Document:

EMPLOYMENT AGREEMENT
                              --------------------

          THIS  AGREEMENT,  made  this         day of              , 2000 by and
                                       -------        -------------
between  ENERGY  CORPORATION OF AMERICA, whose address is 4643 S. Ulster Street,
Suite  1100,  Denver,  Colorado  (hereinafter  "ECA")  and  DONALD C. SUPCOE, of
Charleston,  West  Virginia  (hereinafter  "Employee").

          WHEREAS,  Employee  is  currently Senior Vice-President of Mountaineer
Gas  Company;  and

          WHEREAS,  Employee  has  been  a  valued  employee  of Mountaineer Gas
Company  and  ECA  desires  to  employ  Employee  upon  the terms and conditions
specified  below.

          NOW,  THEREFORE,  in  consideration of the mutual promises hereinafter
contained,  the  parties  agree  as  follows:

          1.     EMPLOYMENT.
                 ----------

               (a)  INITIAL  TERM.  ECA  shall  employ  Employee  and  Employee
                    -------------
accepts  such  employment  upon  the  terms  and  conditions  set  forth in this
Agreement  for an initial term of three (3) years, commencing on the date of the
closing of the sale of the stock of Mountaineer Gas Company to Allegheny Energy,
Inc.  ("Allegheny").

               (b)  RENEWAL.  This  Agreement shall be automatically renewed for
                    -------
one  (1)  additional  year each year after the expiration of the Initial Term as
described  in  Paragraph 1(a) above, unless Employee or ECA gives written notice
to  the  other  at least sixty (60) calendar days prior to the expiration of the
Initial Term or any renewal period of its desire to terminate the Agreement.  If
such  notice  of  termination  is  given  by  either  party,  the Agreement will
terminate by its own terms as set forth in this Agreement, and ECA shall have no
further obligation to pay Employee any compensation or any other amounts, except
for Earned Incentive Compensation, as defined in this Agreement, or as otherwise
required  by  law.

                                       1
<PAGE>

          2.     DUTIES.  During the period the Management Agreement between ECA
                 ------
and  Allegheny  remains  in effect, Employee's duties shall be substantially the
same  as  the Employee previously performed for Mountaineer Gas Company.  If the
services  to  be  performed  by  Employee  for  Allegheny  under  the Management
Agreement do not require Employee's full time and attention, then ECA shall have
the  right  to assign additional duties and functions to Employee.  In the event
the  Management  Agreement  is  terminated  during  the  term of this Employment
Agreement,  ECA shall have the right to assign other duties and functions to the
Employee.  ECA  shall  use  its  best  efforts  to assign to Employee duties and
functions  which  are similar to Employee's prior job responsibilities; however,
if no similar positions are available at ECA, Employee agrees to undertake other
responsibilities  and  projects  for  ECA.

          3.     COMPENSATION.  ECA  shall  pay  to  Employee  the  following
                 ------------
compensation:

               (a)  SALARY.  During the term of this Agreement Employee shall be
                    ------
paid  an  annual  salary  of  $182,000.00, payable in semi-monthly installments.
Employee's  salary  shall  be reviewed annually and shall be adjusted upward, if
appropriate,  based  on  Employee's  performance.

               (b)  BENEFITS.  ECA shall provide Employee with health insurance,
                    --------
dental  insurance,  life insurance, and disability insurance.  Employee shall be
eligible  to  participate in ECA's 401k Plan and ECA shall make contributions to
the  Plan  on  behalf of Employee in the percentage amount governed by the Plan,
which currently provides for a contribution by ECA in the amount equal to 33% of
Employee's  contributions  to  the  plan.  Employee  shall  also  be eligible to
participate  in  all  other  health,  educational, insurance, profit-sharing and
wellness  programs  offered  by  ECA  to  its  employees.

                                       2
<PAGE>

               (c)  REIMBURSEMENT OF EXPENSES.  ECA shall reimburse Employee for
                    -------------------------
all reasonable business-related expenses incurred by Employee in connection with
his employment at ECA, in accordance with the policies, practices and procedures
in  effect  generally  with  respect  to  ECA  employees.

               (d)  LOAN.  In  consideration of Employee's commitment to ECA and
                    ----
fulfillment  of  his duties and obligations hereunder, subject to the provisions
of  Paragraph  4(c)  below,  ECA  shall make a loan to Employee in the amount of
$136,500.00.  ECA  shall  make  the  loan to Employee at the commencement of the
term of this Agreement.  Employee shall execute a Promissory Note, substantially
in  the  form of Exhibit A attached hereto.  If Employee remains employed at ECA
for  the  Initial Term of this Agreement, then, at the expiration of the Initial
Term, ECA shall cancel all sums due ECA from Employee under the Promissory Note.

               (e)  EARNED  INCENTIVE  COMPENSATION.  At  the  expiration of the
                    -------------------------------
Initial  Term  of this Agreement, Employee shall receive 1,408 shares of Class A
stock  in  ECA.

