<PAGE>

______________________________THREE SISTERS RANCH______________________________
                                 ENTERPRISES


                               TABLE OF CONTENTS

                                                                      PAGE
                                                                      ----
BASIC LEASE INFORMATION ............................................    1

PREMISES ...........................................................    1

POSSESSION AND LEASE COMMENCEMENT ..................................    1

TERM ...............................................................    1

USE ................................................................    1

RULES AND REGULATIONS ..............................................    2

RENT ...............................................................    2

BASIC OPERATING COST ...............................................    3

INSURANCE AND INDEMNIFICATION ......................................    5

WAIVER OF SUBROGATION ..............................................    6

LANDLORD'S REPAIRS AND SERVICES ....................................    6

TENANT'S REPAIRS ...................................................    6

ALTERATIONS ........................................................    7

SIGNS ..............................................................    7

INSPECTION/POSTING NOTICES .........................................    7

UTILITIES ..........................................................    7

SUBORDINATION ......................................................    8

FINANCIAL STATEMENTS ...............................................    8

ESTOPPEL CERTIFICATE ...............................................    8

SECURITY DEPOSIT ...................................................    8

TENANT'S REMEDIES ..................................................    8

ASSIGNMENT AND SUBLETTING ..........................................    9

AUTHORITY OF PARTIES ...............................................    9

CONDEMNATION .......................................................    9

CASUALTY DAMAGE ....................................................   10

HOLDING OVER .......................................................   10

DEFAULT ............................................................   11

LIENS ..............................................................   12

TRANSFERS BY LANDLORD ..............................................   12

RIGHT OF LANDLORD TO PERFORM TENANT'S COVENANTS ....................   12

WAIVER .............................................................   13

NOTICES ............................................................   13

ATTORNEYS' FEES ....................................................   13

SUCCESSORS AND ASSIGNS .............................................   13

FORCE MAJEURE ......................................................   13

BROKERAGE COMMISSION ...............................................   13

MISCELLANEOUS ......................................................   14

ADDITIONAL PROVISIONS ..............................................   14


                                      i

                                             PLEASE INITIAL:     Landlord
                                             Tenant          / /          / /
<PAGE>

                              THREE SISTERS RANCH
                             E N T E R P R I S E S

                            BASIC LEASE INFORMATION

LEASE DATE:

TENANT                   Conceptus, Inc.

TENANT'S ADDRESS:        981 Industrial Road 
                         San Carlos, CA  94070

LANDLORD:                Three Sisters Ranch Enterprises
    
LANDLORD'S ADDRESS:      P. O. Box 1444
                         San Carlos, CA  94070

Project:                 San Carlos Business Park
    
Description              That six (6) building project totaling approximately 
                         123,280 square feet commonly known as San Carlos 
                         Business Park, San Carlos, California.
    
Building Description:    BUILDING 1:
                         That approximately 23,000 square foot, one story 
                         tilt-up concrete building known as 981 Industrial 
                         Road in San Carlos, California.  The building is
                         outlined in blue on Exhibit A.
    
                         BUILDING 2:
                         That approximately 21,680 square foot, one story 
                         tilt-up concrete building known as 957 Industrial 
                         Road in San Carlos, California.  The building is
                         outlined in yellow on Exhibit A.

Premises:                (a)  That approximately 11,941 square feet of 
                         rentable area known as Suites B and D of 981 
                         Industrial Road, San Carlos, California.  The 
                         demised premises are outlined in red on Exhibit A.  
                         See Paragraph 1.
    
                         (b)  That approximately 8,217 square feet of 
                         rentable area known as Suites L, J, D and F of 
                         957 Industrial Road, San Carlos, California.  The 
                         demised premises are outlined in green on Exhibit A. 
                         See Paragraph 1.

                         (c)  That approximately 4380 square feet of 
                         rentable area known as Suite P of 957 Industrial 
                         Road, San Carlos, California.  The demised premises 
                         are outlined in pink on Exhibit A. See Paragraph 1.

Permitted Use:           General office, storage and distribution, light 
                         manufacturing not involving hazardous or toxic 
                         materials other than those consistent with normal
                         office use and other directly related and concurrent 
                         related legal uses.  See Paragraph 4.
    
Parking Density:         Three (3) unreserved automobile parking spaces per 
                         1,000 square feet, free of charge throughout the term 
                         of the Lease.
<PAGE>

Estimated Term 
Commencement Date:       The Lease Term shall commence on:

                         Suites B & D,        981 Industrial Road:    05/15/97
                         Suites D, F, L & J,  957 Industrial Road:    06/01/97
                         Suite P,   957 Industrial Road:       
                         When vacated by existing tenant, Lessee shall have 30 
                         days of  free  rent pursuant to the terms set forth 
                         herein.

Length of Term:          (a) INITIAL TERM:  All leases shall expire on 
                         May 31,  2002.

                         Tenant may not terminate any portion of the leases 
                         premises hereunder , except as specified as to 
                         asbestos remediation as set forth in  this Lease.  
                         Failure to pay rent on any suite, or other breach of 
                         this lease as  to any suite, shall be a default of  
                         the entire lease and  each suite shall be subject  
                         to such default.  THE OCCUPANCY RIGHTS OF THE SUITES 
                         IS COTERMINOUS AND THE TERMINATION OF LEASE RIGHTS, 
                         BY LAPSE OF TIME OR BY BREACH, SHALL TERMINATE ALL 
                         LEASE OCCUPANCY RIGHTS AS TO ALL SUITES (EXCEPT AS 
                         TO TERMINATION DUE TO ACM ABATEMENT AS PROVIDED FOR 
                         BELOW).

                         (b) TERM EXTENSIONS:  One (1) extension for a Sixty 
                         (60) Month period according to the terms of 
                         Paragraph 43.

Rent:    

   Base Rent

<TABLE>
<CAPTION>
Suite Numbers                  Sq. Ft           Period              Base NNN Rent Per Sq. Ft.
-------------                  ------           ------              -------------------------
<S>                            <C>         <C>                      <C>
981 Ind. Ste. B & D            11, 941     5/15/97 - 5/31/98                   $ 1.05
                                           6/01/98 - 5/31/99                   $ 1.10
                                           6/01/99 - 5/31/00                   $ 1.15
                                           6/01/00 - 5/31/01                   $ 1.20
                                           6/01/01 - 5/31/02                   $ 1.25


957 Ind. Ste. D, F, J & L      8,217       6/01/97 - 5/31/98                   $ 1.05
                                           6/01/98 - 5/31/99                   $ 1.10
                                           6/01/99 - 5/31/00                   $ 1.15
                                           6/01/00 - 5/31/01                   $ 1.20
                                           6/01/02 - 5/31/02                   $ 1.25

957 Ind. Ste. P                4,380       When vacated by existing tenant leasee shall have
                                           30 days of free rent thereafter per rent amounts for 957 Ind. 
                                           Ste. D, F, J & L.


Estimated First Year Basic Operating Cost:          $0.20 /sq.ft./mo. NNN (not to exceed $0.20 
                                                   /sq.ft./mo. NNN for 1997)  See Paragraph 7.
</TABLE>
<PAGE>


FIRST MONTH'S RENT THRU 6/30/97  $27,434.92

Security Deposit:       $25,764.90.  See Paragraph 19.     
    
Tenant's Proportionate Share:

  Of Building 1:   51.9%
  Of Building 2:   58.1%
  
  Of Project:        19.9%   

Broker:            Tenant:  CB/Madison            See Paragraph 35.
                   Landlord:  CB Commercial



The foregoing Basic Lease Information is incorporated into and made a part of 
this Lease.  Each reference in this Lease to any of the Basic Lease 
Information shall mean the respective information above and shall be 
construed to incorporate all of the terms provided under the particular Lease 
paragraph pertaining to such information.  In the event of any conflict 
between the Basic Lease Information and the Lease, the latter shall control.  
All square footage is approximate.  Measurements are calculated uniformly 
throughout the project. Tenant may have measurements verified by an architect 
at its sole cost and expense.

<PAGE>

                                   LEASE

THIS LEASE is made as of this 15th day of April, 1997, by and between 
Three Sisters Ranch Enterprises (hereinafter called "Landlord") and Conceptus, 
Inc. (hereinafter called "Tenant").

PREMISES     1.  Landlord leases to Tenant and Tenant leases from Landlord, 
                 upon the terms and conditions hereinafter set forth, those 
                 premises (the "Premises") outlined in red on Exhibit A and 
                 described in the Basic Lease Information.  The Premises may be 
                 all or part of the building(s) (the "Building(s)") or of the 
                 project (the "Project") which may consist of more than one 
                 building.  Tenant's right to use  the Premises shall include 
                 the right of reasonable ingress and egress to the Premises, 
                 the right to use any other reasonably necessary easements or 
                 rights of way, and the right to use common and joint use areas 
                 throughout  the Project. The Building(s) and Project are 
                 outlined in blue and green respectively on Exhibit A.

POSSESSION   2.  A.  EXISTING IMPROVEMENTS.  In the event this Lease pertains
 AND LEASE       to a Premises in which the interior improvements have already
 COMMENCE-       been constructed ("Existing Improvements"), the provisions of 
      MENT       this Paragraph 2.A. shall apply and the term commencement 
                 date ("Term Commencement Date") shall be the earlier of the 
                 date on which:  (1) Tenant takes possession of some or all 
                 of the Premises; or (2) Landlord delivers written notice to 
                 Tenant that Tenant may occupy the Premises.  If for any 
                 reason Landlord cannot deliver possession of the Premises to 
                 Tenant on the Estimated Term Commencement Date, Landlord 
                 shall not be subject to any liability therefor, nor shall 
                 Landlord be in default hereunder, and Tenant agrees to 
                 accept possession of the Premises at such time as Landlord 
                 is able to deliver the same, which date shall then be deemed 
                 the Term Commencement Date.  Tenant shall not be liable for 
                 any Rent for any period prior to the Term Commencement Date. 
                  Tenant acknowledges that Tenant has inspected and accepts 
                 the Premises in their present condition, broom clean, "as 
                 is", as suitable for the purpose for which the Premises are 
                 leased.  Tenant agrees that said Premises and other 
                 improvements are in good and satisfactory condition as of 
                 when possession was taken.  Tenant further acknowledges that 
                 no representations as to the condition or repair of the 
                 Premises nor promises to alter, remodel or improve the 
                 Premises have been made by Landlord unless such are 
                 expressly set forth in this Lease.  Tenant shall, upon 
                 demand, execute and deliver to Landlord a letter of 
                 acceptance of delivery of the Premises.

                 B.  CONSTRUCTION OF IMPROVEMENTS. In the event this Lease 
                 pertains to a Building to be constructed or improvements to be 
                 construed within a Building, the provisions of this Paragraph 
                 2.B shall apply in lieu of the provisions of Paragraph 2.A. 
                 above and the term commencement date ("Term Commencement 
                 Date") shall be the earlier of the date on which:  (1) 
                 Tenant takes possession of some or all of the Premises, or 
                 (2) the improvements constructed or to be construed in the 
                 Premises shall have been substantially completed in 
                 accordance with the plans and specifications described on 
                 Exhibit B, whether or not substantial completion of the 
                 Building itself shall have occurred.  If for any reason 
                 Landlord cannot deliver possession of the Premises to Tenant 
                 on the Estimated Term Commencement Date, Landlord shall not 
                 be subject to any liability therefor, nor shall Landlord be 
                 in default hereunder.  In the event of any dispute as to 
                 substantial completion of work performed or required to be 
                 performed by Landlord, the certificate of Landlord's 
                 architect or general contractor shall be conclusive.  
                 Substantial completion shall have occurred notwithstanding 
                 Tenant's submission of a punchlist to Landlord, which Tenant 
                 shall submit, if at all, within thirty (30) days after the 
                 Term Commencement Date.  Tenant shall, upon demand, execute 
                 and deliver to Landlord a letter of acceptance of delivery 
                 of the Premises.

TERM         3.  The Term of this Lease shall commence on the Term 
                 Commencement Date and continue in full force and effect for 
                 the number of months as the Length of Term in the Basic Lease 
                 Information or until this Lease is terminated as otherwise 
                 provided herein (Initial Term).  If the Term Commencement Date 
                 is a date other than the first day of the calendar month, the 
                 Term shall be the number of months of the Length of Term in 
                 addition to the remainder of the calendar month following the 
                 Term Commencement Date.

