Document:

Exhibit 10.2

                                      LEASE

                                 BY AND BETWEEN

                        Technology Centre Associates LLC,
                     a California limited liability company

                                   as Landlord

                                       and

                             Adept Technology, Inc.,
                            a California corporation

                                    as Tenant

                                  June 1, 1998

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<TABLE>
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                                TABLE OF CONTENTS

                                                                                   PAGE
<S>               <C>                                                               <C>
ARTICLE 1               REFERENCE....................................................1

         1.1      References.........................................................1

ARTICLE 2               LEASED PREMISES, TERM AND POSSESSION.........................2

         2.1      Demise Of Leased Premises..........................................2

         2.2      Right To Use Outside Areas.........................................3

         2.3      Lease Commencement Date And Lease Term.............................3

         2.4      Delivery Of Possession.............................................3

         2.5      Performance Of Improvement Work; Acceptance Of Possession..........3

         2.6      Surrender Of Possession............................................3

ARTICLE 3               RENT, LATE CHARGES AND SECURITY DEPOSITS.....................4

         3.1      Base Monthly Rent..................................................4

         3.2      Additional Rent....................................................4

         3.3      Year-End Adjustments...............................................5

         3.4      Late Charge, And Interest On Rent In Default.......................5

         3.5      Payment Of Rent....................................................6

         3.6      Prepaid Rent.......................................................6

         3.7      Security Deposit...................................................6

ARTICLE 4               USE OF LEASED PREMISES AND OUTSIDE AREA......................7

         4.1      Permitted Use......................................................7

         4.2      General Limitations On Use.........................................7

         4.3      Noise And Emissions................................................7

         4.4      Trash Disposal.....................................................7

         4.5      Parking............................................................7

         4.6      Signs..............................................................8

         4.7      Compliance With Laws And Private Restrictions......................8

         4.8      Compliance With Insurance Requirements.............................8

         4.9      Landlord's Right To Enter..........................................8

         4.10     Use Of Outside Areas...............................................9

         4.11     Environmental Protection...........................................9

                                       i.
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                                   TABLE OF CONTENTS
                                      (CONTINUED)

         4.12     Rules And Regulations.............................................11

ARTICLE 5               REPAIRS, MAINTENANCE, SERVICES AND UTILITIES................11

         5.1      Repair And Maintenance............................................11

         5.2      Tenant's Obligations..............................................11

                  (a) Landlord's Obligation.........................................11

         5.3      Utilities.........................................................12

         5.4      Security..........................................................12

         5.5      Energy And Resource Consumption...................................12

         5.6      Limitation Of Landlord's Liability................................12

ARTICLE 6               ALTERATIONS AND IMPROVEMENTS................................12

         6.1      By Tenant.........................................................12

         6.2      Ownership Of Improvements.........................................13

         6.3      Alterations Required By Law.......................................13

         6.4      Liens.............................................................13

ARTICLE 7               ASSIGNMENT AND SUBLETTING BY TENANT.........................14

         7.1      By Tenant.........................................................14

         7.2      Merger Or Reorganization..........................................14

         7.3      Landlord's Election...............................................15

         7.4      Conditions To Landlord's Consent..................................15

         7.5      Assignment Consideration And Excess Rentals Defined...............16

         7.6      Payments..........................................................16

         7.7      Good Faith........................................................16

         7.8      Effect Of Landlord's Consent......................................17

ARTICLE 8               LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY............17

         8.1      Limitation On Landlord's Liability And Release....................17

         8.2      Tenant's Indemnification Of Landlord..............................17

ARTICLE 9               INSURANCE...................................................18

         9.1      Tenant's Insurance................................................18

         9.2      Landlord's Insurance..............................................19

                                       ii.

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                                   TABLE OF CONTENTS
                                      (CONTINUED)

         9.3      Mutual Waiver Of Subrogation......................................19

ARTICLE 10              DAMAGE TO LEASED PREMISES...................................19

         10.1     Landlord's Duty To Restore........................................19

         10.2     Insurance Proceeds................................................20

         10.3     Landlord's Right To Terminate.....................................20

         10.4     Tenant's Right To Terminate.......................................20

         10.5     Tenant's Waiver...................................................21

         10.6     Abatement Of Rent.................................................21

ARTICLE 11              CONDEMNATION................................................21

         11.1     Tenant's Right To Terminate.......................................21

         11.2     Landlord's Right To Terminate.....................................21

         11.3     Restoration.......................................................21

         11.4     Temporary Taking..................................................21

         11.5     Division Of Condemnation Award....................................21

         11.6     Abatement Of Rent.................................................22

         11.7     Taking Defined....................................................22

ARTICLE 12              DEFAULT AND REMEDIES........................................22

         12.1     Events Of Tenant's Default........................................22

         12.2     Landlord's Remedies...............................................23

         12.3     Landlord's Default And Tenant's Remedies..........................24

         12.4     Limitation Of Tenant's Recourse...................................24

         12.5     Tenant's Waiver...................................................25

ARTICLE 13              GENERAL PROVISIONS..........................................25

         13.1     Taxes On Tenant's Property........................................25

         13.2     Holding Over......................................................25

         13.3     Subordination To Mortgages........................................25

         13.4     Tenant's Attornment Upon Foreclosure..............................26

         13.5     Mortgagee Protection..............................................26

         13.6     Estoppel Certificate..............................................26

                                      iii.

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                                   TABLE OF CONTENTS
                                      (CONTINUED)

         13.7     Tenant's Financial Information....................................26

         13.8     Transfer By Landlord..............................................27

         13.9     Force Majeure.....................................................27

         13.10    Notices...........................................................27

         13.11    Attorneys' Fees...................................................27

         13.12    Definitions.......................................................27

                  (a) Real Property Taxes...........................................28

                  (b) Landlord's Insurance Costs....................................28

                  (c) Property Maintenance Costs....................................28

                  (d) Building Maintenance Costs....................................29

                  (e) Property Operating Expenses...................................29

                  (f) Law  29

                  (g) Lender........................................................29

                  (h) Private Restrictions..........................................29

                  (i) Rent 29

         13.13    General Waivers...................................................29

         13.14    Miscellaneous.....................................................29

ARTICLE 14              CORPORATE AUTHORITY BROKERS AND ENTIRE AGREEMENT............30

         14.1     Corporate Authority...............................................30

         14.2     Brokerage Commissions.............................................30

         14.3     Entire Agreement..................................................30

         14.4     Landlord's Representations........................................30

ARTICLE 15              OPTION TO EXTEND............................................30

ARTICLE 16              TELEPHONE SERVICE...........................................32

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                                      iv.
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                                      LEASE

         THIS LEASE,  dated June 1, 1998 for reference purposes only, is made by
and between  TECHNOLOGY  CENTRE  ASSOCIATES LLC, a California  limited liability
company  ("Landlord"),  and ADEPT  TECHNOLOGY,  INC., a  California  corporation
("Tenant"), to be effective and binding upon the parties as of the date the last
of the designated  signatories to this Lease shall have executed this Lease (the
"Effective Date of this Lease").

                                    ARTICLE 1

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                                    REFERENCE

1.1   References.   All  references  in  this  Lease  (subject  to  any  further
clarifications  contained in this Lease) to the  following  terms shall have the
following meaning or refer to the respective address, person, date, time period,
amount, percentage, calendar year or fiscal year as below set forth:

<S>      <C>                                         <C>
         Tenant's Address for Notice:                Adept Technology, Inc.
                                                     150 Rose Orchard Way
                                                     San Jose, California 95134

         Tenant's Representative:                    Chief Financial Officer

         Landlord's Address for Notices:             c/o Menlo Equities LLC
                                                     525 University Avenue
                                                     Suite 100
                                                     Palo Alto, California  94301

         Landlord's Representative:                  Henry Bullock/Richard Holmstrom
         Phone Number:                               (650) 326-9300

         Intended Commencement Date:                 June 1, 1998

         Intended Term:                              5 years, 7 months

         Lease                                       Expiration Date:  December 31, 2003, unless earlier terminated
                                                     by  Landlord  or Tenant in  accordance  with the terms of this
                                                     Lease, or extended by Tenant pursuant to Article 15.

         Options to Renew:                           1 option to renew for a term of five (5) years.

         First Month's Prepaid Rent:                 None

         Tenant's Security Deposit:                  $92,448.00 in the form of a letter of credit

         Late Charge Amount:                         Five Percent (5%) of the Delinquent Amount

         Tenant's Required Liability
         Coverage:                                   $3,000,000 Combined Single Limit

         Broker(s):                                  Bruce Horton, Grubb & Ellis

         Property:                                   That certain real  property  situated in the City of San Jose,
                                                     County  of Santa  Clara,  State of  California,  as  presently
                                                     improved with five buildings,  which real property is shown on

                                                        1.

<PAGE>

                                                     the Site Plan  attached  hereto as Exhibit "A" and is commonly
                                                     known as or otherwise described as follows: Technology Centre,
                                                     San Jose, California.

         Building:                                   That  certain  building  within  the  Property  in  which  the
                                                     Leased Premises are located (the  "Building"),  which Building
                                                     is shown  outlined  on Exhibit  "A"  hereto.  The  Building is
                                                     commonly  known as or  otherwise  described  as  follows:  150
                                                     Rose Orchard Way, San Jose, California.

         Outside                                     Areas:  The  "Outside  Areas"  shall mean all areas within the
                                                     Property  which are  located  outside the  buildings,  such as
                                                     pedestrian  walkways,  parking areas,  landscaped  area,  open
                                                     areas and enclosed trash disposal areas.

         Leased                                      Premises:   All  the  interior   space  within  the  Building,
                                                     including  stairwells,   connecting  walkways,   and  atriums,
                                                     consisting  of  approximately  92,448  square  feet  and,  for
                                                     purposes  of this  Lease,  agreed to  contain  said  number of
                                                     square feet.

         Base                                        Monthly  Rent:  The term "Base  Monthly  Rent"  shall mean the
                                                     following:

                                                     During Period:                       Base Monthly Rent is:

                                                     Commencement Date through 12/31/98        $92,448.00
                                                     1/1/99 through 12/31/99                   $97,070.40
                                                     1/1/2000 through 12/31/2000               $101,692.80
                                                     1/1/2001 through 12/31/2001               $165,481.92
                                                     1/1/2002 through 12/31/2002               $171,953.28
                                                     1/1/2003 through 12/31/2003               $178,424.64

         Permitted                                   Use:  Light  Manufacturing,  Assembly of Industrial  Products,
                                                     General Office, Warehouse, and Research and Development.

         Tenant's Project Proportionate Share:       29.70%

         Tenant's Building Proportionate Share:      100%

         Exhibits:                                   The term  "Exhibits"  shall  mean the  Exhibits  of this Lease
                                                     which are described as follows:

                                                     Exhibit "A" - Site Plan showing the  Property and  delineating
                                                     the Building in which the Leased Premises are located.

                                                     Exhibit "B" - Floor Plan outlining the Leased Premises
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                                    ARTICLE 2

                      LEASED PREMISES, TERM AND POSSESSION

2.1  Demise Of Leased  Premises.  Landlord  hereby  leases to Tenant  and Tenant
hereby  leases from  Landlord  for  Tenant's  own use in the conduct of Tenant's
business and not for purposes of speculating in real estate,  for the Lease Term
and upon the terms and subject to the  conditions  of this Lease,  that  certain
interior  space  described in Article 1 as the Leased  Premises,  reserving  and
excepting  to  Landlord  the  right to  fifty  percent  (50%) of all  assignment

                                       2.

<PAGE>

consideration and excess rentals as provided in Article 7 below.  Tenant's lease
of the Leased Premises,  together with the appurtenant  right to use the Outside
Areas as described in Paragraph  2.2 below,  shall be subject to the  continuing
compliance by Tenant with (i) all the terms and  conditions of this Lease,  (ii)
all Laws  governing the use of the Leased  Premises and the Property,  (iii) all
Private  Restrictions,   easements  and  other  matters  now  of  public  record
respecting the use of the Leased Premises and Property,  and (iv) all reasonable
rules and regulations from time to time established by Landlord.

2.2 Right To Use Outside Areas. As an appurtenant right to Tenant's right to the
use and occupancy of the Leased Premises, Tenant shall have the right to use the
Outside Areas in conjunction  with its use of the Leased Premises solely for the
purposes for which they were  designated  and intended and for no other purposes
whatsoever.  Tenant's  right to so use the Outside Areas shall be subject to the
limitations  on  such  use  as  set  forth  in  Article  1 and  shall  terminate
concurrently with any termination of this Lease.

2.3 Lease  Commencement Date And Lease Term. Subject to Paragraph 2.4 below, the
term of this Lease shall begin, and the Lease  Commencement Date shall be deemed
to have occurred,  on the Intended  Commencement Date, as set forth in Article 1
(the "Lease Commencement  Date"). The term of this Lease shall in all events end
on the Lease  Expiration  Date (as set forth in Article 1). The Lease Term shall
be that period of time commencing on the Lease  Commencement  Date and ending on
the Lease Expiration Date (the "Lease Term").

2.4 Delivery Of  Possession.  Tenant is currently  in  possession  of the Leased
Premises and acknowledges that on the Lease  Commencement Date it shall take the
Leased Premises in their "as-is" condition.

2.5  Performance Of Improvement  Work;  Acceptance Of Possession.  Tenant hereby
acknowledges  that Tenant has  inspected  the Leased  Premises and that Landlord
shall  deliver the Leased  Premises  and all  Building or  operating  systems to
Tenant (and Tenant hereby  accepts them) in their then "AS IS"  condition,  with
all faults,  subject to  Landlord's  maintenance  and repair  obligations  under
Section 5.1(b) hereof.

2.6 Surrender Of  Possession.  Immediately  prior to the  expiration or upon the
sooner termination of this Lease, Tenant shall remove all of Tenant's signs from
the exterior of the Building and shall remove all of Tenant's  equipment,  trade
fixtures, furniture, supplies, wall decorations and other personal property from
within the Leased Premises, the Building and the Outside Areas, shall vacate and
surrender the Leased Premises,  the Building, the Outside Areas and the Property
to  Landlord  in the same  condition,  broom  clean,  as  existed  at the  Lease
Commencement  Date,  reasonable  wear and tear  excepted,  and shall  repair all
damage  caused by such  removal.  Tenant  shall  repair all damage to the Leased
Premises,  the exterior of the Building and the Outside Areas caused by Tenant's
removal of Tenant's  property.  Tenant shall patch and  refinish,  to Landlord's
reasonable satisfaction, all penetrations made by Tenant or its employees to the
floor,  walls or ceiling of the Leased Premises,  whether such penetrations were
made with Landlord's approval or not. Tenant shall repair or replace all stained
or damaged  ceiling tiles,  wall coverings and floor coverings to the reasonable
satisfaction  of Landlord,  to the extent of damage beyond  reasonable  wear and
tear. Tenant shall repair all damage to the exterior surface of the Building and
the paved  surfaces of the Outside  Areas  caused by Tenant in  connection  with
removal  activities and, where necessary,  replace or resurface same,  provided,
however,  that if such damage is covered by Landlord's  insurance,  Tenant shall
only be  responsible  for the deductible  amount,  if any.  Notwithstanding  the
foregoing,  Landlord  reserves  the  right  to  require  Tenant  to  remove  any
specialized  improvements,  including raised floor computer areas,  vaults,  and
other  improvements  of such a nature as not  likely to be  generally  usable by
likely  future  tenants of the  Building.  In the event  Landlord  requires such
removal,  Tenant shall, upon the expiration or sooner  termination of the Lease,
remove any such  improvements  and repair  all  damage  caused by such  removal.
Additionally,  to the extent that Landlord shall have notified Tenant in writing
at the time any alterations,  modifications or other improvements were completed
that it desired to have such  alterations,  modifications or other  improvements
removed at the expiration or sooner termination of the Lease, Tenant shall, upon
the expiration or sooner termination of the Lease,  remove any such alterations,
modifications  or other  improvements  constructed  or  installed by Landlord or
Tenant and repair all damage caused by such removal. If the Leased Premises, the
Building,  the Outside Areas and the Property are not surrendered to Landlord in
the condition required by this paragraph at the expiration or sooner termination
of this Lease,  Landlord may, at Tenant's  expense,  so remove  Tenant's  signs,
property  and/or   improvements  not  so  removed  and  make  such  repairs  and
replacements not so made or hire, at Tenant's expense,  independent  contractors
to perform such work.  Tenant shall be liable to Landlord for all costs incurred
by Landlord in returning the Leased Premises, the Building and the Outside Areas
to the required condition,  together with interest on all costs so incurred

                                       3.

<PAGE>

from the date paid by Landlord  until paid, at the lesser of (i) maximum rate of
interest  not  prohibited  or made  usurious by law or (ii) the sum of that rate
quoted by Wells  Fargo  Bank,  N.T. & S.A.  from time to time as its prime rate,
plus three percent (3%). Tenant shall pay to Landlord the amount of all costs so
incurred plus such interest thereon,  within ten (10) days of Landlord's billing
Tenant for same.  Tenant  shall  indemnify  Landlord  against  loss or liability
resulting from delay by Tenant in surrendering the Leased  Premises,  including,
without  limitation,  any claims made by any succeeding  Tenant or any losses to
Landlord with respect to lost opportunities to lease to succeeding tenants.

                                   ARTICLE 3

                    RENT, LATE CHARGES AND SECURITY DEPOSITS

3.1 Base Monthly Rent.  Commencing on the Lease Commencement Date (as determined
pursuant  to  Paragraph  2.3 above) and  continuing  throughout  the Lease Term,
Tenant shall pay to Landlord,  without prior demand therefor,  in advance on the
first day of each calendar month, the amount set forth as "Base Monthly Rent" in
Article 1 (the "Base Monthly Rent").

3.2 Additional Rent.  Commencing on the Lease  Commencement  Date (as determined
pursuant to Paragraph 2.3 above) and  continuing  throughout  the Lease Term, in
addition to the Base  Monthly Rent and to the extent not required by Landlord to
be contracted  for and paid directly by Tenant,  Tenant shall pay to Landlord as
additional rent (the "Additional Rent") the following amounts:

         (a) An amount equal to all Property  Operating  Expenses (as defined in
Article 13)  incurred by  Landlord.  Payment  shall be made by  whichever of the
following  methods  (or  combination  of  methods)  is (are)  from  time to time
designated by Landlord:

                  (i) Landlord may forward  invoices or bills for such  expenses
to Tenant,  and Tenant  shall,  no later than  thirty (30) days prior to the due
date,  pay such  invoices  or bills and  deliver  satisfactory  evidence of such
payment to Landlord, and/or

                  (ii) Landlord may bill to Tenant, on a periodic basis not more
frequently  than monthly,  the amount of such expenses (or group of expenses) as
paid or incurred by  Landlord,  and Tenant  shall pay to Landlord  the amount of
such  expenses  within thirty (30) days after receipt of a written bill therefor
from Landlord, or prior to delinquency, whichever is earlier and/or

                  (iii)  Landlord  may deliver to Tenant  Landlord's  reasonable
estimate  of any  given  expense  (such as  Landlord's  Insurance  Costs or Real
Property  Taxes),  or group of expenses,  which it  anticipates  will be paid or
incurred for the ensuing calendar or fiscal year, as Landlord may determine, and
Tenant  shall pay to Landlord an amount  equal to the  estimated  amount of such
expenses for such year in equal monthly  installments  during such year with the
installments of Base Monthly Rent.

Landlord  reserves  the right to change from time to time the methods of billing
Tenant for any given expense or group of expenses or the periodic basis on which
such expenses are billed.

         (b)  Landlord's  share of the  consideration  received  by Tenant  upon
certain assignments and sublettings as required by Article 7.

         (c) Any  legal  fees and  costs  that  Tenant  is  obligated  to pay or
reimburse to Landlord pursuant to Article 13; and

         (d) Any other  charges  or  reimbursements  due  Landlord  from  Tenant
pursuant to the terms of this Lease.

