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                                                                    EXHIBIT 10.4

                                INDUSTRIAL LEASE
                              (MULTI-TENANT; NET)
                                    "AS-IS"


     THIS LEASE is made as of the 6th day of August, 1998, by and between THE
IRVINE COMPANY, hereafter called "Landlord," and SIONIX CORPORATION, a Utah
corporation, which will do business in California as SIONIX SYSTEMS CORPORATION,
hereinafter called "Tenant."


                       ARTICLE I. BASIC LEASE PROVISIONS


     Each reference in this Lease to the "Basic Lease Provisions" shall mean 
and refer to the following collective terms, the application of which shall be 
governed by the provisions in the remaining Articles of this Lease.

1.   Premises: Suite No. 108 (the Premises are more particularly described in 
     Section 2.1).

     Address of Building: 9272 Jeronimo Road, Irvine, CA 92618

                                                                 INITIAL HERE
                                                                   [      ]
2.   Project Description (if applicable): Irvine Business Park

3.   Use of Premises: General Office and Warehousing.

4.   Commencement Date: September 1, 1998

5.   Lease Term: The Term of this Lease shall expire at midnight on August 30, 
     2001.

6.   Basic Rent: Two Thousand Eight Hundred Ninety-Nine Dollars ($2,899.00) per 
     month, based on $.85 per rentable square foot.

     Basic Rent is subject to adjustment as follows:

     Commencing September 1, 1999, the Basic Rent shall be Three Thousand Two 
     Dollars ($3,002.00) per month, based on $.88 per rentable square foot.

     Commencing September 1, 2000, the Basic Rent shall be Three Thousand One 
     Hundred Four Dollars ($3,104.00) per month, based on $.91 per rentable 
     square foot.

7.   Guarantor(s): None

8.   Floor Area of Premises: approximately 3,411 rentable square feet

9.   Security Deposit: $6,829.00

10.  Broker(s): CB Richard Ellis, Inc.

11.  Additional Insureds: Insignia\ESG of California, Inc.

12.  Address for Payments and Notices:

          LANDLORD                          TENANT

     INSIGNIA\ESG OF CALIFORNIA, INC.       SIONIX CORPORATION
     1 Ada, Suite 270                       which will do business in California
     Irvine, CA 92618                       as SIONIX SYSTEMS CORPORATION
                                            9272 Jeronimo Road, Suite 108
                                            Irvine, CA 92618

     with a copy of notices to:
     IRVINE INDUSTRIAL COMPANY
     P.O. Box 6370
     Newport Beach, CA 92658-6370
     Attn: Vice President, Industrial Operations

13.  Tenant's Liability Insurance Requirement: $1,000,000.00

14.  Vehicle Parking Spaces: (10)


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                              ARTICLE II. PREMISES


     SECTION 2.1.   LEASED PREMISES. Landlord leases to Tenant and Tenant leases
from Landlord the premises shown in Exhibit A (the "Premises"), containing
approximately the floor area set forth in Item 8 of the Basic Lease Provisions
and known by the suite number identified in Item 1 of the Basic Lease
Provisions. The Premises are located in the building identified in Item 1 of the
Basic Lease Provisions (which together with the underlying real property, is
called the "Building"), and is a portion of the project shown in Exhibit Y (the
"Project"). Tenant understands that the floor area set forth in Item 8 of the
Basic Lease Provisions may include, at Landlord's option, a factor approximating
the total square footage of any common lobby or internal common features of the
Building times the ratio of the actual square footage of the Premises to the
total square footage of the Building. If, at any time and from time to time,
Landlord's architect or space planner determines that the rentable square
footage of the Premises differs from that set forth in the Basic Lease
Provisions, then Landlord shall so notify Tenant and the Basic Rent (as shown in
Item 6 of the Basic Lease Provisions) shall be promptly adjusted in proportion
to the change in square footage. Within five (5) days following Landlord's
request, the parties shall memorialize the adjustments by executing an amendment
to this Lease prepared by Landlord, provided that the failure or refusal by
either party to execute the amendment shall not affect its validity.

     SECTION 2.2.   ACCEPTANCE OF PREMISES. Tenant acknowledges that neither 
Landlord nor any representative of Landlord has made any representations or 
warranty with respect to the Premises or the Building or the suitability or 
fitness of either for any purpose, including without limitation any 
representations or warranties regarding zoning or other land use matters, and 
that neither Landlord nor any representative of Landlord has made any 
representations or warranties regarding (i) what other tenants or uses may be 
permitted or intended in the Building and the Project, or (ii) any exclusivity 
of use by Tenant with respect to its permitted use of the Premises as set forth 
in Item 3 of the Basic Lease Provisions. It is further understood that Tenant 
shall take possession of the Premises as of the Commencement Date of the Lease 
in an "as-is" condition without further obligation on Landlord's part as to 
improvements whatsoever.

     SECTION 2.3.   BUILDING NAME AND ADDRESS. Tenant shall not utilize any name
selected by Landlord from time to time for the Building and/or the Project as
any part of Tenant's corporate or trade name. Landlord shall have the right to
change the name, address, number or designation of the Building or Project
without liability to Tenant.


                               ARTICLE III. TERM

     SECTION 3.1.   GENERAL. The Term shall be for the period shown in Item 5 of
the Basic Lease Provisions. The Term shall commence ("Commencement Date") on the
date set forth in Item 4 of the Basic Lease Provisions and will expire in said
item.

     SECTION 3.2.   DELAY IN POSSESSION. If Landlord, for any reason 
whatsoever, cannot deliver possession of the Premises to Tenant on or before 
the Commencement Date, this Lease shall not be void or voidable nor shall 
Landlord be liable to Tenant for any resulting loss or damage. However, Tenant 
shall not be liable for any rent and the Commencement Date shall not occur 
until Landlord delivers possession of the Premises and the Premises are in fact 
available for Tenant's occupancy, except that if Landlord's failure to so 
deliver possession on the Commencement Date is attributable to any action or 
inaction by Tenant, then the Commencement Date shall not be advanced to the 
date on which possession of the Premises is tendered to Tenant, and Landlord 
shall be entitled to full performance by Tenant (including the payment of rent) 
from the date Landlord would have been able to deliver the Premises to Tenant 
but for Tenant's delay(s).