USE          4.  A.  GENERAL.  Tenant shall use the Premises for the Permitted 
                 Use and for no other use or purpose.  Tenant shall control 
                 Tenant's employees, agents, customers, visitors, invitees, 
                 licensees, contractors, assignees and subtenants 
                 (collectively, "Tenant's Parties") in such a manner that Tenant
                 and Tenant's Parties cumulatively do not exceed the Parking 
                 Density at any time.  Tenant and Tenant's parties shall have 
                 nonexclusive right to use, in common with other parties 
                 occupying the Building or Project, the parking areas and 
                 driveways of the Project, subject to such rules and 
                 regulations as Landlord may from time to time prescribe.
                                           
                 B.  LIMITATIONS. Tenant shall not permit any odors, smoke, 
                 dust, gas, substances, noise or vibrations to emanate from 
                 the Premises, nor taken any action which could reasonably and 
                 potentially constitute a nuisance or could disturb, obstruct 
                 or endanger any other tenants of the Building or Project in 
                 which the Premises are situated or interfere with their use 
                 of their respective premises.  Storage outside the Premises 
                 of materials, vehicles or any other items is prohibited.  
                 Tenant shall not use or allow the Premises to be used for any 
                 improper, immoral, unlawful or objectionable purpose, nor 
                 shall Tenant cause or maintain or permit any nuisance in, on 
                 or about the Premises.  Tenant shall not commit or suffer the 
                 commission of any waste in, on or about the Premises. Tenant 
                 shall not allow any sale by auction upon the Premises, or 
                 place any loads upon the floors, walls or ceilings which 
                 endanger the structure, or place any harmful liquids in the 
                 drainage system of the Building or Project.  No waste, 
                 materials or refuse shall be dumped upon or permitted to 
                 remain outside the Premises except in trash containers placed 
                 inside exterior enclosures designated for that purpose by 
                 Landlord.  Landlord shall not be responsible to Tenant for 
                 the 


                                             APPROVAL INITIALS:     Landlord
                                             Tenant          / /          / /
<PAGE>

                 non-compliance by any other tenant or occupant of the 
                 Building or Project with any of the above-referenced rules or 
                 any other terms or provisions of such tenant's or occupant's 
                 lease or other contract.

                 C.  COMPLIANCE WITH REGULATIONS.  Except as otherwise 
                 provided in this Agreement, by entering the Premises, Tenant 
                 accepts the Premises in the condition existing as of the date 
                 of such entry, subject to all existing or future applicable 
                 municipal, state and federal and other governmental statutes, 
                 regulations, laws and ordinances, including zoning ordinances 
                 and regulations governing and relating to the use, occupancy 
                 and possession of the Premises and the use, storage, 
                 generation and disposal of Hazardous Materials (hereinafter 
                 defined) in, on and under the Premises (collectively 
                 "Regulations").  Subject to the terms and conditions of this 
                 Agreement, Tenant, at is sole expense, shall use and occupy 
                 the Premises in compliance with all laws, including, without 
                 limitation, the Americans With Disabilities Act, orders, 
                 judgments, ordinances, regulations, codes, directives, 
                 permits, licenses, covenants and restrictions now or 
                 hereafter applicable to the Premises (collectively, "Legal 
                 Requirements"). The Premises shall not be used as a place of 
                 public accommodation under the Americans With Disabilities 
                 Act or similar state statutes or local ordinances or any 
                 regulations promulgated thereunder, all as may be amended 
                 from time to time. Tenant shall, at its expense, make any 
                 alterations or modifications, within or without the Premises, 
                 that are required by Legal Requirements related to Tenant's 
                 use or occupation of the Premises.  Except for pre-existing 
                 obligations and those obligations placed on the Landlord by 
                 this Lease Agreement, Tenant shall, at Tenant's sole expense, 
                 strictly comply with all Regulations now in force or which 
                 may hereafter be in force relating to the Premises and the 
                 use of the Premises and/or the use, storage or generation of 
                 Hazardous Materials in, on and under the Premises.  Tenant 
                 shall at its sole cost and expense obtain any and all 
                 licenses or permits necessary for Tenant's use of the 
                 Premises.  Tenant shall comply with the requirements of any 
                 board of fire underwriters or other similar body now or 
                 hereafter constituted.  Tenant shall be solely responsible 
                 for compliance with any requirements for modification to the 
                 Premises to provide for fire prevention or suppression 
                 improvements or modifications, including sprinkler 
                 requirements, as public officials or law may require.  Tenant 
                 shall not do or permit anything to be done in, on, or about 
                 the Premises or bring or keep anything which will in any way 
                 increase the rate of any insurance upon the Premises, 
                 Building or Project, or upon any contents therein, or cause a 
                 cancellation of said insurance.  Tenant shall indemnify, 
                 defend, protect and hold Landlord harmless from and against 
                 any loss, cost, expense, damage, attorneys' fees or liability 
                 arising out of the failure to Tenant to comply with any 
                 applicable law or regulation or comply with the requirements 
                 as set forth herein.  The taking of possession of the 
                 Premises shall be conclusive evidence that Tenant accepts the 
                 Premises and that the Premises were in good condition at the 
                 time possession was taken.  Despite any provision herein to 
                 the contrary, if any asbestos containing materials (ACM) is 
                 found to exist in the Premises, which ACM is either (i) 
                 friable or otherwise dangerous in its existing condition, or 
                 (ii) necessary to remove for the purpose of completing the 
                 tenant improvement work, then Landlord will be obligated to 
                 remove the ACM at its own cost, up to a cumulative total of  
                 $50,000.  If the ACM abatement costs exceed $50,000 for the 
                 total of all property leased hereunder, Landlord shall have 
                 the right to terminate this lease with respect to any suite 
                 where the $50,000 cap would be exceeded;  Tenant shall have 
                 the right to any amount in excess of $50,000 at its written 
                 election within fifteen (15) days of notice;  if either 
                 Landlord or Tenant elect not to proceed with payment for ACM 
                 abatement in excess of $50,000 they shall do so without 
                 liability to the other for such election.

                 D.  HAZARDOUS WASTES MATERIALS.  Excepting those chemicals 
                 consistent with normal office use (office cleaning 
                 solutions, white out), Tenant shall not cause, or allow any 
                 of Tenant's Parties to cause, any Hazardous Materials to be 
                 used, generated, stored or disposed of on or about the 
                 Premises, the Building or the Project.  As used in this 
                 Lease, "Hazardous Materials" shall include, but not be 
                 limited to, "hazardous materials," "hazardous wastes," 
                 "toxic substances," or other similar designations in any 
                 federal, state or local law, regulation, or ordinance.  
                 Landlord shall have the right but not the obligation at all 
                 reasonable times to inspect the Premises and to conduct 
                 tests and investigations to determine whether Tenant is in 
                 compliance with the foregoing provisions, the costs of all 
                 such inspections, tests and investigations to be borne by 
                 Tenant.  Tenant shall indemnify, defend, protect and hold 
                 Landlord harmless from and against all liabilities, losses, 
                 costs and expenses, demands, causes of action, claims or 
                 judgments directly or indirectly arising out of the use, 
                 generation, storage or disposal of Hazardous Materials by 
                 Tenant or any of Tenant's Parties, which indemnity shall 
                 include, without limitation, the cost of any required or 
                 necessary repair, cleanup or detoxification, and the 
                 preparation of any closure or other required plans, whether 
                 such action is required or necessary prior to or following 
                 the termination of this Lease.  Neither the written consent 
                 by Landlord to the use, generation, storage or disposal of 
                 Hazardous Materials nor the strict compliance by Tenant with 
                 all laws pertaining to Hazardous Materials shall excuse 
                 Tenant from Tenant's obligation of indemnification pursuant 
                 to this Lease.  Tenant's obligations pursuant to the 
                 foregoing indemnity shall survive the termination of this 
                 Lease.  Tenant shall not be held liable in any manner for 
                 the presence of any Hazardous Materials existing on or about 
                 the Premises, Buildings or the Project prior to the first 
                 Commencement Date of the Lease.

RULES AND    5.       Tenant shall faithfully observe and comply with any rules
REGULATIONS      and regulations Landlord may from time to time prescribe in 
                 writing for the purpose of maintaining the proper care, 
                 cleanliness, safety, traffic flow and general order of the 
                 Premises or Project.  Tenant shall cause Tenant's Parties to 
                 comply with such rules and regulations.  Landlord shall not 
                 be responsible to Tenant for the non-compliance by any other 
                 tenant or occupant of the Building or Project with any of the 
                 rules and regulations.

RENT         6.  A.  BASE RENT.  Tenant shall pay to Landlord, without demand 
                 throughout the Term, Base Rent as specified in the Basic 
                 Lease Information, payable in monthly installments in advance 
                 on or before the first day of each calendar month, in lawful 
                 money of the United States, without deduction or offset 
                 whatsoever, at the address specified in the Basic Lease 
                 Information or to such other place as Landlord may from time 
                 to time designate in writing.  Base Rent and estimated 
                 monthly Basic Operating Cost for the first full month of the 
                 Term shall be paid by Tenant upon 


                                      2

                                             APPROVAL INITIALS:     Landlord
                                             Tenant          / /          / /
<PAGE>

                 Tenant's execution of this Lease.  If the obligation for 
                 payment of Base Rent commences on other than the first day of 
                 a month, then Base Rent and the estimated monthly Basic 
                 Operating Cost payment shall be prorated and the prorated 
                 installment shall be paid on the first day of the calendar 
                 month next succeeding the Term Commencement Date.

                 B.  ADDITIONAL RENT.  All monies other than Base Rent 
                 required to be paid by Tenant hereunder, including, but not 
                 limited to, the interest and late charge described in 
                 Paragraph 26.D., any monies spent by Landlord pursuant to 
                 Paragraph 30, and Tenant's Proportionate Share of Basic 
                 Operating Cost, as specified in Paragraph 7 of this Lease, 
                 shall be considered additional rent ("Additional Rent").  Rent
                 shall mean Base Rent and Additional Rent.
                                            
    BASIC    7.  A.  BASIC OPERATING COST.  In addition to the Base Rent 
OPERATING        required to be paid hereunder, Tenant shall pay as Additional
     COST        Rent, Tenant's Proportionate Share, as defined in the Basic
                 Lease Information, of Basic Operating Cost in the manner set 
                 forth below. Landlord shall account for each item of Basic 
                 Operating Cost as either a cost attributable to the Building 
                 or to the Project, as determined by Landlord in Landlord's 
                 sole discretion, and unless provided to the contrary in this 
                 Lease, Tenant shall pay the applicable Tenant's Proportionate 
                 Share of each such Basic Operating Cost, as set forth in the 
                 Basic Lease Information.  Basic Operating Cost shall mean all 
                 expenses and costs of every kind and nature which Landlord 
                 shall pay or become obligated to pay, because of or in 
                 connection with the management, maintenance, preservation and 
                 operation of the Project and its supporting facilities 
                 (determined in accordance with generally accepted accounting 
                 principles, consistently applied) including but not limited 
                 to the following:

                 (1)  TAXES. All real property taxes, possessory interest 
                 taxes, business or license taxes or fees, service payments in 
                 lieu of such taxes or fees, annual or periodic license or use 
                 fees, excises, transit charges, housing fund assessments, 
                 open space charges, assessments, levies, fees or charges 
                 general and special, ordinary and extraordinary, unforeseen 
                 as well as foreseen, of any kind (including fees "in-lieu" of 
                 any such tax or assessment) which are assessed, levied, 
                 charged, confirmed, or imposed by any public authority upon 
                 the Project, its operations or the Rent (or any portion or 
                 component thereof) (all of the foregoing being hereinafter 
                 collectively referred to as "real property taxes"), or any tax
                 imposed in substitution, partially or totally, of any tax 
                 previously included within the definition of real property 
                 taxes, or any additional tax the nature of which was 
                 previously included within the definition of real property 
                 taxes, except (a) inheritance or estate taxes imposed upon or 
                 assessed against the Project, or any part thereof or interest 
                 therein, and (b) taxes computed upon the basis of net income 
                 of Landlord or the owner of any interest therein, except as 
                 otherwise provided in the following sentence.  Basic 
                 Operating Cost shall also include any taxes, assessments, or 
                 any other fees imposed by any public authority upon or 
                 measured by the monthly rental or other charges payable 
                 hereunder, including, without limitation, any gross income 
                 tax or excise tax levied by the local governmental body with 
                 respect to receipt of such rental, or upon, with respect to 
                 or by reason of the development, possession, leasing, 
                 operation, management, maintenance, alteration, repair, use 
                 or occupancy by Tenant of the Premises or any portion 
                 thereof, or upon this transaction or any document to which 
                 Tenant is a party creating or transferring an interest or an 
                 estate in the Premises.  In the event that it shall not be 
                 lawful for Tenant to reimburse Landlord for all or any part 
                 of such taxes, the monthly rental payable to Landlord under 
                 this Lease shall be revised to net to Landlord the same total 
                 net rental after imposition of any such taxes by Landlord as 
                 would have been payable to Landlord prior to the payment of 
                 any such taxes.

                 (2)  INSURANCE.  All insurance premiums and costs, including 
                 but not limited to, any deductible amounts, premiums and cost 
                 of insurance incurred by Landlord, as more fully set forth in 
                 Paragraph 8.A. herein.

                 (3)  REPAIRS AND IMPROVEMENTS.  Repairs, replacements and 
                 general maintenance for the Premises, Building and Project 
                 (except for those repairs or improvements expressly made the 
                 financial responsibility of Landlord pursuant to the terms of 
                 this Lease, repairs to the extent paid for by proceeds of 
                 insurance or by Tenant or other third parties, and 
                 alterations attributable solely to tenants of the Project 
                 other than Tenant).  Such repairs, replacements, and general 
                 maintenance shall include the cost of any capital 
                 improvements made to or capital assets acquired for the 
                 Project, Building, or Premises after the Term Commencement 
                 Date that reduce any other Basic Operating Cost, are 
                 reasonably necessary for the health and safety of the 
                 occupants of the Project, or are made to the Building by 
                 Landlord after the date of this Lease and are required under 
                 any governmental law or regulation, such costs or allocable 
                 portions thereof to be amortized over such reasonable period 
                 as Landlord shall determine, together with interest on the 
                 unamortized balance at the "prime rate" charged at the time 
                 such improvements or capital assets are constructed or 
                 acquired by Bank of America, N. T. S. A. (San Francisco), 
                 plus two (2) percentage points, but in no event more than the 
                 maximum rate permitted by law.

