ASSIGNMENT AND MODIFICATION OF LEASES

 ASSIGNMENT AND MODIFICATION OF LEASES

         THIS ASSIGNMENT AND  MODIFICATION OF LEASES (this  "Assignment) is made
as of the 16th day of August, 1996, by and among the D. R. STEPHENS & COMPANY, a
California limited partnership  ("Lessor"),  NETWORK COMPUTING DEVICES,  INC., a
California  corporation  ("Assignor"),  and PINNACLE SYSTEMS, INC., a California
corporation ("Assignee").

                                    Recitals

         A. Lessor and Assignor,  as Lessee,  entered into that certain Standard
Industrial/Commercial  Single-Tenant  Lease-Net  for  the  approximately  53,300
square foot premises  located at 280(A) North  Bernardo  Avenue,  Mountain View,
California,  and  that  certain  Standard   Industrial/Commercial   SingleTenant
Lease-Net for the  approximately  53,160 square foot premises  located at 280(B)
North Bernardo Avenue,  Mountain View,  California,  each dated as of August 18,
1992.  Said  Leases are  referred to herein  collectively  as the  "Leases"  and
individually as the "280(A) Lease" and the "280(B) Lease".  Copies of the Leases
are attached hereto as Exhibits A and B and made a part hereof by reference.

         B.       On the terms and conditions hereinafter provided:

                  (i)  Assignor  desires to assign the Leases to Assignee and be
released by Lessor from all further  obligations in connection  with the Leases,
except as  otherwise  herein  provided  and except with  respect to that certain
Sublease  attached  hereto as Exhibit E (the  "Sublease")  between  Assignor and
Assignee of even date herewith concerning the 280(A) North Bernardo premises;

                  (ii) Assignee  desires to accept the assignment and assume the
lessee's obligations under each of the Leases,  provided the Leases are modified
in certain respects; and

                  (iii)  Lessor is  willing  to modify  the Leases as desired by
Assignee and to approve the  assignment to Assignee and the  Sublease,  provided
the Leases are modified in certain additional respects.

         THEREFORE, Lessor, Assignor and Assignee agree as follows:

         1.  Assignment.  Subject and pursuant to the terms and  conditions  set
forth herein and in that certain  Agreement to Assign and Modify Leases  between
the parties  hereto  dated June 5, 1996 (the  "Agreement")  and in that  certain
Agreement  Concerning  Assignment  of  Leases  of even  date  therewith  between
Assignor  and  Assignee  (the  "Agreement  Concerning  Assignment"),  for  value
received,  receipt of which is hereby acknowledged,  Assignor hereby assigns and
transfers  to Assignee all of its right,  title,  and interest in and to each of
the  Leases.  Assignee  shall  succeed to all rights  and  privileges  under the
Leases,  except as herein otherwise  provided.  Assignor covenants with Assignee
that  Assignor  is  the  lawful  owner  of  the  assigned  interests;  that  the
Commencement  Date under each of the Leases was October 1, 1992; that the Leases
are in full force and effect and not in default or subject to a condition which,
with the  giving  of notice  or  passage  of time or both,  would  constitute  a
default;  that the assigned  interests  are free and clear of and from all liens
and encumbrances; that Assignor has good right to sell

and assign said interests as aforesaid;  and that Assignor has no claims against
Lessor under the Leases and this  assignment is made without  reservation of any
kind as against Lessor.

         2. Return of Assignor  Deposits.  Assignor  acknowledges the receipt of
its  security  deposits  which have been  returned  to Assignor by Lessor in the
combined  amount of  $83,040,  less any amounts  which may have been  applied by
Lessor in accordance  with the provisions of the Leases.  Assignor  acknowledges
that the amount it is receiving  concurrently with the execution and exchange of
this Assignment is in full satisfaction of Lessor's  obligation to Assignor with
respect to amounts  deposited  by  Assignor  pursuant  to the  Leases.  Assignee
acknowledges that Lessor is returning Assignor's deposits to Assignor, that such
deposits are not among the interests of Assignor which are assigned  pursuant to
this Assignment,  and that Assignee is depositing its own funds pursuant to this
Assignment.

         3.  Condition  of  Premises.  Assignor  acknowledges  that  it has  had
occupancy  and  control  of the  premises  under the Leases at all time from the
Commencement Date thereunder through the date hereof,  that Lessor completed its
obligations for  improvements  and repairs under the Leases,  including  without
limitation,  all obligations  under the Work Letter Agreements of the Leases and
the roof  replacement  and any and all work indicated by the  inspection  report
pursuant to Sections 2 and 3 of the Addenda to the Leases; and that Assignor has
been  responsible  for all  maintenance  and repairs of the premises  except for
Lessor's  obligation to replace, if necessary,  the air conditioner  compressors
and heat  exchangers  pursuant  to Section  2(b) of the  Addendum to each of the
Leases.  Accordingly,  Assignor,  rather than Lessor,  has been in a position to
know the condition of the premises and has been responsible for their condition.
Except  as  otherwise  provided  herein or in the  Agreement,  any  warranty  or
representation  to Assignee as to the  condition  of the  premises is being made
under the Agreement Concerning Assignment to which Lessor is not a party, except
that, to the extent possible,  Assignor and Lessor hereby assign to Assignee, on
a  nonexclusive  basis,  the  benefits of the warranty  for the  aforesaid  roof
replacement.

         4. Lessor  Disclaimer as to Condition.  Lessor makes only those limited
representations  set forth in the Agreement but absolutely no  representation or
warranty as to the condition of the buildings located on the premises.  All such
representations  or  warranties  included  in the  Addenda  and the Work  Letter
Agreements to the Leases no longer apply.  Assignee  acknowledges  that Assignor
has made  access to the  premises  available  to  Assignee,  that  Assignee  has
inspected the premises to its satisfaction, and that, as to Lessor and except as
otherwise provided herein or in the Agreement,  Assignee accepts the premises in
their   present   condition,   as   is,   without   conditions,    reservations,
representations or warranties whatsoever;  provided, however, that the foregoing
shall not be deemed to release Lessor from any liability  Lessor otherwise might
have  arising  from the  presence  of any  hazardous  substances  in the soil or
groundwater of the premises prior to the date of this  Assignment;  and provided
further,    without   limiting   the   generality   of   Assignee's    foregoing
acknowledgments,  that Lessor shall have no liability  whatsoever  in connection
with or as a result of any hazardous  materials  which may be present within the
buildings on the premises,  including without  limitation,  asbestos  containing
materials  as  disclosed  in a report  by Reel  Grobeman  which  has  been  made
available to Assignee through  Assignor and which materials  Lessor  understands
were removed or otherwise  remediated in accordance  with applicable laws in the
course of  Assignor's  improvements  to the  premises.  Any  representations  or
warranties  Assignee may have  received  with respect to the  conditions  of the
buildings located on the premises have been made

                                       -2-

only by  Assignor;  Assignee  agrees to look  solely to  Assignor  with  respect
thereto; and Assignor releases Lessor from and acknowledges and agrees it has no
claim against Lessor for,  damages,  indemnification,  contribution or any other
cause in any way  arising  out of or in  connection  with the  condition  of the
premises,  and Assignor  further  agrees to defend,  indemnify,  and hold Lessor
harmless  from and against any such claims,  except to the extent  caused by the
active or gross negligence or wilful misconduct of Lessor or Lessor's employees,
agents or  contractors.  Assignee  acknowledges  that,  as between  Assignee and
Lessor,  Assignee is responsible for all maintenance,  repair and improvement on
or about the premises as and when required under the Leases,  including  without
limitation,  any work  required  to  conform  to codes and  regulation,  whether
currently  applicable  or enacted or applied  in the  future,  and  specifically
including, without limitation, the Americans with Disabilities Act.

         5. Compressor and Exchanger Replacement.  Except as otherwise set forth
under the Leases (as modified by this Assignment), the only obligation of Lessor
with  respect to the  condition  of the premises for the duration of the Leases,
including  all  possible  extensions  thereof,  shall be as follows:  If the air
conditioner  compressors and heat exchangers servicing the premises under either
of the Leases should require replacement prior to June 30, 2000, Lessor shall be
responsible for such replacement.  Pending any such replacement,  Assignee shall
be responsible  for repair and  maintenance of said  compressors and exchangers.
After any such replacement and after June 30, 2000, in any event, Assignee shall
be  responsible  for all further  repair,  maintenance  and  replacement  of the
compressors  and  exchangers  as  well as all  other  repairs,  maintenance  and
replacements  necessary to keep the premises in good order, condition and repair
in accordance  with  Paragraph  7.1(a) of the Leases,  and Lessor shall use best
efforts to assure  that  Assignee  is an  express  beneficiary  of any  warranty
received by Lessor in connection  with such  replacement of the air  conditioner
compressors and heat exchangers.

         6.  Acceptance and Assumption.  Assignee  accepts the assignment of the
Leases  as  hereinafter  modified  and  expressly  assumes  and  agrees to keep,
perform,  and  fulfill all the terms,  covenants,  conditions,  and  obligations
required to be kept,  performed,  and  fulfilled by the Lessee under each of the
Leases  as so  modified,  and  as  between  Assignee  and  Lessor,  whether  the
obligation shall have occurred on, before or after the date hereof. Lessor shall
look to Assignee for payment of all costs and  expenses  from and after the date
hereof which are the responsibility of "Lessee" under the Leases (as modified by
this Assignment); and it shall be the responsibility of Assignor and Assignee to
agree  between  themselves  by  separate  instrument  as to  any  prorations  or
allocations they desire to make. Lessor shall not be a party to or involved with
such prorations or allocations.

         7. Contribution to Tenant Improvements.  Assignee  acknowledges receipt
of the sum of $16,000 from Lessor to be used towards the  construction of tenant
improvements  to be made by  Assignee.  Except  as  otherwise  set  forth in the
Agreement,  and, as between  Assignor and  Assignee,  as may be set forth in the
Agreement Concerning Assignment,  Assignee agrees that all other costs of tenant
improvements  or  alterations  of any kind shall be the sole  responsibility  of
Assignee.

         8. Construction of Tenant  Improvements.  Assignee may construct tenant
improvements  as shown on the plans and  specifications  referenced in Exhibit C
hereto,  which  plans and  specifications  are  approved  by Lessor.  Assignee's
agreement to observe and perform in accordance with the provisions of the Leases
includes,  without  limitation,  abiding by the provisions of Paragraphs 7.3 and
7.4 governing

                                       -3-

Utility  Installations,  Trade  Fixtures and  Alteration,  with respect to these
tenant improvements. Upon surrender of the premises, Assignee may leave in place
all improvements made by Assignor and all improvements made by Assignee pursuant
to the plans and  specifications  referenced  in Exhibit C, except to the extent
Lessor, as part of its approvals of said plans and specifications,  has reserved
in  writing  the right to  require  Assignee  to remove  certain  aspects of the
Exhibit  C  improvements  on or  before  surrender  of the  premises.  All other
conditions of the Leases required for the premises upon surrender shall continue
in full force and effect.

         9. Consent to Assignment. Lessor consents to the assignment to Assignee
of the Lessee's interest in and to each of the Leases as modified hereby. Except
for  Assignor's  obligations  under the Sublease,  Lessor  waives,  releases and
discharges Assignor from all obligations under the Leases; provided that neither
this  release  nor the  modification  of the Leases  shall in any way affect any
obligation or liability of Assignor to Assignee with respect to the condition of
the  premises,  the state of  Assignor's  right or title in and to the interests
assigned  hereunder,  or any other matter between Assignor and Assignee,  or any
obligations  or  liabilities  of the  parties to one  another  pursuant  to this
Assignment. Lessor's consent to this assignment shall not be deemed or construed
to be a waiver of any term,  covenant,  condition  or provision of either of the
Leases  (except as otherwise  expressly  herein  provided)  nor a consent to any
further,  subsequent  or other  assignment  or  subleasing  under  either of the
Leases,  all  rights of Lessor  under  each of the  Leases as  modified  by this
Assignment being hereby reserved.

         10. Assignee Rent Payment.  Lessor  acknowledges  receipt of the sum of
$45,305.00 to be applied towards the rent due for the calendar month as of which
this Assignment is dated, under the 280(A) Lease and the sum of $45,186.00 to be
applied towards the rent due for the same month under the 280(B) Lease. Assignee
shall be responsible to Lessor for all rent from and after the date hereof.

         11.  Assignee  Security  Deposit.  Lessor  acknowledges  receipt of the
additional  sum of  $100,700  to be  held as a  combined  security  deposit  for
Assignee's  performance under the Leases, to be held by Lessor and refundable to
Assignee as provided in Paragraph 5 of the Leases.

         12. Modification of Leases. The Leases are modified as follows:

                  a. Term.  The Original  Term of each of the Leases is extended
to the last day of  December,  2003,  but this  shall not  extend  the period of
Lessor's obligation for any required replacement of air conditioner  compressors
and heat exchangers.

                  b. Rent.  The Base Rent  payable  each month under each of the
Leases shall be as follows:

Period                                       280(A) Lease        280(B) Lease  
- ----------------------------------------    --------------      -------------- 
Date hereof to May 31, 2001                   $45,305.00          $45,186.00
June 1, 2001, to December 31, 2003            $50,635.00          $50,502.00

                                       -4-

                  c.  Insuring  Party.  Paragraph  1.9 of each of the  Leases is
amended to provide that the "Insuring Party" is the Lessee.

                  d.  Option to Extend.  The option to extend each of the Leases
as granted to Assignor  at Section 8 of the  Addenda is granted to Assignee  and
the "Lessee" pursuant to any Permitted  Transfer (as defined in Paragraph 12.j),
revised  as set forth in Exhibit D  attached  hereto  and made a part  hereof by
reference.

                  e. Late  Charges.  The grace  period  for  payment of rent and
other  sums due  under  each of the  Leases is  extended  from the five (5) days
provided in Paragraph 13.4 of the Leases to seven (7) days.

                  f. Right of First Refusal.   Assignor's right of first refusal
is terminated by this Assignment.  Assignee shall have no right of first refusal
at any time  after  Assignee's  receipt of written  notice of  delinquency  from
Lessor.  The right of first refusal shall apply only in the event of an outright
sale of the premises,  and Assignee  shall have no right of first refusal in the
event Lessor transfers the premises by way of a capital  contribution to another
entity,  including  without  limitation,  a REIT. In the event Lessor's intended
sale of the  property  is  structured  as an  exchange  or other  tax-advantaged
transfer, Assignee's right of first refusal shall apply only if Assignee is able
to and does  cooperate in the exchange or structure  the other  transfer so that
Lessor achieves the intended tax advantage.

                  g.  Signage.  Paragraph 34 of the Leases is deleted.  Assignee
shall have the right, at Assignee's sole cost, to install and maintain at, in or
around the  premises  any and all signage  advertising  Assignee's  business and
operations at the premises that Assignee desires. The size, location, and nature
of such signs shall be subject to all  applicable  governmental  ordinances  and
regulations.  The means of affixing the signs shall be subject to Lessor's prior
written approval, and the signs shall be subject to provisions of Paragraph 7 of
the Leases  (Maintenance,  Repairs,  Utility  Installations,  Trade Fixtures and
Alterations).  Lessor  reserves the right to have "for lease"  and/or "for sale"
signs  posted on or about the premises at any time after  November 30, 2002,  if
Assignee  has not given  notice of its election to exercise the option to extend
the term,  and at any time after  November 30, 2012, if Assignee does extend the
Leases for the Option Term.

                  h. Permitted  Uses.   The  permissible  uses  specified  under
Paragraph  1.8 of each of the Leases is amended to read,  "Light  manufacturing,
assembly,  research and development,  warehouse,  sales,  general office and all
other legal uses."

                  i. Rent.  Paragraph l(d) of the Addendum to each of the Leases
is deleted.

                  j.  Assignment.  Notwithstanding  anything to the contrary set
forth in the Leases,  Assignee may, with only prior notice to Lessor and without
the consent of Lessor, and, without any participation by Lessor in assignment or
subletting proceeds ("transfer  considerations"),  assign the Leases or sublease
the  premises  to  (i)  a  subsidiary,   affiliate,   division  or   corporation
controlling,  controlled  by or  under  common  control  with  Assignee,  (ii) a
successor   corporation   related  to   Assignee   by   merger,   consolidation,
nonbankruptcy  reorganization,  or  government  action,  or (iii) a purchaser of
substantially

                                       -5-

all of  Assignee's  assets;  provided that the  transferee  pursuant to any such
assignment  or  sublease  shall  promptly  execute  and  deliver  to  Lessor  an
instrument assuming all obligations of the lessee under the Leases. In addition,
any public or private offering of Assignee's capital stock or sale of Assignee's
capital stock  through any public  exchange  shall not be deemed an  assignment,
subletting  or  other  transfer  of the  Leases  or the  premises.  A  sublease,
assignment or similar  transfer under the conditions of this provision  shall be
referred  to  as a  "Permitted  Transfer".  The  assumption  instrument  by  the
transferee  notwithstanding,  no assignment,  Sublease or similar transfer shall
relieve Assignee of any obligations under either of the Leases.

                  k.  Subletting.  Lessor hereby approves the Sublease.  By this
approval,  Lessor  shall not be deemed to have  entered  into the Sublease or to
have  consented  to any  further  assignment  of  subletting  of  the  premises.
Additionally,  the second sentence of Paragraph  12.2(c) shall not apply to this
Sublease.

                  l.  Property  Insurance.   Notwithstanding   anything  to  the
contrary  contained in the Leases,  (i) Assignee  shall,  by  endorsement to the
property  insurance policies Assignee is required to carry pursuant to Paragraph
8.3(c) of the Leases,  maintain separately scheduled property insurance coverage
on all of Assignee's personal property and "Lessee Owned Alterations and Utility
Installations"  (as defined in the Leases,  and which  together with  Assignee's
personal  property,  shall  collectively be referred to hereafter as "Assignee's
Property"),  and (ii) all  proceeds  available  form the  insurance  carried  by
Assignee with respect to Assignee's Property shall be paid or assigned by Lessor
to and become the property of Assignee,  regardless of whether or not the Leases
are  terminated  by either  Lessor or Assignee  pursuant  to  Paragraph 9 of the
Leases.

         13.  Brokers.  Each party  warrants and represents to the other that it
has not employed or had dealings with any brokers or finders in connection  with
this transaction,  except Grubb & Ellis Company who has represented Assignee and
Spallino  Reid who has  represented  Assignor.  Each party agrees to  indemnify,
protect,  defend and hold  harmless each other party from and against any claims
for such  commissions  or fees and from and against all claims,  losses,  costs,
expenses and damages  (including  reasonable  attorneys'  fees) resulting from a
breach  of the  foregoing  warranty.  Lessor  shall  pay  $50,000.00  for  total
commissions  due Grubb & Ellis Company and Spallino Reid in connection  with the
transactions encompassed by this Assignment, and Assignor shall pay any other or
additional  commissions or fees payable to any person in connection herewith and
shall defend and  indemnify  Lessor from and against any and all claims for such
other or additional commissions or fees.

         14.  Attorneys'  Fees. In the event of any litigation  involving any of
the  parties  hereto  for  the  enforcement  or  interpretation  of  any  of the
provisions  of this  Assignment,  or of any  right of any party  hereunder,  the
unsuccessful  party in such  litigation  hereby agrees to pay to the  successful
party  all  costs  and  expenses,   including  without  limitation,   reasonable
attorneys'  fees  and  court  costs  incurred  by the  successful  party in such
litigation, whether at the trial, appellate and/or administrative levels, all of
which  fees and  costs may be  included  in,  and as part of,  any  judgment  or
decision rendered in such litigation.

         15.  Entire  Agreement.  Except  as to  matters  specifically  left  to
separate  agreement between Assignor and Assignee,  the terms of this Assignment
are intended by the parties as a final expression of

                                       -6-

their  agreement  with  respect to the  subject  matter  hereof,  and may not be
contradicted by evidence of any prior or contemporaneous agreement. Such parties
further  intend that this  Assignment  constitute  the  complete  and  exclusive
statement  of its  terms  and  that  no  extrinsic  evidence  whatsoever  may be
introduced in any proceedings (judicial or otherwise) involving this Assignment,
except for evidence of a subsequent written amendment hereto.

         16.  Modification.  This  Assignment  may not be  modified,  amended or
otherwise changed in any manner, nor may the Leases be further modified, amended
or otherwise changed in any manner,  except by a written  amendment  executed by
the  applicable  parties  hereto,  or their  respective  successors in interest.
Except as  modified  hereby,  all  terms and  conditions  of the  Leases  remain
unchanged and in full force and effect.

         17. Partial Invalidity.  If any provision hereof is held invalid or not
enforceable to its full extent,  such provision shall be enforced to the fullest
extent  permitted by law, and the validity of the  remaining  provisions  hereof
shall not be affected thereby.

         18.  Headings.  The headings of various sections in this Assignment are
for  convenience  only and are not to be utilized in  construing  the content or
meaning of the substantive provisions hereof.

         19.  Successors.  All of the terms,  covenants  and  conditions of this
Assignment  shall be binding upon, and shall inure to the benefit of, the heirs,
executors, administrators, successors and permitted assigns of the parties.

         IN WITNESS WHEREOF, the parties have executed this Assignment as of the
date first above stated.

ASSIGNOR:

                  NETWORK COMPUTING DEVICES, INC.

                  By /s/ Jack Bradley
                     ---------------------------

                  Jack Bradley
                  ------------------------------
                  [Print Name]

                  Its Chief Financial Officer
                      --------------------------

                                       -7-

ASSIGNEE:

                  PINNACLE SYSTEMS, INC.

                  By /s/ Arthur Chadwick
                     ------------------------------

                  Aruthur Chadwick
                  ---------------------------------
                  [Print Name]

                  Its Chief Financial Officer
                      -----------------------------

LESSOR:

                  D.R. STEPHENS & COMPANY

                  By /s/ Donald R. Stephens
                     ------------------------------
                     Donald R. Stephens, General Partner

                                       -8-

                                    EXHIBIT A

                                  280(A) Lease
                 (including Addendum and Work Letter Agreement)

                   AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

             STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE-NET
                (Do not use this form for Multi-Tenant Property)

1.       Basic Provisions ("Basic Provisions")

         1.1 Parties:  This Lease ("Lease"),  dated for reference purposes only,
August 18, 1992 is made by and between D.R.  Stephens & Company  ("Lessor")  and
Network  Computing   Devices,   Inc.,  a  California   corporation   ("Lessee"),
(collectively the "Parties" or individually a "Party").

         1.2 Premises:  That certain real property,  including all  improvements
therein or to be provided by Lessor under the terms of this Lease,  and commonly
known by the street  address of 280(A)  North  Bernardo  Avenue,  Mountain  View
(formerly  occupied by Synoptics) located in the County of Santa Clara, State of
California,  and  generally  described  as  (describe  briefly the nature of the
property),  also known as Assessor's  Parcel No. 165-37-009  ("Premises").  (See
Paragraph 2 for further provisions.)

         1.3 Term:  Approximately seven (7) years and 1 month ("Original Term").
(See Paragraph 3 and Work Letter for further provisions.)

         1.4      [paragraph intentionally deleted]

         1.5 Base Rent: $41,575.00 per month ("Base Rent"), payable on the First
(1st) day of each month. (See Paragraph 4 for further provisions.)

|X| If this box is checked, there are provisions in this Lease for the Base Rent
to be adjusted.

         1.6 Base  Rent  Paid Upon  Execution:  $41,575.00  as Base Rent for the
first full month following the Commencement Date.

         1.7 Security Deposit: $41,575.00 ("Security Deposit"). (See Paragraph 5
for further provisions.)

         1.8  Permitted  Use:  Office and  testing,  packaging  and  shipping of
computers,   monitors  and  related  devices.   (See  Paragraph  6  for  further
provisions.)

         1.9 Insuring  Party:  Lessor is the "Insuring  Party" unless  otherwise
stated herein. (See Paragraph 8 for further provisions.)

         1.10  Real  Estate   Brokers:   The  following   real  estate   brokers
(collectively,   the  "Brokers")  and  brokerage  relationships  exist  in  this
transaction and are consented to by the Parties (check applicable  boxes):  J.R.
Parish, Inc. -- Colliers International represents

                                       -1-

 |X| Lessor exclusively ("Lessor's Broker");

 |_| both Lessor and Lessee,
      and Spallino Reid represents

 |X| Lessee exclusively ("Lessee's Broker");

 |_| both Lessee and Lessor.  (See Paragraph 15 for further provisions.)

         1.11      [paragraph intentionally deleted]

         1.12  Addenda.  Attached  hereto is an Addendum  and Work Letter all of
which constitute a part of this Lease.

2.       Premises.

         2.1 Letting.  Lessor hereby leases to Lessee,  and Lessee hereby leases
from Lessor,  the  Premises,  for the term,  at the rental,  and upon all of the
terms,  covenants  and  conditions  set forth in this  Lease.  Unless  otherwise
provided  herein,  any statement of square  footage set forth in this Lease,  or
that may have been used in calculating  rental, is an approximation which Lessor
and Lessee agree is  reasonable  and the rental based  thereon is not subject to
revision whether or not the actual square footage is more or less.

         2.2     [paragraph intentionally deleted]

         2.3     [paragraph intentionally deleted]

         2.4 Acceptance of Premises. Lessee hereby acknowledges: (a) that it has
been advised by the Brokers to satisfy  itself with respect to the  condition of
the Premises  (including  but not limited to the  electrical  and fire sprinkler
systems,  security,  environmental  aspects,  compliance with Applicable Law, as
defined in Paragraph 6.3) and the present and future suitability of the Premises
for Lessee's  intended  use, (b) that Lessee has made such  investigation  as it
deems  necessary with  reference to such matters and assumes all  responsibility
therefor as the same relate to Lessee's  occupancy  of the  Premises  and/or the
term of this Lease, and (c) that neither Lessor, nor any of Lessor's agents, has
made any oral or written  representations or warranties with respect to the said
matters other than as set forth in this Lease.

         2.5     [paragraph intentionally deleted]

3.       Term.

         3.1 Term. The Commencement  Date,  Expiration Date and Original Term of
this Lease are as specified in Paragraph 1.3, and the Work Letter.

         3.2     [paragraph intentionally deleted]

                                       -2-

         3.3     [paragraph intentionally deleted]

4.       Rent.

         4.1 Base Rent.  Lessee shall cause  Payment of Base Rent and other rent
or  charges,  as the same may be adjusted  from time to time,  to be received by
Lessor in lawful money of the United States, without offset or deduction,  on or
before the day on which it is due under the terms of this  Lease.  Base Rent and
all other rent and  charges for any period  during the term hereof  which is for
less than one (1) full  calendar  month shall be prorated  based upon the actual
number of days of the calendar  month  involved.  Payment of Base Rent and other
charges  shall be made to Lessor at its address  stated  herein or to such other
persons or at such other  addresses as Lessor may from time to time designate in
writing to Lessee.

5. Security Deposit.  Lessee shall deposit with Lessor upon execution hereof the
Security  Deposit set forth in Paragraph  1.7 as security for Lessee's  faithful
performance  of Lessee's  obligations  under this Lease.  If Lessee fails to pay
Base Rent or other rent or charges due  hereunder,  or otherwise  Defaults under
this Lease (as defined in Paragraph  13.1),  Lessor may use, apply or retain all
or any portion of said Security Deposit for the payment of any amount due Lessor
or to reimburse or compensate Lessor for any liability,  cost, expense,  loss or
damage  (including  attorneys' fees) which Lessor may suffer, or incur by reason
thereof.  If Lessor uses or applies all or any portion of said Security Deposit,
Lessee shall within ten (10) days after written request  therefor deposit moneys
with  Lessor  sufficient  to restore  said  Security  Deposit to the full amount
required by this Lease.  Lessor shall not be required to keep all or any part of
the Security  Deposit separate from its general  accounts.  Lessor shall, at the
expiration  or  earlier  termination  of the term  hereof  and after  Lessee has
vacated the  Premises,  return to Lessee (or,  at Lessor's  option,  to the last
assignee,  if any, of Lessee's  interest  herein),  that portion of the Security
Deposit  not used or applied by Lessor.  Unless  otherwise  expressly  agreed in
writing by Lessor,  no part of the Security  Deposit  shall be  considered to be
held in  trust,  to bear  interest  or other  increment  for its  use,  or to be
prepayment for any moneys to be paid by Lessee under this Lease.

6.       Use.

         6.1 Use. Lessee shall use and occupy the Premises only for the purposes
set forth in Paragraph  1.8, or any other use which is comparable  thereto,  and
for no other purpose.  Lessee shall not use or permit the use of the Premises in
a manner that creates waste or a nuisance,  or that unreasonably disturbs owners
and/or  occupants of, or causes damage to,  neighboring  premises or properties.
Lessor  hereby agrees to not  unreasonably  withhold or delay its consent to any
written request by Lessee,  Lessees assignees or subtenants,  and by prospective
assignees and  subtenants of the Lessee,  its  assignees and  subtenants,  for a
modification  of said  permitted  purpose for which the  premises may be used or
occupied,  so long as the same will not impair the  structural  integrity of the
improvements on the Premises,  the mechanical or electrical systems therein,  is
not significantly more burdensome to the Premises and the improvements  thereon,
and is otherwise  permissible  pursuant to this Paragraph 6. If Lessor elects to
withhold such consent, Lessor shall within five (5) business days give a written
notification  of same,  which notice shall  include an  explanation  of Lessor's
reasonable objections to the change in use.

                                       -3-

         6.2 Hazardous Substances.

                       (a) Reportable Uses Require Consent.  The term "Hazardous
Substance"  as used in this Lease shall mean any product,  substance,  chemical,
material  or  waste  whose  presence,   nature,  quantity  and/or  intensity  of
existence, use, manufacture, disposal, transportation,  spill release or effect,
either by itself or in combination  with other  materials  expected to be on the
Premises,  is either: (i) potentially  injurious to the public health, safety or
welfare,  the  environment  or the Premises,  (ii) regulated or monitored by any
governmental  authority,  or  (iii) a  basis  for  liability  of  Lessor  to any
governmental  agency or third party under any  applicable  statute or common law
theory.  Hazardous Substance shall include, but not be limited to, hydrocarbons,
petroleum,  gasoline,  crude  oil  or any  products,  by-products  or  fractions
thereof.  Lessee  shall not engage in any  activity in, on or about the Premises
which  constitutes  a  Reportable  Use (as  hereinafter  defined)  of  Hazardous
Substances without the express prior written consent of Lessor and compliance in
a timely manner (at Lessee's sole cost and expense) with all  Applicable Law (as
defined in Paragraph 6.3).  "Reportable  Use" shall mean (i) the installation or
use of any above or below ground storage tank, (ii) the generation,  possession,
storage, use, transportation, or disposal of a Hazardous Substance that requires
a permit  from,  or with  respect  to which a report,  notice,  registration  or
business  plan  is  required  to be  filed  with,  any  governmental  authority.
Reportable Use shall also include  Lessee's being  responsible  for the presence
in, on or about the Premises of a Hazardous  Substance with respect to which any
Applicable Law requires that a notice be given to persons  entering or occupying
the Premises or neighboring  properties.  Notwithstanding the foregoing,  Lessee
may without  Lessor's prior consent,  but in compliance with all Applicable Law,
use any  ordinary  and  customary  materials  reasonably  required to be used by
Lessee in the normal course of Lessee's business  permitted on the Premises,  so
long as such use is not a  Reportable  Use and does not expose the  Premises  or
neighboring  properties to any  meaningful  risk of  contamination  or damage or
expose Lessor to any liability  therefor.  In addition,  Lessor may (but without
any  obligation  to do so)  condition  its consent to the use or presence of any
Hazardous  Substance,  activity or storage tank by Lessee upon  Lessee's  giving
Lessor such additional assurances as Lessor, in its reasonable discretion, deems
necessary  to protect  itself,  the public,  the  Premises  and the  environment
against damage,  contamination or injury and/or liability therefrom or therefor,
including,  but not limited to, the installation (and removal on or before Lease
expiration  or  earlier   termination)   of  reasonably   necessary   protective
modifications to the Premises (such as concrete  encasements) and/or the deposit
of an additional Security Deposit under Paragraph 5 hereof.

                       (b) Duty  to  Inform  Lessor.  If  Lessee  knows,  or has
reasonable  cause  to  believe,  that  a  Hazardous  Substance,  or a  condition
involving or resulting  from same, has come to be located in, on, under or about
the  Premises,  other than as  previously  consented to by Lessor,  Lessee shall
immediately  give  written  notice of such fact to  Lessor.  Lessee  shall  also
immediately give Lessor a copy of any statement,  report, notice,  registration,
application,  permit,  business plan, license, claim, action or proceeding given
to, or received from, any  governmental  authority or private party,  or persons
entering or occupying the Premises,  concerning  the presence,  spill,  release,
discharge of, or exposure to, any Hazardous  Substance or contamination  in, on,
or about the Premises, including but not limited to all such documents as may be
involved in any Reportable Uses involving the Premises.

                                       -4-

                       (c) Indemnification.  Lessee  shall  indemnify,  protect,
defend and hold Lessor,  its agents,  employees,  lenders and ground Lessor,  if
any,  and the  Premises,  harmless  from and  against  any and all loss of rents
and/or  damages,   liabilities,   judgments,  costs,  claims,  liens,  expenses,
penalties,  permits  and  attorney's  and  consultant's  fees  arising out of or
involving any  Hazardous  Substance or storage tank brought onto the Premises by
or for  Lessee  or under  Lessee's  control.  Lessee's  obligations  under  this
Paragraph  6  shall  include,  but  not  be  limited  to,  the  effects  of  any
contamination or injury to person, property or the environment created by or for
Lessee, and the cost of investigation (including consultants and attorney's fees
and testing), removal, remediation,  restoration and/or abatement thereof, or of
any contamination therein involved,  and shall survive the expiration or earlier
termination of this Lease.  No termination,  cancellation  or release  agreement
entered  into by Lessor and Lessee  shall  release  Lessee from its  obligations
under this Lease with respect to Hazardous  Substances or storage tanks,  unless
specifically so agreed by Lessor in writing at the time of such agreement.

         6.3  Lessee's  Compliance  with Law.  Except as  otherwise  provided in
Section 2 of the  Addendum,  Lessee,  shall,  at Lessee's sole cost and expense,
fully,  diligently and in a timely  manner,  comply with all  "Applicable  Law,"
which  term is used in this  Lease to  include  all  laws,  rules,  regulations,
ordinances, directives, covenants, easements and restrictions of record permits,
the requirements of any applicable fire insurance  underwriter or rating bureau,
and the recommendations of Lessor's engineers and/or consultants relating in any
manner to Lessee's  occupancy or use of the Premises  (including but not limited
to matters pertaining to (i) industrial hygiene,  (ii) environmental  conditions
on, in, under or about the Premises,  including soil and groundwater  conditions
created by or for Lessee and (iii) the use, generation, manufacture, production,
installation, maintenance, removal, transportation, storage, spill or release of
any Hazardous  Substance or storage tank),  now in effect or which may hereafter
come into  effect,  and  whether or not  reflecting  a change in policy from any
previously existing policy.  Lessee shall, within five (5) days after receipt of
Lessor's  written  request,  provide  Lessor  with copies of all  documents  and
information,  including, but not limited to, permits, registrations,  manifests,
applications, reports and certificates,  evidencing Lessee's compliance with any
Applicable Law specified by Lessor,  and shall immediately upon receipt,  notify
Lessor in writing (with copies of any documents  involved) of any  threatened or
actual claim, notice,  citation,  warning,  complaint or report pertaining to or
involving failure by Lessee or the Premises to comply with any Applicable Law.

         6.4 Inspection;  Compliance.  Lessor and Lessor's Lender(s) (as defined
in paragraph  8.3(a)) shall have the right to enter the Premises at any time, in
the case of an emergency,  and otherwise at reasonable  times upon prior notice,
whether  written or oral,  for the purpose of  inspecting  the  condition of the
Premises  and for  verifying  compliance  by  Lessee  with  this  Lease  and all
Applicable  Laws (as defined in Paragraph  6.3),  and to employ  experts  and/or
consultants  in  connection  therewith  and/or to advise  Lessor with respect to
Lessee's  activities  including but not limited to the installation,  operation,
use, monitoring,  maintenance,  or removal of any Hazardous Substance or storage
tank on or from the  Premises.  The costs and  expenses of any such  inspections
shall be paid by the party requesting  same,  unless a Default or Breach of this
Lease,  violation of Applicable  Law, or a  contamination,  caused or materially
contributed  to by  Lessee  is  found to exist or be  imminent,  or  unless  the
inspection is requested or ordered by a governmental  authority as the result of
any such  existing or imminent  violation  or  contamination.  In any such case,
Lessee shall upon request  reimburse Lessor or Lessor's Lender,  as the case may
be, for the costs and expenses of such inspections.

                                       -5-

7. Maintenance; Repairs: Utility Installations: Trade Fixtures and Alterations.

         7.1 Lessee's Obligations.

                       (a) Subject to the  provisions of Sections 2 and 3 in the
Addendum, 7.2 (Lessor's obligations to repair), 9 (damage and destruction),  and
14  (condemnation),  Lessee shall,  at Lessee's sole cost and expense and at all
times,  keep the Premises and every part  thereof in good order,  condition  and
repair,  structural  and  non-structural  (whether  or not such  portion  of the
Premises requiring  repairs,  or the means of repairing the same, are reasonably
of readily  accessible  to Lessee,  and whether or not the need for such repairs
occurs as a result of Lessee's  use,  any prior use,  the elements or the age of
such portion of the Premises), including, without limiting the generality of the
foregoing all equipment or  facilities  serving the Premises,  such as plumbing,
heating,  air  conditioning,   ventilating,   electrical,  lighting  facilities,
boilers,  fired or unfired pressure vessels, fire sprinkler and/or standpipe and
hose or other automatic fire extinguishing  system,  including fire alarm and/or
smoke detection systems and equipment, fire hydrants,  fixtures, walls (interior
and exterior),  foundations,  ceilings,  roofs,  floors,  windows,  doors, plate
glass, skylights, landscaping, driveways, parking lots, fences, retaining walls,
signs,  sidewalks  and  parkways  located  in, on,  about,  or  adjacent  to the
Premises. Lessee shall not cause or permit any Hazardous Substance to be spilled
or released in, on, under or about the Premises  (including through the plumbing
or sanitary  sewer system) and shall  promptly,  at Lessee's  expense,  take all
investigatory  and/or remedial  action  reasonably  recommended,  whether or not
formally,  ordered or required, for the cleanup of any contamination of, and for
the  maintenance,  security  and/or  monitoring  of the  Premises,  the elements
surrounding  same,  or  neighboring  properties,  that was caused or  materially
contributed to by Lessee, or pertaining to or involving any Hazardous  Substance
and/or  storage  tank  brought  onto the  Premises by or for Lessee or under its
control.  Lessee,  in keeping the Premises in good order,  condition and repair,
shall  exercise and perform good  maintenance  practices.  Lessee's  obligations
shall include restorations,  replacements or renewals when necessary to keep the
Premises and all improvements thereon or a part thereof in good order, condition
and state of repair.  If Lessee  occupies  the  Premises  for seven (7) years or
more,  Lessor may require Lessee to repaint the exterior of the buildings on the
Premises as reasonably  required,  but not more frequently than once every seven
(7) years.

                       (b) Lessee  shall,  at  Lessee's  sole cost and  expense,
procure and maintain  contracts,  with copies to Lessor,  in customary  form and
substance  for,  and with  contractors  specializing  and  experienced  in,  the
inspection, maintenance and service of the following equipment and improvements,
if any, located on the Premises:  (i) heating,  air conditioning and ventilation
equipment,  (ii) boiler, fired or unfired pressure vessels, (iii) fire sprinkler
and/or  standpipe  and  hose or  other  automatic  fire  extinguishing  systems,
including fire alarm and/or smoke  detection,  (iv)  landscaping  and irrigation
systems,  (v) roof covering and drain  maintenance  and (vi) asphalt and parking
lot maintenance.