                    ARTICLE IV. RENT AND OPERATING EXPENSES

     SECTION 4.1.   BASIC RENT. From and after the Commencement Date, Tenant 
shall pay to Landlord without deduction or offset, Basic Rent for the Premises 
in the total amount shown (including subsequent adjustments, if any) in Item 6 
of the Basic Lease Provisions. Any rental adjustment shown in Item 6 shall be 
deemed to occur on the specified monthly anniversary of the Commencement Date, 
whether or not that date occurs at the end of a calendar month. The rent shall 
be due and payable in advance commencing on the Commencement Date (as prorated 
for any partial month) and continuing thereafter on the first day of each 
successive calendar month of the Term. No demand, notice or invoice shall be 
required for the payment of Basic Rent. An installment of rent in the amount of 
one (1) full month's Basic Rent at the initial rate specified in Item 6 of the 
Basic Lease Provisions shall be delivered to Landlord concurrently with 
Tenant's execution of this Lease and shall be applied against the Basic Rent 
first due hereunder.

     SECTION 4.2.   OPERATING EXPENSES.

          (a)       Tenant shall pay to Landlord, as additional rent, Tenant's 
Share of "Operating Expenses", as defined below, incurred by Landlord in the 
operation of the Building and Project. The term "Tenant's Share" means that 
portion of an Operating Expense determined by multiplying the cost of such item 
by a fraction, the numerator of which


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is the floor area of the Premises and the denominator of which is the total 
square footage of the floor area, as of the date on which the computation is 
made, to be charged with such Operating Expense.

          (b)  Commencing prior to the start of the first full "Expense Recovery
Period" (as defined below) of the Lease, and prior to the start of each full or
partial Expense Recovery Period thereafter, Landlord shall give Tenant a written
estimate of the amount of Tenant's Share of Operating Expenses for the Expense
Recovery Period. Tenant shall pay the estimated amounts to Landlord in equal
monthly installments, in advance, with Basic Rent. If Landlord has not furnished
its written estimate for any Expense Recovery Period by the time set forth
above, Tenant shall continue to pay cost reimbursements at the rates established
for the prior Expense Recovery Period, if any; provided that when the new
estimate is delivered to Tenant, Tenant shall, at the next monthly payment date,
pay any accrued cost reimbursements based upon the new estimate. For purposes
hereof, "Expense Recovery Period" shall mean every twelve month period during
the Term (or portion thereof for the first and last lease years) commencing
July 1 and ending June 30.

          (c)  Within one hundred twenty (120) days after the end of each
Expense Recovery Period, Landlord shall furnish to Tenant a statement showing in
reasonable detail the actual or prorated Operating Expenses incurred by Landlord
during the period, and the parties shall within thirty (30) days thereafter make
any payment or allowance necessary to adjust Tenant's estimated payments, if
any, to the actual Tenant's Share as shown by the annual statement. Any delay or
failure by Landlord in delivering any statement hereunder shall not constitute a
waiver of Landlord's right to require Tenant to pay Tenant's Share of Operating
Expenses pursuant hereto. Any amount due Tenant shall be credited against
installments next coming due under this Section 4.2, and any deficiency shall be
paid by Tenant together with the next installment. If Tenant has not made
estimated payments during the Expense Recovery Period, any amount owing by
Tenant pursuant to subsection (a) above shall be paid to Landlord in accordance
with Article VI. Should Tenant fail to object in writing to Landlord's
determination of actual Operating Expenses within sixty (60) days following
delivery of Landlord's expense statement, Landlord's determination of actual
Operating Expenses for the applicable Expense Recovery Period shall be
conclusive and binding on the parties and any future claims to the contrary
shall be barred.

          (d)  Even though the Lease has terminated and the Tenant has vacated
the Premises, when the final determination is made of Tenant's Share of
Operating Expenses for the Expense Recovery Period in which the Lease
terminates, Tenant shall upon notice pay the entire increase due over the
estimated expenses paid. Conversely, any overpayment made in the event expenses
decrease shall be rebated by Landlord to Tenant.

          (e)  If, at any time during any Expense Recovery Period, any one or
more of the Operating Expenses are increased to a rate(s) or amount(s) in excess
of the rate(s) or amount(s) used in calculating the estimated expenses for the
year, then the estimate of Tenant's Share of Operating Expenses shall be
increased for the month in which such rate(s) or amount(s) becomes effective and
for all succeeding months by an amount equal to Tenant's Share of the increase.
Landlord shall give Tenant written notice of the amount or estimated amount of
the increase, the month in which the increase will become effective, Tenant's
Share thereof and the month for which the payments are due. Tenant shall pay the
increase to Landlord as a part of Tenant's monthly payments of estimated
expenses as provided in paragraph (b) above, commencing with the month in which
effective.

          (f)  The term "Operating Expenses" shall mean and include all "Project
Costs" (as hereafter defined) and "Property Taxes" (as hereafter defined).

          (g)  The term "Project Costs" shall include all expenses of operation
and maintenance of the Building and the Project, together with all appurtenant
Common Areas (as defined in Section 6.2), and shall include the following
charges by way of illustration but not limitation: water and sewer charges;
insurance premiums or reasonable premium equivalents should Landlord elect to
self-insure any risk that Landlord is authorized to insure hereunder; license,
permit, and inspection fees; heat; light; power; janitorial services to any
interior Common Areas; air conditioning; supplies; materials; equipment; tools;
the cost of any environmental, insurance, tax or other consultant utilized by
Landlord in connection with the Building and/or Project; establishment of
reasonable reserves for replacements and/or repair of Common Area improvements,
equipment and supplies; costs incurred in connection with compliance of any laws
or changes in laws applicable to the Building or the Project; the cost of any
capital investments (other than tenant improvements for specific tenants) to the
extent of the amortized amount thereof over the useful life of such capital
investments calculated at a market cost of funds, all as determined by Landlord,
for each such year of useful life during the Term; costs associated with the
procurement and maintenance of an air conditioning, heating and ventilation
service agreement, and procurement and maintenance of an intrabuilding network
cable service agreement for any intrabuilding network cable telecommunications
lines within the Project, and any other installation, maintenance, repair and
replacement costs associated with such lines; labor; reasonably allocated wages
and salaries, fringe benefits, and payroll taxes for administrative and other
personnel directly applicable to the Building and/or Project, including both
Landlord's personnel and outside personnel; any expense incurred pursuant to
Sections 6.1, 6.2, 6.4, 7.2 and 10.2; and a reasonable overhead/management fee
for the professional operation of the Project. Notwithstanding anything to the
contrary herein, Tenant's Share of any such property management fees shall be
determined by multiplying the actual property management fee charged (which from
time to time may be with respect to the Building only, a portion of the Project
only, the entire Project, or the Project together with other properties owned by
Landlord and/or its affiliates) by a fraction, the numerator of which is the
floor area of the Premises (as set forth in Item 8 of the Basic Lease Provisions
contained in the Lease), and the denominator of which is the total square
footage of space charged with such management fee actually leased to tenants
(including Tenant). It is understood that Project Costs shall include
competitive charges for direct services provided by any subsidiary or division
of Landlord.



