Document:

EMPLOYMENT AGREEMENT

         This  Agreement  is  made  and  entered  into  by and  between  Network
Peripherals  Inc., a Delaware  Corporation (the  "Company"),  and James G. Regel
("Regel") as September 12, 2000 (the "Effective Date").

         1.  Position and Duties.  Regel shall be employed by the Company as its
President and Co-Chief  Executive  Officer,  reporting to the Company's Board of
Directors (the "Board"). As its President and Co-Chief Executive Officer,  Regel
agrees to devote his full business  time,  energy and skill to his duties at the
Company.  These duties shall include all those duties  customarily  performed by
the  President  and Chief  Executive  Officer,  as well as any other  reasonable
duties that may be assigned from time to time by Board.  In addition,  Regel has
been  elected  to the Board for a term  expiring  at the  annual  meeting of the
stockholders of the Company to be held in 2001.

         2. Term of Employment.  Regel's employment with the Company will be for
no specified  term,  and may be  terminated by Regel or the Company at any time,
with or without  cause.  Upon the  termination  of Regel's  employment  with the
Company for any  reason,  neither  Regel nor the Company  shall have any further
obligation or liability under this Employment  Agreement to the other, except as
set forth in paragraphs 5, 6, 10 and 11 below.

         3.  Compensation.  Regel  shall be  compensated  by the Company for his
services as follows:

                 (a) Base  Salary.  Regel shall be paid a monthly base salary of
$20,833.33 per month  ($250,000 on an annualized  basis),  subject to applicable
withholding, in accordance with the Company's normal payroll procedures.

                 (b) Benefits.  Regel shall have the right, on the same basis as
other members senior management of the Company, to participate in and to receive
benefits under any of the Company's employee benefit plans, as such plans may be
modified from time to time. In addition, Regel shall be entitled to the benefits
afforded to other members of senior  management  under the  Company's  vacation,
holiday and business expense reimbursement policies.

                 (c)  Performance  Bonus.  Regel  shall be  eligible  to earn an
annual  bonus of  $100,000  based on the  attainment  of MBOs as approved by the
Compensation  Committee.  For the first 12 months of his employment,  $75,000 or
75% of the total eligible bonus is guaranteed, and is paid in equal amounts over
the first twelve months of his employment.  This  guaranteed  bonus will be paid
consistent with the Company's normal payroll  procedure,  with the remaining 25%
of the eligible bonus to be determined by attainment of the MBOs as evaluated by
the  Compensation  Committee  and paid in the quarter  following  Regel's  first
twelve months of employment.

         4. Stock  Option.  Regel  shall be granted the option to purchase up to
375,000  shares of the Common  Stock of the Company (the  "Option").  Subject to
Regel's continued  employment with the Company, the shares subject to the Option
(the  "Optioned  Shares")  shall

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<PAGE>

become vested and exercisable at the rate of 93,750 Optioned Shares on August 1,
2001 and an  additional  7,812  Optioned  Shares  for each full month of Regel's
employment with the Company  thereafter.  Provided that Regel's  employment with
the Company has not terminated prior to the date of the consummation of a Change
in Control (as defined in paragraph 7 below),  the vesting and exercisability of
the Optioned Shares shall be accelerated  effective as of the date ten (10) days
prior to the date of the Change in Control as to:

                 (a) 50% of the  Optioned  Shares  that would  otherwise  remain
unvested  as of the date of the Change in Control,  provided  that the Change in
Control is consummated on or before February 1, 2001; or

                 (b) 75% of the  Optioned  Shares  that would  otherwise  remain
unvested as of the dated of the Change in Control,  provided  that the Change in
Control is  consummated  after February 1, 2001 and on or before August 1, 2001;
or

                 (c) 100% of the  Optioned  Shares that would  otherwise  remain
unvested  as of the date of the Change in Control,  provided  that the Change in
Control is consummated after August 1, 2001.

Except as otherwise provided herein, the Option shall be subject to the terms of
the Company's 1997 and 1999 Stock Plan and the appropriate standard form Company
stock option agreement,  which Regel shall be required to sign as a condition of
the issuance of the Option.

         5. Benefits Upon Voluntary Termination,  Permanent Disability or Death.
In the event that Regel voluntarily terminates his employment  relationship with
the  Company  at any time  and such  termination  is not  deemed a  Constructive
Termination  Following a Change in Control (as defined in paragraph 7 below), or
in the event  that  Regel's  employment  terminates  as a result of his death or
Permanent Disability (as defined in paragraph 7 below) other that within one (1)
year after a Change in Control,  Regel shall be entitled to no  compensation  or
benefits from the Company other that those earned under paragraphs 3 and 4 above
through  the date of his  termination  of  employment.  In the event  that Regel
voluntarily   resigns  from  his   employment   with  the   Company,   he  shall
simultaneously resign from his membership on the Board.

         6. Benefits Upon Other  Termination.  Regel agrees that his  employment
may be  terminated  by the Company at any time,  with or without  cause.  In the
event of the  termination  of Regel's  employment by the Company for the reasons
set forth below, he shall be entitled to the following:

                  (a) Termination for Cause. If Regel's employment is terminated
by the  Company  for Cause (as  defined in  paragraph  7 below),  Regel shall be
entitled to no compensation or benefits from the Company other than those earned
under paragraph 3 and 4 above through the date of his termination of employment.
In the event that Regel's  employment  is  terminated  by the Company for Cause,
Regel shall immediately resign from his membership on the Board.

                 (b) Termination  Without Cause:  Resignation Upon  Constructive
Termination  Following  a  Change  in  Control:  Death or  Permanent  Disability
Following a Change in Control.

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<PAGE>

                 (i) If Regel's  employment is terminated by the Company for any
reason  other than for Cause (as  defined  in  paragraph  7 below),  or if Regel
resigns from all capacities in which he is then rendering service to the Company
(including services as a member of the Board) within a reasonable period of time
following an event constituting  Constructive  Termination Following a Change in
Control (as defined in  paragraph 7 below) as a result of his death or Permanent
Disability  following  such  Change in  Control,  Regel shall be entitled to the
following separation benefits:

                 (A)  Compensation  and benefits earned under paragraphs 3 and 4
through the date of Regel's termination;

                 (B)  Regel's  employment  as an  officer of the  Company  shall
terminate immediately; however, the Company shall continue Regel's employment as
a non-officer employee of the Company for a period of one (1) year following the
date of his termination (the "Severance  Period").  During the Severance Period,
Regel shall be entitled  to the greater of (1) his then  current  base salary or
(2) his base salary as provide in paragraph 3 of this Employment Agreement, less
applicable withholding,  payable in accordance with the Company's normal payroll
practices;

                 (C)  Within  ten (10)  days of  submission  of  proper  expense
reports by Regel,  the Company  shall  reimburse  Regel for all  expenses he has
reasonably  and  necessarily  incurred in  connection  with the  business of the
Company prior to his termination of employment;

                 (D)  Continued  provision of the  Company's  standard  employee
medical  insurance  coverages through the Severance  Period;  thereafter,  Regel
shall be entitled to elect continued  medical  insurance  coverage in accordance
with the applicable provisions of federal law (COBRA);  provided,  however, that
in the event Regel becomes  covered under another  employer's  group health plan
during the period  provided  for herein,  the Company  shall cease  provision of
continued group health insurance for Regel; and

                 (E) Notwithstanding any provisions to the contrary contained in
any stock option  agreement  between the Company and Regel,  if  termination  of
Regel's  employment  with the Company as  contemplated  by this  paragraph  6(b)
occurs within one (1) year following a Change in Control, then

                           (1) All stock options  grated by the Company to Regel
prior to the  Change in  Control,  which  are not  accelerated  pursuant  to the
provisions  of paragraph 4 shall become  immediately  exercisable  and vested in
full as of the time of such termination; and

                           (2) All such stock options  shall remain  exercisable
for a  period  of at  least  one  (1)  year  following  Regel's  termination  of
employment, subject to any longer periods for exercise of such options set forth
in the particular option agreements.

This paragraph  6(b)(i)(E)  shall apply to all stock option  agreements  entered
into between the Company and Regel, whether heretofore or hereafter enter into.

                 (ii) Regel's  entitlement to any benefits under  paragraph 6(b)
is

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<PAGE>

conditioned upon Regel's  execution and delivery to the Company of (A) a general
release  of  claims  in a form  satisfactory  to the  Company  and  (B)  Regel's
resignation  from all of his  positions  with the Company (with the exception of
any continued employment for the purposes set forth in paragraph 6(b), including
from the Board, in a form satisfactory of the Company.

                 (iii) In the event  that  Regel  accepts  employment  with,  or
provides any  services to (whether as a partner,  consultant,  joint  venture or
otherwise),  any person or entity  which  offers  products or services  that are
competitive  with any  products or  services  offered by the Company or with any
products or services  that Regel is aware the  Company  intends to offer,  Regel
shall be deemed to have resigned from his employment with the Company  effective
immediately  upon such  acceptance of employment or provision of services.  Upon
such  resignation,  Regel  shall not be  entitled  to any  further  payments  or
benefits as provided under paragraph 6(b).

                 (iv) In the  event  that  Regel  accepts  employment  with,  or
provides any  services to (whether as a partner,  consultant,  joint  venture or
otherwise), any person or entity while Regel continues to receive any separation
benefits  pursuant to this paragraph 6(b),  Regel shall  immediately  notify the
Company of such acceptance and provide to the Company  information  with respect
to such  person or entity as the  Company  may  reasonably  request  in order to
determine if that person's or entity's products or services are competitive with
the Company's.

         7.  Definitions.  As used in this Employment  Agreement,  the following
terms shall have the meaning set forth below:

                 (a) "Acquiring  Corporation" means, in connection with a Change
in Control, the surviving,  continuing,  successor, or purchasing corporation or
parent corporation thereof, as the cause may be.

                 (b) "Cause" means Regel's:

                           (i)  theft,   material  act  of  dishonesty,   fraud,
falsification  of any  employment  or Company  records or the  commission of any
criminal  act which  impairs  his  ability  to  perform  his  duties  under this
Employment Agreement;

                           (ii)   improper    disclosures   of   the   Company's
confidential, business or proprietary information;

                           (iii) action which the Board reasonably  believes has
had or will have a material  detrimental  effect on the Company's  reputation or
business; or

                           (iv) persistent  failure to perform the lawful duties
and responsibilities  assigned by the Company to him which is not cured within a
reasonable time following his receipt of written notice of such failure from the
Company.

                 (c) "Change in Control"  means an  Ownership  Change  Event (as
defined below) or a series of related Ownership Change Events (collectively, the
"Transaction")  wherein the stockholders of the Company  immediately  before the
Transaction,  direct or indirect

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<PAGE>

beneficial  ownership  of more that fifty  percent  (50%) of the total  combined
voting power of the  outstanding  voting stock of the Company or the corporation
or  corporations  to which  the  assets of the  Company  were  transferred  (the
"Transferee  Corporation(s),  as the case may be. For purposes of the  preceding
sentence,  indirect beneficial ownership shall include,  without limitation,  an
interact   resulting  from  ownership  of  the  voting  stock  of  one  or  more
corporations  which,  as a result of the  Transaction,  own the  Company  or the
Transferee Corporation(s), as the case may be, either directly or through one or
more  subsidiary  corporations.  The Board  shall  have the  right to  determine
whether  multiple  sales or  exchanges  of the  voting  stock of the  Company or
multiply  Ownership Change Events are related,  and its  determination  shall be
final, binding and conclusive.

For purposes of this Agreement, "Ownership Change Event" means the occurrence of
any of the  following  with respect to the  Company:  (i) the direct or indirect
sale  or  exchange  in a  single  or  series  or  related  transactions  by  the
stockholders of the Company of more that fifty percent (50%) of the voting stock
of the Company;  (ii) a merger or consolidation in which the Company is a party;
(iii) the sale, exchange,  or transfer of all or substantially all of the assets
of the Company; or (iv) a liquidation or dissolution of the Company.

                 (d)  "Constructive  Termination  Following a Change in Control"
means one or more of the following  events that occurs within one (1) year after
the occurrence of any Change in Control:  (i) without  Regel's  express  written
consent,  the  assignment to Regel of any duties,  or any  limitation of Regel's
responsibilities,   substantially  inconsistent  with  his  positions,   duties,
responsibilities  and status with the Company  immediately  prior to the date of
the Change in Control;

                           (ii) without  Regel's express  written  consent,  the
removal of Regel from his position  with the Company as held by him  immediately
prior to the Change in Control,  except in connection  with the  termination  of
Regel's employment with the Company for Cause;

                           (iii) without Regel's express  written  consent,  the
relocation  of the principal  place of Regel's  employment to a location that is
more that fifty (50) miles from his principal  place of  employment  immediately
prior  to the  date of the  Change  in  Control,  or the  imposition  of  travel
requirements on Regel  substantially  inconsistent with such travel  requirement
existing immediately prior to the date of the Change in Control;

                           (iv)  any  failure  by the  company  to  pay,  or any
reduction by the Company of (A) Regel's base salary in effect  immediately prior
to the date of the Change in Control (unless reductions comparable in amount and
duration  are  concurrently  made for all other  employees  of the Company  with
responsibilities,  organizational  level and title comparable to Regel),  or (B)
Regel's bonus compensation in effect immediately prior to the date of the Change
in Control (subject to applicable  performance  requirements with respect to the
actual amount of bonus  compensation  earned by Regel and all other participants
in the bonus program);

                           (v) any  failure by the  Company to (A)  continue  to
provide Regel with the  opportunity  to  participate,  on term no less favorable
than  those  in  effect  for  the  benefit  of  any  executive,   management  or
administrative  group which customarily includes a person holding the employment
position  or a  comparable  position  with the  company  then  held by Regel any
benefit

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or compensation plans and programs, including, but not limited to, the Company's
life,  disability,  health,  dental,  medical,  saving,  profit  sharing,  stock
purchase and retirement plans which Regel was participating immediately prior to
the date of change in Control, or their equivalent  (provided,  that any changes
or terminations of such existing benefit or compensation  plans or program shall
not be a  Constructive  Termination  within the meaning of this paragraph if the
changed plan or program or replacement  plan or program  provides  equivalent or
more favorable  benefit or compensation to Regel), or (B) provide Regel with all
other fringe benefit (or their  equivalent)  from time to time in effect for the
benefit of any executive,  management or administrative  group which customarily
includes a person holding the employment  position with the Company then held by
Regel; or

                           (vi) any failure or refuse of a successor  company to
assume the Company's  obligation under this Employment  Agreement as required by
paragraph 15;

provided,  however, that Regel's resignation as a result of any of the foregoing
events  shall  be a  voluntary  resignation,  and  not a  resignation  following
Constructive  Termination  Following  a change in  Control,  unless  Regel gives
written notice of any such event(s) to the Board and allows the Company at least
ten days thereafter to correct such condition(s).

                 (e) "Permanent Disability" mean that:

                 (i) Regel has been incapacitated by bodily injury or disease so
as to be  prevented  thereby  from  engaging  in the  performance  of his duties
following reasonable accommodations on behalf of the Company;

                 (ii) such total incapacity shall have continued for a period of
six (6) consecutive months; and

                 (iii) such  incapacity  will,  in the  opinion  of a  qualified
physician, be permanent and continuous during the remainder of Regel's life.

         8.  Parachute  Payments.  In the  event  that any  payment  or  benefit
received or to be received by Regel  pursuant to this  Employment  Agreement  or
otherwise  (collectively,  the "payments") would result in a "parachute payment"
as described in section 280G of the Internal  Revenue Code of 1986,  as amended,
notwithstanding the other provisions of this Employment Agreement, the amount of
such Payments will not exceed the amount which  produces the greatest  after-tax
benefit to Regel. For purposes of the foregoing,  the greatest after-tax benefit
will be determined  within thirty (30) days of the occurrence of such payment to
Regel, in his sole and absolute discretion.  If no such determination is made by
Regel within thirty (30) days of the  occurrence  of such  payment,  the Company
will promptly make such determination in a fair and equitable manner.

         9. Confidential and Proprietary  Information.  Regel agrees to abide by
the  terms  and   conditions  of  the   Company's   standard  form  of  employee
confidentiality and assignment of inventions  agreement as executed by Regel and
attached hereto as Exhibit A.

         10.  Agreement  Not To Compete  Unfairly.  Employee  agrees that in the
event of his  termination  at any time and for any reason,  he shall not compete
with the Company in any unfair

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manner,  including,  without  limitation,  using any confidential or proprietary
information of the Company to compete with the Company in any way.

         11.  None-Solicitation.  Employee  agrees that for a period of one year
after date of the  termination of his  employment for any reason,  he shall not,
either directly or indirectly,  solicit the services,  or attempt to solicit the
services, of any employee of the Company to any other person or entity.