         7.2 Lessor's  Obligations.  Except for the warranties and agreements of
Lessor  contained  in Sections 2 and 3 of the  Addendum,  Section 9 (relating to
destruction of the Premises) and 14 (relating to  condemnation of the Premises),
it is  intended by the Parties  hereto  that Lessor have no  obligation,  in any
manner whatsoever, to repair and maintain the Premises, the improvements located
thereon, or the equipment therein, whether structural or non structural,  all of
which  obligations are intended to be that of the Lessee and under Paragraph 7.1
hereof. It is the intention of the Parties that the terms of this

                                       -6-

Lease govern the respective  obligations  of the Parties as to  maintenance  and
repair of the  Premises.  Lessee and Lessor  expressly  waive the benefit of any
statute now or  hereafter  in effect to the extent it is  inconsistent  with the
terms of this Lease with respect to, or which  affords  Lessee the right to make
repairs  at the  expense of Lessor or to  terminate  this Lease by reason of any
needed repairs.

         7.3 Utility Installations; Trade Fixtures: Alterations.

                       (a)  Definitions;  Consent  Required.  The term  "Utility
Installations"  is  used  in  this  lease  to  refer  to all  carpeting,  window
coverings,  air lines, power panels,  electrical  distribution,  security,  fire
protection  systems,   communication   systems,   lighting  fixtures,   heating,
ventilating,  and air conditioning  equipment,  plumbing,  and fencing in, on or
about the Premises.  The term "Trade Fixtures" shall mean Lessee's machinery and
equipment that can be removed without doing material damage to the premises. The
term  "Alterations"  shall  mean any  modification  of the  improvements  on the
Premises  from that which are  provided by Lessor under the terms of this Lease,
other than  Utility  Installations  or Trade  Fixtures,  whether by  addition or
deletion. "Lessee Owned Alterations and/or Utility Installations" are defined as
Alterations  and/or Utility  Installations made by Lessee that are not yet owned
by Lessor as defined in Paragraph 7.4(a).  Lessee shall not make any Alterations
or Utility  installations  in, on, under or about the Premises  without Lessor's
prior  written  consent  which  shall not be  unreasonably  withheld or delayed.
Lessee may, however,  make non-structural  Utility Installations to the interior
of the Premises  (excluding the roof),  as long as they are not visible from the
outside,  do not involve  puncturing,  relocating  or  removing  the roof or any
existing walls, and the cumulative cost thereof during each calendar year of the
Lease does not exceed $25,000.

                       (b) Consent.  Any  Alterations  or Utility  Installations
that  Lessee  shall  desire to make and which  require the consent of the Lessor
shall be presented to Lessor in written form with proposed  detailed plans.  All
consents  given  by  Lessor,  whether  by  virtue  of  Paragraph  7.3(a)  or  by
subsequent,  specific  consent,  shall be deemed  conditioned upon: (i) Lessee's
acquiring all applicable permits required by governmental authorities,  (ii) the
furnishing  of  copies  of such  permits  together  with a copy of the plans and
specifications  for the  Alteration or Utility  Installation  to Lessor prior to
commencement  of the work thereon,  and (iii) the  compliance by Lessee with all
conditions of said permits in a prompt and expeditious  manner.  Any Alterations
or utility  Installations  by Lessee during the term of this Lease shall be done
in a good and workmanlike  manner,  with good and sufficient  materials,  and in
compliance  with all  Applicable  Law.  Lessee shall  promptly  upon  completion
thereof furnish Lessor with as-built plans and specifications therefor.

                       (c)  Indemnification.  Lessee  shall pay,  when due,  all
claims for labor or materials  furnished or alleged to have been furnished to or
for Lessee at or for use on the Premises,  which claims are or may be secured by
any  mechanics'  or  materialmen's  lien  against the  Premises or any  interest
therein.  Lessee  shall give Lessor not less than ten (10) days' notice prior to
the  commencement  of any work,  in, on or about the Premises,  and Lessor shall
have the right to post  notices of  non-responsibility  in or on the Premises as
provided by law. If Lessee  shall,  in good faith,  contest the  validity of any
such lien,  claim or demand,  then Lessee shall,  at its sole expense defend and
protect  itself,  Lessor  and the  Premises  against  the same and shall pay and
satisfy  any such  adverse  judgment  that may be  rendered  thereon  before the
enforcement thereof against the Lessor or the Premises. If Lessor shall require,
Lessee shall furnish

                                       -7-

to Lessor a surety  bond  satisfactory  to Lessor in an amount  equal to one and
one-half times the amount of such  contested lien claim or demand,  indemnifying
Lessor against liability for the same, as required by law for the holding of the
Premises  free from the effect of such lien or claim.  In  addition,  Lessor may
require Lessee to pay Lessor's attorneys fees and costs in participating in such
action if Lessor shall decide it is to its best interest to do so.

         7.4 Ownership; Removal: Surrender; and Restoration.

                       (a) Ownership. Subject to Lessor's right to require their
removal or become the owner thereof as  hereinafter  provided in this  Paragraph
7.4, all  Alterations and Utility  Installations  made to the Premises by Lessee
shall be the  property  of and owned by  Lessee,  but  considered  a part of the
Premises. Unless otherwise instructed per subparagraph 7.4(b) hereof, all Lessee
Owned Alterations and Utility  Installations shall, at the expiration or earlier
termination of this Lease,  become the property of Lessor and remain upon and be
surrendered by Lessee with the premises.

                       (b) Removal.  Unless  otherwise  agreed in writing Lessor
may  require  that any or all Lessee  Alterations  or Utility  Installations  be
removed by the expiration or earlier termination of this Lease,  notwithstanding
their installation may have been consented to by Lessor.  Lessor may require the
removal  at any  time of all or any  part of any  Lessee  Owned  Alterations  or
Utility Installations made without the required consent of Lessor.

                       (c)  Surrender/Restoration.  Lessee shall  Surrender  the
Premises by the end of the last day of the Lease term or any earlier termination
date, with all of the improvements, parts and surfaces thereof clean and free of
debris and in good operating order, condition and state of repair, ordinary wear
and tear  excepted.  "Ordinary  wear and tear"  shall not  include any damage or
deterioration, that would have been prevented by good maintenance practice or by
Lessee performing all of its obligations  under this Lease.  Except as otherwise
agreed or specified in writing by Lessor,  the Premises,  as surrendered.  shall
include the Utility  Installations.  The  obligation of Lessee shall include the
repair of any damage occasioned by the  installation,  maintenance or removal of
Lessee's Trade Fixtures, furnishings,  equipment, and Alterations and/or Utility
Installations,  as well as the removal of any storage  tank  installed by or for
Lessee, and the removal,  replacement,  or remediation of any soil,  material or
ground water  contaminated by Lessee,  all as may then be required by Applicable
Law and/or good  service  practice.  Lessee's  Trade  Fixtures  shall remain the
property of Lessee and shall be removed by Lessee  subject to its  obligation to
repair and restore the Premises per this Lease.

8.       Insurance; Indemnity.

         8.1 Payment For  Insurance.  Regardless of whether the Lessor or Lessee
is the Insuring  Party,  Lessee shall pay for all insurance  required under this
Paragraph 8 except to the extent of the cost attributable to liability insurance
carried by Lessor in excess of $1,000,000  per  occurrence.  Premiums for policy
periods commencing prior to or extending beyond the Lease term shall be prorated
to correspond to the Lease term.  Payment shall be made by Lessee to Lessor with
ten (10) days following receipt of an invoice for any amount due.

                                       -8-

         8.2 Liability Insurance.

                       (a) Carried by Lessee.  Lessee  shall  obtain and keep in
force during the term of this Lease a  Commercial  General  Liability  policy of
insurance protecting Lessee and Lessor (as an additional insured) against claims
for bodily injury,  personal injury and property damage based upon, involving or
arising out of the ownership,  use, occupancy or maintenance of the Premises and
all areas  appurtenant  thereto.  Such insurance shall be on an occurrence basis
providing  single  limit  coverage  in an amount  not less than  $1,000,000  per
occurrence  with  an  "Additional   Insured-Managers  or  Lessors  of  Premises"
Endorsement  and contain the  "Amendment of the Pollution  Exclusion" for damage
caused by heat, smoke or fumes from a hostile fire. The policy shall not contain
any intra-insured  exclusions as between insured persons or  organizations,  but
shall  include  coverage for  liability  assumed under this Lease as an "insured
contract"  for the  performance  of Lessee's  indemnity  obligations  under this
Lease.  The  limits of said  insurance  required  by this Lease or as carried by
Lessee shall not,  however,  limit the liability of Lessee nor relieve Lessee of
any obligation hereunder. All insurance to be carried by Lessee shall be primary
to and not  contributory  with any similar  insurance  carried by Lessor,  whose
insurance shall be considered excess insurance only.

                       (b)  Carried  by  Lessor.  In  the  event  Lessor  is the
Insuring  Party,  Lessor shall also maintain  liability  insurance  described in
Paragraph  8.2(a),  above,  in  addition  to, and not in lieu of, the  insurance
required to be maintained by Lessee.  Lessee shall not be named as an additional
insured therein.

         8.3 Property Insurance-Building, Improvements and Rental Value.

                       (a) Building and  Improvements.  The Insuring Party shall
obtain and keep in force  during the term of this Lease a policy or  policies in
the name of  Lessor,  with loss  payable  to Lessor  and to the  holders  of any
mortgages,  deeds of trust  or  ground  leases  on the  Premises  ("Lender(s)"),
insuring loss or damage to the Premises.  The amount of such insurance  shall be
equal to the full replacement cost of the Premises, as the same shall exist from
time to time, or the amount  required by Lenders,  but in no event more than the
commercially  reasonable and available  insurable value thereof if, by reason of
the unique  nature or age of the  improvements  involved,  such latter amount is
less than the full replacement costs. If Lessor is the Insuring Party,  however,
Lessee Owned  Alterations and Utility  Installations  shall be insured by Lessee
under  Paragraph  8.4 rather than by Lessor.  If the coverage is  available  and
commercially appropriate, such policy or policies shall insure against all risks
of direct physical loss or damage (except the perils of flood and /or earthquake
unless  required  by a Lender),  including  coverage  for any  additional  costs
resulting  from  debris  removal  and  reasonable  amounts of  coverage  for the
enforcement of any ordinance or law regulating the reconstruction or replacement
of any undamaged  sections of the Premises  required to be demolished or removed
by reason of the enforcement of any building, zoning, safety or land use laws as
the  result of a covered  cause of loss.  Said  policy or  policies  shall  also
contain an agreed valuation provision in lieu of any coinsurance clause,  waiver
of subrogation, and inflation guard protection causing an increase in the annual
property  insurance  coverage  amount by a factor of not less than the  adjusted
U.S.  Department of Labor Consumer  Price Index for All Urban  Consumers for the
city nearest to where the Premises are located. If such insurance coverage has a

                                       -9-

deductible clause, the deductible amount shall not exceed $1,000 per occurrence,
and Lessee shall be liable for such deductible amount in the event of an Insured
Loss, as defined in Paragraph 9.1(c).

                       (b) Rental Value.  The Insuring Party shall, in addition,
obtain and keep in force  during the term of this Lease a policy or  policies in
the name of Lessor, with loss payable to Lessor and Lender(s), insuring the loss
of the full  rental and other  charges  payable  by Lessee to Lessor  under this
Lease for one (1) year (including all real estate taxes,  insurance  costs,  and
any scheduled rental increases).  Said insurance shall provide that in the event
the Lease is terminated  by reason of an insured  loss,  the period of indemnity
for such coverage shall be extended beyond the date of the completion of repairs
or  replacement  of the Premises,  to provide for one full year's loss of rental
revenues from the date of any such loss.  Said insurance shall contain an agreed
valuation  provision  in lieu of any  coinsurance  clause,  and  the  amount  of
coverage  shall be adjusted  annually to reflect the  projected  rental  income,
property taxes,  insurance premium costs and other expenses,  if any,  otherwise
payable by Lessee, for the next twelve (12) month period. Lessee shall be liable
for any deductible amount in the event of such loss.

                       (c)  Adjacent  Premises.  If the  Premises  are part of a
larger  building,  or if the Premises are part of a group of buildings  owned by
Lessor which are adjacent to the Premises, the Lessee shall pay for any increase
in the premiums for the property insurance of such building or buildings if said
increase  is  caused  by  Lessee's  acts,  omissions,  use or  occupancy  of the
Premises.

                       (d) Tenant's Improvements.  If the Lessor is the Insuring
Party,  the Lessor shall not be required to insure Lessee Owned  Alterations and
Utility  Installations  unless the item in question  has become the  property of
Lessor  under the terms of this  Lease.  If Lessee is the  Insuring  Party,  the
policy  carried by Lessee under this  Paragraph  8.3 shall  insure  Lessee Owned
Alterations and Utility Installations.

         8.4  Lessee's  Property  Insurance.  Subject  to  the  requirements  of
Paragraph  8.5,  Lessee at its cost  shall  either  by  separate  policy  or, at
Lessor's option, by endorsement to a policy already carried,  maintain insurance
coverage on all of Lessee's  personal  property,  Lessee Owned  Alterations  and
Utility  Installations in, on, or about the Premises similar in coverage to that
carried by the Insuring Party under  Paragraph 8.3. Such insurance shall be full
replacement  cost  coverage  with a deductible  of not to exceed  $5,000.00  per
occurrence. The proceeds from any such insurance shall be used by Lessee for the
replacement of personal  property or the restoration of Lessee Owned Alterations
and Utility  Installations.  Lessee shall be the Insuring  Party with respect to
the  insurance  required by this  Paragraph  8.4 and shall  provide  Lessor with
written evidence that such insurance is in force.

         8.5  Insurance  Policies.  Insurance  required  hereunder  shall  be in
companies duly licensed to transact business in the state where the Premises are
located, and maintaining during the policy term "General  Policyholders  Rating"
of at least B-, V, or such other rating as may be required by a Lender  having a
lien on the  Premises,  as set  forth  in the  most  current  issue  of  "Best's
Insurance  Guide." Lessee shall not do or permit to be done anything which shall
invalidate the insurance  policies referred to in this Paragraph 8. If Lessee is
the Insuring  Party,  Lessee  shall cause to be  delivered  to Lessor  certified
copies of policies of such  insurance or  certificates  evidencing the existence
and  amounts of such  insurance  with the insured  and loss  payable  clauses as
required  by this  Lease.  No such  policy  shall be  cancellable  or subject to
modification  except  after  thirty  (30) days prior  written  notice to Lessor.
Lessee shall at least

                                      -10-

thirty (30) days prior to the expiration of such  policies,  furnish Lessor with
evidence of renewals or  "insurance  binders"  evidencing  renewal  thereof,  or
Lessor may order such  insurance  and charge the cost  thereof to Lessee,  which
amount shall be payable by Lessee to Lessor upon demand.  If the Insuring  Party
shall fail to procure and maintain the  insurance  required to be carried by the
Insuring  Party under this  Paragraph  8, the other Party may,  but shall not be
required to, procure and maintain the same, but at Lessee's expense.

         8.6  Waiver of  Subrogation.  Without  affecting  any  other  rights or
remedies,  Lessee and Lessor  ("Waiving  Party") each hereby release and relieve
the other,  and waive their entire right to recover damages (whether in contract
or in tort)  against  the other,  for loss of or damage to the  Waiving  Party's
property arising out of or incident to the perils required to be insured against
under  Paragraph  8. The  effect of such  releases  and  waivers of the right to
recover  damages  shall not be  limited by the  amount of  insurance  carried or
required, or by an deductibles applicable thereto.

         8.7 Indemnity. Except for Lessor's gross negligence, willful misconduct
and/or breach of express  warranties  or  obligations,  Lessee shall  indemnify,
protect, defend and hold harmless the Premises,  Lessor and its agents, Lessor's
master or ground  Lessor,  partners  and  Lenders,  from and against any and all
claims,  loss of rents  and/or  damages,  costs,  liens,  judgments,  penalties,
permits,  attorney's and consultant's fees,  expenses and/or liabilities arising
out of, involving,  or in dealing with, the occupancy of the Premises by Lessee,
the conduct of Lessee's  business,  any act, omission or neglect of Lessee,  its
agents,  contractors,  employees or invites, and out of any Default or Breach by
Lessee in the  performance in a timely manner of any obligation on Lessee's part
to be  performed  under this Lease.  The  foregoing  shall  include,  but not be
limited  to, the  defense  or  pursuit of any claim or any action or  proceeding
involved therein, and whether or not (in the case of claims made against Lessor)
litigated  and/or reduced to judgment,  and whether well founded or not. In case
any  action or  proceeding  be  brought  against  Lessor by reason of any of the
foregoing  matters,  Lessee upon notice  from  Lessor  shall  defend the same at
Lessee's expense by counsel  reasonably  satisfactory to Lessor and Lessor shall
cooperate with Lessee in such defense.  Lessor need not have first paid any such
claim in order to be so indemnified.

         8.8  Exemption  of Lessor from  Liability.  Except for  Lessor's  gross
negligence,   willful  misconduct,   Lessor's  breach  of  express  warranty  or
obligations,  Lessor  shall not be liable  for injury or damage to the person or
goods,  wares,  merchandise  or other  property of Lessee.  Lessee's  employees,
contractors,  invites,  customers, or any other person in or about the Premises,
whether  such  damage  or  injury is caused  by or  results  from  fire,  steam,
electricity,  gas, water or rain, or from the breakage, leakage,  obstruction or
other  defects of pipes,  fire  sprinklers,  wires,  appliances,  plumbing,  air
conditioning  or lighting  fixtures,  or from any other cause,  whether the said
injury or damage results from conditions arising upon the Premises or upon other
portions of the building of which the Premises are a part, or from other sources
or places,  and  regardless of whether the cause of such damage or injury or the
means of repairing the same is accessible or not. Lessor shall not be liable for
any  damages  arising  from any act or  neglect  of any other  tenant of Lessor.
Notwithstanding  Lessor's gross negligence or breach of this Lease, Lessor shall
under no circumstances be liable for injury to Lessee's business or for any loss
of income or profit therefrom.

9.       Damage or Destruction.

                                      -11-

         9.1 Definitions.

                       (a)  "Premises  Partial  Damage"  shall  mean  damage  or
destruction  to the  improvements  on the  Premises,  other  than  Lessee  Owned
Alterations  and  Utility  Installations,  the  repair  cost of which  damage or
destruction  is less  than  50% of the  then  Replacement  Cost of the  Premises
immediately prior to such damage or destruction, excluding from such calculation
the value of the land and Lessee Owned Alterations and Utility Installations.

                       (b)  "Premises  Total  Destruction"  shall mean damage or
destruction  to the Premises,  other than Lessee Owned  Alterations  and Utility
Installations  the repair cost of which damage or destruction is 50%, or more of
the then  Replacement Cost of the Premises  immediately  prior to such damage or
destruction,  excluding from such  calculation  the value of the land and Lessee
Owned Alterations and Utility Installations.

                       (c) "Insured  Loss" shall mean damage or  destruction  to
improvements  on the Premises,  other than Lessee Owned  Alterations and Utility
Installations,  which  was  caused by an event  required  to be  covered  by the
insurance  described in Paragraph 8.3(a)  irrespective of any deductible amounts
or coverage limits involved.

                       (d)  "Replacement  Cost" shall mean the cost to repair or
rebuild the improvements  owned by Lessor at the time of the occurrence to their
condition  existing  immediately  prior thereto,  including  demolition,  debris
removal and upgrading  required by the operation of applicable  building  codes,
ordinances or laws, and without deduction for depreciation.

                       (e)  "Hazardous   Substance  Condition"  shall  mean  the
occurrence  or  discovery  of  a  condition  involving  the  presence  of,  or a
contamination by, a Hazardous  Substance as defined in Paragraph 6.2(a), in, on,
or under the Premises.

         9.2 Partial  Damage--Insured Loss. If a Premises Partial Damage that is
an Insured Loss occurs,  then Lessor  shall,  at Lessor's  expense,  repair such
damage (but not Lessee's Trade Fixtures or Lessee Owned  Alterations and Utility
Installations)  as soon as reasonably  possible and this Lease shall continue in
full force and  effect;  provided,  however,  that  Lessee  shall,  at  Lessor's
election,  make the repair of any damage or destruction the total cost to repair
of which is $10,000 or less, and, in such event, Lessor shall make the insurance
proceeds   available  to  Lessee  on  a  reasonable   basis  for  that  purpose.
Notwithstanding the foregoing, if the required insurance was not in force or the
insurance  proceeds are not sufficient to effect such repair, the Insuring Party
shall promptly  contribute the shortage in proceeds (except as to the deductible
which is Lessee's responsibility) as and when required to complete said repairs.
In the event,  however,  the shortage in proceeds  was due to the fact that,  by
reason of the unique nature of the improvements, full replacement cost insurance
coverage was not  commercially  reasonable and  available,  Lessor shall have no
obligation to pay for the shortage in insurance proceeds or to fully restore the
unique aspects of the Premises  unless Lessee  provides Lessor with the funds to
cover  same,  or  adequate  assurance  thereof,  within ten (10) days  following
receipt of written  notice of such  shortage  and  request  therefor.  If Lessor
receives  said funds or  adequate  assurance  thereof  within  said ten (10) day
period, the party responsible for making the repairs shall complete them as soon
as reasonably possible

                                      -12-

and this Lease shall remain in full force and effect. If Lessor does not receive
such funds or assurance  within said period,  Lessor may  nevertheless  elect by
written  notice  to  Lessee  within  ten  (10)  days  thereafter  to  make  such
restoration  and repair as is  commercially  reasonable  with Lessor  paying any
shortage in  proceeds,  in which case this Lease shall  remain in full force and
effect.  If in such  case  Lessor  does not so  elect,  then  this  Lease  shall
terminate sixty (60) days following the occurrence of the damage or destruction.
Unless  otherwise   agreed,   Lessee  shall  in  no  event  have  any  right  to
reimbursement from Lessor for any funds contributed by Lessee to repair any such
damage or destruction.  Premises Partial Damage due to flood or earthquake shall
be subject to Paragraph  9.3 rather than  Paragraph  9.2,  notwithstanding  that
there may be some insurance coverage, but the net proceeds of any such insurance
shall be made available for the repairs if made by either Party.

         9.3 Partial  Damage--Uninsured  Loss. If a Premises Partial Damage that
is not an Insured  Loss occurs,  unless  caused by a negligent or willful act of
Lessee (in which event  Lessee  shall make the  repairs at Lessee's  expense and
this Lease  shall  continue  in full force and  effect,  but subject to Lessor's
rights under Paragraph 13), Lessor may at Lessor's  option,  either:  (i) repair
such damage as soon as reasonably  possible at Lessor's expense,  in which event
this Lease shall continue in full force and effect,  or (ii) give written notice
to Lessee  within  thirty (30) days after  receipt by Lessor of knowledge of the
occurrence of such damage of Lessor's  desire to terminate  this Lease as of the
date sixty (60) days  following  the giving of such notice.  In the event Lessor
elects to give such notice of Lessor's intention to terminate this Lease, Lessee
shall have the right within twenty (20) days after the receipt of such notice to
give written  notice to Lessor of Lessee's  commitment  to pay for the repair of
such damage totally at Lessee's expense and without  reimbursement  from Lessor.
Lessee shall provide  Lessor with the required funds or  satisfactory  assurance
thereof  within thirty (30) days  following  Lessee's said  commitment.  In such
event this Lease  shall  continue  in full force and  effect,  and Lessor  shall
proceed to make such  repairs as soon as  reasonably  possible  and the required
funds are  available.  If Lessee does not give such notice and provide the funds
or assurance thereof within the times specified above this Lease shall terminate
as of the date specified in Lessor's notice of termination.

         9.4 Total Destruction. Notwithstanding any other provision hereof, if a
Premises Total  Destruction  occurs  (including any destruction  required by any
authorized public  authority),  this Lease shall be deemed to have terminated as
of the date of such  Premises  Total  Destruction,  whether or not the damage or
destruction  is an Insured  Loss or was caused by a negligent  or willful act of
Lessee.  In the event,  however,  that the damage or  destruction  was caused by
Lessee,  Lessor  shall have the right to recover  Lessor's  damages  from Lessee
except as released and waived in Paragraph 8.6.

         9.5  Damage  Near End of Term.  If at any time  during the last six (6)
months of the term of this  Lease  there is damage  for which the cost to repair
exceeds one (1) month's Base Rent,  whether or not an Insured Loss,  Lessor may,
at Lessor's option, terminate this Lease effective sixty (60) days following the
date of occurrence of such damage by giving written notice to Lessee of Lessor's
election to do so within  thirty (30) days after the date of  occurrence of such
damage.  Provided,  however, if Lessee at that time has an exercisable option to
extend this Lease or to purchase the  Premises,  then Lessee may  preserve  this
Lease by, within twenty (20) days  following  the  occurrence of the damage,  or
before the  expiration  of the time  provided in such  option for its  exercise,
whichever is earlier  ("Exercise  Period"),  (i) exercising such option and (ii)
providing Lessor with any shortage in insurance proceeds (or

                                      -13-

adequate assurance thereof) needed to make the repairs. If Lessee duly exercises
such  option  during said  Exercise  Period and  provides  Lessor with funds (or
adequate assurance thereof) to cover any shortage in insurance proceeds,  Lessor
shall, at Lessor's expense repair such damage as soon as reasonably possible and
this Lease shall continue in full force and effect.  If Lessee fails to exercise
such option and provide such funds or  assurance  during said  Exercise  Period,
then Lessor may at Lessor's option  terminate this Lease as of the expiration of
said sixty (60) day period  following  the  occurrence  of such damage by giving
written  notice to Lessee of  Lessor's  election  to do so within  ten (10) days
after  the  expiration  of the  Exercise  Period,  notwithstanding  any  term or
provision in the grant of option to the contrary.

         9.6 Abatement of Rent; Lessee's Remedies.

                       (a) In the event of damage  described  in  Paragraph  9.2
(Partial  Damage--Insured),  whether or not Lessor or Lessee repairs or restores
the Premises,  the Base Rent, Real Property Taxes, insurance premiums, and other
charges,  if any,  payable by Lessee  hereunder for the period during which such
damage,  its repair or the  restoration  continues (not to exceed the period for
which  rental value  insurance is required  under  Paragraph  8.3(b)),  shall be
abated in  proportion  to the degree to which  Lessee's  use of the  Premises is
impaired.  Except for  abatement of Base Rent,  Real Property  Taxes,  insurance
premiums,  and other  charges,  if any, as aforesaid,  all other  obligations of
Lessee  hereunder shall be performed by Lessee to the extent it is not prevented
by such  damage,  and Lessee shall have no claim  against  Lessor for any damage
suffered by reason of any such repair or restoration.

                       (b) If Lessor shall be obligated to repair or restore the
Premises under the  provisions of this Paragraph 9 and shall not commence,  in a
substantial and meaningful way, the repair or restoration of the Premises within
ninety days (90) days after such  obligation  shall  accrue,  Lessee may, at any
time prior to the commencement of such repair or restoration give written notice
to Lessor and to any  Lenders of which  Lessee  has  actual  notice of  Lessee's
election  to  terminate  this  Lease on a date not less  than  sixty  (60)  days
following  the giving of such notice.  If Lessee gives such notice to Lessor and
such Lenders and such repair or restoration is not commenced  within thirty (30)
days after  receipt of such  notice,  this Lease shall  terminate as of the date
specified  in said  notice.  If  Lessor  or a Lender  commences  the  repair  or
restoration  of the  Premises  within  thirty  (30) days  after  receipt of such
notice,  this Lease shall continue in full force and effect.  "Commence" as used
in this Paragraph shall mean the beginning of the actual work on the Premises.

         9.7 Hazardous Substance Conditions.  If a Hazardous Substance Condition
occurs,  unless  Lessee is legally  responsible  therefor  (in which case Lessee
shall make the investigation and remediation  thereof required by Applicable Law
and this Lease shall continue in full force and effect,  but subject to Lessor's
rights under Paragraph 13), Lessor may at Lessor's option either (i) investigate
and  remediate  such  Hazardous  Substance  Condition,  if  required  as soon as
reasonably  possible  at  Lessor's  expense,  in which  event this  Lease  shall
continue in full force and effect,  provided Lessee's use of the Premises is not
prevented,  or (ii) if the estimated  cost to  investigate  and  remediate  such
condition  exceeds  twelve (12) times the then  monthly  Base Rent or  $100,000,
whichever is greater,  give  written  notice to Lessee  within  thirty (30) days
after  receipt  by Lessor  of  knowledge  of the  occurrence  of such  Hazardous
Substance  Condition of Lessor's  desire to terminate  this Lease as of the date
sixty (60) days following the giving of such notice.  In the event Lessor elects
to give such notice of Lessor's intention to terminate this Lease,

                                      -14-

Lessee  shall  have the right  within  ten (10) days  after the  receipt of such
notice to give written  notice to Lessor of Lessee's  commitment  to pay for the
investigation and remediation of such Hazardous  Substance  Condition totally at
Lessee's expense and without  reimbursement  from Lessor except to the extent of
an amount  equal to twelve (12) times the then  monthly  Base Rent or  $100,000,
whichever is greater.  Lessee shall  provide  Lessor with the funds  required of
Lessee or  satisfactory  assurance  thereof  within  thirty (30) days  following
Lessee's said commitment.  In such event this Lease shall continue in full force
and effect,  and Lessor shall proceed to make such investigation and remediation
as soon as reasonably  possible and the required funds are available.  If Lessee
does not give such notice and provide the required  funds or  assurance  thereof
within the times  specified  above,  this Lease shall  terminate  as of the date
specified in Lessor's notice of termination.  If a Hazardous Substance Condition
occurs for which Lessee is not legally responsible,  there shall be abatement of
Lessee's  obligations  under  this  Lease  to the same  extent  as  provided  in
Paragraph  9.6(a) for a period of not to exceed  twelve  (12)  months.  If after
12-months,  Lessee  proceeds to cure such  Hazardous  Substance  Condition,  and
provided that Lessee is not legally responsible therefor;  Lessor will reimburse
Lessee for its actual and necessary  out-of-pocket  costs  incurred to cure such
Hazardous Substance condition.

         9.8  Termination-Advance  Payments.  Upon  termination  of  this  Lease
pursuant to this Paragraph 9, an equitable  adjustment  shall be made concerning
advance  Base  Rent and any other  advance  payments  made by Lessee to  Lessor,
Lessor shall, in addition, return to Lessee so much of Lessee's Security Deposit
as has not been, or is not then required to be used by Lessor under the terms of
this Lease.

         9.9 Waive  Statutes.  Lessor  and  Lessee  agree that the terms of this
Lease shall  govern the effect of any damage to or  destruction  of the Premises
with respect to the termination of this Lease and hereby waive the provisions of
any present or future statute to the extent inconsistent herewith.

10.      Real Property Taxes.

         10.1          (a)  Payment of Taxes. Lessee shall pay the Real Property
Taxes as defined in Paragraph 10.2 applicable to the premises during the term of
this Lease.  Subject to Paragraph  10.1(b),  all such payments  shall be made at
least ten (10) days prior to the delinquency date of the applicable installment.
Lessee shall promptly furnish Lessor with satisfactory  evidence that such taxes
have been paid. If any such taxes to be paid by Lessee shall cover any period of
time prior to or after the expiration or earlier termination of the term hereof,
Lessee's  share of such  taxes  shall be  equitably  prorated  to cover only the
period of time  within the tax fiscal  year this Lease is in effect,  and Lessor
shall reimburse Lessee for any overpayment after such proration. If Lessee shall
fail to pay any Real Property Taxes required by this Lease to be paid by Lessee,
Lessor shall have the right to pay the same, and Lessee shall  reimburse  Lessor
therefor upon demand.

                       (b) Advance Payment.  In order to insure payment when due
and before  delinquency of any or all Real Property  Taxes,  Lessor reserves the
right, at Lessor's option to estimate the current Real Property Taxes applicable
to the Premises,  and to require such current  year's Real Property  Taxes to be
paid in advance to Lessor by Lessee  monthly in advance  with the payment of the
Base Rent. If Lessor elects

                                      -15-

to require payment  monthly in advance,  the monthly payment shall be that equal
monthly amount which,  over the number of months  remaining  before the month in
which the  applicable  tax  installment  would  become  delinquent  (and without
interest  thereon),  would provide a fund large enough to fully discharge before
delinquency  the  estimated  installment  of taxes to be paid.  When the  actual
amount of the applicable tax bill is known,  the amount of such monthly  advance
payment  shall be  adjusted  as  required  to provide the fund needed to pay the
applicable  taxes  before  delinquency.  If the amounts paid to Lessor by Lessee
under the  provisions  of this  Paragraph  are  insufficient  to  discharge  the
obligations  of Lessee to pay such Real  Property  Taxes as the same become due,
Lessee shall pay to Lessor upon Lessor's  demand,  such  additional  sums as are
necessary  to pay  such  obligations.  All  moneys  paid to  Lessor  under  this
Paragraph  may be  intermingled  with other  moneys of Lessor and shall not bear
interest.

         10.2  Definition  of "Real  Property  Taxes." As used herein,  the term
"Real  Property  Taxes" shall include any form of real estate tax or assessment,
general,  special,  ordinary or extraordinary;  and any license fee,  commercial
rental tax,  improvement  bond or bonds,  levy or tax (other  than  inheritance,
personal  income or estate  taxes)  imposed upon the  Premises by any  authority
having the direct or indirect power to tax, including any city, state or federal
government,  or any school,  agricultural,  sanitary,  fire street,  drainage or
other  improvement  district  thereof,  levied  against  any legal or  equitable
interest of Lessor in the Premises or in the real property of which the Premises
are a part,  Lessor's right to rent or other income  therefrom,  and/or Lessor's
business of leasing the  Premises.  The term "Real  Property  Taxes"  shall also
include any tax,  fee,  levy,  assessment  or charge,  or any increase  therein,
imposed  by reason of events  occurring  or  changes  in  applicable  law taking
effect, during the term of this Lease,  including but not limited to a change in
the ownership of the Premises or in the improvements  thereon,  the execution of
this Lease, or any modification,  amendment or transfer thereof,  and whether or
not contemplated by the Parties.

         10.3 Joint  Assessment.  If the Premises are not  separately  assessed,
Lessee's  liability shall be an equitable  proportion of the Real Property Taxes
for all of the land and  improvements  included within the tax parcel  assessed,
such  proportion  to be  determined  by Lessor  from the  respective  valuations
assigned  in the  assessor's  work  sheets or such other  information  as may be
reasonably available.  Lessor's reasonable  determination thereof, in good faith
shall be conclusive.

         10.4 Personal Property Taxes. Lessee shall pay prior to delinquency all
taxes  assessed  against  and levied  upon  Lessee  Owned  Alterations,  Utility
Installations,  Trade Fixtures, furnishings, equipment and all personal property
of Lessee  contained in the Premises or elsewhere.  When possible,  Lessee shall
cause its Trade Fixtures, furnishings, equipment and all other personal property
to be assessed and billed separately from the real property of Lessor. If any of
Lessee's said personal  property  shall be assessed with Lessor's real property,
Lessee shall pay Lessor the taxes  attributable  to Lessee  within ten (10) days
after  receipt of a written  statement  setting  forth the taxes  applicable  to
Lessee's property or, at Lessor's option, as provided in Paragraph 10.1(b).

11.  Utilities.  Lessee  shall  pay for all  water,  gas,  heat,  light,  power,
telephone,  trash  disposal and other  utilities  and  services  supplied to the
Premises,  together  with  any  taxes  thereon.  If any  such  services  are not
separately  metered to Lessee,  Lessee shall pay a reasonable  proportion  to be
determined by Lessor of all charges jointly metered with other premises.

                                      -16-

12.      Assignment and Subletting.

         12.1 Lessor's Consent Required.

                       (a) Lessee shall not  voluntarily  or by operation of law
assign,  transfer,  mortgage or otherwise  transfer or encumber:  (collectively,
"assignment") or sublet all or any part of Lessee's interest in this Lease or in
the Premises  without  Lessor's prior written consent given under and subject to
the terms of Paragraph 36.

                       (b) A change in the control of Lessee shall constitute an
assignment requiring Lessor's consent.  The transfer,  on a cumulative basis, of
twenty-five  percent  (25%)  or more  of the  voting  control  of  Lessee  shall
constitute a change in control for this purpose.

                       (c)  The  involvement  of  Lessee  or its  assets  in any
transaction,  or series of transactions  (by way of merger,  sale,  acquisition,
financing, refinancing, transfer, leveraged buy-out or otherwise) whether or not
a formal  assignment or  hypothecation  of this Lease or Lessee's assets occurs,
which  results or will  result in a  reduction  of the Net Worth of  Lessee,  as
hereinafter  defined,  by an amount equal to or greater than  fifty-one  percent
(51%) of such Net Worth of Lessee as it was represented to Lessor at the time of
the  execution  by  Lessor  of this  Lease  or at the  time of the  most  recent
assignment to which Lessor has consented,  or as it exists  immediately prior to
said transaction or transactions  constituting such reduction, at whichever time
said Net Worth of Lessee was or is greater, shall be considered an assignment of
this Lease by Lessee to which Lessor may reasonably  withhold its consent.  "Net
Worth of Lessee"  for  purposes  of this Lease  shall be the net worth of Lessee
(excluding any  guarantors)  established  under  generally  accepted  accounting
principles consistently applied.

                       (d) As assignment  or subletting of Lessee's  interest in
this Lease without  Lessor's  specific prior written  consent shall, at Lessor's
option, be a Default curable after notice per Paragraph 13.1(c), or a noncurable
Breach without the necessity of any notice and grace period. If Lessor elects to
treat such  unconsented  to assignment  or  subletting  as a noncurable  Breach,
Lessor shall have the right to either:  (i) terminate  this Lease,  or (ii) upon
thirty (30) days written notice ("Lessor's  Notice"),  increase the monthly Base
Rent to fair market  rental value or one hundred ten percent  (110%) of the Base
Rent then in effect, whichever is greater. Pending determination of the new fair
market  rental  value,  if disputed by Lessee,  Lessee  shall pay the amount set
forth  in  Lessor's  Notice,  with any  overpayment  credited  against  the next
installment(s)  of Base Rent coming  due,  and any  underpayment  for the period
retroactively  to the  effective  date of the  adjustment  being due and payable
immediately upon the determination thereof. Further, in the event of such Breach
and market value  adjustment,  (i) the purchase  price of any option to purchase
the Premises  held by Lessee shall be subject to similar  adjustment to the then
fair market value  (without the Lease being  considered  an  encumbrance  or any
deduction for depreciation or obsolescence,  and considering the Premises at its
highest and best use and in good  condition),  or one hundred ten percent (110%)
of the price previously in effect, whichever is greater, (ii) any index-oriented
rental or price adjustment formulas contained in this Lease shall be adjusted to
require that the base index be determined with reference to the index applicable
to the time of such adjustment, and (iii) any fixed rental adjustments scheduled
during the remainder of the Lease

                                      -17-

term shall be increased in the same ratio as the new market  rental bears to the
Base Rent in effect immediately prior to the market value adjustment.

                       (e) Lessee's remedy for any breach of this Paragraph 12.1
by Lessor shall be limited to compensatory damages and injunctive relief.

         12.2 Terms and Conditions Applicable to Assignment and Subletting.

                       (a)  Regardless of Lessor's  consent,  any  assignment or
subletting shall not: (i) be effective without the express written assumption by
such assignee or sublessee of the  obligations of Lessee under this Lease,  (ii)
release  Lessee  of any  obligations  hereunder,  or  (iii)  alter  the  primary
liability  of Lessee  for the  payment  of Base Rent and other  sums due  Lessor
hereunder or for the  performance  of any other  obligations  to be performed by
Lessee under this Lease.