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         (h)  The term "Property Taxes" as used herein shall include the
following: (i) all real estate taxes or personal property taxes, as such
property taxes may be reassessed from time to time; and (ii) other taxes,
charges and assessments which are levied with respect to this Lease or to the
Building and/or the Project, and any improvements, fixtures and equipment and
other property of Landlord located in the Building and/or the Project, except
that general net income and franchise taxes imposed against Landlord shall be
excluded; and (iii) all assessments and fees for public improvements, services,
and facilities and impacts thereon, including without limitation arising out of
any Community Facilities Districts, "Mello Roos" districts, similar assessment
districts, and any traffic impact mitigation assessments or fees; (iv) any tax,
surcharge or assessment which shall be levied in addition to or in lieu of real
estate or personal property taxes, other than taxes covered by Article VIII; and
(v) costs and expenses incurred in contesting the amount or validity of any
Property Tax by appropriate proceedings.

     SECTION 4.3.  SECURITY DEPOSIT. Concurrently with Tenant's delivery of this
Lease, Tenant shall deposit with Landlord the sum, if any, stated in Item 9 of
the Basic Lease Provisions, to be held by Landlord as security for the full and
faithful performance of Tenant's obligations under this Lease (the "Security
Deposit"). Subject to the last sentence of this Section, the Security Deposit
shall be understood and agreed to be the property of Landlord upon Landlord's
receipt thereof, and may be utilized by Landlord in its discretion towards the
payment of all prepaid expenses by Landlord for which Tenant would be required
to reimburse Landlord under this Lease, including without limitation brokerage
commissions. Upon any default by Tenant, including, specifically Tenant's
failure to pay rent or to abide by its obligations under Sections 7.1 and 15.3
below, whether or not Landlord is informed of or has knowledge of the default,
the Security Deposit shall be deemed to be automatically and immediately
applied, without waiver of any rights Landlord may have under this Lease or at
law or in equity as a result of the default, as a setoff for full or partial
compensation for that default. If any portion of the Security Deposit is applied
after a default by Tenant, Tenant shall within five (5) days after written
demand by Landlord deposit cash with Landlord in an amount sufficient to restore
the Security Deposit to its original amount. Landlord shall not be required to
keep this Security Deposit separate from its general funds, and Tenant shall not
be entitled to interest on the Security Deposit. If Tenant fully performs its
obligations under this Lease, the Security Deposit shall be returned to Tenant
(or, at Landlord's option, to the last assignee of Tenant's interest in this
Lease) after the expiration of the Term, provided that Landlord may retain the
Security Deposit to the extent and until such time as all amounts due from
Tenant in accordance with this Lease have been determined and paid in full.

                                ARTICLE V. USES

     SECTION 5.1.  USE. Tenant shall use the Premises only for the purposes
stated in Item 3 of the Basic Lease Provisions, all in accordance with
applicable laws and restrictions and pursuant to approvals to be obtained by
Tenant from all relevant and required governmental agencies and authorities. The
parties agree that any contrary use shall be deemed to cause material and
irreparable harm to Landlord and shall entitle Landlord to injunctive relief in
addition to any other available remedy. Tenant, at its expense, shall procure,
maintain and make available for Landlord's inspection throughout the Term, all
governmental approvals, licenses and permits required for the proper and lawful
conduct of Tenant's permitted use of the Premises. Tenant shall not do or permit
anything to be done in or about the Premises which will in any way interfere
with the rights of other occupants of the Building or the Project, or use or
allow the Premises to be used for any unlawful purpose, nor shall Tenant permit
any nuisance or commit any waste in the Premises or the Project. Tenant shall
not perform any work or conduct any business whatsoever in the Project other
than inside the Premises. Tenant shall not do or permit to be done anything
which will invalidate or increase the cost of any insurance policy(ies) covering
the Building, the Project and/or the their contents, and shall comply with all
applicable insurance underwriters rules and the requirements of the Pacific Fire
Rating Bureau or any other organization performing a similar function. Tenant
shall comply at its expense with all present and future laws, ordinances,
restrictions, regulations, orders, rules and requirements of all governmental
authorities that pertain to Tenant or its use of the Premises, including without
limitation all federal and state occupational health and safety requirements,
whether or not Tenant's compliance will necessitate expenditures or interfere
with its use and enjoyment of the Premises. Tenant shall comply at its expense
with all present and future covenants, conditions, easements or restrictions now
or hereafter affecting or encumbering the Building and/or Project, and any
amendments or modifications thereto, including without limitation the payment by
Tenant of any periodic or special dues or assessments charged against the
Premises or Tenant which may be allocated to the Premises or Tenant in
accordance with the provisions thereof. Tenant shall promptly upon demand
reimburse Landlord for any additional insurance premium charged by reason of
Tenant's failure to comply with the provisions of this Section, and shall
indemnify Landlord from any liability and/or expense resulting from Tenant's
noncompliance.