         12. Dispute  Resolution.  In the event of any dispute or claim relating
to or arising out of this Employment Agreement  (including,  but not limited to,
any claim of breach of contract, wrongful termination or age, sex, race or other
discrimination),  Regel and the Company  agree that all such  disputes  shall be
fully and finally  resolved by binding  arbitration  conducted  by the  American
Arbitration Association in Santa Clara County, California in accordance with its
National  Employment  Dispute  Resolution rules, as those rules are currently in
effect (and not as they may be modified in the  future).  Employee  acknowledges
that by accepting this  arbitration  provision he is waiving any right to a jury
trail in the event of such dispute.  Provided,  however,  that this  arbitration
provision  shall not apply to any disputes or claims  relation to or arising out
of the misuse or misappropriation of trade secrets or proprietary information.

         13.  Attorney's Fees. The prevailing party shall be entitled to recover
from the  losing  party its  attorney's  fees and costs  incurred  in any action
brought to enforce any right arising out of this Employment Agreement.

         14.  Interpretation.  Regel and the Company agree that this  Employment
Agreement  shall be interpreted  in accordance  with and governed by the laws of
the State of California.

         15. Successors and Assigns.

                 (a)  Successors  of the  Company.  The Company will require any
successor  or  assign  (whether  direct  or  indirect,   by  purchase,   merger,
consolidation or otherwise) to all or  substantially  all of the business and/or
assets of the Company,  expressly,  absolutely and unconditionally to assume and
agree to perform  this  Employment  Agreement in the same manner and to the same
extent that the Company would be require to perform it if no such  succession or
assignment  had taken  place.  Failure of the Company to obtain  such  agreement
prior to the effectiveness of any such succession  transaction shall be a breach
of this  Employment  Agreement  and shall  entitle the Employee to terminate his
employment  with the Company  within three (3) months  thereafter and to receive
the benefits  provided  under Section 6(b) of this  Employment  Agreement in the
event of Constructive  Termination Following a Change in Control. As used in the
Employment Agreement,  "Company" shall mean the Company as defined above and any
successor or assign to its business  and/or assets as aforesaid  which  executes
and delivers the agreement  provided for in this paragraph 15 or which otherwise
becomes bound by all the terms and  provisions of this  Employment  Agreement by
operation of law.

                 (b) Heirs of Employee.  In view of the  personal  nature of the
service to be performed under this  Employment  Agreement by Regel, he shall not
have the right to assign or transfer any of his rights,  obligations or benefits
under  this  Employment  Agreement,  except  as  otherwise  noted  herein.  This
Employment Agreement shall inure to the benefit of and be

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<PAGE>

enforceable   by  Regel's   personal  and  legal   representatives,   executors,
administrators,  successors, heirs, distributes,  devises and legatees. If Regel
should die after the  conditions  to payment of benefits  set forth  herein have
been met and any amounts are still payable to him  hereunder,  all such amounts,
unless otherwise  provide herein,  shall be paid in accordance with the terms of
this Employment Agreement to Regel's Beneficiary, successor, devisee, legatee or
other  designee or, if there be no such  designee,  to Regel's  estate.  Until a
contrary  designation  is made to the Company,  Regel hereby  designates  as his
beneficiary under this Employment  Agreement the person whose name appears below
his signature on this Employment Agreement.

         16. Entire Agreement.  This Employment Agreement constitutes the entire
employment  agreement  between  Regel and the  Company  regarding  the terms and
conditions of his employment,  with the exception of (a) the agreement described
in  paragraph  9 and (b) any  stock  option  agreements  between  Regel  and the
Company. This Employment Agreement (including the documents described in clauses
(a) and  (b)  above)  supersedes  all  prior  negotiations,  representations  or
agreements  between Regel and the Company,  whether written or oral,  concerning
Regel's employment by the Company.

         17. Notices. For purposes of this Employment Agreement, notices and all
other  communications  provided  for in the  Employment  Agreement  shall  be in
writing and shall be deemed to have been duly given when  delivered or mailed by
United States certified mail,  return receipt  requested,  postage  prepaid,  as
follows;

               If to the Company:         Network Peripherals, Inc.
                                          2859 Bayview Dr.
                                          Fremont, CA 94538
                                          Attn:  Corporate Secretary

And if to  Regel,  at  the  address  specified  at the  end of  this  Employment
Agreement.  Notice may also be given at such other  address as either  party may
have  furnished  to the other in writing in  accordance  herewith,  except  that
notices of change of address shall be effective only upon receipt.

         18.  Validity.  If any  one or  more of the  provisions  (or  any  part
thereof)  of this  Employment  Agreement  shall  be  held  invalid,  illegal  or
unenforceable in any respect,  the validity,  legality and enforceability of the
remaining  provisions  (or any part thereof) shall not in any way be affected or
impaired thereby.

         19.  Modification.  This  Employment  Agreement  may only  modified  or
amended by a supplemental written agreement signed by Regel and the Company.

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<PAGE>

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

                                         NETWORK PERIPERALS INC.

     Date: September 14, 2000        By: \s\ William Rosenberger
           ---------------------        -------------------------------

                                     Its: Chief Executive Officer
                                        -------------------------------

     Date: September 14, 2000            \s\ James Regel
           ---------------------        -------------------------------
                                             James G. Regel

                                        Address for Notice to Regel:

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

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

     Name of Designated Beneficiary:    Address of Designated Beneficiary:

     Anne Regel
    -------------------------------     -------------------------------

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

                                       9THE KONTRABECKI GROUP
                              INDUSTRIAL- R&D LEASE

         This Lease,  dated  September 18, 2000,  for reference  purposes  only,
entered into by Tri-Valley  Campus I, LLC,  ("Landlord"),  whose address is 2755
Campus Drive,  Suite 100, San Mateo,  California,  94403, and Adept  Technology,
Inc,  ("Tenant").  Landlord  and  Tenant  agree  to  the  terms,  covenants  and
conditions of this Lease, as follows:

                  1.  Definitions.

                  1.1 Property. The term "Property" shall mean the real property
with all  improvements  now or hereafter  located thereon  described by the site
plan  attached   hereto  as  Exhibit  "A",  the  aggregate   area  of  which  is
approximately Six Hundred Fifty Three Thousand and Four Hundred (653,400) square
feet (the "Property Gross Leasable Area").

                  1.2 Building.  The term  "Building"  shall mean the structures
situated on the  Property in which the Premises are located as shown as the site
plan  attached  hereto as Exhibit  "A",  containing  approximately  Two  Hundred
Nineteen Thousand Eight Hundred Eighteen (219,818) square feet of gross leasable
area (the "Building Gross Leasable Area"), and located at the following address:
3011, 3055 and 3077 Triad Drive, Livermore, California.

                  1.3  Premises.  The term  "Premises"  shall mean those certain
Premises located within the Buildings  outlined on the site plan attached hereto
as Exhibit "A"  containing  approximately  Two Hundred  Nineteen  Thousand Eight
Hundred  Eighteen  (219,818)  square feet of gross  leasable area (the "Premises
Gross Leasable Area").  The exact square footage shall be verified in accordance
with the "drip line" method of floor measurement. The Premises shall include the
Initial Premises and the Expansion Premises as further defined below.

                  1.4 Initial Premises.  The term "Initial  Premises" shall mean
those certain  Premises  located  within the Building  outlined on the site plan
attached  hereto as Exhibit "A" containing  approximately  Seventy Four Thousand
Seven  Hundred  Sixty Eight  (74,768)  square feet of gross  leasable  area (the
"Initial  Premises  Gross  Leasable  Area") and further  described as 3011 Triad
Drive.

                  1.5 Expansion  Premises.  The term "Expansion  Premises" shall
mean those certain  Premises  located  within the Building  outlined on the site
plan attached hereto as Exhibit "A" containing  approximately  One Hundred Forty
Five  Thousand  and Fifty  (145,050)  square  feet of gross  leasable  area (the
"Expansion  Premises  Gross  Leasable  Area")  comprised  of  3055  Triad  Drive
containing  70,986  square  feet of gross  leasable  area and 3077  Triad  Drive
containing  74,064 square feet of gross leasable area. The Commencement Date for
the  Expansion  Premises  shall be no earlier  than January 1, 2002 and no later
than September 1, 2002.

                  1.6 Tenant's Share.  The term "Tenant's  Share" shall mean the
percentage  obtained by dividing the Initial Premises gross leasable area, plus,
if occupied by Tenant,  the  Expansion  Premises  gross  leasable  area,  by the
Building  Gross  Leasable  Area,  which the parties agree will be 33.88% for the
Initial Premises and will be One hundred percent (100%) for the Initial Premises
plus, the Expansion Premises.

                  1.7 Outside  Areas.  The term  "Outside  Areas" shall mean all
areas and facilities within the Property,  except for the Building and any other
buildings  located thereon,  provided and designated by Landlord for the general
use and  convenience  of  Tenant  and  other  tenants  of all or any part of the
Property,  including,  without  limitation,  parking areas, access and perimeter
roads,   sidewalks,   landscaped  areas,   service  areas,  and  trash  disposal
facilities.  The Outside  Areas do not  include  the vacant land  located on the
north side of the buildings and designated as "Expansion  Land" on the site plan
attached hereto as Exhibit "A". This land is not subject to this Lease.

                  1.8 Common Areas. The term "Common Areas" shall mean all areas
in the Building  designated by Landlord for the general use and  convenience  of
Tenant and other tenants of the Building, including, without limitation, service
corridors, stairways, lobbies, and restrooms.

<PAGE>

         2.       Demise, Term and Possession.

                  2.1 Demise of Premises. Landlord hereby leases the Premises to
Tenant and Tenant hereby  leases the Premises from Landlord in as-is  condition,
broom  cleaned,  with all system  warranties  assigned  to Tenant upon the Lease
Commencement Date, for the term, at the rental, and upon all of the other terms,
covenants and  conditions set forth herein,  together with (a) the  non-assigned
and  non-exclusive  right to use all the parking  spaces located on the property
and (b) the non-exclusive right to use the Common Areas and Outside Areas.

                  Notwithstanding   the   foregoing,   Landlord   warrants   and
represents  that, as of the Commencement  Date, (i) the Premises,  the Building,
and the Property will comply with all Regulations (as hereinafter defined), (ii)
the Premises will be in good and clean operating condition and repair, (iii) the
electrical,  mechanical,  HVAC,  plumbing,  sewer,  elevator  and other  systems
serving the Premises and the Building  will be in good  operating  condition and
repair,  and (iv) the roof of the Building  will be in good  condition and water
tight.  Tenant shall notify Landlord prior to the  Commencement  Date of any non
compliance with Landlord's warranty.  Landlord shall,  promptly after receipt of
such  notice  from  Tenant,  remedy any  non-compliance  with such  warranty  at
Landlord's sole cost and expense.

                  2.2  Term.  The term of this  Lease for the  Initial  Premises
shall be for One Hundred Twenty Six (126) months, commencing on the date that is
Sixty (60) days after the delivery of  possession  of the Initial  Premises (the
"Commencement Date"), and ending on the last day of the One Hundred Twenty Sixth
month of the Lease Term (the  "Expiration  Date"),  unless sooner  terminated or
extended pursuant to the provisions hereof. The term of the Lease, as it relates
to the  Expansion  Premises,  shall  commence  upon  delivery  of the  Expansion
Premises  to  Tenant  and  shall be  co-terminus  with the Term for the  Initial
Premises.

                  2.3  Delay  in  Delivery  of  Possession  Notwithstanding  the
Commencement  Date in Paragraph 2.2 above,  if for any reason  Landlord fails to
deliver  possession of the Premises to Tenant on said date,,  Landlord shall not
be liable to Tenant therefor, nor shall such failure affect the validity of this
Lease or the obligations of Tenant hereunder,  except as set forth below. In the
event of any delay in  delivery  of  possession,  the  Expiration  Date shall be
extended  one day for each day of such delay,  and Tenant shall not be obligated
to pay rent or to perform any of its other obligations under this Lease,  except
for the  prepayment  of rent and  payment of the  security  deposit  pursuant to
Paragraphs 3.5 and 3.6 below,  until  possession of the Premises is delivered to
Tenant.

                  2.4 Alternative Commencement Date.  Notwithstanding  Paragraph
2.2 above,  if at the date of execution of this Lease,  Landlord and Tenant have
agreed  that  Landlord  shall  construct,   modify,   or  install  any  interior
improvements to the Premises, as set forth in Exhibit "B", then the Commencement
Date for the Initial Premises shall be the later of:

                           (a) The  scheduled  Commencement  Date  set  forth in
Paragraph 2.2 above, or

                           (b) The date on which Landlord delivers possession of
the  Premises  to  Tenant  after  approval  of  occupancy  by  the   appropriate
governmental  authority, if so required and after substantial completion of such
interior improvements as reasonably certified by Landlord's architect.

                  Upon delivery of the Initial Premises, Landlord will determine
the  Commencement  Date for purposes of this Lease and deliver notice thereof to
Tenant. Paragraph 2.3 shall not be applicable in the event the Commencement Date
is  determined  pursuant to this  Paragraph  2.4. The  Expiration  Date shall be
extended  one day for  each day the  scheduled  Commencement  Date set  forth in
Paragraph 2.2 is extended pursuant to this Paragraph 2.4.

                  If the Delivery  Date has not  occurred for any reason,  other
than Tenant  Delays,  on or before July 1, 2001,  then,  in addition to Tenant's
other rights and remedies,  Tenant may terminate this Lease by written notice to
Landlord,  whereupon any monies  previously  paid by Tenant to Landlord shall be
reimbursed to Tenant and Landlord shall return the Letter of Credit to Tenant.

                  2.5 Early Entry. All of the terms and provisions  hereof shall
be applicable as of the date of such occupancy, except for the obligation to pay
rent  which  shall  commence  on the  Commencement  Date.  Tenant  agrees not to
interfere  with or cause  any  delay  with any work  conducted  on or about  the
Premises by Landlord or its employees  and  contractors,  and further  agrees to
indemnify  Landlord  from and  against  any and all claims of damage  whatsoever
arising or alleged to have arisen out of any activity by Tenant,  or its agents,
employees or contractors on or about the Premises during such early entry.

<PAGE>

         3.       Rent -Initial Premises.

                  3.1 Base Rent.  Subject to  adjustment of the rent pursuant to
provisions of the Addendum to this Lease relating thereto,  if any, Tenant shall
pay to Landlord for each calendar month of the term of this Lease,  monthly base
rent (hereafter called "Base Rent") for the Initial Premises, in installments as
follows:

                 MONTHS                   RENT PER SQUARE FOOT NNN
                 ------                   ------------------------
                 1-12                     $1.45
                 13-126                   $1.45 plus 4% Annual Rental Increases

The base rent for the 3055  Triad  Drive and 3077 Triad  Drive  (the  "Expansion
Premises")  shall be the same rent per  square  foot as the rent for 3011  Triad
Drive, on the Expansion  Premises Lease  Commencement Date. Rent for the Initial
Premises shall be abated for the first sixty (60) days after Landlord's delivery
of possession in accordance with the terms of this Lease.

                  3.2 Manner of Payment.  Tenant  shall pay to Landlord all rent
payable under this Lease without  deduction,  offset, or abatement,  and without
prior notice or demand,  in advance on the first day of each  calendar  month of
the term of this  Lease.  Rent shall be  payable  in lawful  money of the United
States of America to  Landlord at the  address  stated in the initial  paragraph
above or to such other persons or at such other places as Landlord may from time
to time  designate in writing.  Tenant's  obligation to pay rent for any partial
month shall be prorated on the basis of a thirty (30) day month.

                  3.3 Late Payment  Charge.  If any  installment  of rent or any
other sum due from Tenant is not received by Landlord within five (5) days after
the due  date,  Tenant  shall pay to  Landlord  an  additional  sum equal to ten
percent  (10%)  of  the  amount  overdue  as a late  charge  to  compensate  for
processing  and  accounting  charges  and any  charges  that may be  incurred by
Landlord with regard to any financing secured by the Property. Acceptance of any
late charge shall not  constitute  a waiver of Tenant's  default with respect to
the overdue amount.

                  3.4 Prepayment of Rent.  Upon execution of this Lease,  Tenant
shall pay to Landlord in cash the sum of  $134,582.40 as a prepayment of rent to
be credited  against  the first  installment  of Base Rent and Direct  Operating
Expenses for the Initial Premises, as defined in Paragraph 6.4 below.