Notwithstanding  the  foregoing,  Landlord may elect by thirty (30) days written
notice to Tenant to have Tenant pay Real Property  Taxes or any portion  thereof
directly to the  applicable  taxing  authority,  in which case Tenant shall

                                       4.

<PAGE>

make such payments and deliver  satisfactory  evidence of payment to Landlord no
later than ten (10) days before such Real Property Taxes become delinquent.

Tenant  may cause an audit of  Landlord's  books and  records to  determine  the
accuracy of Landlord's  billings for Property  Operating  Expenses charges under
this Lease.  If such audit reveals that the actual Property  Operating  Expenses
for any given  year were less than the  amount  that  Tenant  paid for  Property
Operating  Expenses  for any such year,  then  Landlord  shall pay to Tenant the
excess.  If such audit reveals a  discrepancy  of more than five (5%) percent of
the actual  amount of any Property  Operating  Expenses  charges,  then Landlord
shall pay the cost of the audit.

Additionally,  Tenant  shall  have the right,  by  appropriate  proceedings,  to
protest or contest any  assessment,  reassessment or allocation of Real Property
Taxes or any change therein or any application of any Law to the Leased Premises
or Tenant's use thereof.  Landlord will reasonably  cooperate with Tenant in the
contest or proceedings.  If Tenant does not pay the Real Property Taxes when due
which are the subject of such  protest or contest,  Tenant  shall post a bond in
lieu thereof in an amount  reasonably  determined  by Landlord but not less than
one  hundred  twenty-five  percent  (125%) of the amount  demanded by the taxing
authorities  which holds  Landlord  and the  Property  harmless  from any damage
arising out of the contest and ensuring the payment of any judgment  than may be
rendered.  With respect to any contest of Real  Property  Taxes or Laws,  Tenant
shall hold  Landlord and the Property  harmless  from any damage  arising out of
such  protest or contest  and shall pay any  judgment  that may be  rendered  in
connection  with such  contest or protest.  Any protest or contest  conducted by
Tenant under this paragraph shall be at Tenant's expense and if interest or late
charges become payable as a result of such contest or protest,  Tenant shall pay
the same. Tenant shall receive a proportionate share of any refund applicable to
the Lease  Term  based on the  amount of Real  Property  Taxes paid by Tenant as
Tenant's Lot Proportionate Share.

3.3 Year-End Adjustments.  If Landlord shall have elected to bill Tenant for the
Property  Operating  Expenses  (or any group of such  expenses)  on an estimated
basis in accordance with the provisions of Paragraph 3.2(a)(iii) above, Landlord
shall furnish to Tenant within three months  following the end of the applicable
calendar or fiscal year,  as the case may be, a statement  setting forth (i) the
amount of such  expenses  paid or  incurred  during the just ended  calendar  or
fiscal  year,  as  appropriate,  and (ii) the  amount  that  Tenant  has paid to
Landlord for credit against such expenses for such period.  If Tenant shall have
paid more than its obligation for such expenses for the stated period,  Landlord
shall, at its election,  either (i) credit the amount of such overpayment toward
the next ensuing  payment or payments of Additional Rent that would otherwise be
due or (ii)  refund in cash to Tenant  the amount of such  overpayment.  If such
year-end  statement  shall show that Tenant did not pay its  obligation for such
expenses  in  full,  then  Tenant  shall  pay to  Landlord  the  amount  of such
underpayment  within thirty (30) days from Landlord's billing of same to Tenant.
The  provisions  of this  Paragraph  shall  survive  the  expiration  or  sooner
termination of this Lease.

3.4 Late Charge, And Interest On Rent In Default.  Tenant  acknowledges that the
late  payment by Tenant of any monthly  installment  of Base Monthly Rent or any
Additional  Rent will cause  Landlord to incur  certain  costs and  expenses not
contemplated  under  this  Lease,  the  exact  amounts  of which  are  extremely
difficult or  impractical  to fix. Such costs and expenses will include  without
limitation,  administration  and collection  costs and processing and accounting
expenses.  Therefor,  if any installment of Base Monthly Rent is not received by
Landlord from Tenant within ten calendar days after the same becomes due, Tenant
shall immediately pay to Landlord a late charge in an amount equal to the amount
set forth in Article 1 as the "Late Charge  Amount," and if any Additional  Rent
is not  received by Landlord  within ten  calendar  days after same becomes due,
Tenant shall  immediately pay to Landlord a late charge in an amount equal to 5%
of the Additional Rent not so paid, provided,  however,  that once but only once
in any twelve (12) month period during the Lease Term,  Tenant shall be entitled
to written notice of  non-receipt  of Base Monthly Rent or Additional  Rent from
Landlord,  and Tenant  shall not be liable for any Late  Charge  Amount or other
late charge  hereunder if such  installment  of Base Monthly Rent or  Additional
Rent is  received  by  Landlord  within ten (10)  business  days after  Tenant's
receipt of such notice from  Landlord.  Landlord and Tenant agree that this late
charge  represents a reasonable  estimate of such costs and expenses and is fair
compensation  to Landlord  for the  anticipated  loss  Landlord  would suffer by
reason of  Tenant's  failure  to make  timely  payment.  In no event  shall this
provision  for a late  charge be  deemed  to grant to  Tenant a grace  period or
extension of time within which to pay any rental installment or prevent Landlord
from exercising any right or remedy  available to Landlord upon Tenant's failure
to pay each  rental  installment  due under this Lease when due,  including  the
right to terminate  this Lease.  If any rent remains  delinquent for a period in
excess of 10 calendar days, then, in addition to such late charge,  Tenant

                                       5.

<PAGE>

shall pay to  Landlord  interest on any rent that is not so paid from said tenth
day at the lesser of (i) the maximum  rate of interest  not  prohibited  or made
usurious by law or (ii) the sum of that rate quoted by Wells Fargo Bank,  N.T. &
S.A. from time to time as its prime rate, plus three percent (3%).

3.5 Payment Of Rent.  Except as specifically  provided  otherwise in this Lease,
all rent  shall  be paid in  lawful  money of the  United  States,  without  any
abatement,  reduction or offset for any reason  whatsoever,  to Landlord at such
address as Landlord may designate from time to time.  Tenant's obligation to pay
Base Monthly Rent and all Additional Rent shall be appropriately prorated at the
commencement  and expiration of the Lease Term. The failure by Tenant to pay any
Additional Rent as required pursuant to this Lease when due shall be treated the
same as a failure  by Tenant to pay Base  Monthly  Rent when due,  and  Landlord
shall have the same rights and remedies  against  Tenant as Landlord  would have
had Tenant failed to pay the Base Monthly Rent when due.

3.6 Prepaid Rent.  Tenant shall,  upon execution of this Lease,  pay to Landlord
the amount set forth in Article 1 as "First Month's  Prepaid Rent" as prepayment
of rent for credit  against the first full month's  payment of Base Monthly Rent
due hereunder.

3.7 Security Deposit. Tenant has deposited with Landlord the amount set forth in
Article 1 as the "Security Deposit" as security for the performance by Tenant of
the terms of this Lease to be  performed  by Tenant,  and not as  prepayment  of
rent. Landlord may apply such portion or portions of the Security Deposit as are
reasonably  necessary for the following  purposes:  (i) to remedy any default by
Tenant in the payment of Base Monthly Rent or  Additional  Rent or a late charge
or interest on defaulted  rent,  or any other  monetary  payment  obligation  of
Tenant  under this  Lease;  (ii) to repair  damage to the Leased  Premises,  the
Building or the Outside Areas caused or permitted to occur by Tenant;  provided,
however,  that if damage  shall  occur  during the term of the  Lease,  and such
damage has not resulted in a dangerous, unsafe or unsanitary condition, Landlord
shall first notify  Tenant of such damage and Tenant shall have 30 days from the
date of such  notification  to repair such damage at its own  expense;  (iii) to
clean and restore and repair the Leased  Premises,  the  Building or the Outside
Areas  following their surrender to Landlord if not surrendered in the condition
required  pursuant to the  provisions of Article 2, and (iv) to remedy any other
default of Tenant to the extent permitted by Law including,  without limitation,
paying in full on Tenant's behalf any sums claimed by materialmen or contractors
of Tenant to be owing to them by Tenant  for work done or  improvements  made at
Tenant's  request to the Leased Premises.  In this regard,  Tenant hereby waives
any  restriction  on the uses to which the  Security  Deposit  may be applied as
contained in Section 1950.7(c) of the California Civil Code and/or any successor
statute.  In the event the Security  Deposit or any portion  thereof is so used,
Tenant shall pay to Landlord, promptly upon demand, an amount in cash sufficient
to restore the  Security  Deposit to the full  original  sum. If Tenant fails to
promptly  restore the Security Deposit and if Tenant shall have paid to Landlord
any sums as "Last Month's  Prepaid Rent," Landlord may, in addition to any other
remedy  Landlord may have under this Lease,  reduce the amount of Tenant's  Last
Month's  Prepaid  Rent by  transferring  all or  portions  of such Last  Month's
Prepaid  Rent to  Tenant's  Security  Deposit  until  such  Security  Deposit is
restored  to the amount set forth in Article 1.  Landlord  shall not be deemed a
trustee  of the  Security  Deposit.  Landlord  may use the  Security  Deposit in
Landlord's  ordinary  business  and shall not be required to  segregate  it from
Landlord's general accounts. Tenant shall not be entitled to any interest on the
Security Deposit.  If Landlord transfers the Building or the Property during the
Lease Term,  Landlord may pay the Security  Deposit to any  subsequent  owner in
conformity  with the provisions of Section  1950.7 of the California  Civil Code
and/or any successor statute, in which event the transferring  landlord shall be
released from all  liability for the return of the Security  Deposit or Landlord
may return to Tenant  the amount of the  Security  Deposit  remaining  after any
deductions made pursuant to this section. Tenant specifically grants to Landlord
(and Tenant hereby waives the provisions of California Civil Code Section 1950.7
to the  contrary)  a period of ninety days  following a surrender  of the Leased
Premises by Tenant to Landlord within which to inspect the Leased Premises, make
required  restorations  and  repairs,  receive  and  verify  workmen's  billings
therefor,  and prepare a final accounting with respect to the Security  Deposit.
In no event shall the Security  Deposit or any portion  thereof,  be  considered
prepaid rent. Notwithstanding the foregoing, in lieu of a cash Security Deposit,
Tenant may deliver to Landlord a clean, unconditional, irrevocable, transferable
letter of credit in the full amount of the Security Deposit required pursuant to
Article 1 hereof  (the  "Letter of  Credit")  in form and issued by a  financial
institution  ("Issuer")  satisfactory  to Landlord in its sole  discretion.  The
Letter of Credit shall permit partial draws,  and provide that draws  thereunder
will be honored upon receipt by Issuer of a written statement signed by Landlord
or its  authorized  agent  stating that Landlord is entitled to draw down on the
Letter of Credit pursuant to the terms of the Lease.  The Letter of Credit shall
have an expiration period of one (1) year but shall  automatically  renew by its
terms unless  affirmatively  cancelled by either Issuer or Tenant, in which case
Issuer must provide

                                       6.

<PAGE>

Landlord 30 days' prior written notice of such  expiration or  cancellation.  If
the Letter of Credit is cancelled or terminated, and not replaced within 10 days
of Landlord's  receipt of notice thereof,  Landlord shall be entitled to draw on
the entire amount of the Letter of Credit.  Any amount drawn under the Letter of
Credit shall be held or used by Landlord in accordance with this Section 3.7.

                                   ARTICLE 4

                     USE OF LEASED PREMISES AND OUTSIDE AREA

4.1 Permitted Use.  Tenant shall be entitled to use the Leased  Premises  solely
for the  "Permitted  Use" as set  forth in  Article  1 and for no other  purpose
whatsoever.  Tenant shall  continuously and without  interruption use the Leased
Premises for such purpose for the entire Lease Term. Any  discontinuance of such
use for a period of sixty  consecutive  calendar  days  shall be, at  Landlord's
election, a default by Tenant under the terms of this Lease, provided,  however,
that such  discontinuance  shall not be a default  hereunder if Tenant maintains
the Leased Premises as if fully occupied and as otherwise  required by the terms
of this Lease and if such  discontinuance is not due to the material  diminution
in  financial  strength  of the Tenant.  Tenant  shall have the right to use the
Outside  Areas in  conjunction  with its  Permitted  Use of the Leased  Premises
solely for the  purposes  for which they were  designed  and intended and for no
other purposes whatsoever.

4.2 General  Limitations  On Use.  Tenant shall not do or permit  anything to be
done in or about the Leased  Premises,  the  Building,  the Outside Areas or the
Property  which does or could (i)  jeopardize  the  structural  integrity of the
Building or (ii) cause damage to any part of the Leased Premises,  the Building,
the Outside Areas or the Property. Tenant shall not operate any equipment within
the Leased Premises which does or could (i) injure,  vibrate or shake the Leased
Premises  or the  Building,  (ii)  damage,  overload  or  impair  the  efficient
operation of any electrical,  plumbing, heating, ventilating or air conditioning
systems within or servicing the Leased Premises or the Building, or (iii) damage
or impair the  efficient  operation of the  sprinkler  system (if any) within or
servicing  the Leased  Premises or the  Building.  Tenant  shall not install any
equipment or antennas on or make any  penetrations of the exterior walls or roof
of the Building or affix any  equipment to or make any  penetrations  or cuts in
the floor, ceiling,  walls or roof of the Leased Premises without the Landlord's
written approval,  which approval shall not unreasonably be withheld or delayed,
but which approval shall be conditioned upon Tenant's  compliance with Article 2
hereof. Tenant shall not place any loads upon the floors, walls, ceiling or roof
systems which could endanger the structural  integrity of the Building or damage
its floors,  foundations or supporting structural  components.  Tenant shall not
place any explosive, flammable or harmful fluids or other waste materials in the
drainage systems of the Leased Premises,  the Building, the Outside Areas or the
Property. Tenant shall not drain or discharge any fluids in the landscaped areas
or  across  the paved  areas of the  Property.  Tenant  shall not use any of the
Outside Areas for the storage of its materials, supplies, inventory or equipment
and all such materials,  supplies,  inventory or equipment shall at all times be
stored  within the  Leased  Premises.  Tenant  shall not commit nor permit to be
committed any waste in or about the Leased Premises,  the Building,  the Outside
Areas or the Property.

4.3 Noise And Emissions.  All noise generated by Tenant in its use of the Leased
Premises  shall be  confined or muffled so that it does not  interfere  with the
businesses of or annoy the occupants  and/or users of adjacent  properties.  All
dust, fumes,  odors and other emissions  generated by Tenant's use of the Leased
Premises shall be sufficiently dissipated in accordance with sound environmental
practice and  exhausted  from the Leased  Premises in such a manner so as not to
interfere with the businesses of or annoy the occupants and/or users of adjacent
properties,  or cause any  damage to the  Leased  Premises,  the  Building,  the
Outside Areas or the Property or any  component  part thereof or the property of
adjacent property owners.

4.4 Trash  Disposal.  Tenant shall provide trash bins or other adequate  garbage
disposal  facilities  within the trash  enclosure areas provided or permitted by
Landlord outside the Leased Premises  sufficient for the interim disposal of all
of its trash,  garbage and waste. All such trash,  garbage and waste temporarily
stored in such areas  shall be stored in such a manner so that it is not visible
from outside of such areas, and Tenant shall cause such trash, garbage and waste
to be  regularly  removed  from  the  Property  in a  clean,  sanitary  and neat
condition free and clear of all trash, garbage,  waste and/or boxes, pallets and
containers containing same at all times.

4.5  Parking.  Tenant  shall not,  at any time,  park or permit to be parked any
recreational vehicles, inoperative vehicles or equipment in the Outside Areas or
on any  portion of the  Property.  Tenant  agrees to assume

                                       7.

<PAGE>

responsibility  for  compliance  by its  employees and invitees with the parking
provisions  contained herein. If Tenant or its employees park any vehicle within
the Property in violation of these  provisions,  then  Landlord  may, upon prior
written notice to Tenant giving Tenant one (1) day (or any applicable  statutory
notice  period,  if  longer  than one (1) day) to  remove  such  vehicle(s),  in
addition  to any other  remedies  Landlord  may have  under this  Lease,  charge
Tenant, as Additional Rent, and Tenant agrees to pay, as Additional Rent, Twenty
Five Dollars ($25) per day for each day or partial day that each such vehicle is
so parked within the Property.

4.6 Signs.  Tenant  shall not place or  install on or within any  portion of the
Leased Premises, the exterior of the Building, the Outside Areas or the Property
any sign,  advertisement,  banner, placard, or picture which is visible from the
exterior of the Leased Premises.  Tenant shall not place or install on or within
any portion of the Leased  Premises,  the exterior of the Building,  the Outside
Areas or the Property any business identification sign which is visible from the
exterior of the Leased  Premises  until  Landlord shall have approved in writing
and in its reasonable discretion the location,  size, content, design, method of
attachment  and  material  to be used in the  making  of  such  sign;  provided,
however,  that  so  long  as  such  signs  are  normal  and  customary  business
directional  or  identification  signs within the Building,  Tenant shall not be
required to obtain  Landlord's  approval.  Any sign,  once approved by Landlord,
shall be  installed  at  Tenant's  sole  cost  and  expense  and only in  strict
compliance  with  Landlord's  approval,  using a person  approved by Landlord to
install  same.  Landlord may remove any signs  (which have not been  approved in
writing by Landlord), advertisements, banners, placards or pictures so placed by
Tenant on or within the Leased  Premises,  the  exterior  of the  Building,  the
Outside  Areas or the  Property  and charge to Tenant the cost of such  removal,
together  with any costs  incurred  by  Landlord  to repair  any  damage  caused
thereby,  including  any cost  incurred to restore the surface  (upon which such
sign was so affixed)  to its  original  condition.  Tenant  shall  remove all of
Tenant's signs,  repair any damage caused thereby,  and restore the surface upon
which  the  sign  was  affixed  to its  original  condition,  all to  Landlord's
reasonable satisfaction, upon the termination of this Lease.

4.7  Compliance  With Laws And  Private  Restrictions.  Subject to  Section  6.3
hereof, Tenant shall abide by and shall promptly observe and comply with, at its
sole cost and expense, all Laws and Private Restrictions  respecting the use and
occupancy  of the  Leased  Premises,  the  Building,  the  Outside  Areas or the
Property  including,  without  limitation,  all Laws  governing  the use  and/or
disposal  of  hazardous  materials,  and shall  defend with  competent  counsel,
indemnify  and hold  Landlord  harmless  from any claims,  damages or  liability
resulting  from  Tenant's  failure to so abide,  observe,  or  comply.  Tenant's
obligation hereunder shall survive the termination of the Lease. Landlord hereby
represents  that it has not  recorded  or  caused  to be  recorded  any  Private
Restrictions  which have not been  disclosed  to Tenant prior to the date hereof
and which affect the Leased  Premises and would have a material  negative impact
on the Tenant or the Leased Premises.

4.8  Compliance  With  Insurance  Requirements.  With  respect to any  insurance
policies  required or permitted to be carried by Landlord in accordance with the
provision  of this  Lease,  copies  of which  have been or will,  upon  Tenant's
written request  therefor,  be provided to Tenant,  Tenant shall not conduct nor
permit any other  person to conduct any  activities  nor keep,  store or use (or
allow  any  other  person to keep,  store or use) any item or thing  within  the
Leased  Premises,  the Building,  the Outside Areas or the Property which (i) is
prohibited  under  the  terms of any such  policies,  (ii)  could  result in the
termination of the coverage  afforded  under any of such  policies,  (iii) could
give to the insurance carrier the right to cancel any of such policies,  or (iv)
could  cause an  increase in the rates  (over  standard  rates)  charged for the
coverage  afforded  under any of such  policies.  Tenant  shall  comply with all
requirements of any insurance company,  insurance underwriter,  or Board of Fire
Underwriters  which are necessary to maintain,  at standard rates, the insurance
coverages carried by either Landlord or Tenant pursuant to this Lease; provided,
however,  that if insurance  company,  insurance  underwriter,  or Board of Fire
Underwriters requires any modification,  alteration or improvement to the Leased
Premises which is of a capital  nature,  Landlord shall make such  modification,
alteration  or  improvement  and  recover  the cost from  Tenant  as a  Property
Operating Expense pursuant to Article 3 and Section 13.12.