     SECTION 5.2.  SIGNS. Except as approved in writing by Landlord, in its sole
discretion, Tenant shall have no right to maintain identification signs in any
location in, on or about the Premises, the Building or the Project and shall not
place or erect any other signs, displays or other advertising materials that are
visible from the exterior of the Building. The size, design, graphics, material,
style, color and other physical aspects of any permitted sign shall be subject
to Landlord's written approval prior to installation (which approval may be
withheld in Landlord's discretion), any covenants, conditions or restrictions
encumbering the Premises, Landlord's signage program for the Project, as in
effect from time to time and approved by the City in which the Premises are
located ("Signage Criteria"), and any applicable municipal or other governmental
permits and approvals. Tenant acknowledges having received and reviewed a copy
of the current Signage Criteria for the Project. Tenant shall be responsible for
the cost of any permitted sign, including the fabrication, installation,
maintenance and removal thereof. If Tenant fails to maintain its sign, or if
Tenant fails to remove same upon termination of this Lease and repair any damage
caused by such removal, Landlord may do so at Tenant's expense.


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     SECTION 5.3 HAZARDOUS MATERIALS.

          (a)  For purposes of this Lease, the term "Hazardous Materials" 
includes (i) any "hazardous materials" as defined in Section 25501(n) of the 
California Health and Safety Code, (ii) any other substance or matter which 
results in liability to any person or entity from exposure to such substance or 
matter under any statutory or common law theory, and (iii) any substance or 
matter which is in excess of permitted levels set forth in any federal, 
California or local law or regulation pertaining to any hazardous or toxic 
substance, material or waste.

          (b)  Tenant shall not cause or permit any Hazardous Materials to be 
brought upon, stored, used, generated, released or disposed of on, under, from 
or about the Premises (including without limitation the soil and groundwater 
thereunder) without the prior written consent of Landlord. Notwithstanding the 
foregoing, Tenant shall have the right, without obtaining prior written consent 
of Landlord, to utilize within the Premises standard office products that may 
contain Hazardous Materials (such as photocopy toner, "White Out", and the 
like), provided however, that (i) Tenant shall maintain such products in their 
original retail packaging, shall follow all instructions on such packaging with 
respect to the storage, use and disposal of such products, and shall otherwise 
comply with all applicable laws with respect to such products, and (ii) all 
of the other terms and provisions of this Section 5.3 shall apply with respect 
to Tenant's storage, use and disposal of all such products. Landlord may, in 
its sole discretion, place such conditions as Landlord deems appropriate with 
respect to any such Hazardous Materials, and may further require that Tenant 
demonstrate that any such Hazardous Materials are necessary or useful to 
Tenant's business and will be generated, stored, used and disposed of in a 
manner that complies with all applicable laws and regulations pertaining 
thereto and with good business practices. Tenant understands that Landlord 
may utilize an environmental consultant to assist in determining conditions of 
approval in connection with the storage, generation, release, disposal or use 
of Hazardous Materials by Tenant on or about the Premises, and/or to conduct 
periodic inspections of the storage, generation, use, release and/or disposal 
of such Hazardous Materials by Tenant on and from the Premises, and Tenant 
agrees that any costs incurred by Landlord in connection therewith shall be 
reimbursed by Tenant to Landlord as additional rent hereunder upon demand.

          (c)  Prior to the execution of this Lease, Tenant shall complete, 
execute and deliver to Landlord an Environmental Questionnaire and Disclosure 
Statement (the "Environmental Questionnaire") in the form of Exhibit B attached 
hereto. The completed Environmental Questionnaire shall be deemed incorporated 
into this Lease for all purposes, and Landlord shall be entitled to rely fully 
on the information contained therein. On each anniversary of the Commencement 
Date until the expiration or sooner termination of this Lease, Tenant shall 
disclose to Landlord in writing the names and amounts of all Hazardous 
Materials which were stored, generated, used, released and/or disposed of on, 
under or about the Premises for the twelve-month period prior thereto, and 
which Tenant desires to store, generate, use, release and/or dispose of on, 
under or about the Premises for the succeeding twelve-month period. In 
addition, to the extent Tenant is permitted to utilize Hazardous Materials 
upon the Premises, Tenant shall promptly provide Landlord with complete 
and legible copies of all the following environmental documents relating 
thereto: reports filed pursuant to any self-reporting requirements; permit 
applications, permits, monitoring reports, workplace exposure and community 
exposure warnings or notices and all other reports, disclosures, plans or 
documents (even those which may be characterized as confidential) relating to 
water discharges, air pollution, waste generation or disposal, and underground 
storage tanks for Hazardous Materials; orders, reports, notices, listings and 
correspondence (even those which may be considered confidential) of or 
concerning the release, investigation of, compliance, cleanup, remedial and 
corrective actions, and abatement of Hazardous Materials; and all complaints, 
pleadings and other legal documents filed by or against Tenant related to 
Tenant's use, handling, storage, release and/or disposal of Hazardous Materials.

          (d)  Landlord and its agents shall have the right, but not the
obligation, to inspect, sample and/or monitor the Premises and/or the soil or
groundwater thereunder at any time to determine whether Tenant is complying with
the terms of this Section 5.3, and in connection therewith Tenant shall provide
Landlord with full access to all relevant facilities, records and personnel. If
Tenant is not in compliance with any of the provisions of this Section 5.3, or
in the event of a release of any Hazardous Material on, under or about the
Premises caused or permitted by Tenant, its agents, employees, contractors,
licensees or invitees, Landlord and its agents shall have the right, but not the
obligation, without limitation upon any of Landlord's other rights and remedies
under this Lease, to immediately enter upon the Premises without notice and to
discharge Tenant's obligations under this Section 5.3 at Tenant's expense,
including without limitation the taking of emergency or long-term remedial
action. Landlord and its agents shall endeavor to minimize interference with
Tenant's business in connection therewith, but shall not be liable for any such
interference. In addition, Landlord, at Tenant's expense, shall have the right,
but not the obligation, to join and participate in any legal proceedings or
actions initiated in connection with any claims arising out of the storage,
generation, use, release and/or disposal by Tenant or its agents, employees,
contractors, licensees or invitees of Hazardous Materials, on, under, from or
about the Premises.