                       (b) Lessor may accept any rent or performance of Lessee's
obligations from any person other than Lessee pending approval or disapproval of
an assignment. Neither a delay in the approval or disapproval of such assignment
nor the  acceptance  of any rent or  performance  shall  constitute  a waiver or
estoppel of Lessor's right to exercise its remedies for the Default or Breach by
Lessee of any of the terms, covenants or conditions of this Lease.

                       (c) The consent of Lessor to any assignment or subletting
shall not  constitute a consent to any  subsequent  assignment  or subletting by
Lessee or to any  subsequent  or  successive  assignment  or  subletting  by the
sublessee. However, Lessor may consent to subsequent sublettings and assignments
of the sublease or any amendments or  modifications  thereto  without  notifying
Lessee or anyone  else liable on the Lease or  sublease  and  without  obtaining
their  consent,  and such action shall not relieve  such persons from  liability
under this Lease or sublease.

                       (d) In the event of any  Default  or  Breach of  Lessee's
obligations  under this Lease,  Lessor may proceed directly against Lessee,  any
Guarantors  or any one else  responsible  for the  performance  of the  Lessee's
obligations under this Lease, including the sublessee,  without first exhausting
Lessor's  remedies  against any other person or entity  responsible  therefor to
Lessor, or any security held by Lessor or Lessee.

                       (e)  Each  request  for  consent  to  an   assignment  or
subletting shall be in writing,  accompanied by information relevant to Lessor's
determination   as  to  the  financial  and   operational   responsibility   and
appropriateness of the proposed assignee or subleases, including but not limited
to the intended use and/or required modification of the Premises.  Lessee agrees
to provide Lessor with such other or additional information and/or documentation
as may be reasonably requested by Lessor.

                       (f) Any  assignee  of, or  sublessee  under,  this  Lease
shall, by reason of accepting such assignment or entering into such sublease, be
deemed for the  benefit of Lessor,  to have  assumed  and agreed to conform  and
comply with each and every term, covenant, condition and obligation herein to be
observed or performed by Lessee during the term of said  assignment or sublease,
other than such

                                      -18-

obligations as are contrary to or inconsistent  with provisions of an assignment
or sublease to which Lessor has specifically consented in writing.

                       (g)    [provision intentionally deleted]

                       (h) Lessor,  as a condition  to giving its consent to any
assignment or subletting,  may require that the amount and adjustment  structure
of the rent  payable  under  this Lease be  adjusted  to what is then the market
value and/or  adjustment  structure for property similar to the Premises as then
constituted.

         12.3  Additional  Terms and Conditions  Applicable to  Subletting.  The
following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises  and shall be deemed  included in all  subleases  under
this Lease whether or not expressly incorporated therein:

                       (a) Lessee hereby  assigns and transfers to Lessor all of
Lessee's  interest in all rentals and income arising from any sublease of all or
a portion of the Premises  heretofore or hereafter,  made by Lessee,  and Lessor
may  collect  such rent and income and apply same  toward  Lessee's  obligations
under  this  Lease;  provided,  however,  that  until a Breach  (as  defined  in
Paragraph  13.1) shall occur in the  performance of Lessee's  obligations  under
this Lease,  Lessee may,  except as otherwise  provided in this Lease,  receive,
collect and enjoy the rents accruing  under such sublease.  Lessor shall not, by
reason of this or any other assignment of such sublease to Lessor, nor by reason
of the  collection  of the  rents  from a  sublessee,  be  deemed  liable to the
sublessee  for any  failure of Lessee to perform and comply with any of Lessee's
obligations to such sublessee  under such  sublease.  Lessee hereby  irrevocably
authorizes and directs any such sublessee, upon receipt of a written notice from
Lessor stating that a Breach exists in the  performance of Lessee's  obligations
under this Lease, to pay to Lessor the rents and other charges due and to become
due under the sublease. Sublessee shall rely upon any such statement and request
from  Lessor and shall pay such rents and other  charges to Lessor  without  any
obligation   or  right  to  inquire  as  to  whether  such  Breach   exists  and
notwithstanding  any notice  from or claim from Lessee to the  contrary.  Lessee
shall have no right or claim  against  said  sublessee  or, until the Breach has
been cured  against  Lessor for any such rents and other charges so paid by said
sublessee to Lessor.

                       (b) In the event of a Breach by Lessee in the performance
of its  obligations  under this  Lease,  Lessor,  at its option and  without any
obligation  to do so, may require any  sublessee  to attorn to Lessor,  in which
event  Lessor  shall  undertake  the  obligations  of the  sublessor  under such
sublease from the time of the exercise of said option to the  expiration of such
sublease; provided, however, Lessor shall not be liable for any prepaid rents or
security deposit paid by such sublessee to such sublessor or for any other prior
Defaults or Breaches of such sublessor under such sublease.

                       (c) Any  matter or thing  requiring  the  consent  of the
sublessor under a sublease shall also require the consent of Lessor herein.

                       (d) No sublessee  shall  further  assign or sublet all or
any part of the Premises without Lessor's prior written consent.

                                      -19-

                       (e) Lessor shall  deliver a copy of any notice of Default
or  Breach  by Lessee  to the  sublessee,  who shall  have the right to cure the
Default of Lessee within the grace period, if any, specified in such notice. The
sublessee shall have a right of reimbursement and offset from and against Lessee
for any such Defaults cured by the sublessee.

13.      Default; Breach; Remedies.

         13.1 Default; Breach. A "Default" is defined as a failure by the Lessee
to observe,  comply with or perform any of the terms,  covenants,  conditions or
rules  applicable  to Lessee  under this  Lease.  A  "Breach"  is defined as the
occurrence  of any one or more of the  following  Defaults,  and,  where a grace
period for cure after notice is specified herein,  the failure by Lessee to cure
such Default prior to the  expiration  of the  applicable  grace  period,  shall
entitle Lessor to pursue the remedies set forth in Paragraph 13.2 and/or 13.3:

                       (a) The vacating of the Premises without the intention to
reoccupy same, or the abandonment of the Premises.

                       (b) Except as expressly otherwise provided in this Lease,
the  failure by Lessee to make any  payment  of Base Rent or any other  monetary
payment required to be made by Lessee hereunder  whether to Lessor or to a third
party,  as and when due, the failure by Lessee to provide Lessor with reasonable
evidence of insurance or surety bond required  under this Lease,  or the failure
of Lessee to  fulfill  any  obligation  under  this  Lease  which  endangers  or
threatens  life or property  where such failure  continues for a period of three
(3) days following written notice thereof by or on behalf of Lessor to Lessee.

                       (c) Except as expressly otherwise provided in this Lease,
the failure by Lessee to provide  Lessor with  reasonable  written  evidence (in
duly executed  original form, if applicable) of (i) compliance  with  Applicable
Law per Paragraph 6.3, (ii) the inspection,  maintenance  and service  contracts
required  under  Paragraph  7.1(b),   (iii)  the  recision  of  an  unauthorized
assignment or subletting  per Paragraph  12.1(b),  (iv) a Tenancy  Statement per
Paragraphs 16 or 37, (v) the  subordination or  non-subordination  of this Lease
per Paragraph 30, (vi) [clause  intentionally  omitted],  (vii) the execution of
any  document  requested  under  Paragraph 42  (easements),  or (viii) any other
documentation or information which Lessor may reasonably require of Lessee under
the terms of this Lease,  where any such failure  continues  for a period of ten
(10) days following written notice by or on behalf of Lessor to Lessee.

                       (d) A  Default  by  Lessee  as to the  terms,  covenants,
conditions or provisions of this Lease,  or of the rules adopted under Paragraph
40 hereof that are to be observed,  complied with or performed by Lessee,  other
than those described in subparagraphs (a), (b) or (c), above, where such Default
continues for a period of thirty (30) days after written notice thereof by or on
behalf  of  Lessor  to  Lessee;  provided,  however,  that if the  nature of the
Lessee's default is such that more than thirty (30) days are reasonably required
for its  cure,  then it shall  not be  deemed  to be a Breach  of this  Lease by
Lessee,  if Lessee  commences  such cure  within said thirty (30) day period and
thereafter diligently prosecutes such cure to completion.

                                      -20-

                       (e) The  occurrence of any of the following  events:  (i)
The making by Lessee of any general arrangement or assignment for the benefit of
creditors,  (ii) Lessee's becoming a "debtor" as defined in 11 U.S.C. ss. 101 or
any successor  statute thereto (unless,  in the case of a petition filed against
Lessee,  the same is dismissed  within one hundred twenty (120) days,  (iii) the
appointment of a trustee or receiver to take possession of substantially  all of
Lessee's  assets located at the Premises or of Lessee's  interest in this Lease,
where  possession  is not restored to Lessee within sixty (60) days; or (iv) the
attachment, execution or other judicial seizure of substantially all of Lessee's
assets located at the Premises or of Lessee's interest in this Lease, where such
seizure is not  discharged  within sixty (60) days;  provided,  however,  in the
event that any provision of this  subparagraph (e) is contrary to any applicable
law, such provision shall be of no force or effect,  and not affect the validity
of the remaining provisions.

                       (f) The discovery by Lessor that any financial  statement
given to Lessor by Lessee or any Guarantor of Lessee's obligations hereunder was
materially false.

                       (g)     [paragraph intentionally deleted]

         13.2  Remedies.  If Lessee  fails to perform  any  affirmative  duty or
obligation of Lessee under this Lease, within ten (10) days after written notice
to Lessee (or in case of an emergency, without notice), Lessor may at its option
(but without  obligation to do so),  perform such duty or obligation on Lessee's
behalf including but not limited to the obtaining of reasonably  required bonds,
insurance policies, or governmental  licenses,  permits or approvals.  The costs
and  expenses  of any such  performance  by Lessor  shall be due and  payable by
Lessee to Lessor upon invoice  therefor.  If any check given to Lessor by Lessee
shall not be honored by the bank upon which it is drawn,  Lessor, at its option,
may require all future payments to be made under this Lease by Lessee to be made
only by cashier's  check.  In the event of a Breach of this Lease by Lessee,  as
defined in Paragraph 13.1, with or without further notice or demand, and without
limiting  Lessor in the exercise of any right or remedy which Lessor may have by
reason of such Breach, Lessor may:

                       (a)  Terminate   Lessee's  right  to  possession  of  the
Premises by any lawful means, in which case this Lease and the term hereof shall
terminate and Lessee shall immediately  surrender  possession of the Premises to
Lessor.  In such event Lessor shall be entitled to recover from Lessee:  (i) the
worth at the time of the award of the unpaid  rent which had been  earned at the
time of termination;  (ii) 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 that the Lessee  proves could have
been reasonably  avoided;  (iii) the worth at the time of award of the amount by
which  the  unpaid  rent for the  balance  of the term  after  the time or award
exceeds  the  amount  of such  rental  loss  that  the  Lessee  proves  could be
reasonably avoided; and (iv) any other amount necessary to compensate Lessor for
all the  detriment  proximately  caused by the  Lessee's  failure to perform its
obligations  under this Lease or which in the ordinary course of things would be
likely to result therefrom,  including but not limited to the cost of recovering
possession  of  the  Premises,   expenses  of  reletting,   including  necessary
renovation and alteration of the Premises,  reasonable attorneys' fees, and that
portion of the leasing  commission  paid by Lessor  applicable  to the unexpired
term of this Lease.  The worth at the time of award of the amount referred to in
provision  (iii) of the prior  sentence  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

                                      -21-

one  percent  (1%).  Efforts by Lessor to  mitigate  damages  caused by Lessee's
Default  or Breach of this  Lease  shall not  waive  Lessor's  right to  recover
damages under this Paragraph.  If termination of this Lease is obtained  through
the  provisional  remedy of unlawful  detainer,  Lessor  shall have the right to
recover in such  proceeding  the  unpaid  rent and  damages  as are  recoverable
therein,  or Lessor may  reserve  therein  the right to recover  all or any part
thereof in a separate suit for such rent and/or  damages.  If a notice and grace
period  required  under  subparagraphs  13.1(b),  (c) or (d) was not  previously
given,  a notice to pay rent or quit, or to perform or quit, as the case may be,
given to Lessee  under any  statute  authorizing  the  forfeiture  of leases for
unlawful  detainer shall also constitute the applicable  notice for grace period
purposes  required  by  subparagraphs  13.1(b),  (c) or (d).  In such case,  the
applicable grace period under  subparagraphs  13.1(b),  (c) or (d) and under the
unlawful  detainer statute shall run  concurrently  after the one such statutory
notice,  and the failure of Lessee to cure the Default within the greater of the
two such grace periods shall  constitute both an unlawful  detainer and a Breach
of this Lease entitling Lessor to the remedies provided for in this Lease and/or
by said statute.

                       (b) Continue the Lease and Lessee's  right to  possession
in effect (in  California  under  California  Civil Code Section  1951.4)  after
Lessee's Breach and abandonment and recover the rent as it becomes due, provided
Lessee  has  the  right  to  sublet  or  assign,   subject  only  to  reasonable
limitations.  See  paragraphs 12 and 36 for the  limitations  on assignment  and
subletting  which  limitations  Lessee and Lessor agree are reasonable.  Acts of
maintenance or preservation,  efforts to relet the Premises,  or the appointment
of a receiver  to  protect  the  Lessor's  interest  under the Lease,  shall not
constitute a termination of the Lessee's right to possession.

                       (c) Pursue any other remedy now or hereafter available to
Lessor  under  the laws or  decisions  of the state  wherein  the  Premises  are
located.

                       (d) The  expiration or  termination  of this Lease and/or
the  termination of Lessee's  right to possession  shall not relieve Lessee from
liability under any indemnity  provisions of this Lease as to matters  occurring
or accruing  during the term hereof or by reason of  Lessee's  occupancy  of the
Premises.

         13.3 Inducement  Recapture In Event Of Breach.  Any agreement by Lessor
for free or abated rent or other charges applicable to the Premises,  or for the
giving  or  paying  by  Lessor  to or for  Lessee  of any cash or  other  bonus,
inducement or consideration  for Lessee's entering into this Lease, all of which
concessions are  hereinafter  referred to as "Inducement  Provisions,"  shall be
deemed  conditioned  upon Lessee's full and faithful  performance  of all of the
terms,  covenants  and  conditions  of this Lease to be performed or observed by
Lessee during the term hereof as the same may be extended.  Upon the  occurrence
of a Breach of this Lease by Lessee,  as defined  in  Paragraph  13.l,  any such
inducement  Provision shall  automatically be deemed deleted from this Lease and
of no further force or effect, and any rent, other charge, bonus,  inducement or
consideration  theretofore  abated,  given  or  paid  by  Lessor  under  such an
Inducement  Provision  shall be immediately due and payable by Lessee to Lessor,
and   recoverable   by  Lessor  as   additional   rent  due  under  this  Lease,
notwithstanding  any subsequent cure of said Breach by Lessee. The acceptance by
Lessor of rent or the cure of the Breach which  initiated  the operation of this
Paragraph  shall not be deemed a waiver  by  Lessor  of the  provisions  of this
Paragraph unless specifically so stated in writing by Lessor at the time of such
acceptance.

                                      -22-

         13.4 Late  Charges.  Lessee  hereby  acknowledges  that late payment by
Lessee to Lessor of rent and other sums due hereunder will cause Lessor to incur
costs  not  contemplated  by this  Lease,  the  exact  amount  of which  will be
extremely  difficult to ascertain.  Such costs include,  but are not limited to,
processing  and accounting  charges,  and late charges which may be imposed upon
Lessor by the terms of any ground  lease,  mortgage or trust deed  covering  the
Premises.  Accordingly,  if any  installment  of rent or any  other sum due from
Lessee shall not be received by Lessor or Lessor's designee within five (5) days
after such amount  shall be due,  then,  without any  requirement  for notice to
Lessee,  Lessee  shall Pay to Lessor a late charge  equal to six percent (6%) of
such overdue amount. The parties hereby agree that such late charge represents a
fair and  reasonable  estimate of the costs  Lessor will incur by reason of late
payment by Lessee.  Acceptance  of such late charge by Lessor  shall in no event
constitute  a waiver of Lessee's  Default or Breach with respect to such overdue
amount,  nor prevent Lessor from exercising any of the other rights and remedies
granted hereunder. In the event that a late charge is payable hereunder, whether
or nor collected,  for three (3)  consecutive  installments  of Base Rent,  then
notwithstanding  Paragraph  4.1 or any  other  provision  of this  Lease  to the
contrary,  Base Rent shall, at Lessor's option, become due and payable quarterly
in advance.

         13.5  Breach by  Lessor.  Lessor  shall not be deemed in breach of this
Lease unless  Lessor fails  within a  reasonable  time to perform an  obligation
required to be performed by Lessor.

14.  Condemnation.  If the  Premises or any portion  thereof are taken under the
power of eminent  domain or sold under the threat of the  exercise of said power
(all of which are herein called  "condemnation"),  this Lease shall terminate as
to the part so taken as of the date  the  condemning  authority  takes  title or
possession,  whichever first occurs. If more than ten percent (10%) of the floor
area of the Premises,  or more than  twenty-five  percent (25%) of the land area
not occupied by any building, is taken by condemnation,  Lessee may, at Lessee's
option,  to be exercised in writing within ten (10) days after Lessor shall have
given  Lessee  written  notice of such taking (or in the absence of such notice,
within ten (10) days after the condemning authority shall have taken possession)
terminate  this  Lease  as of the  date  the  condemning  authority  takes  such
possession.  If Lessee  does not  terminate  this Lease in  accordance  with the
foregoing, this Lease shall remain in full force and effect as to the portion of
the Premises  remaining,  except that the Base Rent shall be reduced in the same
proportion as the rentable  floor area of the Premises  taken bears to the total
rentable  floor area of the building  located on the  Premises.  No reduction of
Base Rent shall occur if the only portion of the Premises taken is land on which
there is no building and such taking does not interfere materially with Lessee's
use of the premises. Any award for the taking of all or any part of the Premises
under the  power of  eminent  domain or any  payment  made  under  threat of the
exercise of such power shall be the property of Lessor, whether such award shall
be made as  compensation  for  diminution  in value of the  leasehold or for the
taking of the fee, or as severance damages; provided, however, that Lessee shall
be  entitled  to any  compensation  separately  awarded to Lessee  for  Lessee's
relocation  expenses and/or loss of Lessee's Trade  Fixtures.  In the event that
this Lease is not terminated by reason of such condemnation, Lessor shall to the
extent of its net severance damages received, over and above the legal and other
expenses incurred by Lessor in the condemnation matter, repair any damage to the
Premises caused by such condemnation,  except to the extent that Lessee has been
reimbursed therefor by the condemning authority. Lessee shall be responsible for
the payment of any amount in excess of such net  severance  damages  required to
complete such repair.

                                      -23-

15.      Broker's Fee.

         15.1 The Brokers named in Paragraph  1.10 are the  procuring  causes of
this Lease.

         15.2     [paragraph intentionally deleted]

         15.3     [paragraph intentionally deleted]

         15.4     [paragraph intentionally deleted]

         15.5 Lessee and Lessor each  represent and warrant to the other that it
has had no dealings  with any  person,  firm,  broker or finder  (other than the
Brokers,  if any named in Paragraph  1.10) in connection with the negotiation of
this Lease and/or the consummation of the transaction  contemplated  hereby, and
that no broker or other person,  firm or entity other than said named Brokers is
entitled to any commission or finder's fee in connection with said  transaction.
Lessee and Lessor do each hereby agree to  indemnify,  protect,  defend and hold
the other harmless from and against  liability for compensation or charges which
may be claimed by any such  unnamed  broker,  finder or other  similar  party by
reason of any  dealings  or actions of the  indemnifying  Party,  including  any
costs, expenses, attorneys' fees reasonably incurred with respect thereto.

         15.6  Lessor  and  Lessee  hereby  consent  to and  approve  all agency
relationships, including any dual agencies, indicated in Paragraph 1.10.

16.      Tenancy Statement.

         16.1 Each  Party (as  "Responding  Party")  shall  within ten (10) days
after  written  notice from the other Party (the  "Requesting  Party")  execute,
acknowledge  and deliver to the Requesting  Party a statement in writing in form
similar to the then most  current  "Tenancy  Statement"  form  published  by the
American Industrial Real Estate Association,  plus such additional  information,
confirmation and/or statements as may be reasonably  requested by the Requesting
Party.

         16.2 If Lessor desires to finance, refinance, or sell the Premises, any
part thereof,  or the building of which the Premises are a part,  Lessee and all
Guarantors  of Lessee's  performance  hereunder  shall  deliver to any potential
lender or purchaser designated by Lessor such financial statements of Lessee and
such  Guarantors  as may be  reasonably  required by such  lender or  purchaser,
including but not limited to Lessee's  financial  statements  for the past three
(3) years.  All such financial  statements  shall be received by Lessor and such
lender or purchaser in confidence and shall be used only for the purposes herein
set forth.

17. Lessor's Liability. The term "Lessor" as used herein shall mean the owner or
owners at the time in question of the fee title to the Premises,  or, if this is
a  sublease,  of the  Lessee's  interest in the prior  lease.  In the event of a
transfer of Lessor's title or interest in the Premises or in this Lease,  Lessor
shall  deliver to the  transferee  or assignee (in cash or by credit) any unused
Security  Deposit  held by Lessor at the time of such  transfer  or  assignment.
Except as provided in Paragraph 15, upon such transfer or

                                      -24-

assignment and delivery of the Security Deposit, as aforesaid,  the prior Lessor
shall be  relieved  of all  liability  with  respect to the  obligations  and/or
covenants under this Lease thereafter to be performed by the Lessor.  Subject to
the foregoing, the obligations and/or covenants in this Lease to be performed by
the Lessor shall be binding only upon the Lessor as hereinabove defined.

18.  Severability.  The invalidity of any provision of this Lease, as determined
by a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.

19. Interest on Past-Due Obligations. Any monetary payment due Lessor hereunder,
other  than late  charges,  not  received  by  Lessor  within  thirty  (30) days
following  the  date  on  which  it  was  due,  shall  bear  interest  from  the
thirty-first  (31st) day after it was due at the rate of 12% per annum,  but not
exceeding  the  maximum  rate  allowed by law,  in  addition  to the late charge
provided for in Paragraph 13.4.

20. Time of Essence.  Time is of the essence with respect to the  performance of
all obligations to be performed or observed by the Parties under this Lease.

21. Rent Defined.  All monetary  obligations of Lessee to Lessor under the terms
of this Lease are deemed to be rent.

22. No Prior or Other  Agreements;  Broker  Disclaimer.  This Lease contains all
agreements  between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each  represents and warrants to the Brokers that it has made,
and is relying  solely upon its own  investigation  as to the  nature,  quality,
character and financial  responsibility  of the other Party to this Lease and as
to  the  nature,  quality  and  character  of  the  Premises,  Brokers  have  no
responsibility  with  respect  thereto or with  respect to any default or breach
hereof by either Party.

23.      Notices.

         23.1 All  notices  required  or  permitted  by this  Lease  shall be in
writing  and may be  delivered  in person  (by hand or by  messenger  or courier
service) or may be sent by regular,  certified or registered mail or U.S. Postal
Service Express Mail, with postage prepaid,  or by facsimile  transmission,  and
shall be  deemed  sufficiently  given if served  in a manner  specified  in this
Paragraph 23. The addresses noted adjacent to a Party's  signature on this Lease
shall be that Party's address for delivery or mailing of notice purposes. Either
Party may by written notice to the other specify a different  address for notice
purposes,  except that upon Lessee's  taking  possession  of the  Premises,  the
Premises  shall  constitute  Lessee's  address  for the  purpose  of  mailing or
delivering  notices to Lessee. A copy of all notices required or permitted to be
given to Lessor  hereunder  shall be  concurrently  transmitted to such party or
parties at such addresses as Lessor may from time to time hereafter designate by
written notice to Lessee.

         23.2 Any notice sent by registered or certified  mail,  return  receipt
requested,  shall be deemed  given on the date of delivery  shown on the receipt
card, or if no delivery date is shown, the postmark thereon.  If sent by regular
mail the notice shall be deemed given forty-eight (48) hours after the same

                                      -25-

is  addressed  as  required  herein and mailed  with  postage  prepaid.  Notices
delivered by United  States  Express Mail or overnight  courier that  guarantees
next day delivery shall be deemed given twenty-four (24) hours after delivery of
the same to the  United  States  Postal  Service  or  courier.  If any notice is
transmitted by facsimile transmission or similar means, the same shall be deemed
served or delivered upon telephone  confirmation of receipt of the  transmission
thereof,  provided a copy is also  delivered  via delivery or mail. If notice is
received on a Sunday or legal holiday,  it shall be deemed  received on the next
business day.

24. Waivers.  No waiver by Lessor of the Default or Breach of any term, covenant
or  condition  hereof by  Lessee,  shall be  deemed a waiver of any other  term,
covenant or condition hereof,  or of any subsequent  Default or Breach by Lessee
of the same or of any other term, covenant or condition hereof. Lessor's consent
to, or  approval  of,  any act shall  not be  deemed to render  unnecessary  the
obtaining of Lessor's  consent to, or approval of, any subsequent or similar act
by Lessee,  or be construed as the basis of an estoppel to enforce the provision
or  provisions  of this Lease  requiring  such  consent.  Regardless of Lessor's
knowledge of a Default or Breach at the time of accepting  rent,  the acceptance
of rent by Lessor  shall not be a waiver of any  preceding  Default or Breach by
Lessee of any  provision  hereof,  other  than the  failure of Lessee to pay the
particular rent so accepted.  Any payment given Lessor by Lessee may be accepted
by Lessor  on  account  of moneys or  damages  due  Lessor  notwithstanding  any
qualifying  statements  or conditions  made by Lessee in  connection  therewith,
which  such  statements  and/or  conditions  shall  be of  no  force  or  effect
whatsoever unless  specifically  agreed to in writing by Lessor at or before the
time of deposit of such payment.

25. Recording. Either Lessor or Lessee shall, upon request of the other execute,
acknowledge  and deliver to the other a short form  memorandum of this Lease for
recording  purposes.  The Party requesting  recordation shall be responsible for
payment of any fees or taxes applicable thereto.

26.  No Right To  Holdover.  Lessee  has no right to  retain  possession  of the
Premises or any part thereof  beyond the  expiration or earlier  termination  of
this Lease.

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

28.  Covenants and  Conditions.  All  provisions of this Lease to be observed or
performed by Lessee are both covenants and conditions.

29. Binding Effect; Choice of Law. This Lease shall be binding upon the parties,
their  personal  representatives,  successors and assigns and be governed by the
laws of the State in which the Premises are located.  Any litigation between the
Parties hereto  concerning this Lease shall be initiated in the county which the
Premises are located.

30.      Subordination; Attornment; Non-Disturbance.

         30.1  Subordination.  This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease,  mortgage,  deed of trust, or other
hypothecation or security device

                                      -26-

(collectively,  "Security  Device"),  now or hereafter placed by Lessor upon the
real  property of which the Premises are part,  to any and all advances  made on
the  security  thereof,  and to  all  renewals,  modifications,  consolidations,
replacements and extensions thereof.  Lessee agrees that the Lenders holding any
such Security Device shall have no duty,  liability or obligation to perform any
of the obligations of Lessor under this Lease, but that in the event of Lessor's
default with respect to any such  obligation,  Lessee will give any Lender whose
name and address have been  furnished  Lessee in writing for such purpose notice
of Lessor's default and allow such Lender thirty (30) days following  receipt of
such notice for the cure of said default before invoking any remedies Lessee may
have by reason thereof.  If any Lender shall elect to have this Lease and/or any
Option granted hereby superior to the lien of its Security Device and shall give
written  notice  thereof to Lessee,  this Lease and such Options shall be deemed
prior  to such  Security  Device,  notwithstanding  the  relative  dates  of the
documentation or recordation thereof.

         30.2 Attornment. Subject to the non-disturbance provisions of Paragraph
30.3,  Lessee  agrees to attorn  to a Lender  or any  other  party who  acquired
ownership of the Premises by reason of a foreclosure of a Security  Device,  and
that in the event of such  foreclosure,  such new owner shall not: (i) be liable
for any act or omission of any prior lessor or with respect to events  occurring
prior to  acquisition  of  ownership,  (ii) be subject to any offsets or defense
which  Lessee  might  have  against  any  prior  lessor,  or  (iii)  be bound by
prepayment of more than one (1) month's rent.

         30.3 Non-Disturbance.  With respect to Security Devices entered into by
Lessor after the execution of this Lease,  Lessee's  subordination of this Lease
shall be subject to receiving assurance (a "non-disturbance agreement") from the
Lender that Lessee's  possession and this Lease,  including any option to extend
the term hereof, will not be disturbed so long as Lessee is not in Breach hereof
and attorns to the record owner of the Premises.

         30.4  Self-Executing.  The  agreements  contained in this  Paragraph 30
shall be effective  without the  execution of any further  documents;  provided,
however, that, upon written request from Lessor or a Lender in connection with a
sale, financing or refinancing of the Premises,  Lessee and Lessor shall execute
such further writings as may be reasonably  required to separately  document any
such  subordination  or  non-subordination,  attornment  and/or  non-disturbance
agreement as is provided for herein.

31.  Attorney's  Fees.  If any Party or Broker brings an action or proceeding to
enforce the terms hereof or declare rights  hereunder,  the Prevailing Party (as
hereafter defined) or Broker in any such proceeding,  action, or appeal thereon,
shall be entitled to reasonable attorney's fees. Such fees may be awarded in the
same  suit or  recovered  in a  separate  suit,  whether  or not such  action or
proceeding is pursued to decision or judgment. The term "Prevailing Party" shall
include,  without  limitation,  a Party or Broker who  substantially  obtains or
defeats  the  relief  sought,  as  the  case  may  be,  whether  by  compromise,
settlement,  judgment,  or the  abandonment  by the other Party or Broker of its
claim or defense.  The attorney's fees award shall not be computed in accordance
with any  court  fee  schedule,  but  shall be such as to  fully  reimburse  all
attorney's  fees  reasonably  incurred.  Lessor shall be entitled to  attorney's
fees,  costs and expenses  incurred in the preparation and service of notices of
Default and

                                      -27-

consultations  in  connection  therewith  whether  or  not  a  legal  action  is
subsequently commenced in connection with such Default or resulting Breach.

32. Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agents shall
have the right to enter the Premises at any time,  in the case of an  emergency,
and otherwise at reasonable  times upon prior notice,  whether  written or oral,
for the  purpose of showing  the same to  prospective  purchasers,  lenders,  or
lessees, and making such alterations,  repairs, improvements or additions to the
Premises or to the building of which they are a part,  as Lessor may  reasonably
deem  necessary.  Lessor  may at any  time  place on or about  the  Premises  or
building  any  ordinary  "For Sale"  signs and Lessor may at any time during the
last one  hundred  twenty  (120) days of the term  hereof  place on or about the
Premises any ordinary "For Lease" signs.  All such activities of Lessor shall be
without abatement of rent or liability to Lessee.

33.  Auctions.  Lessee shall not  conduct,  nor permit to be  conducted,  either
voluntarily or involuntarily, any auction upon the Premises without first having
obtained  Lessor's  prior  written  consent.  Notwithstanding  anything  to  the
contrary in this Lease,  Lessor  shall not be obligated to exercise any standard
of reasonableness in determining whether to grant such consent.

34. Signs. Lessee shall not place any sign upon the Premises, except that Lessee
may, with Lessor's  prior  written  consent,  install (but not on the roof) such
signs as are  reasonably  required  to  advertise  Lessee's  own  business.  The
installation  of any sign on the  Premises by or for Lessee  shall be subject to
the  provisions of Paragraph 7  (Maintenance,  Repairs,  Utility  Installations,
Trade Fixtures and Alterations).

35.  Termination;  Merger.  Unless  specifically  stated otherwise in writing by
Lessor,  the  voluntary or other  surrender of this Lease by Lessee,  the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee,  shall  automatically  terminate any sublease or lesser estate in the
Premises;  provided,  however, Lessor shall, in the event of any such surrender,
termination or  cancellation,  have the option to continue any one or all of any
existing subtenancies.  Lessor's failure within ten (10) days following any such
event to make a written election to the contrary by written notice to the holder
of any such lesser  interest,  shall constitute  Lessor's  election to have such
event constitute the termination of such interest.

36.      Consents.

                       (a)  Except  for  Paragraph  33 hereof  (Auctions)  or as
otherwise  provided  herein,  wherever  in this Lease the  consent of a Party is
required  to an act  by or for  the  other  Party,  such  consent  shall  not be
unreasonably withheld or delayed.  Lessor's actual reasonable costs and expenses
(including  but not  limited to  architects',  attorneys',  engineers'  or other
consultants'  fees) incurred in the  consideration of, or response to, a request
by Lessee  for any Lessor  consent  pertaining  to this  Lease or the  Premises,
including  but not limited to consents to an  assignment,  a  subletting  or the
presence or use of a Hazardous  Substance,  practice or storage  tank,  shall be
paid by Lessee to Lessor upon receipt of an invoice and supporting documentation
therefor. Subject to Paragraph 12.2(e) (applicable to assignment or subletting),
Lessor may, as a condition to  considering  any such request by Lessee,  require
the Lessee

                                      -28-

deposit with Lessor an amount of money (in addition to the Security Deposit held
under Paragraph 5) reasonably  calculated by Lessor to represent the cost Lessor
will  incur in  considering  and  responding  to  Lessee's  request.  Except  as
otherwise  provided,  any unused  portion of said  deposit  shall be refunded to
Lessee without interest.  Lessor's consent to any act,  assignment of this Lease
or subletting of the Premises by Lessee shall not  constitute an  acknowledgment
that no Default or Breach by Lessee of this Lease exists, nor shall such consent
be deemed a waiver of any then  existing  Default  or  Breach,  except as may be
otherwise specifically stated in writing by Lessor at the time of such consent.

                       (b) All conditions to Lessor's consent authorized by this
Lease are  acknowledged  by Lessee as being  reasonable.  The failure to specify
herein any  particular  condition  to Lessor's  consent  shall not  preclude the
imposition by Lessor at the time of consent of such further or other  conditions
as are then reasonable with reference to the particular matter for which consent
is being given.

37.      [paragraph intentionally deleted]

38.      [paragraph intentionally deleted]

39.      [paragraph intentionally deleted]

40.  Multiple  Buildings.  If the  Premises  are  part of a group  of  buildings
controlled by Lessor,  Lessee agrees that it will abide by, keep and observe all
reasonable rules and regulations which Lessor may make from time to time for the
management,  safety,  care,  and  cleanliness  of the  grounds,  the parking and
unloading of vehicles  and the  preservation  of good order,  as well as for the
convenience  of other  occupants  or tenants of such other  buildings  and their
invitees, and that Lessee will pay its fair share of common expenses incurred in
connection therewith.

41. Security  Measures.  Lessee hereby  acknowledges  that the rental payable to
Lessor  hereunder  does not include the cost of guard service or other  security
measures,  and that Lessor shall have no obligation  whatsoever to provide same.
Lessee assumes all  responsibility  for the protection of the Premises,  Lessee,
its agents and invitees and their property from the acts of third parties.

42.  Reservations.  Lessor  reserves to itself the right,  from time to time, to
grant, with the consent of Lessee,  which shall not be unreasonably  withheld or
delayed, such easements, rights and dedications that Lessor deems necessary, and
to cause  the  recordation  of  parcel  maps and  restrictions,  so long as such
easements,  rights,  dedications,  maps  and  restrictions  do not  unreasonably
interfere  with the use of the  Premises  by Lessee.  Lessee  agrees to sign any
documents reasonably requested by Lessor to effectuate any such easement rights,
dedication, map or restrictions.

43.  Performance  Under Protest.  If at any time a dispute shall arise as to any
amount or sum of money to be paid by one Party to the other under the provisions
hereof, the Party against whom the obligation to pay the money is asserted shall
have the right to make payment  "under  protest"  and such payment  shall not be
regarded as a voluntary payment and there shall survive the right on the part of
said Party to  institute  suit for recovery of such sum. If it shall be adjudged
that there was no legal obligation

                                      -29-

on the part of said Party to pay such sum or any part thereof,  said Party shall
be  entitled  to  recover  such  sum or so much  thereof  as it was not  legally
required to pay under the provisions of this Lease.

44.  Authority.  If either Party hereto is a corporation,  trust,  or general or
limited  partnership,  each  individual  executing  this Lease on behalf of such
entity  represents and warrants that he or she is duly authorized to execute and
deliver  this  Lease  on its  behalf.  If  Lessee  is a  corporation,  trust  or
partnership,  Lessee  shall,  within  thirty (30) days after  request by Lessor,
deliver to Lessor evidence satisfactory to Lessor of such authority.

45. Conflict.  Any conflict between the printed provisions of this Lease and the
typewritten or handwritten  provisions shall be controlled by the typewritten or
handwritten provisions.

46. Offer.  Preparation of this Lease by Lessor or Lessor's agent and submission
of same to Lessee shall not be deemed an offer to lease to Lessee. This Lease is
not intended to be binding until executed by all Parties hereto.

47.  Amendments.  This  Lease may be  modified  only in  writing,  signed by the
Parties in interest  at the time of the  modification.  The parties  shall amend
this  Lease from time to time to reflect  any  adjustments  that are made to the
Base  Rent or  other  rent  payable  under  this  Lease.  As long as they do not
materially  change Lessee's  obligations  hereunder,  Lessee agrees to make such
reasonable  non-monetary  modifications  to  this  Lease  as may  be  reasonably
required  by an  institutional,  insurance  company,  or pension  plan Lender in
connection with the obtaining of normal financing or refinancing of the property
of which the Premises are a part.

48. Multiple  Parties.  Except as otherwise  expressly  provided herein, if more
than one  person or entity is named  herein  as  either  Lessor or  Lessee,  the
obligations   of  such   Multiple   Parties  shall  be  the  joint  and  several
responsibility of all persons or entities named herein as such Lessor or Lessee.

LESSOR AND LESSEE HAVE  CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION  CONTAINED  HEREIN,  AND BY THE  EXECUTION  OF THIS  LEASE  SHOW THEIR
INFORMED AND VOLUNTARY  CONSENT  THERETO.  THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND  EFFECTUATE  THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.

         IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN  PREPARED FOR  SUBMISSION
         TO YOUR ATTORNEY FOR HIS APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED
         TO EVALUATE THE  CONDITION OF THE PROPERTY AS TO THE POSSIBLE  PRESENCE
         OF ASBESTOS,  STORAGE TANKS OR HAZARDOUS SUBSTANCES.  NO REPRESENTATION
         OR  RECOMMENDATION  IS  MADE BY THE  AMERICAN  INDUSTRIAL  REAL  ESTATE
         ASSOCIATION  OR BY  THE  REAL  ESTATE  BROKER(S)  OR  THEIR  AGENTS  OR
         EMPLOYEES  AS  TO  THE  LEGAL   SUFFICIENCY,   LEGAL  EFFECT,   OR  TAX
         CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES;  THE
         PARTIES SHALL RELY SOLELY UPON THE ADVICE OF

                                      -30-

         THEIR OWN COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS
         LEASE.  IF THE SUBJECT PROPERTY IS LOCATED IN A STATE OTHER THAN
         CALIFORNIA, AN ATTORNEY FROM THE STATE WHERE THE PROPERTY IS
         LOCATED SHOULD BE CONSULTED.

         The parties  hereto have  executed this Lease at the place on the dates
specified above to their respective signatures.