                  3.5.  Security Deposit.  Upon execution of this Lease,  Tenant
shall  deposit  with  Landlord in cash or a Letter of Credit the sum of $133,333
(the "Deposit") as security for the faithful performance by Tenant of all of its
obligations  hereunder.  Upon the Commencement  Date of the Expansion  Premises,
Tenant shall deposit with Landlord an additional  $266,667 deposit, in cash or a
Letter of Credit,  so that the total  Deposit  shall be  $400,000.  The Security
Deposit shall,  if Tenant fails to pay rent or any other sums due hereunder,  or
otherwise  defaults  with respect to any  provision of this Lease,  Landlord may
use,  apply,  or retain all or any portion of the Deposit for the payment of any
rent or other sum in default,  or to compensate  Landlord for the payment of any
other sum which  Landlord  may become  obligated  to spend by reason of Tenant's
default,  or to compensate  Landlord for any expenditures,  loss or damage which
Landlord may suffer  thereby.  If Landlord so uses or applies all or any portion
of the Deposit,  Tenant shall within ten (10) days after written demand therefor
deposit with Landlord an amount in cash sufficient to restore the Deposit to the
full  amount  hereinabove  stated.  Landlord  shall not be  required to keep the
Deposit separate from its general funds.  The Deposit,  less any portion thereof
which  Landlord is entitled to retain,  shall be  returned,  without  payment of
interest,  to Tenant (or at Landlord's  option to the last assignee,  if any, of
Tenant's  interest  hereunder)  within  thirty  (30) days after the later of the
expiration of the term hereof or the date on which Tenant vacates the Premises.

         4.       Use.

                  4.1 Permitted  Uses.  The Premises  shall be used and occupied
only for the following purposes: office, research and development, manufacturing
services,  sales,  and warehouse  uses,  and for any lawful  purpose  incidental
thereto, and for no other use or purpose. Tenant may occupy and use the Premises
24 hours per day, seven days per week and 365 days per year.

                  4.2 Compliance with Law.  Landlord  warrants to Tenant that as
of the  Commencement  Date the Premises do not violate any  applicable  building
code, regulation or ordinance. Tenant shall accept possession of the Premises in
their  physical  condition  existing  as of the date of  Landlord's  delivery of
possession thereof to Tenant,  subject to all laws,  ordinances,  codes,  rules,
orders,   directions   and   regulations   of  lawful   governmental   authority
(collectively,  "Regulations" for purposes of this

                                       3
<PAGE>

paragraph)  regulating  the use or  occupancy of the  Premises,  and all matters
disclosed by any exhibits  attached  hereto.  Tenant,  at Tenant's sole expense,
shall promptly  comply with all regulations as may now or hereafter be in effect
relating to or affecting Tenant's particular use or occupancy of the Premises.

                  Notwithstanding the foregoing, Tenant shall not be required to
comply with or cause the Premises to comply with any Applicable Laws unless such
compliance  is  necessitated  solely  due  to  Tenant's  particular  use  of the
Premises.  Tenant  shall not be required  to comply with any rule or  regulation
unless the same applies  non-discriminatorily  to all occupants of the Property,
does not  unreasonably  interfere with Tenant's use of, access to, or parking at
the Premises,  and does not materially  increase the obligations or decrease the
rights of Tenant under this Lease.

                  4.3  Restrictions  on Use.  Tenant shall not use or permit the
use of the Premises in any manner that will tend to create waste on the Premises
or  constitute  a nuisance to any other  occupant or user of the Building or any
building on the Property or adjacent  thereto or do or keep  anything  that will
cause  cancellation  of or an increase in rates of any  insurance  covering  the
Building in which the Premises are located.  Tenant shall not use any apparatus,
machinery,  or  other  equipment  in  or  about  the  Premises  that  may  cause
substantial noise or vibration,  or overload existing  electrical  systems,  and
shall not place any loads upon the floors,  walls,  or ceilings of the  Premises
which may  jeopardize  the  structural  integrity  of the  Building  or any part
thereof.  Tenant shall not make any  penetrations of the roof or exterior of the
Building  without  the prior  written  approval of  Landlord.  No  materials  or
articles of any nature shall be stored in the Common Areas,  or upon any portion
of the Outside Areas unless located within an enclosure approved by Landlord and
which complies with any  applicable  governmental  requirements,  the covenants,
conditions and  restrictions  set forth in Exhibit "C" hereto (if any), and with
the rules and regulations set forth in Exhibit "D" hereto (if any).

             4.4  Toxic Materials.

                           (a) Tenant shall not 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,  toxic,  or  radioactive  materials,
including,  but not limited to, those  materials  identified in Section 66680 of
Title 22 of the  California  Administrative  Code,  Division  4,  Chapter 30, as
amended from time to time (collectively "Toxic Materials"), except in compliance
with  law.  Tenant  shall at its sole  expense  comply  with any and all  rules,
regulations,  codes,  ordinances,  statutes,  and other  requirements  of lawful
governmental authority respecting Toxic Materials,  pollution, harmful chemicals
and other  materials in  connection  with  Tenant's  activities  on or about the
Premises.  Tenant  specifically  agrees  to  comply  with any such  requirements
relating to the handling, use, storage and disposal of Toxic Materials and other
materials which are considered by any such governmental  authorities as harmful,
dangerous,  toxic,  flammable,  or otherwise  deserving of special care.  Tenant
shall pay the full cost of any clean-up work  performed on or about the Premises
as required by any such governmental authority in order to remove, neutralize or
otherwise treat  materials of any type whatsoever  released or emitted by Tenant
or its agents,  employees  or  contractors  on or about the Premises or the land
under or about the Premises.

                           (b) Tenant shall be solely  responsible for and shall
indemnify,  defend,  and  hold  Landlord  harmless  from  any  and  all  claims,
judgments,  losses, demands, causes of action, proceedings, or hearings relating
to the release or emission of Toxic Materials (hereinafter collectively referred
to as "Claims")  by Tenant,  its agents,  or invitees on or about the  Premises,
including,  but not limited  to,  Claims  resulting  from the  contamination  of
subterranean  water  beneath,  adjoining,  or in the vicinity of the  Premises..
Tenant shall reimburse Landlord for (I) losses in or reductions to rental income
resulting from Tenant's  release or emission of Toxic  Materials in violation of
law;  (ii)  all  costs  of  refitting  or  other  alterations  to  the  Premises
necessitated by Tenant's use, storage, or disposal of Toxic Materials including,
but not limited to, alterations  required to accommodate an alternate use of the
Premises;  and (iii) any  diminution  in the fair market  value of the  Premises
caused by Tenant's use, storage, or disposal of Toxic Materials Tenant agrees to
defend all such Claims on behalf of Landlord with counsel reasonably  acceptable
to Landlord,  and to pay all fees,  costs,  damages,  or expenses relating to or
arising out of any such Claim including  attorneys' fees and costs. Tenant shall
further be solely responsible for and shall indemnify,  defend and hold Landlord
harmless from and against all claims,  including reasonable  attorneys' fees and
costs,  arising  out  of  or  in  connection  with  any  removal,  clean-up,  or
restoration work which is required by any government agency having  jurisdiction
and which arises from Tenant's  storage,  use, or disposal of Toxic Materials on
the Premises during the term of this Lease.

                                       4
<PAGE>

                           (c) To  Landlord's  best  knowledge,   (i)  no  Toxic
Materials  are present in the Building or at the  Property or the soil,  surface
water, or groundwater thereof,  (ii) no underground storage tanks are present at
the  Property,  and (c) no action,  proceeding or claim is pending or threatened
regarding the Building or the Property concerning any Toxic Material or pursuant
to any Environmental Law.

                           (d) The obligations of Landlord and Tenant under this
Paragraph 4.4 shall survive the expiration of the Lease term.

                  4.5  Covenants,  Conditions,  and  Restrictions.  Tenant shall
comply with the covenants, conditions, and restrictions set forth in Exhibit "C"
hereto (if any) and any subsequent amendments thereto.

                  4.6 Rules and Regulations.  Tenant shall comply with all rules
and  regulations  set forth in Exhibit  "D"  hereto (if any) and any  subsequent
amendments thereto.  Landlord from time to time may promulgate  additional rules
and  regulations  or  modifications  thereto  applicable to all occupants of the
Property  for the  safety,  care,  cleanliness  and  orderly  management  of the
Property, its Common Areas and Outside Areas, and Tenant shall abide by all such
rules and  regulations  from and after receipt of a written copy  thereof.  Such
rules and regulations shall not unreasonably restrict or interfere with Tenant's
use of the Premises or contradict any provision hereof.

         5.       Taxes.

                  5.1  Tenant's  Personal  Property.  Tenant  shall pay prior to
delinquency  all taxes,  license  fees,  and public  charges  assessed or levied
against  Tenant  or  Tenant's  estate  in  this  Lease  or  Tenant's   leasehold
improvements,  trade  fixtures,  furnishings,  equipment and all other  personal
property and merchandise of Tenant situated in or about the Premises.

                  5.2 Tenant's  Obligations to Pay Real Property  Taxes.  Tenant
shall pay Tenant's  Share of all Real Property  Taxes (as  hereinafter  defined)
which  become due during the Lease  term;  provided,  however,  if the  Property
contains  more than one  building,  then Tenant shall pay Tenant's  Share of all
Real Property  Taxes which  Landlord  reasonably  determines is allocable to the
Building,  including a proportionate  share based on the Building Gross Leasable
Area as a percentage of the Property  Gross  Leasable Area, of all Real Property
Taxes  assessed with respect to the Outside Areas that are not fairly  allocable
to any one building.  Notwithstanding the foregoing,  in the event there is more
than one tenant in the Building, Landlord reserves the right to adjust the share
of Tenant of the Real  Property  Taxes  respecting  the  Building to reflect the
portion  thereof  which is equitably  allocable  to Tenant.  Tenant shall pay to
Landlord  all Real  Property  Taxes due and payable  hereunder  on or before the
later of (a) ten (10) days  prior to the  delinquency  thereof,  or (b) ten (10)
days after the date on which  Tenant  receives a copy of the tax bill and notice
of  Landlord's  determination  hereunder  and other  reasonable  evidence of the
amount of Real  Property  Taxes due and  payable by Tenant  hereunder.  Tenant's
liability to pay Real Property Taxes shall be prorated on the basis of a 365 day
year to account for any fractional  portion of a fiscal tax year included in the
Lease term at the  commencement or expiration of the term. If Landlord's  lender
requires  Landlord to pay any or all Real Property Taxes into an impound account
on a  periodic  basis  during the term of this  Lease,  Tenant,  on notice  from
Landlord  indicating  this  requirement,  shall  pay a sum of money  toward  its
liability  under this  paragraph to Landlord on a periodic  basis in  accordance
with the lender's requirements.

                  5.3 Real  Property  Taxes  Defined . The term  "Real  Property
Taxes" as used herein shall mean (a) all taxes,  assessments,  levies, and other
charges of any kind or nature  whatsoever,  general and  special,  foreseen  and
unforeseen,  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  against or with  respect to; (1) the
value,  occupancy or use of the Property  (as now  constructed  or as may at any
time  hereinafter  be  constructed,  altered,  or  otherwise  changed),  (2) the
fixtures, equipment, and other real or personal property of Landlord that are an
integral part of the Property, (3) the gross receipts,  income, and rentals from
the  Property,  or (4)  the  use of the  Outside  Areas,  Common  Areas,  public
utilities,  or energy  within  the  Property;  (b) all  charges,  levies or fees
imposed by reason of environmental  regulation or other governmental  control of
the property; (c) new excise,  transaction,  sales, privilege or other taxes now
or hereafter  imposed upon Landlord as a result of this Lease; and (d) all costs
and fees (including attorneys' fees) incurred by Landlord in contesting any Real
Property  Taxes  and in  negotiating  with  public  authorities  as to any  Real
Property  Taxes. If at any time during the Lease term the taxation or assessment
of the property  prevailing as of the Commencement Date shall be altered so that
in lieu of or in addition to any Real Property Taxes described above there shall
be levied,  assessed or imposed  (whether by reason of a change in the method

                                       5
<PAGE>

of taxation or assessment,  creation of a new tax or charge, or any other cause)
an alternate,  substitute,  or additional tax or charge (a) on the value, use or
occupancy of the property, (b) on or measured by the gross receipts,  income, or
rentals from the property, or on Landlord's business of leasing the Property, or
(c) 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 term  "Real  Property  Taxes"  for  purposes  of the  Lease.  If any Real
Property Tax is 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 as determined by Landlord  shall be included  within the meaning of the
term  "Real  Property  Taxes."  Notwithstanding  the  foregoing,  the term "Real
property  Taxes"  shall  not  include  estate,  inheritance,  transfer,  gift or
franchise  taxes of  Landlord  or the federal or state net income tax imposed on
Landlord's  income  from all  sources,  for any  similar or  replacement  tax or
assessment  or  resulting  from the  improvement  of any of the  Building or the
Property for the sole use of other occupants.

         6.       Maintenance and Repairs.

                  6.1 Tenant's  Obligations.  Except as  otherwise  specifically
provided  herein  Tenant  shall,  at  Tenant's  expense,  keep in good  and safe
condition,  order and repair the  Premises  and every  part  thereof,  including
without limitation, (a) all plumbing, fire sprinkler and sewage systems, and all
ducts,  pipes,  vents  or  other  parts  of the  heating,  ventilation  and  air
conditioning  system (the "HVAC") which service only the Premises (as opposed to
servicing an area larger than the  Premises),  (b) all  electrical  and lighting
facilities, systems, appliances, and equipment within the Premises including all
wiring therein, (c) all fixtures,  interior walls, interior surfaces of exterior
walls, floors, and ceilings, and (d) all windows,  doors,  entrances,  all glass
(including plate glass), and skylights located within the Premises, and the roof
membrane.  Tenant's  responsibility for maintenance and repair shall include all
such  facilities or systems that are located on or within the walls and floor of
the Premises.  Tenant shall maintain, repair and replace when necessary all HVAC
equipment which services only the Premises,  and shall maintain in full force at
all times during the term of this Lease an HVAC systems  preventive  maintenance
contract with a qualified  service company  reasonably  satisfactory to Landlord
covering  all such HVAC  systems.  Said  contract  shall  provide  for  periodic
servicing  no less  than  every  ninety  (90)  days and  shall  include  without
limitation  replacement  of  filters,   oiling  and  lubricating  of  machinery,
adjustment  of drive belts,  oil changes,  weather  proofing of all exposed HVAC
equipment  and  ducts,  parts  replacement  and  other  preventive   maintenance
provided,  however,  that  Tenant  shall  have  the  benefit  of all  warranties
available to Landlord  regarding the equipment in said systems.  Notwithstanding
the foregoing  Landlord may, by written  notice to Tenant,  elect at any time to
assume responsibility for performing maintenance,  repair and replacement of all
HVAC equipment  servicing  only the Premises.  All costs incurred by Landlord in
performing such maintenance, repair and replacement shall be paid by Tenant on a
periodic basis within ten (10) days after receipt of a written invoice  therefor
from Landlord. If the Premises consists of the entire Building, and the Building
is the only building on the property,  then Tenant at its expense shall also (a)
maintain and replace the  landscaping  on the Property and repair when necessary
the  parking  areas on the  Property,  and wash as and when  needed to keep in a
clean and sightly  condition  all windows and plate glass of the Premises  (both
interior and exterior  surfaces).  Tenant shall furnish  Landlord with a copy of
the HVAC service contract  required by this paragraph,  which shall provide that
it may not be  canceled  or  changed  without  at least  thirty  (30) days prior
written notice to Landlord.  All repairs  required to be made by Tenant shall be
made promptly  with new  materials of like kind and quality.  If the repair work
affects the  structural  parts of the Building,  or if the estimated cost of any
item of repair  exceeds  $10,000,  then  Tenant  shall first  obtain  Landlord's
written approval of the scope of work, plans therefor,  materials to be used and
the  contractor.  Tenant  hereby  waives  the  benefit  of  any  statute  now or
hereinafter  in effect  which would  otherwise  afford  Tenant the right to make
repairs at Landlord's  expense or to terminate  this Lease because of Landlord's
failure  to keep the  Premises  in good  condition,  order  and  repair.  Tenant
specifically  waives all rights it may have under  Sections  1932(1),  1941, and
1942 of the California Civil Code, and any similar or successor statute or law.