          4.     TERMINATION  OF  EMPLOYMENT.
                 ---------------------------

               (a)  BY  DEATH  OR  DISABILITY.  Employee's  employment  with ECA
                    -------------------------
shall  terminate  automatically  upon  Employee's  death.  ECA  may  terminate
Employee's  employment  during  any period in which Employee is prevented, after
reasonable  accommodation  by  ECA, from properly performing his duties due to a
mental  or physical illness for a period of three months in the aggregate in any
twelve  month  period.

               (b)  FOR CAUSE.  Notwithstanding any other provision contained in
                    ---------
this  Agreement,  ECA may terminate this Agreement immediately, at any time, for
cause.  For  purposes  of this Agreement "for cause" shall be deemed to include:
(1)  any  willful breach or habitual neglect of the Employee's duties that he is
required  to  perform  under  the terms of this Agreement; (2) commission of any
material  act  of  dishonesty,  fraud,  misrepresentation, or other act of moral
turpitude;  (3) gross carelessness or misconduct; (4) violation of any fiduciary
duty  owed  to  ECA;  and  (5)  conviction  of  a  felony.

                                       3
<PAGE>

          5.     OBLIGATIONS  OF  EMPLOYEE  ON  TERMINATION.
                 ------------------------------------------

               (a)  Employee  acknowledges  and  agrees  that  all  property,
including  keys,  credit  cards,  books,  manuals,  records,  reports,  notes,
contracts,  confidential  information,  copies  of any of the foregoing, and any
equipment  furnished  to  Employee  by  ECA  belong to ECA and shall be promptly
returned  to  ECA  upon  termination  of  employment.

               (b)  Upon  termination of employment, Employee shall be deemed to
have  resigned  from  all  offices  and  directorships  held  at  ECA.

               (c)  REPAYMENT  OF  LOAN.  If  Employee  resigns  or  otherwise
                    -------------------
voluntarily  terminates  his  employment from ECA prior to the expiration of the
Initial  Term  of this Agreement, or if ECA terminates Employee's employment for
cause  as defined in Paragraph 4(b) above prior to the expiration of the Initial
Term  of  this  Agreement,  then  all amounts outstanding under the loan made to
Employee  pursuant  to  Paragraph  3(d)  above  shall become due and payable and
Employee shall repay such loan to ECA within ten (10) days of the termination of
his  employment.

          6.       OBLIGATIONS  OF  ECA  ON  TERMINATION.
                   -------------------------------------

               (a)  DEATH,  DISABILITY,  OR FOR CAUSE.  If Employee's employment
                    ---------------------------------
is  terminated  by  reason  of  Employee's death or disability, or if Employee's
employment  is  terminated  by ECA for cause as provided in this Agreement, this
Agreement  shall  terminate  as  provided  by its terms and ECA's obligations to
Employee  under  this  Agreement shall be limited to (i) the prorated payment of
Employee's  salary  through  the  date  of termination to the extent not paid by

                                       4
<PAGE>

then;  (ii)  the  payment  of  any  unused  earned  vacation through the date of
termination;  and  (iii)  the payment of any reimbursable business expenses that
were  documented  by  Employee  prior  to  termination  in accordance with ECA's
policies  and  that were not reimbursed by ECA at the time of the termination of
this  Agreement.  As  of  the  date  of  termination  of  this  Agreement, ECA's
obligations  to Employee under this Agreement shall terminate, and ECA will have
no  further  obligation  to  pay  Employee or his estate, beneficiaries or legal
representatives  any  compensation  or  any  other  amounts, except as otherwise
provided by law.  If Employee's employment is terminated by reason of Employee's
death  or disability, then ECA shall cancel all sums due ECA from Employee under
the  Promissory  Note.

          (b)  FOR  REASONS  OTHER  THAN  DEATH,  DISABILITY,  OR FOR CAUSE.  If
               ------------------------------------------------------------
Employee's  employment  is  terminated  by  ECA  for  reasons  other than death,
disability  or  for cause, ECA's obligations to Employee shall be limited to (i)
the payment of Employee's salary and the continuation of Employee's benefits for
the  period from the date of termination until the end of the Initial Term; (ii)
the  cancellation  of  all sums due and owing ECA under the Promissory Note; and
(iii)  the  issuance  of the shares of Class A stock described in Paragraph 3(e)
above.

          7.     ARBITRATION.
                 -----------

               (a)  All  claims, disputes, controversies or disagreements of any
kind  whatsoever ("Claims") including any claims arising out of or in connection
with Employee's employment or the termination of Employee's employment, that may
arise  between  Employee  and  ECA,  including any claims that may arise between
Employee  and  ECA's officers, directors, employees, or agents in their capacity
as  such,  shall  be  submitted  to  arbitration before the American Arbitration
Association  in  Charleston,  West  Virginia  in  accordance  with the rules and
procedures  of  the  American  Arbitration  Association  then  existing.