                 (4)  SERVICES.  Except as otherwise provided in this Section 
                 7, all expenses relating to maintenance, and service 
                 agreements and services, and costs of supplies and equipment 
                 used in maintaining the Premises, Building and Project and 
                 the equipment therein and the adjacent sidewalks, driveways, 
                 parking and service areas, including, without limitation, 
                 alarm service, window cleaning, elevator maintenance, 
                 Building exterior maintenance and landscaping.

                 (5)  UTILITIES.  Utilities which benefit all or a portion of 
                 the Premises, Building or Project.

                 (6)  MANAGEMENT FEE.  A management and accounting cost 
                 recovery fee equal to five percent (5%) of the Basic 
                 Operating Cost.

                 (7)  LEGAL AND ACCOUNTING.  Legal and accounting expenses 
                 relating to the Project, including the cost of audits by 


                                      3

                                             APPROVAL INITIALS:     Landlord
                                             Tenant          / /          / /
<PAGE>

                 certified public accountants.  Legal and accounting expenses 
                 shall be reasonable and shall not include the cost of any 
                 enforcement or eviction action against another tenant at the 
                 Project.

                 In the event that the Building is not fully occupied during 
                 any fiscal year of the as determined by Landlord, an 
                 adjustment shall be made in computing the Basic Operating 
                 Cost for such year so that Tenant pays an equitable portion 
                 of all variable items of Basic Operating Cost, as reasonably 
                 determined by Landlord.

                      In calculating the Basic Operating Cost, Landlord shall 
                 apply the following provision:

                      Any category of costs allocated to the Buildings in 
                 question, the other Buildings of the Project shall also bear 
                 the burden for those categories of costs, so that such costs 
                 will be uniformly treated as Building costs throughout the 
                 Project, on a consistent and non-discriminatory basis.  The 
                 same shall apply for categories of costs allocated as Project 
                 costs.

                      Insurance deductibles in excess of $5,000 shall be 
                 amortized over the useful life of the item repaired or 
                 replaced. Tenant shall not be required to pay the insurance 
                 deductible if the damage results from the gross negligence or 
                 willful misconduct of Landlord or Landlord's agents, 
                 employees or contractors.

                 Basic Operating Cost shall not include specific costs 
                 incurred for the account of, separately billed to and paid by 
                 specific tenants.  Notwithstanding anything herein to the 
                 contrary, in any instance wherein Landlord, in Landlord's 
                 sole discretion, deems Tenant to be responsible for any 
                 amounts greater than Tenant's Proportionate Share, Landlord 
                 shall have the right to allocate costs in any manner Landlord 
                 deems appropriate.

                 The following items shall be excluded from Basic Operating 
                 Costs:  loan payments; brokers' and finders' fees or other 
                 commissions; leasing expenses; depreciation on improvements 
                 or equipment and machinery; expenses for items which are not 
                 generally of use to all tenants; advertising or promotional 
                 expenses; wages, salaries, employee benefits and payroll 
                 taxes for Landlord's personnel (except to the extent such 
                 personnel are employed to operate or repair the Project or 
                 the common area); costs incurred by Landlord in connection 
                 with the clean-up or removal of any Hazardous Materials 
                 existing prior to the respective Commencement Dates of the 
                 Lease Term; or costs or expenses incurred due to violation by 
                 Landlord of any term or condition of the Lease.  In addition, 
                 Basic Operating Costs shall be reduced by insurance or other 
                 recoveries or user fees.

                 B.  PAYMENT OF ESTIMATED BASIC OPERATING COST.  "Estimated 
                 Basic Operating Cost" for any particular year shall mean 
                 Landlord's estimate of the Basic Operating Cost for such 
                 fiscal year made prior to commencement of such fiscal year as 
                 hereinafter provided.  Landlord shall have the right from 
                 time to time to revise its fiscal year and interim accounting 
                 periods so long as the periods as so revised are reconciled 
                 with prior periods in accordance with generally accepted 
                 accounting principles applied in a consistent manner.  During 
                 the last month of each fiscal year during the Term, or as 
                 soon thereafter as practicable, Landlord shall give Tenant 
                 written notice of the Estimated Basic Operating Cost for the 
                 ensuing fiscal year.  Tenant shall pay Tenant's Proportionate 
                 Share of the Estimated Operating Cost with installments of 
                 Base Rent for the fiscal year to which the Estimated Basic 
                 Operating Cost applies in monthly installments on the first 
                 day of each calendar month during such year, in advance.  If 
                 at any time during the course of the fiscal year, Landlord 
                 determines that Basic Operating Cost is projected to vary 
                 from the then Estimated Basic Operating Cost by more than ten 
                 percent (10%), Landlord may, by written notice to Tenant, 
                 revise the Estimated Basic Operating Cost for the balance of 
                 such fiscal year, and Tenant's monthly installments for the 
                 remainder of such year shall be adjusted so that by the end 
                 of such fiscal year Tenant has paid to Landlord Tenant's 
                 Proportionate Share of the revised Estimated Basic Operating 
                 Cost for such year.

                 C.  COMPUTATION OF BASIC OPERATING COST ADJUSTMENT.  "Basic 
                 Operating Cost Adjustment" shall mean the difference between 
                 Estimated Basic Operating Cost and Basic Operating Cost for 
                 any fiscal year determined as hereinafter provided. Within 
                 one hundred twenty (120) days after the end of each fiscal 
                 year, as determined by Landlord, or as soon thereafter as 
                 practicable, Landlord shall deliver to Tenant a statement of 
                 Basic Operating Cost for the fiscal year just ended, 
                 accompanied by a computation of Basic Operating Cost 
                 Adjustment. Landlord's statement of Basic Operating Costs 
                 should include a reasonable line-item breakdown and 
                 reasonable supporting data.  If such statement shows that 
                 Tenant's payment based upon Estimated Basic Operating Cost is 
                 less than Tenant's Proportionate Share of Basic Operating 
                 Cost, then Tenant shall pay to Landlord the difference within 
                 twenty (20) days after receipt of such statement.  If such 
                 statement shows that Tenant's payments of Estimated Basic 
                 Operating Cost exceed Tenant's Proportionate Share of Basic 
                 Operating Cost, then (provided that Tenant is not in default 
                 under this Lease) Landlord shall pay to Tenant the difference 
                 within twenty (20) days after delivery of such statement to 
                 Tenant.  If this Lease has been terminated or the Term hereof 
                 has expired prior to the date of such statement, then the 
                 Basic Operating Cost Adjustment shall be paid by the 
                 appropriate party within twenty (20) days after the date of 
                 delivery of the statement.  Should this Lease commence or 
                 terminate at any time other than the first day of the fiscal 
                 year, Tenant's Proportionate Share of the Basic Operating 
                 Cost adjustment shall be prorated by reference to the exact 
                 number of calendar days during such fiscal year that this 
                 Lease is in effect.

                 D.  NET LEASE.  This shall be a net Lease and Base Rent shall 
                 be paid to Landlord absolutely net of all costs and expenses, 
                 except as specifically provided to the contrary in this 
                 Lease. The provisions for payment of Basic Operating Cost and 
                 the Basic Operating Cost Adjustment are intended to pass on 
                 to Tenant and reimburse Landlord 


                                      4

                                             APPROVAL INITIALS:     Landlord
                                             Tenant          / /          / /
<PAGE>

                 for all costs and expenses of the nature described in 
                 Paragraph 7.A. incurred in connection with the ownership, 
                 maintenance and operation of the Building or Project and such 
                 additional facilities now and in subsequent years as may be 
                 determined by Landlord to the be necessary to the Building or 
                 Project.

                 E.  JANITORIAL SERVICE.  Tenant shall be solely responsible 
                 for all interior janitorial maintenance of the Premises.

                 F.  TENANT AUDIT.  In the event that Tenant shall dispute the 
                 amount set forth in any statement provided by Landlord under 
                 Paragraph 7.B or 7.C. above, Tenant shall have the right, not 
                 later than thirty (30) days following the receipt of such 
                 statement and upon the condition that Tenant shall first 
                 deposit with Landlord the full amount in dispute, to cause 
                 Landlord's books and records with respect to Basic Operating 
                 Cost for such fiscal year to be audited by certified public 
                 accountants selected by Tenant and subject to Landlord's 
                 reasonable right of approval.  The Basic Operating Cost 
                 Adjustment shall be appropriately adjusted on the basis of 
                 such audit.  If such audit discloses a liability for a refund 
                 in excess of seven and one half percent (7.5%) of Tenant's 
                 Proportionate Share of the Basic Operating Cost Adjustment 
                 previously reported, the cost of such audit shall be borne by 
                 Landlord; otherwise the cost of such audit shall be paid by 
                 Tenant.  If Tenant shall not request an audit in accordance 
                 with the provisions of this Paragraph 7.E. within twenty (20) 
                 days after receipt of Landlord's statement provided pursuant 
                 to Paragraph 7.B. or 7.C., such statement shall be final and 
                 binding for all purposes hereof.  

                 G.  THREE DAY NOTICE.  In the event Tenant fails to pay Basic 
                 Operating Costs when due as Additional Rent, Tenant shall be 
                 subject to a three (3) day notice to pay rent or quit.
                                            
   INSURANCE  8. A.  LANDLORD'S INSURANCE.  Landlord agrees to the extent 
AND INDEMNI-     reasonably available to maintain insurance insuring the 
    FICATION     Building against fire, lightning, vandalism and malicious
                 mischief (including, if Landlord elects, "All Risk" coverage, 
                 earthquake, and/or flood insurance), in an amount not less 
                 than eight percent (80%) of the replacement cost thereof, 
                 with deductibles and the form and endorsements of such 
                 coverage as selected by Landlord.  Any cost associated with 
                 Landlord's procurement of "All Risk" coverage, earthquake, 
                 and/or flood insurance shall be passed through to Tenant as a 
                 Basic Operating Cost if such insurance is available at 
                 commercially reasonable rates. In addition Landlord shall 
                 procure insurance against loss of Base Rent and Additional 
                 Rent, in an amount equal to the amount of Base Rent and 
                 Additional Rent payable by Tenant for a period of at least 
                 twelve (12) months commencing on the date of loss if such 
                 insurance is available at commercially reasonable rates.  
                 Such insurance shall be for the sole benefit of Landlord and 
                 under Landlord's sole control.  Landlord shall not be 
                 obligated to insure any furniture, equipment, machinery, 
                 goods or supplies which Tenant may keep or maintain in the 
                 Premises, or any leasehold improvements, additions or 
                 alterations within the Premises.  Landlord may also carry 
                 such other insurance as Landlord may deem prudent or 
                 advisable, including, without limitation, liability insurance 
                 in such amounts and on such terms as Landlord shall determine.

                 B.  TENANT'S INSURANCE.

                 (1)  PROPERTY INSURANCE.  Tenant shall procure at Tenant's 
                 sole cost and expense and keep in effect from the date of 
                 this Lease and at all times until the end of the Term, 
                 insurance on all personal property and fixtures of Tenant and 
                 all improvements made by or for Tenant to the Premises, 
                 insuring such property for the full replacement value of such 
                 property.

                 (2)  LIABILITY INSURANCE.  Tenant shall procure at Tenant's 
                 sole cost and expense and keep in effect from the date of 
                 this Lease and at all times until the end of the Term either 
                 Comprehensive General Liability Insurance or Commercial 
                 General Liability insurance applying to the use and occupancy 
                 of the Premises and the Building, and any part of either, and 
                 any areas adjacent thereto, and the business operated by 
                 Tenant, or by any other occupant on the Premises.  Such 
                 insurance shall include Broad Form Contractual Liability 
                 insurance coverage insuring Tenant's indemnity obligations 
                 under this Lease. Such coverage shall have a minimum combined 
                 single limit of liability of at least One Million Dollars 
                 ($1,000,000.00), and a general aggregate limit of One Million 
                 Dollars ($1,000,000.00).  All such policies shall be written 
                 to apply to bodily injury, property damage or loss, personal 
                 injury and other covered loss, however occasioned, occurring 
                 during the policy term, shall be endorsed to add Landlord and 
                 any party holding an interest to which this Lease may be 
                 subordinated as an additional insured, and shall provide that 
                 such coverage shall be primary and that any insurance 
                 maintained by Landlord shall be excess insurance only.  Such 
                 coverage shall also contain endorsements:  (i) including 
                 employees as additional insureds; (ii) deleting any liquor 
                 liability exclusion; and (iii) providing for coverage of 
                 employer's automobile non-ownership liability.  All such 
                 insurance shall provide for severability of interests; and 
                 shall afford coverage  for all claims based on acts, 
                 omissions, injury and damage, which claims occurred or arose 
                 (or the onset of which occurred or arose) in whole or in part 
                 during the policy period.  Said coverage shall be written on 
                 an "occurrence" basis, if available.  If an "occurrence" basis 
                 form is not available, Tenant must purchase "tail" coverage for
                 the most number of years available, and tenant must also 
                 purchase "tail" coverage if the retroactive date of a policy 
                 form is changed so as to leave a gap in coverage for 
                 occurrences that might have occurred in prior years.  If a 
                 "claims made" policy is ever used, the policy must be endorsed 
                 so that Landlord is given the right to purchase "tail" coverage
                 should Tenant for any reason not do so or if the policy is to 
                 be canceled for nonpayment of premium, provided such 
                 endorsement is available at commercially reasonable rates.

