATION FROM THE NEXT PRIOR YEAR,
BUT MAY NOT DISPUTE STATEMENTS FOR THAT YEAR NOT MADE IN A TIMELY MANNER.

SECTION 2.05 -    PAYMENT IN ADVANCE

Tenant shall pay to Landlord each month,  one twelfth (1/12) of the amounts,  if
any, reasonably  computed by Landlord to be Tenant's  anticipated annual charges
for  Additional  Rents,  in  anticipation  of Additional  Rents due for the then
current calendar year and all such monthly payments shall be applied to Tenant's
Additional Rent for the then current calendar year.

FOR INFORMATIONAL PURPOSES ONLY, A COPY OF THE ESTIMATED COST OF DIRECT EXPENSES
FOR THE  DEMISED  PREMISES  FOR THE 1999  CALENDAR  YEAR IS  ATTACHED  HERETO AS
EXHIBIT  F;  HOWEVER,  SUCH  SCHEDULE  IS NOT  INTENDED  TO BE, AND SHALL NOT BE
CONSTRUED BY TENANT TO BE, A LIMITATION ON THE TYPE OR LEVEL OF DIRECT  EXPENSES
FOR WHICH TENANT IS RESPONSIBLE UNDER THIS LEASE, WHICH SHALL BE GOVERNED BY THE
TERMS AND CONDITIONS OF THIS LEASE.

SECTION 2.06 -    PAYMENT OF RENTS. LATE PAYMENT. NON-PAID CHECK

All rents shall be paid at the address  from time to time  specified by Landlord
by written notice to Tenant. The covenant of Tenant to pay rents is and shall be
independent of any and all other  covenants of this Lease and all rents shall be
payable when due without prior notice or demand and without  offset or deduction
whatsoever,  in legal tender of the United  States of America for the payment of
public or private debts.

In addition to such  remedies as may be provided  under  Article 12,  Default by
Tenant  and  Landlord's  Remedies,  Landlord  shall be  entitled  to, as further
Additional Rent, a late charge of two (2%) per cent of any amount due hereunder,
if not received  within  fifteen (15) days of when due, and a charge of two (2%)
per cent of any amount  due  hereunder,  for any check  given by Tenant not paid
when first  presented to the financial  institution on which the check is drawn.

                                       5
<PAGE>

In  addition,  in the event the Tenant  fails to pay any  amount  due  hereunder
including, but not limited to any Monthly Minimum Rent, Adjusted Monthly Minimum
Rent,  Additional  Rents, or other monetary payment as and when provided in this
Lease  (which  shall  include a failure to pay by reason of the failure to honor
any check),  the Tenant shall pay to the Landlord as Additional  Rent,  interest
daily at the annual  rate of four (4%) per cent in excess of the prime  interest
rate from time to time in effect,  by CitiBank  N.A.,  New York,  New York.  Any
payment by Tenant or acceptance by Landlord of a lesser amount than shall be due
from  Tenant to  Landlord  shall,  be  treated  as a  payment  on  account.  The
acceptance  by Landlord of a check for a lesser  amount with an  endorsement  or
statement thereon,  or upon any letter accompanying such check, that such lesser
amount is payment in full shall be given no effect, and Landlord may accept such
check without  prejudice to any other rights or remedies which Landlord may have
against Tenant.

SECTION 2.07 -    OTHER CHARGES TO BE TREATED AS RENTS

All charges,  costs and sums required to be paid by Tenant to Landlord hereunder
shall be considered  Additional  Rent and shall be  collectible  by and with the
same rights held by the Landlord for the collection of rents.

                                   ARTICLE 3
                      IMPROVEMENTS TO THE DEMISED PREMISES

SECTION 3.01 -    TENANT'S ACCEPTANCE OF PREMISES

Tenant represents to the Landlord that it has examined and inspected the Demised
Premises and finds them to be as represented by the Landlord,  satisfactory  for
Tenant's intended use, and free from existing violations of Section 4.02. Tenant
hereby accepts the Demised  Premises "as is". Any additional  improvements to be
performed by Landlord are separately identified in EXHIBIT B.

SECTION 3.02 -    SCOPE OF LANDLORD'S WORK

Landlord  shall,  at its own expense,  perform the additional  work described as
"Landlord's Work" in EXHIBIT B attached hereto and made a part hereof.  LANDLORD
SHALL  PROVIDE  TENANT AN ALLOWANCE  UP TO, BUT NOT TO EXCEED,  $5.00 PER SQUARE
FOOT OF DEMISED PREMISES LEASED, IN ORDER TO PERFORM LANDLORD'S WORK. TENANT, AT
ITS EXPENSE, SHALL PAY ANY ADDITIONAL COST INCURRED TO COMPLETE LANDLORD'S WORK.
SUCH ADDITIONAL COSTS SHALL BE PAID BY TENANT WITHIN THIRTY (30) DAYS OF RECEIPT
OF BILL FROM LANDLORD.  It is expressly  understood  and agreed that  Landlord's
obligation with respect to construction of the Demised Premises shall be limited
to the scope of work  described as Landlord's  Work in EXHIBIT B and shall in no
event  include  any work not  described  on EXHIBIT B and shall not  include the
performance,  procurement  and/or  installation  of any other work,  fixtures or
equipment.  All Landlord's  Work shall  constitute  improvements  to the Demised
Premises and shall remain upon expiration of the Term of the Lease.

                                       6
<PAGE>

SECTION 3.03 -    NOTICE OF COMPLETION OF LANDLORD'SWORK

Landlord  shall notify Tenant upon  completion of Landlord's  Work.  The Demised
Premises shall be deemed "ready for occupancy"  under the terms of this Lease if
the Demised Premises are "Systems Ready" (as defined in Section 13.12 below) and
if Landlord has  substantially  completed its work in accordance  with the terms
and conditions of EXHIBIT B attached hereto,  which can be accomplished prior to
and  independently of any construction or installation  required to be performed
by Tenant.  The occupancy and use of the additional  improvements  by the Tenant
shall be deemed conclusive  evidence that the Demised Premises are Systems Ready
and that  Landlord's  Work has been  substantially  completed in accordance with
EXHIBIT B.

The failure by Tenant to give notice  within thirty (30) days of the delivery of
possession  of  the  Demised  Premises  specifying  in  detail  those  items  of
Landlord's Work which are not then complete shall be deemed conclusive  evidence
that Tenant has accepted the Demised  Premises with all items of Landlord's Work
completed. Provided, however, that the foregoing sentence shall not be construed
as  limiting  Tenant's  right to make  additional  improvements  to the  Demised
Premises for a period of twelve (12) months from the  Commencement  Date, and to
be reimbursed  therefor,  subject to the terms and  conditions of Paragraph 3 of
EXHIBIT B attached hereto.

LANDLORD  SHALL  WARRANT  LANDLORD'S  WORK AND THE HVAC  SYSTEM FOR THE  DEMISED
PREMISES  (BUT NOT THE  SEPARATE  UVAC  SYSTEM FOR THE LAN ROOM) TO BE FREE FROM
DEFECTS IN MATERIALS AND WORKMANSHIP FOR ONE (1) YEAR FROM THE COMMENCEMENT DATE
OF THIS LEASE.  PROVIDED,  HOWEVER, THAT THE FOREGOING WARRANTY SHALL NOT EXTEND
TO THE LANDLORD'S  PERSONAL PROPERTY OR THE TENANT'S PERSONAL PROPERTY,  AS EACH
IS DESCRIBED ON EXHIBIT H ATTACHED  HERETO,  NOR TO ANY WORK DONE BY LANDLORD OR
THE PRIOR TENANT TO MAKE THE DEMISED PREMISES "SYSTEMS READY".