                                       5
<PAGE>

               (b)  The fees and costs of the arbitration shall be borne equally
by  the  Employee and ECA, except that Employee and ECA shall each pay for their
own  attorneys' fees or costs of representation for purposes of the arbitration,
unless  otherwise  provided  by  law.

          8.     ASSIGNMENT.  This  Agreement  is personal to Employee and shall
                 ----------
not  be  assigned by Employee.  Any such assignment shall be null and void.  ECA
shall  have  the  right  to assign its obligations hereunder to any affiliate or
subsidiary  of  ECA.

          9.     SUCCESSORS.  This  Agreement  shall inure to the benefit and be
                 ----------
binding  upon  ECA  and  its subsidiaries, successors and assigns and any person
acquiring,  whether  by  merger,  consolidation,  or  the  purchase  of  all  or
substantially all of ECA's assets.  The rights of Employee to receive payment of
compensation  provided for in this Agreement shall inure to the benefit, and may
be  enforced  by,  Employee's  estate  in  the  event  of  his  death.

          10.     WAIVER.  No delay or omission by ECA or Employee in exercising
                  ------
any  right  under  this Agreement shall operate as a waiver of that or any other
right.  No  waiver  of  any  provision  of  this  Agreement,  or  consent to any
departure  by  either  party  from  any  provision  of  this  Agreement shall be
effective  in any event unless it is in writing, designated a waiver, and signed
by  the  party  waiving  the breach.  Such waiver shall be effective only in the
specific  instance  and  for  the  purpose  for  which  it  is  given.

          11.     SEVERABILITY.  The provisions of this Agreement are divisible;
                  ------------
if  any provision shall be deemed invalid or unenforceable, that provision shall
be deemed limited to the extent necessary to render it valid and enforceable and
the  remaining  provisions  of  this  Agreement shall continue in full force and
effect  without  being  impaired  or  invalidated  in  any  way.

                                       6
<PAGE>

          12.     AMENDMENT.  This  Agreement  may  not  be  altered or amended,
                  ---------
except  in  a  writing  signed  by  both  Employee  and  ECA.

          13.     CONSTRUCTION  AND  GOVERNING  LAW.  The  captions  used  in
                  ---------------------------------
connection  with this Agreement are for reference purposes only and shall not be
construed  as  part  of this Agreement.  This Agreement shall be governed by and
construed  in  accordance  with  the  laws  of  the  State  of  West  Virginia.

          14.     ENTIRE  AGREEMENT.  This  Agreement  supersedes  all  prior
                  -----------------
agreements, understandings, and communications between Employee and ECA, whether
written  or  oral,  express  or  implied, relating to the subject matter of this
Agreement and is intended as a complete and final expression of the terms of the
Agreement between Employee and ECA and shall not be changed or subject to change
orally.

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

                              ENERGY  CORPORATION  OF  AMERICA

                              By  /S/   John Mork
                                --------------------------------------
                                   John  Mork,  President  and  CEO

                                 /S/  Donald C. Supcoe
                                --------------------------------------
                                        Donald  C.  Supcoe

<PAGE>

                                    EXHIBIT A

                                 PROMISSORY NOTE

$136,500.00                                        Charleston,  WV
                                                           ,  2000
                                           ----------------

          FOR  VALUE  RECEIVED,  THE UNDERSIGNED, Donald C. Supcoe ("Borrower"),
hereby promises to pay to the order of Energy Corporation of America ("Lender"),
at  its  offices  located  at  4643  South  Ulster  Street,  Suite 1100, Denver,
Colorado,  80237,  or  at  such  other place as the holder may from time to time
designate,  the  principal  sum  of  $136,500.00  in  lawful money of the United
States,  and  to pay interest thereon in like money at said office from the date
of this Note on the unpaid principal balance hereof at the rate of eight percent
(8%)  per  annum.

          The  principal  amount  due  hereunder  together with interest thereon
shall  be  paid  three  (3) years from the date of this Note; provided, however,
that  such  repayment  obligations shall be cancelled (i) if Borrower remains in
the  continuous  employment,  in good standing, of Energy Corporation of America
for  a  period  of  three  (3)  years from the date of this Note; or (ii) Energy
Corporation  of  America  terminates  Borrower's employment at any time prior to
three  (3) years from the date of this Note, for any reason other than cause; or
(iii)  the  Borrower's  death  or  disability.

          Borrower  waives  diligence, demand, presentment, notice of nonpayment
and  protest,  and  assent to extensions of the time of payment, forbearance, or
other  indulgence,  without  notice.

          IN WITNESS WHEREOF, Borrower has caused this Note to be executed as of
the  date  and  year  first  above  written.