          (e)  If the presence of any Hazardous Materials on, under, from or 
about the Premises or the Project caused or permitted by Tenant or its agents, 
employees, contractors, licensees or invitees results in (i) injury to any 
person, (ii) injury to or any contamination of the Premises or the Project, or 
(iii) injury to or contamination of any real or personal property wherever 
situated, Tenant, at its expense, shall promptly take all actions necessary to 
return the Premises and the Project and any other affected real or personal 
property owned by Landlord to the condition existing prior to the introduction 
of such Hazardous Materials and to remedy or repair any such injury or 
contamination, including without limitation, any cleanup, remediation, removal, 
disposal, neutralization or other treatment of any such Hazardous Materials. 
Notwithstanding the foregoing, Tenant shall not, without Landlord's prior 
written consent, take any remedial action in response to the presence of any 
Hazardous Materials on, under or about the Premises or the Project or any other 
affected real or personal property owned by Landlord or enter into any similar 
agreement, consent, decree or other compromise with any governmental agency 
with respect to any Hazardous Materials claims; provided however, 


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Landlord's prior written consent shall not be necessary in the event that the
presence of Hazardous Materials on, under or about the Premises or the Project
or any other affected real or personal property owned by Landlord (i) imposes an
immediate threat to the health, safety or welfare of any individual or (ii) is
of such a nature that an immediate remedial response is necessary and it is not
possible to obtain Landlord's consent before taking such action. To the fullest
extent permitted by law, Tenant shall indemnify, hold harmless, protect and
defend (with attorneys acceptable to Landlord) Landlord and any successors to
all or any portion of Landlord's interest in the Premises and the Project and
any other real or personal property owned by Landlord from and against any and
all liabilities, losses, damages, diminution in value, judgments, fines,
demands, claims, recoveries, deficiencies, costs and expenses (including without
limitation attorneys' fees, court costs and other professional expenses),
whether foreseeable or unforeseeable, arising directly or indirectly out of the
use, generation, storage, treatment, release, on- or off-site disposal or
transportation of Hazardous Materials on, into, from, under or about the
Premises, the Building and the Project and any other real or personal property
owned by Landlord caused or permitted by Tenant, its agents, employees,
contractors, licensees or invitees, specifically including without limitation
the cost of any required or necessary repair, restoration, cleanup or
dextexification of the Premises, the Building and the Project and any other real
or personal property owned by Landlord, and the preparation of any closure or
other required plans, whether or not such action is required or necessary during
the Term or after the expiration of this Lease. If Landlord at any time
discovers that Tenant or its agents, employees, contractors, licensees or
invitees may have caused or permitted the release of a Hazardous Material on,
under, from or about the Premises or the Project or any other real or personal
property owned by Landlord, Tenant shall, at Landlord's request, immediately
prepare and submit to Landlord a comprehensive plan, subject to Landlord's
approval, specifying the actions to be taken by Tenant to return the Premises or
the Project or any other real or personal property owned by Landlord to the
condition existing prior to the introduction of such Hazardous Materials. Upon
Landlord's approval of such cleanup plan, Tenant shall, at its expense, and
without limitation of any rights and remedies of Landlord under this Lease or at
law or in equity, immediately implement such plan and proceed to cleanup such
Hazardous Materials in accordance with all applicable laws and as required by
such plan and this Lease. The provisions of this subsection (e) shall expressly
survive the expiration or sooner termination of this Lease.

        (f)  Landlord hereby discloses to Tenant, and Tenant hereby
acknowledges, certain facts relating to Hazardous Materials at the Project known
by Landlord to exist as of the date of this Lease, as more particularly
described in Exhibit C attached hereto. Tenant shall have no liability or
responsibility with respect to the Hazardous Materials facts described in
Exhibit C, nor with respect to any Hazardous Materials which Tenant proves were
not caused or permitted by Tenant, its agents, employees, contractors, licensees
or invitees. Notwithstanding the preceding two sentences, Tenant agrees to
notify its agents, employees, contractors, licensees, and invitees of any
exposure or potential exposure to Hazardous Materials at the Premises that
Landlord brings to Tenant's attention.

                       ARTICLE VI. COMMON AREAS; SERVICES


     SECTION 6.1. UTILITIES AND SERVICES. Tenant shall be responsible for and
shall pay promptly, directly to the appropriate supplier, all charges for water,
gas, electricity, sewer, heat, light, power, telephone, refuse pickup,
janitorial service, interior landscape maintenance and all other utilities,
materials and services furnished directly to Tenant or the Premises or used by
Tenant in, on or about the Premises during the Term, together with any taxes
thereon. If any utilities or services are not separately metered or assessed to
Tenant, Landlord shall make a reasonable determination of Tenant's proportionate
share of the cost of such utilities and services and Tenant shall pay such
amount to Landlord, as an item of additional rent, within ten (10) days after
receipt of Landlord's statement or invoice therefor. Alternatively, Landlord may
elect to include such cost in the definition of Building Costs in which event
Tenant shall pay Tenant's proportionate share of such costs in the manner set
forth in Section 4.2. Landlord shall not be liable for damages or otherwise for
any failure or interruption of any utility or other service furnished to the
Premises, and no such failure or interruption shall be deemed an eviction or
entitle Tenant to terminate this Lease or withhold or abate any rent due
hereunder. Landlord shall at all reasonable times have free access to all
electrical and mechanical installations of Landlord.

     SECTION 6.2. OPERATION AND MAINTENANCE OF COMMON AREAS. During the Term,
Landlord shall operate all Common Areas within the Building and the Project. The
term "Common Areas" shall mean all areas within the exterior boundaries of the
Building and other buildings in the Project which are not held for exclusive use
by persons entitled to occupy space, and all other appurtenant areas and
improvements provided by Landlord for the common use of Landlord and tenants and
their respective employees and invitees, including without limitation parking
areas and structures, driveways, sidewalks, landscaped and planted areas,
hallways and interior stairwells not located within the premises of any tenant,
common electrical rooms and roof access entries, common entrances and lobbies,
elevators, and restrooms not located within the premises of any tenant.

     SECTION 6.3. USE OF COMMON AREAS. The occupancy by Tenant of the Premises
shall include the use of the Common Areas in common with Landlord and with all
others for whose convenience and use the Common Areas may be provided by
Landlord, subject, however, to compliance with all rules and regulations as are
prescribed from time to time by Landlord. Landlord shall operate and maintain
the Common Areas in the manner Landlord may determine to be appropriate. All
costs incurred by Landlord for the maintenance and operation of the Common Areas
shall be included in Project Costs unless any particular cost incurred can be
charged to a specific tenant of the Project. Landlord shall at all times during
the Term have exclusive control of the Common Areas, and may restrain any use of
occupancy, except as authorized by Landlord's rules and regulations. Tenant
shall keep the Common Areas clear of any obstruction or unauthorized use related
to Tenant's operations. Nothing in this Lease shall be deemed to impose
liability


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upon Landlord for any damage to or loss of the property of, or for any injury 
to, Tenant, its invitees or employees. Landlord may temporarily close any 
portion of the Common Areas for repairs, remodeling and/or alterations, to 
prevent a public dedication or the accrual of prescriptive rights, or for 
any other reason deemed sufficient by Landlord, without liability to Landlord.