                 (3)  GENERAL INSURANCE REQUIREMENTS.  All coverages described 
                 in this Paragraph 8.B. shall be endorsed to provide Landlord 
                 with thirty (30) days' notice of cancellation or change in 
                 terms.  If at any time during the Term the amount or coverage 
                 of insurance which Tenant is required to carry under this 
                 Paragraph 8.B. is, in Landlord's 


                                      5

                                             APPROVAL INITIALS:     Landlord
                                             Tenant          / /          / /
<PAGE>

                 reasonable judgment, materially less than the amount or type 
                 of insurance coverage typically carried by owners or tenants 
                 of properties located in the general area in which the 
                 Premises are located which are similar to and operated for 
                 similar purposes as the Premises, Landlord shall have to 
                 require Tenant to increase the amount or change the types of 
                 insurance coverage required under this Paragraph 8.B.  All 
                 insurance policies required to be carried under this Lease 
                 shall be written by companies rated A-V or better in "Best's 
                 Insurance Guide" and authorized to do business in California.  
                 Any deductible amounts under any insurance policies required 
                 hereunder shall be subject to Landlord's prior written 
                 approval.  In any event deductible amounts shall not exceed 
                 Ten Thousand Dollars ($10,000.00).  Tenant shall deliver to 
                 Landlord on or before the Term Commencement Date, and 
                 thereafter at least thirty (30) days before the expiration 
                 dates of the expiring policies, certified copies of Tenant's 
                 insurance policies, or a certificate evidencing the same 
                 issued by the insurer thereunder, showing that all premiums 
                 have been paid for the full policy period; and, in the event 
                 Tenant shall fail to procure such insurance, or to deliver 
                 such policies or certificates, Landlord may, as an additional 
                 insured, at Landlord's option and in addition to Landlord's 
                 other remedies in the event of a default by Tenant hereunder, 
                 procure the same for the account of Tenant, and the cost 
                 thereof shall be paid to Landlord as Additional Rent.

                 C.  INDEMNIFICATION.  Landlord shall  not be liable to Tenant 
                 for any loss or damage to person or property caused by theft, 
                 fire, acts of God, acts of a public enemy, riot, strike, 
                 insurrection, war, court order, requisition or order of 
                 governmental body or authority or for any damage or 
                 inconvenience which may arise through repair or alteration of 
                 any part of the Building or Project or failure to make any 
                 such repair, except as expressly otherwise provided in 
                 Paragraph 10.  Tenant shall indemnify, defend by counsel 
                 acceptable to Landlord, protect and hold Landlord harmless 
                 from and against any and all liabilities, losses, costs, 
                 damages, injuries or expenses, including reasonable 
                 attorneys' fees and court costs, arising out of or related 
                 to:  (1) claims of injury to or death of persons or damage to 
                 property occurring or resulting directly or indirectly from 
                 the use or occupancy of the Premises, or from activities of 
                 Tenant, Tenant's Parties or anyone in or about the Premises 
                 or Project, or (2) claims for work or labor performed, or for 
                 materials or supplies furnished to or at the request of 
                 Tenant in connection with performance of any work done for 
                 the account of Tenant in the performance of any covenant 
                 contained in this Lease.  The foregoing indemnity shall not 
                 be applicable to claims arising from the active negligence or 
                 willful misconduct of Landlord.  The provisions of this 
                 Paragraph shall survive the expiration or termination of this 
                 Lease with respect to any claims or liability occurring prior 
                 to such expiration or termination.

 WAIVER OF   9.       To the extent permitted by law and without affecting the 
  SUBROGA-       coverage provided by insurance to be maintained hereunder,
      TION       Landlord and Tenant each waive any right to recover against 
                 the other for:  (a) damages for injury to or death of 
                 persons; (b) damages to property; (c) damages to the Premises 
                 or any part thereof, and (d) claims arising by reason of the 
                 foregoing due to hazards covered by insurance to the extent 
                 of proceeds recovered therefrom.  This provision is intended 
                 to waive fully, and for the benefit of each party, any rights 
                 and/or claims which might give rise to a right of subrogation 
                 in favor of any insurance carrier.  The coverage obtained by 
                 each party pursuant to this Lease shall include, without 
                 limitation, a waiver of subrogation by the carrier which 
                 conforms to the provisions of this paragraph.

 LANDLORD'S  10.      Landlord shall at Landlord's expense maintain the 
REPAIRS AND      structural soundness of the structural portions of the roof, 
   SERVICES      foundations and exterior walls of the Building in good repair, 
                 reasonable wear and tear excepted.  The term exterior walls 
                 as used herein shall not include windows, glass or plate 
                 glass, doors, special store fronts or office entries.  
                 Landlord shall perform on behalf of Tenant and other tenants 
                 of the Project, as an item or office entries.  Landlord shall 
                 perform on behalf of Tenant and other tenants of the Project, 
                 as an item of Basic Operating Cost, the maintenance of the 
                 Building, Project, and public and common areas of the 
                 Project, including but not limited to the roof, pest 
                 extermination, the landscaped areas, parking areas, 
                 driveways, the truck staging areas, fire sprinkler systems, 
                 sanitary and storm sewer lines, non-structural portions of 
                 the roof, roof membrane, utility services, electric and 
                 telephone equipment servicing the Building(s) exterior 
                 lighting, and anything which affects the operation and 
                 exterior appearance of the Project, which determination shall 
                 be at Landlord's sole discretion.   Except for the expenses 
                 directly involving the items specifically described in the 
                 first sentence of this Paragraph 10, Tenant shall reimburse 
                 Landlord for all costs in accordance with Paragraph 7.  Any 
                 damage caused by or repairs necessitated by any act of Tenant 
                  may be repaired by Landlord at Landlord's option and at 
                 Tenant's expense.  Tenant shall immediately give Landlord 
                 written notice of any defect or need of repairs after which 
                 Landlord shall have a reasonable opportunity to repair same.  
                 Landlord's liability with respect to any defects, repairs, or 
                 maintenance for which Landlord is responsible under any of 
                 the provisions of this Lease shall be limited to the cost of 
                 such repairs or maintenance.

 TENANT'S    11.      Tenant shall at Tenant's expense maintain all parts of the
  REPAIRS        Premises in a good clean and secure condition and promptly 
                 make all necessary repairs and replacements, including but 
                 not limited to all windows, glass, doors, walls and wall 
                 finishes, floor covering, heating, ventilating and air 
                 conditioning systems, truck doors, dock bumpers, dock plates 
                 and levelers, plumbing work and fixtures, downspouts, 
                 electrical and lighting systems, and fire sprinklers.  Tenant 
                 shall at Tenant's expense also perform regular removal of 
                 trash and debris.   Tenant shall, at Tenant's own expense, 
                 enter into a regularly scheduled preventative 
                 maintenance/service contract with a maintenance contractor 
                 for servicing all hot water, heating and air conditioning 
                 systems and equipment within or serving the Premises.  The 
                 maintenance contractor and the contract must be approved by 
                 Landlord.  The service contract must include all services 
                 suggested by the equipment manufacturer within the 
                 operation/maintenance manual and must become effective and a 
                 copy thereof delivered to Landlord within thirty (30) days 
                 after the Term Commencement Date.  Tenant shall not damage 
                 any demising wall or disturb the integrity and support 
                 provided by any demising wall and shall, at its own expense, 
                 immediately repair any damage to any demising wall caused by 
                 Tenant or Tenant's Parties.


                                      6

                                             APPROVAL INITIALS:     Landlord
                                             Tenant          / /          / /
<PAGE>

ALTERATIONS  12.      Excepting non-structural alterations to the Premises 
                 costing less than five thousand dollars ($5,000.00), Tenant 
                 shall not make, or allow to be made, any alterations or 
                 physical additions in, about or to the Premises without 
                 obtaining the prior written consent of Landlord, which 
                 consent shall not be unreasonably withheld with respect to 
                 proposed alterations and additions which:  (a) comply with 
                 all applicable laws, ordinances, rules and regulations; (b) 
                 are in Landlord's opinion compatible with the Project and its 
                 mechanical, plumbing, electrical, heating/ventilation/air 
                 conditioning systems; and (c) will not interfere with the use 
                 and occupancy of any other portion of the Building or Project 
                 by any other tenant or its invitees.  Specifically, but 
                 without limiting the generality of the foregoing, Landlord 
                 shall have the right of written consent for all plans and 
                 specifications for the proposed alterations or additions, 
                 construction means and methods, all appropriate permits and 
                 licenses, any contractor or subcontractor to be employed on 
                 the work of alterations or additions, and the time for 
                 performance of such work.  Tenant shall also supply to 
                 Landlord any documents and information reasonably requested 
                 by Landlord in connection with Landlord's consideration of a 
                 request for approval hereunder.  Tenant shall reimburse 
                 Landlord for all costs which Landlord may incur in connection 
                 with the granting approval to Tenant for any such alterations 
                 and additions, including any costs or expenses which Landlord 
                 may incur in electing to have outside architects and 
                 engineers review said plans and specifications.  All such 
                 alterations, physical additions or improvements shall remain 
                 the property of Tenant until termination of this Lease, at 
                 which time they shall be and become the property of Landlord 
                 if Landlord so elects; provided, however, that Landlord may, 
                 at Landlord's option, require that Tenant, at Tenant's 
                 expense, remove any or all alterations, additions, 
                 improvements and partitions made by Tenant and restore the 
                 Premises by the termination of this Lease, whether by lapse 
                 of time, or otherwise, to their condition existing prior to 
                 the construction of any such alterations, additions, 
                 partitions or leasehold improvements.  All such removals and 
                 restoration shall accomplished in a good and workmanlike 
                 manner so as not to cause any damage to the Premises or 
                 Project whatsoever.  If Tenant fails to so remove such 
                 alterations, additions, improvements and partitions or 
                 Tenant's trade fixtures or furniture, Landlord may keep and 
                 use them or remove any of them and cause them to be stored or 
                 sold in accordance with applicable law, at Tenant's sole 
                 expense.  In addition to and wholly apart from Tenant's 
                 obligations to pay Tenant's Proportionate Share of Basic 
                 Operating Cost, Tenant shall be responsible for and shall pay 
                 prior to delinquency any taxes or governmental service fees, 
                 possessory interest taxes, fees or charges in lieu of any 
                 such taxes, capital levies, or other charges imposed upon, 
                 levied with respect to or assessed against its personal 
                 property, on the value of the alterations, additions or 
                 improvements within the Premises, and on Tenant's interest 
                 pursuant to this Lease.  To the extent that any such taxes 
                 are not separately assessed or billed to Tenant, Tenant shall 
                 pay the amount thereof as invoiced to Tenant by Landlord.  
                 Tenant, at its own cost and expense and without Landlord's 
                 prior approval, may erect such shelves, bins, machinery and 
                 trade fixtures (collectively "Trade Fixtures") in the ordinary
                 course of its business provided that such do not alter the 
                 basic character of the Premises, do not overload or damage 
                 the Premises, and may be removed without injury to the 
                 Premises, and the construction, erection, and installation 
                 thereof complies with all Legal Requirements and with 
                 Landlord's requirements set forth above.  Tenant shall remove 
                 its Trade Fixtures and shall repair any damage caused by such 
                 removal.


SIGNS        13.      Landlord shall allow at Tenant's sole cost and expense 
                 the installation of building signage subject to Landlord's 
                 and the City of San Carlos's approval and consistent with the 
                 San Carlos Business Park's current signage program as 
                 outlined by the Project's Sign Criteria, attached hereto as 
                 Exhibit D and incorporated by this reference.  Any 
                 installation of signs or graphics on or about the Premises 
                 and Project shall be subject to any applicable governmental 
                 laws, ordinances, regulations and to any other requirements 
                 imposed by Landlord. Tenant shall remove all such signs and 
                 graphics prior to the termination of this Lease.  Such 
                 installations and removals shall be made in such manner as to 
                 avoid injury or defacement of the Premises, Building or 
                 Project and any other limitation, discoloration caused by 
                 such installation or removal.

INSPECTION/  14.      After reasonable notice, except in emergencies where no 
    POSTING      such notice shall be required, Landlord, and Landlord's agents
    NOTICES      and representatives, shall have the right to enter the 
                 Pemises to inspect the same, to clean, to perform such work 
                 as may be permitted or required hereunder, to make repairs or 
                 alterations to the Premises or Project or to other tenant 
                 spaces therein, to deal with emergencies, to post such 
                 notices as may be required by law to prevent the perfection 
                 of liens against Landlord's interest in the Project or to 
                 exhibit the Premises to prospective tenants, purchasers, 
                 encumbrancers or others, or for any other purpose as Landlord 
                 may deem necessary or desirable; provided, however, that 
                 Landlord shall use reasonable efforts not to unreasonably 
                 interfere with Tenant's business operations.  Tenant shall 
                 not be entitled to any abatement of Rent by reason of the 
                 exercise of any such right of entry.  At any time within six 
                 (6) months prior to the end of the Term, Landlord shall have 
                 the right to erect on the Premises and/or Project a suitable 
                 sign indicating that the Premises are available for lease.  
                 Tenant shall give written notice to Landlord at least thirty 
                 (30) days prior to vacating the Premises and shall meet with 
                 Landlord for a joint inspection of the Premises at the time 
                 of vacating.  In the event of Tenant's failure to give such 
                 notice or participate in such joint inspection, Landlord's 
                 inspection at or after Tenant's vacating the Premises shall 
                 conclusively be deemed correct for purposes of determining 
                 Tenant's responsibility for repairs and restoration.