4.9 Landlord's  Right To Enter.  Landlord and its agents shall have the right to
enter the Leased  Premises  during normal  business hours after giving Tenant at
least twenty four (24) hours prior  notice  (except in the event of an emergency
when no notice  shall re  required)  notice and subject to  Tenant's  reasonable
security  measures for the purpose of (i) inspecting the same;  (ii) showing the
Leased Premises to prospective  purchasers,  mortgagees or tenants; (iii) making
necessary alterations, additions or repairs; and (iv) performing any of Tenant's
obligations  when Tenant has failed to do so.  Landlord  shall have the right to
enter the Leased Premises during normal business hours (or as otherwise agreed),
subject to Tenant's reasonable security measures,  for purposes of supplying any

                                       8.

<PAGE>

maintenance or services  agreed to be supplied by Landlord.  Landlord shall have
the right to enter the Outside Areas during normal  business  hours for purposes
of (i)  inspecting  the  exterior of the Building  and the Outside  Areas;  (ii)
posting notices of nonresponsibility (and for such purposes Tenant shall provide
Landlord at least thirty days' prior written  notice of any work to be performed
on the Leased  Premises);  and (iii)  supplying  any  services to be provided by
Landlord.  Any entry into the Leased  Premises or the Outside Areas  obtained by
Landlord in accordance with this paragraph shall not under any  circumstances be
construed or deemed to be a forcible or unlawful  entry into,  or a detainer of,
the Leased Premises,  or an eviction,  actual or constructive of Tenant from the
Leased Premises or any portion  thereof;  provided,  however,  that at all times
during any such entry, Landlord and its agents shall use commercially reasonable
efforts to minimize any disruption or interference with access to and use of the
Leased Premises.

4.10 Use Of Outside Areas. Tenant, in its use of the Outside Areas, shall at all
times  keep  the  Outside  Areas  in a safe  condition  free  and  clear  of all
materials,  equipment,  debris,  trash (except  within  existing  enclosed trash
areas),  inoperable  vehicles,  and  other  items  which  are  not  specifically
permitted  by  Landlord  to be stored or located  thereon by Tenant.  If, in the
opinion of Landlord,  unauthorized persons are using any of the Outside Areas by
reason of, or under  claim of, the  express or implied  authority  or consent of
Tenant,  then Tenant,  upon demand of Landlord,  shall restrain,  to the fullest
extent then  allowed by Law,  such  unauthorized  use, and shall  initiate  such
appropriate proceedings as may be required to so restrain such use.

4.11  Environmental  Protection.  Tenant's  obligations  under this Section 4.11
shall survive the expiration or termination of this Lease.

         (a) As used herein, the term "Hazardous Materials" shall mean any toxic
or hazardous  substance,  material or waste or any  pollutant or  infectious  or
radioactive material,  including but not limited to those substances,  materials
or wastes regulated now or in the future under any of the following  statutes or
regulations and any and all of those substances  included within the definitions
of "hazardous  substances," "hazardous materials," "hazardous waste," "hazardous
chemical  substance or mixture,"  "imminently  hazardous  chemical  substance or
mixture," "toxic  substances,"  "hazardous air pollutant," "toxic pollutant," or
"solid waste" in the (a) Comprehensive Environmental Response,  Compensation and
Liability  Act of 1990  ("CERCLA" or  "Superfund"),  as amended by the Superfund
Amendments and Reauthorization Act of 1986 ("SARA"), 42 U.S.C.ss.  9601 et seq.,
(b) Resource Conservation and Recovery Act of 1976 ("RCRA"),  42 U.S.C.ss.  6901
et seq., (c) Federal Water Pollution Control Act ("FSPCA"), 33 U.S.C.ss. 1251 et
seq., (d) Clean Air Act ("CAA"), 42 U.S.C.ss. 7401 et seq., (e) Toxic Substances
Control  Act  ("TSCA"),  14  U.S.C.ss.  2601 et seq.,  (f)  Hazardous  Materials
Transportation  Act, 49 U.S.C.  ss. 1801, et seq., (g)  Carpenter-Presley-Tanner
Hazardous Substance Account Act ("California  Superfund"),  Cal. Health & Safety
Codess. 25300 et seq., (h) California Hazardous Waste Control Act, Cal. Health &
Safety code ss. 25100 et seq.,  (i)  Porter-Cologne  Water  Quality  Control Act
("Porter-Cologne  Act"),  Cal. Water Codess.  13000 et seq., (j) Hazardous Waste
Disposal Land Use Law, Cal.  Health & Safety  codesss.  25220 et seq.,  (k) Safe
Drinking Water and Toxic Enforcement Act of 1986 ("Proposition 65"), Cal. Health
& Safety codess.  25249.5 et seq., (l) Hazardous Substances  Underground Storage
Tank Law, Cal.  Health & Safety  codess.  25280 et seq.,  (m) Air Resources Law,
Cal.  Health & Safety  Codess.  39000 et seq., and (n)  regulations  promulgated
pursuant  to said  laws or any  replacement  thereof,  or as  similar  terms are
defined in the federal, state and local laws, statutes,  regulations,  orders or
rules. Hazardous Materials shall also mean any and all other biohazardous wastes
and  substances,  materials  and  wastes  which are,  or in the  future  become,
regulated under applicable Laws for the protection of health or the environment,
or which are classified as hazardous or toxic  substances,  materials or wastes,
pollutants  or  contaminants,  as defined,  listed or  regulated by any federal,
state or local law,  regulation or order or by common law  decision,  including,
without     limitation,     (i)     trichloroethylene,      tetrachloroethylene,
perchloroethylene and other chlorinated solvents, (ii) any petroleum products or
fractions thereof, (iii) asbestos, (iv) polychlorinted  biphenyls, (v) flammable
explosives,  (vi) urea formaldehyde,  (vii) radioactive materials and waste, and
(viii)  materials  and wastes that are harmful to or may threaten  human health,
ecology or the environment.

         (b) Notwithstanding  anything to the contrary in this Lease, Tenant, at
its sole cost,  shall  comply  with all Laws  relating to the  storage,  use and
disposal of  Hazardous  Materials in  connection  with the  Property;  provided,
however,  that Tenant shall not be responsible for  contamination  of the Leased
Premises or Outside  Areas by  Hazardous  Materials  existing as of the date the
Leased  Premises are delivered to Tenant  (whether before or after the Scheduled
Delivery Date) unless caused by Tenant.  Tenant shall not store,  use or dispose
of any Hazardous  Materials  except for those  Hazardous  Materials  listed in a
Hazardous  Materials  management  plan  ("HMMP")  which

                                       9.

<PAGE>

Tenant  shall  deliver to Landlord  upon  execution  of this Lease and update at
least annually with Landlord  ("Permitted  Materials") which may be used, stored
and  disposed  of  provided  (i) such  Permitted  Materials  are  used,  stored,
transported,  and disposed of in strict  compliance with  applicable  laws, (ii)
such Permitted  Materials shall be limited to the materials listed on and may be
used only in the  quantities  specified  in the HMMP,  and  (iii)  Tenant  shall
provide  Landlord  with  copies of all  material  safety  data  sheets and other
documentation  required under applicable Laws in connection with Tenant's use of
Permitted Materials as and when such documentation is provided to any regulatory
authority  having  jurisdiction,  in no event shall Tenant cause or permit to be
discharged  into the plumbing or sewage  system of the Building or onto the land
underlying or adjacent to the Building any Hazardous Materials.  Tenant shall be
solely  responsible for and shall defend,  indemnify,  and hold Landlord and its
agents harmless from and against all claims,  costs and  liabilities,  including
attorneys'  fees  and  costs,  arising  out of or in  connection  with  Tenant's
storage,  use  and/or  disposal  of  Hazardous  Materials.  If the  presence  of
Hazardous Materials on the Leased Premises caused or permitted by Tenant results
in  contamination  or deterioration of water or soil, then Tenant shall promptly
take  any and all  action  necessary  to clean  up such  contamination,  but the
foregoing  shall in no event be deemed to  constitute  permission by Landlord to
allow  the  presence  of such  Hazardous  Materials.  At any  time  prior to the
expiration  of the Lease Term if Tenant has a  reasonable  basis to suspect that
there has been any release or the presence of Hazardous  Materials in the ground
or ground water on the  Premises  which did not exist upon  commencement  of the
Lease Term,  Tenant shall have the right to conduct  appropriate  tests of water
and soil and to deliver to  Landlord  the  results of such tests to  demonstrate
that no  contamination in excess of permitted levels has occurred as a result of
Tenant's use of the Leased Premises.  Tenant shall further be solely responsible
for, and shall defend, indemnify, and hold Landlord and its agents harmless from
and against all claims,  costs and  liabilities,  including  attorneys' fees and
costs, arising out of or in connection with any removal, cleanup and restoration
work and  materials  required  hereunder  to return the Leased  Premises and any
other  property  of whatever  nature to their  condition  existing  prior to the
appearance of the Hazardous Materials,  except such Hazardous Materials as exist
on the Leased  Premises  because of  migration  to the Leased  Premises  from an
offsite source,  in which case Landlord may undertake any removal,  cleanup,  or
restoration  work,  the cost of which shall be  included  in Property  Operating
Expenses as defined in Section 13.12.

         (c) Upon  termination  or expiration  of the Lease,  Tenant at its sole
expense  shall  cause all  Hazardous  Materials  placed  in or about the  Leased
Premises,  the Building and/or the Property by Tenant, its agents,  contractors,
or invitees,  and all installations (whether interior or exterior) made by or on
behalf of Tenant relating to the storage,  use,  disposal or  transportation  of
Hazardous  Materials to be removed from the  property and  transported  for use,
storage  or  disposal  in  accordance  and  compliance  with all Laws and  other
requirements  respecting  Hazardous  Materials  used or  permitted to be used by
Tenant. Tenant shall apply for and shall obtain from all appropriate  regulatory
authorities  (including any applicable fire department or regional water quality
control board) all permits,  approvals and clearances  necessary for the closure
of the Property and shall take all other  actions as may be required to complete
the closure of the Building and the Property. In addition, prior to vacating the
Premises,  Tenant shall undertake and submit to Landlord an  environmental  site
assessment from an environmental  consulting  company  reasonably  acceptable to
Landlord which site  assessment  shall evidence  Tenant's  compliance  with this
Paragraph 4.11.

         (d) At any time  prior to  expiration  of the Lease  term,  subject  to
reasonable  prior  notice (not less than  forty-eight  (48) hours) and  Tenant's
reasonable   security   requirements   and  provided  such   activities  do  not
unreasonably  interfere  with the  conduct of  Tenant's  business  at the Leased
Premises,  Landlord  shall  have the  right  to enter in and upon the  Property,
Building and Leased Premises in order to conduct  appropriate tests of water and
soil to determine whether levels of any Hazardous Materials in excess of legally
permissible  levels has occurred as a result of Tenant's  use thereof.  Landlord
shall  furnish  copies of all such test  results  and  reports to Tenant and, at
Tenant's  option and cost,  shall permit split sampling for testing and analysis
by  Tenant.  Such  testing  shall  be at  Tenant's  expense  if  Landlord  has a
reasonable basis for suspecting and confirms the presence of Hazardous Materials
in the soil or surface or ground water in, on, under, or about the Property, the
Building or the Leased  Premises,  which has been caused by or resulted from the
activities of Tenant, its agents, contractors, or invitees.

         (e) Landlord may voluntarily  cooperate in a reasonable manner with the
efforts  of  all   governmental   agencies  in  reducing   actual  or  potential
environmental damage. Tenant shall not be entitled to terminate this Lease or to
any  reduction  in or  abatement  of  rent  by  reason  of  such  compliance  or
cooperation. Tenant agrees at all times to cooperate fully with the requirements
and recommendations of governmental  agencies regulating,  or otherwise involved
in, the protection of the environment.

                                      10.

<PAGE>

4.12  Rules  And  Regulations.  Landlord  have the  right  from  time to time to
establish  reasonable  rules and  regulations  and/or  amendments  or  additions
thereto  respecting the use of the Leased Premises and the Outside Areas for the
care and orderly  management of the Property.  Upon delivery to Tenant of a copy
of such rules and  regulations  or any amendments or additions  thereto,  Tenant
shall  comply with such rules and  regulations.  A violation by Tenant of any of
such rules and regulations shall constitute a default by Tenant under this Lease
provided  Tenant has received  notice of such default and has not remedied  such
default within the applicable  cure period.  If there is a conflict  between the
rules and regulations and any of the provisions of this Lease, the provisions of
this Lease shall prevail.  Landlord shall not be responsible or liable to Tenant
for the  violation  of such  rules and  regulations  by any other  tenant of the
Property.

                                   ARTICLE 5

                  REPAIRS, MAINTENANCE, SERVICES AND UTILITIES

5.1 Repair And  Maintenance.  Except in the case of damage to or  destruction of
the Leased Premises,  the Building,  the Outside Areas or the Property caused by
an act of God other  peril or  condemnation,  in which  case the  provisions  of
Article 10 and Article 11 shall  control,  the parties  shall have the following
obligations and  responsibilities  with respect to the repair and maintenance of
the Leased Premises, the Building, the Outside Areas, and the Property.

5.2 (a) Tenant's  Obligations.  Tenant shall, at all times during the Lease Term
and at its sole cost and  expense,  regularly  clean and  continuously  keep and
maintain in good order,  condition and repair  (unless such repair is occasioned
by the active or gross  negligence  of Landlord)  the Leased  Premises and every
part thereof  including,  without limiting the generality of the foregoing,  (i)
all interior walls, floors and ceilings,  (ii) all windows, doors and skylights,
(iii)  all  electrical  wiring,  conduits,  connectors  and  fixtures,  (iv) all
plumbing,  pipes, sinks, toilets, faucets and drains, (v) all lighting fixtures,
bulbs and lamps and all heating, ventilating and air conditioning equipment, and
(vi) all entranceways to the Leased Premises.  Tenant,  if requested to do so by
Landlord,  shall hire,  at Tenant's sole cost and expense,  a licensed  heating,
ventilating and air conditioning  contractor to regularly and periodically  (not
less  frequently   than  every  three  months)  inspect  and  perform   required
maintenance  on the heating,  ventilating  and air  conditioning  equipment  and
systems  serving the Leased  Premises,  or  alternatively,  Landlord may, at its
election,  contract in its own name for such regular and periodic inspections of
and maintenance on such heating,  ventilating and air conditioning equipment and
systems and charge to Tenant,  as Additional Rent, the cost thereof.  Tenant, if
requested to do so by Landlord, shall hire, at Tenant's sole cost and expense, a
licensed roofing  contractor to regularly and periodically  (not less frequently
than every three months) inspect and perform required maintenance on the roof of
the Leased Premises, or alternatively,  Landlord may, at its election,  contract
in its own name for such regular and periodic  inspections of and maintenance on
the roof and charge to Tenant,  as Additional  Rent,  the cost  thereof.  Tenant
shall,  at all times during the Lease Term,  keep in a clean and safe  condition
the Outside Areas.  Tenant shall regularly and periodically  sweep and clean the
driveways and parking areas. Tenant shall, at its sole cost and expense,  repair
all  damage to the Leased  Premises,  the  Building,  the  Outside  Areas or the
Property  caused  by the  activities  of  Tenant,  its  employees,  invitees  or
contractors  promptly  following  written notice from Landlord to so repair such
damages.  If Tenant  shall fail to perform the required  maintenance  or fail to
make  repairs  required  of it pursuant to this  paragraph  within a  reasonable
period of time  following  notice from  Landlord to do so, then Landlord may, at
its election and without  waiving any other remedy it may  otherwise  have under
this Lease or at law,  perform such  maintenance or make such repairs and charge
to Tenant,  as Additional  Rent, the costs so incurred by Landlord for same. All
glass within or a part of the Leased Premises, both interior and exterior, is at
the sole risk of Tenant and any broken  glass  shall  promptly  be  replaced  by
Tenant at Tenant's expense with glass of the same kind, size and quality. Tenant
shall be  entitled  to the  benefit  of any  warranties  in  favor  of  Landlord
applicable to Tenant's  obligations  under Section 5.1(a).  Notwithstanding  the
foregoing, if any of Tenant's obligations in this Section 5.2(a) requires Tenant
to make a capital improvement,  Landlord shall make such capital improvement and
recover the cost from Tenant as a Property Operating Expense pursuant to Article
3 and Section 13.12.

         (b)  Landlord's  Obligation.  Landlord  shall,  at all times during the
Lease  Term,  maintain  in  good  condition  and  repair  the  foundation,  roof
structure,  load-bearing  and  exterior  walls of the  Building  and the Outside
Areas.  The provisions of this  subparagraph (b) shall in no way limit the right
of Landlord to charge to Tenant,  as  Additional  Rent pursuant to Article 3 (to
the extent  permitted  pursuant to Article 3), the costs incurred by Landlord in
performing such maintenance and/or making such repairs.

                                      11.

<PAGE>

5.3 Utilities.  Tenant shall arrange at its sole cost and expense and in its own
name, for the supply of gas and electricity to the Leased Premises. In the event
that  such  services  are not  separately  metered,  Tenant  shall,  at its sole
expense,  cause such meters to be installed.  Landlord  shall maintain the water
meter(s)  in its own name;  provided,  however,  that if at any time  during the
Lease Term Landlord  shall  require  Tenant to put the water service in Tenant's
name,  Tenant shall do so at Tenant's sole cost. Tenant shall be responsible for
determining if the local supplier of water,  gas and  electricity can supply the
needs of Tenant  and  whether  or not the  existing  water,  gas and  electrical
distribution  systems  within the Building and the Leased  Premises are adequate
for Tenant's needs.  Tenant shall be responsible for determining if the existing
sanitary  and storm sewer  systems now  servicing  the Leased  Premises  and the
Property  are  adequate  for  Tenant's  needs.  Tenant shall pay all charges for
water, gas,  electricity and storm and sanitary sewer services as so supplied to
the Leased Premises,  irrespective of whether or not the services are maintained
in Landlord's or Tenant's name.

5.4 Security.  Tenant  acknowledges  that Landlord has not  undertaken  any duty
whatsoever  to provide  security  for the Leased  Premises,  the  Building,  the
Outside Areas or the Property and, accordingly,  Landlord is not responsible for
the  security  of  same or the  protection  of  Tenant's  property  or  Tenant's
employees,  invitees or contractors.  To the extent Tenant  determines that such
security or protection services are advisable or necessary, Tenant shall arrange
for and pay the costs of providing same.

5.5 Energy And Resource  Consumption.  Landlord may  voluntarily  cooperate in a
reasonable  manner  with the efforts of  governmental  agencies  and/or  utility
suppliers in reducing energy or other resource  consumption within the Property.
Tenant shall not be entitled to terminate  this Lease or to any  reduction in or
abatement of rent by reason of such compliance or cooperation.  Tenant agrees at
all times to cooperate fully with Landlord and to abide by all reasonable  rules
established by Landlord (i) in order to maximize the efficient  operation of the
electrical,  heating,  ventilating  and air  conditioning  systems and all other
energy or other  resource  consumption  systems with the Property given Tenant's
Permitted Use and/or (ii) in order to comply with the reasonable requirements of
utility suppliers and governmental agencies regulating the consumption of energy
and/or other resources.