SECTION 3.04 -    LATEST COMPLETION DATE

The Landlord shall exercise  reasonable care to cause the Landlord's Work at the
Demised  Premises  to be  substantially  complete  on or  prior  to  the  Latest
Completion Date (as defined on EXHIBIT B attached  hereto).  The parties confirm
and agree that the  completion  of  Landlord's  Work may be delayed  for reasons
beyond the Landlord's control,  Force Majeure,  and hereby agree that the Latest
Completion  Date shall  automatically  be extended if and to the extent that any
delays  are  encountered  which are not  within  the  control  of the  Landlord.
Notwithstanding  the foregoing,  in the event  Landlord's  Work is not completed
within FORTY FIVE (45) days following the Latest Completion Date,  provided that
Landlord has diligently and  continuously  pursued  completion of the Landlord's
Work  during  such period and that  Tenant has not  commenced  occupancy  of the
Demised Premises,  then this Lease Agreement shall automatically become null and
void and  neither  party  hereto  shall have any further  rights or  obligations
hereunder.  Under no  circumstances  shall  Landlord be liable to Tenant for any
damages  including,  but not limited to direct,  indirect,  and consequential or
incidental damages, which may be caused by any delay in commencing or completing
its  construction  of the Demised  Premises  or for a total  failure to complete
same.

                                       7
<PAGE>

                                   ARTICLE 4
                        USE OF THE PROPERTY BY THE TENANT

SECTION 4.01 -    USE GENERALLY

Tenant may use the Demised  Premises  for the  purposes  stated in Section  1.03
hereof, but for none other without  Landlord's prior written consent,  provided,
however,  notwithstanding  the  generality of the  foregoing,  in no event shall
Tenant make any use of the Demised  Premises,  the  Building or the Common Areas
which is in violation of any applicable  laws,  ordinances,  statutes,  rules or
regulations  affecting the Demised  Premises,  the Building or the Common Areas,
including without limitation general rules and regulations  proscribed from time
to time by Landlord  for the use of the Demised  Premises,  the  Building or the
Common Areas and  restrictions  with respect to employee  parking in  designated
employee  parking  areas as may be  developed  from time to time by Landlord and
delivered  t Tenant or posted on the  Building  insofar as they might  relate to
Tenant's use and occupancy of the Demised Premises,  nor may Tenant make any use
of  the  Demised  Premises  not  permitted  by  any  present  or  future  lawful
restrictive  covenants which apply to the Demised Premises, or which is or might
constitute  a  nuisance,  or which  increases  the  property,  casualty or other
insurance premiums (or makes any such insurance unavailable to Landlord or other
tenants) on the Building.

Tenant shall not permit its agents,  employees,  or invitees to place  excessive
loads on the parking lots and drives.

Tenant shall not permit its agents,  employees,  or invitees to place  excessive
loads on the floors of the  Buildings,  the maximum  load shall not exceed Eight
Hundred (800) pounds per square foot.

TENANT SHALL MAINTAIN AND CARE FOR ITS PERSONAL PROPERTY ON THE DEMISED PREMISES
INSURE THE SAME AND SHALL NEITHER HAVE NOR MAKE ANY CLAIM  AGAINST  LANDLORD FOR
ANY LOSS OR DAMAGE TO THE SAME.

Tenant may not allow any  animals in the  Demised  Premises  or on the  Property
EXCEPT  FOR  SEEING  EYE  DOGS.  Tenant  may not  allow  unusual  odors,  noise,
vibration,  or dust to emanate from the Demised Premises.  No cooking is allowed
in the Demised Premises other than by household type microwave. To the extent of
insurance  proceeds actually  received by Landlord,  but subject to the terms of
Section 8.06 of this Lease,  LANDLORD SHALL REMAIN LIABLE FOR ALL DIRECT DAMAGES
SUFFERED  BY TENANT  BY AN ACT OF GROSS  NEGLIGENCE  OR  WILLFUL  MISCONDUCT  BY
LANDLORD AND/OR ITS AGENTS.

SECTION 4.02 -    HAZARDOUS WASTE AND RELATED MATFERS

The Tenant  shall not permit any  violation to exist with respect to the Demised
Premises,  Building,  or Property under any federal,  state or local laws, rules
and regulations now or hereafter in effect with respect to oil, hazardous wastes
or hazardous materials, or toxic substances, or the release or disposal thereof.
Tenant shall not use all or any portion of the Demised  Premises,  Building,  or
Property  for  the  generation,  storage,  treatment,  use  of  disposal  of any
substance for which a license or permit is required by North Carolina or Federal
Laws,  without the prior  written  consent of the Landlord.  Without  limitation
express or implied upon any other  requirements of this Lease,  the Tenant shall
pay all such  sums and take all  such  actions  as may be  required  to avoid or

                                       8
<PAGE>

discharge  the  imposition  of any lien on the  Demised  Premises  Building,  or
Property under North Carolina Laws, or applicable federal law as the same may be
amended from time to time, and the Tenant shall  indemnify and save harmless the
Landlord from any arid all liens,  claims,  liabilities and expenses,  including
without  limitation  attorneys'  fees  incurred or  suffered by the  Landlord by
virtue of the provisions  thereof as applied to the Demised Premises,  Building,
or Property.

         (a)      The Tenant shall not:

                  (i)      generate  (except with the proper written  consent of
                           the  Landlord  and  in  compliance   with  all  laws,
                           ordinances,  and regulations  pertaining thereto), or
                           dispose  of  any  hazardous  material  or  oil on the
                           Demised Premises, Building or Property.

                  (ii)     store  (except  with the  prior  written  consent  of
                           Landlord and in compliance with all laws, ordinances,
                           and regulations  pertaining  thereto),  or dispose of
                           any   hazardous   material  or  oil  on  the  Demised
                           Premises, Building or Property

                  (iii)    directly or  indirectly  transport or arrange for the
                           transport  of any  hazardous  material or oil (except
                           with the prior written consent of the Landlord and in
                           compliance with all laws, ordinances, and regulations
                           pertaining   thereto);   on  the  Demised   Premises,
                           Building or Property.

         (b)      The Tenant  shall  indemnify,  defend,  and hold the  Landlord
                  harmless of and from any claim brought or  threatened  against
                  the Landlord by the Tenant,  any  guarantor or endorser of the
                  obligation of Tenant, or any governmental  agency or authority
                  or any other  person  (as well as from  attorneys'  reasonable
                  fees and expenses in  connection  therewith) on account of the
                  presence of hazardous material or oil on the Demised Premises,
                  Building or  Property,  or the failure by the Tenant to comply
                  with the terms and  provisions  hereof.  This  indemnification
                  shall survive any termination of this Lease.

Failure  of Tenant to comply  with this  Section  4.02 of the Lease  shall be an
Event of Default under this Lease.