                                        /s/ Donald C. Supcoe
                                     ------------------------------
                                        DONALD  C.  SUPCOE<PAGE>

                                                                   EXHIBIT 10.10

                           SECOND AMENDMENT TO LEASE
                           -------------------------

  I.   PARTIES AND DATE.

       This Second Amendment to Lease (the "Amendment") dated July 6, 2000, is
by and between IRVINE TECHNOLOGY PARTNERS III, a California general partnership
("Landlord"), and LANTRONIX, a California corporation ("Tenant").

  II.  RECITALS.

       On June 28, 1993, Landlord and Tenant entered into a lease for space in a
building located at 15353 and 15355 Barranca Parkway, Suite 102, Irvine,
California ("Premises"), which lease was amended by a First Amendment to Lease
dated August 10, 1995 (the "First Amendment"), wherein approximately 23,622
rentable square feet within the building was added to the Premises (as amended,
the "Lease").

       On March 18, 1996, Landlord, Tenant and Advanced Computing, Inc.
("Advanced Computing") entered into a Consent to Subletting (the "Advanced
Computing Consent") permitting the sublease of a portion of the Premises, and on
July 29, 1998 Landlord, Tenant and Inter-Tel Technologies, Inc. ("Inter-Tel")
entered into a Consent to Subletting (the "Inter-Tel Consent") permitting the
sublease of an additional portion of the Premises.

       Landlord and Tenant each desire to modify the Lease to extend the Lease
Term, adjust the Basic Rent, and make such other modifications as are set forth
in "III. MODIFICATIONS" next below.

III.   MODIFICATIONS.

       A.  Basic Lease Provisions. The Basic Lease Provisions are hereby amended
           ----------------------
           as follows:

           1.  Item 5 is hereby deleted in its entirety and substituted
           therefor shall be the following:

               "5. Lease Term: The Term of this Lease shall expire at midnight
               on July 31, 2005"

           2.  Item 6 is hereby amended by adding the following:

               "Basic Rent: Commencing August 1, 2000, the Basic Rent shall be
               Fifty Six Thousand Eight Hundred Five Dollars ($56,805.00) per
               month, based on $1.11 per rentable square foot.

               Basic Rent is subject to adjustment as follows:

               Commencing August 1, 2001, the Basic Rent shall be Fifty Eight
               Thousand Three Hundred Forty-One Dollars ($58,341.00) per
               month, based on $1.14 per rentable square foot.

               Commencing August 1, 2002, the Basic Rent shall be Fifty Nine
               Thousand Eight Hundred Seventy-Six Dollars ($59,876.00) per
               month, based on $1.17 per rentable square foot.

               Commencing August 1, 2003, the Basic Rent shall be Sixty One
               Thousand Four Hundred Eleven Dollars ($61,411.00) per month,
               based on $1.20 per rentable square foot.

               Commencing August 1, 2004, the Basic Rent shall be Sixty Two
               Thousand Nine Hundred Forty-Six Dollars ($62,946.00) per month,
               based on $1.23 per rentable square foot."

           3.  Item 9 is hereby deleted in its entirety and substituted
           therefor shall be the following:

               "9. Security Deposit: $69,241.00"

                                       1
<PAGE>

           4.  Item 12 is hereby deleted in its entirety and substituted
           therefor shall be the following:

               "12. Address for Payments and Notices:

               LANDLORD

               IRVINE TECHNOLOGY PARTNERS III
               c/o Insignia/ESG of California, Inc.
               43 Discovery, Suite 120
               Irvine, CA 92618

               with a copy of notices to:

               IRVINE TECHNOLOGY PARTNERS III
               c/o The Irvine Company dba Irvine Industrial Company
               P.O. Box 6370
               Newport Beach, CA 92658-6370
               Attn: Vice President, Operations, Irvine Industrial Company

               TENANT

               LANTRONIX
               15353 Barranca Parkway, Suite 102
               Irvine, CA 92718
               Attn: Fred Thiel, President & CEO"
               with a copy of notices to: CFO

           5.  Item 14 is hereby deleted in its entirety and substituted
           therefor shall be the following:

               "14.  Vehicle Parking Spaces: Two Hundred Four (204) (of which,
               eight shall be marked "visitor" and eight (8) shall be marked
               "reserved")."

     B.    Right to Extend this Lease. Provided that Tenant is not in default
           --------------------------
under any provision of this Lease beyond the expiration of any applicable cure
period, either at the time of exercise of the extension right granted herein or
at the time of the commencement of such extension, and provided further that
Tenant is occupying the entire Premises and has not assigned or sublet any of
its interest in this Lease, Tenant may extend the Term of this Lease for one (1)
period of sixty (60) months. Tenant shall exercise its right to extend the Term
by and only by delivering to Landlord, not less than nine (9) months or more
than twelve (12) months prior to the expiration date of the Term, Tenant's
irrevocable written notice of its commitment to extend (the "Commitment
Notice"). The Basic Rent payable under the Lease during any extension of the
Term shall be determined as provided in the following provisions.