UTILITIES   15.       Tenant shall pay directly for all water, gas, heat, air 
                 conditioning, light, power, telephone, sewer, sprinkler 
                 charges and other utilities and services used on or from the 
                 Premises, together with any taxes, penalties, surcharges or 
                 the like pertaining thereto, and maintenance charges for 
                 utilities and shall furnish all electric light bulbs, 
                 ballasts and tubes.  If any such services are not separately 
                 metered to Tenant, Tenant shall pay a reasonable proportion, 
                 as determined by Landlord, of all charges jointly serving 
                 other premises.  Landlord shall not be liable for any damages 
                 directly or indirectly resulting from nor shall the Rent or 
                 any monies owed Landlord under this Lease herein reserved be 
                 abated by reason of: (a) the installation, use or 
                 interruption of use of any equipment used in connection with 
                 the furnishing of any such utilities or services; (b) the 
                 failure to furnish or delay in furnishing any such utilities 
                 or 


                                      7

                                             APPROVAL INITIALS:     Landlord
                                             Tenant          / /          / /
<PAGE>

                 services when such failure or delay is caused by acts of God 
                 or the elements, labor disturbances of any character, or any 
                 other accidents or other conditions beyond the reasonable 
                 control of Landlord; or (c) the limitation, curtailment, 
                 rationing or restriction on use of water, electricity, gas 
                 or any other form of energy or any other service or utility 
                 whatsoever serving the Premises or Project.  Landlord shall 
                 be entitled to cooperate voluntarily and in a reasonable 
                 manner with efforts of national, state or local governmental 
                 agencies or utility suppliers in reducing energy or other 
                 resource consumption.  The obligation to make services 
                 available hereunder shall be subject to the limitations of 
                 any such voluntary, reasonable program.  Notwithstanding the 
                 foregoing, in the event any interruption of utilities or 
                 Building services specified in this Paragraph 15 continues 
                 for more than seven (7) consecutive days, and the Premises 
                 are rendered unusable for Tenant's proposed use, then Rent 
                 shall be abated for the time period of such interruption.

 SUBORDI-    16.      Without the necessity of any additional document being
   NATION        executed by Tenant for the purpose of effecting a 
                 subordination, the Lease shall be subject and subordinate at 
                 all times to:  (a) all ground leases or underlying leases 
                 which may now exist or hereafter be executed affecting the 
                 Premises and/or the land upon which the Premises and Project 
                 are situated, or both; and (b) any mortgage or deed of trust 
                 which may now exist or be placed upon said Project, land, 
                 ground leases or underlying leases, or Landlord's interest or 
                 estate in any said items which is specified as security.  
                 Notwithstanding the foregoing, Landlord shall have the right 
                 to subordinate or cause to be subordinated any such ground 
                 leases or underlying leases or any such liens to this Lease.  
                 In the event that any ground lease or underlying lease 
                 terminates for any reason or any mortgage or deed of trust is 
                 foreclosed or a conveyance in lieu of foreclosure is made for 
                 any reason, Tenant shall, notwithstanding any subordination, 
                 attorn to and become the Tenant of the successor in interest 
                 to Landlord at the option of such successor in interest.  
                 Within ten (10) days after request by Landlord, Tenant shall 
                 execute and deliver any additional documents evidencing 
                 Tenant's attornment or the subordination of this Lease with 
                 respect to any such ground leases or underlying leases or any 
                 such mortgage or deed of trust, in the form requested by 
                 Landlord or by any ground landlord, mortgagee, or beneficiary 
                 under a deed of trust.  Landlord shall use its best efforts 
                 to obtain a non-disturbance agreement for Tenant's benefit 
                 but shall have no liability if its lender fails to do so.  
                 Landlord's equity in the property is several million dollars.

 FINANCIAL   17.       At the request of Landlord, Tenant shall provide to
STATEMENTS       Landlord Tenant's current financial statement or other
                 information discussing financial worth of Tenant, which 
                 Landlord shall use solely for purposes of this Lease and in 
                 connection with the ownership, management and disposition of 
                 the Project.

   ESTOPPEL  18.       Tenant agrees from time to time, within ten (10) days 
CERTIFICATE      after  request of Landlord, to deliver to Landlord, or 
                 Landlord's designee, an estoppel certificate stating that 
                 this Lease is in full force and effect, the date to which 
                 Rent has been paid, the unexpired portion of this Lease, and 
                 such other matters pertaining to this Lease as may be 
                 reasonably requested by Landlord.  Failure by Tenant to 
                 execute and deliver such certificate shall constitute an 
                 acceptance of the Premises and acknowledgment by Tenant that 
                 the statements included are true and correct without 
                 exception.  Landlord and Tenant intend that any statement 
                 delivered pursuant to this Paragraph may be relied upon by 
                 any mortgagee, beneficiary, purchaser or prospective 
                 purchaser of the Project or any interest therein.  The 
                 parties agree that Tenant's obligation to furnish such 
                 estoppel certificates in a timely fashion is a material 
                 inducement for Landlord's execution of the Lease, and shall 
                 be an event of default if Tenant fails to fully comply.  
                 Tenant shall indemnify Lessor for any loss caused by Tenant's 
                 failure to timely execute an estoppel certificate, including 
                 consequential damages such as loss of financing or 
                 refinancing or loss of a potential sale of the Property, all 
                 of which events are deemed foreseeable by the parties to this 
                 Lease.

 SECURITY    19.      Tenant agrees to deposit with Landlord upon execution 
  DEPOSIT        of this Lease, a Security Deposit as stated in the Basic 
                 Lease Information, which sum shall be held by Landlord, 
                 without obligation for interest, as security for the 
                 performance of Tenant's covenants and obligations under this 
                 Lease.  The Security Deposit is not an advance rental deposit 
                 or a measure of damages incurred by Landlord in case of 
                 Tenant's default.  Upon the occurrence of any event of 
                 default by Tenant, Landlord may, from time to time, without 
                 prejudice to any other remedy provided herein or provided by 
                 law, use such fund to the extent necessary to make good any 
                 arrears of Rent or other payments due to Landlord hereunder, 
                 and any other damage, injury, expense or liability caused by 
                 such event of default, and Tenant shall pay to Landlord, on 
                 demand, the amount so applied in order to restore the 
                 Security Deposit to its original amount.  Although the 
                 Security Deposit shall be deemed the property of Landlord, 
                 any remaining balance of such deposit shall be returned by 
                 Landlord to Tenant at such time after termination of this 
                 Lease that all of Tenant's obligations under this Lease have 
                 been fulfilled.  Landlord may use and commingle the Security 
                 Deposit with other funds of Landlord.

 TENANT'S    20.      The liability of Landlord to Tenant for any default by 
 REMEDIES        Landlord under  the terms of this Lease are not personal 
                 obligations of the individual or other partners, directors, 
                 officers and shareholders of Landlord, and Tenant agrees to 
                 look solely to Landlord's interest in the Project for the 
                 recovery of any amount from Landlord, and shall not look to 
                 other assets of Landlord nor seek recourse against the assets 
                 of the individual or other partners, directors, officers and 
                 shareholders of Landlord. Any lien obtained to enforce any 
                 such judgment and any levy of execution thereon shall be 
                 subject and subordinate to any lien, mortgage or deed of 
                 trust on the Project.

   ASSIGN-   21. A.  GENERAL.  Tenant shall not assign or sublet the 
  MENT AND       Premises or any part thereof without Landlord's prior written 
SUBLETTING       approval, such approval not to be unreasonably withheld,
                 conditioned or delayed except as provided herein.  If Tenant 
                 desires to assign this Lease or sublet any or all of the 
                 Premises, Tenant shall give Landlord written notice 
                 forty-five (45) days prior to the anticipated effective date 
                 of the assignment or sublease.  Landlord shall then have a 
                 period of fifteen (15) days following receipt of such notice 
                 to notify Tenant in writing that Landlord elects either:  


                                      8

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                                             Tenant          / /          / /
<PAGE>

                 (1) to terminate this Lease as to the space so affected as of 
                 the date so requested by Tenant; or (2) to permit Tenant to 
                 assign this Lease or sublet such space, subject, however, to 
                 Landlord's prior written approval of the proposed assignee or 
                 subtenant and of any related documents or agreements 
                 associated with the assignment or sublease.  If Landlord 
                 should fail to notify Tenant in writing of such election 
                 within said period, Landlord shall be deemed to have waived 
                 option (1) above, but written approval by Landlord of the 
                 proposed assignee or subtenant shall be required.  If 
                 Landlord does not exercise the option provided in subitem (1) 
                 above, Landlord's consent to a proposed assignment or sublet 
                 shall not be unreasonably withheld.  Without limiting the 
                 other instances in which it may be reasonable for Landlord to 
                 withhold Landlord's consent to an assignment or subletting, 
                 Landlord and Tenant acknowledge that it shall be reasonable 
                 for Landlord to withhold Landlord's consent in the following 
                 instances:  The use of the Premises by such proposed assignee 
                 or subtenant would not be a permitted use or would increase 
                 the Parking Density of the Project; the proposed assignee or 
                 subtenant is not of sound financial condition; the proposed 
                 assignee or subtenant is a governmental agency; the proposed 
                 assignee or subtenant does not have a good reputation as a 
                 tenant of property; the proposed assignee or subtenant is a 
                 person with whom Landlord is negotiating to lease space in 
                 the Project; the assignment or subletting would entail any 
                 alterations which would lessen the value of the leasehold 
                 improvements in the Premises; or if Tenant is in default of 
                 any obligation of Tenant under this Lease, or Tenant has 
                 defaulted under this Lease on three (3) or more occasions 
                 during any twelve months preceding the date that Tenant shall 
                 request consent.  Failure by Landlord to approve a proposed 
                 assignee or subtenant shall not cause a termination of this 
                 Lease.  Upon a termination under this Paragraph 21.A., 
                 Landlord may lease the Premises to any party, including 
                 parties with whom Tenant has negotiated an assignment or 
                 sublease, without incurring any liability to Tenant.  

                 B.  BONUS RENT.  Any Rent or other consideration realized by 
                 Tenant under any such sublease or assignment in excess of the 
                 Rent payable hereunder, after amortization of a reasonable 
                 brokerage commission shall be divided and paid, ten percent 
                 (10%) to Tenant, ninety percent (90%) to Landlord.  In any 
                 subletting or assignment undertaken by Tenant, Tenant shall 
                 diligently seek to obtain the maximum rental amount available 
                 in the marketplace for such subletting or assignment.
                                           
                 C.  CORPORATION.  If Tenant is a corporation, a transfer of 
                 corporate shares by sale, assignment, bequest, inheritance, 
                 operation of law or other disposition (including such a 
                 transfer to or by a receiver or trustee in federal or state 
                 bankruptcy, insolvency or other proceedings), so as to result 
                 in a change in the present control of such corporation or any 
                 of its parent corporations by the person or persons owning a 
                 majority of said corporate shares, shall constitute an 
                 assignment for purposes of this Lease.

                 Landlord's prior consent shall not be required for any 
                 assignment or sublease of Tenant's interest in the Premises 
                 or the Lease to any corporation with which Tenant may merge 
                 or consolidate or become affiliated as a parent, subsidiary, 
                 holding company or otherwise, or to an entity in which Tenant 
                 has a controlling interest provided such entity's net worth 
                 exceeds Tenant's net worth.
                                           
                 D.  PARTNERSHIP.  If Tenant is a partnership, joint venture 
                 or other incorporated business form, a transfer of the 
                 interest of persons, firms or entities responsible for 
                 managerial control of Tenant by sale, assignment, bequest, 
                 inheritance, operation of law or other disposition, so as to 
                 result in a change in the present control of said entity 
                 and/or a change in the identity of the persons responsible 
                 for the general credit obligations of said entity shall 
                 constitute an assignment for all purposes of this Lease.

                 E.  LIABILITY.  Except as otherwise provided, no assignment 
                 or subletting by Tenant shall relieve Tenant of any 
                 obligation under this Lease.  Any assignment or subletting 
                 which conflicts with the provisions hereof shall be void.

  AUTHORITY  22.      Landlord represents and warrants that it has full right 
 OF PARTIES      and authority to enter into this Lease and to perform all of 
                 Landlord's obligations hereunder.  Tenant represents and 
                 warrants that it has full right and authority to enter into 
                 this Lease and to perform all of Tenant's obligations 
                 hereunder.

   CONDEM-   23. A.  CONDEMNATION RESULTING IN TERMINATION.  If the whole or 
    NATION       any substantial part of the Project of which the Premises are 
                 a part should be taken or condemned for any public use under 
                 governmental law, ordinance or regulation, or by right of 
                 eminent domain, or by private purchase in lieu thereof, and 
                 the taking would prevent or materially interfere with the 
                 Permitted Use of the Premises, this Lease shall terminate and 
                 the Rent shall be abated during the unexpired portion of this 
                 Lease, effective when the physical taking of said Premises 
                 shall have occurred.