As of the  Commencement  Date,  Landlord  represents that Landlord has not used,
generated, stored, treated, or disposed of any hazardous substance,  material or
waste,  or any oil or  toxic  substance,  in or on any  portion  of the  Demised
Premises  which  resulted  in a release or  contamination  in  violation  of any
federal,  state or local laws, rules or regulations,  nor has Landlord  received
any  written  notice from any  federal,  state or local  governmental  agency or
authority  regarding  any  such  release  or  contamination.  Further,  Landlord
represents that the generator  installed on the exterior of the Demised Premises
and the  batteries  related  to the  UPS  that  supports  the  Demised  Premises
generally  are not in violation of any  federal,  state or local laws,  rules or
regulations relating to the use, generation,  storage, treatment and disposal of
such hazardous and toxic substances.

                                       9
<PAGE>

SECTION 4.03 -    PAYMENT FOR UTILITIES FOR DEMISED PREMISES

Tenant shall pay promptly and before any  delinquency for nonpayment all charges
for  utilities  serving  the Demised  Premises,  including  without  limitation,
electricity,  gas, telephone,  and/or oil bills. In the event that any utilities
are not  separately  metered for Tenant,  Tenant  shall pay its proper  pro-rata
portion of such  utilities  in common with others using such  utilities  off the
same meter as  provided  in Section  2.02.  On  request of  Landlord  or Tenant,
Tenant's use of any particular utility shall be determined by appropriate survey
of Tenant's  equipment,  by  monitoring  of  submeters,  or other method  fairly
evaluating  Tenant's  use, and after such  determination,  Tenant's  charges for
utilities   uses   surveyed   shall  be   adjusted  in   accordance   with  such
determinations. In the event Tenant's use of any utilities on a common meter are
irregular or  disproportionate,  either Landlord or Tenant shall have the option
as to future  charges to have installed at its expense  separate  meters for the
utilities in question.

                                   ARTICLE 5
                      REPAIRS AND MAINTENANCE BY THE TENANT

SECTION 5.01 -    REPAIRS AND MAINTENANCE

Tenant shall  maintain,  repair,  or replace,  (and so deliver at the end of the
Lease)  each  and  every  part  of  the  Demised  Premises,   including  without
limitation,  all glass,  doorways and doors,  interior walls, interior ceilings,
interior floors,  plumbing,  electrical,  HYAC, and all equipment located within
the Demised  Premises,  in first class repair and  condition,  and shall make at
Tenant's  sole cost and expense  such  replacements,  restorations,  renewals or
repairs, in quality equivalent to the original work replaced, as may be required
to so  maintain  the  same,  ordinary  wear and tear  only  excepted.  Equipment
servicing  the Demised  Premises  that is located  outside the Demised  Premises
shall be  maintained  by  Tenant,  if it was  installed  by the Tenant or by the
Landlord as part of Landlord's Work (e.g.  HVAC equipment  located on the roof).
Tenant, however, shall make no exterior or structural alterations, other than as
required  pursuant to Tenant's  obligations  to make  repairs and  maintain  the
Demised  Premises,  without  Landlord's  prior  written  consent.  ANY  INTERIOR
ALTERATION BY TENANT SHALL REQUIRE LANDLORD'S WRITTEN CONSENT,  SUCH CONSENT NOT
TO BE UNREASONABLY  WITHHELD. In any case, all work performed by Tenant shall be
done in a good and workmanlike manner, and so as not to disturb or inconvenience
other Tenants in the  Building.  Tenant shall not at any time permit any work to
be performed on the Demised  Premises  except by duly  licensed  contractors  or
artisans,  each of whom must carry general public liability  insurance,  in such
amounts as are  reasonably  directed by Landlord and under which  Landlord is an
additional  insured,  certificates of which shall be furnished  Landlord.  At no
time may Tenant do any work that  results in a claim of lien  against  Landlord,
and if  requested  by  Landlord on  termination  of the Lease or vacation of the
Demised  Premises by Tenant,  Tenant shall  restore at Tenant's sole expense the
Demised  Premises to the same  condition  as existed at the  completion  of work
described  in EXHIBIT B-L and B-2  ordinary  wear and tear only  excepted.  SUCH
ELECTION WILL BE MADE BY LANDLORD AT THE TIME THAT TENANT REQUESTS PERMISSION TO
MAKE AN  ALTERATION.  LANDLORD,  HOWEVER,  MAY ELECT TO REQUIRE  TENANT TO LEAVE
ALTERATIONS PERFORMED BY TENANT.

                                       10
<PAGE>

                                   ARTICLE 6
                REPAIRS. MAINTENANCE AND SERVICES BY THE LANDLORD

SECTION 6.01 -    SERVICES TO THE DEMISED PREMISES

Landlord  shall,  subject  to  interruptions  beyond  his  control  and  to  the
scheduling  of repairs by providers of such  services,  cause to be furnished to
the Demised  Premises in common with other Tenants,  the following  connections:
water and sewer connections,  telephone line connections providing access to the
local public telephone company, normal electrical  connections,  and natural gas
connections.

SECTION 6.02 -    LANDLORD'S REPAIRS

Landlord will be responsible for keeping the foundations, water mains, sewer and
sprinkler lines, roof and structural  portions of the exterior roof and walls of
the Demised Premises in good order and repair.  Landlord shall not, however,  be
responsible  for any repairs  occasioned  by reasons of the acts of Tenant,  its
employees, agents, invitees, licensees, contractors or other agents, nor for any
repairs,  regardless of the cause therefor, to the Tenant's Personal Property or
the  Landlord's  Personal  Property,  as each is described on EXHIBIT H attached
hereto.  Tenant agrees to give Landlord  written notice of the necessity for any
repairs  required to be made by Landlord,  and Landlord  shall have a reasonable
period of time thereafter to make such repairs.

                                   ARTICLE 7
                                  COMMON AREAS

SECTION 7.01 -    DEFINITION OF COMMON AREAS

For  purpose  of this  Lease,  the term  "Common  Areas"  shall  mean all areas,
improvements,  space,  equipment  and  special  services  in or  adjacent to the
Building  provided  by  Landlord  for the  common  or joint use and  benefit  of
tenants,  customers,  and  other  invitees,  including  without  limitation  any
existing or future entrance ways, exits, roads, parking lots, walkways and other
common  spaces in the Property  from time to time  designated as Common Areas by
the Landlord.

SECTION 7.02 -    USE OF COMMON AREAS

Provided Tenant is not in default under this Lease,  Tenant shall be entitled to
use, in common with others entitled thereto,  so much of the Common Areas as may
be designated from time to time by the Landlord,  subject,  however to the terms
and  conditions  of this  Lease and to such  rules and  regulations  for the use
thereof as may be proscribed from time to time by Landlord.

SECTION 7.03 -    CHANGES AND ALTERATIONS OF COMMON AREAS

The Landlord  reserves the rights, at any time and from time to time to increase
or decrease the size of and to alter the  configuration  of the Common Areas, SO
LONG AS SUCH CHANGE WILL NOT INTERFERE WITH TENANT'S USE OF THE DEMISED PREMISES
AND SUCH CHANGES  MAINTAIN THE BUILDING AS A FIRST CLASS  BUSINESS  PARK. In the
event of any such change or  alteration,  Landlord shall not be liable to Tenant
therefore, and Tenant shall not be entitled to any compensation or diminution or
abatement of Monthly  Minimum Rent,  nor shall such  diminution or alteration of
the Common Areas be considered a constructive or actual eviction.