5.6 Limitation Of Landlord's  Liability.  Landlord shall not be liable to Tenant
for injury to Tenant, its employees, agents, invitees or contractors,  damage to
Tenant's property or loss of Tenant's  business or profits,  nor shall Tenant be
entitled to terminate  this Lease or to any reduction in or abatement of rent by
reason of (i) Landlord's  failure to provide security services or systems within
the  Property for the  protection  of the Leased  Premises,  the Building or the
Outside  Areas,  or the protection of Tenant's  property or Tenant's  employees,
invitees,  agents or  contractors,  or (ii)  Landlord's  failure to perform  any
maintenance or repairs to the Leased Premises,  the Building,  the Outside Areas
or the Property until Tenant shall have first notified Landlord,  in writing, of
the need for such  maintenance  or repairs,  and then only after  Landlord shall
have had a reasonable period of time following its receipt of such notice within
which  to  perform  such   maintenance   or  repairs,   or  (iii)  any  failure,
interruption,  rationing or other  curtailment in the supply of water,  electric
current, gas or other utility service to the Leased Premises,  the Building, the
Outside Areas or the Property from whatever cause (other than Landlord's  active
or gross negligence or willful misconduct),  or (iv) the unauthorized  intrusion
or entry into the Leased  Premises by third parties  (other than  Landlord,  its
agents or contractors).

                                   ARTICLE 6

                          ALTERATIONS AND IMPROVEMENTS

6.1 By Tenant.  Tenant shall not make any alterations to or modifications of the
Leased Premises or construct any  improvements  within the Leased Premises until
Landlord shall have first  approved,  in writing,  the plans and  specifications
therefor, which approval shall not be unreasonably withheld or delayed. All such
modifications,  alterations or  improvements,  once so approved,  shall be made,
constructed  or installed by Tenant at Tenant's  expense  (including  all permit
fees and  governmental  charges related  thereto),  using a licensed  contractor
first  reasonably  approved by  Landlord,  in  substantial  compliance  with the
Landlord-approved  plans and  specifications  therefor.  All work  undertaken by
Tenant shall be done in accordance  with all Laws and in a good and  workmanlike
manner using new materials of good quality. Tenant shall not commence the making
of any  such  modifications  or  alterations  or the  construction  of any  such
improvements  until (i) all required  governmental  approvals  and permits shall
have been obtained,  (ii) all requirements  regarding  insurance imposed by this
Lease have been satisfied,  (iii)

                                      12.

<PAGE>

Tenant  shall have given  Landlord  at lease five  business  days prior  written
notice of its intention to commence such work so that Landlord may post and file
notices of non-responsibility,  and (iv) if requested by Landlord,  Tenant shall
have obtained contingent liability and broad form builder's risk insurance in an
amount satisfactory to Landlord in its reasonable discretion to cover any perils
relating  to the  proposed  work not  covered  by  insurance  carried  by Tenant
pursuant  to  Article  9.  In no  event  shall  Tenant  make  any  modification,
alterations or  improvements  whatsoever to the Outside Areas or the exterior or
structural components of the Building including, without limitation, any cuts or
penetrations in the floor, roof or exterior walls of the Leased Premises without
Landlord's written approval,  which approval shall not be unreasonably  withheld
or delayed. As used in this Article, the term "modifications, alterations and/or
improvements" shall include, without limitation,  the installation of additional
electrical  outlets,  overhead lighting  fixtures,  drains,  sinks,  partitions,
doorways, or the like. Notwithstanding the foregoing, Tenant, without Landlord's
prior written consent, shall be permitted to make non-structural  alterations to
the  Building,  provided  that:  (a)  such  alterations  do not  exceed  $25,000
individually or $50,000 in the aggregate in any twelve month period,  (b) Tenant
shall timely  provide  Landlord the notice  required  pursuant to Paragraph  4.9
above,  (c) Tenant shall notify  Landlord in writing  within thirty (30) days of
completion  of the  alteration  and  deliver to  Landlord a set of the plans and
specifications  therefor,  either  "as  built" or  marked  to show  construction
changes  made,  and (d)  Tenant  shall,  upon  Landlord's  request,  remove  the
alteration at the  termination  of the Lease and restore the Leased  Premises to
their condition prior to such alteration.

6.2 Ownership Of Improvements.  All modifications,  alterations and improvements
made or added to the Leased  Premises  by Tenant  shall  remain the  property of
Tenant during the Lease.  Any such  modifications,  alterations or improvements,
once completed,  shall not be altered or removed from the Leased Premises during
the Lease Term without  Landlord's written approval first obtained in accordance
with the  provisions  of  Paragraph  6.1  above.  At the  expiration  or  sooner
termination of this Lease, all such modifications,  alterations and improvements
and all of Tenant's inventory,  equipment,  movable furniture,  wall decorations
and trade  fixtures,  shall be removed  from the  Property,  subject to Tenant's
obligations  under  Article  2 to repair  all  damage  caused  by such  removal.
Landlord shall have no obligations to reimburse Tenant for all or any portion of
the cost or value of any such  modifications,  alterations  or  improvements  so
surrendered to Landlord.  All  modifications,  alterations or improvements which
are installed or constructed  on or attached to the Leased  Premises by Landlord
and/or at  Landlord's  expense  shall be deemed real  property and a part of the
Leased  Premises  and shall be property of  Landlord.  All  lighting,  plumbing,
electrical,  heating,  ventilating and air conditioning fixtures,  partitioning,
window coverings,  wall coverings and floor coverings  installed by Tenant shall
be deemed improvements to the Leased Premises and not trade fixtures of Tenant.

6.3  Alterations   Required  By  Law.  Tenant  shall  make  all   modifications,
alterations and improvements to the Leased Premises,  at its sole cost, that are
required  by any Law  because of (i)  Tenant's  use or  occupancy  of the Leased
Premises,  the Building, the Outside Areas or the Property,  provided,  however,
that  any   modifications,   alterations  or   improvement   which  are  capital
improvements  and which are not required  because of Tenant's  particular use of
the Leased  Premises,  the Building,  the Outside Areas or the Property shall be
made  by  Landlord  and  Landlord  shall  recover  the  costs  of  such  capital
improvements  from Tenant in  accordance  with Section 13.12 and Article 3, (ii)
Tenant's application for any permit or governmental  approval, or (iii) Tenant's
making of any modifications, alterations or improvements to or within the Leased
Premises.  If Landlord  shall, at any time during the Lease Term, be required by
any   governmental   authority  to  make  any   modifications,   alterations  or
improvements  to the Building or the Property,  the cost incurred by Landlord in
making such modifications,  alterations or improvements, including interest at a
rate  equal to the  greater  of (a) 12%,  or (b) the sum of that rate  quoted by
Wells Fargo  Bank,  N.T. & S.A.  from time to time as its prime  rate,  plus two
percent (2%) ("Wells  Prime Plus Two"),  shall be amortized by Landlord over the
useful life of such modifications, alterations or improvements, as determined in
accordance  with  generally  accepted  accounting  principles,  and the  monthly
amortized  cost  of  such  modifications,  alterations  and  improvements  as so
amortized shall be considered a Property  Maintenance Cost during the Lease Term
or any extension thereof.

6.4 Liens.  Tenant  shall keep the Property and every part thereof free from any
lien,  and  shall  pay when due all  bills  arising  out of any work  performed,
materials furnished, or obligations incurred by Tenant, its agents, employees or
contractors  relating  to the  Property.  If any such claim of lien is  recorded
against  Tenant's  interest in this  Lease,  the  Property or any part  thereof,
Tenant shall bond against, discharge or otherwise cause such lien to be entirely
released within ten days after the Tenant has received notice from the Landlord,
a  contractor,  or any other  third  party.  Tenant's  failure to do so shall be
conclusively deemed a material default under the terms of this Lease.

                                      13.

<PAGE>

                                   ARTICLE 7

                       ASSIGNMENT AND SUBLETTING BY TENANT

7.1 By  Tenant.  Tenant  shall not sublet the  Leased  Premises  or any  portion
thereof  or  assign  its  interest  in this  Lease,  whether  voluntarily  or by
operation of Law,  without  Landlord's  prior written consent which shall not be
unreasonably withheld. Any attempted subletting or assignment without Landlord's
prior written  consent,  at Landlord's  election,  shall constitute a default by
Tenant under the terms of this Lease.  The  acceptance  of rent by Landlord from
any person or entity other than Tenant,  or the  acceptance  of rent by Landlord
from Tenant with knowledge of a violation of the  provisions of this  paragraph,
shall not be deemed to be a waiver by Landlord of any  provision of this Article
or this Lease or to be a consent to any  subletting by Tenant or any  assignment
of Tenant's interest in this Lease.  Without limiting the circumstances in which
it may be  reasonable  for Landlord to withhold its consent to an  assignment or
subletting,  Landlord and Tenant  acknowledge  that it shall be  reasonable  for
Landlord to withhold its consent in the following instances:

         (a) the proposed assignee or sublessee is a governmental agency;

         (b) in Landlord's  reasonable judgment,  the use of the Premises by the
proposed assignee or sublessee would involve occupancy by other than a Permitted
Use as set forth in Article 1, would entail any  alterations  which would lessen
the  value of the  leasehold  improvements  in the  Premises,  or would  require
increased services by Landlord;

         (c) in  Landlord's  reasonable  judgment,  the  financial  worth of the
proposed  assignee  is less  than  that of  Tenant  or does not meet the  credit
standards applied by Landlord;

         (d) the proposed  assignee or sublessee (or any of its  affiliates) has
been in material  default under a lease,  has been in litigation with a previous
landlord,  or in the ten years prior to the assignment or sublease has filed for
bankruptcy protection, has been the subject of an involuntary bankruptcy, or has
been adjudged insolvent;

         (e) Landlord has experienced a previous  default by or is in litigation
with the proposed assignee or sublessee;

         (f) in Landlord's  reasonable judgment,  the Premises,  or the relevant
part thereof,  will be used in a manner that will violate any negative  covenant
as to use contained in this Lease;

         (g) the use of the Premises by the proposed  assignee or sublessee will
violate any applicable law, ordinance or regulation;

         (h) the  proposed  assignee  or  sublessee  is,  as of the date of this
Lease, a tenant in the Building;

         (i) the  proposed  assignment  or sublease  fails to include all of the
terms and provisions required to be included therein pursuant to this Article 7;

         (j) Tenant is in  default  of any  monetary  or  material  non-monetary
obligation of Tenant under this Lease,  or Tenant has defaulted under this Lease
on three or more occasions  during the 12 months  preceding the date that Tenant
shall request consent; or

         (k) in the case of a subletting  of less than the entire  Premises,  if
the  subletting  would result in the division of the Premises into more than two
subparcels or would require improvements to be made outside of the Premises.

7.2  Merger Or  Reorganization.  If Tenant is a  corporation,  any  dissolution,
merger,  consolidation or other  reorganization  of Tenant, or the sale or other
transfer in the aggregate over the Lease Term of a controlling percentage of the
capital  stock of Tenant,  shall be deemed a  voluntary  assignment  of Tenant's
interest in this Lease except that any public offering of capital stock or sales
of stock  (other  than a block  trade)  through  an  over-the-counter  market or
recognized national or international  exchange shall not included in determining
whether  a

                                      14.

<PAGE>

controlling percentage of the capital stock of Tenant has been transferred.  The
phrase  "controlling  percentage"  means the  ownership of and the right to vote
stock  possessing  more than fifty percent of the total combined voting power of
all classes of Tenant's  capital stock issued,  outstanding and entitled to vote
for the election of  directors.  If Tenant is a  partnership,  a  withdrawal  or
change,  voluntary,  involuntary or by operation of Law, of any general partner,
or the dissolution of the partnership, shall be deemed a voluntary assignment of
Tenant's  interest in this Lease.  Notwithstanding  the  foregoing,  Tenant may,
without Landlord's prior written consent and without being subject to any of the
provisions of this Article 7, including without limitation,  Landlord's right to
recapture any portion of the Property,  sublet the Premises or assign this Lease
to (individually, a "Permitted Assignee," collectively,  "Permitted Assignees"):
(i) a subsidiary, affiliate, division, corporation or joint venture controlling,
controlled by or under common control with Tenant; (ii) a successor  corporation
related to Tenant by merger,  consolidation,  nonbankruptcy  reorganization,  or
government  action; or (iii) a purchaser of substantially all of Tenant's assets
located in the Leased Premises,  provided that any Permitted Assignee under (ii)
or (iii) above has a net worth equal to or greater than Tenant and does not have
any contingent or off-balance  sheet liabilities that make it less credit worthy
than Tenant.

7.3 Landlord's Election. If Tenant shall desire to assign its interest under the
Lease or to sublet the Leased Premises,  Tenant must first notify  Landlord,  in
writing,  of its intent to so assign or  sublet,  at least  thirty  (30) days in
advance of the date it intends to so assign its interest in this Lease or sublet
the Leased  Premises  but not sooner than one hundred  eighty days in advance of
such  date,  specifying  in detail  the  terms of such  proposed  assignment  or
subletting,  including  the name of the  proposed  assignee  or  sublessee,  the
property assignee's or sublessee's intended use of the Leased Premises,  current
financial statements  (including a balance sheet, income statement and statement
of cash flow,  all prepared in accordance  with  generally  accepted  accounting
principles) of such proposed assignee or sublessee,  the form of documents to be
used in effectuating such assignment or subletting and such other information as
Landlord  may  reasonably  request.  Landlord  shall  have a period  of ten (10)
business  days  following  receipt of such notice and the  required  information
within  which  to do  one  of the  following:  (i)  consent  to  such  requested
assignment or subletting subject to Tenant's  compliance with the conditions set
forth in  Paragraph  7.4 below,  or (ii) refuse to so consent to such  requested
assignment or subletting,  provided that such consent shall not be  unreasonably
refused,  or (iii) terminate this Lease as to the portion (including all) of the
Leased  Premises that is the subject of the proposed  assignment or  subletting.
During such ten (10) business day period,  Tenant covenants and agrees to supply
to Landlord,  upon request, all necessary or relevant information which Landlord
may reasonably request respecting such proposed  assignment or subletting and/or
the proposed assignee or sublessee.  Notwithstanding the foregoing,  if Landlord
elects to terminate the Lease as provided  herein,  Landlord shall notify Tenant
thereof  during such ten (10) business day period and Tenant shall have ten (10)
business days  thereafter to either (i) accept  Landlord's  termination  or (ii)
rescind its request for consent to the assignment or  subletting,  in which case
the Lease shall continue in full force and effect between Tenant and Landlord.

7.4 Conditions To Landlord's  Consent.  If Landlord elects to consent,  or shall
have been  ordered to so consent by a court of competent  jurisdiction,  to such
requested assignment or subletting,  such consent shall be expressly conditioned
upon the occurrence of each of the conditions below set forth, and any purported
assignment  or  subletting  made or  ordered  prior  to the  full  and  complete
satisfaction  of each of the  following  conditions  shall be void  and,  at the
election of Landlord, which election may be exercised at any time following such
a purported  assignment or subletting but prior to the  satisfaction  of each of
the stated conditions,  shall constitute a material default by Tenant under this
Lease until cured by satisfying  in full each such  condition by the assignee or
sublessee. The conditions are as follows:

         (a) Landlord  having  approved in form and substance the  assignment or
sublease  agreement and any ancillary  documents,  which  approval  shall not be
unreasonably  withheld  by Landlord if the  requirements  of this  Article 7 are
otherwise complied with.

         (b)  Each  such  sublessee  or  assignee  having  agreed,   in  writing
satisfactory  to Landlord  and its counsel and for the benefit of  Landlord,  to
assume,  to be bound by,  and to  perform  the  obligations  of this Lease to be
performed by Tenant which relate to space being subleased.

         (c) Tenant having fully and completely performed all of its obligations
under the terms of this Lease through and including the date of such  assignment
or subletting.

                                      15.

<PAGE>

         (d) Tenant  having  reimbursed  to Landlord  all  reasonable  costs and
reasonable  attorneys'  fees  incurred  by  Landlord  in  conjunction  with  the
processing and documentation of any such requested subletting or assignment.

         (e) Tenant having  delivered to Landlord a complete and  fully-executed
duplicate  original of such  sublease  agreement  or  assignment  agreement  (as
applicable) and all related agreements.

         (f) Tenant having paid, or having agreed in writing to pay as to future
payments,  to Landlord  fifty percent (50%) of all assignment  consideration  or
excess  rentals to be paid to Tenant or to any other on  Tenant's  behalf or for
Tenant's benefit for such assignment or subletting as follows:

                  (i) If Tenant assigns its interest under this Lease and if all
or a  portion  of the  consideration  for such  assignment  is to be paid by the
assignee at the time of the assignment,  that Tenant shall have paid to Landlord
and Landlord  shall have  received an amount equal to fifty percent (50%) of the
assignment consideration so paid or to be paid (whichever is the greater) at the
time of the assignment by the assignee; or

                  (ii) If Tenant  assigns its  interest  under this Lease and if
Tenant is to receive all or a portion of the  consideration  for such assignment
in future  installments,  that Tenant and Tenant's  assignee  shall have entered
into a written  agreement with and for the benefit of Landlord  satisfactory  to
Landlord and its counsel whereby Tenant and Tenant's  assignee  jointly agree to
pay to  Landlord  an  amount  equal to fifty  percent  (50%) of all such  future
assignment  consideration  installments  to be paid by such assignee as and when
such assignment consideration is so paid.

                  (iii) If Tenant subleases the Leased Premises, that Tenant and
Tenant's  sublessee shall have entered into a written agreement with and for the
benefit of Landlord  satisfactory to Landlord and its counsel whereby Tenant and
Tenant's  sublessee  jointly agree to pay to Landlord fifty percent (50%) of all
excess  rentals to be paid by such sublessee as and when such excess rentals are
so paid.

7.5 Assignment  Consideration  And Excess Rentals Defined.  For purposes of this
Article,  including  any  amendment  to this Article by way of addendum or other
writing, the term "assignment  consideration" shall mean all consideration to be
paid by the  assignee to Tenant or to any other party on Tenant's  behalf or for
Tenant's benefit as consideration  for such assignment,  after deduction for any
commissions  paid by Tenant or any other costs or expenses  (including,  without
limitation, tenant improvements, capital improvements, building upgrades, permit
fees,  attorneys'  fees,  and other  consultants'  fees)  incurred  by Tenant in
connection with such  assignment,  and the term "excess  rentals" shall mean all
consideration  to be paid by the  sublessee  to Tenant or to any other  party on
Tenant's behalf or for Tenant's  benefit for the sublease of the Leased Premises
in excess of the rent due to Landlord under the terms of this Lease for the same
period, after deduction for any commissions paid by Tenant or any other costs or
expenses   (including,   without  limitation,   tenant   improvements,   capital
improvements,  building  upgrades,  permit  fees,  attorneys'  fees,  and  other
consultants'  fees) incurred by Tenant in connection with such sublease.  Tenant
agrees that the portion of any  assignment  consideration  and/or excess rentals
arising  from any  assignment  or  subletting  by Tenant  which is to be paid to
Landlord  pursuant  to this  Article  now is and shall then be the  property  of
Landlord and not the property of Tenant.

7.6 Payments. All payments required by this Article to be made to Landlord shall
be made  in cash in full as and  when  they  become  due.  At the  time  Tenant,
Tenant's  assignee or sublessee  makes each such payment to Landlord,  Tenant or
Tenant's assignee or sublessee, as the case may be, shall deliver to Landlord an
itemized  statement in reasonable  detail showing the method by which the amount
due Landlord was  calculated  and  certified by the party making such payment as
true and correct.

7.7 Good  Faith.  The rights  granted to Tenant by this  Article  are granted in
consideration of Tenant's express covenant that all pertinent  allocations which
are made by Tenant between the rental value of the Leased Premises and the value
of any of Tenant's  personal  property which may be conveyed or leased generally
concurrently  with and which may  reasonably  be  considered  a part of the same
transaction  as the permitted  assignment  or  subletting  shall be made fairly,
honestly and in good faith.  If Tenant shall breach this covenant,  Landlord may
immediately  declare  Tenant to be in material  default  under the terms of this
Lease and  terminate  this Lease  and/or  exercise any other rights and remedies
Landlord has under Article 12 of this Lease.