Executed at San Francisco, California     Executed at Mountain View, California
            --------------------------                -------------------------
on  August 18, 1992                       on  August 18, 1992
    ----------------------------------        ---------------------------------
by LESSOR: D.R. Stephens & Company        by LESSEE: Network Computing 
           550 Montgomery Street                       Devices, Inc.
- --------------------------------------    -------------------------------------
           San Francisco, CA 94111                   350 North Bernardo Avenue
- --------------------------------------    -------------------------------------
                                                     Mountain View, CA 94043
                                         
By  /s/ D.R. Stephens                     By  /s/ Jack Bradley
    ----------------------------------        ---------------------------------
Name Printed:  D.R. Stephens              Name Printed:  Jack Bradley
               -----------------------                  -----------------------
Title:  General Partner                   Title:  Chief Financial Officer
        ------------------------------           ------------------------------
By                                        By
   -----------------------------------       ----------------------------------
Name Printed:                             Name Printed:
              ------------------------                  -----------------------
Title:                                    Title:
      --------------------------------           ------------------------------
Address:                                  Address:
         -----------------------------             -----------------------------
Tel. No. (        )                       Tel. No. (        )
          --------  ------------------              --------  ------------------

NOTICE:           These forms are often  modified to meet changing  requirements
                  of law and industry  needs.  Always write or call to make sure
                  you are utilizing the most current form:  American  Industrial
                  Real Estate Association, 345 South Figueroa Street, Suite M-1,
                  Los  Angeles,  CA  90071,  (213)  687-8777,   Fax.  No.  (213)
                  687-8616.

           (C) Copyright 1990 - By American  Industrial Real Estate Association.
               All rights reserved.  No part of these works may be reproduced in
               any form without permission in writing.

                                      -31-

                   LEASE ADDENDUM TO 280(A) N. BERNARDO LEASE
                        (Formerly Occupied by Synoptics)

         This   Lease   Addendum   ("Addendum")   is   made   to  the   Standard
Industrial/Commercial  Single-Tenant - Net Lease executed  concurrently herewith
(the "Lease") by and between D. R. Stephens & Company  ("Landlord")  and Network
Computing Devices, Inc., a California corporation ("Tenant").

         Landlord  and  Tenant  hereby  agree  that,   notwithstanding  anything
contained in the Lease to the contrary,  the provisions set forth below shall be
deemed to be part of the Lease and shall supersede,  to the extent  appropriate,
any contrary  provision in the Lease.  All  references  in the Lease and in this
Addendum  shall be construed to mean the Lease and the  exhibits,  as amended or
supplemented  by  this  Addendum.  All  terms  used  in  this  Addendum,  unless
specifically defined in this Addendum, shall have the same meanings as the terms
used in the Lease.

         1. Rent.  Commencing on the Commencement Date and continuing throughout
the Lease Term, Tenant shall pay the following as additional rent:

                  a. All Real  Property  Taxes  applicable  to the  Premises  as
required by Section 10 of the Lease;

                  b. All  water,  gas,  heat,  light,  power,  telephone,  trash
disposal and other  utilities and services  supplied to the Premises as required
by Section 11 of the Lease;

                  c. Any late charges or interest due pursuant to Sections  13.4
and 19 of the Lease; and

                  d. At Landlord's  election,  any other reasonable payments due
to Landlord pursuant to this Lease.

         2.  Condition of the Premises.  Landlord  shall deliver the Premises to
Tenant clean and free of debris on the Commencement Date.

                  a. Building  Systems.  Landlord  warrants,  to the best of its
actual knowledge,  that the existing plumbing, fire sprinkler system,  lighting,
air  conditioning,  heating  and  loading  doors  (collectively,  the  "building
systems"),  if any, in the  Premises,  other than those  constructed  by Tenant,
shall  be in  good  working  order  and  condition  on  the  Commencement  Date.
Notwithstanding  the foregoing,  Tenant  acknowledges  that the building  system
services may be temporarily interrupted during the course of the construction of
that portion of the Tenant Improvements completed after the Commencement Date.

         Tenant  agrees that it shall,  at its sole cost and  expense,  engage a
qualified  inspector,  contractor  or engineer to inspect the building  systems.
Such inspection shall be completed within sixty (60) days after the Commencement
Date.  Tenant shall provide  Landlord with a copy of the  inspection  report and
Landlord  agrees to make such repairs or  replacements,  (at Landlord's cost and
without deduction or

                                       -1-

offset from the  Construction  Allowance as defined in the Work Letter  executed
concurrently  herewith), as are reasonably recommended by the inspection report;
provided,  that,  Landlord may make reasonable  objections  thereto within sixty
(60) days  after  receiving  the  inspection  report.  If  Tenant  does not give
Landlord written notice of a non-compliance with this warranty within sixty (60)
days following the Commencement Date, correction of that non-compliance shall be
the obligation of Tenant at Tenant's sole cost and expense.

         In no event shall  Landlord  be liable for costs to repair,  replace or
maintain the building  systems from and after the date the repair or replacement
of  such  systems  has  been  completed  by  Landlord  in  accordance  with  the
recommendations on the inspection report.

                  b.  Air   Conditioner   Compressors   and   Heat   Exchangers.
Notwithstanding the provisions contained in Section 2(a) above,  Landlord shall,
once during the original Lease Term,  replace,  if and when  necessary,  the air
conditioner  compressors  (except those marked Trane Unit Serial Nos.  776-13581
and 776-13580) and heat exchangers servicing the Premises.

                  c. Roof.  Landlord  and Tenant  have  reviewed a report on the
roof  which  recommends  certain  repairs  be made  thereto.  On or  before  the
Commencement Date,  Landlord agrees, at its sole cost and expense,  to make such
repairs to the roof as are  reasonably  necessary.  Within three (3) years after
the Commencement Date,  Landlord agrees to commence replacing the roof. Prior to
Landlord's  replacement  of the  roof,  Landlord  shall be  responsible  for the
maintenance of the roof. Following the replacement of the roof, Tenant shall, at
its sole cost and expense, be liable for the repair and maintenance thereof.

                  d.  Tenant's  Obligations.  Except as  expressly  provided  in
Sections  9 and 14 of the  Lease  and  Section  1 of Work  Letter,  and  without
limiting  the  provisions  of  Section  7.2  of  the  Lease,   Tenant  shall  be
responsible,  at its sole cost and  expense,  for the  repair,  maintenance  and
replacement, if necessary, of the following:

                                    the parking lot,

                                    dock, and

                                    landscaping.

         3. Compliance with Covenants,  Restrictions and Building Code. Landlord
warrants,  to the best of its actual  knowledge,  that the  improvements  on the
Premises  comply with all applicable  covenants,  or  restrictions of record and
applicable  building  codes,  regulations,  zoning and other  applicable laws in
effect on the  Commencement  Date.  Said  warranty  does not apply to the use to
which Tenant will put the Premises or any  Alterations or Utility  Installations
(as defined in Section  7.3(a) of the Lease)  made or to be made by Tenant.  If,
following  the  inspection  described  in Section 2 above,  the  Premises do not
comply with said warranty,  Landlord shall, subject to the limitations described
in Section 2 above, promptly after receipt of written notice from Tenant setting
forth with specificity the nature and extent of such non-compliance, rectify the
same at Landlord's expense (without deduction or offset against the

                                       -2-

Construction  Allowance).  If Tenant does not give Landlord  written notice of a
non-compliance   with  this  warranty  within  sixty  (60)  days  following  the
Commencement Date,  correction of that non-compliance shall be the obligation of
Tenant at Tenant's sole cost and expense.

         4.       Ownership of Alterations and Utility Installations.

                  a. Alterations.  Notwithstanding anything contained in Section
7.4 of the Lease to the contrary,  Landlord reserves the right, until expiration
or termination of the Lease,  to require  removal or become the owner of any and
all Alterations made to the Premises by the Tenant.

                  b. Utility Installations.  At the time Tenant submits detailed
plans to Landlord for review for the purpose of obtaining  Landlord's consent to
any  proposed  Utility  Installation,  Tenant may  request  Landlord to indicate
whether or not such  proposed  Utility  Installation  is to be removed  from the
Premises upon the  expiration or  termination of the Lease and whether Tenant is
to perform all  restoration  made  necessary  by the removal of any such Utility
Installation. If Tenant does not request Landlord to make such indication, or if
Tenant does not obtain  Landlord's  prior  consent to  Tenant's  removal of such
Utility  Installation,  then all such alterations  shall be property of Landlord
and  remain  upon  and be  surrendered  with the  Premises  upon  expiration  or
termination  of the Lease.  Landlord  shall have the right to require  Tenant to
remove any Utility Installation and to perform all restoration made necessary by
such removal.

                  c.  Security  and   Communication   Systems.   Notwithstanding
anything  contained  herein to the  contrary,  all  security  and  communication
systems  installed by Tenant  shall be deemed to be Trade  Fixtures and shall be
removed  by  Tenant at the  expiration  or  earlier  termination  of the  Lease;
provided,  that  Tenant  shall  repair  and  restore  any and all  damage to the
Premises caused by the removal of such systems.

         5.  Hazardous  Waste.  Subject to the  provisions  of Section 6 of this
Addendum, Landlord shall indemnify,  protect, defend and hold Tenant, its agents
and  employees  harmless  from and  against  any and all  damages,  liabilities,
judgements,  costs, claims, liens, expenses,  penalties,  permits and attorney's
fees and consultant's  fees arising out of or involving any Hazardous  Substance
or storage tank brought onto the Premises on or before the Commencement  Date of
this Lease by or for Landlord or under Landlord's control.

         6.  Limitation  on  Liability.  The liability of Landlord in connection
with the Premises  shall be limited to its interest in the  Premises,  and in no
event shall any other assets of Landlord be subject to any claim  arising out of
or in connection with the Lease or the Premises. Tenant expressly agrees that so
long  as  Landlord  is  a  corporation,   trust,  partnership,   joint  venture,
unincorporated  association or other form of business entity, the obligations of
Landlord shall not constitute personal  obligations of the officers,  directors,
trustees,  partners,  joint venturers,  members,  owners,  stockholders or other
principals or repre sentatives  ("principals")  of such business entity. In this
regard, Tenant agrees that in the event of any actual or alleged failure, breach
or  default  by  Landlord  of its  obligations  under  this  Lease,  that (i) no
principal shall be sued or named as a party in any suit or action (except as may
be necessary to secure  jurisdiction of Landlord) , (ii) no principal shall ever
be required to answer or otherwise plead to any

                                       -3-

service of process, (iii) no judgment will be taken against any principal,  (iv)
any judgment  taken  against any  principal  may be vacated and set aside at any
time  without  hearing,  (v) no writ of  execution  shall be levied  against the
assets of any  principal,  and (vi) these  agreements by Tenant are  enforceable
both by Landlord and by any principal.

         7. Sale by Landlord. Notwithstanding anything contained in the Lease to
the  contrary,  Landlord  shall  have the  right at any time to sell,  transfer,
convey or assign  its  interest  in this  Lease or in the  Premises  or any part
thereof.  To the extent that  Landlord's  covenants and  obligations  under this
Lease are expressly  assumed in writing or by operation of  applicable  law by a
transferee or assignee,  Landlord  without  further  written  agreement shall be
freed  and  relieved  of  such  covenants  and  obligations.  Landlord  (or  the
transferee  or assignee)  shall give Tenant  prompt notice of such a transfer or
assignment.

         In the event of such sale, transfer, conveyance or assignment, from and
after the date thereof Landlord shall be (i) automatically relieved, without any
further act by any person or entity, of all liability for the performance of the
obligations  of the Landlord  hereunder,  and (ii) relieved of all liability for
the performance of the obligations of the Landlord  hereunder which have accrued
before the date of transfer,  but only if its transferee agrees to assume and be
bound by the terms of this Lease and to perform all  obligations of the Landlord
hereunder.  As  used  herein,  the  term  "Landlord"  shall  mean  the  Landlord
originally  named  herein,  but  following  any  transfer of its interest in the
Premises  other  than to a  lender  as  security  for a  debt,  the  term  shall
thereafter mean the transferee of such interest.

         8.  Option To Extend  Term.  Tenant  shall have the right to extend the
term of this Lease for an  additional  term of sixty (60) months (the  "Option")
commencing  upon the  Expiration  Date of the Original Term (the "Option  Term")
upon the following terms and conditions:

                  a. When it notifies  Landlord of its  election to exercise the
Option and on the last day of the  Original  Term of this Lease Tenant shall (i)
not be in default under any of the terms, covenants,  conditions,  provisions or
agreements  of this  Lease,  (ii) not have  committed  any act  which,  with the
passage of time or the giving of notice,  would  constitute  an event of default
and (iii) not have assigned or otherwise transferred its interest in this Lease.
The  Option  is  intended  to be  personal  to Tenant  and may not be  assigned,
voluntarily or involuntarily, separate from or as a part of the Lease.

                  b. The base monthly rent for the Premises shall be ninety-five
percent  (95%)  of the Fair  Market  Rental  (as  hereinafter  defined)  for the
Premises  prevailing at the commencement of the Option Term; provided that in no
event shall the base  monthly  rent be less than the base  monthly  rent for any
year immediately preceding the Option Term.

         The  term  "Fair  Market  Rental"  shall  mean the  base  monthly  rent
(expressed  as a net rental  rate per square  foot of  rentable  area per month)
payable by a tenant and actually  being  received by a landlord  for  comparable
space in other  first  class  buildings  in  Mountain  View of like  quality and
location,  adjusted to account for floor level, views, leasehold improvements or
allowances provided by Landlord, rental abatements, equity participation,  lease
takeovers  or  assumptions,  rent  credits,  moving  expenses and other forms of
rental  concessions,  management  or cost  recovery  fees,  proposed term of the
lease, and any other relevant terms or conditions.

                                       -4-

         Landlord, by notice to Tenant delivered on or before one hundred twenty
(120) days prior to the commencement of the Option Term shall determine the Fair
Market  Rental.  If Tenant  objects to  Landlord's  determination,  Landlord and
Tenant  shall  negotiate  in good faith in an effort to mutually  agree upon the
Fair Market Rental.  If Landlord and Tenant have not been able to agree upon the
Fair Market Rental prior to the  commencement  of the Option Term,  Landlord and
Tenant shall each prepare their own final written proposed determination of Fair
Market  Rental,  which  shall  be  exchanged  by the  parties  and  which  shall
constitute  the final  proposed  determination  submitted  by each  party to the
arbitrators  in the event of  arbitration  as  described  below.  If the parties
cannot agree on the Fair Market  Rental for the period in question,  the parties
shall proceed to  arbitration  to determine  Fair Market  Rental.  Should Tenant
elect to arbitrate and should the  arbitration  not have been concluded prior to
the date the Option Term is to commence,  Tenant shall pay the base monthly rent
to Landlord  commencing  at the Option  Term,  adjusted  to reflect  Fair Market
Rental as Landlord  has so  determined.  If the amount of Fair Market  Rental as
determined by arbitration differs from Landlord's determination,  any adjustment
required to correct the amount  previously  paid shall be made by payment by the
appropriate party after such determination of Fair Market Rental.

         If arbitration  occurs,  the judgment or the award rendered in any such
arbitration may be entered in any court having  jurisdiction  and shall be final
and  binding  between  the  parties.  The  arbitration  shall be  conducted  and
determined  in San Jose in  accordance  with the  then  prevailing  rules of the
American Arbitration  Association or its successor for arbitration of commercial
disputes,  except to the extent that the procedures mandated by said rules shall
be modified as follows:  Tenant shall make demand to Landlord for arbitration in
writing within thirty (30) days after receiving Landlord's determination of Fair
Market Rental,  specifying  therein the name and address of the person to act as
the arbitrator on its behalf. The arbitrator shall be qualified as a real estate
appraiser  familiar with the Fair Market Rental of  comparable  office  building
projects in Mountain View who would qualify over  objection as an expert witness
to give  opinion  testimony  addressed  to the  issue  in a court  of  competent
jurisdiction.   Within   twenty  (20)  days  after   receiving  the  demand  for
arbitration,  Landlord  shall  give  notice to Tenant,  specifying  the name and
address of the person designated by Landlord to act as arbitrator on its behalf,
who shall be similarly  qualified.  If Landlord fails to timely notify Tenant of
the appointment of its arbitrator,  the arbitrator  appointed by Tenant shall be
the arbitrator to determine the issue. In the event that two (2) arbitrators are
chosen,  they shall  appoint a third  arbitrator,  who shall be a competent  and
impartial person with qualifications  similar to those required of the first two
arbitrators.

         Within ten (10) days following the appointment of the third  arbitrator
or the lapse of time  when a party may  appoint  an  arbitrator  after the other
party has appointed  one,  Landlord and Tenant shall each state in writing their
determination of the Fair Market Rental supported by the reasons therefor,  with
counterpart  copies  delivered  to the other party and to the  arbitrators).  If
either party fails  timely to submit its proposal for the Fair Market  Rental in
accordance  with the later of the time  periods  provided  for  above,  the Fair
Market Rental shall be that  submitted by the other party,  and the  arbitration
shall be deemed concluded.  The  arbitrator(s)  shall arrange for a simultaneous
exchange of such proposed  determinations.  If there are three arbitrators,  the
concurrence  of  two  of  the  three  arbitrators  shall  be  controlling.   The
arbitrators  (or  sole  arbitrator)   shall  select  one  of  the  two  proposed
determinations  as the Fair  Market  Rent,  and shall have no right to propose a
middle ground or any modification of either of the two proposed  determinations.
The determination they or he chooses shall constitute the decision

                                       -5-

of the  arbitrator(s)  and  shall be final and  binding  upon the  parties.  The
arbitrator(s)  shall  attempt to decide the issue within ten (10) days after the
appointment of the third  arbitrator.  Each party shall pay the fee and expenses
of its  respective  arbitrator  and both shall share the fee and expenses of the
third  arbitrator,  if any.  The  arbitrator(s)  shall have the right to consult
experts  and  competent   authorities  with  factual   information  or  evidence
pertaining to a determination of Fair Market Rental,  but any such  consultation
shall be made in the presence of both parties with full right of the other party
to crossexamine.  The arbitrator(s) shall render their or his decision and award
in writing with counterpart copies to each party.

                  c. Tenant shall have  notified  Landlord no later than six (6)
months prior to the Expiration Date of the Original Term of Tenant's election to
exercise such right, otherwise the Option shall be automatically null and void.

                  d.  The  lease  for  280(B)  N.  Bernardo  Avenue   ("Adjacent
Property") is still in full force and effect and Tenant shall have  concurrently
notified Landlord of Tenant's election to exercise its option to extend the term
for the Adjacent Property.

                  e. All of the other terms, covenants,  conditions,  provisions
and agreements of this Lease shall remain in full force and effect.

                  f. There shall be no further  right to extend the term of this
Lease, or any right to renew this Lease, beyond the Option Term.

         9.  Right of First  Refusal.  Landlord  hereby  grants  to  Tenant  the
exclusive  right, at Tenant's  option,  to purchase the Premises,  upon the same
terms and  conditions  and for the same  purchase  price as any bona fide  offer
which  Landlord  desires to accept for the  purchase  of the  Premises  from any
person or  entity.  Upon  receipt of a bona fide offer  which is  acceptable  to
Landlord, Landlord shall notify Tenant in writing of the purchase price, closing
schedule,  and such  other  terms  as  Landlord  has  negotiated  and  accepted,
whereupon  Tenant shall have five (5) business days from the date of such notice
in which to elect to exercise  Tenant's  right to purchase.  In the event Tenant
elects to exercise its right to purchase as granted herein,  then Tenant must do
so by notifying  Landlord in writing of its  acceptance  of all the terms in the
bona fide offer within such five-day period.  If Tenant declines to exercise its
right of first refusal or otherwise fails to exercise its right in the manner or
within the time period set forth herein,  then Landlord  shall be free to accept
the offer of said third party.

         10.      Assignment and Subletting.

                  As a material part of the economic bargain between the parties
and as consideration for Tenant's rights in the Premises,  if (i) Tenant assigns
its interest in this Lease, Tenant shall pay Landlord fifty percent (50%) of the
transfer consideration received by Tenant in connection with the assignment, and
(ii) Tenant  sublets the  transfer  space,  Tenant  shall pay to Landlord  fifty
percent  (50%) of the  positive  difference,  if any,  between (A) all  transfer
consideration  received by Tenant in  connection  with the  sublease and (B) the
Base Monthly Rent and  additional  rent  allocated to the transfer space paid by
Tenant to Landlord pursuant to this Lease. Such amount shall be paid to Landlord
on the same basis, whether

                                       -6-

periodic or in lump sum, that it is received by Tenant. As used herein, the term
"transfer  consideration" shall mean any consideration of any kind received,  or
to be  received,  by  Tenant  as a  result  of  the  transfer  (other  than  the
transferee's  promise to assume Tenant's  obligations under this Lease), if such
sums  are  related  to  Tenant's  interest  in this  Lease  or in the  Premises;
including without limitation  payments (in excess of the book value thereof) for
Tenant's assets, trade fixtures,  leasehold improvements,  inventory,  accounts,
goodwill,  equipment,  furniture, general intangibles and capital stock or other
equity ownership interest in Tenant.  Tenant's  obligations under this paragraph
shall  survive  any and all  transfers.  At the time  Tenant  makes any  payment
required  by this  paragraph,  Tenant  shall  deliver to  Landlord  an  itemized
statement  of  the  method  used  to  calculate  Landlord's  share  of  transfer
consideration,  certified by Tenant as true and correct. Landlord shall have the
right to  inspect  Tenant's  books and  records  relating  to the  payments  due
pursuant to this  paragraph.  Upon  request,  Tenant  shall  deliver to Landlord
copies of all agreements,  bills,  invoices or other  documents  related to such
calculations. Landlord may condition its approval of any transfer upon obtaining
a  certification  from both Tenant and the proposed  transferee  of all transfer
consideration that is to be paid to Tenant in connection with such transfer.

         11.  Cross-Default.  Concurrently  herewith,  Tenant is entering into a
lease with  Landlord for the Adjacent  Property  ("280(B) N.  Bernardo  Lease").
Notwithstanding  anything  contained in Section 13 of the Lease to the contrary,
the occurrence of any one or more of the events in Section 13.1 of the 280(B) N.
Bernardo Lease shall  constitute a material  default and breach of this Lease by
Tenant.

         IN WITNESS WHEREOF, Landlord and Tenant have executed this Addendum.

LANDLORD:

D. R. STEPHENS & COMPANY

By: /s/ D.R. Stephens
    -------------------------------
    D. R. Stephens, General Partner

TENANT:

NETWORK COMPUTING DEVICES, INC.,
a California corporation

By /s/ Jack Bradley
   -------------------------------
       Jack Bradley
- ----------------------------------
Print name
Its:Chief Financial Officer
    ------------------------------

                                       -7-

                WORK LETTER AGREEMENT - 280(A) N. Bernardo Avenue
                        (Formerly Occupied by Synoptics)

         THIS WORK  LETTER  AGREEMENT  is made as of  August  18,  1992,  by and
between D. R. Stephens & Company  ("Landlord")  and Network  Computing  Devices,
Inc., a California  corporation  ("Tenant"),  for the premises located at 280(A)
North Bernardo,  Mountain View,  California -- formerly occupied by Synoptics --
(the  "Premises")  pursuant to that certain  Lease and Lease  Addendum  executed
concurrently  herewith,  by and between  Landlord and Tenant (the "Lease").  The
words and phrases which are  capitalized in this Work Letter shall have the same
meaning as such words and phrases have in the Lease.

         1.  Landlord  has no  obligation  to  improve,  alter  or  remodel  the
Premises, except as follows:

                  a.  Landlord  shall make the repairs and replace the  building
systems and roof as required pursuant to Section 2 of the Addendum,

                  b. On or before the Commencement Date (hereinafter defined) or
as soon thereafter as reasonably possible,  Landlord shall, at its sole cost and
expense (and  without  deduction or offset  against the  Construction  Allowance
defined below), do the following:

                                    paint the exterior of the building;

                                    seal, repair and restripe the parking lot to
                                    be suitable for the loading,  unloading  and
                                    travel  of  commercial  vehicles,  including
                                    semi's  (together  with  the  repair  of the
                                    loading area not to exceed $20,400); and

                                    repair  the dock  high  truck  loading  area
                                    (together with the repair of the parking lot
                                    not to exceed $20,400).

                  c. Within six months  after the  Commencement  Date or as soon
thereafter as reasonably possible,  Landlord shall, at its sole cost and expense
(and without  deduction or offset  against the  Construction  Allowance  defined
below), landscape the exterior area in a manner comparable to the landscaping at
350 N. Bernardo Avenue, Mountain View, CA, which will include:

                                    thatching and seeding lawn,

                                    installing  a total of 8 to 10 shrubs on the
                                    Premises and Adjacent Property,

                                    installing  a total  of 10 flats of color on
                                    the Premises and Adjacent Property,

                                    planting,  for fill-in purposes,  shrubs and
                                    ivy as needed, and

                                       -1-

                                    pruning  trees and shrubs  along the Central
                                    Expressway.

                  d. On or before the Commencement Date or as soon thereafter as
reasonably  possible,  Landlord shall, at its sole cost and expense (and without
deduction or offset against the Construction Allowance defined below), make such
changes, if any, to the exterior area of the Premises as are required to be made
by the American Disabilities Act in effect as of the Commencement Date.

                  e. Subject to Landlord's prior approval, Tenant may select the
color of the paint for the Building.

                  f. Landlord  shall  construct or cause to be  constructed  the
Tenant Improvements as provided for in this Work Letter.

         2. Landlord hereby agrees to allocate the sum of Four Hundred  Fourteen
Thousand  Six Hundred and  no/100ths  Dollars  ($414,600.00)  as a  construction
allowance  ("Construction  Allowance")  for the design and  construction  of the
Tenant Improvements  (hereinafter  defined).  Any and all fees and costs for the
Tenant  Improvements in excess of the  Construction  Allowance shall be the sole
and exclusive  obligation of the Tenant.  In the event the fees and costs of the
Tenant  Improvements are in excess of the Construction  Allowance,  Tenant shall
pay such  overage  on a monthly  pro rata  basis  concurrently  with  Landlord's
monthly disbursement of the Construction  Allowance  immediately after receiving
written  notice  from  Landlord  of the amount  payable  by Tenant and  invoices
substantiating  the  payment to be made.  In the event  Tenant  fails to pay its
monthly  pro rata  payment  on the date when due,  then  Landlord  shall have no
obligation to continue  constructing the Tenant  Improvements until such payment
is made, and Tenant shall be chargeable  with any delay in the completion of the
Premises resulting therefrom.

         The costs of the Tenant  Improvements to be paid from the  Construction
Allowance shall include:

                  a. The costs for  preparation of the  Construction  Documents,
including the Grobman's fees and costs;

                  b.  The  costs  for  obtaining  permits  and  other  necessary
authorizations  from the City of  Mountain  View,  County of Santa Clara and the
State of California;

                  c. All costs of interior  design and finish schedule plans and
specifications including as-built drawings; and

                  d. All direct and indirect  costs of procuring and  installing
the Tenant  Improvements  in the Premises,  including the  construction  fee for
overhead and profit and the cost of all on-site  supervisory and  administrative
staff, office,  equipment and temporary services in connection with construction
of the Tenant Improvements.

                  Notwithstanding the foregoing,  Tenant shall be liable for all
costs  and fees for the  services  described  above  which  are in excess of the
Construction Allowance. In no event shall the costs of the

                                       -2-

Tenant  Improvements  include  any  costs for  procuring  or  installing  in the
Premises  any  trade  fixtures,  equipment,  furniture,  furnishings,  telephone
equipment or other  personal  property  ("Personal  Property") to be used in the
Premises  by Tenant,  and the cost of such  Personal  Property  shall be paid by
Tenant.

         3. All space plans, design and working drawings required for the Tenant
Improvements  ("Construction  Documents")  shall be prepared by  Reel/Grobman  &
Associates  ("Grobman").  Tenant  acknowledges that it has reviewed and approved
the  proposal  from  Grobman  dated  August 3, 1992, a copy of which is attached
hereto,  and that Tenant is satisfied  with the terms and  conditions  set forth
therein.  Tenant and Landlord shall each review the Construction Documents on or
before the dates set forth in the schedule  contained  in the Grobman  proposal.
Any such approval is to be evidenced by Tenant's and Landlord's initials on each
sheet of the  Construction  Documents.  If Tenant  does not  approve  any of the
Construction  Documents  it receives  from  Grobman  within the time periods set
forth in the  schedule  or if Tenant  desires to make any  modifications  to the
same, any delay  attributable to such  disapproval or  modifications  shall be a
Tenant Delay (as defined herein below).

         All real property improvements shown on the Construction  Documents are
referred to herein as the "Tenant Improvements."

         4. Tenant shall devote such time as may be necessary to enable Landlord
or Grobman to submit for approval the Construction  Documents to the appropriate
government authorities of the Construction Documents for the Premises by October
23, 1992. In the event any governmental authority whose approval is necessary to
proceed  with the  construction  of Tenant  Improvements  fails to  approve  the
Construction  Documents  prior  to  December  7,  1992 as a result  of  Tenant's
insistence  on  certain  improvements  being  included  as a  part  of  Tenant's
Improvements, such failure shall be deemed to be a Tenant Delay.

         5. Tenant,  by signing the  Construction  Documents  and  approving the
general contractor with Grobman,  shall give Landlord  authorization to complete
the Tenant  Improvements  to the Premises in accordance  with such  Construction
Documents.  If such  authorization  and approval is not received by Landlord and
Grobman  within the time  periods  set forth in the Grobman  schedule,  Landlord
shall not be obligated to commence the Tenant Improvements on the Premises until
such  authorization and approval is received and Tenant shall be chargeable with
any delay in the completion of the Premises resulting therefrom.

         6. Subject to the  provisions  in Paragraph 7 below,  the  Commencement
Date shall mean the earlier to occur of:

                  a.  the date  Tenant  actually  occupies  any  portion  of the
Premises, or

                  b.  the  date  of   Substantial   Completion   of  the  Tenant
Improvements,  which  the  parties  estimate  will  occur on June 1,  1993  (the
"Scheduled Commencement Date").  "Substantial Completion" shall be determined by
Grobman and shall be deemed to have occurred  notwithstanding  a requirement  to
complete "punchlist" or similar minor corrective work.

                                       -3-

         Subject to the  provisions in Paragraph 7 below,  the  Expiration  Date
shall mean the date actually established as the Expiration Date in the lease for
the Adjacent Property.

         If  the   Commencement   Date  is  a  date  other  than  the  Scheduled
Commencement  Date,  Landlord and Tenant shall promptly  execute an amendment to
the Lease specifying the Commencement Date and Expiration Date.

         7. The  Commencement  Date and Expiration  Date shall be subject to and
modified by the following:

                  a. If Substantial Completion of the Tenant Improvements in the
Premises is delayed as a result of any delay  attributable  to Tenant's  acts or
failure to act ("Tenant  Delay"),  then the  Original  Term of the Lease and the
Rent  (including all  Additional  Rent) shall commence to accrue one day earlier
for each day of delay  attributable to Tenant's acts or failure to act. A Tenant
Delay shall include, but not be limited to the following:

                                    Tenant's request for a delay;

                                    Tenant's  request to change the Construction
                                    Documents previously approved;

                                    Tenant's failure to approve within three (3)
                                    working  days  after  Tenant's   receipt  of
                                    Landlord's  request  for any  changes in the
                                    Construction   Documents  necessary  due  to
                                    governmental  requirements  together  with a
                                    copy of the proposed changes;

                                    Tenant's   failure   to  pay  any   monetary
                                    obligations  it is  obligated  to pay within
                                    the time  periods  set forth  hereunder  and
                                    under the Lease,  including  but not limited
                                    to the payment  for the Tenant  Improvements
                                    in excess of the Construction Allowance;

                                    Tenant's   failure   to   comply   with  the
                                    provisions of this Agreement;

                                    Tenant's   request  to  have  additional  or
                                    different  work  not  included   within  the
                                    Construction  Documents  constructed  in the
                                    Premises and/or the construction thereof;

                                    Tenant's failure to approve the Construction
                                    Documents  within the time periods set forth
                                    hereinabove;

                                    The  occurrence of any event which is deemed
                                    a Tenant Delay under this Agreement; and

                                       -4-

                                    Prior to  approval  by both  parties  of the
                                    Construction  Documents,   any  delay  which
                                    Grobman     reasonably     determines     is
                                    attributable  to  changes  or  additions  to
                                    requirements  of Tenant  or the  information
                                    theretofore supplied by Tenant to Grobman or
                                    the  general  contractor,   outside  of  the
                                    normal  scope of such  changes or  additions
                                    which would be customary  in a  construction
                                    project  of the scope  contemplated  by this
                                    Work Letter Agreement.

                  b. Tenant  acknowledges  that the Premises are, as of the date
hereof,  subject  to a lease.  If, for any  reason  other  than a Tenant  Delay,
Landlord  cannot  deliver  possession of the Premises to Tenant by June 1, 1993,
then in that event, Landlord shall not be subject to any liability therefor, nor
shall such failure affect the validity of the Lease or the obligations of Tenant
hereunder,  but in such  case,  Tenant  shall  not be  obligated  to pay rent or
perform any other obligation of Tenant until Landlord delivers possession of the
Premises to Tenant.

                  c. It is the intent of the parties  hereto that the lease term
for the Premises shall run concurrently with and expire  simultaneously with the
lease for the Adjacent Property.

         8. In the event either party  requests  that any portion of the work to
be performed by Landlord be delayed,  the party  requesting such delay shall pay
all  costs  and  any  expenses  occasioned  by  such  delay  including,  without
limitation,  any costs and  expenses  attributable  to  increases in the cost of
labor or materials.

         9.  Any and all  Tenant  Improvements  paid  for in whole or in part by
Landlord shall at once become and remain the property of Landlord.

         10. In the event of any  breach by either  party of the  provisions  of
this Work Letter, the  non-defaulting  party may elect to treat such breach as a
default under the Lease which shall entitle the  non-defaulting  party to any of
the rights and remedies provided thereunder.

                                       -5-

         IN WITNESS WHEREOF, Landlord and Tenant have respectively executed this
Work Letter Agreement as of the date and year first above written.

LANDLORD:

D. R. STEPHENS & COMPANY

By /s/ D.R. Stephens
   -------------------------------
   D. R. Stephens, General Partner

TENANT:

NETWORK COMPUTING DEVICES, INC.,
a California corporation

By /s/ Jack Bradley
   -------------------------------
       Jack Bradley
- ----------------------------------
Print name
Its: Chief Financial Officer
     -----------------------------

                                       -6-

                                    EXHIBIT B

                                  280(B) Lease
                 (including Addendum and Work Letter Agreement)

                   AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

             STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE-NET
                (Do not use this form for Multi-Tenant Property)

1.       Basic Provisions ("Basic Provisions")

         1.1 Parties:  This Lease ("Lease"),  dated for reference purposes only,
August 18, 1992 is made by and between D.R.  Stephens & Company  ("Lessor")  and
Network  Computing   Devices,   Inc.,  a  California   corporation   ("Lessee"),
(collectively the "Parties" or individually a "Party").

         1.2 Premises:  That certain real property,  including all  improvements
therein or to be provided by Lessor under the terms of this Lease,  and commonly
known by the street  address of 280(B)  North  Bernardo  Avenue,  Mountain  View
(formerly  occupied  by GTE)  located  in the  County of Santa  Clara,  State of
California,  and  generally  described  as  (describe  briefly the nature of the
property),  also known as Assessor's  Parcel No. 165-37-008  ("Premises").  (See
Paragraph 2 for further provisions.)

         1.3 Term: Approximately seven (7) years and 8 months ("Original Term").
(See Paragraph 3 and Work Letter for further provisions.)

         1.4       [paragraph intentionally deleted]

         1.5 Base Rent: $41,465.00 per month ("Base Rent"), payable on the First
(1st) day of each month. (See Paragraph 4 for further provisions.)

|X| If this box is checked, there are provisions in this Lease for the Base Rent
to be adjusted.

         1.6 Base  Rent  Paid Upon  Execution:  $41,465.00  as Base Rent for the
first full month following the Commencement Date.

         1.7 Security Deposit: $41,465.00 ("Security Deposit"). (See Paragraph 5
for further provisions.)

         1.8  Permitted  Use:  Office and  testing,  packaging  and  shipping of
computers,   monitors  and  related  devices.   (See  Paragraph  6  for  further
provisions.)

         1.9 Insuring  Party:  Lessor is the "Insuring  Party" unless  otherwise
stated herein. (See Paragraph 8 for further provisions.)

         1.10  Real  Estate   Brokers:   The  following   real  estate   brokers
(collectively,   the  "Brokers")  and  brokerage  relationships  exist  in  this
transaction and are consented to by the Parties (check applicable  boxes):  J.R.
Parish, Inc. -- Colliers International represents

                                       -1-

  Lessor exclusively ("Lessor's Broker");
 |_| both Lessor and Lessee,
      and Spallino Reid represents
 |X| Lessee exclusively ("Lessee's Broker");
 |_| both Lessee and Lessor.  (See Paragraph 15 for further provisions.)

         1.11     [paragraph intentionally deleted]

         1.12  Addenda.  Attached  hereto is an Addendum  and Work Letter all of
which constitute a part of this Lease.

2.       Premises.

         2.1 Letting.  Lessor hereby leases to Lessee,  and Lessee hereby leases
from Lessor,  the  Premises,  for the term,  at the rental,  and upon all of the
terms,  covenants  and  conditions  set forth in this  Lease.  Unless  otherwise
provided  herein,  any statement of square  footage set forth in this Lease,  or
that may have been used in calculating  rental, is an approximation which Lessor
and Lessee agree is  reasonable  and the rental based  thereon is not subject to
revision whether or not the actual square footage is more or less.

         2.2     [paragraph intentionally deleted]

         2.3     [paragraph intentionally deleted]

         2.4 Acceptance of Premises. Lessee hereby acknowledges: (a) that it has
been advised by the Brokers to satisfy  itself with respect to the  condition of
the Premises  (including  but not limited to the  electrical  and fire sprinkler
systems,  security,  environmental  aspects,  compliance with Applicable Law, as
defined in Paragraph 6.3) and the present and future suitability of the Premises
for Lessee's  intended  use, (b) that Lessee has made such  investigation  as it
deems  necessary with  reference to such matters and assumes all  responsibility
therefor as the same relate to Lessee's  occupancy  of the  Premises  and/or the
term of this Lease, and (c) that neither Lessor, nor any of Lessor's agents, has
made any oral or written  representations or warranties with respect to the said
matters other than as set forth in this Lease.

         2.5     [paragraph intentionally deleted]

3.       Term.

         3.1 Term. The Commencement  Date,  Expiration Date and Original Term of
this Lease are as specified in Paragraph 1.3, and the Work Letter.

         3.2     [paragraph intentionally deleted]

                                       -2-

         3.3     [paragraph intentionally deleted]

4.       Rent.

         4.1 Base Rent.  Lessee shall cause  Payment of Base Rent and other rent
or  charges,  as the same may be adjusted  from time to time,  to be received by
Lessor in lawful money of the United States, without offset or deduction,  on or
before the day on which it is due under the terms of this  Lease.  Base Rent and
all other rent and  charges for any period  during the term hereof  which is for
less than one (1) full  calendar  month shall be prorated  based upon the actual
number of days of the calendar  month  involved.  Payment of Base Rent and other
charges  shall be made to Lessor at its address  stated  herein or to such other
persons or at such other  addresses as Lessor may from time to time designate in
writing to Lessee.