                                       11
<PAGE>

                                   ARTICLE 8
                             INSURANCE AND INDEMNITY

SECTION 8.01 -    INSURANCE ON THE BUILDING AN]) CERTAIN IMPROVEMENTS

During  the Term of this  Lease and any  extensions  or  renewals  thereof,  the
Landlord shall maintain  property and casualty  insurance on the Building and on
so much of the upfit and additional real and personal property  improvements and
appurtenances thereto as shall be installed by or at the expense of Landlord and
constitute the property of Landlord, but not on the Landlord's Personal Property
as described on EXHIBIT H attached hereto. Such insurance shall be maintained in
an amount,  not to exceed the replacement  cost thereof,  and shall provide fire
and extended  peril  coverage and coverage  against such further and  additional
perils,  as Landlord shall from time to time determine in its sole discretion to
be appropriate.

The amount of any  insurance  premiums  incurred  by or accrued as an expense of
Landlord in securing such coverage shall  constitute a direct expense within the
meaning of Section 2.02 hereof and the Tenant shall pay its allocable portion of
such cost as a part of the  Direct  Expenses  allocated  to Tenant in the manner
provided in Section 2.02.

SECTION 8.02 -    PUBLIC LIABILITY INSURANCE

Tenant shall, at all times during the Term hereof, at its sole cost and expense,
procure and  maintain in force and effect a policy or policies of  comprehensive
public  liability  insurance  issued by a company or companies from time to time
approved by Landlord NOT TO BE  UNREASONABLY  WITHHELD,  which companies must be
authorized to transact business in North Carolina. Such policy or policies shall
insure,  under valid and enforceable  policies against loss, damage or liability
for  injury to or death of  persons  and loss or damage  to  property  CAUSED BY
TENANT AND ITS AGENTS.  Such policies of liability insurance shall name Landlord
and its  designated  property  manager as an additional  insured and shall be in
amounts and afford  coverage  against perils all as is reasonably  required from
time to time by Landlord. Coverage shall initially be in the single limit amount
of ONE MILLION DOLLARS ($1,000,000.00).

SECTION 8.03 -    INSURANCE RATING

Tenant will not conduct, or permit to be conducted, any activity, will not place
any  equipment  or  materials  in or about the Demised  Premises,  Building,  or
Property, and will not take nor allow its employees, agents, or invitees to take
any action  which  will,  in any way,  violate  any  requirement  of  Landlord's
insurance  policies  or which  will  increase  the rate of  property,  casualty,
liability or other insurance on the Demised Premises or on the Building or their
operation, or which makes any property,  casualty,  liability or other insurance
on the Demised  Premises  or Building  unavailable  to Landlord  from  companies
acceptable to the Landlord. However, in the event the Tenant shall take any such
action then, in addition to and not in  limitation of any other rights  pursuant
to this Lease, the Landlord may require the Tenant,  upon demand,  to separately
pay or  reimburse  to Landlord the amount of any  increased  insurance  premiums
attributable  to such  action  which  are in  excess  of  those  charged  at the
Commencement Date, resulting from such activity.

SECTION 8.04 -    POLICIES OR CERTIFICATES OF INSURANCE

                                       12
<PAGE>

Tenant will furnish the Landlord  prior to the delivery of the Demised  Premises
to  Tenant,  and  thereafter  not  fewer  than  thirty  (30)  days  prior to the
expiration  date of any  expiring  policies,  certified  copies of  policies  or
certificates of insurance bearing  notations  evidencing the payment of premiums
and evidencing  the insurance  coverage  required to be carried by Tenant.  Each
policy and certificate  shall contain an endorsement or provision  requiring not
fewer  than  thirty  (30)  days  written   notice  to  Landlord   prior  to  the
cancellation,  diminution  in the perils  insured  against or  reduction  of the
amount of coverage of the particular policy in question.

SECTION 8.05 -    INSURANCE OF TENANT'S PROPERTY

Tenant hereby acknowledges and agrees that it will secure and maintain insurance
upon its  fixtures,  trade  fixture,  personal  property  and any and all  other
property  of the Tenant or of any third  parties  which may from time to time be
stored or maintained in, on or around the Demised Premises and Building,  except
that  Tenant  shall not be  obligated  to  maintain  insurance  on the  Tenant's
Personal  Property,  as described on EXHIBIT H attached  hereto.  Such insurance
shall  be  maintained  in such  amounts  as  shall be  necessary  to  cover  the
replacement cost thereof.

All such policies  shall include a waiver of  subrogation  of any and all claims
against the  Landlord.  The Tenant hereby agrees that it will look solely to its
insurance  policies for  recovery of any loss for any such  property and further
confirms and agrees that in no event will it make any claim against the Landlord
for any  loss to any  such  property  and  that it will  indemnify  and hold the
Landlord  harmless  from and  against  any claim  arising  out of its failure to
maintain such insurance.

SECTION 8.06 -    WAIVER OF SUBROGATION

Landlord hereby releases Tenant, but only to the extent of Landlord's  insurance
coverage,  from any  liability  for loss or damage  caused by fire or any of the
extended coverage perils included in Landlord's  insurance policies covering the
Demised  Premises and Building  even if the insured peril shall be brought about
by the default, negligence or other action of the Tenant, its agents, employees;
provided,  this release  shall be in effect only with respect to an insured loss
and only so long as  Landlord's  policy  applicable to such loss shall contain a
clause to the effect that this release shall not affect the right of Landlord to
recover under such policy. Landlord does not waive and hereby reserves the right
to secure  compensation from Tenant for any uninsured loss, any amounts not paid
because of deductibles and other amounts not paid for any reason whatsoever:

Tenant hereby releases  Landlord,  but only to the extent of Tenant's  insurance
coverage,  from any  liability  for loss Or damage  caused by fire or any of the
extended  coverage perils included in Tenant's  insurance  policies covering any
property  of Tenant  stored at the Demised  Premises  and  Building  even if the
insured peril shall be brought about by the default,  negligence or other action
of the Landlord,  its agents,  employees or any of them; provided,  this release
shall be in effect  only with  respect  to an  insured  loss and only so long as
Tenant's  policy  applicable  to such loss shall  contain a clause to the effect
that this  release  shall not affect  the right of Tenant to recover  under such
policy.  Notwithstanding  anything to the contrary herein,  Tenant shall make no
claim  against  Landlord or its  insurer  for damage to or loss of the  Tenant's
Personal Property or the Landlord's  Personal Property,  as each is described in
EXHIBIT H ATTACHED HERETO, WHETHER BROUGHT ABOUT BY THE DEFAULT,  NEGLIGENCE, OR

                                       13
<PAGE>

OTHER ACT OR OMISSION OF THE  LANDLORD,  OR FOR ANY OTHER CAUSE,  AND WHETHER OR
NOT INSURED BY EITHER PARTY.

SECTION 8.07 -    INDEMNIFICATION

Tenant will  indemnify  and hold the Landlord  harmless from any and all claims,
actions,  damages,  liability  and  expense  in  connection  with  loss of life,
personal injury, or damage to property arising from or out of any occurrence in,
upon or at the Demised  Premises or out of the occupancy or use by Tenant of the
Demised  Premises or Building or any part thereof,  and occasioned  wholly or in
part by an act or omission of Tenant, its subtenants,  concessionaires,  agents,
contractors,  employees,  invitees,  or  licensees,  or any one or more of them,
including  reasonable  attorney's fees,  incurred by or accrued as an expense of
Landlord in defending any such claim or action.