                                      16.

<PAGE>

7.8 Effect Of Landlord's  Consent.  No subletting or  assignment,  even with the
consent of Landlord, shall relieve Tenant of its personal and primary obligation
to pay rent and to  perform  all of the other  obligations  to be  performed  by
Tenant  hereunder.  Consent by Landlord to one or more  assignments  of Tenant's
interest  in this Lease or to one or more  sublettings  of the  Leased  Premises
shall not be deemed to be a consent to any subsequent  assignment or subletting.
If Landlord  shall have been  ordered by a court of  competent  jurisdiction  to
consent to a  requested  assignment  or  subletting,  or such an  assignment  or
subletting shall have been ordered by a court of competent jurisdiction over the
objection  of  Landlord,  such  assignment  or  subletting  shall not be binding
between  the  assignee  (or  sublessee)  and  Landlord  until  such  time as all
conditions  set forth in Paragraph  7.4 above have been fully  satisfied (to the
extent not then  satisfied)  by the assignee or  sublessee,  including,  without
limitation,  the  payment to Landlord  of all agreed  assignment  considerations
and/or excess rentals then due Landlord.

                                   ARTICLE 8

                LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY

8.1 Limitation On Landlord's Liability And Release. Landlord shall not be liable
to Tenant for, and Tenant hereby releases Landlord and its partners, principals,
members, officers, agents, employees,  lenders, attorneys, and consultants from,
any and all liability,  whether in contract, tort or on any other basis, for any
injury  to or any  damage  sustained  by  Tenant,  Tenant's  agents,  employees,
contractors  or  invitees,  any  damage  to  Tenant's  property,  or any loss to
Tenant's  business,  loss of Tenant's  profits or other financial loss of Tenant
resulting  from or  attributable  to the  condition of, the  management  of, the
repair or maintenance of, the protection of, the supply of services or utilities
to, the damage in or  destruction  of the Leased  Premises,  the  Building,  the
Property or the Outside  Areas,  including  without  limitation (i) the failure,
interruption,  rationing  or other  curtailment  or  cessation  in the supply of
electricity,  water, gas or other utility service to the Property,  the Building
or the Leased  Premises;  (ii) the vandalism or forcible entry into the Building
or the Leased Premises;  (iii) the penetration of water into or onto any portion
of the Leased  Premises;  (iv) the failure to provide  security  and/or adequate
lighting in or about the Property,  the Building or the Leased Premises, (v) the
existence  of any  design or  construction  defects  within  the  Property,  the
Building or the Leased Premises;  (vi) the failure of any mechanical  systems to
function  properly (such as the HVAC  systems);  (vii) the blockage of access to
any portion of the Property,  the Building or the Leased  Premises,  except that
Tenant  does not so release  Landlord  from such  liability  to the extent  such
damage was  proximately  caused by  Landlord's  or its  agent's or  contractors'
active or gross negligence, willful misconduct, or Landlord's failure to perform
an  obligation  expressly  undertaken  pursuant to this Lease after a reasonable
period of time shall have lapsed following receipt of written notice from Tenant
to so perform such obligation.  In this regard,  Tenant  acknowledges that it is
fully apprised of the provisions of Law relating to releases,  and  particularly
to those provisions contained in Section 1542 of the California Civil Code which
reads as follows:

                  "A  general  release  does not  extend  to
                  claims which the creditor does not know or
                  suspect  to exist in his favor at the time
                  of executing  the release,  which if known
                  by him must have  materially  affected his
                  settlement with the debtor."

Notwithstanding such statutory provision,  and for the purpose of implementing a
full and complete release and discharge, Tenant hereby (i) waives the benefit of
such statutory  provision and (ii) acknowledges  that, subject to the exceptions
specifically  set forth  herein,  the  release and  discharge  set forth in this
paragraph is a full and  complete  settlement  and release and  discharge of all
claims and is intended to include in its effect, without limitation,  all claims
which Tenant, as of the date hereof, does not know of or suspect to exist in its
favor.

8.2 Tenant's  Indemnification  Of Landlord.  Tenant shall defend with  competent
counsel  satisfactory  to  Landlord  any claims made or legal  actions  filed or
threatened  against  Landlord  with respect to the  violation of any Law, or the
death,  bodily injury,  personal injury,  property damage,  or interference with
contractual or property rights suffered by any third party occurring  within the
Leased  Premises or  resulting  from  Tenant's  use or  occupancy  of the Leased
Premises,  the  Building  or the  Outside  Areas,  or  resulting  from  Tenant's
activities in or about the Leased Premises,  the Building,  the Outside Areas or
the Property, and Tenant shall indemnify and hold Landlord, Landlord's partners,
principals,  members,  employees,  agents and contractors harmless from any loss
liability,  penalties, or expense whatsoever (including any loss attributable to
vacant space which  otherwise would have been leased,  but for such  activities)
resulting  therefrom,  except to the extent proximately caused by the negligence
or willful  misconduct of Landlord,  its agents or  contractors.  This indemnity
agreement  shall  survive  until  the  latter  to

                                      17.

<PAGE>

occur of (i) the date of the expiration,  or sooner termination,  of this Lease,
or (ii) the date Tenant actually vacates the Leased Premises.

                                   ARTICLE 9

                                    INSURANCE

9.1 Tenant's  Insurance.  Tenant shall maintain insurance  complying with all of
the following:

         (a) Tenant shall procure, pay for and keep in full force and effect, at
all times during the Lease Term, the following:

                  (i) Comprehensive  general liability insurance insuring Tenant
against  liability  for  personal  injury,  bodily  injury,  death and damage to
property occurring within the Leased Premises, or resulting from Tenant's use or
occupancy  of the  Leased  Premises,  the  Building,  the  Outside  Areas or the
Property,  or resulting from Tenant's activities in or about the Leased Premises
or the Property, with coverage in an amount equal to Tenant's Required Liability
Coverage (as set forth in Article 1),  which  insurance  shall  contain a "broad
form  liability"   endorsement   insuring   Tenant's   performance  of  Tenant's
obligations to indemnify Landlord as contained in this Lease.

                  (ii) Fire and property damage insurance in so-called "fire and
extended  coverage" form insuring  Tenant  against loss from physical  damage to
Tenant's personal property,  inventory,  trade fixtures and improvements  within
the Leased Premises with coverage for the full actual replacement cost thereof;

                  (iii) Plate glass insurance, at actual replacement cost;

                  (iv) Boiler insurance, if applicable;

                  (v) Workers'  compensation  insurance  and any other  employee
benefit  insurance  sufficient to comply with all laws; and (vi) With respect to
making of alterations or the construction of improvements or the like undertaken
by Tenant,  contingent liability and builder's risk insurance,  in an amount and
with coverage reasonably satisfactory to Landlord.

         (b) Each policy of liability insurance required to be carried by Tenant
pursuant to this  paragraph  or actually  carried by Tenant with  respect to the
Leased  Premises or the  Property:  (i) shall,  except with respect to insurance
required by subparagraph  (a)(vi) above,  name Landlord,  and such others as are
designated by Landlord, as additional insureds;  (ii) shall be primary insurance
providing  that the insurer  shall be liable for the full amount of the loss, up
to and including the total amount of liability set forth in the  declaration  of
coverage,  without the right of contribution  from or prior payment by any other
insurance coverage of Landlord; (iii) shall be in a form reasonably satisfactory
to  Landlord;  (iv) shall be carried with  companies  reasonably  acceptable  to
Landlord  with Best's  ratings of at least A and XI; (v) shall provide that such
policy  shall not be subject to  cancellation,  lapse or change  except after at
least thirty days prior  written  notice to Landlord,  and (vi) shall  contain a
so-called  "severability"  or  "cross  liability"  endorsement.  Each  policy of
property  insurance  maintained by Tenant with respect to the Leased Premises or
the  Property or any property  therein (i) shall  provide that such policy shall
not be subject to  cancellation or lapse except after at least thirty days prior
written  notice to Landlord and (ii) shall  contain a waiver and/or a permission
to waive by the  insurer  of any  right of  subrogation  against  Landlord,  its
partners,  principals,  members,  officers,  employees,  agents and contractors,
which might arise by reason of any payment under such policy or by reason of any
act or  omission of  Landlord,  its  partners,  principals,  members,  officers,
employees, agents and contractors.

         (c)  Prior to the time  Tenant  or any of its  contractors  enters  the
Leased Premises,  Tenant shall deliver to Landlord,  with respect to each policy
of insurance  required to be carried by Tenant pursuant to this Article,  a copy
of such  policy  (appropriately  authenticated  by the  insurer  as having  been
issued,  premium  paid)  or a  certificate  of the  insurer  certifying  in form
satisfactory to Landlord that a policy has been issued,  premium paid, providing
the coverage required by this Paragraph and containing the provisions  specified
herein.  With respect to each renewal or

                                      18.

<PAGE>

replacement of any such  insurance,  the  requirements of this Paragraph must be
complied with not less than thirty days prior to the expiration or  cancellation
of the policies  being  renewed or replaced.  Landlord may, at any time and from
time to time, inspect and/or copy any and all insurance certificates  evidencing
the  insurance  required to be carried by Tenant  pursuant to this  Article.  If
Landlord's Lender, insurance broker, advisor or counsel reasonably determines at
any time that the  amount of  coverage  set forth in  Paragraph  9.1(a)  for any
policy of insurance  Tenant is required to carry pursuant to this Article is not
adequate,  then Tenant shall  increase the amount of coverage for such insurance
to such  greater  amount as  Landlord's  Lender,  insurance  broker,  advisor or
counsel reasonably deems adequate.

9.2 Landlord's Insurance. With respect to insurance maintained by Landlord:

         (a) Landlord shall maintain,  as the minimum coverage required of it by
this Lease,  fire and property damage  insurance in so-called "fire and extended
coverage"  form insuring  Landlord  (and such others as Landlord may  designate)
against loss from physical damage to the Building with coverage of not less than
one hundred  percent  (100%) of the full  actual  replacement  cost  thereof and
against  loss of rents for a period of not less than six  months.  Such fire and
property damage insurance,  at Landlord's  election but without any requirements
on Landlord's  behalf to do so, (i) may be written in so-called "all risk" form,
excluding only those perils  commonly  excluded from such coverage by Landlord's
then property damage insurer;  (ii) may provide  coverage for physical damage to
the  improvements so insured for up to the entire full actual  replacement  cost
thereof;  (iii) may be endorsed to cover loss or damage caused by any additional
perils against which Landlord may elect to insure,  including  earthquake and/or
flood;  and/or (iv) may provide coverage for loss of rents for a period of up to
twelve  months.  Landlord shall not be required to cause such insurance to cover
any of  Tenant's  personal  property,  inventory,  and  trade  fixtures,  or any
modifications,  alterations or improvements  made or constructed by Tenant to or
within the Leased Premises.  Landlord shall use commercially  reasonable efforts
to obtain such insurance at competitive rates.

         (b) Landlord shall maintain  comprehensive  general liability insurance
insuring  Landlord  (and such  others as are  designated  by  Landlord)  against
liability for personal  injury,  bodily  injury,  death,  and damage to property
occurring  in,  on or  about,  or  resulting  from the use or  occupancy  of the
Property,  or any portion  thereof,  with combined  single limit  coverage of at
least  Three  Million  Dollars  ($3,000,000).  Landlord  may carry such  greater
coverage as Landlord or Landlord's Lender,  insurance broker, advisor or counsel
may  from  time to time  determine  is  reasonably  necessary  for the  adequate
protection of Landlord and the Property.

         (c) Landlord may maintain any other  insurance  which in the opinion of
its  insurance  broker,  advisor or legal  counsel is prudent in carry under the
given  circumstances,  provided such insurance is commonly  carried by owners of
property similarly situated and operating under similar circumstances.

9.3 Mutual  Waiver Of  Subrogation.  Notwithstanding  anything  to the  contrary
contained  herein,  Landlord hereby releases Tenant,  and Tenant hereby releases
Landlord and each of their respective partners,  principals,  members, officers,
agents,  employees and servants,  from any and all liability for loss, damage or
injury  to the  property  of the other in or about the  Leased  Premises  or the
Property which is caused by or results from a peril or event or happening  which
is covered by insurance actually carried and in force at the time of the loss or
required to be carried under this Lease by the party  sustaining such loss. Each
of Landlord and Tenant shall obtain from the present  insurance  carrier issuing
any property  insurance policy required to be carried by this Lease, a waiver of
all right of recovery by way of  subrogation  as required  herein in  connection
with any injury or damage covered by such policy. In the vent either landlord or
Tenant changes insurance carriers,  such party shall use commercially reasonable
efforts  to obtain  such a waiver  from the new  insurance  carrier.  Failure of
either  Tenant  or  Landlord  to  obtain  such a waiver  shall  not be  deemed a
violation of this Lease or a default hereunder.

                                   ARTICLE 10

                            DAMAGE TO LEASED PREMISES

10.1 Landlord's  Duty To Restore.  If the Leased  Premises,  the Building or the
Outside  Area are damaged by any peril after the  Effective  Date of this Lease,
Landlord shall restore the same, as and when required by this paragraph,  unless
this Lease is  terminated  by Landlord  pursuant to Paragraph  10.3 or by Tenant
pursuant to

                                      19.

<PAGE>

Paragraph  10.4. If this Lease is not so  terminated,  then upon the issuance of
all necessary  governmental  permits,  Landlord  shall  commence and  diligently
prosecute to completion the restoration of the Leased Premises,  the Building or
the  Outside  Area,  as the case may be, to the extent  then  allowed by law, to
substantially   the  same  condition  in  which  it  existed  as  of  the  Lease
Commencement Date.  Landlord's  obligation to restore shall be limited to actual
receipt of insurance  proceeds and to the improvements  constructed by Landlord,
except if lack of insurance  proceeds is due to Landlord's  failure to carry the
insurance  required to be carried by Landlord  under this Lease.  Landlord shall
have no  obligation  to restore  any  Improvements  made by Tenant to the Leased
Premises or any of Tenant's personal property,  inventory or trade fixtures.  If
the Lease has not been  terminated as provided  herein,  upon  completion of the
restoration by Landlord,  Tenant shall forthwith  replace or fully repair all of
Tenant's personal  property,  inventory,  trade fixtures and other  improvements
constructed  by Tenant to like or  similar  conditions  as  existed  at the time
immediately prior to such damage or destruction.

10.2  Insurance  Proceeds.  All insurance  proceeds  available from the fire and
property  damage  insurance  carried by Landlord shall be paid to and become the
property of Landlord.  If this Lease is terminated  pursuant to either Paragraph
10.3 or 10.4, all insurance  proceeds available from insurance carried by Tenant
which  cover  loss of  property  that is  Landlord's  property  or would  become
Landlord's property on termination of this Lease shall be paid to and become the
property of Landlord,  and the remainder of such  proceeds  shall be paid to and
become the  property  of Tenant.  If this Lease is not  terminated  pursuant  to
either Paragraph 10.3 or 10.4, all insurance  proceeds  available from insurance
carried by Tenant which cover loss to property that is Landlord's property shall
be paid to and become the property of Landlord,  and all proceeds available from
such insurance which cover loss to property which would only become the property
of Landlord upon the  termination  of this Lease shall be paid to and remain the
property of Tenant.  The  determination  of  Landlord's  property  and  Tenant's
property shall be made pursuant to Paragraph 6.2.

10.3 Landlord's Right To Terminate.  Landlord shall have the option to terminate
this  Lease in the  event  any of the  following  occurs,  which  option  may be
exercised  only by  delivery  to  Tenant  of a written  notice  of  election  to
terminate within thirty days after the date of such damage or destruction:

         (a)  The  Building  is  damaged  by any  peril  covered  by  valid  and
collectible  insurance  actually carried by Landlord and in force at the time of
such  damage or  destruction  (an  "insured  peril") to such an extent  that the
estimated  cost to restore the Building  exceeds the lesser of (i) the insurance
proceeds  available from insurance actually carried by Landlord after payment of
any  deductible  (except  if lack of  insurance  proceeds  is due to  Landlord's
failure  to carry the  insurance  required  to be  carried  under  this  Lease),
provided,  however,  that Tenant may elect to fund any  shortfall  in  insurance
proceeds,  in which case,  Landlord may not terminate the Lease  pursuant to the
foregoing  provision,  or (ii) fifty percent of the then actual replacement cost
thereof;

         (b) The Building is damaged by an uninsured peril, which peril Landlord
was not required to insure  against  pursuant to the  provisions of Article 9 of
this Lease.

         (c) The Building is damaged by any peril and,  because of the laws then
in force,  the  Building  (i) cannot be restored at  reasonable  cost or (ii) if
restored, cannot be used for the same use being made thereof before such damage.

10.4 Tenant's Right To Terminate.  If the Leased  Premises,  the Building or the
Outside Area are damaged by any peril and  Landlord  does not elect to terminate
this Lease or is not entitled to terminate  this Lease pursuant to this Article,
then as soon as reasonably  practicable,  Landlord shall furnish Tenant with the
written opinion of Landlord's  architect or  construction  consultant as to when
the restoration work required of Landlord may be complete. Tenant shall have the
option to terminate this Lease in the event any of the following  occurs,  which
option may be  exercised  only by delivery  to  Landlord of a written  notice of
election to terminate  within ten (10) business days after Tenant  receives from
Landlord the estimate of the time needed to complete such restoration:

         (a) If  the  time  estimated  to  substantially  complete  or  actually
complete the restoration  exceeds 180 days,  extended for Force Majeure from and
after the date the architect's or construction  consultant's  written opinion is
delivered,  provided,  however, if Tenant intends to terminate hereunder because
the  restoration  has not been completed  within 180 days (as extended for Force
Majeure),  Tenant shall first give Landlord  written  notice of its intention to
terminate,  and then  Landlord  shall  have an  additional  sixty  (60)  days to
complete restoration; or

                                      20.

<PAGE>

         (b) If the damage  occurred within twelve months of the last day of the
Lease Term and the time  estimated to  substantially  complete  the  restoration
exceeds one  hundred  eighty  days from and after the date such  restoration  is
commenced, or

         (c) a spill of or  contamination  from Hazardous  Materials  causes the
public health  authorities  or the Fire  Department to prevent  access to Leased
Premises for a period in excess of 180 days.

10.5 Tenant's Waiver. Landlord and Tenant agree that the provisions of Paragraph
10.4 above,  captioned "Tenant's Right To Terminate",  are intended to supersede
and replace the  provisions  contained in California  Civil Code,  Section 1932,
Subdivision 2, and California Civil Code, Section 1934, and accordingly,  Tenant
hereby waives the  provisions of such Civil Code Sections and the  provisions of
any successor Civil Code Sections or similar laws hereinafter enacted.

10.6 Abatement Of Rent. In the event of damage to the Leased Premises,  the Base
Monthly Rent (and any Additional Rent) shall be temporarily abated from the date
such damage occurs through the period of restoration in proportion in the degree
to which Tenant's use of the Leased Premises is impaired by such damage.

                                   ARTICLE 11

                                  CONDEMNATION

11.1 Tenant's Right To Terminate. Except as otherwise provided in Paragraph 11.4
below  regarding  temporary  takings,  Tenant shall have the option to terminate
this  Lease if, as a result of any  taking,  (i) all of the Leased  Premises  is
taken, or (ii) twenty-five percent (25%) or more of the Leased Premises or fifty
percent  (50%) of the parking area is taken and the part of the Leased  Premises
that remains  cannot,  within a reasonable  period of time,  be made  reasonably
suitable for the continued operation of Tenant's business.  Tenant must exercise
such option within a reasonable  period of time, to be effective on the later to
occur of (i) the date that  possession  of that  portion of the Leased  Premises
that is condemned is taken by the condemnor or (ii) the date Tenant  vacated the
Leased Premises.