     SECTION 6.4. PARKING. Tenant shall be entitled to the number of vehicle 
parking spaces set forth in Item 14 of the Basic Lease Provisions, which spaces 
shall be unreserved and unassigned, on those portions of the Common Areas 
designated by Landlord for parking. Tenant shall not use more parking spaces 
than such number. All parking spaces shall be used only for parking by vehicles 
no larger than full size passenger automobiles or pickup trucks. Tenant shall 
not permit or allow any vehicles that belong to or are controlled by Tenant or 
Tenant's employees, suppliers, shippers, customers or invitees to be loaded, 
unloaded or parked in areas other than those designated by Landlord for such 
activities. If Tenant permits or allows any of the prohibited activities 
described above, then Landlord shall have the right, without notice, in 
addition to such other rights and remedies that Landlord may have, to remove or 
tow away the vehicle involved and charge the costs to Tenant. Parking within 
the Common Areas shall be limited to striped parking stalls, and no parking 
shall be permitted in any driveways, access ways or in any area which would 
prohibit or impede the free flow of traffic within the Common Areas. There 
shall be no overnight parking of any vehicles of any kind unless otherwise 
authorized by Landlord, and vehicles which have been abandoned or parked in 
violation of the terms hereof may be towed away at the owner's expense. Nothing 
contained in this Lease shall be deemed to create liability upon Landlord for 
any damage to motor vehicles of visitors or employees, for any loss of property 
from within those motor vehicles, or for any injury to Tenant, its visitors or 
employees, unless ultimately determined to be caused by the sole active 
negligence or willful misconduct of Landlord. Landlord shall have the right to 
establish, and from time to time amend, and to enforce against all users all 
reasonable rules and regulations (including the designation of areas for 
employee parking) that Landlord may deem necessary and advisable for the proper 
and efficient operation and maintenance of parking within the Common Areas. 
Landlord shall have the right to construct, maintain and operate lighting 
facilities within the parking areas; to change the area, level, location and 
arrangement of the parking areas and improvements therein; to restrict parking 
by tenants, their officers, agents and employees to employee parking areas; to 
enforce parking charges (by operation of meters or otherwise); and to do and 
perform such other acts in and to the parking areas and improvements therein 
as, in the use of good business judgment, Landlord shall determine to be 
advisable. Any person using the parking area shall observe all directional 
signs and arrows and any posted speed limits. In no event shall Tenant 
interfere with the use and enjoyment of the parking area by other tenants of 
the Building or their employees or invitees. Parking areas shall be used only 
for parking vehicles. Washing, waxing, cleaning or servicing of vehicles, or 
the storage of vehicles for 24-hour periods, is prohibited unless otherwise 
authorized by Landlord. Tenant shall be liable for any damage to the parking 
areas caused by Tenant or Tenant's employees, suppliers, shippers, customers or 
invitees, including without limitation damage from excess oil leakage. Tenant 
shall have no right to install any fixtures, equipment or personal property in 
the parking areas.

     SECTION 6.5. CHANGES AND ADDITIONS BY LANDLORD. Landlord reserves the 
right to make alterations or additions to the Building or the Project, or to 
the attendant fixtures, equipment and Common Areas. Landlord may at any time 
relocate or remove any of the various buildings, parking areas, and other 
Common Areas, and may add buildings and areas to the Project from time to time. 
No change shall entitle Tenant to any abatement of rent or other claim against 
Landlord, provided that the change does not deprive Tenant of reasonable access
to or use of the Premises.

                     ARTICLE VII. MAINTAINING THE PREMISES

     SECTION 7.1. TENANT'S MAINTENANCE AND REPAIR. Tenant at its sole expense
shall comply with all applicable laws and governmental regulations governing the
Premises and make all repairs necessary to keep the Premises in the condition as
existed on the Commencement Date, excepting ordinary wear and tear, including
without limitation all glass, windows, doors, door closures, hardware, fixtures,
electrical, plumbing, fire extinguisher equipment and other equipment. Any
damage or deterioration of the Premises shall not be deemed ordinary wear and
tear if the same could have been prevented by good maintenance practices by
Tenant. As part of its maintenance obligations hereunder, Tenant shall, at
Landlord's request, provide Landlord with copies of all maintenance schedules,
reports and notices prepared by, for or on behalf of Tenant. All repairs shall
be at least equal in quality to the original work, shall be made only by a
licensed contractor approved in writing in advance by Landlord and shall be made
only at the time or times approved by Landlord. Any contractor utilized by
Tenant shall be subject to Landlord's standard requirements for contractors, as
modified from time to time. Landlord may impose reasonable restrictions and
requirements with respect to repairs, as provided in Section 7.3, and the
provisions of Section 7.4 shall apply to all repairs. Alternatively, Landlord
may elect to make any such repair on behalf of Tenant and at Tenant's expense,
and Tenant shall promptly reimburse Landlord for all costs incurred upon
submission of an invoice.

     SECTION 7.2. LANDLORD'S MAINTENANCE AND REPAIR. Subject to Section 7.1 and 
Article XI, Landlord shall provide service, maintenance and repair with respect 
to any air conditioning, ventilating or heating equipment which serves the 
Premises and shall maintain in good repair the roof, foundations, footings, the 
exterior surfaces of the exterior walls of the Building, and the structural, 
electrical and mechanical systems, except that Tenant at its expense shall make 
all repairs which Landlord deems reasonably necessary as a result of the act or 
negligence of Tenant, its agents, employees, invitees, subtenants or 
contractors. Landlord shall have the right to employ or designate any reputable 
person or firm, including any employee or agent of Landlord or any of 
Landlord's affiliates or divisions, to perform any service, repair or 
maintenance function. Landlord need not make any other improvements or repairs


   




<PAGE>   8
except as specifically required under this Lease, and nothing contained in this 
Section shall limit Landlord's right to reimbursement from Tenant for 
maintenance, repair costs and replacement costs as provided elsewhere in this 
Lease. Tenant understands that it shall not make repairs at Landlord's expense 
or by rental offset. Tenant further understands that Landlord shall not be 
required to make any repairs to the roof, foundations, footings, structural, 
electrical or mechanical systems unless and until Tenant has notified Landlord 
in writing of the need for such repair and Landlord shall have a reasonable 
period of time thereafter to commence and complete said repair, if warranted. 
All costs of any maintenance and repairs on the part of Landlord provided 
hereunder shall be considered part of Project Costs.