Landlord will  indemnify and hold Tenant  harmless from any and all actual costs
and  expenses  incurred by Tenant in  defending  any claim or action for loss of
life, personal injury or damage to property arising out of an act or omission of
Landlord;  provided,  however, that Landlord's liability shall be limited to the
extent that  Landlord is  determined  by a final  judgment  issued by a court of
competent  jurisdiction  to be liable for such loss of life,  personal injury or
damage to  property,  and then only to the  extent of  Landlord's  proportionate
share of such  liability.  As conditions to  Landlord's  obligations  under this
Section 8.07, Tenant shall (i) within sixty (60) days of receiving notice of any
such claim against Tenant,  provide  Landlord with written notice of such claim,
together  with a copy of the  complaint;  and  (ii)  retain  counsel  reasonably
acceptable to Landlord.

SECTION 8.08 -    NOTIFICATION

Tenant  agrees to give Landlord  prompt  notice of any accidents or  occurrences
subject to the provisions of this Article 8.

                                   ARTICLE 9
                           LANDLORD'S RESERVED RIGHTS

SECTION 9.01 - ALTERATIONS AND ADDITIONS TO BUILDINGS AND SITE.  Landlord hereby
reserves  the  right at any time and from  time to time to make  alterations  or
additions  to, and build  additions on the Building and to build  adjoining  the
same,  and to  install,  maintain,  use and repair  and  replace  pipes,  ducts,
conduits and wires  leading  through the Demised  Premises in locations  serving
other parts of the Building  which will not  materially  interfere with Tenant's
use of the Demised Premises. Landlord also reserves the right to construct other
buildings or improvements  from time to time and to make alterations  thereof or
additions  thereto  and to build  additional  stories  on any such  Building  or
buildings and to build  adjoining same and to construct such parking  facilities
as may be necessary or desirable.

It is understood and agreed that the description of the Demised  Premises as set
forth in  EXHIBIT A hereof  and the  location  of the  Demised  Premises  in the
Building hereof shall be subject to such changes as m be certified by Landlord's
architect  as  necessary  for  engineering  or  architectural  purposes  for the
construction  of the  improvements  to be constructed  thereon,  so long as such
changes do not materially change the Demised Premises or adversely affect access

                                       14
<PAGE>

to the  Demised  Premises.  SUCH  CHANGE  WILL NOT ALTER THE SIZE OF THE DEMISED
PREMISES  MORE THAN TWO PERCENT (2%) AND THE  CALCULATION  OF RENTS THAT ARE DUE
BASED UPON THAT SIZE. Any such changes so certified  shall not  invalidate  this
Lease and the description and location of the Demised Premises shall be deemed I
have been expressly modified and amended herein in accordance with such changes.
All such changes shall maintain the first class status of the business park.

SECTION 9.02 - THIS SECTION HAS BEEN INTENTIONALLY DELETED.

SECTION 9.03 -    ACCESS TO DEMISED PREMISES

Landlord shall have the right,  either itself or through its authorized  agents,
to enter the Demised Premises WITH PRIOR VERBAL NOTICE at all reasonable  times,
to examine the same, to show them to prospective tenants for other spaces in the
Building or for the Demised Premises, to allow inspection by mortgagees,  and to
make such repairs,  alterations or changes as Landlord deems necessary.  In case
of  emergency,  Landlord or Landlord's  authorized  agent may access the Demised
Premises at any time without any  liability to the Tenant.  Tenant,  its agents,
employees,  invitees,  and guests, shall have the right of ingress and egress to
common  and  public  areas of the  Building,  provided  Landlord  by  reasonable
regulation may control such access for the comfort,  convenience  and protection
of all tenants in the Building.

Tenant  agrees to provide  Landlord with one (1) key to each lock in the Demised
Premises.

SECTION 9.04 -    LANDLORD'S RULES AND REGULATIONS

Landlord  reserves  the  right  to  establish  (and  change  from  time to time)
regulations it deems  appropriate for the common use and benefit of all tenants,
with which  regulations  Tenant  shall  comply.  Landlord  may sell the Building
without  affecting the  obligations of Tenant  hereunder.  NO RULE OR REGULATION
SHALL UNREASONABLY, MATERIALLY OR ADVERSELY AFFECT TENANT'S RIGHTS HEREUNDER.

SECTION 9.05 -    WINDOW TREATMENTS, SIGNS, AND EXTERIOR APPEARANCE

Tenant may not erect,  install, or display any sign,  advertising  material,  or
window  treatment on any wall or window surface of the Demised  Premises visible
from the exterior or on the Building,  without the prior written  consent of the
Landlord.  Landlord will not approve any signs,  advertising  material or window
treatments  which, in the sole discretion of the Landlord,  are detrimental to a
consistent and well maintained external appearance of the Building,  Property or
the Common Area. Landlord shall furnish, install, and maintain an individualized
Tenant identification sign, built to Landlord's specifications, on the facade of
the Building.  Owner reserves the right, at anytime, to change the name by which
the Property is designated.

SECTION 9.06 -    LANDLORD'S PERFORMANCE OF TENANT'S OBLIGATIONS

In the event the Tenant  shall  fail to  discharge  any  duties and  obligations
hereunder  imposed upon Tenant,  the Landlord shall have the right,  but not the
obligation,  to perform  such duties or  obligations  and,  in such  event,  the
Landlord and its agents shall be entitled to receive as  reimbursement  from the
Tenant, upon demand, an amount equal to One Hundred Twenty Percent (120%) of the

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<PAGE>

total of all  costs  and  expenses.  Any such  reimbursement  and  charge  shall
constitute Additional Rents hereunder.

                                   ARTICLE 10
                            FINANCING AND REFINANCING

SECTION 10.01 -   SUBORDINATION- ATTORNMENT

This Lease shall be deemed  subject and  subordinate  to any mortgage  which may
heretofore  or hereafter be executed by Landlord  covering the Building and land
upon which the  Building  is  located,  and to all  renewals,  modifications  or
extensions  thereof.  The  Landlord's  interest in this Lease may be assigned as
security for any financing now or hereafter  required by Landlord.  In the event
any  proceedings  are brought or notice given by any assignee for foreclosure of
any mortgage on the  Building or for the exercise of any rights  pursuant to any
mortgage or  assignment,  upon  demand,  Tenant  will  attorn to the  mortgagee,
assignee  or  purchaser  at a  foreclosure  sale  as the  case  may be and  will
recognize  such  assignee,  mortgagee or purchaser as Landlord,  providing  such
assignee,  mortgagee or purchaser agrees not to disturb  Tenant's  possession so
long as Tenant is not in  default  under the terms of this  Lease.  In the event
that Tenant  refuses to or does not  respond to  Landlord's  written  request to
execute any  documents  required by any  mortgagee,  assignee  or  purchaser  as
aforesaid  within ten calendar days,  Tenant shall be presumed to consent to the
contents thereof, and any such mortgagee, assignor or purchaser may conclusively
rely thereon.