5. Security Deposit.  Lessee shall deposit with Lessor upon execution hereof the
Security  Deposit set forth in Paragraph  1.7 as security for Lessee's  faithful
performance  of Lessee's  obligations  under this Lease.  If Lessee fails to pay
Base Rent or other rent or charges due  hereunder,  or otherwise  Defaults under
this Lease (as defined in Paragraph  13.1),  Lessor may use, apply or retain all
or any portion of said Security Deposit for the payment of any amount due Lessor
or to reimburse or compensate Lessor for any liability,  cost, expense,  loss or
damage  (including  attorneys' fees) which Lessor may suffer, or incur by reason
thereof.  If Lessor uses or applies all or any portion of said Security Deposit,
Lessee shall within ten (10) days after written request  therefor deposit moneys
with  Lessor  sufficient  to restore  said  Security  Deposit to the full amount
required by this Lease.  Lessor shall not be required to keep all or any part of
the Security  Deposit separate from its general  accounts.  Lessor shall, at the
expiration  or  earlier  termination  of the term  hereof  and after  Lessee has
vacated the  Premises,  return to Lessee (or,  at Lessor's  option,  to the last
assignee,  if any, of Lessee's  interest  herein),  that portion of the Security
Deposit  not used or applied by Lessor.  Unless  otherwise  expressly  agreed in
writing by Lessor,  no part of the Security  Deposit  shall be  considered to be
held in  trust,  to bear  interest  or other  increment  for its  use,  or to be
prepayment for any moneys to be paid by Lessee under this Lease.

6.       Use.

         6.1 Use. Lessee shall use and occupy the Premises only for the purposes
set forth in Paragraph  1.8, or any other use which is comparable  thereto,  and
for no other purpose.  Lessee shall not use or permit the use of the Premises in
a manner that creates waste or a nuisance,  or that unreasonably disturbs owners
and/or  occupants of, or causes damage to,  neighboring  premises or properties.
Lessor  hereby agrees to not  unreasonably  withhold or delay its consent to any
written request by Lessee,  Lessees assignees or subtenants,  and by prospective
assignees and  subtenants of the Lessee,  its  assignees and  subtenants,  for a
modification  of said  permitted  purpose for which the  premises may be used or
occupied,  so long as the same will not impair the  structural  integrity of the
improvements on the Premises,  the mechanical or electrical systems therein,  is
not significantly more burdensome to the Premises and the improvements  thereon,
and is otherwise  permissible  pursuant to this Paragraph 6. If Lessor elects to
withhold such consent, Lessor shall within five (5) business days give a written
notification  of same,  which notice shall  include an  explanation  of Lessor's
reasonable objections to the change in use.

                                       -3-

         6.2 Hazardous Substances.

                       (a) Reportable Uses Require Consent.  The term "Hazardous
Substance"  as used in this Lease shall mean any product,  substance,  chemical,
material  or  waste  whose  presence,   nature,  quantity  and/or  intensity  of
existence, use, manufacture, disposal, transportation,  spill release or effect,
either by itself or in combination  with other  materials  expected to be on the
Premises,  is either: (i) potentially  injurious to the public health, safety or
welfare,  the  environment  or the Premises,  (ii) regulated or monitored by any
governmental  authority,  or  (iii) a  basis  for  liability  of  Lessor  to any
governmental  agency or third party under any  applicable  statute or common law
theory.  Hazardous Substance shall include, but not be limited to, hydrocarbons,
petroleum,  gasoline,  crude  oil  or any  products,  by-products  or  fractions
thereof.  Lessee  shall not engage in any  activity in, on or about the Premises
which  constitutes  a  Reportable  Use (as  hereinafter  defined)  of  Hazardous
Substances without the express prior written consent of Lessor and compliance in
a timely manner (at Lessee's sole cost and expense) with all  Applicable Law (as
defined in Paragraph 6.3).  "Reportable  Use" shall mean (i) the installation or
use of any above or below ground storage tank, (ii) the generation,  possession,
storage, use, transportation, or disposal of a Hazardous Substance that requires
a permit  from,  or with  respect  to which a report,  notice,  registration  or
business  plan  is  required  to be  filed  with,  any  governmental  authority.
Reportable Use shall also include  Lessee's being  responsible  for the presence
in, on or about the Premises of a Hazardous  Substance with respect to which any
Applicable Law requires that a notice be given to persons  entering or occupying
the Premises or neighboring  properties.  Notwithstanding the foregoing,  Lessee
may without  Lessor's prior consent,  but in compliance with all Applicable Law,
use any  ordinary  and  customary  materials  reasonably  required to be used by
Lessee in the normal course of Lessee's business  permitted on the Premises,  so
long as such use is not a  Reportable  Use and does not expose the  Premises  or
neighboring  properties to any  meaningful  risk of  contamination  or damage or
expose Lessor to any liability  therefor.  In addition,  Lessor may (but without
any  obligation  to do so)  condition  its consent to the use or presence of any
Hazardous  Substance,  activity or storage tank by Lessee upon  Lessee's  giving
Lessor such additional assurances as Lessor, in its reasonable discretion, deems
necessary  to protect  itself,  the public,  the  Premises  and the  environment
against damage,  contamination or injury and/or liability therefrom or therefor,
including,  but not limited to, the installation (and removal on or before Lease
expiration  or  earlier   termination)   of  reasonably   necessary   protective
modifications to the Premises (such as concrete  encasements) and/or the deposit
of an additional Security Deposit under Paragraph 5 hereof.

                       (b)  Duty to  Inform  Lessor.  If  Lessee  knows,  or has
reasonable  cause  to  believe,  that  a  Hazardous  Substance,  or a  condition
involving or resulting  from same, has come to be located in, on, under or about
the  Premises,  other than as  previously  consented to by Lessor,  Lessee shall
immediately  give  written  notice of such fact to  Lessor.  Lessee  shall  also
immediately give Lessor a copy of any statement,  report, notice,  registration,
application,  permit,  business plan, license, claim, action or proceeding given
to, or received from, any  governmental  authority or private party,  or persons
entering or occupying the Premises,  concerning  the presence,  spill,  release,
discharge of, or exposure to, any Hazardous  Substance or contamination  in, on,
or about the Premises, including but not limited to all such documents as may be
involved in any Reportable Uses involving the Premises.

                                       -4-

                       (c)  Indemnification.  Lessee shall  indemnify,  protect,
defend and hold Lessor,  its agents,  employees,  lenders and ground Lessor,  if
any,  and the  Premises,  harmless  from and  against  any and all loss of rents
and/or  damages,   liabilities,   judgments,  costs,  claims,  liens,  expenses,
penalties,  permits  and  attorney's  and  consultant's  fees  arising out of or
involving any  Hazardous  Substance or storage tank brought onto the Premises by
or for  Lessee  or under  Lessee's  control.  Lessee's  obligations  under  this
Paragraph  6  shall  include,  but  not  be  limited  to,  the  effects  of  any
contamination or injury to person, property or the environment created by or for
Lessee, and the cost of investigation (including consultants and attorney's fees
and testing), removal, remediation,  restoration and/or abatement thereof, or of
any contamination therein involved,  and shall survive the expiration or earlier
termination of this Lease.  No termination,  cancellation  or release  agreement
entered  into by Lessor and Lessee  shall  release  Lessee from its  obligations
under this Lease with respect to Hazardous  Substances or storage tanks,  unless
specifically so agreed by Lessor in writing at the time of such agreement.

         6.3  Lessee's  Compliance  with Law.  Except as  otherwise  provided in
Section 2 of the  Addendum,  Lessee,  shall,  at Lessee's sole cost and expense,
fully,  diligently and in a timely  manner,  comply with all  "Applicable  Law,"
which  term is used in this  Lease to  include  all  laws,  rules,  regulations,
ordinances, directives, covenants, easements and restrictions of record permits,
the requirements of any applicable fire insurance  underwriter or rating bureau,
and the recommendations of Lessor's engineers and/or consultants relating in any
manner to Lessee's  occupancy or use of the Premises  (including but not limited
to matters pertaining to (i) industrial hygiene,  (ii) environmental  conditions
on, in, under or about the Premises,  including soil and groundwater  conditions
created by or for Lessee and (iii) the use, generation, manufacture, production,
installation, maintenance, removal, transportation, storage, spill or release of
any Hazardous  Substance or storage tank),  now in effect or which may hereafter
come into  effect,  and  whether or not  reflecting  a change in policy from any
previously existing policy.  Lessee shall, within five (5) days after receipt of
Lessor's  written  request,  provide  Lessor  with copies of all  documents  and
information,  including, but not limited to, permits, registrations,  manifests,
applications, reports and certificates,  evidencing Lessee's compliance with any
Applicable Law specified by Lessor,  and shall immediately upon receipt,  notify
Lessor in writing (with copies of any documents  involved) of any  threatened or
actual claim, notice,  citation,  warning,  complaint or report pertaining to or
involving failure by Lessee or the Premises to comply with any Applicable Law.

         6.4 Inspection;  Compliance.  Lessor and Lessor's Lender(s) (as defined
in paragraph  8.3(a)) shall have the right to enter the Premises at any time, in
the case of an emergency,  and otherwise at reasonable  times upon prior notice,
whether  written or oral,  for the purpose of  inspecting  the  condition of the
Premises  and for  verifying  compliance  by  Lessee  with  this  Lease  and all
Applicable  Laws (as defined in Paragraph  6.3),  and to employ  experts  and/or
consultants  in  connection  therewith  and/or to advise  Lessor with respect to
Lessee's  activities  including but not limited to the installation,  operation,
use, monitoring,  maintenance,  or removal of any Hazardous Substance or storage
tank on or from the  Premises.  The costs and  expenses of any such  inspections
shall be paid by the party requesting  same,  unless a Default or Breach of this
Lease,  violation of Applicable  Law, or a  contamination,  caused or materially
contributed  to by  Lessee  is  found to exist or be  imminent,  or  unless  the
inspection is requested or ordered by a governmental  authority as the result of
any such  existing or imminent  violation  or  contamination.  In any such case,
Lessee shall upon request  reimburse Lessor or Lessor's Lender,  as the case may
be, for the costs and expenses of such inspections.

                                       -5-

7.       Maintenance;   Repairs:  Utility  Installations:   Trade  Fixtures  and
         Alterations.

         7.1 Lessee's Obligations.

                       (a) Subject to the  provisions of Sections 2 and 3 in the
Addendum, 7.2 (Lessor's obligations to repair), 9 (damage and destruction),  and
14  (condemnation),  Lessee shall,  at Lessee's sole cost and expense and at all
times,  keep the Premises and every part  thereof in good order,  condition  and
repair,  structural  and  non-structural  (whether  or not such  portion  of the
Premises requiring  repairs,  or the means of repairing the same, are reasonably
of readily  accessible  to Lessee,  and whether or not the need for such repairs
occurs as a result of Lessee's  use,  any prior use,  the elements or the age of
such portion of the Premises), including, without limiting the generality of the
foregoing all equipment or  facilities  serving the Premises,  such as plumbing,
heating,  air  conditioning,   ventilating,   electrical,  lighting  facilities,
boilers,  fired or unfired pressure vessels, fire sprinkler and/or standpipe and
hose or other automatic fire extinguishing  system,  including fire alarm and/or
smoke detection systems and equipment, fire hydrants,  fixtures, walls (interior
and exterior),  foundations,  ceilings,  roofs,  floors,  windows,  doors, plate
glass, skylights, landscaping, driveways, parking lots, fences, retaining walls,
signs,  sidewalks  and  parkways  located  in, on,  about,  or  adjacent  to the
Premises. Lessee shall not cause or permit any Hazardous Substance to be spilled
or released in, on, under or about the Premises  (including through the plumbing
or sanitary  sewer system) and shall  promptly,  at Lessee's  expense,  take all
investigatory  and/or remedial  action  reasonably  recommended,  whether or not
formally,  ordered or required, for the cleanup of any contamination of, and for
the  maintenance,  security  and/or  monitoring  of the  Premises,  the elements
surrounding  same,  or  neighboring  properties,  that was caused or  materially
contributed to by Lessee, or pertaining to or involving any Hazardous  Substance
and/or  storage  tank  brought  onto the  Premises by or for Lessee or under its
control.  Lessee,  in keeping the Premises in good order,  condition and repair,
shall  exercise and perform good  maintenance  practices.  Lessee's  obligations
shall include restorations,  replacements or renewals when necessary to keep the
Premises and all improvements thereon or a part thereof in good order, condition
and state of repair.  If Lessee  occupies  the  Premises  for seven (7) years or
more,  Lessor may require Lessee to repaint the exterior of the buildings on the
Premises as reasonably  required,  but not more frequently than once every seven
(7) years.

                       (b) Lessee  shall,  at  Lessee's  sole cost and  expense,
procure and maintain  contracts,  with copies to Lessor,  in customary  form and
substance  for,  and with  contractors  specializing  and  experienced  in,  the
inspection, maintenance and service of the following equipment and improvements,
if any, located on the Premises:  (i) heating,  air conditioning and ventilation
equipment,  (ii) boiler, fired or unfired pressure vessels, (iii) fire sprinkler
and/or  standpipe  and  hose or  other  automatic  fire  extinguishing  systems,
including fire alarm and/or smoke  detection,  (iv)  landscaping  and irrigation
systems,  (v) roof covering and drain  maintenance  and (vi) asphalt and parking
lot maintenance.

         7.2 Lessor's  Obligations.  Except for the warranties and agreements of
Lessor  contained  in Sections 2 and 3 of the  Addendum,  Section 9 (relating to
destruction of the Premises) and 14 (relating to  condemnation of the Premises),
it is  intended by the Parties  hereto  that Lessor have no  obligation,  in any
manner whatsoever, to repair and maintain the Premises, the improvements located
thereon, or the equipment therein, whether structural or non structural,  all of
which  obligations are intended to be that of the Lessee and under Paragraph 7.1
hereof. It is the intention of the Parties that the terms of this

                                       -6-

Lease govern the respective  obligations  of the Parties as to  maintenance  and
repair of the  Premises.  Lessee and Lessor  expressly  waive the benefit of any
statute now or  hereafter  in effect to the extent it is  inconsistent  with the
terms of this Lease with respect to, or which  affords  Lessee the right to make
repairs  at the  expense of Lessor or to  terminate  this Lease by reason of any
needed repairs.

         7.3 Utility Installations; Trade Fixtures: Alterations.

                       (a)  Definitions;  Consent  Required.  The term  "Utility
Installations"  is  used  in  this  lease  to  refer  to all  carpeting,  window
coverings,  air lines, power panels,  electrical  distribution,  security,  fire
protection  systems,   communication   systems,   lighting  fixtures,   heating,
ventilating,  and air conditioning  equipment,  plumbing,  and fencing in, on or
about the Premises.  The term "Trade Fixtures" shall mean Lessee's machinery and
equipment that can be removed without doing material damage to the premises. The
term  "Alterations"  shall  mean any  modification  of the  improvements  on the
Premises  from that which are  provided by Lessor under the terms of this Lease,
other than  Utility  Installations  or Trade  Fixtures,  whether by  addition or
deletion. "Lessee Owned Alterations and/or Utility Installations" are defined as
Alterations  and/or Utility  Installations made by Lessee that are not yet owned
by Lessor as defined in Paragraph 7.4(a).  Lessee shall not make any Alterations
or Utility  installations  in, on, under or about the Premises  without Lessor's
prior  written  consent  which  shall not be  unreasonably  withheld or delayed.
Lessee may, however,  make non-structural  Utility Installations to the interior
of the Premises  (excluding the roof),  as long as they are not visible from the
outside,  do not involve  puncturing,  relocating  or  removing  the roof or any
existing walls, and the cumulative cost thereof during each calendar year of the
Lease does not exceed $25,000.

                       (b) Consent.  Any  Alterations  or Utility  Installations
that  Lessee  shall  desire to make and which  require the consent of the Lessor
shall be presented to Lessor in written form with proposed  detailed plans.  All
consents  given  by  Lessor,  whether  by  virtue  of  Paragraph  7.3(a)  or  by
subsequent,  specific  consent,  shall be deemed  conditioned upon: (i) Lessee's
acquiring all applicable permits required by governmental authorities,  (ii) the
furnishing  of  copies  of such  permits  together  with a copy of the plans and
specifications  for the  Alteration or Utility  Installation  to Lessor prior to
commencement  of the work thereon,  and (iii) the  compliance by Lessee with all
conditions of said permits in a prompt and expeditious  manner.  Any Alterations
or utility  Installations  by Lessee during the term of this Lease shall be done
in a good and workmanlike  manner,  with good and sufficient  materials,  and in
compliance  with all  Applicable  Law.  Lessee shall  promptly  upon  completion
thereof furnish Lessor with as-built plans and specifications therefor.

                       (c)  Indemnification.  Lessee  shall pay,  when due,  all
claims for labor or materials  furnished or alleged to have been furnished to or
for Lessee at or for use on the Premises,  which claims are or may be secured by
any  mechanics'  or  materialmen's  lien  against the  Premises or any  interest
therein.  Lessee  shall give Lessor not less than ten (10) days' notice prior to
the  commencement  of any work,  in, on or about the Premises,  and Lessor shall
have the right to post  notices of  non-responsibility  in or on the Premises as
provided by law. If Lessee  shall,  in good faith,  contest the  validity of any
such lien,  claim or demand,  then Lessee shall,  at its sole expense defend and
protect  itself,  Lessor  and the  Premises  against  the same and shall pay and
satisfy  any such  adverse  judgment  that may be  rendered  thereon  before the
enforcement thereof against the Lessor or the Premises. If Lessor shall require,
Lessee shall furnish

                                       -7-

to Lessor a surety  bond  satisfactory  to Lessor in an amount  equal to one and
one-half times the amount of such  contested lien claim or demand,  indemnifying
Lessor against liability for the same, as required by law for the holding of the
Premises  free from the effect of such lien or claim.  In  addition,  Lessor may
require Lessee to pay Lessor's attorneys fees and costs in participating in such
action if Lessor shall decide it is to its best interest to do so.

         7.4 Ownership; Removal: Surrender; and Restoration.

                       (a) Ownership. Subject to Lessor's right to require their
removal or become the owner thereof as  hereinafter  provided in this  Paragraph
7.4, all  Alterations and Utility  Installations  made to the Premises by Lessee
shall be the  property  of and owned by  Lessee,  but  considered  a part of the
Premises. Unless otherwise instructed per subparagraph 7.4(b) hereof, all Lessee
Owned Alterations and Utility  Installations shall, at the expiration or earlier
termination of this Lease,  become the property of Lessor and remain upon and be
surrendered by Lessee with the premises.

                       (b) Removal.  Unless  otherwise  agreed in writing Lessor
may  require  that any or all Lessee  Alterations  or Utility  Installations  be
removed by the expiration or earlier termination of this Lease,  notwithstanding
their installation may have been consented to by Lessor.  Lessor may require the
removal  at any  time of all or any  part of any  Lessee  Owned  Alterations  or
Utility Installations made without the required consent of Lessor.

                       (c)  Surrender/Restoration.  Lessee shall  Surrender  the
Premises by the end of the last day of the Lease term or any earlier termination
date, with all of the improvements, parts and surfaces thereof clean and free of
debris and in good operating order, condition and state of repair, ordinary wear
and tear  excepted.  "Ordinary  wear and tear"  shall not  include any damage or
deterioration, that would have been prevented by good maintenance practice or by
Lessee performing all of its obligations  under this Lease.  Except as otherwise
agreed or specified in writing by Lessor,  the Premises,  as surrendered.  shall
include the Utility  Installations.  The  obligation of Lessee shall include the
repair of any damage occasioned by the  installation,  maintenance or removal of
Lessee's Trade Fixtures, furnishings,  equipment, and Alterations and/or Utility
Installations,  as well as the removal of any storage  tank  installed by or for
Lessee, and the removal,  replacement,  or remediation of any soil,  material or
ground water  contaminated by Lessee,  all as may then be required by Applicable
Law and/or good  service  practice.  Lessee's  Trade  Fixtures  shall remain the
property of Lessee and shall be removed by Lessee  subject to its  obligation to
repair and restore the Premises per this Lease.

8.       Insurance; Indemnity.

         8.1 Payment For  Insurance.  Regardless of whether the Lessor or Lessee
is the Insuring  Party,  Lessee shall pay for all insurance  required under this
Paragraph 8 except to the extent of the cost attributable to liability insurance
carried by Lessor in excess of $1,000,000  per  occurrence.  Premiums for policy
periods commencing prior to or extending beyond the Lease term shall be prorated
to correspond to the Lease term.  Payment shall be made by Lessee to Lessor with
ten (10) days following receipt of an invoice for any amount due.

                                       -8-

         8.2 Liability Insurance.

                       (a) Carried by Lessee.  Lessee  shall  obtain and keep in
force during the term of this Lease a  Commercial  General  Liability  policy of
insurance protecting Lessee and Lessor (as an additional insured) against claims
for bodily injury,  personal injury and property damage based upon, involving or
arising out of the ownership,  use, occupancy or maintenance of the Premises and
all areas  appurtenant  thereto.  Such insurance shall be on an occurrence basis
providing  single  limit  coverage  in an amount  not less than  $1,000,000  per
occurrence  with  an  "Additional   Insured-Managers  or  Lessors  of  Premises"
Endorsement  and contain the  "Amendment of the Pollution  Exclusion" for damage
caused by heat, smoke or fumes from a hostile fire. The policy shall not contain
any intra-insured  exclusions as between insured persons or  organizations,  but
shall  include  coverage for  liability  assumed under this Lease as an "insured
contract"  for the  performance  of Lessee's  indemnity  obligations  under this
Lease.  The  limits of said  insurance  required  by this Lease or as carried by
Lessee shall not,  however,  limit the liability of Lessee nor relieve Lessee of
any obligation hereunder. All insurance to be carried by Lessee shall be primary
to and not  contributory  with any similar  insurance  carried by Lessor,  whose
insurance shall be considered excess insurance only.

                       (b)  Carried  by  Lessor.  In  the  event  Lessor  is the
Insuring  Party,  Lessor shall also maintain  liability  insurance  described in
Paragraph  8.2(a),  above,  in  addition  to, and not in lieu of, the  insurance
required to be maintained by Lessee.  Lessee shall not be named as an additional
insured therein.

         8.3 Property Insurance-Building, Improvements and Rental Value.

                       (a) Building and  Improvements.  The Insuring Party shall
obtain and keep in force  during the term of this Lease a policy or  policies in
the name of  Lessor,  with loss  payable  to Lessor  and to the  holders  of any
mortgages,  deeds of trust  or  ground  leases  on the  Premises  ("Lender(s)"),
insuring loss or damage to the Premises.  The amount of such insurance  shall be
equal to the full replacement cost of the Premises, as the same shall exist from
time to time, or the amount  required by Lenders,  but in no event more than the
commercially  reasonable and available  insurable value thereof if, by reason of
the unique  nature or age of the  improvements  involved,  such latter amount is
less than the full replacement costs. If Lessor is the Insuring Party,  however,
Lessee Owned  Alterations and Utility  Installations  shall be insured by Lessee
under  Paragraph  8.4 rather than by Lessor.  If the coverage is  available  and
commercially appropriate, such policy or policies shall insure against all risks
of direct physical loss or damage (except the perils of flood and /or earthquake
unless  required  by a Lender),  including  coverage  for any  additional  costs
resulting  from  debris  removal  and  reasonable  amounts of  coverage  for the
enforcement of any ordinance or law regulating the reconstruction or replacement
of any undamaged  sections of the Premises  required to be demolished or removed
by reason of the enforcement of any building, zoning, safety or land use laws as
the  result of a covered  cause of loss.  Said  policy or  policies  shall  also
contain an agreed valuation provision in lieu of any coinsurance clause,  waiver
of subrogation, and inflation guard protection causing an increase in the annual
property  insurance  coverage  amount by a factor of not less than the  adjusted
U.S.  Department of Labor Consumer  Price Index for All Urban  Consumers for the
city nearest to where the Premises are located. If such insurance coverage has a

                                       -9-

deductible clause, the deductible amount shall not exceed $1,000 per occurrence,
and Lessee shall be liable for such deductible amount in the event of an Insured
Loss, as defined in Paragraph 9.1(c).

                       (b) Rental Value.  The Insuring Party shall, in addition,
obtain and keep in force  during the term of this Lease a policy or  policies in
the name of Lessor, with loss payable to Lessor and Lender(s), insuring the loss
of the full  rental and other  charges  payable  by Lessee to Lessor  under this
Lease for one (1) year (including all real estate taxes,  insurance  costs,  and
any scheduled rental increases).  Said insurance shall provide that in the event
the Lease is terminated  by reason of an insured  loss,  the period of indemnity
for such coverage shall be extended beyond the date of the completion of repairs
or  replacement  of the Premises,  to provide for one full year's loss of rental
revenues from the date of any such loss.  Said insurance shall contain an agreed
valuation  provision  in lieu of any  coinsurance  clause,  and  the  amount  of
coverage  shall be adjusted  annually to reflect the  projected  rental  income,
property taxes,  insurance premium costs and other expenses,  if any,  otherwise
payable by Lessee, for the next twelve (12) month period. Lessee shall be liable
for any deductible amount in the event of such loss.

                       (c)  Adjacent  Premises.  If the  Premises  are part of a
larger  building,  or if the Premises are part of a group of buildings  owned by
Lessor which are adjacent to the Premises, the Lessee shall pay for any increase
in the premiums for the property insurance of such building or buildings if said
increase  is  caused  by  Lessee's  acts,  omissions,  use or  occupancy  of the
Premises.

                       (d) Tenant's Improvements.  If the Lessor is the Insuring
Party,  the Lessor shall not be required to insure Lessee Owned  Alterations and
Utility  Installations  unless the item in question  has become the  property of
Lessor  under the terms of this  Lease.  If Lessee is the  Insuring  Party,  the
policy  carried by Lessee under this  Paragraph  8.3 shall  insure  Lessee Owned
Alterations and Utility Installations.

         8.4  Lessee's  Property  Insurance.  Subject  to  the  requirements  of
Paragraph  8.5,  Lessee at its cost  shall  either  by  separate  policy  or, at
Lessor's option, by endorsement to a policy already carried,  maintain insurance
coverage on all of Lessee's  personal  property,  Lessee Owned  Alterations  and
Utility  Installations in, on, or about the Premises similar in coverage to that
carried by the Insuring Party under  Paragraph 8.3. Such insurance shall be full
replacement  cost  coverage  with a deductible  of not to exceed  $5,000.00  per
occurrence. The proceeds from any such insurance shall be used by Lessee for the
replacement of personal  property or the restoration of Lessee Owned Alterations
and Utility  Installations.  Lessee shall be the Insuring  Party with respect to
the  insurance  required by this  Paragraph  8.4 and shall  provide  Lessor with
written evidence that such insurance is in force.

         8.5  Insurance  Policies.  Insurance  required  hereunder  shall  be in
companies duly licensed to transact business in the state where the Premises are
located, and maintaining during the policy term "General  Policyholders  Rating"
of at least B-, V, or such other rating as may be required by a Lender  having a
lien on the  Premises,  as set  forth  in the  most  current  issue  of  "Best's
Insurance  Guide." Lessee shall not do or permit to be done anything which shall
invalidate the insurance  policies referred to in this Paragraph 8. If Lessee is
the Insuring  Party,  Lessee  shall cause to be  delivered  to Lessor  certified
copies of policies of such  insurance or  certificates  evidencing the existence
and  amounts of such  insurance  with the insured  and loss  payable  clauses as
required  by this  Lease.  No such  policy  shall be  cancelable  or  subject to
modification  except  after  thirty  (30) days prior  written  notice to Lessor.
Lessee shall at least

                                      -10-

thirty (30) days prior to the expiration of such  policies,  furnish Lessor with
evidence of renewals or  "insurance  binders"  evidencing  renewal  thereof,  or
Lessor may order such  insurance  and charge the cost  thereof to Lessee,  which
amount shall be payable by Lessee to Lessor upon demand.  If the Insuring  Party
shall fail to procure and maintain the  insurance  required to be carried by the
Insuring  Party under this  Paragraph  8, the other Party may,  but shall not be
required to, procure and maintain the same, but at Lessee's expense.

         8.6  Waiver of  Subrogation.  Without  affecting  any  other  rights or
remedies,  Lessee and Lessor  ("Waiving  Party") each hereby release and relieve
the other,  and waive their entire right to recover damages (whether in contract
or in tort)  against  the other,  for loss of or damage to the  Waiving  Party's
property arising out of or incident to the perils required to be insured against
under  Paragraph  8. The  effect of such  releases  and  waivers of the right to
recover  damages  shall not be  limited by the  amount of  insurance  carried or
required, or by an deductibles applicable thereto.

         8.7 Indemnity. Except for Lessor's gross negligence, willful misconduct
and/or breach of express  warranties  or  obligations,  Lessee shall  indemnify,
protect, defend and hold harmless the Premises,  Lessor and its agents, Lessor's
master or ground  Lessor,  partners  and  Lenders,  from and against any and all
claims,  loss of rents  and/or  damages,  costs,  liens,  judgments,  penalties,
permits,  attorney's and consultant's fees,  expenses and/or liabilities arising
out of, involving,  or in dealing with, the occupancy of the Premises by Lessee,
the conduct of Lessee's  business,  any act, omission or neglect of Lessee,  its
agents,  contractors,  employees or invites, and out of any Default or Breach by
Lessee in the  performance in a timely manner of any obligation on Lessee's part
to be  performed  under this Lease.  The  foregoing  shall  include,  but not be
limited  to, the  defense  or  pursuit of any claim or any action or  proceeding
involved therein, and whether or not (in the case of claims made against Lessor)
litigated  and/or reduced to judgment,  and whether well founded or not. In case
any  action or  proceeding  be  brought  against  Lessor by reason of any of the
foregoing  matters,  Lessee upon notice  from  Lessor  shall  defend the same at
Lessee's expense by counsel  reasonably  satisfactory to Lessor and Lessor shall
cooperate with Lessee in such defense.  Lessor need not have first paid any such
claim in order to be so indemnified.

         8.8  Exemption  of Lessor from  Liability.  Except for  Lessor's  gross
negligence,   willful  misconduct,   Lessor's  breach  of  express  warranty  or
obligations,  Lessor  shall not be liable  for injury or damage to the person or
goods,  wares,  merchandise  or other  property of Lessee.  Lessee's  employees,
contractors,  invites,  customers, or any other person in or about the Premises,
whether  such  damage  or  injury is caused  by or  results  from  fire,  steam,
electricity,  gas, water or rain, or from the breakage, leakage,  obstruction or
other  defects of pipes,  fire  sprinklers,  wires,  appliances,  plumbing,  air
conditioning  or lighting  fixtures,  or from any other cause,  whether the said
injury or damage results from conditions arising upon the Premises or upon other
portions of the building of which the Premises are a part, or from other sources
or places,  and  regardless of whether the cause of such damage or injury or the
means of repairing the same is accessible or not. Lessor shall not be liable for
any  damages  arising  from any act or  neglect  of any other  tenant of Lessor.
Notwithstanding  Lessor's gross negligence or breach of this Lease, Lessor shall
under no circumstances be liable for injury to Lessee's business or for any loss
of income or profit therefrom.

9.       Damage or Destruction.

                                      -11-

         9.1 Definitions.

                       (a)  "Premises  Partial  Damage"  shall  mean  damage  or
destruction  to the  improvements  on the  Premises,  other  than  Lessee  Owned
Alterations  and  Utility  Installations,  the  repair  cost of which  damage or
destruction  is less  than  50% of the  then  Replacement  Cost of the  Premises
immediately prior to such damage or destruction, excluding from such calculation
the value of the land and Lessee Owned Alterations and Utility Installations.

                       (b)  "Premises  Total  Destruction"  shall mean damage or
destruction  to the Premises,  other than Lessee Owned  Alterations  and Utility
Installations  the repair cost of which damage or destruction is 50%, or more of
the then  Replacement Cost of the Premises  immediately  prior to such damage or
destruction,  excluding from such  calculation  the value of the land and Lessee
Owned Alterations and Utility Installations.

                       (c) "Insured  Loss" shall mean damage or  destruction  to
improvements  on the Premises,  other than Lessee Owned  Alterations and Utility
Installations,  which  was  caused by an event  required  to be  covered  by the
insurance  described in Paragraph 8.3(a)  irrespective of any deductible amounts
or coverage limits involved.

                       (d)  "Replacement  Cost" shall mean the cost to repair or
rebuild the improvements  owned by Lessor at the time of the occurrence to their
condition  existing  immediately  prior thereto,  including  demolition,  debris
removal and upgrading  required by the operation of applicable  building  codes,
ordinances or laws, and without deduction for depreciation.

                       (e)  "Hazardous   Substance  Condition"  shall  mean  the
occurrence  or  discovery  of  a  condition  involving  the  presence  of,  or a
contamination by, a Hazardous  Substance as defined in Paragraph 6.2(a), in, on,
or under the Premises.

         9.2 Partial  Damage--Insured Loss. If a Premises Partial Damage that is
an Insured Loss occurs,  then Lessor  shall,  at Lessor's  expense,  repair such
damage (but not Lessee's Trade Fixtures or Lessee Owned  Alterations and Utility
Installations)  as soon as reasonably  possible and this Lease shall continue in
full force and  effect;  provided,  however,  that  Lessee  shall,  at  Lessor's
election,  make the repair of any damage or destruction the total cost to repair
of which is $10,000 or less, and, in such event, Lessor shall make the insurance
proceeds   available  to  Lessee  on  a  reasonable   basis  for  that  purpose.
Notwithstanding the foregoing, if the required insurance was not in force or the
insurance  proceeds are not sufficient to effect such repair, the Insuring Party
shall promptly  contribute the shortage in proceeds (except as to the deductible
which is Lessee's responsibility) as and when required to complete said repairs.
In the event,  however,  the shortage in proceeds  was due to the fact that,  by
reason of the unique nature of the improvements, full replacement cost insurance
coverage was not  commercially  reasonable and  available,  Lessor shall have no
obligation to pay for the shortage in insurance proceeds or to fully restore the
unique aspects of the Premises  unless Lessee  provides Lessor with the funds to
cover  same,  or  adequate  assurance  thereof,  within ten (10) days  following
receipt of written  notice of such  shortage  and  request  therefor.  If Lessor
receives  said funds or  adequate  assurance  thereof  within  said ten (10) day
period, the party responsible for making the repairs shall complete them as soon
as reasonably possible

                                      -12-

and this Lease shall remain in full force and effect. If Lessor does not receive
such funds or assurance  within said period,  Lessor may  nevertheless  elect by
written  notice  to  Lessee  within  ten  (10)  days  thereafter  to  make  such
restoration  and repair as is  commercially  reasonable  with Lessor  paying any
shortage in  proceeds,  in which case this Lease shall  remain in full force and
effect.  If in such  case  Lessor  does not so  elect,  then  this  Lease  shall
terminate sixty (60) days following the occurrence of the damage or destruction.
Unless  otherwise   agreed,   Lessee  shall  in  no  event  have  any  right  to
reimbursement from Lessor for any funds contributed by Lessee to repair any such
damage or destruction.  Premises Partial Damage due to flood or earthquake shall
be subject to Paragraph  9.3 rather than  Paragraph  9.2,  notwithstanding  that
there may be some insurance coverage, but the net proceeds of any such insurance
shall be made available for the repairs if made by either Party.

         9.3 Partial  Damage--Uninsured  Loss. If a Premises Partial Damage that
is not an Insured  Loss occurs,  unless  caused by a negligent or willful act of
Lessee (in which event  Lessee  shall make the  repairs at Lessee's  expense and
this Lease  shall  continue  in full force and  effect,  but subject to Lessor's
rights under Paragraph 13), Lessor may at Lessor's  option,  either:  (i) repair
such damage as soon as reasonably  possible at Lessor's expense,  in which event
this Lease shall continue in full force and effect,  or (ii) give written notice
to Lessee  within  thirty (30) days after  receipt by Lessor of knowledge of the
occurrence of such damage of Lessor's  desire to terminate  this Lease as of the
date sixty (60) days  following  the giving of such notice.  In the event Lessor
elects to give such notice of Lessor's intention to terminate this Lease, Lessee
shall have the right within twenty (20) days after the receipt of such notice to
give written  notice to Lessor of Lessee's  commitment  to pay for the repair of
such damage totally at Lessee's expense and without  reimbursement  from Lessor.
Lessee shall provide  Lessor with the required funds or  satisfactory  assurance
thereof  within thirty (30) days  following  Lessee's said  commitment.  In such
event this Lease  shall  continue  in full force and  effect,  and Lessor  shall
proceed to make such  repairs as soon as  reasonably  possible  and the required
funds are  available.  If Lessee does not give such notice and provide the funds
or assurance thereof within the times specified above this Lease shall terminate
as of the date specified in Lessor's notice of termination.

         9.4 Total Destruction. Notwithstanding any other provision hereof, if a
Premises Total  Destruction  occurs  (including any destruction  required by any
authorized public  authority),  this Lease shall be deemed to have terminated as
of the date of such  Premises  Total  Destruction,  whether or not the damage or
destruction  is an Insured  Loss or was caused by a negligent  or willful act of
Lessee.  In the event,  however,  that the damage or  destruction  was caused by
Lessee,  Lessor  shall have the right to recover  Lessor's  damages  from Lessee
except as released and waived in Paragraph 8.6.

         9.5  Damage  Near End of Term.  If at any time  during the last six (6)
months of the term of this  Lease  there is damage  for which the cost to repair
exceeds one (1) month's Base Rent,  whether or not an Insured Loss,  Lessor may,
at Lessor's option, terminate this Lease effective sixty (60) days following the
date of occurrence of such damage by giving written notice to Lessee of Lessor's
election to do so within  thirty (30) days after the date of  occurrence of such
damage.  Provided,  however, if Lessee at that time has an exercisable option to
extend this Lease or to purchase the  Premises,  then Lessee may  preserve  this
Lease by, within twenty (20) days  following  the  occurrence of the damage,  or
before the  expiration  of the time  provided in such  option for its  exercise,
whichever is earlier  ("Exercise  Period"),  (i) exercising such option and (ii)
providing Lessor with any shortage in insurance proceeds (or

                                      -13-

adequate assurance thereof) needed to make the repairs. If Lessee duly exercises
such  option  during said  Exercise  Period and  provides  Lessor with funds (or
adequate assurance thereof) to cover any shortage in insurance proceeds,  Lessor
shall, at Lessor's expense repair such damage as soon as reasonably possible and
this Lease shall continue in full force and effect.  If Lessee fails to exercise
such option and provide such funds or  assurance  during said  Exercise  Period,
then Lessor may at Lessor's option  terminate this Lease as of the expiration of
said sixty (60) day period  following  the  occurrence  of such damage by giving
written  notice to Lessee of  Lessor's  election  to do so within  ten (10) days
after  the  expiration  of the  Exercise  Period,  notwithstanding  any  term or
provision in the grant of option to the contrary.

         9.6 Abatement of Rent; Lessee's Remedies.

                       (a) In the event of damage  described  in  Paragraph  9.2
(Partial  Damage--Insured),  whether or not Lessor or Lessee repairs or restores
the Premises,  the Base Rent, Real Property Taxes, insurance premiums, and other
charges,  if any,  payable by Lessee  hereunder for the period during which such
damage,  its repair or the  restoration  continues (not to exceed the period for
which  rental value  insurance is required  under  Paragraph  8.3(b)),  shall be
abated in  proportion  to the degree to which  Lessee's  use of the  Premises is
impaired.  Except for  abatement of Base Rent,  Real Property  Taxes,  insurance
premiums,  and other  charges,  if any, as aforesaid,  all other  obligations of
Lessee  hereunder shall be performed by Lessee to the extent it is not prevented
by such  damage,  and Lessee shall have no claim  against  Lessor for any damage
suffered by reason of any such repair or restoration.

                       (b) If Lessor shall be obligated to repair or restore the
Premises under the  provisions of this Paragraph 9 and shall not commence,  in a
substantial and meaningful way, the repair or restoration of the Premises within
ninety days (90) days after such  obligation  shall  accrue,  Lessee may, at any
time prior to the commencement of such repair or restoration give written notice
to Lessor and to any  Lenders of which  Lessee  has  actual  notice of  Lessee's
election  to  terminate  this  Lease on a date not less  than  sixty  (60)  days
following  the giving of such notice.  If Lessee gives such notice to Lessor and
such Lenders and such repair or restoration is not commenced  within thirty (30)
days after  receipt of such  notice,  this Lease shall  terminate as of the date
specified  in said  notice.  If  Lessor  or a Lender  commences  the  repair  or
restoration  of the  Premises  within  thirty  (30) days  after  receipt of such
notice,  this Lease shall continue in full force and effect.  "Commence" as used
in this Paragraph shall mean the beginning of the actual work on the Premises.