                  6.2  Landlord's  Obligations.  Landlord shall maintain in good
condition,  order and repair the Common Areas, the foundation and exterior walls
of the Building  (excluding the interior of all walls and, except as provided in
Paragraph 6.3 below,  the exterior and interior of all windows,  doors and plate
glass), and the exterior roof of the Building, including structural supports and
excluding  the roof  membrane.  If  there  is a  central  HVAC  system  or other
facilities  servicing  portions of the Premises and other areas of the Building,
Landlord  shall maintain in good condition and repair and replace when necessary
such systems and  facilities.  The manner in which such  systems and  facilities
shall  be  maintained  and the  expenditures  therefor  shall be  determined  by
Landlord.  Landlord  shall  exercise  reasonable  diligence in  performing  such
repairs as soon as practicable.  However,  Landlord's obligation to make repairs
under this paragraph shall commence after  Landlord's  receipt of written notice
from  Tenant  of the need for such  repairs.  Except as  otherwise  specifically
provided  herein,  there shall be no

                                       6
<PAGE>

abatement of rent or other sums payable by Tenant prior to or during any repairs
by Tenant or Landlord. Landlord may enter into a preventive maintenance contract
with a qualified service company  reasonably  satisfactory to Landlord providing
for periodic  repair and  maintenance  of any central HVAC system  servicing the
Premises and other areas of the  Building.  Tenant's  Share of the cost of these
preventive maintenance contracts shall be borne by the Tenant.

                  6.3 Maintenance  and Control of Outside Areas.  Landlord shall
maintain in good  condition,  order and repair the Outside Areas,  together with
all facilities and improvements now or hereafter  located thereon,  and together
with all other  improvements  adjacent to the  Property as may be required  from
time  to  time  by  governmental   authority.   Such  obligation  shall  include
maintenance  and  replacement of landscaping  and repair of parking areas of the
Property,  and washing  exterior  windows and plate glass of the Building If the
Premises consist of the entire Building and the Building is the only building on
the Property,  then Tenant shall at its sole cost perform such obligation.  Such
obligation shall also  specifically  include painting the outside surface of the
exterior walls of the Building as and when necessary,  as determined by Landlord
in its reasonable discretion. The manner in which such areas shall be maintained
and the  expenditures  therefor  shall be at the  sole  discretion  of  Landlord
Tenant's Share of the cost of this maintenance shall be borne by the Tenant.

                  Landlord  shall at all times  have  exclusive  control  of the
Outside  Areas  and may at any time  temporarily  close  any part  thereof,  may
exclude  and  restrain  anyone  from  any part  thereof  (except  the bona  fide
employees and invitees of Tenant),  and Landlord may change the configuration of
the  Outside  Areas or the  location of  facilities  thereon so long as any such
change by Landlord  does not  unreasonably  interfere  with  Tenant's  use of or
access to the Premises.  Landlord shall also be entitled to employ third parties
to  operate  and  maintain  all or any  part of such  areas  on such  terms  and
conditions as Landlord shall determine.  In exercising any of Landlord's  rights
hereunder, Landlord shall make a reasonable effort to minimize any disruption of
Tenant's business.

                  6.4  Tenant's  Obligation  to  Reimburse.   Tenant  shall  pay
Tenant's Share of all Direct  Operating  Expenses (as defined) as may be paid or
incurred by Landlord during the term of this Lease;  provided,  however, that if
the Property contains more than one building, Tenant shall pay Tenant's Share of
all Direct  Operating  Expenses  fairly  allocable to the Building as reasonably
determined by Landlord,  and a  proportionate  share based on the Building Gross
Leasable Area as a percentage of the Property Gross Leasable Area, of all Direct
Operating  Expenses  which  relate to the Property in general and are not fairly
allocable to any one building on the  Property.  Tenant shall pay to Landlord on
the first day of each calendar month during the period immediately following the
Commencement Date until the first December 1 thereafter a fraction of the amount
which Landlord estimates will be Tenant's Share of all Direct Operating Expenses
for such period,  the numerator of which is the number of calendar months during
said period, and the denominator of which is twelve (12).  Thereafter during the
lease  term,  on the first day of each  calendar  month  during each twelve (12)
month period commencing  January 1, Tenant shall pay to Landlord until the first
December 1  thereafter  an amount  estimated  by Landlord to be  one-twelfth  of
Tenant's  Share of the Direct  Operating  Expenses  for such  twelve  (12) month
period.  Within  ninety  (90)  days  following  the end of each  calendar  year,
Landlord  shall  furnish  Tenant a statement  covering the calendar year and the
payments  made by  Tenant  with  respect  to such  period  as set  forth in this
paragraph.  If Tenant's  payments  for Tenant's  Share of said Direct  Operating
Expenses  did not equal  Tenant's  Share of the  actual  amount  of said  Direct
Operating Expenses,  Tenant shall pay to Landlord the deficiency within ten (10)
days after receipt of such statement.  If said payments exceed the actual Direct
Operating  Expense,  Landlord  shall  refund the amount of the  overpayments  to
Tenant in cash within ten (10) days after Landlord sends such statement.  Direct
Operating  Expenses  shall  be  prorated  as of the  Commencement  Date  and the
Expiration Date to reflect the portion of the calendar year occurring within the
Lease term. Tenant's Share of Direct Operating Expenses for the Initial Premises
are initially  estimated to be $26,168.80 per month.  Upon the Commencement Date
for the Expansion  Premises,  Tenant's  obligation for Direct Operating Expenses
shall increase to a total monthly expense estimate of $77,000 per month.  Tenant
shall have the right to review Landlord's  calculations related to the operating
expense reconciliation once per year within three weeks after any reconciliation
is complete.

                  6.5  Direct  Operating  Expenses  Defined.  The  term  "Direct
Operating  Expenses" shall mean the sum of the following costs and expenses paid
or incurred by Landlord:

                           (a) All labor, materials,  supplies and services used
or consumed in managing, maintaining,  operating and repairing the Outside Areas
and the Common Areas, including without limitation,  landscaping maintenance and
replacement,  cleaning,  repairing  concrete  walkways and patios,

                                       7
<PAGE>

sweeping and repairing parking areas, operation,  maintenance and replacement of
lighting,  maintenance  and  replacement of all  directional and security signs,
cleaning,  maintenance  and  replacement  of carpets  and other  fixtures in the
Common  Areas,  labor  costs of  employees  incurred  in the  management  of the
Building(s) including salaries and employer taxes thereon, cleaning,  repainting
and resurfacing the exterior surface of Common Area walls and the exterior walls
of the Building,  utilities and water servicing such areas, pest control service
(exterior only),  janitorial  service,  if any, security patrol service, if any,
trash  removal,  and the operation and the rental or the purchase of maintenance
equipment;

                           (b) All labor, materials,  supplies and services used
or consumed in  maintaining,  repairing or replacing the membrane of the roof of
the Building and any central HVAC system  servicing the Premises and other areas
of the Building, including the cost of all maintenance contracts entered into by
Landlord pursuant to Paragraph 6.2 hereof; and

                           (c) A  Property  Management  fee  equal to five  (5%)
percent of the monthly base rent.

                           (d) Direct Operating Expenses shall not include:  (i)
costs  occasioned  by the act,  omission or violation of any  Applicable  Law by
Landlord,  any other  occupant  of the  Property,  or their  respective  agents,
contractors,  or invitees;  (ii) costs  occasioned by fire, acts of God or other
casualties or by the exercise of the power of eminent domain; (iii) costs of any
renovation, improvement, painting or redecorating of any portion of the Building
or the Property not made  available for Tenant's use; (iv) costs  resulting from
the  violation  by Landlord or any other  occupant of the  Property  (other than
Tenant) of the terms or  conditions of any lease or other  agreement;  (v) costs
for  earthquake,  increases in insurance  costs caused by the  activities of any
other occupant of the Property, , and co-insurance payments; (vi) costs incurred
in connection with the presence of any Hazardous Material,  except to the extent
caused by the  release or  emission  of the  Hazardous  Material  in question by
Tenant; (vii) costs in the nature of depreciation, amortization or other expense
reserves;  (viii) costs to repair,  replace,  restore or maintain the structural
portions of the  Building.  (ix)  compensation  for any employee of Landlord not
directly  involved  with  the  management  of  the  Property  in  excess  of the
reasonable management fee which would be charged by an unaffiliated professional
management service for operation of comparable  properties in the vicinity;  (x)
costs arising from the  disproportionate  use of any utility or service supplied
by Landlord to any other  occupant of the Property or associated  with utilities
or  services  of a type not  provided  to  Tenant;  and (xi) costs  incurred  in
connection  with any mortgage,  deed of trust or ground lease  applicable to any
portion of the Property.

         6.6 Tenant's Negligence.  Notwithstanding  anything in this Paragraph 6
to the contrary,  and subject to the waiver of  subrogation  rights  pursuant to
Paragraph  12.7,  Tenant  shall  pay for the  entire  cost  of  maintaining  and
repairing the Premises,  the Building,  the Common Areas,  the Outside Areas and
any other  portion of the Property if such cost is incurred and to the extent it
is incurred as a result of the negligence or willful  misconduct of Tenant,  its
agents, customers, employees, contractors or invitees.

         7.       Alterations.

                  7.1 Landlord's  Consent  Required.  Tenant shall not,  without
Landlord's prior written consent, make any alterations, improvements, additions,
or utility  installations  (collectively the  "alterations") in, on or about the
Premises,  except for  nonstructural  alterations  which in the aggregate do not
exceed  Twenty-Five  Thousand  Dollars  $10,000 in cost during any twelve  month
period during the Lease Term. As used in this  Paragraph  7.1, the term "utility
installation" means power panels,  wiring,  florescent fixtures,  space heaters,
conduits,  air  conditioning  and plumbing.  Should Tenant make any  alterations
without the prior written consent of Landlord,  Tenant shall immediately  remove
the same at Tenant's  expense upon demand by Landlord.  Any alterations  made by
Tenant  shall not  interfere  with the use or  occupancy  of the Building by any
other tenants nor interfere  with the operation of any  mechanical  apparatus or
electrical or plumbing system in the Building.

                  7.2 Plans and Permits.  Any alteration  that Tenant desires to
make in or about the Premises and which  requires the consent of Landlord  shall
be presented  to Landlord in written  form,  with  proposed  detailed  plans and
specifications  therefor  prepared  at  Tenant's  sole  expense.  Any consent by
Landlord thereto shall be deemed  conditioned  upon Tenant's  acquisition of all
permits  required  to make such  alteration  from all  appropriate  governmental
agencies,  the furnishing of copies thereof to Landlord prior to commencement of
the work,  and the compliance by Tenant with all conditions of said permits in a
prompt and expeditious manner, all at Tenant's sole expense.  Upon completion of
any such alteration, Tenant, at Tenant's sole cost, shall immediately deliver to
Landlord  "as-built"  plans  in  milar  form,  and  in digital form  on  disk if
available, and specifications therefor.

                                       8
<PAGE>

                  7.3 Construction  Work Done by Tenant.  All construction  work
required or  permitted  to be done by Tenant  shall be  performed  by a licensed
contractor  in a prompt,  diligent,  and good and  workmanlike  manner and shall
conform in quality and design with the Premises  existing as of the Commencement
Date,  and shall not  diminish  the value of the  Building or the  Property.  In
addition,  all such  construction work shall be performed in compliance with all
applicable statutes,  ordinances,  regulations, codes and orders of governmental
authorities and insurers of the Premises.  Tenant or its agents shall secure all
licenses and permits necessary therefor.

                  7.4 Title to Alterations. Unless Landlord requires the removal
thereof as set forth in Paragraph 7.5, any alterations  which may be made on the
Premises, shall upon installation or construction thereof become the property of
Landlord  and shall  remain  upon and be  surrendered  with the  Premises at the
expiration or sooner termination of the term of this Lease. Without limiting the
generality of the foregoing,  all heating,  lighting,  electrical (including all
wiring, conduits, main and subpanels), air conditioning,  partitioning, drapery,
and  carpet  installations  made by  Tenant,  regardless  of how  affixed to the
Premises,  together with all other alterations that have become an integral part
of the Premises, shall be and become the property of Landlord upon installation,
and shall not be deemed trade fixtures, and shall remain upon and be surrendered
with the  Premises  at the  expiration  or  sooner  termination  of this  Lease.
Notwithstanding  the  provisions of this Paragraph  7.5,  Tenant's  furnishings,
machinery  and  equipment,  other than that which is affixed to the  Premises so
that it cannot be removed without material damage to the Premises,  shall remain
the property of Tenant and may be removed by Tenant.  Tenant  shall  immediately
after  removal  repair any damage to the  Premises  caused  thereby at  Tenant's
expense.

                  7.5  Removal  of  Alterations.  Tenant  shall  ascertain  from
Landlord  within  thirty  (30) days  before the end of the term of this Lease or
within five (5) days after sooner termination, thereof, whether Landlord desires
to have the Premises, or any part or parts thereof,  restored to their condition
as of the commencement of this Lease. Landlord may elect, by notice to Tenant to
require  Tenant to remove any  alterations  that Tenant has made to the Premises
and to restore the Premises as hereafter provided. If Landlord so elects, Tenant
shall,  at its sole expense,  upon expiration of the Lease term or within twenty
(20) days after any sooner termination thereof, remove such alterations,  repair
any damage  occasioned  thereby,  and  restore  the  Premises  to the  condition
existing  as of the  Commencement  Date,  subject to normal  wear and tear.  The
obligations of Tenant set forth in this paragraph  shall survive the termination
of this Lease. Tenant's trade fixtures, furniture,  equipment and other personal
property installed in the Premises shall at all times be Tenant's property,  and
Tenant may remove any or all of such  property from the Premises at any time and
from  time to time  provided  that  Tenant  repairs  all  damage  caused by such
removal. Landlord shall have no lien or other interest whatsoever in any item of
such property, and Landlord waives all such liens and interest.  Within ten (10)
days  following  Tenant's  request  from time to time,  Landlord  shall  execute
documents in form reasonably  acceptable to Tenant to evidence Landlord's waiver
of any right,  title,  lien or interest in any of such  property  and giving any
lenders holding a security  interest or lien on such property  reasonable rights
of access to the Premises to remove such  property,  provided  that such lenders
repair all damage caused by such removal.

         8.  Mechanics'  Liens.  Tenant shall keep the Premises and the Property
free from any liens. If any claim of lien is recorded, Tenant shall bond against
or  discharge  the same  within ten (10) days  after the same has been  recorded
against the Premises or the Property.  Tenant shall give Landlord  notice of the
date of  commencement  of any work in the  Premises  not less than ten (10) days
prior   thereto,   and  Landlord  shall  have  the  right  to  post  notices  of
non-responsibility  or  similar  notices  in or on the  Premises  in  connection
therewith.

         9. Utilities and Services. Tenant shall pay all charges for water, gas,
electricity,  telephone,  central  station  monitor,  refuse pickup,  janitorial
services,  and all other  utilities  and  services  supplied or furnished to the
Premises  during the term of this Lease,  together with any taxes thereon.  Said
utilities  may be supplied to Tenant in common with any other  tenant(s)  in the
Building, or at Landlord's option, be separately metered. If separately metered,
or if the  Premises  consist of the entire  building  Tenant  shall pay all such
charges directly to the charging authority when due. If not separately  metered,
Tenant shall pay its allocable portion based upon the ratio between the Premises
Gross Leasable Area and the total gross leasable  square feet of space served by
the common  utility.  However,  if  Landlord  determines  that Tenant is using a
disproportionate  amount of any utility  service not  separately  metered,  then
Landlord may either install a separate meter to measure the utility service,  at
Tenant's cost, or charge Tenant a sum equal to Landlord's reasonable estimate of
the cost of Tenant's excess use of such utility service.  Tenant shall reimburse
Landlord on a monthly basis for Landlord's  actual cost in furnishing

                                       9
<PAGE>

utilities  and  services  to the  Premises  within  ten (10) days  after  Tenant
receives an invoice from  Landlord  and in no event shall  Landlord be liable to
Tenant for any such failure or  interruption  unless caused by the misconduct of
Landlord.  No failure or  interruption  of any such  utilities or services shall
entitle  Tenant to  terminate  this Lease or to withhold  rent or other sums due
hereunder and unless otherwise specifically provided herein.  Landlord shall not
be responsible for providing  security  guards or other security  protection for
all or any portion of the Premises or the Property,  and Tenant shall at its own
expense  provide or obtain  such  security  services as Tenant  shall  desire to
ensure the safety of the Premises and the Property.

         10. Indemnity.  Tenant hereby  indemnifies  Landlord and holds Landlord
harmless  from and  against  any and all claims  for  damage,  loss,  expense or
liability due to, but not limited to, bodily injury,  including  death resulting
at any time therefrom, and/or property damage, now or hereafter arising from any
act, work or things done,  or any omission to act, in or about the Premises,  by
Tenant or by any of Tenant's agents,  employees,  contractors,  or invitees,  or
from any breach or default by Tenant in the performance of any obligation on the
part of Tenant to be  performed  under  the terms of this  Lease,  except to the
extent such damage,  loss, expense or liability is caused by the sole negligence
or willful misconduct of Landlord or its employees or agents.  Tenant shall also
indemnify Landlord from and against all damage, loss, expense (including without
limitation,  attorneys' fees), and liability incurred or suffered by Landlord in
the defense of or arising out of or resulting  from any such claim or any action
or proceeding  brought  thereon.  In the event any action or proceeding shall be
brought  against  Landlord by reason of any such claim,  Tenant upon notice from
Landlord  shall  defend  the same at  Tenant's  expense  by  counsel  reasonably
satisfactory to Landlord.  The obligations of Tenant contained in this paragraph
shall survive the termination of this Lease.