SECTION 10.02 -   ESTOPPEL CERTIFICATE

Tenant will furnish to Landlord  and/or to the holder of any mortgage  from time
to time  encumbering  the Demised  Premises,  a  statement  of the status of any
matter pertaining to this Lease, including,  without limitation,  acknowledgment
that (or the  extent to  which)  the Lease is in full  force  and  effect,  that
Landlord is in compliance with its respective obligations  thereunder,  and that
Tenant has no offsets or claims against  Landlord.  Tenant agrees to execute and
deliver  within  fifteen  (15) days after  receipt  thereof;  an  instrument  of
estoppel in the form or substantially in the form annexed hereto as EXHIBIT D In
the event that Tenant refuses or does not respond to Landlord's  written request
to execute and return the  foregoing  instrument  within  twenty (20) days after
Tenant's  receipt  thereof,  the  Tenant  shall be  presumed  to  consent to the
contents  thereof,   and  any  such  mortgagee,   assignor,   or  purchaser  may
conclusively rely thereon.

SECTION 10.03 -   CERTAIN CHANGES FOR FINANCING

If Landlord seeks a loan on the Demised  Premises,  Building or Property and the
proposed mortgagee requires as a condition of making the loan that this Lease be
modified, Tenant agrees to enter into such modification agreement providing that
the same  does not  increase  the  charges  to  Tenant,  does not vary the areas
demised,  does not change  the Term of  Tenant's  Lease and does not  materially
increase or vary Tenant's obligations, duties or covenants under this Lease.

                                   ARTICLE 11
                           DESTRUCTION OR CONDEMNATION

SECTION 11.01 -   DESTRUCTION OF PREMISES

                                       16
<PAGE>

If the Demised  Premises  are totally  destroyed  by fire or other  casualty not
resulting  from the  wrongful or  negligent  act of Tenant,  either  Landlord or
Tenant may by written  notice,  given not later than  thirty (30) days after the
date of such total  destruction,  terminate this Lease, in which event rent paid
for the period beyond the date of  destruction  shall be refunded to Tenant.  If
there is not total  destruction  and  Tenant  reasonably  is  required  to close
operation  during  repairs,  rent shall abate while so closed,  but if Tenant is
able to continue  its  operations  during  repairs,  rent shall be adjusted  and
prorated in the proportion  which the area of unusable leased space bears to the
total Demised Premises,  providing that Landlord shall not in such case have any
liability for losses  claimed by Tenant.  However,  if: (i) the damages are such
that Landlord  concludes that restoration cannot be completed within one hundred
arid fifty  (150) days;  or (ii) less than ten  percent  (10%) of the Lease Term
Remains;  or (iii) in Landlord's  judgment,  the cost of restoration will exceed
the amount of one (1) years minimum rent; or (iv) insurance  carried by Landlord
is  insufficient to restore the Premises,  Landlord may at its option  terminate
this Lease. If the Demised Premises are damaged by cause due to fault or neglect
of Tenant,  its agents,  employees,  invitees,  or licensees,  there shall be no
apportionment  or abatement of rent.  Landlord  shall not be required to restore
fixtures  or  improvements  made or  owned  by  Tenant  that  were  not  part of
Landlord's Work or subsequently  constructed in the Demised Premises by Landlord
as part of the Lease  terms.  In the event of damage due to  casualty,  Landlord
shall not be obligated to restore any portion of the Tenant's  Personal Property
or the Landlord's Personal Property,  as each is described in EXHIBIT H attached
hereto.

SECTION 11.02 -   CONDEMNATION

If the whole or more than twenty (20%) per cent of the Demised Premises is taken
by any governmental  agency or corporation  vested with the right of exercise of
eminent domain, whether such taking be effected by Court action or by settlement
with the agency  exercising  or  threatening  to exercise  such power and if the
property so taken  renders the remainder of the Demised  Premises  unfit for the
use  thereof by Tenant,  then  Tenant  shall have the option to  terminate  this
Lease, which option must be exercised by notice in writing, received by Landlord
within  sixty  (60)  days of such  taking.  if the  Tenant  shall  not  elect to
terminate,  or if the taking does not interfere with Tenant's use of the Demised
Premises to the extent Tenant does not have an option to terminate,  there shall
be an  adjustment of all rents  reflecting on a pro-rata  basis any reduction in
the Demised Premises.

If the whole of the Demised  Premises  shall be acquired or condemned by eminent
domain for any public or quasi-public use or purpose, then the Term of the Lease
shall  cease and  terminate  as of the date of title  vesting in such  public or
quasi public entity and all rents shall be paid up to that date and Tenant shall
have no claim against Landlord nor the condemning authority for the value of any
unexpired Term of this Lease.  In the event of a partial taking or  condemnation
which is not extensive enough to render the Demised Premises  unsuitable for the
business of the Tenant, the Landlord shall promptly restore the Demised Premises
to .a condition  comparable  to its  condition at the time of such  condemnation
less the portion lost in the taking, and this Lease shall continue in full force
and effect with the rents proportionally adjusted.

If the whole,  or a  substantial  part,  as  determined  by Landlord in its sole
discretion,  of the common  parking  areas  shall be acquired  or  condemned  as
aforesaid,  then the term of this Lease shall cease and terminate as of the date
of title  vesting in such public or quasi public entity  unless  Landlord  shall
take immediate steps to provide other suitable parking facilities,  In the event

                                       17
<PAGE>

that Landlord shall provide such other parking facilities, then this Lease shall
continue in full force and effect without any reduction or abatement of rent.

In the  event of any  condemnation  or  taking as  aforesaid,  whether  whole or
partial, the Tenant shall not be entitled to any part of the award paid for such
condemnation  and  Landlord is to receive  the full  amount of such  award,  the
Tenant hereby expressly waiving any right to claim to any part thereof. Although
all  damages  in the event of any  condemnation  are to belong to the  Landlord,
whether such damages are awarded as compensation  for diminution in value of the
leasehold  or to the fee of the  Premises,  Tenant shall have the right to claim
and  recover  from  the  condemning  authority,  but  not  from  Landlord,  such
compensation  as may be separately  awarded or recoverable by Tenant in Tenant's
own on  account  of any and all  damage to  Tenant's  business  by reason of the
condemnation  and for or on account of any cost or loss to which Tenant might be
put  in  removing   Tenant's   merchandise,   furniture,   fixtures,   leasehold
improvements and equipment.

                                   ARTICLE 12
                    DEFAULT BY TENANT AND LANDLORD'S REMEDIES

SECTION 12.01 -   EVENTS OF DEFAULT

For purposes of this Lease,  the  occurrence of any one or more of the following
shall constitute an "Event of Default" hereunder:

         (a)      Tenant fails to pay any Monthly Minimum Rent, Adjusted Monthly
                  Minimum Rent,  Additional Rents or other monetary  payments as
                  and when provided in this Lease; or

         (b)      Tenant breaches any other covenant,  term, condition agreement
                  or  obligation  herein  set forth and shall  fail to cure such
                  breach within ten (10) days after written notice;  PROVIDED IF
                  TENANT COMMENCES A CURE WITHIN SUCH THIRTY (30) DAY PERIOD AND
                  DILIGENTLY  AND IN GOOD FAITH  CONTINUES  TO EFFECT SAID CURE,
                  THE LANDLORD SHALL EXTEND THE PERIOD OF THE TIME TO CURE SAME;

         (c)      The  commencement  in any court or tribunal of any proceeding,
                  voluntary  or  involuntary,  to declare  Tenant  insolvent  or
                  unable to pay its debts as and when due;

         (d)      The assignment by Tenant of all or any part of its property or
                  assets for the benefit of creditors;

         (e)      The levy or  execution,  attachment,  or taking  of  property,
                  assets, or the leasehold  interest of Tenant by process of law
                  or otherwise in satisfaction of any judgment, debt, or claim;

         (f)      The  filing by Tenant of any  petition  or action  for  relief
                  under    any    creditor's    law    (including    bankruptcy,
                  reorganization,  or  similar  actions),  either  in  state  or
                  federal court;

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<PAGE>

         (g)      The filing against Tenant of any petition or action for relief
                  under    any    creditor's    law    (including    bankruptcy,
                  reorganization,  or  similar  actions),  either  in  state  or
                  federal court; which is not dismissed within sixty (60) days.