         9.7 Hazardous Substance Conditions.  If a Hazardous Substance Condition
occurs,  unless  Lessee is legally  responsible  therefor  (in which case Lessee
shall make the investigation and remediation  thereof required by Applicable Law
and this Lease shall continue in full force and effect,  but subject to Lessor's
rights under Paragraph 13), Lessor may at Lessor's option either (i) investigate
and  remediate  such  Hazardous  Substance  Condition,  if  required  as soon as
reasonably  possible  at  Lessor's  expense,  in which  event this  Lease  shall
continue in full force and effect,  provided Lessee's use of the Premises is not
prevented,  or (ii) if the estimated  cost to  investigate  and  remediate  such
condition  exceeds  twelve (12) times the then  monthly  Base Rent or  $100,000,
whichever is greater,  give  written  notice to Lessee  within  thirty (30) days
after  receipt  by Lessor  of  knowledge  of the  occurrence  of such  Hazardous
Substance  Condition of Lessor's  desire to terminate  this Lease as of the date
sixty (60) days following the giving of such notice.  In the event Lessor elects
to give such notice of Lessor's intention to terminate this Lease,

                                      -14-

Lessee  shall  have the right  within  ten (10) days  after the  receipt of such
notice to give written  notice to Lessor of Lessee's  commitment  to pay for the
investigation and remediation of such Hazardous  Substance  Condition totally at
Lessee's expense and without  reimbursement  from Lessor except to the extent of
an amount  equal to twelve (12) times the then  monthly  Base Rent or  $100,000,
whichever is greater.  Lessee shall  provide  Lessor with the funds  required of
Lessee or  satisfactory  assurance  thereof  within  thirty (30) days  following
Lessee's said commitment.  In such event this Lease shall continue in full force
and effect,  and Lessor shall proceed to make such investigation and remediation
as soon as reasonably  possible and the required funds are available.  If Lessee
does not give such notice and provide the required  funds or  assurance  thereof
within the times  specified  above,  this Lease shall  terminate  as of the date
specified in Lessor's notice of termination.  If a Hazardous Substance Condition
occurs for which Lessee is not legally responsible,  there shall be abatement of
Lessee's  obligations  under  this  Lease  to the same  extent  as  provided  in
Paragraph  9.6(a) for a period of not to exceed  twelve  (12)  months.  If after
12-months,  Lessee  proceeds to cure such  Hazardous  Substance  Condition,  and
provided that Lessee is not legally responsible therefor;  Lessor will reimburse
Lessee for its actual and necessary  out-of-pocket  costs  incurred to cure such
Hazardous Substance condition.

         9.8  Termination-Advance  Payments.  Upon  termination  of  this  Lease
pursuant to this Paragraph 9, an equitable  adjustment  shall be made concerning
advance  Base  Rent and any other  advance  payments  made by Lessee to  Lessor,
Lessor shall, in addition, return to Lessee so much of Lessee's Security Deposit
as has not been, or is not then required to be used by Lessor under the terms of
this Lease.

         9.9 Waive  Statutes.  Lessor  and  Lessee  agree that the terms of this
Lease shall  govern the effect of any damage to or  destruction  of the Premises
with respect to the termination of this Lease and hereby waive the provisions of
any present or future statute to the extent inconsistent herewith.

10.      Real Property Taxes.

         10.1          (a) Payment of Taxes.  Lessee shall pay the Real Property
Taxes as defined in Paragraph 10.2 applicable to the premises during the term of
this Lease.  Subject to Paragraph  10.1(b),  all such payments  shall be made at
least ten (10) days prior to the delinquency date of the applicable installment.
Lessee shall promptly furnish Lessor with satisfactory  evidence that such taxes
have been paid. If any such taxes to be paid by Lessee shall cover any period of
time prior to or after the expiration or earlier termination of the term hereof,
Lessee's  share of such  taxes  shall be  equitably  prorated  to cover only the
period of time  within the tax fiscal  year this Lease is in effect,  and Lessor
shall reimburse Lessee for any overpayment after such proration. If Lessee shall
fail to pay any Real Property Taxes required by this Lease to be paid by Lessee,
Lessor shall have the right to pay the same, and Lessee shall  reimburse  Lessor
therefor upon demand.

                       (b) Advance Payment.  In order to insure payment when due
and before  delinquency of any or all Real Property  Taxes,  Lessor reserves the
right, at Lessor's option to estimate the current Real Property Taxes applicable
to the Premises,  and to require such current  year's Real Property  Taxes to be
paid in advance to Lessor by Lessee  monthly in advance  with the payment of the
Base Rent. If Lessor elects

                                      -15-

to require payment  monthly in advance,  the monthly payment shall be that equal
monthly amount which,  over the number of months  remaining  before the month in
which the  applicable  tax  installment  would  become  delinquent  (and without
interest  thereon),  would provide a fund large enough to fully discharge before
delinquency  the  estimated  installment  of taxes to be paid.  When the  actual
amount of the applicable tax bill is known,  the amount of such monthly  advance
payment  shall be  adjusted  as  required  to provide the fund needed to pay the
applicable  taxes  before  delinquency.  If the amounts paid to Lessor by Lessee
under the  provisions  of this  Paragraph  are  insufficient  to  discharge  the
obligations  of Lessee to pay such Real  Property  Taxes as the same become due,
Lessee shall pay to Lessor upon Lessor's  demand,  such  additional  sums as are
necessary  to pay  such  obligations.  All  moneys  paid to  Lessor  under  this
Paragraph  may be  intermingled  with other  moneys of Lessor and shall not bear
interest.

         10.2  Definition  of "Real  Property  Taxes." As used herein,  the term
"Real  Property  Taxes" shall include any form of real estate tax or assessment,
general,  special,  ordinary or extraordinary;  and any license fee,  commercial
rental tax,  improvement  bond or bonds,  levy or tax (other  than  inheritance,
personal  income or estate  taxes)  imposed upon the  Premises by any  authority
having the direct or indirect power to tax, including any city, state or federal
government,  or any school,  agricultural,  sanitary,  fire street,  drainage or
other  improvement  district  thereof,  levied  against  any legal or  equitable
interest of Lessor in the Premises or in the real property of which the Premises
are a part,  Lessor's right to rent or other income  therefrom,  and/or Lessor's
business of leasing the  Premises.  The term "Real  Property  Taxes"  shall also
include any tax,  fee,  levy,  assessment  or charge,  or any increase  therein,
imposed  by reason of events  occurring  or  changes  in  applicable  law taking
effect, during the term of this Lease,  including but not limited to a change in
the ownership of the Premises or in the improvements  thereon,  the execution of
this Lease, or any modification,  amendment or transfer thereof,  and whether or
not contemplated by the Parties.

         10.3 Joint  Assessment.  If the Premises are not  separately  assessed,
Lessee's  liability shall be an equitable  proportion of the Real Property Taxes
for all of the land and  improvements  included within the tax parcel  assessed,
such  proportion  to be  determined  by Lessor  from the  respective  valuations
assigned  in the  assessor's  work  sheets or such other  information  as may be
reasonably available.  Lessor's reasonable  determination thereof, in good faith
shall be conclusive.

         10.4 Personal Property Taxes. Lessee shall pay prior to delinquency all
taxes  assessed  against  and levied  upon  Lessee  Owned  Alterations,  Utility
Installations,  Trade Fixtures, furnishings, equipment and all personal property
of Lessee  contained in the Premises or elsewhere.  When possible,  Lessee shall
cause its Trade Fixtures, furnishings, equipment and all other personal property
to be assessed and billed separately from the real property of Lessor. If any of
Lessee's said personal  property  shall be assessed with Lessor's real property,
Lessee shall pay Lessor the taxes  attributable  to Lessee  within ten (10) days
after  receipt of a written  statement  setting  forth the taxes  applicable  to
Lessee's property or, at Lessor's option, as provided in Paragraph 10.1(b).

11.  Utilities.  Lessee  shall  pay for all  water,  gas,  heat,  light,  power,
telephone,  trash  disposal and other  utilities  and  services  supplied to the
Premises,  together  with  any  taxes  thereon.  If any  such  services  are not
separately  metered to Lessee,  Lessee shall pay a reasonable  proportion  to be
determined by Lessor of all charges jointly metered with other premises.

                                      -16-

12.      Assignment and Subletting.

         12.1 Lessor's Consent Required.

                       (a) Lessee shall not  voluntarily  or by operation of law
assign,  transfer,  mortgage or otherwise  transfer or encumber:  (collectively,
"assignment") or sublet all or any part of Lessee's interest in this Lease or in
the Premises  without  Lessor's prior written consent given under and subject to
the terms of Paragraph 36.

                       (b) A change in the control of Lessee shall constitute an
assignment requiring Lessor's consent.  The transfer,  on a cumulative basis, of
twenty-five  percent  (25%)  or more  of the  voting  control  of  Lessee  shall
constitute a change in control for this purpose.

                       (c)  The  involvement  of  Lessee  or its  assets  in any
transaction,  or series of transactions  (by way of merger,  sale,  acquisition,
financing, refinancing, transfer, leveraged buy-out or otherwise) whether or not
a formal  assignment or  hypothecation  of this Lease or Lessee's assets occurs,
which  results or will  result in a  reduction  of the Net Worth of  Lessee,  as
hereinafter  defined,  by an amount equal to or greater than  fifty-one  percent
(51%) of such Net Worth of Lessee as it was represented to Lessor at the time of
the  execution  by  Lessor  of this  Lease  or at the  time of the  most  recent
assignment to which Lessor has consented,  or as it exists  immediately prior to
said transaction or transactions  constituting such reduction, at whichever time
said Net Worth of Lessee was or is greater, shall be considered an assignment of
this Lease by Lessee to which Lessor may reasonably  withhold its consent.  "Net
Worth of Lessee"  for  purposes  of this Lease  shall be the net worth of Lessee
(excluding any  guarantors)  established  under  generally  accepted  accounting
principles consistently applied.

                       (d) As assignment  or subletting of Lessee's  interest in
this Lease without  Lessor's  specific prior written  consent shall, at Lessor's
option, be a Default curable after notice per Paragraph 13.1(c), or a noncurable
Breach without the necessity of any notice and grace period. If Lessor elects to
treat such  unconsented  to assignment  or  subletting  as a noncurable  Breach,
Lessor shall have the right to either:  (i) terminate  this Lease,  or (ii) upon
thirty (30) days written notice ("Lessor's  Notice"),  increase the monthly Base
Rent to fair market  rental value or one hundred ten percent  (110%) of the Base
Rent then in effect, whichever is greater. Pending determination of the new fair
market  rental  value,  if disputed by Lessee,  Lessee  shall pay the amount set
forth  in  Lessor's  Notice,  with any  overpayment  credited  against  the next
installment(s)  of Base Rent coming  due,  and any  underpayment  for the period
retroactively  to the  effective  date of the  adjustment  being due and payable
immediately upon the determination thereof. Further, in the event of such Breach
and market value  adjustment,  (i) the purchase  price of any option to purchase
the Premises  held by Lessee shall be subject to similar  adjustment to the then
fair market value  (without the Lease being  considered  an  encumbrance  or any
deduction for depreciation or obsolescence,  and considering the Premises at its
highest and best use and in good  condition),  or one hundred ten percent (110%)
of the price previously in effect, whichever is greater, (ii) any index-oriented
rental or price adjustment formulas contained in this Lease shall be adjusted to
require that the base index be determined with reference to the index applicable
to the time of such adjustment, and (iii) any fixed rental adjustments scheduled
during the remainder of the Lease

                                      -17-

term shall be increased in the same ratio as the new market  rental bears to the
Base Rent in effect immediately prior to the market value adjustment.

                       (c) Lessee's remedy for any breach of this Paragraph 12.1
by Lessor shall be limited to compensatory damages and injunctive relief.

         12.2 Terms and Conditions Applicable to Assignment and Subletting.

                       (a)  Regardless of Lessor's  consent,  any  assignment or
subletting shall not: (i) be effective without the express written assumption by
such assignee or sublessee of the  obligations of Lessee under this Lease,  (ii)
release  Lessee  of any  obligations  hereunder,  or  (iii)  alter  the  primary
liability  of Lessee  for the  payment  of Base Rent and other  sums due  Lessor
hereunder or for the  performance  of any other  obligations  to be performed by
Lessee under this Lease.

                       (b) Lessor may accept any rent or performance of Lessee's
obligations from any person other than Lessee pending approval or disapproval of
an assignment. Neither a delay in the approval or disapproval of such assignment
nor the  acceptance  of any rent or  performance  shall  constitute  a waiver or
estoppel of Lessor's right to exercise its remedies for the Default or Breach by
Lessee of any of the terms, covenants or conditions of this Lease.

                       (c) The consent of Lessor to any assignment or subletting
shall not  constitute a consent to any  subsequent  assignment  or subletting by
Lessee or to any  subsequent  or  successive  assignment  or  subletting  by the
sublessee. However, Lessor may consent to subsequent sublettings and assignments
of the sublease or any amendments or  modifications  thereto  without  notifying
Lessee or anyone  else liable on the Lease or  sublease  and  without  obtaining
their  consent,  and such action shall not relieve  such persons from  liability
under this Lease or sublease.

                       (d) In the event of any  Default  or  Breach of  Lessee's
obligations  under this Lease,  Lessor may proceed directly against Lessee,  any
Guarantors  or any one else  responsible  for the  performance  of the  Lessee's
obligations under this Lease, including the sublessee,  without first exhausting
Lessor's  remedies  against any other person or entity  responsible  therefor to
Lessor, or any security held by Lessor or Lessee.

                       (e)  Each  request  for  consent  to  an   assignment  or
subletting shall be in writing,  accompanied by information relevant to Lessor's
determination   as  to  the  financial  and   operational   responsibility   and
appropriateness of the proposed assignee or subleases, including but not limited
to the intended use and/or required modification of the Premises.  Lessee agrees
to provide Lessor with such other or additional information and/or documentation
as may be reasonably requested by Lessor.

                       (f) Any  assignee  of, or  sublessee  under,  this  Lease
shall, by reason of accepting such assignment or entering into such sublease, be
deemed for the  benefit of Lessor,  to have  assumed  and agreed to conform  and
comply with each and every term, covenant, condition and obligation herein to be
observed or performed by Lessee during the term of said  assignment or sublease,
other than such

                                      -18-

obligations as are contrary to or inconsistent  with provisions of an assignment
or sublease to which Lessor has specifically consented in writing.

                       (g) [provision intentionally deleted]

                       (h) Lessor,  as a condition  to giving its consent to any
assignment or subletting,  may require that the amount and adjustment  structure
of the rent  payable  under  this Lease be  adjusted  to what is then the market
value and/or  adjustment  structure for property similar to the Premises as then
constituted.

         12.3  Additional  Terms and Conditions  Applicable to  Subletting.  The
following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises  and shall be deemed  included in all  subleases  under
this Lease whether or not expressly incorporated therein:

                       (a) Lessee hereby  assigns and transfers to Lessor all of
Lessee's  interest in all rentals and income arising from any sublease of all or
a portion of the Premises  heretofore or hereafter,  made by Lessee,  and Lessor
may  collect  such rent and income and apply same  toward  Lessee's  obligations
under  this  Lease;  provided,  however,  that  until a Breach  (as  defined  in
Paragraph  13.1) shall occur in the  performance of Lessee's  obligations  under
this Lease,  Lessee may,  except as otherwise  provided in this Lease,  receive,
collect and enjoy the rents accruing  under such sublease.  Lessor shall not, by
reason of this or any other assignment of such sublease to Lessor, nor by reason
of the  collection  of the  rents  from a  sublessee,  be  deemed  liable to the
sublessee  for any  failure of Lessee to perform and comply with any of Lessee's
obligations to such sublessee  under such  sublease.  Lessee hereby  irrevocably
authorizes and directs any such sublessee, upon receipt of a written notice from
Lessor stating that a Breach exists in the  performance of Lessee's  obligations
under this Lease, to pay to Lessor the rents and other charges due and to become
due under the sublease. Sublessee shall rely upon any such statement and request
from  Lessor and shall pay such rents and other  charges to Lessor  without  any
obligation   or  right  to  inquire  as  to  whether  such  Breach   exists  and
notwithstanding  any notice  from or claim from Lessee to the  contrary.  Lessee
shall have no right or claim  against  said  sublessee  or, until the Breach has
been cured  against  Lessor for any such rents and other charges so paid by said
sublessee to Lessor.

                       (b) In the event of a Breach by Lessee in the performance
of its  obligations  under this  Lease,  Lessor,  at its option and  without any
obligation  to do so, may require any  sublessee  to attorn to Lessor,  in which
event  Lessor  shall  undertake  the  obligations  of the  sublessor  under such
sublease from the time of the exercise of said option to the  expiration of such
sublease; provided, however, Lessor shall not be liable for any prepaid rents or
security deposit paid by such sublessee to such sublessor or for any other prior
Defaults or Breaches of such sublessor under such sublease.

                       (c) Any  matter or thing  requiring  the  consent  of the
sublessor under a sublease shall also require the consent of Lessor herein.

                       (d) No sublessee  shall  further  assign or sublet all or
any part of the Premises without Lessor's prior written consent.

                                      -19-

                       (e) Lessor shall  deliver a copy of any notice of Default
or  Breach  by Lessee  to the  sublessee,  who shall  have the right to cure the
Default of Lessee within the grace period, if any, specified in such notice. The
sublessee shall have a right of reimbursement and offset from and against Lessee
for any such Defaults cured by the sublessee.

13.      Default; Breach; Remedies.

         13.1 Default; Breach. A "Default" is defined as a failure by the Lessee
to observe,  comply with or perform any of the terms,  covenants,  conditions or
rules  applicable  to Lessee  under this  Lease.  A  "Breach"  is defined as the
occurrence  of any one or more of the  following  Defaults,  and,  where a grace
period for cure after notice is specified herein,  the failure by Lessee to cure
such Default prior to the  expiration  of the  applicable  grace  period,  shall
entitle Lessor to pursue the remedies set forth in Paragraph 13.2 and/or 13.3:

                       (a) The vacating of the Premises without the intention to
reoccupy same, or the abandonment of the Premises.

                       (b) Except as expressly otherwise provided in this Lease,
the  failure by Lessee to make any  payment  of Base Rent or any other  monetary
payment required to be made by Lessee hereunder  whether to Lessor or to a third
party,  as and when due, the failure by Lessee to provide Lessor with reasonable
evidence of insurance or surety bond required  under this Lease,  or the failure
of Lessee to  fulfill  any  obligation  under  this  Lease  which  endangers  or
threatens  life or property  where such failure  continues for a period of three
(3) days following written notice thereof by or on behalf of Lessor to Lessee.

                       (c) Except as expressly otherwise provided in this Lease,
the failure by Lessee to provide  Lessor with  reasonable  written  evidence (in
duly executed  original form, if applicable) of (i) compliance  with  Applicable
Law per Paragraph 6.3, (ii) the inspection,  maintenance  and service  contracts
required  under  Paragraph  7.1(b),   (iii)  the  recision  of  an  unauthorized
assignment or subletting  per Paragraph  12.1(b),  (iv) a Tenancy  Statement per
Paragraphs 16 or 37, (v) the  subordination or  non-subordination  of this Lease
per Paragraph 30, (vi) [clause  intentionally  omitted],  (vii) the execution of
any  document  requested  under  Paragraph 42  (easements),  or (viii) any other
documentation or information which Lessor may reasonably require of Lessee under
the terms of this Lease,  where any such failure  continues  for a period of ten
(10) days following written notice by or on behalf of Lessor to Lessee.

                       (d) A  Default  by  Lessee  as to the  terms,  covenants,
conditions or provisions of this Lease,  or of the rules adopted under Paragraph
40 hereof that are to be observed,  complied with or performed by Lessee,  other
than those described in subparagraphs (a), (b) or (c), above, where such Default
continues for a period of thirty (30) days after written  notice  therefor by or
on behalf of Lessor to  Lessee;  provided,  however,  that if the  nature of the
lessee's default is such that more than thirty (30) days are reasonably required
for its  cure,  then it shall  not be  deemed  to be a Breach  of this  Lease by
Lessee,  if Lessee  commences  such cure  within said thirty (30) day period and
thereafter diligently prosecutes such cure to completion.

                                      -20-

                       (e) The  occurrence of any of the following  events:  (i)
The making by Lessee of any general arrangement or assignment for the benefit of
creditors,  (ii) Lessee's becoming a "debtor" as defined in 11 U.S.C. ss. 101 or
any successor  statute thereto (unless,  in the case of a petition filed against
Lessee,  the same is dismissed  within one hundred twenty (120) days,  (iii) the
appointment of a trustee or receiver to take possession of substantially  all of
Lessee's  assets located at the Premises or of Lessee's  interest in this Lease,
where  possession  is not restored to Lessee within sixty (60) days; or (iv) the
attachment, execution or other judicial seizure of substantially all of Lessee's
assets located at the Premises or of Lessee's interest in this Lease, where such
seizure is not  discharged  within sixty (60) days;  provided,  however,  in the
event that any provision of this  subparagraph (e) is contrary to any applicable
law, such provision shall be of no force or effect,  and not affect the validity
of the remaining provisions.

                       (f) The discovery by Lessor that any financial  statement
given to Lessor by Lessee or any Guarantor of Lessee's obligations hereunder was
materially false.

                       (g)     [paragraph intentionally deleted]

         13.2  Remedies.  If Lessee  fails to perform  any  affirmative  duty or
obligation of Lessee under this Lease, within ten (10) days after written notice
to Lessee (or in case of an emergency, without notice), Lessor may at its option
(but without  obligation to do so),  perform such duty or obligation on Lessee's
behalf including but not limited to the obtaining of reasonably  required bonds,
insurance policies, or governmental  licenses,  permits or approvals.  The costs
and  expenses  of any such  performance  by Lessor  shall be due and  payable by
Lessee to Lessor upon invoice  therefor.  If any check given to Lessor by Lessee
shall not be honored by the bank upon which it is drawn,  Lessor, at its option,
may require all future payments to be made under this Lease by Lessee to be made
only by cashier's  check.  In the event of a Breach of this Lease by Lessee,  as
defined in Paragraph 13.1, with or without further notice or demand, and without
limiting  Lessor in the exercise of any right or remedy which Lessor may have by
reason of such Breach, Lessor may:

                       (a)  Terminate   Lessee's  right  to  possession  of  the
Premises by any lawful means, in which case this Lease and the term hereof shall
terminate and Lessee shall immediately  surrender  possession of the Premises to
Lessor.  In such event Lessor shall be entitled to recover from Lessee:  (i) the
worth at the time of the award of the unpaid  rent which had been  earned at the
time of termination;  (ii) 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 that the Lessee  proves could have
been reasonably  avoided;  (iii) the worth at the time of award of the amount by
which  the  unpaid  rent for the  balance  of the term  after  the time or award
exceeds  the  amount  of such  rental  loss  that  the  Lessee  proves  could be
reasonably avoided; and (iv) any other amount necessary to compensate Lessor for
all the  detriment  proximately  caused by the  Lessee's  failure to perform its
obligations  under this Lease or which in the ordinary course of things would be
likely to result therefrom,  including but not limited to the cost of recovering
possession  of  the  Premises,   expenses  of  reletting,   including  necessary
renovation and alteration of the Premises,  reasonable attorneys' fees, and that
portion of the leasing  commission  paid by Lessor  applicable  to the unexpired
term of this Lease.  The worth at the time of award of the amount referred to in
provision  (iii) of the prior  sentence  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

                                      -21-

one  percent  (1%).  Efforts by Lessor to  mitigate  damages  caused by Lessee's
Default  or Breach of this  Lease  shall not  waive  Lessor's  right to  recover
damages under this Paragraph.  If termination of this Lease is obtained  through
the  provisional  remedy of unlawful  detainer,  Lessor  shall have the right to
recover in such  proceeding  the  unpaid  rent and  damages  as are  recoverable
therein,  or Lessor may  reserve  therein  the right to recover  all or any part
thereof in a separate suit for such rent and/or  damages.  If a notice and grace
period  required  under  subparagraphs  13.1(b),  (c) or (d) was not  previously
given,  a notice to pay rent or quit, or to perform or quit, as the case may be,
given to Lessee  under any  statute  authorizing  the  forfeiture  of leases for
unlawful  detainer shall also constitute the applicable  notice for grace period
purposes  required  by  subparagraphs  13.1(b),  (c) or (d).  In such case,  the
applicable grace period under  subparagraphs  13.1(b),  (c) or (d) and under the
unlawful  detainer statute shall run  concurrently  after the one such statutory
notice,  and the failure of Lessee to cure the Default within the greater of the
two such grace periods shall  constitute both an unlawful  detainer and a Breach
of this Lease entitling Lessor to the remedies provided for in this Lease and/or
by said statute.

                       (b) Continue the Lease and Lessee's  right to  possession
in effect (in  California  under  California  Civil Code Section  1951.4)  after
Lessee's Breach and abandonment and recover the rent as it becomes due, provided
Lessee  has  the  right  to  sublet  or  assign,   subject  only  to  reasonable
limitations.  See  paragraphs 12 and 36 for the  limitations  on assignment  and
subletting  which  limitations  Lessee and Lessor agree are reasonable.  Acts of
maintenance or preservation,  efforts to relet the Premises,  or the appointment
of a receiver  to  protect  the  Lessor's  interest  under the Lease,  shall not
constitute a termination of the Lessee's right to possession.

                       (c) Pursue any other remedy now or hereafter available to
Lessor  under  the laws or  decisions  of the state  wherein  the  Premises  are
located.

                       (d) The  expiration or  termination  of this Lease and/or
the  termination of Lessee's  right to possession  shall not relieve Lessee from
liability under any indemnity  provisions of this Lease as to matters  occurring
or accruing  during the term hereof or by reason of  Lessee's  occupancy  of the
Premises.

         13.3 Inducement  Recapture In Event Of Breach.  Any agreement by Lessor
for free or abated rent or other charges applicable to the Premises,  or for the
giving  or  paying  by  Lessor  to or for  Lessee  of any cash or  other  bonus,
inducement or consideration  for Lessee's entering into this Lease, all of which
concessions are  hereinafter  referred to as "Inducement  Provisions,"  shall be
deemed  conditioned  upon Lessee's full and faithful  performance  of all of the
terms,  covenants  and  conditions  of this Lease to be performed or observed by
Lessee during the term hereof as the same may be extended.  Upon the  occurrence
of a Breach of this Lease by Lessee,  as defined  in  Paragraph  13.l,  any such
inducement  Provision shall  automatically be deemed deleted from this Lease and
of no further force or effect, and any rent, other charge, bonus,  inducement or
consideration  theretofore  abated,  given  or  paid  by  Lessor  under  such an
Inducement  Provision  shall be immediately due and payable by Lessee to Lessor,
and   recoverable   by  Lessor  as   additional   rent  due  under  this  Lease,
notwithstanding  any subsequent cure of said Breach by Lessee. The acceptance by
Lessor of rent or the cure of the Breach which  initiated  the operation of this
Paragraph  shall not be deemed a waiver  by  Lessor  of the  provisions  of this
Paragraph unless specifically so stated in writing by Lessor at the time of such
acceptance.

                                      -22-

         13.4 Late  Charges.  Lessee  hereby  acknowledges  that late payment by
Lessee to Lessor of rent and other sums due hereunder will cause Lessor to incur
costs  not  contemplated  by this  Lease,  the  exact  amount  of which  will be
extremely  difficult to ascertain.  Such costs include,  but are not limited to,
processing  and accounting  charges,  and late charges which may be imposed upon
Lessor by the terms of any ground  lease,  mortgage or trust deed  covering  the
Premises.  Accordingly,  if any  installment  of rent or any  other sum due from
Lessee shall not be received by Lessor or Lessor's designee within five (5) days
after such amount  shall be due,  then,  without any  requirement  for notice to
Lessee,  Lessee  shall Pay to Lessor a late charge  equal to six percent (6%) of
such overdue amount. The parties hereby agree that such late charge represents a
fair and  reasonable  estimate of the costs  Lessor will incur by reason of late
payment by Lessee.  Acceptance  of such late charge by Lessor  shall in no event
constitute  a waiver of Lessee's  Default or Breach with respect to such overdue
amount,  nor prevent Lessor from exercising any of the other rights and remedies
granted hereunder. In the event that a late charge is payable hereunder, whether
or nor collected,  for three (3)  consecutive  installments  of Base Rent,  then
notwithstanding  Paragraph  4.1 or any  other  provision  of this  Lease  to the
contrary,  Base Rent shall, at Lessor's option, become due and payable quarterly
in advance.

         13.5  Breach by  Lessor.  Lessor  shall not be deemed in breach of this
Lease unless  Lessor fails  within a  reasonable  time to perform an  obligation
required to be performed by Lessor.

14.  Condemnation.  If the  Premises or any portion  thereof are taken under the
power of eminent  domain or sold under the threat of the  exercise of said power
(all of which are herein called  "condemnation"),  this Lease shall terminate as
to the part so taken as of the date  the  condemning  authority  takes  title or
possession,  whichever first occurs. If more than ten percent (10%) of the floor
area of the Premises,  or more than  twenty-five  percent (25%) of the land area
not occupied by any building, is taken by condemnation,  Lessee may, at Lessee's
option,  to be exercised in writing within ten (10) days after Lessor shall have
given  Lessee  written  notice of such taking (or in the absence of such notice,
within ten (10) days after the condemning authority shall have taken possession)
terminate  this  Lease  as of the  date  the  condemning  authority  takes  such
possession.  If Lessee  does not  terminate  this Lease in  accordance  with the
foregoing, this Lease shall remain in full force and effect as to the portion of
the Premises  remaining,  except that the Base Rent shall be reduced in the same
proportion as the rentable  floor area of the Premises  taken bears to the total
rentable  floor area of the building  located on the  Premises.  No reduction of
Base Rent shall occur if the only portion of the Premises taken is land on which
there is no building and such taking does not interfere materially with Lessee's
use of the premises. Any award for the taking of all or any part of the Premises
under the  power of  eminent  domain or any  payment  made  under  threat of the
exercise of such power shall be the property of Lessor, whether such award shall
be made as  compensation  for  diminution  in value of the  leasehold or for the
taking of the fee, or as severance damages; provided, however, that Lessee shall
be  entitled  to any  compensation  separately  awarded to Lessee  for  Lessee's
relocation  expenses and/or loss of Lessee's Trade  Fixtures.  In the event that
this Lease is not terminated by reason of such condemnation, Lessor shall to the
extent of its net severance damages received, over and above the legal and other
expenses incurred by Lessor in the condemnation matter, repair any damage to the
Premises caused by such condemnation,  except to the extent that Lessee has been
reimbursed therefor by the condemning authority. Lessee shall be responsible for
the payment of any amount in excess of such net  severance  damages  required to
complete such repair.

                                      -23-

15.      Broker's Fee.

         15.1 The Brokers named in Paragraph  1.10 are the  procuring  causes of
this Lease.

         15.2       [paragraph intentionally deleted]

         15.3       [paragraph intentionally deleted]

         15.4       [paragraph intentionally deleted]

         15.5 Lessee and Lessor each  represent and warrant to the other that it
has had no dealings  with any  person,  firm,  broker or finder  (other than the
Brokers,  if any named in Paragraph  1.10) in connection with the negotiation of
this Lease and/or the  consummation of the transaction  contemplated  hereby and
that no broker or other person,  firm or entity other than said named Brokers is
entitled to any commission or finder's fee in connection with said  transaction.
Lessee and Lessor do each hereby agree to  indemnify,  protect,  defend and hold
the other harmless from and against  liability for compensation or charges which
may be claimed by any such  unnamed  broker,  finder or other  similar  party by
reason of any  dealings  or actions of the  indemnifying  Party,  including  any
costs, expenses, attorneys' fees reasonably incurred with respect thereto.

         15.6  Lessor  and  Lessee  hereby  consent  to and  approve  all agency
relationships, including any dual agencies, indicated in Paragraph 1.10.

16.      Tenancy Statement.

         16.1 Each  Party (as  "Responding  Party")  shall  within ten (10) days
after  written  notice from the other Party (the  "Requesting  Party")  execute,
acknowledge  and deliver to the Requesting  Party a statement in writing in form
similar to the then most  current  "Tenancy  Statement"  form  published  by the
American Industrial Real Estate Association,  plus such additional  information,
confirmation and/or statements as may be reasonably  requested by the Requesting
Party.

         16.2 If Lessor desires to finance, refinance, or sell the Premises, any
part thereof,  or the building of which the Premises are a part,  Lessee and all
Guarantors  of Lessee's  performance  hereunder  shall  deliver to any potential
lender or purchaser designated by Lessor such financial statements of Lessee and
such  Guarantors  as may be  reasonably  required by such  lender or  purchaser,
including but not limited to Lessee's  financial  statements  for the past three
(3) years.  All such financial  statements  shall be received by Lessor and such
lender or purchaser in confidence and shall be used only for the purposes herein
set forth.

17. Lessor's Liability. The term "Lessor" as used herein shall mean the owner or
owners at the time in question of the fee title to the Premises,  or, if this is
a  sublease,  of the  Lessee's  interest in the prior  lease.  In the event of a
transfer of Lessor's title or interest in the Premises or in this Lease,  Lessor
shall  deliver to the  transferee  or assignee (in cash or by credit) any unused
Security  Deposit  held by Lessor at the time of such  transfer  or  assignment.
Except as provided in Paragraph 15, upon such transfer or

                                      -24-

assignment and delivery of the Security Deposit, as aforesaid,  the prior Lessor
shall be  relieved  of all  liability  with  respect to the  obligations  and/or
covenants under this Lease thereafter to be performed by the Lessor.  Subject to
the foregoing, the obligations and/or covenants in this Lease to be performed by
the Lessor shall be binding only upon the Lessor as hereinabove defined.

18.  Severability.  The invalidity of any provision of this Lease, as determined
by a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.

19. Interest on Past-Due Obligations. Any monetary payment due Lessor hereunder,
other  than late  charges,  not  received  by  Lessor  within  thirty  (30) days
following  the  date  on  which  it  was  due,  shall  bear  interest  from  the
thirty-first  (31st) day after it was due at the rate of 12% per annum,  but not
exceeding  the  maximum  rate  allowed by law,  in  addition  to the late charge
provided for in Paragraph 13.4.

20. Time of Essence.  Time is of the essence with respect to the  performance of
all obligations to be performed or observed by the Parties under this Lease.

21. Rent Defined.  All monetary  obligations of Lessee to Lessor under the terms
of this Lease are deemed to be rent.

22. No Prior or Other  Agreements;  Broker  Disclaimer.  This Lease contains all
agreements  between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each  represents and warrants to the Brokers that it has made,
and is relying  solely upon its own  investigation  as to the  nature,  quality,
character and financial  responsibility  of the other Party to this Lease and as
to  the  nature,  quality  and  character  of  the  Premises,  Brokers  have  no
responsibility  with  respect  thereto or with  respect to any default or breach
hereof by either Party.

23. Notices.

         23.1 All  notices  required  or  permitted  by this  Lease  shall be in
writing  and may be  delivered  in person  (by hand or by  messenger  or courier
service) or may be sent by regular,  certified or registered mail or U.S. Postal
Service Express Mail, with postage prepaid,  or by facsimile  transmission,  and
shall be  deemed  sufficiently  given if served  in a manner  specified  in this
Paragraph 23. The addresses noted adjacent to a Party's  signature on this Lease
shall be that Party's address for delivery or mailing of notice purposes. Either
Party may by written notice to the other specify a different  address for notice
purposes,  except that upon Lessee's  taking  possession  of the  Premises,  the
Premises  shall  constitute  Lessee's  address  for the  purpose  of  mailing or
delivering  notices to Lessee. A copy of all notices required or permitted to be
given to Lessor  hereunder  shall be  concurrently  transmitted to such party or
parties at such addresses as Lessor may from time to time hereafter designate by
written notice to Lessee.

         23.2 Any notice sent by registered or certified  mail,  return  receipt
requested,  shall be deemed  given on the date of delivery  shown on the receipt
card, or if no delivery date is shown, the postmark thereon.  If sent by regular
mail the notice shall be deemed given forty-eight (48) hours after the same

                                      -25-

is  addressed  as  required  herein and mailed  with  postage  prepaid.  Notices
delivered by United  States  Express Mail or overnight  courier that  guarantees
next day delivery shall be deemed given twenty-four (24) hours after delivery of
the same to the  United  States  Postal  Service  or  courier.  If any notice is
transmitted by facsimile transmission or similar means, the same shall be deemed
served or delivered upon telephone  confirmation of receipt of the  transmission
thereof,  provided a copy is also  delivered  via delivery or mail. If notice is
received on a Sunday or legal holiday,  it shall be deemed  received on the next
business day.

24. Waivers.  No waiver by Lessor of the Default or Breach of any term, covenant
or  condition  hereof by  Lessee,  shall be  deemed a waiver of any other  term,
covenant or condition hereof,  or of any subsequent  Default or Breach by Lessee
of the same or of any other term, covenant or condition hereof. Lessor's consent
to, or  approval  of,  any act shall  not be  deemed to render  unnecessary  the
obtaining of Lessor's  consent to, or approval of, any subsequent or similar act
by Lessee,  or be construed as the basis of an estoppel to enforce the provision
or  provisions  of this Lease  requiring  such  consent.  Regardless of Lessor's
knowledge of a Default or Breach at the time of accepting  rent,  the acceptance
of rent by Lessor  shall not be a waiver of any  preceding  Default or Breach by
Lessee of any  provision  hereof,  other  than the  failure of Lessee to pay the
particular rent so accepted.  Any payment given Lessor by Lessee may be accepted
by Lessor  on  account  of moneys or  damages  due  Lessor  notwithstanding  any
qualifying  statements  or conditions  made by Lessee in  connection  therewith,
which  such  statements  and/or  conditions  shall  be of  no  force  or  effect
whatsoever unless  specifically  agreed to in writing by Lessor at or before the
time of deposit of such payment.

25. Recording. Either Lessor or Lessee shall, upon request of the other execute,
acknowledge  and deliver to the other a short form  memorandum of this Lease for
recording  purposes.  The Party requesting  recordation shall be responsible for
payment of any fees or taxes applicable thereto.

26.  No Right To  Holdover.  Lessee  has no right to  retain  possession  of the
Premises or any part thereof  beyond the  expiration or earlier  termination  of
this Lease.

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

28.  Covenants and  Conditions.  All  provisions of this Lease to be observed or
performed by Lessee are both covenants and conditions.

29. Binding Effect; Choice of Law. This Lease shall be binding upon the parties,
their  personal  representatives,  successors and assigns and be governed by the
laws of the State in which the Premises are located.  Any litigation between the
Parties hereto  concerning this Lease shall be initiated in the county which the
Premises are located.

30.      Subordination; Attornment; Non-Disturbance.

         30.1  Subordination.  This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease,  mortgage,  deed of trust, or other
hypothecation or security device

                                      -26-

(collectively,  "Security  Device"),  now or hereafter placed by Lessor upon the
real  property of which the Premises are part,  to any and all advances  made on
the  security  thereof,  and to  all  renewals,  modifications,  consolidations,
replacements and extensions thereof.  Lessee agrees that the Lenders holding any
such Security Device shall have no duty,  liability or obligation to perform any
of the obligations of Lessor under this Lease, but that in the event of Lessor's
default with respect to any such  obligation,  Lessee will give any Lender whose
name and address have been  furnished  Lessee in writing for such purpose notice
of Lessor's default and allow such Lender thirty (30) days following  receipt of
such notice for the cure of said default before invoking any remedies Lessee may
have by reason thereof.  If any Lender shall elect to have this Lease and/or any
Option granted hereby superior to the lien of its Security Device and shall give
written  notice  thereof to Lessee,  this Lease and such Options shall be deemed
prior  to such  Security  Device,  notwithstanding  the  relative  dates  of the
documentation or recordation thereof.