         Notwithstanding  the  foregoing,  Landlord  shall  not be  released  or
indemnified from, and shall indemnify,  defend, protect and hold harmless Tenant
from and against, all losses, costs, claims, liabilities, and damages (including
reasonable  attorneys' fees and expenses) arising from the negligence or willful
misconduct  of  Landlord  or  its  agents,   contractors,  or  invitees  in  the
performance of Landlord's obligations under the terms of this lease.

         11. Waiver of Claims.  Tenant hereby waives any claims against Landlord
for injury to Tenant's business or any loss of income therefrom or for damage to
the goods,  wares,  merchandise  or other  property of Tenant,  or for injury or
death of Tenant's agents,  employees,  invitees, or any other person in or about
the  Premises  from  any  cause  whatsoever,  except  to the  extent  caused  by
Landlord's negligence or willful misconduct,  or that of its employees,  agents,
or contractors.

         12.  Insurance.

                  12.1 Tenant's Liability  Insurance.  Tenant shall, at Tenant's
expense,  obtain and keep in force  during the term of this  Lease,  a policy of
commercial general liability  insurance insuring Landlord and Tenant against any
liability  arising out of the  condition,  use,  occupancy or maintenance of the
Premises.  Such policy of insurance  shall have a combined single limit for both
bodily  injury and  property  damage in an amount  not less than  Three  Million
Dollars  ($3,000,000).  The policy  shall  insure  performance  by Tenant of the
indemnity  provisions of Paragraph 10. The limits of said  insurance  shall not,
however, limit the liability of Tenant hereunder.  Not more frequently than once
each  calendar  year if, in the  reasonable  opinion of Landlord,  the amount of
liability insurance required hereunder is not consistent with reasonably prudent
business  practices in Alameda  County,  Tenant shall  increase  said  insurance
coverage as reasonably required by Landlord.

                  12.2 Tenant's  Property  Insurance.  Tenant shall, at Tenant's
sole expense,  obtain and keep in force during the term of this Lease,  a policy
of fire  and  extended  coverage  insurance  including  a  standard  "all  risk"
endorsement,  and a sprinkler  leakage  endorsement  (if the  Premises  shall be
sprinklered),  insuring the inventory,  fixtures,  equipment, personal property,
and leasehold  improvements  and alterations of Tenant within the Premises other
than the initial Tenant  Improvements for the full replacement value thereof, as
the same may  increase  from time to time due to  inflation  or  otherwise.  The
proceeds from any of such policies  shall be used for the repair or  replacement
of such items so insured and Landlord  shall have no interest in the proceeds of
such insurance.

                  12.3 Landlord's Liability  Insurance.  Landlord may maintain a
policy or policies of commercial  general liability  insurance insuring Landlord
(and such other entities as may be designated

                                       10
<PAGE>

by Landlord) against  liability for personal injury,  bodily injury or death and
damage to property  occurring or resulting  from an occurrence  in, on, or about
the Property with a combined single limit of not less than Three Million Dollars
($3,000,000),  or such  greater  coverage  as  Landlord  may  from  time to time
determine is reasonably necessary for its protection.

                  12.4  Property  Insurance.  Landlord  shall obtain and keep in
force  during the term of this Lease a policy or policies of  insurance  for the
benefit of Landlord  and Tenant  covering  loss or damage to the  Building,  the
Common Areas, and the Outside Areas,  for full  replacement  cost, but excluding
coverage of merchandise,  fixtures, and equipment, and leasehold improvements of
Tenant, which are not considered part of the real estate for insurance purposes,
in the  amount  of the full  replacement  value  thereof,  providing  protection
against  all  perils  included  within  the  classification  of  fire,  extended
coverage,  vandalism,  malicious  mischief,  special extended perils (all risk),
including (at Landlord's sole discretion)  earthquake  (provided that earthquake
insurance is available at  commercially  reasonable  rates) boiler and machinery
coverage (if applicable)  and an inflation  endorsement.  In addition,  Landlord
shall  obtain  and keep in force,  during  the term of this  Lease,  a policy of
rental loss insurance  covering a period of one year,  commencing on the date of
loss,  with proceeds  payable to Landlord,  which insurance shall also cover all
Real Property Taxes,  Direct Operating Expenses,  insurance premiums,  and other
sums  payable by Tenant to Landlord  hereunder  for said period.  The  insurance
coverage shall include sprinkler leakage insurance if the Building contains fire
sprinklers.  All proceeds  under such policies of insurance  shall be payable to
Landlord,  and Tenant shall have no interest in or right to such  proceeds.  The
cost of any  increase  in property  insurance  coverage  specifically  caused by
Tenant's particular use of the Premises shall be borne by the tenant causing the
increase.

                  12.5  Payment  Tenant  shall pay to  Landlord  during the term
hereof  Tenant's  Share of the premiums for any  insurance  obtained by Landlord
pursuant to Paragraphs 12.3 and 12.4.  Notwithstanding  the foregoing,  Landlord
may  obtain  liability   insurance  and  property  insurance  for  the  Building
separately,  or together  with other  buildings and  improvements  under blanket
policies of insurance. In such case Tenant shall be liable for only such portion
of the premiums for such blanket  policies as are allocable to the Premises,  as
reasonably determined by the insurer or Landlord. Tenant shall pay such premiums
to Landlord  within  thirty  (30) days after  receipt by Tenant of a copy of the
premium statement or other reasonable evidence of the amount due. If the term of
this  Lease  does not  expire  concurrently  with the  expiration  of the period
covered by such insurance,  Tenant's liability for premiums shall be prorated on
an annual basis.

                  12.6 Insurance Policies. The insurance required to be obtained
by Tenant  pursuant to Paragraphs 12.1 and 12.2, and Paragraph 12.4 if Tenant is
the insuring party thereunder,  shall be primary insurance and (a) shall provide
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  declarations  without
the right of  contribution  from any other insurance  coverage of Landlord,  (b)
shall be in a form satisfactory to Landlord, and shall be carried with companies
acceptable to Landlord,  and (d) shall  specifically  provide that such policies
shall not be subject to  cancellation,  reduction  of coverage  or other  change
except after at least  thirty (30) days prior  written  notice to Landlord.  The
policy or  policies,  or duly  executed  certificates  for them,  together  with
satisfactory evidence of payment of the premium thereon, shall be deposited with
Landlord on or prior to the  Commencement  Date,  and upon each  renewal of such
policies,  which shall be effected not less than,  thirty (30) days prior to the
expiration  date of the term of such coverage.  Tenant shall not do or permit to
be done anything  which shall  invalidate  any of the  insurance  policies to be
carried by Tenant or Landlord hereunder.

                  12.7 Waiver of  Subrogation.  Tenant and Landlord  each hereby
waive any and all rights of recovery against the other, or against the officers,
employees, agents and representatives of the other, for loss of or damage to the
property of the waiving party or the property of others under its control, where
such loss or damage is insured  against  under any insurance  policy  carried by
Landlord or Tenant and in force at the time of such loss or damage,  or required
to be insured against  hereunder.  Tenant and Landlord shall, upon obtaining the
policies of insurance required  hereunder,  give notice to the insurance carrier
or carriers that the foregoing mutual waiver of subrogation is contained in this
Lease.  All of Landlord's and Tenant's  repair and indemnity  obligations  under
this Lease shall be subject to the waiver and release in this Paragraph.

                  12.8  No   Limitation   of   Liability.   Landlord   makes  no
representation that the limits of liability specified to be carried by Tenant or
Landlord  under the terms of this Lease are  adequate to protect  any party.  If
Tenant  believes  that the  insurance  coverage  required  under  this  Lease is
insufficient  to adequately  protect  Tenant,  Tenant shall provide,  at its own
expense, such additional insurance as Tenant deems adequate.

                                       11
<PAGE>

                  12.9  Impounding of Premiums.  If Landlord's  lender  requires
Landlord to pay insurance  premiums into an impound  account on a periodic basis
during the term of this Lease, Tenant, upon notice from Landlord indicating this
requirement,  shall  pay a sum  of  money  toward  its  liabilities  under  this
Paragraph  12 to Landlord on a periodic  basis in  accordance  with the lender's
requirements.

         13.  Damage or Destruction.

                  13.1  Partial  Damage-Insured.  Subject to the  provisions  of
Paragraphs  13.3 and 13.4, if the Premises or the Building,  as the case may be,
are damaged to the extent of less than  seventy-five  percent  (75%) of the then
replacement value thereof (excluding excavations and foundations with respect to
the Building), and such damage was caused by an act or casualty covered under an
insurance  policy required to be maintained  pursuant to Paragraph 12.4, and the
proceeds of such  insurance  received by Landlord are  sufficient  to repair the
damage,  Landlord  shall at  Landlord's  expense  repair  such damage as soon as
reasonably possible and this Lease shall continue in full force and effect.

                  13.2 Partial  Damage-Uninsured.  Subject to the  provisions of
Paragraphs  13.3 and 13.4, if at any time during the term hereof the Premises or
the  Building,  as the case may be, are  damaged  and the  proceeds  received by
Landlord are not sufficient to repair such damage,  or such damage was caused by
an act or  casualty  not  covered  under  an  insurance  policy  required  to be
maintained by Landlord  pursuant to Paragraph  12.4,  Landlord may at Landlord's
option  either  (a)  repair  such  damage  as soon  as  reasonably  possible  at
Landlord's  expense,  in which event this Lease shall continue in full force and
effect, or (b) give written notice of termination of this Lease to Tenant within
thirty  (30) days  after the date of the  occurrence  of such  damage,  with the
effective  date of such  termination  to be the date of the  occurrence  of such
damage.  In the event  Landlord  gives such notice of termination of this Lease,
Tenant shall have the right,  within ten (10) days after receipt of such notice,
to agree in writing on a basis  satisfactory  to  Landlord to pay for the entire
cost of  repairing  such damage less only the amount of insurance  proceeds,  if
any,  received by Landlord,  in which event the notice of  termination  shall be
ineffective and this Lease shall continue in full force and effect, and Landlord
shall  proceed to make such repairs as soon as  reasonably  possible.  If Tenant
does not give such  notice  within  such ten (10) day period this Lease shall be
terminated pursuant to such notice of termination by Landlord.

                  13.3 Partial Damage-Uninsured.  If at any time during the term
hereof  either  the  Premises  or the  Building  is  destroyed  to the extent of
seventy-five  percent  (75%)  or  more of the  then  replacement  value  thereof
(excluding  excavations and foundations with respect to the Building),  from any
cause wether or not covered by the  insurance  maintained  pursuant to Paragraph
12.4,  this Lease  shall at the option of Landlord  terminate  as of the date of
such  destruction.  Landlord shall exercise its right to terminate this Lease by
delivery of notice of  termination  to Tenant  within thirty (30) days after the
date that Tenant  notifies  Landlord of the  occurrence  of such damage.  In the
event  Landlord  does not  elect to  terminate  this  Lease,  Landlord  shall at
Landlord's expense repair such damage as soon as reasonably  possible,  and this
Lease shall continue in full force and effect.

                  13.4 Damage Near End of Term. If the Premises are destroyed or
damaged  in whole or in part  during the last six (6) months of the term of this
Lease,  Landlord may at Landlord's  option cancel and terminate this Lease as of
the date of  occurrence  of such  damage by giving  written  notice to Tenant of
Landlord's  selection  to do so  within  thirty  (30)  days  after  the  date of
occurrence of such damage.

                  13.5  Abatement  of  Rent.  Notwithstanding  anything  to  the
contrary contained in Paragraph 13.3 or elsewhere in this Lease, if the Premises
are  partially  damaged and Landlord  repairs or restores  them  pursuant to the
provisions of this  Paragraph 13, the rent,  including  Tenant's Share of Direct
Operating  Expenses,  Real  Property  Taxes,  and  insurance  premiums,  payable
hereunder for the period  commencing on the occurrence of such damage and ending
upon  completion of such repair or restoration  shall be abated in proportion to
the extent to which  Tenant's use of the Premises is impaired  during the period
of repair; provided that, nothing herein shall be construed to preclude Landlord
from being  entitled to collect  the full  amount of any rental  loss  insurance
proceeds  Except  for  abatement  of rent,  if any,  Tenant  shall have no claim
against  Landlord  for  any  damage  suffered  by  reason  of any  such  damage,
destruction, repair or restoration.

                  13.6 Waiver.  Tenant waives the provisions of California Civil
Code  Sections  1932(2)  and  1933(4),  and any  similar or  successor  statutes
relating to  termination  of leases when the thing  leased is  substantially  or
entirely  destroyed,  and  agrees  that any such  occurrence  shall  instead  be
governed by the terms of this Lease.

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<PAGE>

                  13.7 Tenant's  Property.  Landlord's  obligation to rebuild or
restore shall not include  restoration  of Tenant's trade  fixtures,  equipment,
merchandise, or any improvements, alterations or additions made by Tenant to the
Premises (but shall include the initial Tenant Improvements).

                  13.8 Notice of Damage.  Tenant  shall notify  Landlord  within
five (5) days after the  occurrence  thereof of any damage to all or any portion
of the  Premises.  Landlord's  obligation  to repair  or  restore  the  Premises
pursuant to this Paragraph 13 shall commence after Landlord's  receipt of notice
from  Tenant of the  nature  and  scope of any  damage  to the  Premises,  and a
reasonable period of time to collect insurance proceeds arising from such damage
(unless such damage is clearly not covered by insurance then in effect  covering
the Premises).

                  13.9  Replacement  Cost.  The  determination  in good faith by
Landlord of the estimated  cost of repair of any damage,  or of the  replacement
cost, shall be conclusive for purposes of this Paragraph 13.

                  13.10 Tenant  Termination Right:  Notwithstanding  anything in
         this  Lease to the  contrary,  if the  Premises  or any  portion of the
         Building is damaged by any casualty whatsoever,  then Tenant shall have
         the option to terminate  this Lease if the Premises  cannot  reasonably
         be, or are not in fact,  fully  restored  by  Landlord  to their  prior
         condition  within one hundred  eighty (180) days after the date of such
         damage.

         14.  Condemnation.

                  14.1  Partial  Taking.  If the floor area of the  Premises  is
taken for any public or quasi-public  use, under any statute or right of eminent
domain  (collectively  a "taking"),  this Lease shall,  as to the part so taken,
terminate  as of the date the  condemnor or purchaser  takes  possession  of the
property  being taken,  and the rent payable  hereunder  shall be reduced in the
same  proportion  that the floor area of the  portion of the  Premises  so taken
bears to the original  floor area of the Premises.  Landlord  shall,  at its own
cost and expense,  make all  necessary  alterations  to the Premises in order to
make the portion of the Premises not taken a complete  architectural  unit. Such
work  shall  not,  however,  exceed  the scope of the work done by  Landlord  in
originally constructing the Premises. Each party hereto waives the provisions of
California Code of Civil  Procedure  Section  1265.130  allowing either party to
petition  the Superior  Court to terminate  this Lease in the event of a partial
taking of the Premises.

                  14.2 Total  Taking.  If more than fifty  percent  (50%) of the
floor area of the Premises is taken,  then any such taking shall be treated as a
total taking,  and this Lease shall terminate upon the date possession  shall be
taken by the condemning authority.

                  14.3  Distribution  of Award. If a part or all of the Premises
is taken, all compensation  awarded upon such taking shall belong to and be paid
to Landlord,  except that Tenant shall receive from the award a sum attributable
to Tenant's  movable property or trade fixtures on the Premises which Tenant has
the right to remove from the Premises  pursuant to the provisions of this Lease,
but elects not to remove;  or, if Tenant  elects to remove any such  property or
trade fixtures, Tenant shall receive a sum for reasonable removal and relocation
costs not to exceed  the market  value  thereof  on the date  possession  of the
Premises is taken,

                  14.4 Sale Under Threat of Condemnation.  A sale by Landlord to
any  authority  having  the power of  eminent  domain,  either  under  threat of
condemnation or while  condemnation  proceedings are pending,  shall be deemed a
taking under the power of eminent domain for purposes of this Paragraph 14.