       SECTION 7.3.  ALTERATIONS. Tenant shall make no alterations or 
improvements to the Premises without the prior written consent of Landlord, 
which consent may be given or withheld in Landlord's sole discretion. 
Notwithstanding the foregoing, Landlord shall not unreasonably withhold its 
consent to any alterations, additions or improvements to the Premises which 
cost less than One Dollar ($1.00) per square foot of the improved portions of 
the Premises (excluding warehouse square footage) and do not (i) affect the 
exterior of the Building or outside areas (or be visible from adjoining sites), 
or (ii) affect or penetrate any of the structural portions of the Building, 
including but not limited to the roof, or (iii) require any change to the basic 
floor plan of the Premises, any change to any structural or mechanical systems 
of the Premises, or any governmental permit as a prerequisite to the 
construction thereof, or (iv) interfere in any manner with the proper 
functioning of or Landlord's access to any mechanical, electrical, plumbing or 
HVAC systems, facilities or equipment located in or serving the Building, or 
(v) diminish the value of the Premises. Landlord may impose, as a condition to 
its consent, any requirements that Landlord in its discretion may deem 
reasonable or desirable, including but not limited to a requirement that all 
work be covered by a lien and completion bond satisfactory to Landlord and 
requirements as to the manner, time, and contractor for performance of the 
work. Tenant shall obtain all required permits for the work and shall perform 
the work in compliance with all applicable laws, regulations and ordinances, 
all covenants, conditions and restrictions affecting the Project, and the Rules 
and Regulations (hereinafter defined). Tenant understands and agrees that 
Landlord shall be entitled to a supervision fee in the amount of five percent 
(5%) of the cost of the work. If any governmental entity requires, as a 
condition to any proposed alterations, additions or improvements to the 
Premises by Tenant, that improvements be made to the Common Areas, and if 
Landlord consents to such improvements to the Common Areas, then Tenant shall, 
at Tenant's sole expense, make such required improvements to the Common Areas 
in such manner, utilizing such materials, and with such contractors (including, 
if required by Landlord, Landlord's contractors) as Landlord may require in 
its sole discretion. Under no circumstances shall Tenant make any improvement 
which incorporates any Hazardous Materials, including without limitation 
asbestos-containing construction materials into the Premises. Any request for 
Landlord's consent shall be made in writing and shall contain architectural 
plans describing the work in detail reasonably satisfactory to Landlord. Unless 
Landlord otherwise agrees in writing, all alterations, additions or 
improvements affixed to the Premises (excluding moveable trade fixtures and 
furniture) shall become the property of Landlord and shall be surrendered with 
the Premises at the end of the Term, except that Landlord may, by notice to 
Tenant, require Tenant to remove by the Expiration Date, or sooner termination 
of this Lease, all or any alterations, decorations, fixtures, additions, 
improvements and the like installed either by Tenant or by Landlord at Tenant's 
request and to repair any damage to the Premises arising from that removal. 
Except as otherwise provided in this Lease or in any Exhibit to this Lease, 
should Landlord make any alteration or improvement to the Premises for Tenant, 
Landlord shall be entitled to prompt reimbursement from Tenant for all costs 
incurred.

       SECTION 7.4.  MECHANIC'S LIENS. Tenant shall keep the Premises free from 
any liens arising out of any work performed, materials furnished, or 
obligations incurred by or for Tenant. Upon request by Landlord, Tenant shall 
promptly cause any such lien to be released by posting a bond in accordance 
with California Civil Code Section 3143 or any successor statute. In the event 
that Tenant shall not, within thirty (30) days following the imposition of any 
lien, cause the lien to be released of record by payment or posting of a proper 
bond, Landlord shall have, in addition to all other available remedies, the 
right to cause the lien to be released by any means it deems proper, including 
payment of or defense against the claim giving rise to the lien. All expenses 
so incurred by Landlord, including Landlord's attorneys' fees, and any 
consequential or other damages incurred by Landlord arising out of such lien, 
shall be reimbursed by Tenant promptly following Landlord's demand, together 
with interest from the date of payment by Landlord at the maximum rate 
permitted by law until paid. Tenant shall give Landlord no less than twenty 
(20) days' prior notice in writing before commencing construction of any kind 
on the Premises so that Landlord may post and maintain notices of 
nonresponsibility on the Premises.

       SECTION 7.5.  ENTRY AND INSPECTION. Landlord shall at all reasonable 
times, upon written or oral notice (except in emergencies, when no notice shall 
be required) have the right to enter the Premises to inspect them, to supply 
services in accordance with this Lease, to protect the interests of Landlord in 
the Premises, and to submit the Premises to prospective or actual purchasers or 
encumbrance holders (or, during the last one hundred and eighty (180) days of 
the Term or when an uncured Tenant default exists, to prospective tenants), all 
without being deemed to have caused an eviction of Tenant and without abatement 
of rent except as provided elsewhere in this Lease. Landlord shall have the 
right, if desired, to retain a key which unlocks all of the doors in the 
Premises, excluding Tenant's vaults and safes, and Landlord shall have the 
right to use any and all means which Landlord may deem proper to open the doors 
in an emergency in order to obtain entry to the Premises, and any entry to the 
Premises obtained by Landlord shall not under any circumstances be deemed to be 
a forcible or unlawful entry into, or a detainer of, the Premises, or any 
eviction of Tenant from the Premises.