11.2 Landlord's  Right To Terminate.  Except as otherwise  provided in Paragraph
11.4  below  regarding  temporary  takings,  Landlord  shall  have the option to
terminate  this  Lease  if,  as a result of any  taking,  (i) all of the  Leased
Premises is taken, (ii) twenty-five percent (25%) or more of the Leased Premises
is taken and the part of the Leased Premises that remains cannot, within one (1)
year from the date of the taking, be made reasonably  suitable for the continued
operation of Tenant's business,  or (iii) because of the laws then in force, the
Leased  Premises may not be used for the same use being made before such taking,
whether or not restored as required by Paragraph 11.3 below.  Any such option to
terminate by Landlord must be exercised  within a reasonable  period of time, to
be effective as of the date possession is taken by the condemnor.

11.3  Restoration.  If any part of the Leased  Premises or the Building is taken
and this  Lease is not  terminated,  then  Landlord  shall,  to the  extent  not
prohibited by laws then in force,  repair any damage  occasioned  thereby to the
remainder  thereof to a condition  reasonably  suitable for  Tenant's  continued
operations and otherwise,  to the extent  practicable,  in the manner and to the
extent provided in Paragraph 10.1.

11.4 Temporary  Taking. If a portion of the Leased Premises is temporarily taken
for a period of 180 days or less and such  period  does not  extend  beyond  the
Lease Expiration Date, this Lease shall remain in effect.  If any portion of the
Leased  Premises is  temporarily  taken for a period  which  exceeds one year or
which extends beyond the Lease  Expiration Date, then the rights of Landlord and
Tenant shall be determined in accordance with Paragraphs 11.1 and 11.2 above.

11.5  Division  Of  Condemnation  Award.  Any award  made for any  taking of the
Property,  the Building, or the Leased Premises,  or any portion thereof,  shall
belong to and be paid to Landlord,  and Tenant hereby assigns to Landlord all of
its right, title and interest in any such award; provided,  however, that Tenant
shall be entitled to receive any portion of the award that is made  specifically
(i) for the taking of personal  property,  inventory or trade fixtures belonging
to Tenant,  (ii) for the interruption of Tenant's  business or its moving costs,
or (iii) for the value of any leasehold  improvements  installed and paid for by
Tenant.  The rights of Landlord and Tenant regarding any

                                      21.

<PAGE>

condemnation  shall be determined  as provided in this  Article,  and each party
hereby waives the provisions of Section 1265.130 of the California Code of Civil
Procedure,  and the provisions of any similar law hereinafter enacted,  allowing
either  party to  petition  the Supreme  Court to  terminate  this Lease  and/or
otherwise allocate  condemnation awards between Landlord and Tenant in the event
of a taking of the Leased Premises.  In the event of a temporary taking,  Tenant
shall  receive the entire  condemnation  award,  provided  that Tenant is not in
default  hereunder and continues pay all rent  (including  Base Monthly Rent and
Additional Rent) due under this Lease.

11.6 Abatement Of Rent. In the event of a taking of the Leased  Premises  (other
than a  temporary  taking),  then,  as of the  date  possession  is taken by the
condemning  authority,  the  Base  Monthly  Rent  shall be  reduced  in the same
proportion  that the area of that part of the Leased Premises so taken (less any
addition  to the area of the Leased  Premises  by reason of any  reconstruction)
bears to the area of the Leased Premises immediately prior to such taking.

11.7 Taking  Defined.  The term  "taking" or "taken" as used in this  Article 11
shall mean any transfer or conveyance of all or any portion of the Property to a
public or quasi-public agency or other entity having the power of eminent domain
pursuant  to or as a result of the  exercise  of such  power by such an  agency,
including  any inverse  condemnation  and/or any sale or transfer by Landlord of
all  or any  portion  of  the  Property  to  such  an  agency  under  threat  of
condemnation or the exercise of such power.

                                   ARTICLE 12

                              DEFAULT AND REMEDIES

12.1 Events Of Tenant's  Default.  Tenant shall be in default of its obligations
under this Lease if any of the following events occur:

         (a) Tenant shall have failed to pay Base Monthly Rent or any Additional
Rent when due  provided,  however,  that once but only once in any  twelve  (12)
month period during the Lease Term,  Tenant shall be entitled to written  notice
of non-receipt of Base Monthly Rent or Additional Rent from Landlord, and Tenant
shall not be in default for such delinquency if such installment of Base Monthly
Rent or  Additional  Rent is received by Landlord  within ten (10) business days
after Tenant's receipt of such notice from Landlord; or

         (b) Tenant  shall  have done or  permitted  to be done any act,  use or
thing in its use, occupancy or possession of the Leased Premises or the Building
or the  Outside  Areas which is  prohibited  by the terms of this Lease and such
failure  continues for more than five (5) days after notice  thereof by Landlord
or such longer  period as is  reasonably  required in the event such  default is
curable but not within such five (5) day period,  provided such cure is promptly
commenced  within  such  five  (5)  day  period  and  is  thereafter  diligently
prosecuted to completion; or

         (c) Tenant shall have failed to perform any term, covenant or condition
of this Lease  (except  those  requiring  the  payment of Base  Monthly  Rent or
Additional  Rent,  which failures shall be governed by  subparagraph  (a) above)
within thirty (30) days after written notice from Landlord to Tenant  specifying
the nature of such failure and requesting  Tenant to perform same or within such
longer period as is reasonably required in the event such default is curable but
not within such thirty (30) day period, provided such cure is promptly commenced
within such thirty (30) day period and is  thereafter  diligently  prosecuted to
completion; or

         (d)  Tenant  shall  have  sublet the Leased  Premises  or  assigned  or
encumbered its interest in this Lease in violation of the  provisions  contained
in Article 7, whether voluntarily or by operation of law; or

         (e) Tenant shall have abandoned the Leased Premises; or

         (f) Tenant or any  guarantor  of this Lease  shall  have  permitted  or
suffered the sequestration or attachment of, or execution on, or the appointment
of a custodian or receiver with respect to, all or any  substantial  part of the
property  or assets of  Tenant  (or such  guarantor)  or any  property  or asset
essential to the conduct of Tenant's (or such guarantor's)  business, and Tenant
(or such guarantor)  shall have failed to obtain a return or release of the same
within  sixty  (60)  days  thereafter,   or  prior  to  sale  pursuant  to  such
sequestration, attachment or levy, whichever is earlier; or

                                      22.

<PAGE>

         (g) Tenant or any  guarantor  of this  Lease  shall have made a general
assignment  of all or a  substantial  part of its assets for the  benefit of its
creditors; or

         (h) Tenant or any  guarantor  of this  Lease  shall  have  allowed  (or
sought)  to have  entered  against  it a decree or order  which:  (i)  grants or
constitutes an order for relief,  appointment of a trustee, or condemnation or a
reorganization  plan  under  the  bankruptcy  laws of the  United  States;  (ii)
approves as properly  filed a petition  seeking  liquidation  or  reorganization
under said  bankruptcy  laws or any other debtor's relief law or similar statute
of the  United  States or any state  thereof;  or (iii)  otherwise  directs  the
winding up or liquidation of Tenant;  provided,  however, if any decree or order
was entered without  Tenant's consent or over Tenant's  objection,  Landlord may
not terminate this Lease pursuant to this  Subparagraph  if such decree or order
is rescinded or reversed within sixty (60) days after its original entry; or

         (i) Tenant or any guarantor of this Lease shall have availed  itself of
the protection of any debtor's  relief law,  moratorium law or other similar law
which does not require the prior entry of a decree or order.

12.2  Landlord's  Remedies.  In the event of any default by Tenant,  and without
limiting  Landlord's  right to  indemnification  as  provided  in  Article  8.2,
Landlord shall have the following remedies,  in addition to all other rights and
remedies provided by law or otherwise  provided in this Lease, to which Landlord
may resort cumulatively, or in the alternative:

         (a) Landlord may, at Landlord's election, keep this Lease in effect and
enforce,  by an action at law or in equity, all of its rights and remedies under
this Lease including,  without limitation, (i) the right to recover the rent and
other sums as they become due by  appropriate  legal  action,  (ii) the right to
make  payments  required  by Tenant,  or  perform  Tenant's  obligations  and be
reimbursed by Tenant for the cost thereof with interest at the then maximum rate
of  interest  not  prohibited  by law from the date the sum is paid by  Landlord
until  Landlord is  reimbursed  by Tenant,  and (iii) the remedies of injunctive
relief and specific  performance  to prevent  Tenant from violating the terms of
this Lease and/or to compel Tenant to perform its obligations  under this Lease,
as the case may be.

         (b)  Landlord  may, at  Landlord's  election,  terminate  this Lease by
giving Tenant  written  notice of  termination,  in which event this Lease shall
terminate on the date set forth for termination in such notice.  Any termination
under this  subparagraph  shall not relieve Tenant from its obligation to pay to
Landlord all Base Monthly Rent and  Additional  Rent then or thereafter  due, or
any other sums due or thereafter accruing to Landlord, or from any claim against
Tenant for damages  previously  accrued or then or  thereafter  accruing.  In no
event shall any one or more of the following actions by Landlord, in the absence
of a  written  election  by  Landlord  to  terminate  this  Lease  constitute  a
termination of this Lease:

                  (i)  Appointment  of a receiver  or keeper in order to protect
Landlord's interest hereunder;

                  (ii)  Consent  to any  subletting  of the Leased  Premises  or
assignment of this Lease by Tenant, whether pursuant to the provisions hereof or
otherwise; or

                  (iii)  Any  action   taken  by  Landlord   or  its   partners,
principals, members, officers, agents, employees, or servants, which is intended
to  mitigate  the  adverse  effects  of any  breach  of this  Lease  by  Tenant,
including,  without  limitation,  any action  taken to maintain and preserve the
Leased  Premises on any action taken to relet the Leased Premises or any portion
thereof for the account at Tenant and in the name of Tenant.

         (c) In the event Tenant is in default under this Lease and abandons the
Leased  Premises,  Landlord may terminate  this Lease,  but this Lease shall not
terminate  unless  Landlord  gives  Tenant  written  notice of  termination.  If
Landlord does not terminate this Lease by giving written notice of  termination,
Landlord may enforce all its rights and remedies under this Lease, including the
right and remedies provided by California Civil Code Section 1951.4 ("lessor may
continue lease in effect after lessee's  breach and abandonment and recover rent
as it becomes  due,  if lessee has right to sublet or  assign,  subject  only to
reasonable limitations"), as in effect on the Effective Date of this Lease.

         (d) In the event  Landlord  terminates  this Lease,  Landlord  shall be
entitled,  at  Landlord's  election,  to the rights  and  remedies  provided  in
California Civil Code Section 1951.2, as in effect on the Effective Date of this

                                      23.

<PAGE>

Lease. For purposes of computing damages pursuant to Section 1951.2, an interest
rate equal to the maximum rate of interest  then not  prohibited by law shall be
used where permitted. Such damages shall include, without limitation:

                  (i) The worth at the time of award of the  amount by which the
unpaid  rent for the  balance  of the term after the time of award  exceeds  the
amount of such rental  loss that  Tenant  proves  could be  reasonably  avoided,
computed by discounting  such amount at the discount rate of the Federal Reserve
Bank of San Francisco, at the time of award plus one percent; and

                  (ii) Any other amount necessary to compensate Landlord for all
detriment proximately caused by Tenant's failure to perform Tenant's obligations
under this Lease,  or which in the ordinary  course of things would be likely to
result therefrom,  including without limitation, the following: (i) expenses for
cleaning,  repairing  or  restoring  the  Leased  Premises,  (ii)  expenses  for
altering,  remodeling or otherwise improving the Leased Premises for the purpose
of  reletting,  including  removal of  existing  leasehold  improvements  and/or
installation of additional leasehold improvements (regardless of how the same is
funded,  including  reduction  of rent,  a direct  payment or allowance to a new
tenant,  or  otherwise),  (iii)  broker's fees allocable to the remainder of the
term of this Lease, advertising costs and other expenses of reletting the Leased
Premises;  (iv) costs of carrying and maintaining the Leased  Premises,  such as
taxes,  insurance  premiums,  utility  charges  and  security  precautions,  (v)
expenses  incurred  in  removing,  disposing  of and/or  storing any of Tenant's
personal  property,   inventory  or  trade  fixtures  remaining  therein;   (vi)
reasonable   attorney's  fees,  expert  witness  fees,  court  costs  and  other
reasonable  expenses  incurred by Landlord (but not limited to taxable costs) in
retaking possession of the Leased Premises,  establishing damages hereunder, and
releasing the Leased  Premises;  and (vii) any other expenses,  costs or damages
otherwise incurred or suffered as a result of Tenant's default.

12.3 Landlord's  Default And Tenant's  Remedies.  In the event Landlord fails to
perform its obligations under this Lease,  Landlord shall nevertheless not be in
default under the terms of this Lease until such time as Tenant shall have first
given Landlord  written notice  specifying the nature of such failure to perform
its  obligations,  and then only after  Landlord shall have had thirty (30) days
following its receipt of such notice  within which to perform such  obligations;
provided  that, if longer than thirty (30) days is reasonably  required in order
to perform such  obligations,  Landlord shall have such reasonably longer period
provided  that the  Landlord is  proceeding  with due  diligence to perform such
obligations.  In the event of Landlord's  default as above set forth,  then, and
only then, Tenant may then (i) proceed in equity or at law to compel Landlord to
perform its  obligations  and/or to recover damages  proximately  caused by such
failure to perform  (except as and to the extent  Tenant has waived its right to
damages as provided in this Lease) or (ii) perform such obligations on behalf of
Landlord  and then  proceed  at law to  recover  damages  proximately  caused by
Landlord's  failure to  perform  and  Tenant's  subsequent  performance  of such
obligations  (except as and to the extent Tenant has waived its right to damages
as provided in this Lease).

12.4  Limitation Of Tenant's  Recourse.  Tenant's  recourse  shall be limited to
Landlord's interest in the Property.  In addition, if Landlord is a corporation,
trust,  partnership,  joint venture,  limited liability company,  unincorporated
association,  or other  form of  business  entity,  Tenant  agrees  that (i) the
obligations  of  Landlord  under  this  Lease  shall  not  constitute   personal
obligations of the officers,  directors,  trustees,  partners,  joint venturers,
members, owners, stockholders,  or other principals of such business entity, and
(ii) Tenant  shall have no recourse to the assets of such  officers,  directors,
trustees,   partners,  joint  venturers,   members,   owners,   stockholders  or
principals.  Additionally,  if Landlord is a  partnership  or limited  liability
company, then Tenant covenants and agrees:

         (a) No partner or member of Landlord  shall be sued or named as a party
in any suit or action  brought by Tenant with  respect to any alleged  breach of
this Lease  (except  to the extent  necessary  to secure  jurisdiction  over the
partnership and then only for that sole purpose);

         (b) No service of process  shall be made  against any partner or member
of  Landlord  except for the sole  purpose  of  securing  jurisdiction  over the
partnership; and

         (c) No writ of execution  will ever be levied against the assets of any
partner or member of Landlord other than to the extent of his or her interest in
the  assets  of  the  partnership  or  limited  liability  company  constituting
Landlord.

                                      24.

<PAGE>

Tenant further agrees that each of the foregoing  covenants and agreements shall
be enforceable by Landlord and by any partner or member of Landlord and shall be
applicable  to any actual or alleged  misrepresentation  or  nondisclosure  made
regarding  this Lease or the Leased  Premises or any actual or alleged  failure,
default or breach of any covenant or agreement  either  expressly or  implicitly
contained in this Lease or imposed by statute or at common law.

12.5 Tenant's Waiver. Landlord and Tenant agree that the provisions of Paragraph
12.3 above are intended to supersede  and replace the  provisions  of California
Civil Code  Sections  1932(1),  1941 and 1942,  and  accordingly,  Tenant hereby
waives the provisions of California Civil Code Sections  1932(1),  1941 and 1942
and/or any similar or successor law regarding  Tenant's  right to terminate this
Lease or to make  repairs and deduct the  expenses of such repairs from the rent
due under this Lease.

                                   ARTICLE 13

                               GENERAL PROVISIONS

13.1 Taxes On Tenant's Property. Tenant shall pay before delinquency any and all
taxes,  assessments,  license fees, use fees,  permit fees and public charges of
whatever  nature or description  levied,  assessed or imposed  against Tenant or
Landlord by a  governmental  agency arising out of, caused by reason of or based
upon Tenant's estate in this Lease, Tenant's ownership of property, improvements
made by Tenant to the Leased Premises or the Outside Areas, improvements made by
Landlord  for  Tenant's  use within the Leased  Premises or the  Outside  Areas,
Tenant's use (or  estimated  use) of public  facilities  or services or Tenant's
consumption (or estimated  consumption) of public  utilities,  energy,  water or
other resources  (collectively,  "Tenant's Interest").  Upon demand by Landlord,
Tenant shall furnish Landlord with satisfactory  evidence of these payments.  If
any such taxes, assessments, fees or public charges are levied against Landlord,
Landlord's property related to the Property, the Building or the Property, or if
the assessed value of the Building or the Property is increased by the inclusion
therein of a value placed upon  Tenant's  Interest,  regardless  of the validity
thereof,  Landlord shall have the right to require Tenant to pay such taxes, and
if not paid and satisfactory  evidence of payment delivered to Landlord at least
ten days prior to  delinquency,  then Landlord  shall have the right to pay such
taxes on  Tenant's  behalf and to invoice  Tenant  for the same.  Tenant  shall,
within the  earlier to occur of (a) thirty  (30) days of the date it receives an
invoice from Landlord setting forth the amount of such taxes, assessments, fees,
or public charge so levied,  or (b) the due date of such invoice (which shall be
no earlier  than ten (10) days after  receipt by Tenant),  pay to  Landlord,  as
Additional Rent, the amount set forth in such invoice.  Failure by Tenant to pay
the amount so invoiced  within such time period shall be  conclusively  deemed a
default by Tenant under this Lease. Tenant shall have the right to bring suit in
any court of competent  jurisdiction  to recover from the taxing  authority  the
amount of any such taxes, assessments, fees or public charges so paid.

13.2 Holding Over.  This Lease shall  terminate  without  further  notice on the
Lease  Expiration  Date (as set forth in Article 1). Any holding  over by Tenant
after  expiration  of the Lease  Term shall  neither  constitute  a renewal  nor
extension of this Lease nor give Tenant any rights in or to the Leased  Premises
except as expressly  provided in this Paragraph.  Any such holding over to which
Landlord has  consented  shall be construed to be a tenancy from month to month,
on the same terms and conditions herein specified insofar as applicable,  except
that the Base  Monthly Rent shall be increased to an amount equal to one hundred
fifty percent (150%) of the Base Monthly Rent payable during the last full month
immediately preceding such holding over.

13.3 Subordination To Mortgages. This Lease is subject to and subordinate to all
ground  leases,  mortgages  and deeds of trust which  affect the Building or the
Property and which are of public record as of the Effective  Date of this Lease,
and to all renewals, modifications,  consolidations, replacements and extensions
thereof.  However,  if the  lessor  under any such  ground  lease or any  lender
holding any such mortgage or deed of trust shall advise Landlord that it desires
or requires this Lease to be made prior and superior thereto, then, upon written
request of Landlord to Tenant,  Tenant shall promptly  execute,  acknowledge and
deliver any and all  customary  or  reasonable  documents or  instruments  which
Landlord  and such lessor or lender  deems  necessary  or desirable to make this
Lease prior  thereto.  Tenant hereby  consents to Landlord's  ground leasing the
land underlying the Building or the Property and/or  encumbering the Building or
the  Property  as  security  for future  loans on such terms as  Landlord  shall
desire, all of which future ground leases,  mortgages or deeds of trust shall be
subject to and subordinate to this Lease.  However, if any lessor under any such
future ground lease or any lender holding such future  mortgage or deed of trust
shall

                                      25.