         30.2 Attornment. Subject to the non-disturbance provisions of Paragraph
30.3,  Lessee  agrees to attorn  to a Lender  or any  other  party who  acquired
ownership of the Premises by reason of a foreclosure of a Security  Device,  and
that in the event of such  foreclosure,  such new owner shall not: (i) be liable
for any act or omission of any prior lessor or with respect to events  occurring
prior to  acquisition  of  ownership,  (ii) be subject to any offsets or defense
which  Lessee  might  have  against  any  prior  lessor,  or  (iii)  be bound by
prepayment of more than one (1) month's rent.

         30.3 Non-Disturbance.  With respect to Security Devices entered into by
Lessor after the execution of this Lease,  Lessee's  subordination of this Lease
shall be subject to receiving assurance (a "non-disturbance agreement") from the
Lender that Lessee's  possession and this Lease,  including any option to extend
the term hereof, will not be disturbed so long as Lessee is not in Breach hereof
and attorns to the record owner of the Premises.

         30.4  Self-Executing.  The  agreements  contained in this  Paragraph 30
shall be effective  without the  execution of any further  documents;  provided,
however, that, upon written request from Lessor or a Lender in connection with a
sale, financing or refinancing of the Premises,  Lessee and Lessor shall execute
such further writings as may be reasonably  required to separately  document any
such  subordination  or  non-subordination,  attornment  and/or  non-disturbance
agreement as is provided for herein.

31.  Attorney's  Fees.  If any Party or Broker brings an action or proceeding to
enforce the terms hereof or declare rights  hereunder,  the Prevailing Party (as
hereafter defined) or Broker in any such proceeding,  action, or appeal thereon,
shall be entitled to reasonable attorney's fees. Such fees may be awarded in the
same  suit or  recovered  in a  separate  suit,  whether  or not such  action or
proceeding is pursued to decision or judgment. The term "Prevailing Party" shall
include,  without  limitation,  a Party or Broker who  substantially  obtains or
defeats  the  relief  sought,  as  the  case  may  be,  whether  by  compromise,
settlement,  judgment,  or the  abandonment  by the other Party or Broker of its
claim or defense.  The attorney's fees award shall not be computed in accordance
with any  court  fee  schedule,  but  shall be such as to  fully  reimburse  all
attorney's  fees  reasonably  incurred.  Lessor shall be entitled to  attorney's
fees,  costs and expenses  incurred in the preparation and service of notices of
Default and

                                      -27-

consultations  in  connection  therewith  whether  or  not  a  legal  action  is
subsequently commenced in connection with such Default or resulting Breach.

32. Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agents shall
have the right to enter the Premises at any time,  in the case of an  emergency,
and otherwise at reasonable  times upon prior notice,  whether  written or oral,
for the  purpose of showing  the same to  prospective  purchasers,  lenders,  or
lessees, and making such alterations,  repairs, improvements or additions to the
Premises or to the building of which they are a part,  as Lessor may  reasonably
deem  necessary.  Lessor  may at any  time  place on or about  the  Premises  or
building  any  ordinary  "For Sale"  signs and Lessor may at any time during the
last one  hundred  twenty  (120) days of the term  hereof  place on or about the
Premises any ordinary "For Lease" signs.  All such activities of Lessor shall be
without abatement of rent or liability to Lessee.

33.  Auctions.  Lessee shall not  conduct,  nor permit to be  conducted,  either
voluntarily or involuntarily, any auction upon the Premises without first having
obtained  Lessor's  prior  written  consent.  Notwithstanding  anything  to  the
contrary in this Lease,  Lessor  shall not be obligated to exercise any standard
of reasonableness in determining whether to grant such consent.

34. Signs. Lessee shall not place any sign upon the Premises, except that Lessee
may, with Lessor's  prior  written  consent,  install (but not on the roof) such
signs as are  reasonably  required  to  advertise  Lessee's  own  business.  The
installation  of any sign on the  Premises by or for Lessee  shall be subject to
the  provisions of Paragraph 7  (Maintenance,  Repairs,  Utility  Installations,
Trade Fixtures and Alterations).

35.  Termination;  Merger.  Unless  specifically  stated otherwise in writing by
Lessor,  the  voluntary or other  surrender of this Lease by Lessee,  the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee,  shall  automatically  terminate any sublease or lesser estate in the
Premises;  provided,  however, Lessor shall, in the event of any such surrender,
termination or  cancellation,  have the option to continue any one or all of any
existing subtenancies.  Lessor's failure within ten (10) days following any such
event to make a written election to the contrary by written notice to the holder
of any such lesser  interest,  shall constitute  Lessor's  election to have such
event constitute the termination of such interest.

36.      Consents.

                       (a)  Except  for  Paragraph  33 hereof  (Auctions)  or as
otherwise  provided  herein,  wherever  in this Lease the  consent of a Party is
required  to an act  by or for  the  other  Party,  such  consent  shall  not be
unreasonably withheld or delayed.  Lessor's actual reasonable costs and expenses
(including  but not  limited to  architects',  attorneys',  engineers'  or other
consultants'  fees) incurred in the  consideration of, or response to, a request
by Lessee  for any Lessor  consent  pertaining  to this  Lease or the  Premises,
including  but not limited to consents to an  assignment,  a  subletting  or the
presence or use of a Hazardous  Substance,  practice or storage  tank,  shall be
paid by Lessee to Lessor upon receipt of an invoice and supporting documentation
therefor. Subject to Paragraph 12.2(e) (applicable to assignment or subletting),
Lessor may, as a condition to  considering  any such request by Lessee,  require
the Lessee

                                      -28-

deposit with Lessor an amount of money (in addition to the Security Deposit held
under Paragraph 5) reasonably  calculated by Lessor to represent the cost Lessor
will  incur in  considering  and  responding  to  Lessee's  request.  Except  as
otherwise  provided,  any unused  portion of said  deposit  shall be refunded to
Lessee without interest.  Lessor's consent to any act,  assignment of this Lease
or subletting of the Premises by Lessee shall not  constitute an  acknowledgment
that no Default or Breach by Lessee of this Lease exists, nor shall such consent
be deemed a waiver of any then  existing  Default  or  Breach,  except as may be
otherwise specifically stated in writing by Lessor at the time of such consent.

                       (b) All conditions to Lessor's consent authorized by this
Lease are  acknowledged  by Lessee as being  reasonable.  The failure to specify
herein any  particular  condition  to Lessor's  consent  shall not  preclude the
imposition by Lessor at the time of consent of such further or other  conditions
as are then reasonable with reference to the particular matter for which consent
is being given.

37.      [paragraph intentionally deleted]

38.      [paragraph intentionally deleted]

39.      [paragraph intentionally deleted]

40.  Multiple  Buildings.  If the  Premises  are  part of a group  of  buildings
controlled by Lessor,  Lessee agrees that it will abide by, keep and observe all
reasonable rules and regulations which Lessor may make from time to time for the
management,  safety,  care,  and  cleanliness  of the  grounds,  the parking and
unloading of vehicles  and the  preservation  of good order,  as well as for the
convenience  of other  occupants  or tenants of such other  buildings  and their
invitees, and that Lessee will pay its fair share of common expenses incurred in
connection therewith.

41. Security  Measures.  Lessee hereby  acknowledges  that the rental payable to
Lessor  hereunder  does not include the cost of guard service or other  security
measures,  and that Lessor shall have no obligation  whatsoever to provide same.
Lessee assumes all  responsibility  for the protection of the Premises,  Lessee,
its agents and invitees and their property from the acts of third parties.

42.  Reservations.  Lessor  reserves to itself the right,  from time to time, to
grant, with the consent of Lessee,  which shall not be unreasonably  withheld or
delayed, such easements, rights and dedications that Lessor deems necessary, and
to cause  the  recordation  of  parcel  maps and  restrictions,  so long as such
easements,  rights,  dedications,  maps  and  restrictions  do not  unreasonably
interfere  with the use of the  Premises  by Lessee.  Lessee  agrees to sign any
documents reasonably requested by Lessor to effectuate any such easement rights,
dedication, map or restrictions.

43.  Performance  Under Protest.  If at any time a dispute shall arise as to any
amount or sum of money to be paid by one Party to the other under the provisions
hereof, the Party against whom the obligation to pay the money is asserted shall
have the right to make payment  "under  protest"  and such payment  shall not be
regarded as a voluntary payment and there shall survive the right on the part of
said Party to  institute  suit for recovery of such sum. If it shall be adjudged
that there was no legal obligation

                                      -29-

on the part of said Party to pay such sum or any part thereof,  said Party shall
be  entitled  to  recover  such  sum or so much  thereof  as it was not  legally
required to pay under the provisions of this Lease.

44.  Authority.  If either Party hereto is a corporation,  trust,  or general or
limited  partnership,  each  individual  executing  this Lease on behalf of such
entity  represents and warrants that he or she is duly authorized to execute and
deliver  this  Lease  on its  behalf.  If  Lessee  is a  corporation,  trust  or
partnership,  Lessee  shall,  within  thirty (30) days after  request by Lessor,
deliver to Lessor evidence satisfactory to Lessor of such authority.

45. Conflict.  Any conflict between the printed provisions of this Lease and the
typewritten or handwritten  provisions shall be controlled by the typewritten or
handwritten provisions.

46. Offer.  Preparation of this Lease by Lessor or Lessor's agent and submission
of same to Lessee shall not be deemed an offer to lease to Lessee. This Lease is
not intended to be binding until executed by all Parties hereto.

47.  Amendments.  This  Lease may be  modified  only in  writing,  signed by the
Parties in interest  at the time of the  modification.  The parties  shall amend
this  Lease from time to time to reflect  any  adjustments  that are made to the
Base  Rent or  other  rent  payable  under  this  Lease.  As long as they do not
materially  change Lessee's  obligations  hereunder,  Lessee agrees to make such
reasonable  non-monetary  modifications  to  this  Lease  as may  be  reasonably
required  by an  institutional,  insurance  company,  or pension  plan Lender in
connection with the obtaining of normal financing or refinancing of the property
of which the Premises are a part.

48. Multiple  Parties.  Except as otherwise  expressly  provided herein, if more
than one  person or entity is named  herein  as  either  Lessor or  Lessee,  the
obligations   of  such   Multiple   Parties  shall  be  the  joint  and  several
responsibility of all persons or entities named herein as such Lessor or Lessee.

LESSOR AND LESSEE HAVE  CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION  CONTAINED  HEREIN,  AND BY THE  EXECUTION  OF THIS  LEASE  SHOW THEIR
INFORMED AND VOLUNTARY  CONSENT  THERETO.  THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND  EFFECTUATE  THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.

         IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN  PREPARED FOR  SUBMISSION
         TO YOUR ATTORNEY FOR HIS APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED
         TO EVALUATE THE  CONDITION OF THE PROPERTY AS TO THE POSSIBLE  PRESENCE
         OF ASBESTOS,  STORAGE TANKS OR HAZARDOUS SUBSTANCES.  NO REPRESENTATION
         OR  RECOMMENDATION  IS  MADE BY THE  AMERICAN  INDUSTRIAL  REAL  ESTATE
         ASSOCIATION  OR BY  THE  REAL  ESTATE  BROKER(S)  OR  THEIR  AGENTS  OR
         EMPLOYEES  AS  TO  THE  LEGAL   SUFFICIENCY,   LEGAL  EFFECT,   OR  TAX
         CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES;  THE
         PARTIES SHALL RELY SOLELY UPON THE ADVICE OF

                                      -30-

         THEIR OWN COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS
         LEASE.  IF THE SUBJECT PROPERTY IS LOCATED IN A STATE OTHER THAN
         CALIFORNIA, AN ATTORNEY FROM THE STATE WHERE THE PROPERTY IS
         LOCATED SHOULD BE CONSULTED.

         The parties  hereto have  executed this Lease at the place on the dates
specified above to their respective signatures.

Executed at                           Executed at
San Francisco, California             Mountain View, California
- ----------------------------------    ----------------------------------
on  August 18, 1992                   on  August 18, 1992
    ------------------------------       -------------------------------
by LESSOR: D.R. Stephens & Company    by LESSEE: Network Computing Devices, Inc.
           550 Montgomery Street                 350 North Bernardo Avenue
- ----------------------------------    ----------------------------------
           San Francisco, CA 94111               Mountain View, CA 94043
- ----------------------------------    ----------------------------------

By  /s/ D.R. Stephens                 By  /s/ Jack Bradley
    ------------------------------        ------------------------------
Name Printed:  D.R. Stephens          Name Printed:  Jack Bradley
               -------------------                   -------------------
Title:  General Partner               Title:  Chief Financial Officer
        --------------------------            --------------------------

By                                    By
  --------------------------------      --------------------------------
Name Printed:                         Name Printed:
             ---------------------                 ---------------------
Title:                                Title:
      ----------------------------          ----------------------------
Address:                              Address:
        --------------------------            --------------------------
Tel. No. (     )                      Tel. No. (     )
          -----  -----------------              -----  ----------------

NOTICE:  These forms are often modified to meet changing requirements of law and
         industry needs. Always write or call to make sure you are utilizing the
         most current form:  American  Industrial Real Estate  Association,  345
         South  Figueroa  Street,  Suite  M-1,  Los  Angeles,  CA  90071,  (213)
         687-8777, Fax. No. (213) 687-8616.

 (C) Copyright 1990 - By American Industrial Real Estate Association. All rights
     reserved. No part of these works  may  be  reproduced  in  any form without
     permission in writing.

                                      -31-

                   LEASE ADDENDUM TO 280(B) N. BERNARDO LEASE
                           (Formerly occupied by GTE)

         This   Lease   Addendum   ("Addendum")   is   made   to  the   Standard
Industrial/Commercial  Single-Tenant - Net Lease executed  concurrently herewith
(the "Lease") by and between D. R. Stephens & Company  ("Landlord")  and Network
Computing Devices, Inc., a California corporation ("Tenant").

         Landlord  and  Tenant  hereby  agree  that,   notwithstanding  anything
contained in the Lease to the contrary,  the provisions set forth below shall be
deemed to be part of the Lease and shall supersede,  to the extent  appropriate,
any contrary  provision in the Lease.  All  references  in the Lease and in this
Addendum  shall be construed to mean the Lease and the  exhibits,  as amended or
supplemented  by  this  Addendum.  All  terms  used  in  this  Addendum,  unless
specifically defined in this Addendum, shall have the same meanings as the terms
used in the Lease.

         1. Rent.  Commencing on the Commencement Date and continuing throughout
the Lease Term, Tenant shall pay the following as additional rent:

                  a. All Real  Property  Taxes  applicable  to the  Premises  as
required by Section 10 of the Lease;

                  b. All  water,  gas,  heat,  light,  power,  telephone,  trash
disposal and other  utilities and services  supplied to the Premises as required
by Section 11 of the Lease;

                  c. Any late charges or interest due pursuant to Sections  13.4
and 19 of the Lease; and

                  d. At Landlord's  election,  any other reasonable payments due
to Landlord pursuant to this Lease.

         2.  Condition of the Premises.  Landlord  shall deliver the Premises to
Tenant clean and free of debris on the Commencement Date.

                  a. Building  Systems.  Landlord  warrants,  to the best of its
actual knowledge,  that the existing plumbing, fire sprinkler system,  lighting,
air  conditioning,  heating  and  loading  doors  (collectively,  the  "building
systems"),  if any, in the  Premises,  other than those  constructed  by Tenant,
shall  be in  good  working  order  and  condition  on  the  Commencement  Date.
Notwithstanding  the foregoing,  Tenant  acknowledges  that the building  system
services may be temporarily interrupted during the course of the construction of
that portion of the Tenant Improvements completed after the Commencement Date.

         Tenant  agrees that it shall,  at its sole cost and  expense,  engage a
qualified  inspector,  contractor  or engineer to inspect the building  systems.
Such inspection shall be completed within sixty (60) days after the Commencement
Date.  Tenant shall provide  Landlord with a copy of the  inspection  report and
Landlord  agrees to make such repairs or  replacements  (at Landlord's  cost and
without deduction or offset

                                       -1-

from  the  Construction  Allowance  as  defined  in  the  Work  Letter  executed
concurrently  herewith), as are reasonably recommended by the inspection report;
provided,  that,  Landlord may make reasonable  objections  thereto within sixty
(60) days  after  receiving  the  inspection  report.  If  Tenant  does not give
Landlord written notice of a non-compliance with this warranty within sixty (60)
days following the Commencement Date, correction of that non-compliance shall be
the obligation of Tenant at Tenant's sole cost and expense.

         In no event shall  Landlord  be liable for costs to repair,  replace or
maintain the building  systems from and after the date the repair or replacement
of  such  systems  has  been  completed  by  Landlord  in  accordance  with  the
recommendations on the inspection report.

                  b.  Air   Conditioner   Compressors   and   Heat   Exchangers.
Notwithstanding the provisions contained in Section 2(a) above,  Landlord shall,
once during the Original Lease Term,  replace,  if and when  necessary,  the air
conditioner compressors and heat exchangers servicing the Premises.

                  c. Roof.  Landlord  and Tenant  have  reviewed a report on the
roof  which  recommends  certain  repairs  be made  thereto.  On or  before  the
Commencement Date,  Landlord agrees, at its sole cost and expense,  to make such
repairs to the roof as are reasonably necessary. Within five (5) years after the
Commencement  Date,  Landlord  agrees to commence  replacing the roof.  Prior to
Landlord's  replacement  of the  roof,  Landlord  shall be  responsible  for the
maintenance of the roof. Following the replacement of the roof, Tenant shall, at
its sole cost and expense, be liable for the repair and maintenance thereof.

                  d.  Tenant's  Obligations.  Except as  expressly  provided  in
Sections  9 and 14 of the  Lease  and  Section  1 of Work  Letter,  and  without
limiting  the  provisions  of  Section  7.2  of  the  Lease,   Tenant  shall  be
responsible,  at its sole cost and  expense,  for the  repair,  maintenance  and
replacement, if necessary, of the following:

                             the parking lot, and

                             landscaping.

         3. Compliance with Covenants,  Restrictions and Building Code. Landlord
warrants,  to the best of its actual  knowledge,  that the  improvements  on the
Premises  comply with all applicable  covenants,  or  restrictions of record and
applicable  building  codes,  regulations,  zoning and other  applicable laws in
effect on the  Commencement  Date.  Said  warranty  does not apply to the use to
which Tenant will put the Premises or any  Alterations or Utility  Installations
(as defined in Section  7.3(a) of the Lease)  made or to be made by Tenant.  If,
following  the  inspection  described  in Section 2 above,  the  Premises do not
comply with said warranty,  Landlord shall, subject to the limitations described
in Section 2 above, promptly after receipt of written notice from Tenant setting
forth with specificity the nature and extent of such noncompliance,  rectify the
same at Landlord's expense (without deduction or offset against the Construction
Allowance).  If Tenant does not give Landlord written notice of a non-compliance
with this  warranty  within sixty (60) days  following  the  Commencement  Date,
correction of that non-compliance  shall be the obligation of Tenant at Tenant's
sole cost and expense.

                                       -2-

         4.       Ownership of Alterations and Utility Installations.

                  a. Alterations.  Notwithstanding anything contained in Section
7.4 of the Lease to the contrary,  Landlord reserves the right, until expiration
or termination of the Lease,  to require  removal or become the owner of any and
all Alterations made to the Premises by the Tenant.

                  b. Utility Installations.  At the time Tenant submits detailed
plans to Landlord for review for the purpose of obtaining  Landlord's consent to
any  proposed  Utility  Installation,  Tenant may  request  Landlord to indicate
whether or not such  proposed  Utility  Installation  is to be removed  from the
Premises upon the  expiration or  termination of the Lease and whether Tenant is
to perform all  restoration  made  necessary  by the removal of any such Utility
Installation. If Tenant does not request Landlord to make such indication, or if
Tenant does not obtain  Landlord's  prior  consent to  Tenant's  removal of such
Utility  Installation,  then all such alterations  shall be property of Landlord
and  remain  upon  and be  surrendered  with the  Premises  upon  expiration  or
termination  of the Lease.  Landlord  shall have the right to require  Tenant to
remove any Utility Installation and to perform all restoration made necessary by
such removal.

                  c.  Security  and   Communication   Systems.   Notwithstanding
anything  contained  herein to the  contrary,  all  security  and  communication
systems  installed by Tenant  shall be deemed to be Trade  Fixtures and shall be
removed  by  Tenant at the  expiration  or  earlier  termination  of the  Lease;
provided,  that  Tenant  shall  repair  and  restore  any and all  damage to the
Premises caused by the removal of such systems.

         5.  Hazardous  Waste.  Subject to the  provisions  of Section 6 of this
Addendum, Landlord shall indemnify,  protect, defend and hold Tenant, its agents
and  employees  harmless  from and  against  any and all  damages,  liabilities,
judgements,  costs, claims, liens, expenses,  penalties,  permits and attorney's
fees and consultant's  fees arising out of or involving any Hazardous  Substance
or storage tank brought onto the Premises on or before the Commencement  Date of
this Lease by or for Landlord or under Landlord's control.

         6.  Limitation  on  Liability.  The liability of Landlord in connection
with the Premises  shall be limited to its interest in the  Premises,  and in no
event shall any other assets of Landlord be subject to any claim  arising out of
or in connection with the Lease or the Premises. Tenant expressly agrees that so
long  as  Landlord  is  a  corporation,   trust,  partnership,   joint  venture,
unincorporated  association or other form of business entity, the obligations of
Landlord shall not constitute personal  obligations of the officers,  directors,
trustees,  partners,  joint venturers,  members,  owners,  stockholders or other
principals or  representatives  ("principals")  of such business entity. In this
regard, Tenant agrees that in the event of any actual or alleged failure, breach
or  default  by  Landlord  of its  obligations  under  this  Lease,  that (i) no
principal shall be sued or named as a party in any suit or action (except as may
be necessary to secure  jurisdiction of Landlord) , (ii) no principal shall ever
be required  to answer or  otherwise  plead to any service of process,  (iii) no
judgment will be taken against any  principal,  (iv) any judgment  taken against
any principal may be vacated and set aside at any time without  hearing,  (v) no
writ of execution shall be levied against the assets of any principal,  and (vi)
these  agreements  by  Tenant  are  enforceable  both  by  Landlord  and  by any
principal.

                                       -3-

         7. Sale by Landlord. Notwithstanding anything contained in the Lease to
the  contrary,  Landlord  shall  have the  right at any time to sell,  transfer,
convey or assign  its  interest  in this  Lease or in the  Premises  or any part
thereof.  To the extent that  Landlord's  covenants and  obligations  under this
Lease are expressly  assumed in writing or by operation of  applicable  law by a
transferee or assignee,  Landlord  without  further  written  agreement shall be
freed  and  relieved  of  such  covenants  and  obligations.  Landlord  (or  the
transferee  or assignee)  shall give Tenant  prompt notice of such a transfer or
assignment.  Notwithstanding the foregoing, Landlord shall not, without Tenant's
consent,  which consent shall not be unreasonably  withheld or delayed, sell the
Premises  before the date that the real property  commonly known as 280(A) North
Bernardo Avenue, Mountain View, California (also formerly occupied by Synoptics)
("Adjacent  Property")  is  delivered  to Tenant  pursuant  to a lease  executed
concurrently herewith.

         In the event of such sale, transfer, conveyance or assignment, from and
after the date thereof Landlord shall be (i) automatically relieved, without any
further act by any person or entity, of all liability for the performance of the
obligations  of the Landlord  hereunder,  and (ii) relieved of all liability for
the performance of the obligations of the Landlord  hereunder which have accrued
before the date of transfer,  but only if its transferee agrees to assume and be
bound by the terms of this Lease and to perform all  obligations of the Landlord
hereunder.  As  used  herein,  the  term  "Landlord"  shall  mean  the  Landlord
originally  named  herein,  but  following  any  transfer of its interest in the
Premises  other  than to a  lender  as  security  for a  debt,  the  term  shall
thereafter mean the transferee of such interest.

         8.  Option To Extend  Term.  Tenant  shall have the right to extend the
term of this Lease for an  additional  term of sixty (60) months (the  "Option")
commencing the day after the  Expiration  Date of the Original Term (the "Option
Term") upon the following terms and conditions:

                  a. When it notifies  Landlord of its  election to exercise the
Option and on the last day of the  Original  Term of this Lease Tenant shall (i)
not be in default under any of the terms, covenants,  conditions,  provisions or
agreements  of this  Lease,  (ii) not have  committed  any act  which,  with the
passage of time or the giving of notice,  would  constitute  an event of default
and (iii) not have assigned or otherwise transferred its interest in this Lease.
The  Option  is  intended  to be  personal  to Tenant  and may not be  assigned,
voluntarily or involuntarily, separate from or as a part of the Lease.

                  b. The base monthly rent for the Premises shall be ninety-five
percent  (95%)  of the Fair  Market  Rental  (as  hereinafter  defined)  for the
Premises  prevailing at the commencement of the Option Term; provided that in no
event shall the base  monthly  rent be less than the base  monthly  rent for any
year immediately preceding the Option Term.

         The  term  "Fair  Market  Rental"  shall  mean the  base  monthly  rent
(expressed  as a net rental  rate per square  foot of  rentable  area per month)
payable by a tenant and actually  being  received by a landlord  for  comparable
space in other  first  class  buildings  in  Mountain  View of like  quality and
location, adjusted to account for, floor level, views, leasehold improvements or
allowances provided by Landlord, rental abatements, equity participation,  lease
takeovers  or  assumptions,  rent  credits,  moving  expenses and other forms of
rental  concessions,  management  or cost  recovery  fees,  proposed term of the
lease, and any other relevant terms or conditions.

                                       -4-

         Landlord, by notice to Tenant delivered on or before one hundred twenty
(120) days prior to the commencement of the Option Term shall determine the Fair
Market  Rental.  If Tenant  objects to  Landlord's  determination,  Landlord and
Tenant  shall  negotiate  in good faith in an effort to mutually  agree upon the
Fair Market Rental.  If Landlord and Tenant have not been able to agree upon the
Fair Market Rental prior to the  commencement  of the Option Term,  Landlord and
Tenant shall each prepare their own final written proposed determination of Fair
Market  Rental,  which  shall  be  exchanged  by the  parties  and  which  shall
constitute  the final  proposed  determination  submitted  by each  party to the
arbitrators  in the event of  arbitration  as  described  below.  If the parties
cannot agree on the Fair Market  Rental for the period in question,  the parties
shall proceed to  arbitration  to determine  Fair Market  Rental.  Should Tenant
elect to arbitrate and should the  arbitration  not have been concluded prior to
the date of the Option Term is to  commence,  Tenant  shall pay the base monthly
rent to Landlord  commencing at the Option Term, adjusted to reflect Fair Market
Rental as Landlord  has so  determined.  If the amount of Fair Market  Rental as
determined by arbitration differs from Landlord's determination,  any adjustment
required to correct the amount  previously  paid shall be made by payment by the
appropriate party after such determination of Fair Market Rental.

         If arbitration  occurs,  the judgment or the award rendered in any such
arbitration may be entered in any court having  jurisdiction  and shall be final
and  binding  between  the  parties.  The  arbitration  shall be  conducted  and
determined  in San Jose in  accordance  with the  then  prevailing  rules of the
American Arbitration  Association or its successor for arbitration of commercial
disputes,  except to the extent that the procedures mandated by said rules shall
be modified as follows:  Tenant shall make demand to Landlord for arbitration in
writing within thirty (30) days after receiving Landlord's determination of Fair
Market Rental,  specifying  therein the name and address of the person to act as
the arbitrator on its behalf. The arbitrator shall be qualified as a real estate
appraiser  familiar with the Fair Market Rental of  comparable  office  building
projects in Mountain View who would qualify over  objection as an expert witness
to give  opinion  testimony  addressed  to the  issue  in a court  of  competent
jurisdiction.   Within   twenty  (20)  days  after   receiving  the  demand  for
arbitration,  Landlord  shall  give  notice to Tenant,  specifying  the name and
address of the person designated by Landlord to act as arbitrator on its behalf,
who shall be similarly  qualified.  If Landlord fails to timely notify Tenant of
the appointment of its arbitrator,  the arbitrator  appointed by Tenant shall be
the arbitrator to determine the issue. In the event that two (2) arbitrators are
chosen,  they shall  appoint a third  arbitrator,  who shall be a competent  and
impartial person with qualifications  similar to those required of the first two
arbitrators.

         Within ten (10) days following the appointment of the third  arbitrator
or the lapse of time  when a party may  appoint  an  arbitrator  after the other
party has appointed  one,  Landlord and Tenant shall each state in writing their
determination of the Fair Market Rental supported by the reasons therefor,  with
counterpart  copies  delivered to the other party and to the  arbitrator(s).  If
either party fails  timely to submit its proposal for the Fair Market  Rental in
accordance  with the later of the time  periods  provided  for  above,  the Fair
Market Rental shall be that  submitted by the other party,  and the  arbitration
shall be deemed concluded.  The  arbitrator(s)  shall arrange for a simultaneous
exchange of such proposed  determinations.  The arbitrators (or sole arbitrator)
shall select one of the two proposed determinations as the Fair Market Rent, and
shall have no right to propose a middle ground or any  modification of either of
the two proposed determinations. If there are three arbitrators, the concurrence
of two of the three arbitrators shall be controlling.  The determination they or
he chooses shall constitute the decision of the

                                       -5-

arbitrator(s) and shall be final and binding upon the parties. The arbitrator(s)
shall attempt to decide the issue within ten (10) days after the  appointment of
the  third  arbitrator.  Each  party  shall  pay  the fee  and  expenses  of its
respective  arbitrator  and both shall  share the fee and  expenses of the third
arbitrator,  if any. The  arbitrator(s)  shall have the right to consult experts
and competent  authorities with factual  information or evidence pertaining to a
determination of Fair Market Rental,  but any such consultation shall be made in
the   presence  of  both   parties  with  full  right  of  the  other  party  to
cross-examine. The arbitrator(s) shall render their or his decision and award in
writing with counterpart copies to each party.

                  c. Tenant shall have  notified  Landlord no later than six (6)
months prior to the Expiration Date of the Original Term of Tenant's election to
exercise such right, otherwise, the Option shall be automatically null and void.

                  d. The lease for the Adjacent  Property is still in full force
and effect and Tenant  shall have  concurrently  notified  Landlord  of Tenant's
election to exercise its option to extend the term for the Adjacent Property.

                  e. All of the other terms, covenants,  conditions,  provisions
and agreements of this Lease shall remain in full force and effect.

                  f. There shall be no further  right to extend the term of this
Lease, or any right to renew this Lease, beyond the Option Term.

         9.  Right of First  Refusal.  Landlord  hereby  grants  to  Tenant  the
exclusive  right, at Tenant's  option,  to purchase the Premises,  upon the same
terms and  conditions  and for the same  purchase  price as any bona fide  offer
which  Landlord  desires to accept for the  purchase  of the  Premises  from any
person or  entity.  Upon  receipt of a bona fide offer  which is  acceptable  to
Landlord, Landlord shall notify Tenant in writing of the purchase price, closing
schedule,  and such  other  terms  as  Landlord  has  negotiated  and  accepted,
whereupon  Tenant shall have five (5) business days from the date of such notice
in which to elect to exercise  Tenant's  right to purchase.  In the event Tenant
elects to exercise its right to purchase as granted herein,  then Tenant must do
so by notifying  Landlord in writing of its  acceptance  of all the terms in the
bona fide offer within such five-day period.  If Tenant declines to exercise its
right of first refusal or otherwise fails to exercise its right in the manner or
within the time period set forth herein,  then Landlord  shall be free to accept
the offer of said third party.

         10.  Assignment  and  Subletting.  As a material  part of the  economic
bargain  between the parties and as  consideration  for  Tenant's  rights in the
Premises,  if (i) Tenant  assigns its  interest in this Lease,  Tenant shall pay
Landlord fifty percent (50%) of the transfer consideration received by Tenant in
connection  with the  assignment,  and (ii) Tenant  sublets the transfer  space,
Tenant shall pay to Landlord fifty percent (50%) of the positive difference,  if
any,  between (A) all transfer  consideration  received by Tenant in  connection
with the sublease and (B) the Base Monthly Rent and additional rent allocated to
the  transfer  space paid by Tenant to Landlord  pursuant  to this  Lease.  Such
amount shall be paid to Landlord on the same basis,  whether periodic or in lump
sum,  that  it is  received  by  Tenant.  As used  herein,  the  term  "transfer
consideration"  shall  mean any  consideration  of any kind  received,  or to be
received,  by Tenant as a result of the  transfer  (other than the  transferee's
promise to assume Tenant's

                                       -6-

obligations under this Lease), if such sums are related to, Tenant's interest in
this Lease or in the Premises;  including without limitation payments (in excess
of the book value  thereof)  for  Tenant's  assets,  trade  fixtures,  leasehold
improvements,  inventory,  accounts,  goodwill,  equipment,  furniture,  general
intangibles  and capital  stock or other  equity  ownership  interest in Tenant.
Tenant's  obligations  under this paragraph shall survive any and all transfers.
At the time Tenant makes any payment  required by this  paragraph,  Tenant shall
deliver to  Landlord  an  itemized  statement  of the method  used to  calculate
Landlord's  share of  transfer  consideration,  certified  by Tenant as true and
correct.  Landlord  shall have the right to inspect  Tenant's  books and records
relating to the payments due pursuant to this  paragraph.  Upon request,  Tenant
shall deliver to Landlord  copies of all  agreements,  bills,  invoices or other
documents related to such  calculations.  Landlord may condition its approval of
any transfer upon  obtaining a  certification  from both Tenant and the proposed
transferee  of all  transfer  consideration  that  is to be paid  to  Tenant  in
connection with such transfer.

         11.  Cross-Default.  Concurrently  herewith,  Tenant is entering into a
lease with  Landlord for the Adjacent  Property  ("280(A) N.  Bernardo  Lease").
Notwithstanding  anything  contained in Section 13 of the Lease to the contrary,
the occurrence of any one or more of the events in Section 13.1 of the 280(A) N.
Bernardo Lease shall  constitute a material  default and breach of this Lease by
Tenant.

         IN WITNESS WHEREOF, Landlord and Tenant have executed this Addendum.

LANDLORD:

D. R. STEPHENS & COMPANY

By /s/ D.R. Stephens
   -----------------------------------
       D. R. Stephens, General Partner

TENANT:

NETWORK COMPUTER DEVICES, INC.,
a California corporation

By /s/ Jack Bradley
   -----------------------------------
       Jack Bradley
- --------------------------------------
Print name
Its: Chief Financial Officer
     ---------------------------------

                                       -7-

                WORK LETTER AGREEMENT - 280(B) N. Bernardo Avenue
                           (Formerly occupied by GTE)

         THIS WORK  LETTER  AGREEMENT  is made as of  August  18,  1992,  by and
between D. R. Stephens & Company  ("Landlord")  and Network  Computing  Devices,
Inc., a California  corporation  ("Tenant"),  for the premises located at 280(B)
North Bernardo,  Mountain View,  California -- formerly  occupied by GTE -- (the
"Premises")   pursuant  to  that  certain  Lease  and  Lease  Addendum  executed
concurrently  herewith,  by and between  Landlord and Tenant (the "Lease").  The
words and phrases which are  capitalized in this Work Letter shall have the same
meaning as such words and phrases have in the Lease.

         1.  Landlord  has no  obligation  to  improve,  alter  or  remodel  the
Premises, except as follows:

                  a.  Landlord  shall make the repairs and replace the  building
systems and roof as required pursuant to Section 2 of the Addendum,

                  b. On or before the Commencement Date (hereinafter defined) or
as soon thereafter as reasonably possible,  Landlord shall, at its sole cost and
expense (and  without  deduction or offset  against the  Construction  Allowance
defined below), do the following:

                                    paint the exterior of the building; and

                                    seal, repair and restripe the parking lot to
                                    be suitable for the loading,  unloading  and
                                    travel  of  commercial  vehicles,  including
                                    semi's not to exceed $14,000.

                  c. Within six months  after the  Commencement  Date or as soon
thereafter as reasonably possible,  Landlord shall, at its sole cost and expense
(and without  deduction or offset  against the  Construction  Allowance  defined
below), landscape the exterior area in a manner comparable to the landscaping of
the property  located at 350 N. Bernardo  Avenue,  Mountain View, CA, which will
include:

                                    pruning  trees and shrubs  along the Central
                                    Expressway,

                                    installing  a total of 8 to 10 shrubs on the
                                    Premises and Adjacent Property,

                                    installing  a total  of 10 flats of color on
                                    the Premises and Adjacent Property,

                                    cleaning the patio area, and

                                    planting,  for fill-in purposes,  shrubs and
                                    ivy, as needed.

                                       -1-

                  d. On or before the Commencement Date or as soon thereafter as
reasonably  possible,  Landlord shall, at its sole cost and expense (and without
deduction or offset against the Construction Allowance defined below), make such
changes, if any, to the exterior area of the Premises as are required to be made
by the American Disabilities Act in effect as of the Commencement Date.

                  e. Subject to Landlord's prior approval, Tenant may select the
color of the paint for the Building.

                  f. Landlord  shall  construct or cause to be  constructed  the
Tenant Improvements as provided for in this Work Letter.

         2.  Landlord  hereby  agrees to allocate  the sum of Six Hundred  Fifty
Thousand  and  no/100ths  Dollars  ($650,000.00)  as  a  construction  allowance
("Construction  Allowance")  for  the  design  and  construction  of the  Tenant
Improvements  (hereinafter  defined).  Any and all fees and costs for the Tenant
Improvements  in  excess  of the  Construction  Allowance  shall be the sole and
exclusive  obligation  of the  Tenant.  In the  event  the fees and costs of the
Tenant  Improvements are in excess of the Construction  Allowance,  Tenant shall
pay such  overage  on a monthly  pro rata  basis  concurrently  with  Landlord's
monthly disbursement of the Construction  Allowance  immediately after receiving
written  notice  from  Landlord  of the amount  payable  by Tenant and  invoices
substantiating  the  payment to be made.  In the event  Tenant  fails to pay its
monthly  pro rata  payment  on the date when due,  then  Landlord  shall have no
obligation to continue  constructing the Tenant  Improvements until such payment
is made, and Tenant shall be chargeable  with any delay in the completion of the
Premises resulting therefrom.

         The costs of the Tenant  Improvements to be paid from the  Construction
Allowance shall include:

                  a. The costs for the preparation of the Construction Documents
(hereinafter defined), including Grobman's fees and costs;

                  b.  The  costs  for  obtaining  permits  and  other  necessary
authorizations  from the City of  Mountain  View,  County of Santa Clara and the
State of California;

                  c. All costs of interior  design and finish schedule plans and
specifications including as-built drawings; and

                  d. All direct and indirect  costs of procuring and  installing
the Tenant  Improvements  in the Premises,  including the  construction  fee for
overhead and profit and the cost of all onsite  supervisory  and  administrative
staff, office,  equipment and temporary services in connection with construction
of the Tenant Improvements.

                  Notwithstanding the foregoing,  Tenant shall be liable for all
costs  and fees for the  services  described  above  which  are in excess of the
Construction  Allowance.  In no event shall the costs of the Tenant Improvements
include  any  costs  for  procuring  or  installing  in the  Premises  any trade
fixtures,  equipment,  furniture,  furnishings,  telephone  equipment  or  other
personal  property  ("Personal  Property") to be used in the Premises by Tenant,
and the cost of such Personal Property shall be paid by Tenant.