         15.  Assignment and Subletting.  Tenant shall not assign this Lease, or
any interest  therein,  voluntarily or  involuntarily,  and shall not sublet the
Premises or any part thereof, or any right or privilege  appurtenant thereto, or
allow any other person (the agents and servants of Tenant excepted) to occupy or
use the Premises,  or any portion thereof,  without the prior written consent of
Landlord in each instance  pursuant to the terms and conditions set forth below,
which consent  shall not  unreasonably  be withheld.  Neither the use by, or the
subletting  to, any subsidiary or parent company of Tenant of all or any portion
of the Premises shall be deemed an Assignment or Sublease under this Lease.

                  15.1 Documentation.  Prior to any assignment or sublease which
Tenant desires to make, Tenant shall provide to Landlord the name and address of
the  proposed  assignee  or  sublessee,  and true  and  complete  copies  of all
documents relating to Tenant's prospective agreement to assign or sublease,  and
shall specify all  consideration to be received by Tenant for such assignment or
sublease in the form

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<PAGE>

of lump sum payments,  installments of rent, or otherwise.  For purposes of this
Paragraph 15, the term "consideration"  shall include,  without limitation,  all
monies or other  consideration of any kind,  including but not limited to, bonus
money,  and  payments (in excess of book value  thereof)  for  Tenant's  assets,
fixtures,  inventory,   accounts,  good  will,  equipment,   furniture,  general
intangibles,  and capital  stock or other  equity  ownership  of Tenant.  Within
thirty (30) days after the receipt of such  documentation and other information,
Landlord  shall  either (a)  consent in writing to the  proposed  assignment  or
sublease  subject to the terms and  conditions  hereinafter  set  forth,  or (b)
notify  Tenant  in  writing  that  Landlord  refuses  such  consent,  specifying
reasonable grounds for such refusal.

                  15.2  Terms  and  Conditions.  As a  condition  to  Landlord's
granting its consent to any  assignment  or  sublease,  (a) Landlord may require
that Tenant pay to Landlord, after first deducting the costs associated with the
sublease,  as and when  received  by Tenant,  all of the amount of any excess of
such consideration,  to be received by Tenant in connection with said assignment
or sublease  over and above the rental amount fixed by this Lease and payable by
Tenant to  Landlord,  and  after  deducting  brokerage  commissions  and  tenant
improvement  costs  payable by Tenant in  connection  with such transfer and (b)
Tenant and the proposed  assignee or sublessee  must  demonstrate  to Landlord's
reasonable   satisfaction   that  the  assignee  or  sublessee  is   financially
responsible  and  proposes to use the Premises  for the  permitted  use or a use
which is otherwise  satisfactory to Landlord,  and which is not injurious to the
Premises.  Each assignment or sublease agreement to which Landlord has consented
shall be an instrument in writing in form  reasonably  satisfactory to Landlord,
and shall be executed by both Tenant and the assignee or sublessee,  as the case
may be. Each such  assignment or sublease  agreement shall recite that it is and
shall be subject and  subordinate  to the  provisions  of this  Lease,  that the
assignee or sublessee  accepts such assignment or sublease and agrees to perform
all of the  obligations  of Tenant  hereunder  (to the extent  such  obligations
relate to the  portion of the  Premises  assigned  or  subleased),  and that the
termination  of this Lease shall,  at  Landlord's  sole  election,  constitute a
termination  of every such  assignment or sublease.  In the event Landlord shall
consent to an assignment or sublease,  Tenant shall nonetheless remain primarily
liable for all obligations and liabilities of Tenant under this Lease, including
but not limited to the payment of rent. Tenant agrees to reimburse Landlord upon
demand for reasonable  attorneys'  fees incurred by Landlord in connection  with
the negotiation,  review, and documentation of any such requested  assignment or
sublease.  Tenant hereby  stipulates that the foregoing terms and conditions are
reasonable.

                  15.3  Partnership.  If Tenant is a  partnership,  a  transfer,
voluntary or involuntary,  of all or any part of an interest in the partnership,
or the dissolution of the partnership,  shall be deemed an assignment  requiring
Landlord's prior written consent.

                  15.4 Corporation. If Tenant is a corporation, any dissolution,
merger,  consolidation,  or other  reorganization  of Tenant,  or the  transfer,
either all at once or in a series of transfers,  of a controlling  percentage of
the capital stock of Tenant,  or the sale, or series of sales within any one (1)
year period,  of all or substantially  all of Tenant's assets located in, on, or
about the  Premises,  shall be deemed an  assignment.  The  phrase  "controlling
percentage"  means the ownership of, and the right to vote,  stock possessing at
least fifty-one  percent (51%) 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.  The  provisions  of this  paragraph  shall not apply to
Tenant  if Tenant is a  corporation  the stock of which is listed on a  national
securities  exchange  (as this term is used in the  Securities  Exchange  Act of
1934,  as  amended)  or is publicly  traded on the  over-the-counter  market and
prices therefor are published  daily on business days in a recognized  financial
journal.  The provisions of this  paragraph  shall not apply to Tenant if Tenant
provides Landlord with sufficient written confirmation and assurances of (I) the
continuation of Tenant's lease obligations and (ii) no materially adverse change
in Tenant's financial condition, subsequent to any change in ownership of Tenant
as provided in this paragraph

                   15.5 Landlord's Remedies.  Any assignment or sublease without
Landlord's prior written consent shall at Landlord's election be void, and shall
constitute  a default.  The consent by Landlord  to any  assignment  or sublease
shall not constitute a waiver of the provisions of this Paragraph 15,  including
the  requirement  of  Landlord's  prior  written  consent,  with  respect to any
subsequent  assignment or sublease. If Tenant shall purport to assign this Lease
or sublease all or any portion of the Premises,  or permit any person or persons
other than  Tenant to occupy the  Premises,  without  Landlord's  prior  written
consent, Landlord may collect rent from the person or persons then or thereafter
occupying  the Premises and apply the net amount  collected to the rent reserved
herein, but no such collection shall be deemed a waiver of Landlord's rights and
remedies  under  this  Paragraph  15 or the  acceptance  of any  such  purported
assignee,  sublessee  or  occupant,  or a  release  of Tenant  from the  further
performance by Tenant of covenants on the part of Tenant herein contained.

                                       14
<PAGE>

                  15.6 Encumbrances,  Licenses and Concession Agreements. Tenant
shall  not  encumber  its  interest  under  this  lease or any  rights of Tenant
hereunder,  or enter into any license or concession  agreement respecting all or
any portion of the Premises,  without  Landlord's  prior  written  consent which
consent shall not  unreasonably be withheld  subject to the terms and conditions
referred  to in  Paragraph  15.2  above,  and  Tenant's  granting  of  any  such
encumbrance, license, or concession agreement shall constitute an assignment for
purposes of this Paragraph 15.

         16.  Default by Tenant.

                  16.1 Event of Default.  The  occurrence  of any one or more of
the  following  events (an "Event of Default"),  shall  constitute a default and
breach of this Lease by Tenant:

                           (a) The failure by Tenant to make any payment of rent
or any other payment required to be made by Tenant  hereunder,  as and when due,
and such failure  shall not have been cured within three (3) days after  written
notice thereof from Landlord;

                           (b)  Tenant's  failure  to  perform  any other  term,
covenant  or  condition  contained  in this  Lease and such  failure  shall have
continued for thirty (30) days after written  notice of such failure is given to
Tenant; provided that, where such failure cannot reasonably be cured within said
thirty (30) day period,  Tenant shall not be in default if Tenant commences such
cure within said thirty (30) day period, and thereafter  diligently continues to
pursue all reasonable efforts to complete said cure until completion thereof;

                           (c) Tenant's abandonment of the Premises.

                           (d) Tenant's assignment of its assets for the benefit
of its creditors other than in the ordinary course of business;

                           (e) The sequestration of, attachment of, or execution
on, any substantial part of the property of Tenant or on any property  essential
to the  conduct of  Tenant's  business on the  Premises,  and Tenant  shall have
failed to obtain a return or release  on such  property  within  sixty (60) days
thereafter,  or prior to sale  pursuant  to such  sequestration,  attachment  or
execution, whichever is earlier;

                           (f) An  entry  of any of the  following  orders  by a
court having  jurisdiction,  and such order shall have continued for a period of
sixty (60) days: (1) an order for relief in any proceeding under Title 11 of the
United States Code, or an order adjudicating Tenant to be bankrupt or insolvent;
(2) an order appointing a receiver,  trustee or assignee of Tenant's property in
bankruptcy or any other proceeding;  or (3) an order directing the winding up or
liquidation of Tenant; or

                           (g) The  filing of a  petition  to  commence  against
Tenant an involuntary  proceeding  under Title 11 of the United States Code, and
Tenant shall fail to cause such petition to be dismissed  within sixty (60) days
thereafter.

                  16.2 Remedies. Upon any Event of Default,  Landlord shall have
the following remedies, in addition to all other rights and remedies provided by
law or equity:

                           (a) Landlord  shall be entitled to keep this Lease in
full force and effect for so long as Landlord does not terminate  Tenant's right
to  possession  (whether or not Tenant shall have  abandoned  the  Premises) and
Landlord may enforce all of its rights and remedies under this Lease,  including
the right to recover  rent and other sums as they  become due under this  Lease,
plus interest at the lower of five percent (5%) per annum plus the discount rate
of the Federal  Reserve Bank of San Francisco,  or the highest rate then allowed
by law, from the due date of each  installment  of rent or other sum until paid;
or

                           (b) Landlord  may  terminate  the  Tenant's  right to
possession by giving Tenant written notice of termination.  On the giving of the
notice,  this Lease and all of Tenant's rights in the Premises shall  terminate.
Any  termination  under this paragraph shall not release Tenant from the payment
of any sum then due  Landlord or from any claim for  damages or rent  previously
accrued or then accruing against Tenant.

                           In the event this  Lease is  terminated  pursuant  to
this Paragraph 16.2(b), Landlord may recover from Tenant:

                                       15
<PAGE>

                                    (1) the  worth  at the  time of award of the
unpaid rent which had been earned at the time of termination; plus

                                    (2) the  worth  at the  time of award of the
amount by which the unpaid rent which would have been earned  after  termination
until the time of award  exceeds  the  amount of such  rental  loss for the same
period that Tenant proves could have been reasonably avoided; plus

                                    (3) 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 for the same period that Tenant
proves could be reasonably avoided; plus

                                    (4) any other amount necessary to compensate
Landlord  for all the  detriment  approximately  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.

                           The  "worth  at the  time of  award"  of the  amounts
referred to in  Subparagraphs  (1) and (2) of this  Paragraph  16.2(b)  shall be
computed by allowing  interest at the lower of five  percent (5%) per annum plus
the discount rate of the Federal  Reserve Bank of San Francisco,  or the maximum
rate then  permitted  by law.  The  "worth  at the time of award" of the  amount
referred  to in  Subparagraph  (3)  of  this  paragraph  shall  be  computed  by
discounting  such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus five percent (5%). The term,  "rent" as used
in this  paragraph  shall  include  all sums  required  to be paid by  Tenant to
Landlord pursuant to the terms of this Lease.

                           (c) This  Lease  may  be  terminated  by  a  judgment
specifically  providing for termination,  or by Landlord's delivery to Tenant of
written notice specifically terminating this Lease. 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 or a
waiver of Landlord's right to recover damages under this Paragraph 16:

                                    (1)  appointment  of a receiver  in order to
protect Landlord's interest hereunder;

                                    (2)  consent  to  any   subletting   of  the
Premises or assignment of this Lease by Tenant,  whether  pursuant to provisions
hereof concerning subletting and assignment or otherwise; or

                                    (3)  any  other   action  by   Landlord   or
Landlord's agents 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 Premises,  or any action taken to relet the Premises or any portion
thereof for the account of Tenant and in the name of Tenant.

                  16.3 No Relief From  Forfeiture  After Default.  Tenant waives
all rights of  redemption or relief from  forfeiture  under  California  Code of
Civil  Procedure  Sections 1174 and 1179,  and under any other present or future
law,  in the event  Tenant is  evicted  or  Landlord  otherwise  lawfully  takes
possession of the Premises by reason of any Event of Default.

                  16.4  Landlord's  Right to Perform  Tenant's  Obligations.  If
Tenant  shall at any time  fail to make any  payment  or  perform  any other act
required  to be made or  performed  by Tenant  under this Lease  within the time
periods provided herein,  then Landlord may, but shall not be obligated to, make
such  payment  or  perform  such  other  act to the  extent  Landlord  may  deem
desirable, and may, in connection therewith, pay any and all expenses incidental
thereto and employ counsel.  No such action by Landlord shall be deemed a waiver
by  Landlord  of any rights or  remedies  Landlord  may have as a result of such
failure by Tenant,  or a release of Tenant from  performance of such obligation.
All  sums so paid by  Landlord,  including  without  limitation  all  penalties,
interest and costs in connection  therewith,  shall be due and payable by Tenant
to Landlord  on the day  immediately  following  any such  payment by  Landlord.
Landlord  shall have the same rights and remedies for the nonpayment of any such
sums as  Landlord  may be  entitled  to in the case of  default by Tenant in the
payment of rent.

                  16.5  Interest  on Past Due  Obligations.  Any  amount  due to
Landlord  hereunder  not paid when due shall bear  interest at the lower of five
percent (5%) per annum plus the discount rate of the Federal Reserve Bank of San
Francisco, or the highest rate then allowed by law, from the date due until

                                       16
<PAGE>

paid in full.  Payment of such interest  shall not excuse or cure any default by
Tenant under this Lease.

                  16.6  Additional  Rent. All sums payable by Tenant to Landlord
or to third parties  under this Lease in addition to such sums payable  pursuant
to Paragraph 3 hereof shall be payable as additional  sums of rent. For purposes
of  any  unlawful  detainer  action  by  Landlord  against  Tenant  pursuant  to
California  Code of  Civil  Procedure  Sections  1161-1174,  or any  similar  or
successor statutes,  Landlord shall be entitled to recover as rent not only such
sums  specified  in  Paragraph  3 as may  then be  overdue,  but  also  all such
additional sums of rent as may then be overdue.

                  16.7 Remedies Not Exclusive.  No remedy or election  hereunder
shall be deemed exclusive but shall,  wherever possible,  be cumulative with all
other remedies herein provided or permitted at law or in equity.

         17.  Default by Landlord.

                  17.1  Cure  Period.  Landlord  shall  not be  deemed  to be in
default in the  performance  of any  obligation  required to be  performed by it
hereunder  unless and until it has failed to perform such obligation  within the
period of time  specifically  provided herein,  or if no period of time has been
provided,  then  within  fifteen  (15) days after  receipt of written  notice by
Tenant to  Landlord  specifying  wherein  Landlord  has failed to  perform  such
obligation;  provided,  however,  that if the nature of Landlord's obligation is
such  that  more  than  fifteen  (15)  days  are  reasonably  required  for  its
performance,  then  Landlord  shall not be deemed to be in  default  if it shall
commence  such  performance  within such fifteen (15) day period and  thereafter
diligently prosecute the same to completion.

                  17.2 Mortgagee Protection.  In the event of any default on the
part of Landlord, Tenant will give notice by registered or certified mail to any
beneficiary  of a deed of trust  or  mortgagee  of a  mortgage  encumbering  the
Premises  whose address shall have been  furnished to Tenant,  and before Tenant
shall  have  any  right  to  terminate  this  Lease,  Tenant  shall  grant  such
beneficiary  or mortgagee a reasonable  period within which to cure the default,
if such action is necessary to effect a cure.

         18.  Advertisements  and Signs.  Tenant shall not place or permit to be
placed any sign, display,  advertisement, or decoration (collectively "sign") on
the exterior of the  Building or  elsewhere  on the  Property  without the prior
written consent of Landlord as to the color,  size, style,  character,  content,
and location of each such sign. Tenant shall at its sole expense comply with all
codes,   ordinances,   regulations,   and  other   requirements   of  applicable
governmental  authority  relating  to any sign  Tenant  places  on or about  the
Premises. Upon termination of this Lease, Tenant shall remove all signs which it
has placed on or about the  Property,  and shall repair any damage caused by the
installation  or  removal  of each such sign.  Landlord  shall not  unreasonably
withhold,  condition or delay its approval of any Tenant  signage.  Tenant shall
have the right to Tenant's share of all monument and building signage associated
with the Building.