<PAGE>

desire or require  that this Lease be made  subject to and  subordinate  to such
future ground lease,  mortgage or deed of trust, then Tenant agrees,  within ten
days after  Landlord's  written request  therefor,  to execute,  acknowledge and
deliver to Landlord any and all documents or  instruments  requested by Landlord
or by such  lessor  or  lender as may be  necessary  or  proper  to  assure  the
subordination  of this Lease to such future  ground  lease,  mortgage or deed of
trust,  but only if such lessor or lender  agrees to recognize  Tenant's  rights
under this Lease and agrees not to  disturb  Tenant's  quiet  possession  of the
Leased  Premises  so long as Tenant  is not in  default  under  this  Lease.  If
Landlord assigns the Lease as security for a loan, Tenant agrees to execute such
documents as are  reasonably  requested by the lender and to provide  reasonable
provisions in the Lease  protecting  such lender's  security  interest which are
customarily required by institutional  lenders making loans secured by a deed of
trust  provided  that  such  documents  do  not  materially   increase  Tenant's
obligations  under this Lease.  Landlord agrees to use  commercially  reasonable
efforts  to  obtain a  Subordination  Nondisturbance  and  Attornment  Agreement
("SNDA") from Metropolitan Life Insurance Company in substantially the same form
as the SNDA signed by Tenant on January 13, 1997.

13.4 Tenant's  Attornment Upon Foreclosure.  Tenant shall, upon request,  attorn
(i) to any purchaser of the Building or the Property at any foreclosure  sale or
private sale  conducted  pursuant to any security  instruments  encumbering  the
Building or the Property,  (ii) to any grantee or  transferee  designated in any
deed given in lieu of  foreclosure  of any  security  interest  encumbering  the
Building or the  Property,  or (iii) to the lessor  under an  underlying  ground
lease of the land  underlying  the Building or the Property,  should such ground
lease be terminated;  provided that such purchaser, grantee or lessor recognizes
Tenant's rights under this Lease.

13.5 Mortgagee Protection.  In the event of any default on the part of Landlord,
Tenant will give  notice by  registered  mail to any Lender or lessor  under any
underlying ground lease who shall have requested,  in writing, to Tenant that it
be provided  with such  notice,  and Tenant  shall offer such Lender or lessor a
reasonable opportunity to cure the default,  including time to obtain possession
of the  Leased  Premises  by  power  of sale or  judicial  foreclosure  or other
appropriate legal proceedings if reasonably necessary to effect a cure.

13.6  Estoppel  Certificate.  Tenant  will,  following  any request by Landlord,
promptly execute and deliver to Landlord an estoppel  certificate (i) certifying
that this Lease is  unmodified  and in full force and effect,  or, if  modified,
stating the nature of such  modification  and certifying  that this Lease, as so
modified,  is in full force and effect,  (ii) stating the date to which the rent
and other charges are paid in advance,  if any, (iii)  acknowledging  that there
are not, to  Tenant's  knowledge,  any uncured  defaults on the part of Landlord
hereunder,  or specifying such defaults if any are claimed,  and (iv) certifying
such  other  information  about  this Lease as may be  reasonably  requested  by
Landlord,  its Lender or  prospective  lenders,  investors or  purchasers of the
Building or the Property.  Tenant's failure to execute and deliver such estoppel
certificate  within ten (10) days after  Landlord's  request therefor shall be a
material  default by Tenant under this Lease, and Landlord shall have all of the
rights and remedies  available to Landlord as Landlord  would  otherwise have in
the case of any  other  material  default  by  Tenant,  including  the  right to
terminate this Lease and sue for damages  proximately  caused thereby,  it being
agreed and  understood  by Tenant  that  Tenant's  failure  to so  deliver  such
estoppel certificate in a timely manner could result in Landlord being unable to
perform committed obligations to other third parties which were made by Landlord
in reliance  upon this  covenant of Tenant.  Landlord and Tenant intend that any
statement  delivered pursuant to this paragraph may be relied upon by any Lender
or purchaser or prospective  Lender or purchaser of the Building,  the Property,
or any interest in them.

13.7 Tenant's Financial Information. Tenant shall, within ten (10) business days
after  Landlord's  request  therefor deliver to Landlord a copy of Tenant's (and
any guarantor's) current financial statements (including a balance sheet, income
statement and statement of cash flow, all prepared in accordance  with generally
accepted  accounting  principles)  and any  such  other  information  reasonably
requested by Landlord regarding Tenant's financial condition, provided, however,
that if Landlord  requests such  statements and  information for its own use and
not in  connection  with a sale,  refinancing,  or for a  potential  investor in
Landlord  or the  Property,  Landlord  shall not  request  such  statements  and
information more than twice in any calendar year.  Landlord shall be entitled to
disclose such financial  statements or other  information to its Lender,  to any
present  or  prospective  principal  of or  investor  in  Landlord,  or  to  any
prospective  Lender or purchaser of the Building,  the Property,  or any portion
thereof or interest therein.  Any such financial  statement or other information
which is marked  "confidential" or "company secrets" (or is otherwise  similarly
marked by Tenant) shall be  confidential  and shall not be disclosed by Landlord
to any third party except as specifically provided in this paragraph, unless the
same becomes a part of the public domain without the fault of Landlord.

                                      26.

<PAGE>

13.8 Transfer By Landlord.  Landlord and its  successors in interest  shall have
the right to transfer  their  interest in the  Building,  the  Property,  or any
portion  thereof at any time and to any  person or  entity.  In the event of any
such  transfer,  the  Landlord  originally  named herein (and in the case of any
subsequent transfer, the transferor),  from the date of such transfer, (i) shall
be automatically  relieved,  without any further act by any person or entity, of
all liability for the performance of the  obligations of the Landlord  hereunder
which may accrue  after the date of such  transfer and (ii) shall be relieved of
all liability for the performance of the  obligations of the Landlord  hereunder
which have  accrued  before the date of  transfer  if its  transferee  agrees to
assume in  writing  and  perform  all such  prior  obligations  of the  Landlord
hereunder.  Tenant  shall attorn to any such  transferee.  After the date of any
such transfer,  the term  "Landlord" as used herein shall mean the transferee of
such interest in the Building or the Property.

13.9 Force  Majeure.  The  obligations  of each of the parties  under this Lease
(other than the  obligations to pay money) shall be temporarily  excused if such
party is prevented or delayed in performing  such  obligations  by reason of any
strikes,  lockouts  or labor  disputes;  government  restrictions,  regulations,
controls, action or inaction; civil commotion; or extraordinary weather, fire or
other acts of God.

13.10 Notices.  Any notice  required or desired to be given by a party regarding
this Lease shall be in writing  and shall be  personally  served,  or in lieu of
personal  service  may be  given  by  reputable  overnight  courier  service  or
certified mail, postage prepaid, addressed to the other party as follows:

         If to Landlord:            Technology Centre Associates LLC
                                    c/o Menlo Equities LLC
                                    525 University Avenue
                                    Suite 100
                                    Palo Alto, California  94301
                                    Attention: Henry Bullock/Richard Holmstrom

         with a copy to:            Cooley Godward LLP
                                    One Maritime Plaza
                                    20th Floor
                                    San Francisco, California  94111
                                    Attention: Paul Churchill

         If to Tenant:              Adept Technology, Inc.
                                    150 Rose Orchard Way
                                    San Jose, California 95134
                                    Attention: Chief Financial Officer

         with a copy to:            Wilson Sonsini Goodrich & Rosati
                                    650 Page Mill Road
                                    Palo Alto, California 94304
                                    Attention: Real Estate Department

Any notice given in accordance  with the foregoing shall be deemed received upon
actual receipt or refusal to accept delivery.

13.11  Attorneys'  Fees.  In  the  event  any  party  shall  bring  any  action,
arbitration proceeding or legal proceeding alleging a breach of any provision of
this Lease,  to recover rent, to terminate this Lease,  or to enforce,  protect,
determine  or  establish  any term or covenant of this Lease or rights or duties
hereunder of either  party,  the  prevailing  party shall be entitled to recover
from the  non-prevailing  party as a part of such action or proceeding,  or in a
separate action for that purpose brought within one year from the  determination
of such proceeding, reasonable attorneys' fees, expert witness fees, court costs
and other reasonable expenses incurred by the prevailing party.

13.12 Definitions.  Any term that is given a special meaning by any provision in
this Lease  shall,  unless  otherwise  specifically  stated,  have such  meaning
wherever used in this Lease or in any Addenda or amendment  hereto.  In addition
to the terms defined in Article 1, the following  terms shall have the following
meanings:

                                      27.

<PAGE>

         (a) Real Property Taxes. The term "Real Property Tax" or "Real Property
Taxes"  shall  each  mean  Tenant's  Lot  Percentage  Share  of (i)  all  taxes,
assessments,  levies and other charges of any kind or nature whatsoever, general
and special, foreseen and unforeseen (including all instruments of principal and
interest  required  to  pay  any  general  or  special  assessments  for  public
improvements and any increases resulting from reassessments caused by any change
in ownership or new construction),  now or hereafter imposed by any governmental
or  quasi-governmental  authority  or  special  district  having  the  direct or
indirect  power to tax or levy  assessments,  which are levied or  assessed  for
whatever  reason  against the  Property or any portion  thereof,  or  Landlord's
interest herein, or the fixtures,  equipment and other property of Landlord that
is an integral part of the Property and located thereon,  or Landlord's business
of owning,  leasing or managing  the Property or the gross  receipts,  income or
rentals  from the  Property,  (ii) all  charges,  levies or fees  imposed by any
governmental authority against Landlord by reason of or based upon the use of or
number of parking spaces within the Property,  the amount of public  services or
public utilities used or consumed (e.g. water, gas, electricity, sewage or waste
water disposal) at the Property, the number of person employed by tenants of the
Property,  the size  (whether  measured  in area,  volume,  number of tenants or
whatever)  or the value of the  Property,  or the type of use or uses  conducted
within  the  Property,  and all  costs  and  fees  (including  attorneys'  fees)
reasonably  incurred by  Landlord in  contesting  any Real  Property  Tax and in
negotiating  with public  authorities as to any Real Property Tax, and (iii) all
tax increases due to  improvements  made to the Leased  Premises by Tenant or by
Landlord  on behalf  of  Tenant.  If, at any time  during  the Lease  Term,  the
taxation or  assessment of the Property  prevailing as of the Effective  Date of
this Lease  shall be altered so that in lieu of or in  addition  to any the Real
Property Tax described above there shall be levied,  awarded or imposed (whether
by reason of a change in the method of taxation or assessment, creation of a new
tax or charge, or any other cause) an alternate,  substitute,  or additional use
or charge (i) on the value, size, use or occupancy of the Property or Landlord's
interest therein or (ii) on or measured by the gross receipts, income or rentals
from the Property, or on Landlord's business of owning,  leasing or managing the
Property or (iii)  computed in any manner with  respect to the  operation of the
Property,  then any such tax or charge,  however  designated,  shall be included
within the meaning of the terms "Real Property Tax" or "Real Property Taxes" for
purposes of this Lease.  If any Real  Property Tax is partly based upon property
or rents  unrelated to the  Property,  then only that part of such Real Property
Tax that is fairly  allocable  to the  Property  shall be  included  within  the
meaning  of  the  terms  "Real   Property   Tax"  or  "Real   Property   Taxes."
Notwithstanding  the foregoing,  the terms "Real Property Tax" or "Real Property
Taxes"  shall not include  (i) estate,  sales,  inheritance,  transfer,  gift or
franchise  taxes of  Landlord  or the  federal or state  income  tax  imposed on
Landlord's  income from all sources;  (ii) any Real Property Taxes occasioned by
or relating to assessments and other fees for improvements and services which do
not benefit the Property;  (iii) any penalties resulting from Landlord's failure
to pay Real Property Taxes before  delinquency  (unless Tenant has failed to pay
Landlord  hereunder or if Tenant has assumed  responsibility for payment of such
taxes directly); or (iv) any increase in Real Property Taxes due to improvements
made to buildings on the Property other than the Building.  Landlord agrees that
where permitted to do so without penalty, Landlord shall pay Real Property Taxes
in installments.

         (b) Landlord's  Insurance Costs. The term "Landlord's  Insurance Costs"
shall mean  Tenant's  Project  Proportionate  Share of the costs to  Landlord to
carry and maintain the policies of fire and property  damage  insurance  for the
Building and the Property and general liability and any other insurance required
or permitted to be carried by Landlord  pursuant to Article 9, together with any
deductible  amounts paid by Landlord upon the occurrence of any insured casualty
or loss,  provided  that any  deductible  amounts  applicable to a casualty of a
capital nature shall be amortized of the useful life of the capital replacement.

         (c) Property  Maintenance Costs. The term "Property  Maintenance Costs"
shall  mean  Tenant's  Project  Proportionate  Share of all costs  and  expenses
(except Landlord's Insurance Costs, Real Property Taxes and Building Maintenance
Costs)  paid or incurred by  Landlord  in  protecting,  operating,  maintaining,
repairing and preserving the Property and all parts thereof,  including  without
limitation,  (i) market rate  professional  management fees, (ii) the amortizing
portion of any costs  incurred by  Landlord in the making of any  modifications,
alterations or improvements required by any governmental  authority as set forth
in Article 6, Section 4.8,  and Section 5.1,  which are so amortized  during the
Lease Term,  and (iii) such other costs as may be paid or incurred  with respect
to  operating,   maintaining,   and  preserving  the  Property,   repairing  and
resurfacing  paved  areas,  and any other  maintenance  and repair  Landlord  is
required to perform under this Lease,  provided that Landlord shall recover only
the  amortizing  portion of the costs  incurred by Landlord in the making of any
modification,  alteration,  improvement or repair which is of a capital  nature.
Any modification, alteration, improvement or repair which is of a capital nature
shall be amortized  over its useful life and at the rate which is the greater of
(i) twelve percent (12%)or (ii) the

                                      28.

<PAGE>

sum of that rate quoted by Wells Fargo  Bank,  N.T. & S.A.  from time to time as
its prime rate, plus two percent (2%). Notwithstanding the foregoing,  "Property
Maintenance  Costs"  shall not  include  and  Tenant  shall in no event have any
obligation to perform or to pay directly,  or to reimburse  Landlord for, all or
any  portion  of the  following:  (i)  costs  for which  Landlord  has  received
reimbursement  from others;  (ii)  depreciation,  amortization  or other expense
reserves  (except  when  such  reserves  are  actually   expended  for  Property
Maintenance  Costs);  (iii)  mortgages,  interest,  charges and fees incurred on
debt,  payments on mortgages  and rent under ground  leases;  (iv) leasing costs
(including  from disputes) for the leasing of the Property to other tenants;  or
(v) capital expenditures completely allocable to buildings on the Property other
than the Building.

         (d) Building  Maintenance Costs. The term "Building  Maintenance Costs"
shall mean Tenant's  Building  Proportionate  Share of all capital  expenditures
allocable to the Building and all other costs as may be incurred with respect to
operating,   maintaining   and  preserving  the  Building   including,   without
limitation,  repair  and  resurfacing  the  exterior  surfaces  of the  Building
(including roofs), repairing and replacing structural parts of the Building, and
repairing  and  replacing,  when  necessary,   electrical,   plumbing,  heating,
ventilating and air conditioning systems serving the Building.

         (e) Property Operating Expenses. The term "Property Operating Expenses"
shall mean and include all Real Property  Taxes,  plus all Landlord's  Insurance
Costs, plus all Property Maintenance Costs and Building Maintenance Costs.

         (f) Law.  The term "Law"  shall  mean any  judicial  decisions  and any
statute, constitution,  ordinance, resolution,  regulation, rule, administrative
order, or other requirements of any municipal,  county, state, federal, or other
governmental  agency or authority having  jurisdiction  over the parties to this
Lease,  the Leased  Premises,  the Building or the Property,  or any of them, in
effect  either at the  Effective  Date of this  Lease or at any time  during the
Lease Term, including,  without limitation, any regulation,  order, or policy of
any  quasi-official  entity or body (e.g. a board of fire  examiners or a public
utility or special district).

         (g) Lender.  The term "Lender"  shall mean the holder of any promissory
note or other  evidence of  indebtedness  secured by the Property or any portion
thereof.

         (h) Private  Restrictions.  The term "Private  Restrictions" shall mean
(as they may  exist  from time to time) any and all  covenants,  conditions  and
restrictions, private agreements, easements, and any other recorded documents or
instruments  affecting  the  use of  the  Property,  the  Building,  the  Leased
Premises, or the Outside Areas.

         (i) Rent. The term "Rent" shall mean collectively Base Monthly Rent and
all Additional Rent.

13.13  General  Waivers.  One  party's  consent to or approval of any act by the
other party  requiring the first party's consent or approval shall not be deemed
to waive or render  unnecessary  the first party's consent to or approval of any
subsequent similar act by the other party. No waiver of any provision hereof, or
any waiver of any breach of any provision  hereof,  shall be effective unless in
writing and signed by the waiving party.  The receipt by Landlord of any rent or
payment with or without  knowledge of the breach of any other  provision  hereof
shall not be deemed a waiver of any such breach.  No waiver of any  provision of
this Lease shall be deemed a continuing  waiver unless such waiver  specifically
states so in writing  and is signed by both  Landlord  and  Tenant.  No delay or
omission in the  exercise of any right or remedy  accruing to either  party upon
any breach by the other party under this Lease shall impair such right or remedy
or be  construed  as a  waiver  of any such  breach  theretofore  or  thereafter
occurring.  The waiver by either  party of any breach of any  provision  of this
Lease shall not be deemed to be a waiver of any subsequent breach of the same or
any other provisions herein contained.

13.14 Miscellaneous.  Should any provisions of this Lease prove to be invalid or
illegal,  such  invalidity  or  illegality  shall in no way  affect,  impair  or
invalidate any other  provisions  hereof,  and such remaining  provisions  shall
remain in full force and  effect.  Time is of the  essence  with  respect to the
performance  of every  provision of this Lease in which time of performance is a
factor.  Any copy of this Lease which is executed by the parties shall be deemed
an  original  for all  purposes.  This Lease  shall,  subject to the  provisions
regarding  assignment,  apply  to and  bind the  respective  heirs,  successors,
executors,  administrators  and assigns of Landlord and Tenant. The term "party"
shall mean Landlord or Tenant as the context implies. If Tenant consists of more
than one  person or entity,  then all  members  of Tenant  shall be jointly  and
severally  liable  hereunder.  This Lease  shall be  construed  and

                                      29.

<PAGE>

enforced in accordance  with the Laws of the State in which the Leased  Premises
are located.  The captions in this Lease are for convenience  only and shall not
be construed in the construction or interpretation of any provision hereof. When
the context of this Lease  requires,  the neuter gender  includes the masculine,
the feminine,  a partnership,  corporation,  limited  liability  company,  joint
venture, or other form of business entity, and the singular includes the plural.
The terms "must," "shall," "will," and "agree" are mandatory.  The term "may" is
permissive.  When a party is required to do something by this Lease, it shall do
so at its sole cost and expense  without right of  reimbursement  from the other
party unless specific  provision is made therefor.  Where Landlord's  consent is
required hereunder,  the consent of any Lender shall also be required.  Landlord
and Tenant  shall both be deemed to have  drafted  this  Lease,  and the rule of
construction that a document is to be construed against the drafting party shall
not be employed  in the  construction  or  interpretation  of this Lease.  Where
Tenant is  obligated  not to perform any act or is not  permitted to perform any
act,  Tenant is also  obligated  to restrain  any others  reasonably  within its
control, including agents, invitees, contractors,  subcontractors and employees,
from performing such act.  Landlord shall not become or be deemed a partner or a
joint venturer with Tenant by reason of any of the provisions of this Lease.