           If Landlord and Tenant have not by then been able to agree upon the
Basic Rent for the extension of the Term, then within one hundred twenty (120)
and ninety (90) days prior to the expiration date of the Term, Landlord shall
notify Tenant in writing of the Basic Rent that would reflect the prevailing
market rental rate for a 60-month renewal of comparable space in the Project
(together with any increases thereof during the extension period) as of the
commencement of the extension period ("Landlord's Determination"). Should Tenant
disagree with the Landlord's Determination, then Tenant shall, not later than
twenty (20) days thereafter, notify Landlord in writing of Tenant's
determination of those rental terms ("Tenant's Determination"). Within ten (10)
days following delivery of the Tenant's Determination, the parties shall attempt
to agree on an appraiser to determine the fair market rental. If the parties are
unable to agree in that time, then each party shall designate an appraiser
within ten (10) days thereafter. Should either party fail to so designate an
appraiser within that time, then the appraiser designated by the other party
shall determine the fair market rental. Should each of the parties timely
designate an appraiser, then the two appraisers so designated shall appoint a
third appraiser who shall, acting alone, determine the fair market rental for
the Premises. Any appraiser designated hereunder shall have an MAI certification
with not less than five (5) years experience in the valuation of commercial
industrial buildings in the vicinity of the Project.

           Within thirty (30) days following the selection of the appraiser and
such appraiser's receipt of the Landlord's Determination and the Tenant's
Determination, the appraiser shall determine whether the rental rate determined
by Landlord or by Tenant more accurately reflects the fair market rental rate
for the 60-month renewal of the Lease for the Premises, as reasonably
extrapolated to the commencement of the extension period. Accordingly, either
the Landlord's Determination or the Tenant's

                                       2
<PAGE>

Determination shall be selected by the appraiser as the fair market rental rate
for the extension period. In making such determination, the appraiser shall
consider rental comparables for the Project (provided that if) there are an
insufficient number of comparables within the Project, the appraiser shall
consider rental comparables for similarly improved space within the vicinity of
the Project with appropriate adjustment for location and quality of project),
but the appraiser shall not attribute any factor for market tenant improvement
allowances or brokerage commissions in making its determination of the fair
market rental rate. At any time before the decision of the appraiser is
rendered, either party may, by written notice to the other party, accept the
rental terms submitted by the other party, in which event such terms shall be
deemed adopted as the agreed fair market rental. The fees of the appraiser(s)
shall be borne entirely by the party whose determination of the fair market
rental rate was not accepted by the appraiser.

           Within twenty (20) days after the determination of the fair market
rental, Landlord shall prepare an appropriate amendment to this Lease for the
extension period, and Tenant shall execute and return same to Landlord within
twenty (20) days. Should the fair market rental not be established by the
commencement of the extension period, then Tenant shall continue paying rent at
the rate in effect during the last month of the initial Term, and a lump sum
adjustment shall be made promptly upon the determination of such new rental.

           If Tenant fails to timely comply with any of the provisions of this
paragraph, Tenant's right to extend the Term shall be extinguished and the Lease
shall automatically terminate as of the expiration date of the term, without
any extension and without any liability to Landlord. Any attempt to assign or
transfer any right or interest created by this paragraph shall be void from its
inception. Tenant shall have no other right to extend the Term beyond the single
sixty (60) month extension period created by this paragraph. Unless agreed to in
a writing signed by Landlord and Tenant, any extension of the Term, whether
created by an amendment to this Lease or by a holdover of the Premises by
Tenant, or otherwise, shall be deemed a part of, and not in addition to, any
duly exercised extension period permitted by this paragraph.

       C.  Security Deposit. Concurrently with Tenant's delivery of this
           ----------------
Amendment, Tenant shall deliver the sum of Forty One Thousand Sixteen Dollars
($41,016.00) to Landlord, which sum shall be added to the Security Deposit
presently being held by Landlord in accordance with Section 4.3 of the Lease.

       D.  Project Costs. The definition of "Building Costs" in Section 4.2(e)
           -------------
of the Lease is hereby amended to include the establishment of reasonable
reserves for the replacement and/or repair of the Building as well as for Common
Area improvements.

       E.  Operating Expense Caps. The provisions of Article III(F) of the First
           ----------------------
(which insert a revised Section 4.2(g) of the Lease), are hereby deleted in
their entirety and shall have no further force or effect.

       F.  Parking. The requirement in the second line of Section 6.4 Parking of
           -------                                                    -------
the Lease for five (5) reserved parking spaces is hereby deleted in its entirety
in favor of the revised provisions of Item 14 of the Basic Lease Provisions set
forth in this Amendment. The cost of marking the "visitor" and "reserved" spaces
shall be part of the Landlord's Contributions as defined in the Work Letter
attached to this Amendment.