         19.  Entry by  Landlord.  Landlord  and its agents shall be entitled to
enter into and upon the Premises at all reasonable times, upon reasonable notice
(except  in the  case of an  emergency,  in  which  event  no  notice  shall  be
required),  for  purposes  of  inspecting  or  making  repairs,  alterations  or
additions to all or any portion  thereof,  or any other part of the Building (if
the Premises  comprise only a portion of the  Building),  including the erection
and  maintenance  of such  scaffolding,  canopies,  fences  and  props as may be
required,  or for the  purpose of  posting  notices  of  non-responsibility  for
alterations,  additions, or repairs, and during the one hundred eighty (180) day
period  prior to the  expiration  of this Lease,  to place upon the Premises any
usual or ordinary  "for lease"  signs and  exhibit the  Premises to  prospective
tenants at  reasonable  hours,  all  without any  abatement  of rent and without
liability  to Tenant for any injury or  inconvenience  to or  interference  with
Tenant's business, quiet enjoyment of the Premises, or any other loss occasioned
thereby.  Landlord's  rights  of entry as set forth in this  paragraph  shall be
subject to the  reasonable  security  regulations  of  Tenant.  During any entry
within  Tenant's  business  hours,  Landlord  shall act in a manner  designed to
minimize interference with Tenant's business activities on the Premises.

         20.  Subordination and Attornment.

                  20.1 Subordination.  Tenant agrees that this Lease may, at the
option of Landlord,  be subject and subordinate to any mortgage,  deed of trust,
or other  instrument  of security  now of record or which is recorded  after the
date of this  Lease  affecting  all or any  portion  of the  Premises,  and such
subordination is hereby made effective without any further act of Tenant. Tenant
shall  execute and

                                       17
<PAGE>

return to Landlord any documents reasonably required by the lender to accomplish
the purposes of this paragraph,  within seven (7) days after delivery thereof to
Tenant and the failure of Tenant to execute and return any such instrument shall
constitute a default hereunder. Notwithstanding the foregoing, the subordination
of Tenant's  rights and  interests  under this Lease to any  mortgage or deed of
trust shall be contingent  upon Tenant's having received from any such mortgagee
or  beneficiary  of any deed of trust a written  recognition  agreement  in form
reasonably  satisfactory  to Tenant  providing that Tenant's rights and interest
shall not be disturbed in the event of any  foreclosure  of any such mortgage or
deed of trust and  confirming  that Tenant  shall  receive all of the rights and
services provided for under this Lease. Prior to the Commencement Date, Landlord
shall  obtain  and  deliver to Tenant  such a  recognition  and  non-disturbance
agreement  in a form  reasonably  acceptable  to Tenant from each  mortgagee  or
beneficiary of any deed of trust then encumbering the Building.

                  20.2  Attornment.  Tenant  shall  attorn  to any  third  party
purchasing or otherwise  acquiring the Premises at any sale or other proceeding,
or  pursuant  to the  exercise  of any  rights,  powers  or  remedies  under any
mortgages or deeds of trust or ground leases now or hereafter encumbering all or
any part of the  Premises,  as if such third  party had been  named as  Landlord
under this Lease.

         21. Estoppel Certificates and Financial Statements. Tenant shall within
seven (7) days  following  request  by  Landlord:  (a)  execute  and  deliver to
Landlord any documents,  including estoppel certificates,  in the form presented
to Tenant by Landlord (1)  certifying  that this Lease has not been modified or,
if modified,  stating the nature of such  modification  and certifying that this
Lease,  as so  modified,  is in full force and  effect;  (2) stating the date to
which  the  rent  and  other  charges  are  paid  in  advance,  if at  all;  (3)
acknowledging that there are not, to Tenant's knowledge, any uncured defaults on
the part of Landlord hereunder,  or if there are uncured defaults on the part of
Landlord,  stating the nature of such uncured  defaults;  and (4) evidencing the
status of this  Lease as may be  required  either  by a lender  making a loan to
Landlord to be secured by a deed of trust or mortgage  encumbering  the Premises
or a purchaser of the Premises from Landlord;  and (b),  deliver to Landlord the
readily available  current  financial  statements of Tenant with an opinion of a
certified public accountant, if available,  including a balance sheet and profit
and loss statement for the then current fiscal year, and the two (2) immediately
prior fiscal years (if  available),  all prepared in accordance  with  generally
accepted accounting principles consistently applied. Tenant's failure to deliver
any such  documents,  including an estoppel  certificate,  or any such financial
statements within fourteen (14) days following such request shall be an Event of
Default under this Lease.

         22.  Notices.  Any  notice,  approval,   request,  demand,  or  consent
(collectively  "notice")  required or desired to be given under this Lease shall
be in writing and shall be personally  served,  delivered by United States mail,
registered or certified,  postage  prepaid,  delivered by other courier service,
sent by tele fax or e-mail  followed by delivery via mail,  and addressed to the
party to be served at the last  address  given by that party to the other  party
under the provisions of this paragraph.  At the date of execution of this Lease,
the  addresses  of Landlord and Tenant are as set forth above in the preamble to
this Lease.  Any notice  delivered by mail pursuant to this  paragraph  shall be
deemed to have been  delivered  three (3) business days after the posted date of
mailing.  All other notices shall be deemed delivered upon actual receipt by the
addressee.

         23.  Waiver.  The  waiver  by either  party of any  breach of any term,
covenant,  or condition  herein  contained shall not be deemed to be a waiver of
such term,  covenant or condition for any  subsequent  breach of the same or any
other term, covenant or condition herein contained. The subsequent acceptance of
rent  hereunder by Landlord  shall not be deemed to be a waiver of any preceding
breach by Tenant of any term,  covenant or condition  of this Lease,  other than
the failure of Tenant to pay the  particular  rental so accepted,  regardless of
Landlord's  knowledge of such preceding breach at the time of acceptance of such
rent.  No term,  covenant  or  condition  shall be deemed to have been waived by
either  party  unless such  waiver is in writing and signed by the party  making
such waiver.

         24. No Accord and  Satisfaction.  No  payment by Tenant,  or receipt by
Landlord,  of an amount which is less than the full amount of rent and all other
sums  payable by Tenant  hereunder at such time shall be deemed to be other than
on  account  of (a) the  earliest  of such  other  sums  due  and  payable,  and
thereafter (b) to the earliest rent due and payable hereunder. No endorsement or
statement  on any check or any letter  accompanying  any payment of rent or such
other sums shall be deemed an accord and  satisfaction,  and Landlord may accept
any such check or  payment  without  prejudice  to  Landlord's  right to receive
payment of the balance of such rent and/or other sums,  or  Landlord's  right to
pursue any remedies to which Landlord may be entitled to recover such balance.

         25.  Attorneys'  Fees. If any action or proceeding at law or in equity,
or an arbitration  proceeding

                                       18
<PAGE>

(collectively  an  "action"),  shall be brought  to recover  any rent under this
Lease,  or for or on account of any breach of or to enforce or interpret  any of
the terms,  covenants,  or  conditions  of this  Lease,  or for the  recovery of
possession of the Premises,  the  prevailing  party shall be entitled to recover
from the other party as a part of such action,  or in a separate  action brought
for that purpose, its reasonable attorneys' fees and costs and expenses incurred
in connection with the prosecution or defense of such action. "Prevailing Party"
within the meaning of this paragraph shall include,  without limitation, a party
who brings an action  against the other after the other is in breach or default,
if such action is dismissed  upon the other's  payment of the sums allegedly due
for performance of the covenants allegedly breached,  or if the party commencing
such action or proceeding obtains  substantially the relief sought by it in such
action,   whether  or  not,  such  action   proceeds  to  a  final  judgment  or
determination.

         26. Surrender.  Tenant shall, upon expiration or sooner  termination of
this Lease,  surrender the Premises to Landlord in the same condition as existed
on the date Tenant originally took possession thereof (reasonable wear and tear,
acts of God,  casualties,  condemnation,  Hazardous  Materials (other than those
released or emitted by Tenant), and alterations and improvements which Tenant is
not  required  to remove at the  termination  of this  Lease,  and damage due to
causes beyond the reasonable control of Tenant excepted) with all interior walls
cleaned,  all interior  painted  surfaces  repainted in the original  color,  if
necessary,  all holes in walls repaired,  all carpets shampooed and cleaned, all
HVAC  equipment  servicing  only the  Premises  in  operating  order and in good
repair, and all floors cleaned and waxed, all to the reasonable  satisfaction of
Landlord.  Tenant shall at such time also surrender to Landlord such alterations
(to the  Premises) as Landlord  does not require  Tenant to remove in accordance
with  Paragraph  7.6  above.  Tenant,  on or  before  the  expiration  or sooner
termination of this Lease,  shall remove all of its personal  property and trade
fixtures from the Premises and all property so removed shall be deemed abandoned
by Tenant.  Tenant  shall be liable to Landlord for costs of removal of any such
abandoned trade fixtures or equipment of Tenant,  or of any  alterations  Tenant
fails to remove if so required by Landlord,  together with the cost of returning
the Premises to its condition as of the date Tenant  originally  took possession
thereof, and the transportation and storage costs of such items. If the Premises
are not so surrendered  at the  expiration or sooner  termination of this Lease,
Tenant shall indemnify  Landlord against loss or liability  resulting from delay
by Tenant in so surrendering the Premises,  including  without  limitation,  any
claims made by any succeeding  tenant founded on such delay,  losses to Landlord
due to lost  opportunities to lease to succeeding  tenants,  and attorneys' fees
and costs.  All keys to the Premises or any part thereof shall be surrendered to
Landlord upon expiration or sooner termination of the Lease term.

         27. Holding Over. This Lease shall terminate  without further notice at
the  expiration of the Lease term.  Any holding over by Tenant after  expiration
shall not constitute a renewal or extension of the Lease term or give Tenant any
rights in or to the Premises unless otherwise  expressly provided in this Lease.
Any  holding  over after the  expiration  with the  express  written  consent of
Landlord shall be construed to be a tenancy from month to month,  at one hundred
fifty  percent  (150%) of the monthly  Base Rent for the last month of the Lease
term,  and  shall  otherwise  be on the terms and  conditions  herein  specified
insofar  as  applicable,  unless  otherwise  mutually  agreed in  writing by the
parties.

         28.  Transfer of Premises by Landlord.  The term  "Landlord" as used in
this Lease,  so far as the covenants or  obligations on the part of Landlord are
concerned,  shall be limited to mean and  include  only the owner at the time in
question of the fee title to the Premises.  In the event of any transfer of such
fee title, the Landlord herein named (and in case of any subsequent  transfer or
conveyances,  the  then  grantor)  shall  after  the  date of such  transfer  or
conveyance be automatically  freed and relieved of all liability with respect to
performance of any  obligations on the part of Landlord  contained in this Lease
thereafter to be performed; provided, that any funds in the hands of Landlord or
the then  grantor at the time of such  transfer in which Tenant has an interest,
shall be turned over to the grantee. The covenants and obligations  contained in
this Lease on the part of Landlord shall,  subject to the foregoing,  be binding
upon  each  Landlord  hereunder  only  during  his or its  respective  period of
ownership.

         29. Arbitration. Any controversy or claim arising out of or relating to
this  Agreement,  or the breach thereof,  or any controversy  arising out of the
same transaction,  occurrence or series of transactions or occurrences,  related
to the subject of this Agreement, whether in tort or contract and whether in law
or in equity, shall be settled in arbitration in accordance with the Arbitration
Rules of the American Arbitration Association.  Judgment upon the award rendered
by the  arbitrator(s) may be entered in any court having  jurisdiction  thereof.
Notice of demand for arbitration  shall be filed in writing with the other party
to this Agreement and with the American Arbitration Association within three (3)
years from the expiration of this Agreement.  However, in the event that a claim
is within the  jurisdiction  of the Small Claims Court,  then the party claiming
that amount may proceed in the Small Claims Court rather than arbitration

                                       19
<PAGE>

         30.  General Provisions.

                  30.1 Entire  Agreement.  This  instrument,  together  with the
exhibits  attached  hereto,  contains all of the agreements and conditions  made
between the parties hereto and may not be modified orally or in any manner other
than by an  agreement  in writing  signed by all of the parties  hereto or their
respective  successors  in interest.  Any  executed  copy of this Lease shall be
deemed an original for all purposes.

                  30.2  Time.  Time  is of  the  essence  with  respect  to  the
performance  of  each  and  every  provision  of this  Lease  in  which  time of
performance is a factor. All references to days contained in this Lease shall be
deemed to mean calendar days unless otherwise specifically stated.

                  30.3  Captions.  The  captions  and  headings of the  numbered
paragraphs of this Lease are inserted  solely for the convenience of the parties
hereto,  and are not a part of this  Lease  and shall  have no  effect  upon the
construction or interpretation of any part hereof.

                  30.4  California  Law.  This  Lease  shall  be  construed  and
interpreted in accordance with the laws of the State of California. The language
in all parts of this Lease shall in all cases be construed as a whole  according
to its fair meaning and not strictly for or against  either  Landlord or Tenant,
and without reference to which party prepared this Lease.

                  30.5 Gender, Singular and Plural. When required by the context
of this Lease, the neuter includes the masculine, the feminine, a partnership, a
corporation, or a joint venture, and the singular shall include the plural.

                  30.6  Partial  Invalidity.  If any  provision of this Lease is
held by a court of competent jurisdiction to be invalid, void, or unenforceable,
the remainder of the provisions hereof shall nonetheless  continue in full force
and effect and shall in no way be affected, impaired, or invalidated thereby.

                  30.7   No   Warranties.   Any   agreements,    warranties   or
representations not expressly contained herein shall not bind either Landlord or
Tenant, and Landlord and Tenant expressly waive all claims for damages by reason
of any statement,  representation,  warranty,  promise or agreement, if any, not
expressly contained in this Lease.

                  30.8 Joint and Several  Liability.  If Tenant is more than one
person or entity,  each such  person or entity  shall be jointly  and  severally
liable for the obligations of Tenant hereunder.

                  30.9  Binding on  Successors.  The  covenants  and  conditions
herein contained, subject to the provisions as to assignment, shall apply to and
be binding  upon the  parties  hereto  and their  respective  heirs,  executors,
administrator, assigns, and other successors in interest.

                  30.10 Authority. The parties hereby represent and warrant that
they have all necessary power and authority to execute and deliver this Lease on
behalf of Landlord and Tenant, respectively.

                  30.11  Memorandum of Lease. Neither  Landlord nor Tenant shall
record this Lease or a short form memorandum hereof  without  the  prior written
consent of the other

                  30.12 Merger.  The voluntary or other surrender of this Lease,
or a mutual cancellation thereof, shall not work an automatic merger, but shall,
at the sole option of Landlord,  either terminate all or any existing  subleases
or  subtenancies,  or operate as an assignment to Landlord of any or all of such
subleases or subtenancies.

                  30.13  Force  Majeure.  Any  prevention  of or  delay  in  the
performance  by a party  hereto of its  obligations  under this Lease  caused by
inclement weather, labor disputes (including strikes and lockouts), inability to
obtain materials or reasonable substitutes therefor,  governmental restrictions,
regulations, controls, action or inaction, civil commotion, fire or other causes
beyond  the  reasonable  control  of the  party  obligated  to  perform  (except
financial  inability),  shall  excuse  the  performance  by  such  party  of its
obligations  hereunder  (except the  obligation  of Tenant to pay rent and other
sums hereunder) for a period of one day for each such day of delay.

                                       20
<PAGE>

                  30.14  Brokers.  Tenant  warrants  that it has had no dealings
with any real estate broker or agent in connection  with the negotiation of this
Lease other than Mark Dowling,  Bruce Horton and Rick Steffens of Grubb & Ellis.
Landlord  and Tenant agree to hold the other  harmless  from and  indemnify  the
other  against  any claim or  demand  for  commission,  finder's  fee,  or other
compensation by any other broker, based upon their respective acts.

                  30.14 Signage. Tenant shall be allowed signage at the Property
in accordance with the CC&R's and City of Livermore sign ordinance. In addition,
Tenant shall be allowed to the change the name of the street from triad Drive to
Adept Drive or other suitable alternative. All signage, and costs related to the
street name change, will be a Tenant's expense.

                  30.15 Backup  Generator.  Tenant,  at its cost, shall have the
right to install, in a mutually acceptable  location,  a backup generator,  with
Landlord's consent, which shall not be unreasonably  withheld.  There will be no
charge to Tenant  for the  placement  of the  generator.  In the event CCI Triad
leaves behind the existing backup generator,  Tenant shall have the right to use
it free of charge.

                  30.16 Roof Right.  Tenant shall  retain the right,  during the
lease term and  extensions,  to place HVAC  equipment  and  rooftop  antenna and
satellites on the roof for Tenant's own use. There will be no additional  charge
to Tenant associated with rooftop equipment.  Tenant will be responsible for the
cost of all  rooftop  equipment  installation,  maintenance  and any  associated
repairs which are the result of the installation.

                  30.17  Parking.  Throughout  the  lease  term and  extensions,
Tenant shall have the right to parking  spaces at a ratio of 3.2 spaces for each
1,000 square feet leased.