                                   ARTICLE 14

                               CORPORATE AUTHORITY
                          BROKERS AND ENTIRE AGREEMENT

14.1 Corporate Authority. If Tenant is a corporation,  each individual executing
this Lease on behalf of such corporation  represents and warrants that Tenant is
validly formed and duly authorized and existing,  that Tenant is qualified to do
business in the State in which the Leased Premises are located,  that Tenant has
the full right and legal authority to enter into this Lease,  and that he or she
is duly  authorized  to execute  and  deliver  this Lease on behalf of Tenant in
accordance  with its terms.  Tenant  shall,  within  thirty days after  Tenant's
receipt of a written request from Landlord, deliver to Landlord a certified copy
of the  resolution  of its  board of  directors  authorizing  or  ratifying  the
execution  of this  Lease and if  Tenant  fails to do so,  Landlord  at its sole
election may elect to terminate this Lease.

14.2 Brokerage  Commissions.  Landlord and Tenant each represents,  warrants and
agrees that it has not had any dealings with any real estate broker(s),  leasing
agent(s),  finder(s) or salesmen,  other than the Broker (as named in Article 1)
with respect to the lease by it of the Leased  Premises  pursuant to this Lease,
and that it will indemnify,  defend with competent  counsel,  and hold the other
party  harmless from any liability for the payment of any real estate  brokerage
commissions,  leasing  commissions  or finder's  fees claimed by any real estate
broker(s), leasing agent(s),  finder(s), or salesmen other than the Broker to be
earned or due and payable by reason of the  indemnifying  party's  agreement  or
promise  (implied or  otherwise)  to pay (or to have the other party pay) such a
commission or finder's fee by reason of its leasing the Leased Premises pursuant
to this Lease.

14.3 Entire Agreement.  This Lease and the Exhibits (as described in Article 1),
which Exhibits are by this reference incorporated herein,  constitute the entire
agreement between the parties, and there are no other agreements, understandings
or representations  between the parties relating to the lease by Landlord of the
Leased Premises to Tenant,  except as expressed herein.  No subsequent  changes,
modifications  or  additions  to this Lease  shall be binding  upon the  parties
unless in writing and signed by both Landlord and Tenant.

14.4 Landlord's  Representations.  Tenant acknowledges that neither Landlord nor
any  of its  agents  made  any  representations  or  warranties  respecting  the
Property,  the  Building or the Leased  Premises,  upon which  Tenant  relied in
entering into the Lease, which are not expressly set forth in this Lease. Tenant
further  acknowledges  that  neither  Landlord  nor any of its  agents  made any
representations  as to (i) whether the Leased  Premises may be used for Tenant's
intended use under existing Law, or (ii) the  suitability of the Leased Premises
for the conduct of Tenant's  business,  or (iii) the exact square footage of the
Leased Premises,  and that Tenant relies solely upon its own investigations with
respect to such matters.  Tenant  expressly waives any and all claims for damage
by reason of any statement, representation, warranty, promise or other agreement
of Landlord or  Landlord's  agent(s),  if any, not contained in this Lease or in
any Exhibit attached hereto.

                                   ARTICLE 15

                                OPTION TO EXTEND

                                      30.

<PAGE>

         15.1 So long as Adept  Technology,  Inc., a California  corporation (or
its Permitted Assignee,  as defined in Section 7.2), is the Tenant hereunder and
occupies the entirety of the Leased  Premises,  and subject to the condition set
forth in clause  (b) below,  Tenant  shall have one option to extend the term of
this Lease with respect to the entirety of the Leased Premises,  for a period of
five (5) years from the  expiration  of the initial  Lease Term (the  "Extension
Period"), subject to the following conditions:

         (a) The option to extend  shall be  exercised,  if at all, by notice of
exercise  given to Landlord by Tenant not more than fifteen months nor less than
nine months prior to the expiration of the initial Lease Term;

         (b) Anything  herein to the contrary  notwithstanding,  if Tenant is in
default under any of the monetary or material  non-monetary terms,  covenants or
conditions  of this Lease,  either at the time Tenant  exercises  the  extension
option or on the commencement date of the Extension Period, Landlord shall have,
in addition to all of  Landlord's  other  rights and  remedies  provided in this
Lease, the right to terminate such option to extend upon notice to Tenant.

15.2 In the event the option is exercised in a timely  fashion,  the Lease shall
be  extended  for the term of the  Extension  Period  upon all of the  terms and
conditions of this Lease,  provided that the Base Monthly Rent for the Extension
Period  shall be the "Fair  Market  Rent"  for the  Leased  Premises,  increased
annually on each anniversary of the commencement date of the Extension Period to
reflect  the  change  in  the  Consumer   Price  Index  for  the  San  Francisco
Metropolitan  Area,  All Items (the  "CPI"),  for the twelve  (12) month  period
ending  sixty (60) days prior to the subject  adjustment  date,  but in no event
shall Base Monthly Rent be  increased  less than 4.00% per annum,  nor more than
7.00% per annum for such twelve (12) month period. Base Monthly Rent shall be so
adjusted at the end of each twelve (12) month period during the Lease Term.  For
purposes hereof,  "Fair Market Rent" shall mean the Base Monthly Rent determined
pursuant  to the  process  described  below.  In no  event,  however,  shall any
adjustment of Base Monthly Rent pursuant to this paragraph  result in a decrease
of the Base Monthly  Rent for the Premises  below the amount due from Tenant for
the preceding  portion of the initial Lease Term for which Base Monthly Rent had
been fixed.

15.3 Within 30 days after receipt of Tenant's notice of exercise, Landlord shall
notify Tenant in writing of Landlord's estimate of the Base Monthly Rent for the
applicable  extension  period,  based on the provisions of Paragraph 15.2 above.
Within 30 days after receipt of such notice from Landlord, Tenant shall have the
right either to (i) accept Landlord's statement of Base Monthly Rent as the Base
Monthly Rent for the  applicable  extension  period;  or (ii) elect to arbitrate
Landlord's  estimate of Fair  Market  Rent,  such  arbitration  to be  conducted
pursuant to the provisions  hereof;  or (iii) rescind  Tenant's  exercise of the
extension option.  Failure on the part of Tenant to require  arbitration of Fair
Market Rent within such 30-day  period or rescind its exercise of the  extension
option shall  constitute  acceptance of the Base Monthly Rent for the applicable
extension period as calculated by Landlord.  If Tenant elects  arbitration,  the
arbitration  shall be  concluded  within  90 days  after  the  date of  Tenant's
election,  subject  to  extension  for an  additional  30-day  period if a third
arbitrator is required and does not act in a timely  manner.  To the extent that
arbitration  has not been  completed  prior to the  expiration  of any preceding
period for which Base  Monthly Rent has been  determined,  Tenant shall pay Base
Monthly Rent at the rate  calculated  by  Landlord,  with the  potential  for an
adjustment  to be made  once  Fair  Market  Rent  is  ultimately  determined  by
arbitration.

15.4 In the event of arbitration, the judgment or the award rendered in any such
arbitration may be entered in any court having  jurisdiction  and shall be final
and  binding  between  the  parties.  The  arbitration  shall be  conducted  and
determined in the County of Santa Clara in accordance  with the then  prevailing
rules of the American  Arbitration  Association or its successor for arbitration
of commercial disputes except to the extent that the procedures mandated by such
rules shall be modified as follows:

         (a) Tenant shall make demand for  arbitration in writing within 30 days
after  service of  Landlord's  determination  of Fair  Market  Rent given  under
Paragraph 15.3 above,  specifying  therein the name and address of the person to
act as the arbitrator on its behalf. The arbitrator shall be qualified as a real
estate  appraiser  familiar  with the Fair  Market  Rent of similar  industrial,
research and  development,  or office space in the Silicon Valley area who would
qualify as an expert witness over objection to give opinion testimony  addressed
to the issue in a court of competent jurisdiction. Failure on the part of Tenant
to make a proper demand in a timely manner for such arbitration shall constitute
a waiver of the right  thereto.  Within 15 days after the  service of the demand
for arbitration,  Landlord shall give notice to Tenant,  specifying the name and
address of the person  designated by

                                      31.

<PAGE>

Landlord to act as arbitrator on its behalf who shall be similarly qualified. If
Landlord fails to notify Tenant of the appointment of its arbitrator,  within or
by the time above  specified,  then the arbitrator  appointed by Tenant shall be
the arbitrator to determine the issue.

         (b) In the event that two  arbitrators are chosen pursuant to Paragraph
15.4(a) above, the arbitrators so chosen shall,  within 15 days after the second
arbitrator is appointed  determine the Fair Market Rent. If the two  arbitrators
shall be unable to agree upon a  determination  of Fair  Market Rent within such
15-day period, they, themselves,  shall appoint a third arbitrator, who shall be
a competent and impartial person with  qualifications  similar to those required
of the first two arbitrators  pursuant to Paragraph  15.4(a).  In the event they
are unable to agree upon such appointment  within seven days after expiration of
such  15-day  period,  the third  arbitrator  shall be  selected  by the parties
themselves,  if they can agree  thereon,  within a further period of 15 days. If
the parties do not so agree,  then either party,  on behalf of both, may request
appointment  of such a  qualified  person by the then Chief  Judge of the United
States District Court having jurisdiction over the County of Santa Clara, acting
in his private and not in his official  capacity,  and the other party shall not
raise any question as to such Judge's full power and  jurisdiction  to entertain
the application for and make the appointment. The three arbitrators shall decide
the dispute if it has not  previously  been  resolved by following the procedure
set forth below.

         (c) Where an issue  cannot be  resolved  by  agreement  between the two
arbitrators  selected by Landlord and Tenant or  settlement  between the parties
during the  course of  arbitration,  the issue  shall be  resolved  by the three
arbitrators  within  15 days  of the  appointment  of the  third  arbitrator  in
accordance with the following procedure.  The arbitrator selected by each of the
parties  shall  state in  writing  his  determination  of the Fair  Market  Rent
supported by the reasons  therefor with  counterpart  copies to each party.  The
arbitrators  shall  arrange  for  a  simultaneous   exchange  of  such  proposed
resolutions.  The role of the third  arbitrator  shall be to select which of the
two proposed  resolutions most closely  approximates  his  determination of Fair
Market Rent. The third arbitrator shall have no right to propose a middle ground
or any modification of either of the two proposed resolutions. The resolution he
chooses as most closely  approximating  his  determination  shall constitute the
decision of the arbitrators and be final and binding upon the parties.

         (d) In the event of a failure,  refusal or inability of any  arbitrator
to act,  his  successor  shall be appointed by him, but in the case of the third
arbitrator,  his successor shall be appointed in the same manner as provided for
appointment  of the third  arbitrator.  The  arbitrators  shall decide the issue
within 15 days after the  appointment of the third  arbitrator.  Any decision in
which the  arbitrator  appointed  by Landlord  and the  arbitrator  appointed by
Tenant concur shall be binding and conclusive upon the parties. Each party shall
pay the fee and expenses of its  respective  arbitrator and both shall share the
fee and expenses of the third  arbitrator,  if any, and the attorneys'  fees and
expenses of counsel for the respective parties and of witnesses shall be paid by
the respective party engaging such counsel or calling such witnesses.

         (e) The  arbitrators  shall  have the  right  to  consult  experts  and
competent  authorities to obtain factual information or evidence pertaining to a
determination  of Fair Market Rent, but any such  consultation  shall be made in
the presence of both parties with full right on their part to cross-examine. The
arbitrators  shall render their  decision and award in writing with  counterpart
copies  to each  party.  The  arbitrators  shall  have no  power to  modify  the
provisions of this Lease.

                                   ARTICLE 16

                                TELEPHONE SERVICE

         Notwithstanding any other provision of this Lease to the contrary:

         (a) So long as the entirety of the Leased Premises is leased to Tenant:

                  (i) Landlord  shall have no  responsibility  for  providing to
Tenant any telephone equipment,  including wiring, within the Leased Premises or
for providing  telephone  service or connections  from the utility to the Leased
Premises; and

                                      32.

<PAGE>

                  (ii) Landlord makes no warranty as to the quality,  continuity
or availability of the  telecommunications  services in the Building, and Tenant
hereby waives any claim against Landlord for any actual or consequential damages
(including   damages   for   loss   of   business)   in   the   event   Tenant's
telecommunications services in any way are interrupted, damaged or rendered less
effective,  except to the extent caused by the grossly  negligent or willful act
or omission by Landlord, its agents or contractors. Tenant accepts the telephone
equipment  (including,  without  limitation,  the INC, as defined  below) in its
"AS-IS" condition, and Tenant shall be solely responsible for contracting with a
reliable third party vendor to assume  responsibility  for the  maintenance  and
repair thereof (which contract shall contain provisions requiring such vendor to
inspect the INC periodically (the frequency of such inspections to be determined
by such vendor based on its experience and professional judgment), and requiring
such  vendor  to meet  local and  federal  requirements  for  telecommunications
material  and  workmanship).  Landlord  shall not be liable to Tenant and Tenant
waives all claims  against  Landlord  whatsoever,  whether for personal  injury,
property damage,  loss of use of the Leased Premises,  or otherwise,  due to the
interruption  or failure of telephone  services to the Leased  Premises.  Tenant
hereby  holds  Landlord  harmless  and agrees to  indemnify,  protect and defend
Landlord from and against any  liability for any damage,  loss or expense due to
any failure or interruption of telephone  service to the Leased Premises for any
reason except to the extent caused by gross negligence or willful  misconduct of
Landlord. Tenant agrees to obtain loss of rental insurance adequate to cover any
damage, loss or expense occasioned by the interruption of telephone service.

         (b) At such time as the  entirety  of the  Leased  Premise is no longer
leased to Tenant,  Landlord  shall in its sole  discretion  have the  right,  by
written notice to Tenant, to elect to assume limited  responsibility for INC, as
provided below,  and upon such assumption of  responsibility  by Landlord,  this
subparagraph (b) shall apply prospectively.

                  (i) Landlord  shall provide  Tenant access to such quantity of
pairs in the Building  intra-building  network cable ("INC") as is determined to
be available by Landlord in its reasonable  discretion.  Tenant's  access to the
INC  shall be solely by  arrangements  made by  Tenant,  as  Tenant  may  elect,
directly  with  Pacific  Bell or  Landlord  (or  such  vendor  as  Landlord  may
designate),  and Tenant  shall pay all  reasonable  charges as may be imposed in
connection  therewith.  Pacific Bell's charges shall be deemed to be reasonable.
Subject to the foregoing, Landlord shall have no responsibility for providing to
Tenant any telephone equipment,  including wiring, within the Leased Premises or
for providing  telephone  service or connections  from the utility to the Leased
Premises, except as required by law.

                  (ii)  Tenant  shall not alter,  modify,  add to or disturb any
telephone wiring in the Leased Premises or elsewhere in the Building without the
Landlord's  prior  written  consent.  Tenant shall be liable to Landlord for any
damage to the  telephone  wiring in the  Building  due to the act,  negligent or
otherwise,  of Tenant or any  employee,  contractor  or other  agent of  Tenant.
Tenant shall have no access to the telephone closets within the Building, except
in the  manner  and under  procedures  established  by  Landlord.  Tenant  shall
promptly notify Landlord of any actual or suspected failure of telephone service
to the Leased Premises.

                  (iii) All costs  incurred  by Landlord  for the  installation,
maintenance, repair and replacement of telephone wiring in the Building shall be
a Property Maintenance Cost.

                  (iv) Landlord makes no warranty as to the quality,  continuity
or availability of the  telecommunications  services in the Building, and Tenant
hereby waives any claim against Landlord for any actual or consequential damages
(including   damages   for   loss   of   business)   in   the   event   Tenant's
telecommunications services in any way are interrupted, damaged or rendered less
effective,  except to the extent caused by the grossly  negligent or willful act
or omission by  Landlord,  its agents or  employees.  Tenant  acknowledges  that
Landlord  meets its duty of care to Tenant with  respect to the  Building INC by
contracting with a reliable third party vendor to assume  responsibility for the
maintenance  and  repair  thereof  (which  contract  shall  contain   provisions
requiring  such vendor to inspect the INC  periodically  (the  frequency of such
inspections  to be  determined  by  such  vendor  based  on its  experience  and
professional  judgment),  and  requiring  such  vendor to meet local and federal
requirements for  telecommunications  material and workmanship).  Subject to the
foregoing,  Landlord  shall not be liable to Tenant and Tenant waives all claims
against Landlord whatsoever,  whether for personal injury, property damage, loss
of use of the Leased Premises, or otherwise,  due to the interruption or failure
of telephone  services to the Leased  Premises.  Tenant  hereby  holds  Landlord
harmless and agrees to indemnify,  protect and defend  Landlord from and against
any liability for any damage, loss or expense due to any failure or interruption
of telephone  service to the Leased

                                      33.

<PAGE>

Premises  for any  reason.  Tenant  agrees  to obtain  loss of rental  insurance
adequate to cover any damage,  loss or expense occasioned by the interruption of
telephone service.

                                      34.

<PAGE>

         IN WITNESS WHEREOF,  Landlord and Tenant have executed this Lease as of
the respective dates below set forth with the intent to be legally bound thereby
as of the Effective Date of this Lease first above set forth.

                                      LANDLORD:

                                      TECHNOLOGY CENTRE ASSOCIATES LLC, a
                                      California limited liability company

                                      By:  Menlo Equities LLC, a
                                           California limited liability company,
                                           its Managing Member

Dated: June 3, 1998                   By: /s/ illegible            , Member
      ---------------------------         ----------------- -------

                                      TENANT:

                                      ADEPT TECHNOLOGY, INC., a
                                      California corporation

Dated:  June 2, 1998                  By:  /s/ Betsy A. Lange
        -------------------------        ----------------------------------
                                           Title:Chief Financial Officer

                                      35.
<PAGE>

                                    EXHIBIT A

                                    SITE PLAN

                               [site plan drawing]

                                       1.
<PAGE>

                                    EXHIBIT B

                                   FLOOR PLAN

                              [floor plan drawing]

                                       1.Exhibit 10.3

                 AMENDMENT NO. 1 TO OFFICE BUILDING LEASE DATED

May 20,  1993,  By and Between  Puente  Hills  Business  Center II, a California
limited  partnership,  as "Landlord"  and Adept  Technology,  Inc., a California
                           corporation, as "Tenant".

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

This Amendment No. 1 to Office Building Lease is made as of this ninth (9th) day
of September,  1997 by and between Puente Hills Business Center II, a California
limited  partnership,  as "Landlord"  and Adept  Technology,  Inc., a California
corporation, as "Tenant".

                                    RECITALS

A.       WHEREAS,  Landord and Tenant entered into that certain office  building
         Lease dated May 20,  1993,  (the  "Lease")  relating to office space in
         that certain office building located at 17800 Castleton  Street,  Suite
         175, City of Industry, California 91748, in that certain office project
         known as Puente Hills Business Center II.

B.       WHEREAS,  the  parties  desire to amend said  Lease to reflect  certain
         items hereinafter provided, effective July 15, 1998.

         NOW,  THEREFORE,  in consideration of the above recitals and the mutual
         covenants  and  agreements  contained  herein,  IT IS HEREBY  AGREED AS
         FOLLOWS:

                                   WITNESSETH

1.       Term:  The term of the  Lease  shall  be  extended  for four (4)  years
         commencing on September 18, 1997 and terminating on September 17, 2001.

2.       Base Rent:  The Base Rent as  specified in 5.A of the Lease shall be as
         follows:

                         09/18/97-09/17/99           $7,084.00
                         09/18/99-09/17/02           $7,372.00

3.       All other terms and conditions of said Lease shall remain in full force
         and effect.

"LANDLORD"                                            "TENANT"

PUENTE HILLS BUSINESS CENTER II                       Adept Technology, Inc.,
a California limited partnership                      a California corporation
by Amel Management Company,
Its Agent

By:   /s/ Kevin P. Hauber                             By:  /s/ Bruce Shimano
   ----------------------------------                     ----------------------
     Kevin P. Hauber, Vice President                           Bruce Shimano

Date:                                                   Date:  9/23/97
     --------------------------------                        -------------------

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}]]