                 B.  CONDEMNATION NOT RESULTING IN TERMINATION.  If a portion 
                 of the Project of which the Premises are a part should be 
                 taken or condemned for any public use under any governmental 
                 law, ordinance, or regulation, or by right of eminent domain, 
                 or by private purchase in lieu thereof, and this Lease is not 
                 terminated as provided in Paragraph 23.A. above, this Lease 
                 shall not terminate, but the Rent payable hereunder during 
                 the unexpired portion of the Lease shall be reduced, 
                 beginning on the date when the physical taking shall have 
                 occurred, to such amount as may be fair and reasonable under 
                 all of the circumstances.
                                           
                 C.  AWARD.  Landlord shall be entitled to any and all 
                 payment, income, rent, award, or any interest therein 
                 whatsoever which may be paid or made in connection with such 
                 taking or conveyance and Tenant shall have no claim against 
                 Landlord or otherwise for the value of any unexpired portion 
                 of this Lease. Notwithstanding the foregoing, any 
                 compensation specifically awarded Tenant for loss of 
                 business, Tenant's personal property, moving costs or loss of 
                 goodwill, shall be and remain the property of Tenant.  In 
                 addition, in the event of a taking or 


                                      9

                                             APPROVAL INITIALS:     Landlord
                                             Tenant          / /          / /
<PAGE>

                 conveyance under this Section 23 Tenant shall be entitled to 
                 compensation for the value of any of the unamortized tenant 
                 improvements to the extent Tenant paid for any such 
                 improvements.  

  CASUALTY   24. A.  GENERAL.  If the Premises or Building should be damaged 
    DAMAGE       or destroyed by fire, tornado or other casualty, Tenant shall 
                 give immediate written notice thereof to Landlord. Within 
                 thirty (30) days after Landlord's receipt of such notice, 
                 Landlord shall notify Tenant whether in Landlord's opinion 
                 such repairs can reasonably be made either:  (1) within one 
                 hundred and eighty (180) days; or  (2) in more than one 
                 hundred and eighty (180) days from the date of such notice.  
                 Landlord's determination shall be binding on Tenant.

                 B.  LESS THAN 180 DAYS. If the Premises or Building should be 
                 damaged by fire, tornado or other casualty but only to such 
                 extent that rebuilding or repairs can in Landlord's 
                 estimation be reasonably completed within one hundred and 
                 eighty (180) days after the date of such damage, this Lease 
                 shall not terminate, and Landlord shall proceed to rebuild 
                 and repair the Premises in the manner determined by Landlord, 
                 except that Landlord shall not be required to rebuild, repair 
                 or replace any part of the partitions, fixtures additions and 
                 other leasehold improvements which may have been placed in, 
                 on or about the Premises.  If the Premises are untenantable 
                 in whole or in part following such damage, the Rent payable 
                 hereunder during the period in which they are untenantable 
                 shall be abated proportionately, but only to the extent of 
                 rental abatement insurance proceeds received by Landlord 
                 during the time and to the extent the Premises are unfit for 
                 occupancy.  If Landlord's insurer fails to make timely 
                 payment of an insured loss, Landlord's obligation will be 
                 abated for such period of delay, not to exceed thirty (30) 
                 days.

                 C.  GREATER THAN 180 DAYS.  If the Premises or Building 
                 should be damaged by fire, tornado or other casualty but only 
                 to such extent that rebuilding or repairs can in Landlord's 
                 estimation be reasonably completed in more than one hundred 
                 and eighty (180) days, then Landlord shall have the option of 
                 either: (1) terminating the Lease effective upon the date of 
                 the occurrence of such damage, in which event the Rent shall 
                 be abated during the unexpired portion of the Lease; or (2) 
                 electing to rebuild or repair the Premises to substantially 
                 the condition in which they existed prior to such damage, 
                 provided that insurance proceeds are available, to fully 
                 repair the damage, except that Landlord shall not be required 
                 to rebuild, repair or replace any part of the partitions, 
                 fixtures, additions and other improvements which may have 
                 been placed in, on or about the Premises.  If the Premises 
                 are untenantable in whole or in part following such damage, 
                 the Rent payable hereunder during the period in which they 
                 are untenantable shall be abated proportionately, but only to 
                 the extent of rental abatement insurance proceeds received by 
                 Landlord during the time and to the extent the Premises are 
                 unfit for occupancy.  In the event that Landlord should fail 
                 to complete such repairs and rebuilding within one hundred 
                 eight (180) days after the date upon which Landlord is 
                 notified by Tenant of such damage, such period of time to be 
                 extended for delays caused by the fault or neglect of Tenant 
                 or because of acts of God, acts of public agencies, labor 
                 disputes, strikes, fires, freight embargoes, rainy or story 
                 weather, inability to obtain materials, supplies or fuels, or 
                 delays of the contractors or subcontractors or any other 
                 causes or contingencies beyond the reasonable control of 
                 Landlord, Tenant may at Tenant's option within ten (10) days 
                 after the expiration of such one hundred eighty (180) day 
                 period (as such may be extended), terminate this Lease by 
                 delivering written notice of termination to Landlord as 
                 Tenant's exclusive remedy, whereupon all rights hereunder 
                 shall cease and terminate thirty (30) days after Landlord's 
                 receipt of such termination notice.

                 D.  TENANT'S FAULT.  If the Premises or any other portion of 
                 the Building are damaged by fire or other casualty resulting 
                 from the fault, negligence, or breach of this Lease by 
                 Tenant, or Tenant's Parties, Base Rent and Additional Rent 
                 shall not be diminished during the repair of such damage, 
                 except to an amount recovered by Landlord through any rental 
                 abatement insurance, and Tenant shall be liable to Landlord 
                 for the cost and expense of the repair and restoration of the 
                 Building caused thereby to the extent such cost and expense 
                 is not covered by insurance proceeds.

                 F.  UNINSURED CASUALTY.  Notwithstanding anything herein to 
                 the contrary, in the event that the Premises or Building are 
                 damaged or destroyed and are not fully covered by the 
                 insurance proceeds received by Landlord or in the event that 
                 the holder of any indebtedness secured by mortgage or deed of 
                 trust covering the Premises requires that the insurance 
                 proceeds be applied to such indebtedness, then in either case 
                 Landlord shall have the right to terminate this Lease by 
                 delivering written notice of termination to Tenant within 
                 thirty (30) days after the date of notice to Landlord that 
                 said damage or destruction is not fully covered by insurance 
                 or such requirement is made by any such holder, as the case 
                 may be, whereupon all rights and obligations hereunder shall 
                 cease and terminate.
                                           
                 G.  WAIVER.  Except as otherwise provided in this Paragraph 
                 24, Tenant hereby waives the provisions of Sections 1932(a), 
                 1933(4), 1941 and 1942 of the Civil Code of California.

  HOLDING    25. If Tenant shall retain possession of the Premises or any
     OVER        portion thereof without Landlord's consent following the 
                 expiration of the Lease or sooner termination for any reason, 
                 then Tenant shall pay to Landlord for each day of such 
                 retention triple the amount of the daily rental as of the 
                 last month prior to the date of expiration or termination.  
                 Tenant shall also indemnify, defend, protect and hold 
                 Landlord harmless from any loss, liability or cost, including 
                 reasonable attorneys' fees, resulting form delay by tenant in 
                 surrendering the Premises, including, without limitation, any 
                 claims made by any succeeding tenant founded on such delay.  
                 Acceptance of Rent by Landlord following expiration or 
                 termination shall not constitute a renewal of this Lease, and 
                 nothing contained in this Paragraph 25 shall waive Landlord's 
                 right or reentry or any other right.  Unless Landlord 
                 consents in writing to Tenant's holding over, Tenant shall be 
                 only a Tenant at sufferance, whether or not Landlord accepts 
                 any Rent from Tenant while Tenant is holding over without 
                 Landlord's written consent.  Additionally, in the event that 
                 upon termination of the Lease, Tenant has not fulfilled its 
                 obligation with respect to repairs and cleanup of the 
                 Premises or any other Tenant 


                                      10

                                             APPROVAL INITIALS:     Landlord
                                             Tenant          / /          / /
<PAGE>

                 obligations as set forth in this Lease, then Landlord shall 
                 have the right to perform any such obligations as it deems 
                 necessary at Tenant's sole cost and expense, and any time 
                 required by Landlord to complete such obligations shall be 
                 considered a period of holding over and the terms of this 
                 Paragraph 25 shall apply.

DEFAULT      26. A.  EVENTS OF DEFAULT.  The occurrence of any of the 
                 following shall constitute an event of default on the part of 
                 Tenant:

                 (1)  ABANDONMENT.  Abandonment of the Premises for a 
                 continuous period in excess of five (5) days "unless Tenant 
                 continues to pay rent and perform all other obligations of 
                 Tenant required under this Lease, in which case Tenant shall 
                 not be in default."  Tenant waives any right to notice Tenant 
                 may have under Section 1951.3 of the Civil Code of the State 
                 of California, the terms of this Paragraph 26.A. being deemed 
                 such notice to Tenant as required by said Section 1951.3.

                 (2)  NONPAYMENT OF RENT.  Failure to pay any installment of 
                 Rent or any other amount due and payable hereunder upon the 
                 date when said payment is due, and such failure is not cured 
                 within five (5) days notice from Landlord specifying such 
                 failure.

                 (3)  OTHER OBLIGATIONS.  Failure to perform any obligation, 
                 agreement or covenant under this Lease other than those 
                 matters specified in subparagraphs (1) and (2) of this 
                 Paragraph 26.A, such failure continuing for fifteen (15) days 
                 after written notice of such failure, provided, however, that 
                 if the nature of Tenant's default is such that more than 
                 fifteen (15) days are reasonably required for its cure, then 
                 Tenant shall not be deemed to be in default under this Lease 
                 if Tenant shall commence the cure of such default within said 
                 fifteen (15) day period and use his best efforts to prosecute 
                 the same to completion.

                 (4)  GENERAL ASSIGNMENT.  A general assignment by Tenant for 
                 the benefit of credits.

                 (5)  BANKRUPTCY.  The filing of any voluntary petition in 
                 bankruptcy by Tenant, or the filing of an involuntary 
                 petition by Tenant's creditors, which involuntary petition 
                 remains undischarged for a period of thirty (30) days.  In 
                 the event that under applicable law the trustee in bankruptcy 
                 or Tenant has the right to affirm this Lease and continue to 
                 perform the obligations of Tenant hereunder, such trustee or 
                 Tenant shall, in such time period as may be permitted by the 
                 bankruptcy court having jurisdiction, cure all defaults of 
                 Tenant hereunder outstanding as of the date of the affirmance 
                 of this Lease and provide to Landlord such adequate 
                 assurances as may be necessary to ensure Landlord of the 
                 continued performance of Tenant's obligations under this 
                 Lease.

                 (6)  RECEIVERSHIP.  The employment of a receiver to take 
                 possession of substantially all of Tenant's assets or the 
                 Premises, if such appointment remains undismissed or 
                 undischarged for a period of ten (10) days after the order 
                 therefor.

                 (7)  ATTACHMENT.  The attachment, execution or other judicial 
                 seizure of all or substantially all of Tenant's assets or the 
                 Premises, if such attachment or other seizure remains 
                 undismissed or undischarged for a period of ten (10) days 
                 after the levy thereof.

                 B.  REMEDIES UPON DEFAULT.

                 (1)  TERMINATION.  In the event of the occurrence of any 
                 event of default ( and such default remains uncured after the 
                 expiration of any applicable cure period provided herein), 
                 Landlord shall have the right to give a written termination 
                 notice to Tenant, and on the date specified in such notice, 
                 Tenant's right to possession shall terminate, and this Lease 
                 shall terminate unless or before such date all arrears of 
                 rental and all other sums payable by Tenant under this Lease 
                 and all costs and expenses incurred by or on behalf of 
                 Landlord hereunder shall have been paid by Tenant and all 
                 other events of default of this Lease by Tenant at the time 
                 existing shall have been fully remedied to the satisfaction 
                 of Landlord.  At any time after such termination, Landlord 
                 may recover possession of the Premises or any part thereof 
                 and expel and remove therefrom Tenant and any other person 
                 occupying the same, by any lawful means, and again repossess 
                 and enjoy the Premises without prejudice to any of the 
                 remedies that Landlord may have under this Lease, or at law 
                 or equity by reason of Tenant's default or of such 
                 termination.

                 (2)  CONTINUATION AFTER DEFAULT.  Even though an event of 
                 default may have occurred, this Lease shall continue in 
                 effect for so long as Landlord does not terminate Tenant's 
                 right to possession under Paragraph 26.B.(1) hereof, and 
                 Landlord may enforce all of Landlord's rights and remedies 
                 under this Lease, including without limitation, the right to 
                 recover Rent as it becomes due, and Landlord, without 
                 terminating this Lease may exercise all of the rights and 
                 remedies of a Landlord under Section 1951.4 of the Civil Code 
                 of the State of California or any successor code section.  
                 Acts of maintenance, preservation or efforts for lease the 
                 Premises or the appointment of a receiver upon application of 
                 Landlord to protect Landlord's interest under this Lease 
                 shall not constitute an election to terminate Tenant's right 
                 to possession.