                  30.18  Electrical  Systems.  Tenant  shall  have the  right to
exclusively  use the  existing  electrical  and  power  systems  servicing  each
building  upon  occupancy.  In the event CCI Triad  leaves  behind the  existing
Uninterrupted Power Service (U.P.S.) units servicing the Premises,  Tenant shall
have the right to use them free of charge.

                  30.19  Additional  Paragraphs.  Paragraph  1 through 2, as set
forth in the attached  Addendum as well as Exhibits A and B are added hereto and
made a part of this Lease.

                  30.20  Whenever  this Lease  requires the  approval,  consent,
designation,  determination, selection or judgment by either Landlord or Tenant,
such approval, consent,  designation,  determination,  selection or judgment and
conditions  imposed  thereby shall be reasonable  and shall not be  unreasonably
withheld or delayed and, in exercising any right or remedy hereunder, each party
shall at all times act reasonably and in good faith.

                  30.21  Reasonable  Expenditures.  Any  expenditure  by a party
permitted  or  required  under this  Lease,  for which such party is entitled to
demand and does demand  reimbursement  from the other party, shall be limited to
the fair market value of the goods and services  involved,  shall be  reasonably
incurred,  and shall be  substantiated  by  documentary  evidence  available for
inspection  and review by the other party or its  representatives  during normal
business hours.

         IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease on the
dates  specified  below  immediately  adjacent to their  respective  signatures.
Delivery of this Lease to  Landlord,  duly  executed by Tenant,  constitutes  an
offer by  Tenant  to lease  the  Premises  as  herein  set  forth,  and under no
circumstances  shall such delivery be deemed to create an option or  reservation
to lease the  Premises  for the benefit of Tenant.  This Lease shall only become
effective and binding upon execution of this Lease by Landlord and delivery of a
signed copy to Tenant.

                                       21
<PAGE>

LANDLORD

TRI-VALLEY CAMPUS I, LLC

         By:      Tri-Valley Technology Park, LLC, a Delaware

                  limited liability company

         By:               Tri-Valley Managers, LLC

                           a Delaware limited liability company

                            its sole managing member

         By:               The Kontrabecki Group

                            a California corporation,

                           its managing member

                           By: /s/J.T. Kontrabecki
                              -----------------------
                           Its: President                  Date:  10/31/00
                               ----------------------           ----------------

TENANT

ADEPT TECHNOLOGY, INC.

By: /s/ Brian R. Carlisle                 Date:      10/23/2000
   ----------------------------------           ----------------------

Its: CEO
     --------------------------------

                                       22
<PAGE>

                                   EXHIBIT "A"

                               EXPANSION PREMISES

                                       23
<PAGE>

                                   EXHIBIT "A"

                                    PREMISES

                                       24
<PAGE>

                                   EXHIBIT "A"

                                INITIAL PREMISES

                                       25
<PAGE>

                                   EXHIBIT "B"

                             PREMISES LEASED AS-IS.

                                       26
<PAGE>

                                   EXHIBIT "C"

                     COVENANTS, CONDITIONS, AND RESTRICTIONS

                                       27
<PAGE>

                                   EXHIBIT "D"

                              RULES AND REGULATIONS

                                       28
<PAGE>

                                   ADDENDUM TO
                           TRI-VALLEY TECHNOLOGY PARK
                              INDUSTRIAL-R&D LEASE

         The  Addendum is executed  by and  between  Tri-Valley  Campus I LLC, a
Delaware limited liability company, as Landlord,  and Adept Technology,  Inc., a
California  Corporation,  as  Tenant,  with  respect to those  certain  Premises
commonly known as 3011, 3055 and 3077 Triad Drive.  This Addendum is an integral
part of the lease to which it is  attached;  provided,  the  provisions  of this
Addendum  supersede  the  provisions  of the  lease to the  extent  inconsistent
therewith.

         1.       Option to Extend.

                  1.1 Option.  At the  expiration  of both the original term and
the first extension term hereof, Tenant may extend the term of this Lease for an
additional  period  of five  (5)  years  commencing  immediately  following  the
Expiration  Date of the original term or the first extension term (the "Extended
Term").  Tenant shall exercise the option,  if at all, by giving Landlord notice
of Tenant's  intention to do so at least three hundred sixty (360) days prior to
the Expiration Date. In no event shall any purported  exercise of such option by
Tenant be effective  if (i) an Event of Default (as defined in  Paragraph  16.1)
exists  at the time of such  exercise  or at the time the  Extended  Term  would
otherwise  have  commenced,  or (ii) more than three (3) Events of Default  have
occurred  during  the  Lease  term  prior to the date the  Extended  Term  would
otherwise have commenced.  Such Extended Term shall be upon all of the terms and
conditions  hereof,  except  that  the  monthly  rental  and  method  of  rental
adjustment for the Extended Term shall be determined as set forth below.  Unless
expressly  mentioned and approved in the written consent of Landlord referred to
in Paragraph 15 of this Lease,  the option rights of Tenant under this paragraph
are granted for Tenant's personal benefit and may not be assigned or transferred
by Tenant.

                  1.2 Extended Term Rent. As of the commencement of the Extended
Term, the monthly Base Rent and the method of rental  adjustment  (including the
timing of adjustments  and the basis for calculating  the  adjustments)  for the
Extended Term shall be subject to negotiation  between Landlord and Tenant, with
an effort to determine a fair market rental for the Premises, as improved, and a
method of rental  adjustment  consistent  with rental  adjustment  practices for
comparable lease space in the vicinity of the Premises. In the event the parties
fail to agree upon the amount of the monthly  Base Rent and the method of rental
adjustment for the Extended Term prior to commencement thereof, the monthly Base
Rent  and the  method  of  rental  adjustment  for the  Extended  Term  shall be
determined by appraisal in the manner  hereafter set forth;  provided,  however,
that in no event shall the monthly Base Rent for the Extended  Term be less than
the monthly  Base Rent  payable  hereunder  for the last full month of the Lease
term immediately preceding commencement of the Extended Term.

                  In the event it becomes  necessary under this  subparagraph to
determine the fair market monthly Base Rent and the method of rental  adjustment
of the  Premises by  appraisal,  Landlord  and Tenant each shall  appoint a real
estate appraiser who shall be a member of the American  Institute of Real Estate
Appraisers  ("AIREA") and such  appraisers  shall each determine the fair market
monthly Base Rent for the Premises,  and the method of rental  adjustment taking
into account the value of the Premises and the amenities provided by the Outside
Areas, the Common Areas and the Building and prevailing  comparable  rentals and
rental adjustment  practices in the areas. Such appraisers shall,  within twenty
(20) business days after their appointment, complete their appraisals and submit
their appraisal  reports to Landlord and Tenant. If the fair market monthly Base
Rent  of the  Premises  established  in the two (2)  appraisals  varies  by five
percent  (5%) or less of the  higher  rental,  the  average  of the two shall be
controlling.  If said fair  market  monthly  Base Rent  varies by more than five
percent (5%) of the higher rental,  said appraisers,  within ten (10) days after
submission of the last appraisal, shall appoint a third appraiser who shall be a
member of the AIREA and who shall also be experienced in the appraisal of rental
values and adjustment practices for commercial properties in the vicinity of the
Premises. Such third appraiser shall, within twenty (20) business days after his
appointment,  determine  by appraisal  the fair market  monthly Base Rent of the
Premises, taking into account the same factors referred to above, and submit his
appraisal  report to Landlord  and Tenant.  The fair  market  monthly  Base Rent
determined by the third appraiser for the Premises shall be controlling,  unless
it is less than that set forth in the lower appraisal  previously  obtained,  in
which case the value set forth in said lower appraisal shall be controlling,  or
unless it is  greater  than that set forth in the  higher  appraisal  previously
obtained,  in which case the rental set forth in said higher  appraisal shall be
controlling.  The method of adjusting rental

<PAGE>

periodically,  including the manner and timing of such adjustments,  shall be as
determined  by the initial  two  appraisers,  if they agree on a single  method;
otherwise,  it shall be as determined by the third appraiser. If either Landlord
or Tenant fails to appoint an appraiser,  or if an appraiser appointed by either
of them  fails,  after his  appointment,  to submit  his  appraisal  within  the
required period in accordance with the foregoing, the appraisal submitted by the
appraiser  properly  appointed  and timely  submitting  his  appraisal  shall be
controlling.  If the two appraisers  appointed by Landlord and Tenant are unable
to agree upon a third  appraiser  within the required  period in accordance with
the foregoing,  application  shall be made within twenty (20) days thereafter by
either Landlord or Tenant to the AIREA, which shall appoint a

member  of said  institute  willing  to  serve  as  appraiser.  The  cost of all
appraisals  under  this  subparagraph  shall be borne  equally by  Landlord  and
Tenant.

         2.       Construction of Tenant Improvements.

                  2.1  Definitions.

                           (a) The term "Tenant  Improvements"  shall mean those
improvements  that  Tenant  constructs  in the  Premises  pursuant  to plans and
specifications developed therefor in accordance with Paragraph 2.2(a) below.

                           (b) The term "Tenant Improvement Costs" shall include
but not be limited to all sums: (1) paid to contractors  for labor and materials
furnished in connection with construction of the Tenant Improvements pursuant to
Paragraph  2.2 below;  (2) all costs,  expenses,  payments,  fees,  and  charges
whatsoever  paid or incurred by  Landlord  to or at the  direction  of any city,
county, or other governmental  authority or agency which are required to be paid
by Landlord in order to obtain all  necessary  governmental  permits,  licenses,
inspections   and  approvals   relating  to  the   construction  of  the  Tenant
Improvements  and the use  and  occupancy  of the  Premises,  including  without
limitation all in lieu fees and utility fees; (3) engineering and  architectural
fees for services required in connection with the design and construction of the
Tenant  Improvements,  and (4)  premiums,  if any,  for  course of  construction
insurance and for payment and completion  bonds relating only to construction of
the Tenant Improvements.

                           (c)  Landlord  shall  provide a  "Tenant  Improvement
Allowance" in the amount of $20.00 per square foot for the Initial  Premises and
$10.00  per  square  foot per  square  foot for the  Expansion  Premises,  which
allowance  is already  reflected  in the  monthly  Base Rent amount set forth in
Paragraph 3.1 of the Lease.

                  2.2 Procedure of Time Schedules.

                           (a)   Approval  of  Plans.   Within  ten  days  after
execution of this Lease by both parties hereto,  Tenant shall prepare and submit
to Landlord  preliminary  plans,  specifications  and working  drawings  for the
Tenant  Improvements which Tenant desires Landlord to Construct on the Premises.
Tenant shall select the architect  and engineers  required for the design of the
Tenant Improvements, which selection shall be subject to the reasonable approval
of Landlord, As soon as the final plans, specifications and working drawings are
completed,  Tenant shall  deliver the same to Landlord for its  approval,  which
shall not be unreasonably withheld, and which shall be based solely upon whether
such final plans are consistent with the preliminary  plans. In all events,  the
parties  shall use their best efforts to reach  agreement so that such plans may
be submitted for governmental  approval within seven (7) days from submission of
such plans to Landlord  for its  approval.  If Landlord and Tenant agree on such
plans,  they shall indicate their approval  thereof by initialing and dating the
same and a copy of the final Tenant  Improvements plans shall be attached hereto
as Exhibit "B" and shall  become a part  hereof.  Tenant shall submit such final
plans,  specifications  and  working  drawings to all  appropriate  governmental
agencies  for  approval.  Concurrently  with its  submission  of final  plans to
governmental  agencies,  Tenant shall obtain a bid for the  construction  of the
improvements  contemplated by such final plans and  specifications.  Immediately
following  receipt of such bid,  Tenant shall deliver a copy to Landlord for its
review and approval.  Such bid shall be deemed approved by Tenant if Tenant does
not object thereto within ten (10) days thereafter. Tenant shall notify Landlord
of any changes  required by any governmental  agencies,  and Landlord shall have
seven (7) days  thereafter  to indicate its approval  thereof.  All such changes
required by governmental  agencies shall be deemed acceptable to Landlord unless
Tenant's use of the Premises is  materially  impaired or modified  thereby.  The
final plans,  specifications  and working  drawings as approved,  and all change
orders  specifically  permitted  pursuant to  Subparagraph  (c) below,  shall be
referred to herein as the "Approved Plans".

<PAGE>

                           (b)  Contractors.  The Tenant  Improvements  shall be
constructed  by a general  contractor  approved by Landlord  and Tenant.  Tenant
shall use its best  efforts to  complete  the  preparation  and  approval of the
Approved  Plans  so  that  construction  contracts  may be  executed  to  ensure
completion prior to the Commencement Date.

                           (c)   Changes   to   Approved    Plans   for   Tenant
Improvements. Once the Approved Plans have been finally approved by Landlord and
Tenant as provided above, then thereafter  neither party shall have the right to
order extra work or change orders with respect to the construction of the Tenant
Improvements without the prior written consent of the other, which consent shall
not be  unreasonably  withheld  or  delayed.  All extra  work or  change  orders
requested by either  Landlord or Tenant shall be made in writing,  shall specify
the amount of delay or the time saved  resulting  therefrom,  shall  specify any
added or reduced cost resulting  therefrom,  shall specify which party shall pay
such costs and the manner of payment and shall  become  effective  and a part of
the Approved Plans once approved in writing by both parties.

                           (d)   Commencement   and  Completion  of  the  Tenant
Improvements.  As soon as (1) the Approved Plans have been developed as provided
above,  and (2) all necessary  governmental  approvals have been obtained,  then
Tenant shall  thereafter  commence  construction of such  improvements and shall
diligently prosecute such construction to completion. Such improvements shall be
constructed by Tenant  substantially  in accordance with the Approved Plans, and
in compliance with all applicable regulations,  ordinances,  building codes, and
statutes  of  lawful  governmental  authority.  Landlord  shall  not  receive  a
construction management fee.

                           (e) Payment of Cost of Tenant Improvements.  Landlord
shall  pay all  Tenant  Improvement  Costs up to an amount  equal to the  Tenant
Improvement Allowance. Tenant shall thereafter pay any excess Tenant Improvement
Costs over and above such amounts.

                  2.3 Delay in Completion  The parties hereto  acknowledge  that
the date on  which  Tenant's  obligation  to pay the  monthly  Base  Rent  would
otherwise  commence may possibly be delayed because of, among other things (each
a  "Delay"):  (a) failure to  promptly  review and approve  plans for the Tenant
Improvements;   (b)  Tenant's  request  for  special  materials,   finishes,  or
installations  which are not readily  available;  (c) change orders requested by
Tenant and approved by Landlord; (d) Tenant's failure to complete any of its own
improvement  work  to  the  extent  Tenant  delays   completion  by  appropriate
governmental  authorities  of their final  inspection and approval of Landlord's
improvements;  or (e)  interference  with Landlord's work caused by Tenant or by
Tenant's  contractors or Subcontractors.  It is the intent of the parties hereto
that  Tenant's  obligation to pay the monthly Base Rent not be delayed by any of
such  causes or by any other act of Tenant,  and in the event it is so  delayed,
then Tenant's  obligation to pay the monthly Base Rent shall  commence as of the
date it would  otherwise  have  commenced  absent  said delay  caused by Tenant.
Delays in excess of thirty (30) days for any of the above-mentioned  reasons may
affect Landlord's  financing of construction of the Premises,  and Tenant agrees
to pay any reasonable additional financing costs,  including loan fees, incurred
by Landlord as a result thereof.

                  3. Right of First  Negotiation  to Purchase.  If, at any time,
from the date of the Lease  until  July 1, 2001,  Landlord  intends to offer the
entire  Premises,  consisting  of the all three  buildings,  for sale to a party
unrelated to Landlord,  then Landlord  shall first offer to sell same to Tenant.
Tenant shall have ten (10) business days to accept  Landlord's  offer. If Tenant
does not accept  this  offer,  then  Landlord  may  proceed  with a sale with no
further obligation to Tenant.  This right of first negotiation to purchase shall
not apply to any financing  arranged by Landlord  other than a conveyance of the
fee simple real estate title to the entire Premises.

<PAGE>

LANDLORD

Tri-Valley Campus I, LLC, a Delaware
Limited liability company

By:      Tri-Valley Technology Park, LLC, a Delaware

         limited liability company

 By:     Tri-Valley Managers, LLC,

            a Delaware limited liability company,

            its sole managing member

         By:      The Kontrabecki Group, Inc.

                  a California corporation,

                  its managing member

                           By:  /s/J.T. Kontrabecki
                               -------------------------------------------------
                                    John Kontrabecki, President

                           Date:  10/31/00
                                -------------------------
TENANT

ADEPT TECHNOLOGY, INC.

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

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

By: /s/ Brian R. Carlisle
    -----------------------------

Its: CEO                                    Date: 10/23/2000
     ----------------------------                 ------------------------------

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