       G.  Restoration. The reference in the eighth (8th) line of Section 11.1
           -----------
(a) of the Lease to "one hundred eighty (180) days", is hereby revised to "two
hundred seventy (270) days".

       H.  Holding Over. Subsection (a) and (b) of Section 15.1 Holding Over
           ------------                                         ------------
of the Lease are hereby deleted in their entirety, and substituted therefor
shall be the following: "...(a) one hundred seventy-five percent (175%) of the
Basic Rent for the month immediately preceding the date of termination for the
initial two (2) months of holdover, and two hundred percent (200%) of the Basic
Rent for the month immediately preceding the date of termination for each
month of holdover thereafter, or (b) the then currently scheduled Basic Rent
for comparable space in the Project."

       I.  Tenant Improvements. Landlord hereby agrees to complete the Tenant
           -------------------
Improvements for the Premises in accordance with the provisions of Exhibit X-1,
                                                                   -----------
Work Letter, attached hereto. It is understood that the Tenant Improvements
shall be done during Tenant's occupancy of the Premises. In this regard, Tenant
agrees to assume any risk of injury, loss or damage which may result, unless
caused by the gross negligence or willful misconduct of Landlord, its
contractors or employees. Tenant further agrees that no rental abatement shall
result while the Tenant Improvements are completed in the Premises.

                                       3
<PAGE>

       J.  Consents to Subletting. Tenant agrees that the subtenancies of
           ----------------------
Advanced Computing and of Inter-Tel of the Premises have terminated or will
terminate not later than July 31, 2000, and that the Advanced Computing Consent
and the Inter-Tel Consent shall not be effective or binding on Landlord beyond
July 31, 2000.

IV.    GENERAL.

       A.  Effect of Amendments. The Lease shall remain in full force and effect
           --------------------
except to the extent that it is modified by this Amendment.

       B.  Entire Agreement. This Amendment embodies the entire understanding
           ----------------
between Landlord and Tenant with respect to the modifications set forth in "III.
MODIFICATIONS" above and can be changed only by a writing signed by Landlord and
Tenant.

       C.  Counterparts. If this Amendment is executed in counterparts, each is
           ------------
hereby declared to be an original; all, however, shall constitute but one and
the same amendment. In any action or proceeding, any photographic, photostatic,
or other copy of this Amendment may be introduced into evidence without
foundation.

       D.  Defined Terms. All words commencing with initial capital letters in
           -------------
this Amendment and defined in the Lease shall have the same meaning in this
Amendment as in the Lease, unless they are otherwise defined in this Amendment.

       E.  Corporate and Partnership Authority. If Tenant is a corporation or
           -----------------------------------
partnership, or is comprised of either or both of them, each individual
executing this Amendment for the corporation or partnership represents that he
or she is duly authorized to execute and deliver this Amendment on behalf of the
corporation or partnership and that this Amendment is binding upon the
corporation or partnership in accordance with its terms.

       F.  Attorneys' Fees. The provisions of the Lease respecting payment of
           ---------------
attorneys' fees shall also apply to this Amendment.

V.     EXECUTION.

       Landlord and Tenant executed this Amendment on the date as set forth in
"I. PARTIES AND DATE." above.

LANDLORD:                                         TENANT:

IRVINE TECHNOLOGY PARTNERS III,                   LANTRONIX,
a California general partnership                  a California corporation

By: THE IRVINE COMPANY
    Its General Partner

                [LEGAL APPROVED SEAL]             By:  /s/ Steven V. Cotton
                                                     ---------------------------
                                                     Name: Steven V. Cotton
                                                          ----------------------
       By  /s/ Robert E. Williams                    Title: CFO
         -----------------------------------               ---------------------
         Robert E. Williams, Jr., President
         Irvine Industrial Company,
         a division of The Irvine Company         By: /s/ Fred Thiel
                                                     ---------------------------
                                                     Name: /s/ Fred Thiel
       By  /s/ Nancy Trujillo                             ----------------------
         -----------------------------------         Title: CEO
         Nancy E. Trujillo,                                ---------------------
         Assistant Secretary

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<PAGE>

                                   EXHIBIT X

                                  WORK LETTER

                               DOLLAR ALLOWANCE
                           [SECOND GENERATION SPACE]

The Tenant Improvement work (herein "Tenant Improvements") shall consist of any
work required to complete the Premises pursuant to approved plans and
specifications. All of the Tenant Improvement work shall be performed by the
"TI Contractor" selected by Landlord, all in accordance with the procedures and
requirements set forth below.