                 C.  DAMAGES AFTER DEFAULT.  Should Landlord terminate this 
                 Lease pursuant to the provisions of Paragraph 26.B.(1) 
                 hereof, Landlord shall have the rights and remedies of a 
                 Landlord provided by Section 1951.2 of the Civil Code of the 
                 State of California, or successor code sections.  Upon such 
                 termination, in addition to any other rights and remedies to 
                 which Landlord may be entitled under applicable law, Landlord 
                 shall be entitled to recover from Tenant:  (1) the worth at 
                 the time of award of the unpaid Rent and other amounts which 
                 had been earned at the time of 


                                      11

                                             APPROVAL INITIALS:     Landlord
                                             Tenant          / /          / /
<PAGE>

                 termination, (2) the worth at the time of award of the amount 
                 by which the unpaid Rent which would have been earned after 
                 termination until the time of award exceeds the amount of 
                 such Rent loss that Tenant proves could have been reasonably 
                 avoided; (3) the worth at the time of award of the amount by 
                 which the unpaid Rent for the balance of the Term after the 
                 time of award exceeds the amount of such Rent loss that 
                 Tenant proves could be reasonably avoided; and (4) any other 
                 amount necessary to compensate Landlord or all the detriment 
                 proximately caused by Tenant's failure to perform Tenant's 
                 obligations under this Lease or which, in the ordinary course 
                 of things, would be likely to result therefrom.  The worth at 
                 the time of award of the amounts referred to in (1) and (2) 
                 above shall be computed by discounting such amount at the 
                 Federal Discount Rate of the Federal Reserve Bank of San 
                 Francisco at the time of the award.  If this Lease provides 
                 for any periods during the Term during which Tenant is not 
                 required to pay Base Rent or if Tenant otherwise receives a 
                 Rent concession, then upon the occurrence of an event of 
                 default, Tenant shall owe to Landlord the full amount of such 
                 Base Rent or value of such Rent concession, plus interest at 
                 the Applicable Interest Rate, calculated from the date that 
                 such Base Rent or Rent concession would have been payable.

                 D.  LATE CHARGE.  If any installment of Rent is not paid 
                 promptly when due, and such failure is not cured prior to the 
                 expiration of the applicable cure period provided herein, 
                 such amount shall bear interest at the Applicable Interest 
                 Rate from the date on which said payment shall be due until 
                 the date on which Landlord shall receive said payment.  In 
                 addition, Tenant shall pay Landlord a late charge equal to 
                 five percent (5%) of the delinquency, to compensate Landlord 
                 for the loss of the use of the amount not paid and the 
                 administrative costs caused by the delinquency, the parties 
                 agreeing that Landlord's damage by virtue of such 
                 delinquencies would be difficult to compute and the amount 
                 stated herein represents a reasonable estimate thereof.  This 
                 provision shall not relieve Tenant of Tenant's obligation to 
                 pay Rent at the time and in the manner herein specified.
                                           
                 E.  REMEDIES CUMULATIVE.  All rights, privileges and 
                 elections or remedies of the parties are cumulative and not 
                 alternative, to the extent permitted by law and except as 
                 otherwise provided herein.

LIENS        27.      Tenant shall keep the Premises free from liens arising 
                 out of or related to work performed, materials or supplies 
                 furnished or obligations incurred by Tenant or in connection 
                 with work made, suffered or done by or on behalf of Tenant in 
                 or on the Premises or Project.  In the event that Tenant 
                 shall not, within ten (10) days following the imposition of 
                 any such lien, cause the same to be released of record by 
                 payment or posting of a proper bond, Landlord shall have, in 
                 addition to all other remedies provided herein and by law, 
                 the right, but not obligation, to cause the same to be 
                 released by such means as Landlord shall deem proper, 
                 including payment of the claim giving rise to such lien.  All 
                 sums paid by Landlord on behalf of Tenant and all expenses 
                 incurred by Landlord in connection therefor shall be payable 
                 to Landlord by Tenant on demand with interest at the 
                 Applicable Interest Rate.  Landlord shall have the right at 
                 all times to post and keep posted on the Premises any notices 
                 permitting or required by law, or which Landlord shall deem 
                 proper, for the protection of Landlord, the Premises, the 
                 Project and any other party having an interest therein, from 
                 mechanics' and materialmen's liens, and Tenant shall give 
                 Landlord not less than ten (10) business days prior written 
                 notice of the commencement of any work in the Premises or 
                 Project which could lawfully give rise to a claim for 
                 mechanics' or materialmen's liens.

  TRANSFERS  28.      In the event of a sale or conveyance by Landlord of the 
         BY      Building or a foreclosure by any creditor of Landlord, the 
   LANDLORD      same shall operate to release Landlord from any liability 
                 upon any of the covenants or conditions, express or implied, 
                 herein contained in favor of Tenant, to the extent required 
                 to be performed after the passing of title to Landlord's 
                 successor-in-interest.  In such event, Tenant agrees to look 
                 solely to the responsibility of the successor-in-interest of 
                 Landlord under this Lease with respect to the performance of 
                 the covenants and duties of "Landlord" to be performed after 
                 the passing of title to Landlord's successor-in-interest.  
                 This Lease shall not be affected by any such sale and Tenant 
                 agrees to attorn to the purchaser or assignee.  Landlord's 
                 successor(s)-in-interest shall not have liability to Tenant 
                 with respect to the failure to perform all of the obligations 
                 of "Landlord", to the extent required to be performed prior to 
                 the date such successor(s)-in-interest became the owner of 
                 the Building.

   RIGHT OF  29.      All covenants and agreements to be performed by Tenant 
LANDLORD TO      under any of the terms of this Lease shall be performed by 
    PERFORM      Tenant at Tenant's sole cost and expense and without any 
   TENANT'S      abatement of Rent.  If Tenant shall fail to pay any sum of 
  COVENANTS      money, other than Base Rent and Basic Operating Cost, 
                 required to be paid by Tenant hereunder or shall fail to 
                 perform any other act on Tenant's part to be performed 
                 hereunder, and such failure shall continue for five (5) days 
                 after notice thereof by Landlord, Landlord may, but shall not 
                 be obligated to do so, and without waiving or releasing 
                 Tenant from any obligations of Tenant, make any such payment 
                 or perform any such act on Tenant's part to be made or 
                 performed. All sums, so paid by Landlord and all necessary 
                 incidental costs together with interest thereon at the 
                 Applicable Interest Rate from the date of such payment by 
                 Landlord shall be payable to Landlord on demand, and Tenant 
                 covenants to pay such sums, and Landlord shall have, in 
                 addition to any other right or remedy of Landlord, the same 
                 right and remedies in the event of the non-payment thereof by 
                 Tenant as in the case of default by Tenant in the payment of 
                 Base Rent and Basic Operating Cost.

    WAIVER   30.      If either Landlord or Tenant waives the performance of any
                 term, covenant or condition contained in this Lease, such 
                 waiver shall not be deemed to be a waiver of any subsequent 
                 breach of the same or any other term, covenant or condition 
                 contained herein.  The acceptance of Rent by Landlord shall 
                 not constitute a waiver of any preceding breach by Tenant of 
                 any term, covenant or condition of this Lease, regardless of 
                 Landlord's knowledge of such preceding breach at the time 
                 Landlord accepted such Rent.  Failure by Landlord to enforce 
                 any of the terms, covenants or conditions of this Lease for 
                 any length of time shall not be deemed to waive or to 
                 decrease the right of Landlord to insist thereafter upon 
                 strict performance by Tenant. Waiver by Landlord of any term, 
                 covenant or 


                                      12

                                             APPROVAL INITIALS:     Landlord
                                             Tenant          / /          / /
<PAGE>


                 condition contained in this Lease may only be made by a 
                 written document signed by Landlord.

   NOTICES   31.      Each provision of this Lease or of any applicable 
                 governmental laws, ordinances, regulations and other 
                 requirements with reference to sending, mailing or delivery 
                 of any notice or the making of any payment by Landlord or 
                 Tenant to the other shall be deemed to be compiled with when 
                 and if the following steps are taken:

                 A.  RENT.  All Rent and other payments required to be made by 
                 Tenant to Landlord hereunder shall be payable to Landlord at 
                 the address set forth in the Basic Lease Information, or at 
                 such other address as Landlord may specify from time to time 
                 by written notice delivered in accordance herewith.  Tenant's 
                 obligation to pay Rent and any other amounts to Landlord 
                 under the terms of this Lease shall not be deemed satisfied 
                 until such Rent and other amounts have been actually received 
                 by Landlord.

                 B.  OTHER.  All notices, demands, consents and approvals 
                 which may or are required to be given by either party to the 
                 other hereunder shall be in writing and either personally 
                 delivered, sent by commercial overnight courier, or mailed, 
                 certified or registered, postage prepaid, and addressed to 
                 the other party to be notified at the address for such party 
                 as specified in the Basic Lease Information or to such other 
                 place as the party to be notified may from time to time 
                 designate by at least fifteen (15) days notice to the 
                 notifying party. 

                 Notices shall be deemed served upon receipt or refusal to 
                 accept delivery.  Tenant appoints as its agent to receive the 
                 service of all default notices and notice of commencement of 
                 unlawful detainer proceedings the person in charge of or 
                 apparently in charge of occupying the Premises at the time, 
                 and, if there is no such person, then such service may be 
                 made by attaching the same on the main entrance of the 
                 Premises and a copy of such notice being  sent via commercial 
                 overnight carrier or mailed, certified or registered, postage 
                 prepaid to the address listed for Tenant in the Basic Lease 
                 Information.

 ATTORNEYS'  32.      In the event that either Landlord or Tenant should bring 
      FEES       suit for the possession of the Premises, for the recovery of 
                 any sum due under this Lease, or because of the breach of any 
                 provision of this Lease, or for any other relief against the 
                 other party hereunder, then all costs and expenses, including 
                 reasonable attorneys' fees, incurred by the prevailing party 
                 therein shall be paid by the other party, which obligation on 
                 the part of the other party shall be deemed to have accrued 
                 on the date of the commencement of such action and shall be 
                 enforceable whether or not the action is prosecuted to 
                 judgment.  
                                           
 SUCCESSORS  33.      This Lease shall be binding upon and inure to the 
AND ASSIGNS      benefit of Landlord, its successors and assigns, and shall be 
                 binding upon and inure to the benefit of Tenant, its 
                 successors, and to the extent assignment is approved by 
                 Landlord hereunder, Tenant's assigns.  Landlord may transfer 
                 its obligations under this Lease to its successors in title, 
                 in which event Lessor shall be relieved of all obligations 
                 under this Lease and Tenant shall look solely to Landlord's 
                 successor for performance of this Lease.

      FORCE  34.      Whenever a period of time is herein prescribed for 
    MAJEURE      action to be taken by Landlord, Landlord shall not be liable 
                 or responsible for, and there shall be excluded from the 
                 computation for any such period of time, any delays due to 
                 strikes, riots, acts of God, shortages of labor or materials, 
                 war, governmental laws, regulations or restrictions or any 
                 other causes of any kind whatsoever which are beyond the 
                 control of Landlord.

 BROKERAGE   35.      Landlord shall pay a full brokerage commission to 
COMMISSION       Brokers in accordance with CB Commercial's listing Agreement 
                 (Brokerage Commission).  Each Broker named in the Basic Lease 
                 Information  (Brokers) shall receive fifty percent of the 
                 Brokerage Commission based on the terms and conditions 
                 provided in this Lease, including expansion space.  Tenant 
                 warrants to Landlord that Tenant's sole contact with Landlord 
                 or with the Premises in connection with this transaction has 
                 been directly with Landlord and Brokers, and that no other 
                 broker or finder can properly claim a right to a commission 
                 or a finder's fee based upon contacts between the claimant 
                 and Tenant with respect to Landlord or the Premises.  Tenant 
                 shall indemnify, defend by counsel acceptable to Landlord, 
                 protect and hold Landlord harmless from and against any loss, 
                 cost or expense, including, but not limited to attorneys' 
                 fees and costs, resulting from any claim for a fee or 
                 commission by any broker or finder in connection with the 
                 Premises and this Lease other than Broker.

 MISCELLA-   36. A.  GENERAL.  The term "Tenant" or any pronoun used in place 
     NEOUS       thereof shall indicate and include the masculine or feminine, 
                 the singular or plural number, individuals, firms or 
                 corporations, and their respective successors, executors, 
                 administrators and permitted assigns, according to the 
                 context hereof.
                                           
                 B.  TIME.  Time is of the essence regarding this Lease and 
                 all of its provisions.
                                           
                 C.  CHOICE OF LAW.  This Lease shall in all respects be 
                 governed by the laws of the State of California.
                                           
                 D.  ENTIRE AGREEMENT.  This Lease, together with its 
                 Exhibits, contains all the agreements of the parties hereto 
                 and supersedes any previous negotiations. There have been no 
                 representations made by the Landlord or understandings made 
                 between the parties other than those set forth in this Lease 
                 and its exhibits.
                                           
                 E.  MODIFICATION.  This Lease may not be modified except by a 
                 written instrument by the parties hereto.
                                           
                 F.  SEVERABILITY.  If, for any reason whatsoever, any of the 
                 provisions hereof shall be unenforceable or ineffective, all 
                 of the other provisions shall be and remain in full force and 
                 effect.