         (h)      Failure  to  comply  with  Section  4.02  Hazardous  Waste and
                  Related Matters.

Upon the  occurrence  of any Event of  Default,  Landlord  shall be  entitled by
written  notice to the Tenant to either (1) terminate the Term hereof or (ii) to
terminate  Tenant's right to possession or occupancy only,  without  terminating
the Term of this Lease. Unless the Term is specifically- terminated by notice in
writing,  it shall be  assumed  that  the  Landlord  has  elected  to  terminate
possession only, without terminating the Term.

The remedies of terminating  the Term or of terminating  possession  shall be in
addition  to and not in  limitation  of any rights  otherwise  available  to the
Landlord  and the  exercise  of any rights on  default  shall not  preclude  the
exercise of any other rights available to the Landlord at law or in equity.

SECTION 12.02 -   LANDLORD'S RIGHTS ON TERMINATION OF TERM OR POSSESSION

Upon any termination of the Term hereof,  whether by lapse of time or otherwise,
or upon any  termination  of Tenant's  right to  possession  or occupancy  only,
without  terminating  the Term hereof,  Tenant shall  surrender  possession  and
vacate  the  Demised  Premises  and  shall  deliver  possession  thereof  to the
Landlord;  and Tenant  hereby  grants to Landlord full and free license to enter
into and upon the Demised  Premises in such event and with or without process of
law to repossess  the Demised  Premises as of  Landlord's  former  estate and to
expel or remove Tenant and any others who may be occupying the Demised  Premises
and to remove therefrom any and all property,  using for such purpose such force
as may be necessary without being guilty of or liable for trespass,  eviction or
forcible entry or detainer and without relinquishing Landlord's right to rent or
any other right given to Landlord  hereunder or by  operation of law.  Except as
otherwise  expressly provided in this Lease,  Tenant hereby expressly waives the
service and demand for payment of rent or for possession of the Demised Premises
or to re-enter the Demised Premises,  including any and every form of demand and
notice prescribed by any statute or any other law.

If Landlord  elects to  terminate  Tenant's  right to  possession  only as above
provided,  without terminating the Term hereof, Landlord at its option may enter
into the Demised  Premises,  remove  Tenants's  property and other  evidences of
tenancy and take and hold  possession  thereof without such entry and possession
terminating the Term hereof and without  releasing Tenant from its obligation to
pay rents herein  reserved  for the full Term hereof.  Upon and after entry into
possession without terminating such obligations,  Landlord may, but shall not be
obligated to, relet the Demised Premises,  or any part for the account of Tenant
to any person,  firm or  corporation  other than Tenant for such rent,  for such
time, and upon such terms as Landlord in its sole discretion shall determine. If
any rent collected by Landlord upon any such  reletting for Tenant's  account is

                                       19
<PAGE>

not  sufficient  to pay monthly  the full  amount of the rent  herein  reserved,
(including  Monthly Minimum Rents,  Adjusted  Monthly Minimum Rents,  Additional
Rents, and other charges), and not theretofore paid by Tenant, together with the
costs of any repairs, alterations, or redecoration necessary for such reletting,
Tenant shall pay to Landlord the amount of each monthly  deficiency upon demand,
and if the rent so collected  from such reletting is more than enough to pay the
full amount of the rents reserved hereunder and all of the aforementioned costs,
Landlord  shall  be  entitled  to  retain  such  excess.   Notwithstanding   any
termination  of the right to possession  without  termination  of the Term,  the
Landlord  expressly  reserves the right, at any time after there  termination of
possession, to terminate the Term of this Lease by notice of such termination to
Tenant.

Tenant, upon expiration or termination of this Lease, either by lapse of time or
otherwise,  agrees  peaceably to surrender to Landlord the Demised  Premises and
Landlord's Personal Property in broom-clean condition and in good repair, normal
wear and tear  excepted.  In the event  Tenant  shall fail to leave the  Demised
Premises  upon  expiration or  termination  of this Lease,  unless  Landlord has
agreed in  writing  to permit  Tenant to  remain on the  Demised  Premises  on a
month-to- month basis at the most recent rental rate,  Landlord,  in addition to
all other remedies  available to it hereunder,  shall have the right to receive,
as rents for all the time  Tenant  shall so  retain  possession  of the  Demised
Premises,  or any part  thereof,  an amount equal to One Hundred  Fifty  Percent
(150%) of the Monthly  Minimum Rent and Additional  Rents  specified in Sections
1.04, in Article 2 or otherwise in this Lease, as applied to such period.

                                   ARTICLE 13
                            MISCELLANEOUS PROVISIONS

SECTION 13.01 -   ASSIGNMENT OF LEASE - SUBLEASE

Tenant may not assign or encumber this Lease, and may not sublet any part or all
of the Demised Premises without the written consent of Landlord, which shall NOT
BE UNREASONABLY WITHHELD OR DELAYED.  LANDLORD'S CONSIDERATION OF REASONABLENESS
MAY INCLUDE THE ASSIGNEE OR SUBLESSEE'S COMPATIBILITY WITI4 EXISTING TENANTS AND
THE  COMPATIBILITY OF LEASING SPACE TO NEW TENANTS.  TENANT MAY ASSIGN OR SUBLET
THIS  LEASE TO AN  AFFILIATE  PERSON  OF TENANT  PROVIDED  THAT  LANDLORD  SHALL
DETERMINE IN ITS REASONABLE  DISCRETION  THAT SUCH AFFILIATE IS COMPATIBLE  WITH
EXISTING  TENANTS AND WITH THE LEASING OF SPACE TO NEW TENANTS.  FOR PURPOSES OF
THIS  SECTION  13.01,  THE WORDS  "AFFILIATE  PERSON OF TENANT"  MEANS A PERSON,
DIRECTLY OR INDIRECTLY, THROUGH ONE OR MORE INTERMEDIARIES, CONTROLLED BY TENANT
OR UNDER  COMMON  CONTROL  WITH  TENANT.  Any  assignment  or  sublease to which
Landlord may consent  (one consent not being any basis to contend that  Landlord
should  consent  to a further  change)  shall not  relieve  Tenant of any of its
obligations  hereunder.  In no event shall this Lease be assignable by operation
of any law,  and  Tenant's  rights  hereunder  may not become,  and shall not be
listed by Tenant as an asset under any bankruptcy, insolvency, or reorganization
proceedings.  Tenant is not, may not become, and shall never represent itself to
be a agent of Landlord, and Tenant expressly recognizes that Landlord's title is
paramount, and that it can do nothing to affect or impair Landlord's title.