1.   ARCHITECTURAL AND CONSTRUCTION PROCEDURES

     A.   Tenant and Landlord have approved, or shall approve within the time
          period set forth below, both (i) a detailed space plan for the
          Premises, prepared by Landlord's architect, which includes interior
          partitions, ceilings, interior finishes, interior office doors, suite
          entrance, floor coverings, window coverings, lighting, electrical and
          telephone outlets, plumbing connections, heavy floor loads and other
          special requirements ("Preliminary Plan"), and (ii) an estimate,
          prepared by Landlord's contractor, of the cost for which Landlord will
          complete or cause to be completed the Tenant Improvements
          ("Preliminary Cost Estimate"). Tenant shall approve or disapprove each
          of the Preliminary Plan and the Preliminary Cost Estimate by signing
          copies of the appropriate instrument and delivering same to Landlord
          within five (5) working days of its receipt by Tenant. If Tenant
          disapproves any matter, Tenant shall specify in detail the reasons for
          disapproval and Landlord shall attempt to modify the Preliminary Plan
          and the Preliminary Cost Estimate to incorporate Tenant's suggested
          revisions in a mutually satisfactory manner. Subject to the express
          provisions of Article II.A below regarding the application of up to
          One Dollar ($1.00) per rentable square foot of the Landlord's
          Contribution towards the cost of "Non-Standard Improvements" (as
          hereinafter defined), it is understood and agreed that the Preliminary
          Plan submitted by Landlord's architect is intended to include all
          improvements desired by Tenant using Landlord's "Standards" (as
          hereinafter defined), whether or not the full amount of Landlord's
          Contribution would be required to complete construction of the
          improvements as shown in the Preliminary Plan. In all events, however,
          Tenant shall approve in all respects a Preliminary Plan and
          Preliminary Cost Estimate not later than July 6, 2000 ("Plan Approval
          Date").

     B.   On or before the Plan Approval Date, Tenant shall provide in writing
          to Landlord or Landlord's architect all specifications and information
          requested by Landlord for the preparation of final construction
          documents and costing, including without limitation Tenant's final
          selection of wall and floor finishes, complete specifications and
          locations (including load and HVAC requirements) of Tenant's
          equipment, and details of all "Non-Standard Improvements" (as defined
          below) to be installed in the Premises (collectively, "Programming
          Information"). Tenant understands that final construction documents
          for the Tenant Improvements shall be predicated on the Programming
          Information, and accordingly that such information must be accurate
          and complete.

     C.   The Tenant Improvements shall incorporate Landlord's building standard
          materials and specifications ("Standards"). No deviations from the
          Standards may be required by Tenant with respect to doors and frames,
          finish hardware, entry graphics, the ceiling system, light fixtures
          and switches, mechanical systems, life and safety systems, and/or
          window coverings; provided that Landlord may, in its sole discretion,
          authorize in writing one or more of such deviations. In the event that
          Landlord shall so authorize any such deviations from the Standards,
          Landlord shall advise Tenant at the time such deviation(s) are
          authorized whether: (i) such deviation(s) shall remain in the Premises
          at the expiration or earlier termination of this Lease, or (ii) such
          deviation(s) shall be replaced with the applicable Standard item(s)
          (in which event Tenant shall pay to Landlord, prior to the
          commencement of construction and in addition to sums otherwise due
          hereunder from Tenant, an amount equal to the cost, as reasonably
          estimated by Landlord, of replacing the deviating item(s) with the
          applicable Standard item(s) upon the expiration or termination of this
          Lease). All other non-standard items ("Non-Standard Improvements")
          shall be subject to the reasonable prior approval of Landlord.
          Landlord shall in no event be required to approve any Non-Standard
          Improvement if Landlord determines that such improvement (i) is of a
          lesser quality than the corresponding Standard, (ii) fails to conform
          to applicable governmental requirements, (iii) requires building
          services beyond the level normally provided to other tenants, or (iv)
          would have an adverse aesthetic impact from the exterior of the
          Premises.

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<PAGE>

     D.   Upon Tenant's approval of the Preliminary Plan and Preliminary Cost
          Estimate and delivery of the complete Programming Information,
          Landlord's architect and engineers shall prepare and deliver to Tenant
          working drawings and specifications ("Working Drawings and
          Specifications"). Upon completion of the competitive bid process
          described below, the "Bid Amount" (as defined below) together with
          Landlord's final cost estimate of the Completion Cost of the Tenant
          Improvements work (the "Final Cost Estimate") shall be delivered to
          Tenant. Tenant shall have five (5) working days from the receipt
          thereof to approve or disapprove the Working Drawings and
          Specifications and the Final Cost Estimate. Tenant shall not
          unreasonably withhold or delay its approval, and any disapproval or
          requested modification shall be limited to items not contained in the
          approved Preliminary Plan or Preliminary Cost Estimate. Should Tenant
          disapprove the Working Drawings and Specifications and the Final Cost
          Estimate, such disapproval shall be accompanied by a detailed list of
          revisions. Any revision requested by Tenant and accepted by Landlord
          shall be incorporated into a revised set of Working Drawings and
          Specifications and Final Cost Estimate, and Tenant shall approve same
          in writing within five (5) business days of receipt without further
          revision.