                                      13

                                             APPROVAL INITIALS:     Landlord
                                             Tenant          / /          / /
<PAGE>

                 G.  RECORDATION.  Tenant shall not record this Lease or a 
                 short form memorandum hereof.
                                           
                 H.  EXAMINATION OF LEASE.  Submission of this Lease to Tenant 
                 does not constitute an option or offer to lease and this 
                 Lease is not effective otherwise until execution and delivery 
                 by both Landlord and Tenant.
                                           
                 I.  ACCORD AND SATISFACTION.  No payment by Tenant of a 
                 lesser amount than the Rent nor any endorsement on any check 
                 or letter accompanying any check or payment of Rent shall be 
                 deemed an accord and satisfaction of full payment of Rent, 
                 and Landlord may accept such payment without prejudice to 
                 Landlord's right to recover the balance of such Rent or to 
                 pursue other remedies.
                                                 
                 J.  EASEMENTS.  Landlord may grant easements on the Project 
                 and dedicate for public use portions of the Project without 
                 Tenant's consent; provided that no such grant or dedication 
                 shall substantially interfere with Tenant's use of the 
                 Premises.  Upon Landlord's demand, Tenant shall execute, 
                 acknowledge and deliver to Landlord documents, instruments, 
                 maps and plats necessary to effectuate Tenant's covenants 
                 hereunder.
                                           
                 K.  DRAFTING AND DETERMINATION.  The parties acknowledge that 
                 this Lease has been agreed to by both parties, that both 
                 Landlord and Tenant have consulted with attorneys with 
                 respect to the terms of this Lease and that no presumption 
                 shall be created against Landlord because Landlord drafted 
                 this Lease.  Except as otherwise specifically set forth in 
                 this Lease, with respect to any consent, determination or 
                 estimation of Landlord required in this Lease or requested of 
                 Landlord, Landlord's consent, determination or estimation 
                 shall be made in Landlord's good faith opinion, whether 
                 objectively reasonable or unreasonable.
                                           
                 L.  EXHIBITS.  Exhibits A and B attached hereto are hereby 
                 incorporated herein by this reference.
                                           
                 M.  NO LIGHT, AIR OR VIEW EASEMENT.  Any diminution or 
                 shutting off of light, air or view by any structure which may 
                 be erected on lands adjacent to or in the vicinity of the 
                 Building shall in no way affect this Lease or impose any 
                 liability on Landlord.
                                           
                 N.  NO THIRD PARTY BENEFIT.  This Lease is a contract between 
                 Landlord and Tenant and nothing herein is intended to create 
                 any third party benefit.
                                           
                 O.  SECURITY, RELEASE AND INDEMNITY.  Tenant acknowledges and 
                 agrees that, while Landlord may elect to patrol the Project, 
                 Landlord is not providing any security services with respect 
                 to the Premises and that Landlord shall not be liable to 
                 Tenant for, and Tenant waives any claim against Landlord with 
                 respect to, any loss by theft or any other damage to person 
                 or property suffered or incurred by Tenant, Tenant's 
                 employees and invitees, including but not limited to, in 
                 connection with any unauthorized entry into the Premises or 
                 any other breach of security with respect to the Premises.
                                           
                 Tenant shall be responsible for provisions of security for 
                 its premises.  Tenant shall defend, indemnify and hold 
                 Landlord harmless with respect to the Premises and any claims 
                 arising from or related to a purported breach of security or 
                 failure to provide security.
                                            
 ADDITIONAL  38.      Paragraphs 39 through 46, and Exhibits A and B are 
 PROVISIONS      attached hereto and made apart thereof.

             39.      BASE RENT:  Rent for the Premises shall be as follows:

<TABLE>
<CAPTION>
SUITE NUMBERS                 SQ. FT+/-          PERIOD                BASE NNN RENT PER SQ. FT.
-------------                 ---------          ------                -------------------------
<S>                            <C>         <C>                                   <C>
981 Ind. Ste. B & D            11,941      5/15/97 - 5/31/98                     $  1.05
                                           6/01/98 - 5/31/99                     $  1.10
                                           6/01/99 - 5/31/00                     $  1.15
                                           6/01/00 - 5/31/01                     $  1.20
                                           6/01/01 - 5/31/02                     $  1.25
                                           
                                           
957 Ind. Ste. D, F, J & L      8,217       6/01/97 - 5/31/98                     $  1.05
                                           6/01/98 - 5/31/99                     $  1.10
                                           6/01/99 - 5/31/00                     $  1.15
                                           6/01/00 - 5/31/01                     $  1.20
                                           6/01/02 - 5/31/02                     $  1.25

957 Ind. Ste. P                4,380     When vacated by existing tenant leasee shall have
                                         30 days of free rent thereafter per rent amounts for 957
                                         Ind. Ste. D, F, J & L.
</TABLE>


                                      14

                                             APPROVAL INITIALS:     Landlord
                                             Tenant          / /          / /
<PAGE>


             40.     A. TENANT IMPROVEMENT ALLOWANCE.  Tenant shall be 
                 entitled to a one-time tenant improvement allowance (the 
                 "Tenant Improvement Allowance") in the amount of five dollars 
                 ($5.00) for each of the useable square feet of the Premises 
                 listed in the Basic Lease Information for the direct and 
                 indirect costs relating to the initial designing, procuring, 
                 constructing and installing of Tenant's improvements which 
                 are permanently affixed to the Premises (the Tenant 
                 Improvements). Subject to Landlord's review and approval of 
                 Tenant's proposed space plan for the Premises, Tenant will 
                 use its architect for design services and Tenant's own 
                 general contractor to perform any tenant improvement work.  
                 Landlord reserves the right to approve Tenant's construction 
                 management company and general contractor.  In no event shall 
                 Landlord be obligated to make disbursements in a total amount 
                 which exceeds the Tenant Improvement Allowance.

                     B.  DISBURSEMENT OF THE TENANT IMPROVEMENT ALLOWANCE.  
                 Except as otherwise set forth in any Tenant Work Letter, the 
                 Tenant Improvement Allowance shall be disbursed by Landlord 
                 (each of which disbursements shall be made pursuant to 
                 Landlord's disbursement process) for costs related to the 
                 construction of the Tenant Improvements and for the following 
                 items and costs (collectively, the "Tenant Improvement 
                 Allowance Items"): (i) payment of the fees of Tenant's 
                 architect and/or engineers; (ii) the cost of construction of 
                 the Tenant Improvements (iii) the cost of procuring and 
                 installing fixtures in or on the Premises; and (iv) the cost 
                 of other items related to the design and construction of the 
                 Tenant Improvements as designated by Tenant.
                                           
             41.     LANDLORD'S OBLIGATIONS PRIOR TO OCCUPANCY.  Landlord 
                 shall be responsible, at its sole cost and expense, prior to 
                 Tenant's occupancy, for providing the following:   (i)  men's 
                 and women's restrooms are complete and operable, and include 
                 all exhaust and supply HVAC, lighting, water heaters, 
                 partitions, doors, fixtures, and finishes in compliance with 
                 the requirements of the Americans With Disabilities Act of 
                 1990; (ii) all building systems, including existing 
                 electrical, mechanical, HVAC and plumbing shall be in good 
                 working condition and are not subject to deferred maintenance 
                 or in need of immediate replacement.  In addition Landlord, 
                 prior to Tenant's occupancy, shall supply Tenant with any 
                 existing floor plans for the Premises known as Suites B & D 
                 of 981 Industrial Road.  The Premises will be provided to 
                 Tenant in "broom clean" condition.  The roof membrane shall be 
                 free of known leaks and in good condition.
                                           
             42.     EARLY OCCUPANCY:  To the extent  suites to be rented 
                 hereunder are available and occupancy will not interfere with 
                 tenant improvement construction, prior to the Estimated Term 
                 Commencement Dates set forth in the Basic Lease Information 
                 section above, Tenant shall be allowed to occupy the Premises 
                 provided it pays Base Rent and Basic Operating Costs.  Tenant 
                 shall perform all duties and obligations imposed by this 
                 Lease, including, but not limited to, those provisions 
                 relating to insurance and indemnification.
                                           
             43.     RENEWAL OPTION:  While this Lease is in full force and 
                 effect, provided that Tenant is not in default, nor has 
                 Tenant been in default more than three (3) times during the 
                 Term of the Lease of any terms, covenants and conditions 
                 hereof, and this Lease has not been assigned or the Premises 
                 (or a part thereof), Tenant shall have one (1) option to 
                 renew this lease, under the same terms and conditions prior 
                 to then expiration of this Lease for one (1) sixty (60) month 
                 period.  Such extension of the original term shall be on the 
                 same terms, covenants and conditions as provided for in the 
                 original term, except the beginning monthly rental rate, for 
                 the option period, shall be at rate equal to the then 
                 prevailing fair market rate of comparable R&D buildings in 
                 the market.   Tenant's desire to exercise the option must be 
                 given to Landlord, in writing, not less than one-hundred 
                 eighty (180) days prior to the expiration of the term or this 
                 option shall terminate and be of no further effect.
                                           
             44.     EXPANSION SPACE. Landlord will use its best efforts to 
                 inform Tenant of any and all available contiguous space to 
                 the Premises available in the Buildings known as 981 
                 Industrial Road and 957 Industrial Road, San Carlos.
                                           
             45.     ASBESTOS/HAZARDOUS MATERIALS.  To the best of Landlord's 
                 knowledge, there is no asbestos or any hazardous materials on 
                 about or within the Building(s), Project or Premises.
                                           
             46.     INDEMNITY.  Despite any provision herein to the contrary, 
                 Tenant agrees to fully and complete indemnify, protect, 
                 defend and hold Landlord, its partners, members, managers, 
                 directors, officers, employees, attorneys, agents, 
                 successors, assigns and lenders harmless from and against all 
                 claims, actions, losses, damages, costs expenses and 
                 liabilities relating to or arising out of all Property uses 
                 by Tenant, including but not limited to claims of Petroleum 
                 Products and Hazardous Material contamination on site (except 
                 those claims caused solely by willful acts or omissions of 
                 Landlord or environmental conditions pre-existing Tenant's 
                 tenancy) or arising out of any other actual or alleged injury 
                 to or death of any persons or loss of or damages to property 
                 in or upon the Project, including the person and property of 
                 Landlord, its partners, members, managers, directors, 
                 officers, employees, agents or others arising from or related 
                 to Tenant's use or occupancy of the Premises.



                                      15

                                             APPROVAL INITIALS:     Landlord
                                             Tenant          / /          / /
<PAGE>


     IN WITNESS WHEREOF, the parties hereto have executed this Lease the day 
and year first above written.                                             


                               "Landlord"

                                       THREE SISTERS RANCH ENTERPRISES


                               By:
                                    --------------------------------------
                                       Martin E. Ruberry
                                       General Manager


                               "Tenant"

                                       CONCEPTUS, INC.


                               By:
                                    --------------------------------------
                                        Sanford Fitch
                                        Chief Financial Officer

                                      16

                                             APPROVAL INITIALS:     Landlord
                                             Tenant          / /          / /


<PAGE>


                                 EXHIBIT A

This exhibit contains three diagrams.

Diagram 1 - A diagram of the San Carlos Business Park highlighting the suites 
to be rented by Conceptus, Inc.

Diagram 2 - A detailed diagram of 981 Industrial Road, Suite D.

Diagram 3 - A detailed diagram of 981 Industrial Road, Suite B.




<PAGE>


                              EXHIBIT D
               SIGN CRITERIA FOR SAN CARLOS BUSINESS PARK


WALL SIGNS
Tenant allowed one or two wall signs at discretion of landlord. Letters shall 
be manufactured by Gemini Incorporated, 1-800-538-8377. Letters to be 10" 
high, 1" deep injection molded plastic ("Minnesota Letters"), gloss black, 
Helvetica typeface, all capital letters, mounted with #2 pads, glued flush to 
wall. Company name only (no divisions, phone numbers, tag lines, etc.). Up to 
two lines allowed, justified either left or right margin based on 
nearest corner of building. If two lines, allow 5" space between lines. 
Conform to vertical placements used on existing signs.

WINDOW SIGNS
Tenant allowed one window or door sign at main entrance. Sign shall be 
computer-cut white vinyl, placed on exterior of glass. Tenant may use door or 
window, but not both. Message may contain company name, logo, division, tag 
line, and up to three services provided, at discretion of tenant. No 
lettering to exceed 3" in height, no logo or trademark to exceed 6" in 
height. Total sign area not to exceed 16" high by 30" wide. Center all 
graphics 60" above ground level. Landlord to provide 4" high white address 
number at top of door, Helvetica Medium, 2" down from top of door.

REAR DOOR SIGNS
Tenant allowed one sign on rear main door. Sign shall be computer-cut black 
vinyl, placed on exterior of door. Text only, no logos allowed. Message may 
contain company name and shipping/receiving hours and information only, at 
discretion of tenant. Lettering to be Helvetica Medium, upper and lower case, 
2" high, with 1" space between lines, centered. Up to four lines maximum 
allowed. Top line to be placed 2" below small window in door. Landlord to 
provide 4" high black address number at top of door, Helvetica Medium, 2" 
down from top of door.

TENANT DIRECTORY MONUMENT SIGNS
Landlord shall provide lettering for tenant directory monument, at tenant's 
expense. Tenant shall provide to landlord exact name that will be used on the 
appropriate sign. Name shall appear on both sides of one sign, as determined 
by landlord. Long company names may be edited or abbreviated as required to 
fit on the sign, subject to approval of tenant. Lettering shall be 3 5/8" high 
Univers Light Condensed, upper and lower case, white.