                                       -2-

         3. All space plans, design and working drawings required for the Tenant
Improvements  ("Construction  Documents")  shall be prepared by  Reel/Grobman  &
Associates  ("Grobman").  Tenant  acknowledges that it has reviewed and approved
the  proposal  from  Grobman  dated  August 3, 1992, a copy of which is attached
hereto,  and that Tenant is satisfied  with the terms and  conditions  set forth
therein.  Tenant and Landlord shall each review the Construction Documents on or
before the dates set forth in the schedule  contained  in the Grobman  proposal.
Any such approval is to be evidenced by Tenant's and Landlord's initials on each
sheet of the  Construction  Documents.  If Tenant  does not  approve  any of the
Construction  Documents  it receives  from  Grobman  within the time periods set
forth in the  schedule  or if Tenant  desires to make any  modifications  to the
same, any delay  attributable to such  disapproval or  modifications  shall be a
Tenant Delay (as defined herein below).

         All real property improvements shown on the Construction  Documents are
referred to herein as the "Tenant Improvements."

         4. Tenant shall devote such time as may be necessary to enable Landlord
or Grobman to submit for approval the Construction  Documents to the appropriate
government authorities of the Construction Documents for the Premises by October
23, 1992. In the event any governmental authority whose approval is necessary to
proceed  with the  construction  of Tenant  Improvements  fails to  approve  the
construction  Documents  prior  to  December  7,  1992 as a result  of  Tenant's
insistence  on  certain  improvements  being  included  as  a  part  of  Tenants
Improvements, such failure shall be deemed to be a Tenant Delay.

         5. Tenant,  by signing the  Construction  Documents  and  approving the
general contractor with Grobman,  shall give Landlord  authorization to complete
the Tenant  Improvements to the Premises in accordance,  with such  Construction
Documents.  If such  authorization  and approval is not received by Landlord and
Grobman  within the time  periods  set forth in the Grobman  schedule,  Landlord
shall not be obligated to commence the Tenant Improvements on the Premises until
such  authorization and approval is received and Tenant shall be chargeable with
any delay in the completion of the Premises resulting therefrom.

         6. Subject to the  provisions  in Paragraph 7 below,  the  Commencement
Date shall mean the earlier to occur of:

                  a. the date Tenant actually occupies the entire Premises, or

                  b.  the  date  of   Substantial   Completion   of  the  Tenant
Improvements,  which the  parties  estimate  will occur on January 25, 1993 (the
"Scheduled Commencement Date").  "Substantial completion" shall be determined by
Grobman and shall be deemed to have occurred  notwithstanding  a requirement  to
complete "punchlist" or similar minor corrective work.

         Subject to the  provisions in Paragraph 7 below,  the  Expiration  Date
shall  mean the date  which is eight (8) years  and seven (7)  months  after the
Commencement Date.

                                       -3-

         If  the   Commencement   Date  is  a  date  other  than  the  Scheduled
Commencement  Date,  Landlord and Tenant shall promptly  execute an amendment to
the Lease specifying the Commencement Date and Expiration Date.

         7. The  Commencement  Date and the Expiration  Date shall be subject to
and modified by the following:

                  a. If Substantial Completion of the Tenant Improvements in the
Premises is delayed as a result of any delay  attributable  to Tenant's  acts or
failure to act ("Tenant  Delay"),  then the  original  Term of the Lease and the
Rent  (including all  Additional  Rent) shall commence to accrue one day earlier
for each day of delay  attributable to Tenant's acts or failure to act. A Tenant
Delay shall include, but not be limited to the following:

                                    Tenant's request for a delay;

                                    Tenant's  request to change the Construction
                                    Documents previously approved;

                                    Tenant's failure to approve within three (3)
                                    working  days  after  Tenant's   receipt  of
                                    Landlord's  request  for any  changes in the
                                    Construction   Documents  necessary  due  to
                                    governmental  requirements  together  with a
                                    copy of the proposed changes;

                                    Tenant's   failure   to  pay  any   monetary
                                    obligations  it is  obligated  to pay within
                                    the time  periods  set forth  hereunder  and
                                    under the Lease,  including  but not limited
                                    to the payment  for the Tenant  Improvements
                                    in excess of the Construction Allowance;

                                    Tenant's   failure   to   comply   with  the
                                    provisions of this Agreement;

                                    Tenant's   request  to  have  additional  or
                                    different  work  not  included   within  the
                                    Construction  Documents  constructed  in the
                                    Premises and/or the construction thereof;

                                    Tenant's failure to approve the Construction
                                    Documents  within the time periods set forth
                                    hereinabove;

                                    The  occurrence of any event which is deemed
                                    a Tenant Delay under this Agreement; and

                                    Prior to  approval  by both  parties  of the
                                    Construction  Documents,   any  delay  which
                                    Grobman     reasonably     determines     is
                                    attributable  to  changes  or  additions  to
                                    requirements  of Tenant  or the  information
                                    theretofore supplied by Tenant to Grobman or
                                    the general contractor, outside of the

                                       -4-

                                    normal  scope of such  changes or  additions
                                    which would be customary  in a  construction
                                    project  of the scope  contemplated  by this
                                    Work Letter Agreement.

                  b. Tenant  acknowledges  that the Premises are, as of the date
hereof,  subject  to a lease.  If, for any  reason  other  than a Tenant  Delay,
Landlord  cannot  deliver  possession  of the  Premises to Tenant by January 25,
1993,  then in that  event,  Landlord  shall  not be  subject  to any  liability
therefor,  nor  shall  such  failure  affect  the  validity  of the Lease or the
obligations of Tenant hereunder, but in such case, Tenant shall not be obligated
to pay rent or perform any other  obligation of Tenant until  Landlord  delivers
possession of the Premises to Tenant.

                  c. It is the intent of the parties  hereto that the lease term
for the Premises shall run concurrently with and expire  simultaneously with the
lease for the Adjacent Property.

         8.  Upon   substantial   completion  of  that  portion  of  the  Tenant
Improvements in the area of the Premises  devoted  primarily to field repair and
manufacturing,  Tenant may occupy that portion of the Premises;  provided, that,
Tenant  shall pay its  pro-rata  share of (i) the Base  Rent (ii) the  insurance
premiums  incurred by  Landlord,  and (iii) the Real  Property  Taxes.  Tenant's
pro-rata  share shall be  determined  by a ratio,  the numerator of which is the
number of occupied  square feet in the  Premises and the  denominator  is 53,160
square feet. Any such partial,  early occupancy shall not advance nor affect the
Commencement  Date or Expiration  Date of the Original Term.  Except as modified
herein,  Tenant shall be otherwise  subject to all other terms and conditions of
the Lease,  including  the  obligation  to pay for any and all  utility,  water,
heating, air conditioning,  janitorial,  garbage and telephone expenses relating
to Tenant's use or occupancy of the Premises.

         9. In the event either party  requests  that any portion of the work to
be performed by Landlord be delayed,  the party  requesting such delay shall pay
all  costs  and  any  expenses  occasioned  by  such  delay  including,  without
limitation,  any costs and  expenses  attributable  to  increases in the cost of
labor or materials.

         10.  Any and all  Tenant  Improvements  paid for in whole or in part by
Landlord shall at once become and remain the property of Landlord.

         11. In the event of any  breach by either  party of the  provisions  of
this Work Letter, the  non-defaulting  party may elect to treat such breach as a
default under the Lease which shall entitle such non-defaulting  party to any of
the rights and remedies provided thereunder.

                                       -5-

         IN WITNESS WHEREOF, Landlord and Tenant have respectively executed this
Letter Agreement as of the date and year first above written.

LANDLORD:

D. R. STEPHENS & COMPANY

By /s/ D.R. Stephens
   -----------------------------------
       D. R. Stephens, General Partner

TENANT:

NETWORK COMPUTING DEVICES, INC.,
a California corporation

By /s/ Jack Bradley
   -----------------------------------
       Jack Bradley
- --------------------------------------
Print name
Its: Chief Financial Officer
     ---------------------------------

                                       -6-

                                    EXHIBIT C

                          Plans and Specifications for
                         Assignee's Tenant Improvements

             [Document Not Provided to Registrant with Master Lease]

                                    EXHIBIT D

                              Option to Extend Term

         8.  Option To Extend  Term.  Tenant  shall have the right to extend the
term of this  Lease for an  additional  term of ten (10)  years  (the  "Option")
commencing  on  December 1, 2003,  and  terminating  on  November  30, 2013 (the
"Option Term"), upon the following terms and conditions:

                  a. Tenant shall have notified  Landlord no later than November
30, 2002,  of Tenant's  election to exercise  such right,  otherwise  the Option
shall be automatically null and void.

                  b. The leases for both  280(A) and 280(B) N.  Bernardo  Avenue
(each being the  "Adjacent  Property"  to the other) must still be in full force
and  effect,  Tenant  shall have  concurrently  notified  Landlord  of  Tenant's
election to exercise its option to extend the term for the Adjacent Property and
the term for the Adjacent Property must be extended concurrently with the Option
Term under this Lease.

                  c. When it notifies  Landlord of its  election to exercise the
Option and on the last day of the  Original  Term of this Lease Tenant shall (i)
not be in default under any of the terms, covenants,  conditions,  provisions or
agreements  of this  Lease,  (ii) not have  committed  any act  which,  with the
passage of time or the giving of notice,  would  constitute  an event of default
and (iii) not have assigned or otherwise  transferred its interest in this Lease
or subleased  more than a combined  total of 84,800  square feet of the premises
under this Lease and the Lease for the Adjacent Property. The Option is intended
to be personal to Tenant and may not be assigned,  voluntarily or involuntarily,
separate from or as a part of the Lease.

                  d. The initial  base  monthly  rent for the  Premises  for the
Option  Term  shall  be  ninety  percent  (90%) of the Fair  Market  Rental  (as
hereinafter  defined) for the Premises  prevailing  at the  commencement  of the
Option Term;  provided that in no event shall the base monthly rent be less than
the base monthly  rent for any year  immediately  preceding  the Option Term nor
more than one hundred forty percent  (140%) of the highest base monthly  payable
for any month  during the  Original  Term.  The base rent shall be  increased by
$0.05 per  square  foot per month over the  initial  base  monthly  rent for the
period June 1, 2006,  through  November 30, 2008;  there shall be an  additional
increase of $0.05 per square foot per month for base monthly rent for the period
December 1, 2008,  through May 30, 2011;  and there shall be a final increase of
an  additional  $0.05 per square foot per month for the base rent for the period
June 1, 2011, through the termination of the Option Term.

         The  term  "Fair  Market  Rental"  shall  mean the  base  monthly  rent
(expressed  as a net rental  rate per square  foot of  rentable  area per month)
payable by a tenant and actually  being  received by a landlord  for  comparable
space in  other  comparable  buildings  in  Mountain  View of like  quality  and
location, adjusted to account for, floor level, views, leasehold improvements or
allowances provided by Landlord, rental abatements, equity participation,  lease
takeovers or assumptions, rent credits, moving expenses and

other forms of rental  concessions,  management or cost recovery fees,  proposed
term of the lease, and any other relevant terms or conditions.

         Landlord,  by notice to Tenant  delivered  on or before nine (9) months
prior to the  commencement  of the Option Term shall  determine  the Fair Market
Rental. If Tenant objects to Landlord's determination, Landlord and Tenant shall
negotiate  in good faith in an effort to  mutually  agree  upon the Fair  Market
Rental.  If Landlord and Tenant have not been able to agree upon the Fair Market
Rental at least six (6) months  prior to the  commencement  of the Option  Term,
Landlord  and  Tenant  shall  each  prepare  their  own final  written  proposed
determination of Fair Market Rental, which shall be exchanged by the parties and
which shall constitute the final proposed determination  submitted by each party
to the  arbitrators  in the event of  arbitration  as  described  below.  If the
parties  cannot agree on the Fair Market Rental for the period in question,  the
parties shall proceed to arbitration  to determine  Fair Market  Rental.  Should
Tenant elect to arbitrate  and should the  arbitration  not have been  concluded
prior to the date the Option Term is to commence,  then pending determination of
Fair Market Rental by  arbitration,  Tenant shall  continue to pay the same base
monthly  rent  during the Option  Term as Tenant  paid for the last month of the
Original  Term. If the amount of Fair Market Rental as determined by arbitration
differs from the rent  theretofore  paid during the Option Term,  any adjustment
required to correct the amount  previously  paid shall be made by payment by the
appropriate party after such determination of Fair Market Rental.

         If arbitration  occurs,  the judgment or the award rendered in any such
arbitration may be entered in any court having  jurisdiction  and shall be final
and  binding  between  the  parties.  The  arbitration  shall be  conducted  and
determined  in San Jose in  accordance  with the  then  prevailing  rules of the
American Arbitration  Association or its successor for arbitration of commercial
disputes,  except to the extent that the procedures mandated by said rules shall
be modified as follows:  Tenant shall make demand to Landlord for arbitration in
writing  within  thirty  (30) days  after  receiving  Landlord's  final  written
proposed  determination of Fair Market Rental,  specifying  therein the name and
address of the person to act as the  arbitrator  on its behalf.  The  arbitrator
shall be  qualified  as a real estate  appraiser  familiar  with the Fair Market
Rental of comparable office building projects in Mountain View who would qualify
over objection as an expert witness to give opinion  testimony  addressed to the
issue in a court of  competent  jurisdiction.  Within  twenty  (20)  days  after
receiving  the demand for  arbitration,  Landlord  shall give  notice to Tenant,
specifying  the name and address of the person  designated by Landlord to act as
arbitrator on its behalf, who shall be similarly qualified. If Landlord fails to
timely  notify  Tenant of the  appointment  of its  arbitrator,  the  arbitrator
appointed by Tenant shall be the arbitrator to determine the issue. In the event
that two (2) arbitrators are chosen, they shall appoint a third arbitrator,  who
shall be a competent and impartial person with  qualifications  similar to those
required of the first two arbitrators.

         Within ten (10) days following the appointment of the third  arbitrator
or the lapse of time  when a party may  appoint  an  arbitrator  after the other
party has appointed  one,  Landlord and Tenant shall each state in writing their
determination of the Fair Market Rental supported by the reasons therefor,  with
counterpart  copies  delivered to the other party and to the  arbitrator(s).  If
either party fails  timely to submit its proposal for the Fair Market  Rental in
accordance  with the later of the time  periods  provided  for  above,  the Fair
Market Rental shall be that  submitted by the other party,  and the  arbitration
shall be deemed concluded.  The  arbitrator(s)  shall arrange for a simultaneous
exchange of such proposed

                                       -2-

determinations.  If there are three  arbitrators,  the concurrence of two of the
three  arbitrators  shall be controlling.  The arbitrators (or sole  arbitrator)
shall select one of the two proposed determinations as the Fair Market Rent, and
shall have no right to propose a middle ground or any  modification of either of
the two proposed  determinations.  The  determination  they or he chooses  shall
constitute the decision of the arbitrator(s) and shall be final and binding upon
the parties.  The  arbitrator(s)  shall  attempt to decide the issue within (10)
days after the appointment to the third arbitrator. Each party shall pay the fee
and  expenses  of its  respective  arbitrator  and both shall  share the fee and
expenses of the third arbitrator, if any. The arbitrator(s) shall have the right
to consult  experts  and  competent  authorities  with  factual  information  or
evidence  pertaining  to a  determination  of Fair Market  Rental,  but any such
consultation  shall be made in the  presence of both  parties with full right of
the other party to  crossexamine.  The  arbitrator(s)  shall render their or his
decision and award in writing with counterpart copies to each party.

                  e. All of the other terms, covenants,  conditions,  provisions
and agreements of this Lease shall remain in full force and effect.

                  f. There shall be no further  right to extend the term of this
Lease, or any right to renew this Lease, beyond the Option Term.

                                       -3-

                                    EXHIBIT E

                                 280(A) Sublease
                              (including Addendum)

                          STANDARD INDUSTRIAL SUBLEASE
                   American Industrial Real Estate Association

1. Parties.  This Sublease,  dated for reference  purposes only June 5, 1996, is
made by and between PINNACLE  SYSTEMS,  INC., a California  corporation  (herein
called   "Sublessor")  and  NETWORK  COMPUTING   DEVICES,   INC.,  a  California
corporation (herein called "Sublessee").

2.  Premises.  Sublessor  hereby  subleases to Sublessee  and  Sublessee  hereby
subleases  from  Sublessor  for the  term,  at the  rental,  and upon all of the
conditions set forth herein,  that certain real property  situated in the County
of Santa Clara,  State of  California,  commonly known as  approximately  41,460
square feet of space ("Premises")  within the building commonly known as 280 (A)
North Bernardo Avenue,  Mountain View, California as more particularly described
on the Floor Plan,  attached  hereto as Exhibit 2, and made a part hereof.  Said
Building, including the surrounding and improvements,  is hereinafter called the
Master Premises.

3.       Term.

         3.1 Term.  The term of this  Sublease  shall be for twelve  (12) months
commencing  on (See  Paragraph 1 of the First  Addendum  to Standard  Industrial
Sublease attached hereto ("First Addendum")).

         3.2 Delay in Commencement.  Notwithstanding  said commencement date, if
for any reason Sublessor cannot deliver  possession of the Premises to Sublessee
on said date,  Sublessor  shall not be subject to any liability  therefore,  nor
shall such  failure  affect the  validity  of this Lease or the  obligations  of
Sublessee  hereunder or extend the term hereof, but in such case Sublessee shall
not be  obligated  to pay rent until  possession  of the Premises is tendered to
Sublessee.

4. Rent. Sublessee shall pay to Sublessor as rent for the Premises equal monthly
payments of (See Paragraph 2 of the First  Addendum) in advance,  on the 1st day
of each  month  of the term  hereof.  Sublessee  shall  pay  Sublessor  upon the
execution  hereof  $30,000.00 as rent for the first month's Base Rent.  Rent for
any period  during the term  hereof  which is for less than one month shall be a
pro rata  portion of the  monthly  installment.  Rent shall be payable in lawful
money of the United States to Sublessor at the address  stated herein or to such
other persons or at such other places as Sublessor may designate in writing.

5. Security  Deposit.  Sublessee  shall deposit with  Sublessor  upon  execution
hereof   $32,339.00  as  security  for  Sublessee's   faithful   performance  of
Sublessee's  obligations  hereunder.  If  Sublessee  fails  to pay rent or other
charges due  hereunder,  or otherwise  defaults with respect to any provision of
this  Sublease,  Sublessor  may use,  apply or retain all or any portion of said
deposit  for the  payment  of any rent or other  charge  in  default  or for the
payment of any other sum to which  Sublessor  may become  obligated by reason of
Sublessee's  default,  or to  compensate  Sublessor for any loss or damage which
Sublessor may suffer thereby. If Sublessor so uses or applies all or any portion
of said  deposit,  Sublessee  shall  within ten (10) days after  written  demand
therefore  deposit cash with  Sublessor in an amount  sufficient to restore said
deposit to the full amount hereinabove  stated and Sublessee's  failure to do so
shall be a

                                       -1-

material  breach of this Sublease.  Sublessor shall not be required to keep said
deposit  separate  from its  general  accounts.  If  Sublessee  performs  all of
Sublessee's  obligations hereunder,  said deposit, or so much thereof as has not
theretofore  been applied by Sublessor,  shall be returned,  without  payment of
interest or other  increment for its use to Sublessee (or at Sublessor's  option
to the  last  assignee,  if  any,  of  Sublessee's  interest  hereunder)  at the
expiration of the term hereof, and after Sublessee has vacated the Premises.  No
trust  relationship  is created  herein  between  Sublessor and  Sublessee  with
respect to said Security Deposit.

6.       Use.

         6.1 Use.  The  Premises  shall be used and  occupied  only for  general
office,  testing,  packaging  and  shipping of  computers,  monitors and related
electronic devices and for no other purpose.

         6.2     [paragraph intentionally omitted]

         6.3     [paragraph intentionally omitted]

7.       Master Lease.

         7.1  Sublessor  is the  lessee  of the  Premises  by  virtue of a lease
between D.R.  Stephens & Company,  a  California  limited  partnership  ("Master
Lessor") and Sublessee dated August 18, 1992 ("Original Lease"). Pursuant to the
certain  Assignment  and  Modification  of Leases of even  date  herewith  among
Sublessor,  Sublessee and Master Lessor (the  "Assignment"),  the Original Lease
was amended and  Sublessee's  interest  therein was assigned to  Sublessor.  The
Original  Lease as so amended  and  assigned is  hereinafter  referred to as the
Master Lease, a copy of which is attached hereto marked Exhibit 1.

         7.2 This Sublease is and shall be at all times subject and  subordinate
to the Master Lease.

         7.3     [paragraph intentionally omitted]

         7.4     [paragraph intentionally omitted]

         7.5     [paragraph intentionally omitted]

         7.6     [paragraph intentionally omitted]

         7.7     [paragraph intentionally omitted]

         7.8     [paragraph intentionally omitted]

8.0       [paragraph intentionally omitted]

9.0       [paragraph intentionally omitted]

                                       -2-

10.      [paragraph intentionally omitted]

11.  Attorney's  fees. If any party named herein brings an action to enforce the
terms hereof or to declare rights  hereunder,  the prevailing  party in any such
action on trial and appeal, shall be entitled to his reasonable  attorneys' fees
to be paid by the losing party as fixed by the Court.

12.  Additional  Provisions.  If there are no additional  provisions draw a line
from this point to the next printed word after the space left here. If there are
additional provisions place the same here.

         SEE FIRST ADDENDUM.

Executed at                         /s/ Arthur Chadwick
           ---------------              ----------------------------------------
on                                  By Arthur Chadwick
  ------------------------             -----------------------------------------
address                             By
       -------------------            ------------------------------------------
                                            "Sublessor" (Corporate Seal)
- --------------------------
Executed at                         /s/ Jack Bradley
           ---------------              ----------------------------------------
on                                  By Jack Bradley
  ------------------------             -----------------------------------------
address                             By
       -------------------            ------------------------------------------
                                            "Sublessee" (Corporate Seal)
- --------------------------
Executed at                         /s/ D.R. Stephens
           ---------------              ----------------------------------------
on                                  By D.R. Stephens
  ------------------------             -----------------------------------------
address                             By
       -------------------            ------------------------------------------
                                            
- --------------------------                 "Master Lessor" (Corporate Seal)

                                       -3-

                                    Exhibit I

                                  Master Lease

                                [to be inserted]

                                    Exhibit 2

                                   Floor Plan

                                [to be inserted]

                 FIRST ADDENDUM TO STANDARD INDUSTRIAL SUBLEASE

         THIS FIRST ADDENDUM TO STANDARD  INDUSTRIAL SUBLEASE ("First Addendum")
is made between PINNACLE SYSTEMS, INC., as Sublessor ("Sublessor"),  and NETWORK
COMPUTING  DEVICES,  INC.,  as  Sublessee  ("Sublessee"),  to be a part  of that
certain Standard Industrial Sublease  ("Sublease") of even date herewith between
Sublessor  and  Sublessee  for   approximately   41,460  square  feet  of  space
("Premises") within the Building  ("Building")  located at 280(A) North Bernardo
Avenue, Mountain View, California ("Master Premises").

         1.       Term:

                  a. Term: The term of this Sublease (the "Term") shall be for a
period of twelve  (12) months and shall  commence  (the  "Sublease  Commencement
Date")  upon the  "Closing"  as  defined in the  Agreement  to Assign and Modify
Leases of even date  herewith  among  Sublessor,  Sublessee  and  Master  Lessor
("Agreement"), and shall expire (the "Expiration Date") on the last calendar day
of the twelfth (12th) month following the Sublease Commencement Date, unless the
Sublease  is sooner  terminated  pursuant  to its terms or the  Master  Lease is
sooner terminated  pursuant to its terms. If for any reason the Closing does not
occur as and when required under the  Agreement,  then this Sublease shall be of
no force and effect and shall automatically be deemed terminated.

                  b. No Option to Extend:  The parties hereto  acknowledge  that
Sublessee has no option to extend the Term of the Sublease beyond the Expiration
Date.

                  c.  Right of First  Offer:  If at any time  during  the  Term,
Sublessor  desires  to  sublet,  rather  than  occupy,  the  Premises  after the
Expiration  Date,  and if Sublessee is not then in default (or would not then be
in default but for the pendency of any grace period) under this  Sublease,  then
Sublessor  shall notify  Sublessee in writing of the terms on which Sublessor is
willing to sublease the Premises after the  Expiration  Date. If within ten (10)
days  after  receipt  of  Sublessor's  notice,  Sublessee  agrees in  writing to
sublease  the  Premises  upon such  terms or such  other  terms as are  mutually
acceptable to Sublessor and Sublessee,  and Master Lessor approves in writing of
same,  then  Sublessor  and  Sublessee  shall execute a sublease upon such terms
within twenty (20) days of Sublessee's  receipt of Sublessor's notice. If either
Sublessee does not deliver its notice of intent to sublease the Premises  within
said ten (10) day  period,  if  Sublessor  and  Sublessee  do not  enter  into a
fully-executed  sublease  within said twenty (20)  period,  or if  Sublessor  is
unable to obtain Master Lessor's  written  approval of such sublease within said
twenty (20) day period,  then this right of first offer to sublease  shall lapse
and be of no further force or effect;  in such event,  Sublessor  shall have the
right to  sublease  the  Premises  to a third  party on the same or on any other
terms more or less  favorable  than those  offered to  Sublessee.  This right of
first offer is personal to Sublessee and is not transferable.

         2.       Monthly Rent:

                  a. Monthly Base Rent: Sublessee shall pay to Sublessor as Base
Rent  ("Base  Rent")  for the  Premises  equal  monthly  installments  of Thirty
Thousand Dollars ($30,000). Base Rent shall be

                                       -1-

paid monthly on or before the first (1st) day of each calendar  month.  Rent for
any period  during the term  hereof  which is for less than a complete  calendar
month  shall be a pro rata  portion  of the  monthly  installment  based  upon a
thirty-day month. All rent shall be payable without notice or demand and without
any  deduction,  offset,  or abatement,  in lawful money of the United States of
America.  All rent shall be paid directly to Sublessor c/o Mr. Arthur  Chadwick,
Pinnacle Systems, Inc., 870 West Maude Avenue,  Sunnyvale,  California 94086, or
to such other persons or at such other addresses as may be designated in writing
from time to time by Sublessor.

                  b.  Additional  Rent:  All  monies  required  to  be  paid  by
Sublessee under this Sublease, including without limitation, any amounts payable
by  Sublessee or Sublessor  to Master  Lessor  shall be deemed  additional  rent
hereunder.

                  c. Operating Expenses and Real Property Taxes: Sublessee shall
pay to Sublessor  upon demand all insurance  expenses.  Real Property  Taxes (as
defined  in the  Master  Lease  and  incorporated  herein),  or any  installment
thereof,  and any other  expenses under the Master Lease that are required to be
paid  by  Sublessor  to  Master  Lessor,  or  otherwise  required  to be paid by
Sublessor under the Master Lease.

         3.       [Paragraph Intentionally Omitted.]

         4. Use;  Compliance  with Laws:  As Sublessor has been in possession of
the Premises under the Original Lease,  Sublessor has not made and does not make
any representations or warranties  regarding the suitability of the Premises for
Sublessee's  intended use, the permissibility of Sublessee's  intended use under
applicable  laws,  or  the  requirements,  if  any,  which  may  be  imposed  by
governmental  authorities  with respect to such use.  Sublessee,  at Sublessee's
sole cost and  expense,  shall comply with all laws,  ordinances,  underwriter's
requirements,  statutes,  rules,  regulations,  court orders and requirements of
every governmental  authority  (collectively,  "Laws") pertaining to Sublessee's
use of the Premises  and the conduct of  Sublessee's  business at the  Premises,
including without limitation all health and safety Laws,  environmental Laws and
Laws  regarding  construction  of  improvements  in,  on, or about the  Premises
(including without limitation the Americans with Disabilities Act).

         5. Condition: As Sublessor has been in possession of the Premises under
the Original Lease, Sublessor has not made and does not make any representations
or  warranties  regarding  the  quality  or  condition  of the  Premises  or any
improvements located thereon. The Premises are subleased to Sublessee "AS IS" in
their current condition.  Sublessor shall have no obligation  whatsoever to make
or pay the cost of any  alterations,  improvements  or repairs to the  Premises,
including, without limitation, any alteration, improvement or repair required to
comply  with any Laws.  Sublessee  shall  look  solely to Master  Lessor for the
performance  of any  maintenance,  repairs  and/or  restoration  required  to be
performed by Master Lessor under the terms of the Master Lease.

         6. Status of Master  Lease:  This Sublease is and shall at all times be
subject in all respects and  subordinate to the Master Lease.  Sublessee  hereby
expressly  assumes and agrees,  except to the extent  expressly  provided to the
contrary in this Sublease (i) to comply with all provisions of the Master Lease,
(ii) to perform all  obligations of the "Lessee" under the Master Lease in favor
of Sublessor and

                                       -2-

Master  Lessor,  and (iii) to hold  Sublessor  free and harmless of and from all
liability,  judgments,  costs, damages, claims, demands, and expenses (including
reasonable  attorneys' and experts' fees) arising out of Sublessee's  failure to
comply with or to perform Sublessee's  obligations  hereunder or the obligations
of the "Lessee" under the Master Lease as herein  provided.  In the event of the
termination of  Sublessor's  interest as "Lessee" under the Master Lease for any
reason,  then this Sublease shall terminate  concurrently  therewith without any
liability of Sublessor or Master Lessor to Sublessee.  If, however, there is any
conflict  between the terms and  conditions  of this  Sublease and the terms and
conditions of the Master Lease,  as between  Sublessor and Sublessee,  the terms
and conditions of this Sublease shall control.

         7. Broker: Sublessee agrees to pay for and hold Sublessor harmless from
and  against  all claims for  brokerage  commissions,  finder's  fees,  or other
compensation  made by any agent,  broker,  salesman or finder in connection with
this transaction.

         8. Sublessee's  Indemnity:  In amplification  and not in restriction of
Sublessee's  other indemnity  obligations to Sublessor as stated in that certain
Agreement  Concerning  Assignment  of Leases  between  the  parties of even date
herewith  (the  "Assignment  Agreement"),  Sublessee  shall  indemnify,  defend,
protect,  and hold  Sublessor  harmless  from and against  all claims,  demands,
causes of  action,  losses and  expenses  (collectively  "Claims")  which may be
brought  against  Sublessor or which  Sublessor  may pay or incur by reason of a
Breach of this Sublease by Sublessee,  a  misrepresentation  by Sublessee of the
matters set forth herein,  or the negligence or willful  misconduct of Sublessee
or  Sublessee's  employees,  agents,  contractors,  or  invitees in or about the
Premises  during  the Term to the  extent  that the Claims are not caused by the
negligence or willful  misconduct of Sublessor or  Sublessor's  agents.  Without
limiting the  generality of the foregoing,  Sublessee  shall  indemnify  defend,
protect and hold  Sublessor  harmless  from and against any Claims  which may be
brought  against  Sublessor or which Sublessor may pay or incur by reason of any
violation of law by Sublessee or its employees, agents or contractors during the
Term.

         9. Assignment and Subletting: Sublessee shall not assign this Sublease,
or sublet all or any portion of the  Premises.  If Sublessee  assigns or sublets
the Premises,  such  assignment  or subletting  shall be null and void and shall
constitute a Breach of this Sublease.

         10.  Effect  of  Conveyance:   As  used  in  this  Sublease,  the  term
"Sublessor"  means the holder of the interest of the  "Lessee"  under the Master
Lease. In the event of any transfer of said Lessee's  interest,  Sublessor shall
be and hereby is entirely relieved and released of all covenants and obligations
of the  Sublessor  hereunder,  and it shall be  deemed  and  construed,  without
further agreement between the parties, that the transferee has assumed and shall
carry out all  covenants  and  obligations  thereafter  to be  performed  by the
Sublessor  hereunder.  Sublessor  may  transfer  and  deliver  any  security  of
Sublessee to the transferee of said Lessee's  interest in the Master Lease,  and
thereupon  Sublessor shall be discharged from any further liability with respect
thereto.

         11.  Incorporation  of Master Lease:  Unless  specifically  excluded or
modified,  the terms and  conditions of this Sublease shall include all Articles
and  Paragraphs of the Original Lease as modified by the  Assignment,  which are
incorporated into this Sublease as if fully set forth, except that: (i) each

                                       -3-

reference in such  incorporated  Articles  and  Paragraphs  to "Lease"  shall be
deemed a reference to "Sublease"; (ii) each reference to the "Premises" shall be
deemed a reference to the subleased  "Premises" herein;  (iii) each reference to
"Lessor"  and  "Lessee"  shall  be  deemed  a  reference  to   "Sublessor"   and
"Sublessee",  respectively, except as otherwise expressly set forth herein; (iv)
with  respect  to  work,  services,  repairs,  restoration,   insurance  or  the
performance of any other obligation of Master Lessor under the Master Lease, the
sole obligation of Sublessor shall be to request the same in writing from Master
Lessor  as and when  requested  to do so by  Sublessee,  and to use  Sublessor's
reasonable  efforts  (excluding the payment of money or other items of value) to
obtain  Master  Lessor's  performance;  (v) with  respect to any  obligation  of
Sublessee to be performed under this Sublease,  wherever the Master Lease grants
to  Sublessor a specified  number of days to perform its  obligations  under the
Lease, except as otherwise provided herein, Sublessee shall have three (3) fewer
days to  perform  the  obligation,  including,  without  limitation,  curing any
defaults; and (vi) with respect to any approval required to be obtained from the
"Landlord"  under the Master  Lease,  such  consent  must be obtained  from both
Master  Lessor and  Sublessor,  and the approval of Sublessor may be withheld if
Master Lessor's  consent is not obtained.  The following  Articles,  Paragraphs,
Addenda and Exhibits of and to the Original Lease as amended by the  Assignment,
are hereby excluded from this Sublease:  Article 1, except for Paragraph 1.8 and
1 .9:  Articles 3, 12 and 15; the second  sentence  of Article  22;  Article 25;
Lease Addendum Paragraphs 2, 3, 8, 9, 10 and 11, and the Work Letter.

         12.  Surrender of Premises:  Prior to the  expiration of this Sublease,
Sublessee  shall remove all of its trade  fixtures and  personal  property  (and
repair any damage  caused by such  removal) and shall  surrender the Premises to
Sublessor in good condition, reasonable wear and tear, excepted, and free of any
Hazardous  Materials  released or  otherwise  caused by  Sublessee,  its agents,
employees or contractors. If the Premises are not so surrendered, then Sublessee
shall be liable to  Sublessor  for all costs  incurred by Sublessor in returning
the Premises to the required  condition.  Sublessee  shall  indemnify  Sublessor
against all loss and liability  resulting from Sublessee's delay in surrendering
the Premises.

         13.  Survival:  All provisions of the Sublease  which,  by their import
should survive the termination or sooner expiration of this Sublease (including,
without limitation, all indemnifications hereunder) shall so survive.

         14.  Effect of Addendum:  All terms with initial  capital  letters used
herein  as  defined  terms  shall  have  the  meanings  ascribed  to them in the
Sublease,  unless specifically defined herein. In the event of any inconsistency
between this First Addendum (and any exhibits  attached hereto) and the Sublease
(and any exhibits  attached  thereto),  the terms of this First  Addendum  shall
prevail. As used herein, the

                                       -4-

term  "Sublease"  shall mean the Sublease,  this First Addendum and all addenda,
riders, exhibits,  rules,  regulations,  covenants,  conditions and restrictions
referred to in the Sublease or this First Addendum.

SUBLESSOR:                                      SUBLESSEE:

PINNACLE SYSTEMS, INC.                          NETWORK COMPUTING DEVICES, INC.

By: /s/ Arthur Chadwick                         By: /s/ Jack Bradley
    ----------------------------                    ----------------------------

Printed                                         Printed
Name: Arthur Chadwick                           Name: Jack Bradley
      --------------------------                      --------------------------

Title: Chief Financial Officer                  Title: Chief Financial Officer
       -------------------------                       -------------------------

Date: May 31, 1996                              Date: May 31, 1996
      --------------------------                      --------------------------

                                       -5- 

Basic Info X:

Name: ASSIGNMENT AND MODIFICATION OF LEASES
Type: Assignment and Modification of Leases
Date: Sept. 17, 1996
Company: PINNACLE SYSTEMS INC
State: California

Other info:

Date:

  • 16th day of August , 1996
  • October 1 , 1992
  • June 30 , 2000
  • last day of December , 2003
  • June 1 , 2001
  • December 31 , 2003
  • November 30 , 2012
  • June 1 , 1993
  • thirty 30
  • Sunday
  • August 3 , 1992
  • October 23 , 1992
  • December 7 , 1992
  • January 25 , 1993
  • December 1 , 2003
  • November 30 , 2013
  • November 30 , 2002
  • June 1 , 2006
  • November 30 , 2008
  • December 1 , 2008
  • May 30 , 2011
  • June 1 , 2011
  • June 5 , 1996
  • August 18 , 1992
  • May 31 , 1996

Organization:

  • Agreement Concerning Assignment
  • Assignee Security Deposit
  • c. Insuring Party
  • Grubb & Ellis Company
  • Montgomery Street Devices , Inc.
  • Trane Unit Serial Nos
  • J.R. Parish , Inc.
  • Utility Installations or Trade Fixtures
  • Commercial General Liability
  • U.S. Department of Labor Consumer Price Index for All Urban Consumers
  • Lessee 's Property Insurance
  • Damage Near End of Term
  • Hazardous Substance Condition of Lessor
  • Lessor of Lessee
  • Lessee 's Security Deposit
  • Net Worth of Lessee
  • Conditions Applicable to Assignment
  • Federal Reserve Bank of
  • Time of Essence
  • Postal Service Express Mail
  • United States Express Mail
  • United States Postal Service
  • Attornment ; Non-Disturbance
  • General Partner Title
  • Air Conditioner Compressors
  • Security and Communication Systems
  • Original Term of Tenant
  • Base Monthly Rent
  • N. Bernardo Lease
  • Network Computing Devices , Inc.
  • Six Hundred Fifty Thousand
  • City of Mountain View
  • ReelGrobman & Associates
  • D. R. STEPHENS & COMPANY By s D.R
  • American Arbitration Association
  • Fair Market Rental
  • American Industrial Real Estate Association 1
  • State of California
  • First Addendum to Standard Industrial Sublease
  • Thirty Thousand Dollars
  • Pinnacle Systems , Inc.
  • Paragraph Intentionally Omitted

Location:

  • Assignee
  • Tel
  • Addendum
  • Lessor
  • U.S
  • Lessee
  • California Mountain View
  • San Francisco
  • Los Angeles
  • Tenant
  • San Jose
  • Santa Clara
  • North Bernardo Avenue
  • United States of America
  • West Maude Avenue
  • Sunnyvale
  • Paragraphs

Money:

  • $ 83,040
  • $ 16,000
  • $ 100,700
  • $ 45,305.00 $ 45,186.00
  • $ 50,502.00
  • $ 50,000.00
  • $ 41,575.00
  • $ 20,400
  • $ 414,600.00
  • $ 41,465.00
  • $ 25,000
  • $ 1,000,000
  • $ 5,000.00
  • $ 10,000
  • $ 100,000
  • $ 14,000
  • $ 650,000.00
  • $ 0.05
  • $ 30,000.00
  • $ 32,339.00

Person:

  • Assignor
  • Aruthur Chadwick
  • Donald R. Stephens
  • Spallino Reid
  • Grobman
  • D. R. Stephens
  • N. Bernardo Avenue
  • Sublessor
  • Lessee
  • Arthur Chadwick
  • Jack Bradley

Percent:

  • fifty-one percent 51 %
  • ten percent 110 %
  • six percent 6 %
  • twenty-five percent 25 %
  • 12 %
  • ninety-five percent
  • 95 %
  • fifty percent
  • 50 %
  • 90 %
  • forty percent 140 %