     E.   In the event that Tenant requests in writing a revision in the
          approved Working Drawings and Specifications ("Change"), Landlord
          shall advise Tenant by written change order as soon as is practical of
          any increase in the Completion Cost such Change would cause. Tenant
          shall approve or disapprove such change order in writing within two
          (2) working days following its receipt from Landlord. Tenant's
          approval of a Change shall be accompanied by Tenant's payment of any
          resulting increase in the Completion Cost. Landlord shall have the
          right to decline Tenant's request for a Change for any of the reasons
          set forth in Article 1.C above for Landlord's disapproval of a Non-
          Standard Improvement. It is understood that Landlord shall have no
          obligation to interrupt or modify the Tenant Improvement work pending
          Tenant's approval of a change order.

     F.   Landlord shall submit the Working Drawings and Specifications to a
          competitive bidding process involving at least three (3) licensed and
          reputable general contractors. If requested by Tenant, Landlord shall
          provide copies of the bid responses to Tenant. After adjustments for
          any inconsistent assumptions to reflect an "apples to apples"
          comparison, Landlord shall select the lowest qualified bidder and that
          bid so selected shall be referred to as the "Bid Amount". In the event
          Landlord selects other than the lowest bidder, it shall do so based on
          commercially reasonable factors which it shall demonstrate to Tenant.
          Upon selection of the bidder, Landlord shall enter into a "lump sum"
          or "fixed price" construction contract with the chosen contractor (the
          "TI Contractor") for construction of the Tenant Improvements in
          accordance with the approved and final Working Drawings and
          Specifications for the Bid Amount (the "TI Contract").

     G.   Tenant hereby designates Terry Kirschner, Telephone No.(949) 453-7l53
          as its representative, agent and attorney-in-fact for the purpose of
          receiving notices, approving submittals and issuing requests for
          Changes, and Landlord shall be entitled to rely upon authorizations
          and directives of such person(s) as if given directly by Tenant.
          Tenant may amend the designation of its construction representative(s)
          at any time upon delivery of written notice to Landlord.

II.  COST OF TENANT IMPROVEMENTS

     A.   Landlord shall complete, or cause to be completed, the Tenant
          Improvements, at the construction cost shown in the approved Final
          Cost Estimate (subject to the provisions of this Work Letter), in
          accordance with final Working Drawings and Specifications approved by
          both Landlord and Tenant. Landlord shall pay towards the final
          construction costs ("Completion Cost") as incurred a maximum of Four
          Hundred Thirty Four Thousand Nine Hundred Ninety-Six Dollars
          ($434,996.00)) ("Landlord's Contribution"), based on $8.50 per square
          foot of the Premises, and Tenant shall be fully responsible for the
          remainder ("Tenant's Contribution"). Up to, but not exceeding, One
          Dollar ($1.00) per rentable square foot of the Landlord's
          Contribution may be applied towards the cost of "Non-Standard
          Improvements" approved by Landlord pursuant to Article 1.C above and
          incorporated into the approved Working Drawings and Specifications. If
          the actual cost of completion of the Tenant Improvements is less than
          the maximum amount provided for the Landlord's Contribution, such
          savings shall inure to the benefit of Landlord and Tenant shall not be
          entitled to any credit or payment.

     B.   The Completion Cost shall include all direct costs of Landlord in
          completing the Tenant Improvements, including but not limited to the
          following: (i) the Bid Amount, (ii) payments made to architects,
          engineers, contractors, subcontractors and other third party
          consultants in the performance of the work, (iii) permit fees and
          other sums paid to

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<PAGE>

          governmental agencies, (iv) costs of all materials incorporated into
          the work or used in connection with the work, and (v) keying and
          signage costs. The Completion Cost shall also include an
          administrative/supervision fee to be paid to Landlord in the amount
          of five percent (5%) of all such direct costs.

     C.   Prior to start of construction of the Tenant Improvements, Tenant
          shall pay to Landlord in full the amount of the Tenant's Contribution
          set forth in the Final Cost Estimate. If the actual Completion Cost of
          the Tenant Improvements is less than the Final Cost Estimate, any
          portion of the Tenant's Contribution paid by Tenant but not expended
          towards the Completion Cost shall be credited to rent next due under
          this Lease. If the actual Completion Cost is greater than the Final
          Cost Estimate because of modifications or extras not reflected on the
          approved working drawings, then Tenant shall pay to Landlord, within
          ten (10) days following submission of an invoice therefor, all such
          additional costs, including any additional architectural fee. If
          Tenant defaults in the payment of any sums due under this Work Letter,
          Landlord shall (in addition to all other remedies) have the rights as
          in the case of Tenant's failure to pay rent under the Lease.

     D.   Landlord's obligation to fund the Landlord's Contribution shall only
          apply such Tenant Improvement work for which contracts are let not
          later than January 15, 2001. Any portion of the Landlord's
          Contribution not utilized by such date shall be considered forfeited
          by Tenant.

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