SECTION 13.02 -   OUTET ENJOYMENT

If  Tenant  promptly  and  punctually  complies  with  each  of its  obligations
hereunder,  it shall  peacefully  have and enjoy the  possession  of the Demised
Premises during the Term hereof, providing that no action of Landlord in work in
other space in the Building,  or in repairing or restoring the Demised Premises,
shall be deemed a breach of this  covenant,  or give  Tenant any right to modify
this Lease either as to Term,  rent payable,  or other  obligations  to perform.

                                       20
<PAGE>

However,  Landlord  shall not be  responsible  or liable to Tenant for injury or
damage resulting from acts or omissions of persons  occupying  property adjacent
to the  Demised  Premises  or any  part of the  Building  in which  the  Demised
Premises are a part, of for injury or damage resulting to Tenant or its property
from bursting,  stoppage or leaking of water, gas, sewer or steam pipes,  except
where such loss or damage arises from the willful misconduct of Landlord.

SECTION 13.03 -   SECURITY DEPOSIT

Landlord  shall  retain the  Security  Deposit as  additional  security  for the
performance by Tenant of each of its obligations  hereunder.  If Tenant fails at
any time to perform  its  obligations,  Landlord  may at its  option  apply said
deposit or so much  thereof as is required,  to cure  Tenant's  default,  but if
prior to the termination of this Lease,  Landlord depletes said deposit in whole
or in part, Tenant shall immediately restore the amount so used by Landlord, the
obligation  to so restore to be regarded  as the  obligation  to pay  Additional
Rent.  This deposit  shall not bear  interest,  and unless the Landlord uses the
same to cure a default of Tenant,  or to restore  the  Demised  Premises  to the
condition  that Tenant is required to leave them at the  conclusion of the Term,
Landlord shall,  within thirty (30) days of the termination of the Lease, refund
to Tenant, so much of the deposit as it continues to hold. If Landlord transfers
its interest in the Premises  during the Term,  Landlord may assign the Security
Deposit to the transferee and thereafter shall have no further liability for the
return of such Security Deposit.

SECTION 13.04 -   NOTICES

Any notices which Landlord or Tenant is required or desires to give to the other
shall be  deemed  sufficiently  given or  rendered  if,  in  writing,  delivered
personally,  or sent by certified or registered mail,  postage  prepaid,  to the
address listed after the respective signatures on the last page of this Lease.

Any notice  given  herein  shall be deemed  delivered  when the  return  receipt
therefore is signed,  or refusal to accept the mailing by the addressee is noted
thereon by the postal authorities.

SECTION 13.05 -   LIABILITY OF LANDLORD

In the event Landlord  shall fail to perform any covenant,  term or condition of
this Lease upon Landlord's part to be performed,  Tenant covenants and agrees to
look solely to  Landlord's  estate and interest in the Demised  Premises and the
Building in which the  Demised  Premises  are located for any  recovery of money
judgment from Landlord  from and after the date of this Lease  Agreement.  In no
event  is  Landlord,   its  officers  or  employees  or  an  individual  member,
shareholder,  general  or limited  partner  of  Landlord,  or any  successor  in
interest thereof, ever to be personally liable for any such judgment.

SECTION 13.06 -   SALE BY LANDLORD

The  Landlord may at any time assign or transfer its interest as Landlord or may
sell or transfer its interest in the property of which the Demised Premises is a
part.  The term Landlord as used in this Lease so far as the and  obligations on
the part of the Landlord are concerned, hall be limited to mean and include only
the owner or owners of the Demised  Premises at the time in question  and in the
event of any transfer or conveyance of the  Landlord's  title to such  property,
other than by an assignment for security  only, the grantee shall  automatically

                                       21
<PAGE>

be substituted and the grantor shall  automatically be released from any and all
liability   arising  with  respect  to  the  performance  of  any  covenants  or
obligations after the effective date of any such sale.

SECTION 13.07 -   BROKERAGE

Tenant  warrants  that it has had no  dealings  with  any  broker  or  agent  in
connection  with this Lease,  other than DEE CREECH  HALLYBURTON  OF  CAROLANTIC
REALTY,  INC.,  and covenants to pay, hold harmless and indemnify  Landlord from
and  against,  any and all cost,  expense  or  liability  for any  compensation,
commissions  and charges  claimed by any other  broker or agent with  respect to
this Lease or the negotiation thereof.

SECTION 13.08 -   ROOF AND WALLS

Landlord  shall have the  exclusive  right to use all or any part of the roof of
the Building for any purpose;  to erect other structures over all of any part of
the Building; and to erect in connection with the construction thereof temporary
scaffolds  and  other  aids  to  construction  on the  exterior  of the  Demised
Premises, provided that access to the Demised Premises shall not be denied.

SECTION 13.09 -   SPECIAL PROVISIONS - EXHIBIT C

Notwithstanding any contrary provisions hereof, the provisions, if any contained
within  EXHIBIT C constitute  special  provisions  and agreements of the parties
which shall supersede any provisions of this Lease which are  inconsistent  with
the provisions stated within EXHIBIT C.

SECTION  13.10  -  GENERAL  RULES  FOR  INTERPRETING  THIS  LEASE.  Headings  of
paragraphs  are for  convenience  only and shall not be considered in construing
the meaning of the contents of such paragraph.

The  acceptance  of rentals and other  payments  by  Landlord  for any period or
periods  after an Event of Default shall not be deemed a waiver of any rights on
the part of the Landlord to terminate this Lease for any other Event of Default.
No waiver by Landlord of any of the terms or  conditions  of this Lease shall be
construed as a waiver by Landlord of any subsequent Event of Default.

The  invalidity  of any provision of this Lease shall not have any effect on the
balance hereof.

Should Landlord or Tenant institute any legal proceedings  against the other for
breach of any  provision  herein  contained,  and  prevail in such  action,  the
non-prevailing party shall in addition.

                                       22
<PAGE>

IN WITNESS  WHEREOF,  Landlord and Tenant have  executed this Lease in duplicate
originals, all as of the day and year first above written.

                                   LANDLORD:

                                   Southport Business Park Limited Partnership,

                                   BY:      Southport Business Park Investors
                                            Corporation, General Partner

                                                                         (SEAL)
                                     ------------------------------------
                                            Robert T. Karp
                                            Vice President

[CORPORATE SEAL]

                                   ATTEST:

                                   BY:                                   (SEAL)
                                       ----------------------------------
                                                     (Asst) Secretary

ADDRESS FOR LANDLORD FOR NOTICES UNDER LEASE:

SOUTHPORT BUSINESS PARK LIMITED PARTNERSHIP
101 Southcenter Court, Suite 1100
Morrisville, NC 27560

GENERAL COUNSEL
General Investment & Development Co.
600 Atlantic Avenue, Suite 2000
Boston, MA 02210

*******************************************************************
                               TENANT:

                               Home Director, Inc.

                               BY:                                       (SEAL)
                                   --------------------------------------
                                        Steve Carnevale
                                        Chief Financial Officer

                               ATTEST:

                               BY:                                       (SEAL)
                                   --------------------------------------
                                        Jane Crewell, Secretary

ADDRESS FOR TENANT FOR NOTICES UNDER THIS LEASE:

Director of Contracts and Legal Affairs
Home Director, Inc.
1015 Aviation Parkway, Suite 100
Morrisville, North Carolina 27560
*******************************************************************

                                       23
<PAGE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00050-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00050-of-00352.parquet"}]]