       SECTION 7.6.  SPACE PLANNING AND SUBSTITUTION. Landlord shall have the 
right, upon providing not less than forty-five (45) days written notice, to 
move Tenant to other space of comparable size in the Building or in the 
Project. The new space shall be provided with improvements of comparable 
quality to those within the Premises. Landlord shall pay the reasonable 
out-of-pocket costs to relocate and reconnect Tenant's personal property and 
equipment 



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<PAGE>   9
within the new space; provided that Landlord may elect to cause such work to be 
done by its contractors. Landlord shall also reimburse Tenant for such other 
reasonable out-of-pocket costs that Tenant may incur in connection with the 
relocation, including without limitation necessary stationery revisions, 
provided that a reasonable estimate thereof is given to Landlord within twenty 
(20) days following Landlord's notice. In no event, however, shall Landlord be 
obligated to incur or fund total relocation costs, exclusive of tenant 
improvement expenditures, in an amount in excess of two (2) months of Basic 
Rent at the rate then payable hereunder. Within ten (10) days following request 
by Landlord, Tenant shall execute an amendment to this Lease prepared by 
Landlord to memorialize the relocation. Should Tenant fail timely to execute 
and deliver the amendment to Landlord for any reason (including without 
limitation the inability of the parties to reach an agreement on the proposed 
relocation), or should Tenant thereafter fail to comply with the terms thereof, 
then Landlord may at its option elect to terminate this Lease upon not less 
than ninety (90) days prior written notice to Tenant. In the event of such 
termination, Tenant's obligation to pay Basic Rent during the final two (2) 
months of the Term shall be waived. Upon the effective date of any termination 
of this Lease, Tenant shall vacate the Premises in accordance with Section 15.3.


           ARTICLE VIII.  TAXES AND ASSESSMENTS ON TENANT'S PROPERTY

       Tenant shall be liable for and shall pay, at least ten (10) days before 
delinquency, all taxes and assessments levied against all personal property of 
Tenant located in the Premises, against all improvements to the Premises made 
by Landlord or Tenant which are above Landlord's Project standard in quality 
and/or quantity for comparable space within the Project ("Above Standard 
Improvements"), and against any alterations, additions or like improvements 
made to the Premises by or on behalf of Tenant. When possible Tenant shall 
cause its personal property, Above Standard Improvements and alterations to be 
assessed and billed separately from the real property of which the Premises 
form a part. If any taxes on Tenant's personal property, Above Standard 
Improvements and/or alterations are levied against Landlord or Landlord's 
property and if Landlord pays the same, or if the assessed value of Landlord's 
property is increased by the inclusion of a value placed upon the personal 
property, Above Standard Improvements and/or alterations of Tenant and if 
Landlord pays the taxes based upon the increased assessment, Tenant shall pay 
to Landlord the taxes so levied against Landlord or the proportion of the taxes 
resulting from the increase in the assessment. In calculating what portion of 
any tax bill which is assessed against Landlord separately, or Landlord and 
Tenant jointly, is attributable to Tenant's Above Standard Improvements, 
alterations and personal property, Landlord's reasonable determination shall be 
conclusive.


                     ARTICLE IX.  ASSIGNMENT AND SUBLETTING

       SECTION 9.1.  RIGHTS OF PARTIES.

              (a)    Notwithstanding any provision of this Lease to the 
contrary, Tenant will not, either voluntarily or by operation of law, assign, 
sublet, encumber, or otherwise transfer all or any part of Tenant's interest in 
this lease, or permit the Premises to be occupied by anyone other than Tenant, 
without Landlord's prior written consent, which consent shall not unreasonably 
be withheld in accordance with the provisions of Section 9.1(b). No assignment 
(whether voluntary, involuntary or by operation of law) and no subletting shall 
be valid or effective without Landlord's prior written consent and, at 
Landlord's election, any such assignment or subletting or attempted assignment 
or subletting shall constitute a material default of this Lease. Landlord shall 
not be deemed to have given its consent to any assignment or subletting by any 
other course of action, including its acceptance of any name for listing in the 
Building directory. To the extent not prohibited by provisions of the 
Bankruptcy Code, 11 U.S.C. Section 101 et seq. (the "Bankruptcy Code"), 
including Section 365(f)(1), Tenant on behalf of itself and its creditors, 
administrators and assigns waives the applicability of Section 365(e) of the 
Bankruptcy Code unless the proposed assignee of the Trustee for the estate of 
the bankrupt meets Landlord's standard for consent as set forth in Section 
9.1(b) of this Lease. If this Lease is assigned to any person or entity 
pursuant to the provisions of the Bankruptcy Code, any and all monies or other 
considerations to be delivered in connection with the assignment shall be 
delivered to Landlord, shall be and remain the exclusive property of Landlord 
and shall not constitute property of Tenant or of the estate of Tenant within 
the meaning of the Bankruptcy Code. Any person or entity to which this Lease is 
assigned pursuant to the provisions of the Bankruptcy Code shall be deemed to 
have assumed all of the obligations arising under this Lease on and after the 
date of the assignment, and shall upon demand execute and deliver to Landlord 
an instrument confirming that assumption.

              (b)    If Tenant desires to transfer an interest in this Lease, 
it shall first notify Landlord of its desire and shall submit in writing to 
Landlord: (i) the name and address of the proposed transferee; (ii) the nature 
of any proposed subtenant's or assignee's business to be carried on in the 
Premises; (iii) the terms and provisions of any proposed sublease or 
assignment, including a copy of the proposed assignment or sublease form; (iv) 
evidence of insurance of the proposed assignee or subtenant complying with the 
requirements of Exhibit D hereto; (v) a completed Environmental Questionnaire 
from the proposed assignee or subtenant; and (vi) any other information 
requested by Landlord and reasonably related to the transfer. Except as 
provided in Subsection (c) of this Section, Landlord shall not unreasonably 
withhold its consent, provided: (1) the use of the Premises will be consistent 
with the provisions of this Lease and with Landlord's commitment to other 
tenants of the Building and Project; (2) the proposed assignee or subtenant has 
not been required by any prior landlord, lender or governmental authority to 
take remedial action in connection with Hazardous Materials contaminating a 
property arising out of the proposed assignee's or subtenant's actions or use of
the property in question and is not subject to any enforcement order issued by 
any governmental 



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authority in connection with the use, disposal or storage of a Hazardous 
Material; (3) at Landlord's election, insurance requirements shall be brought 
into conformity with Landlord's then current leasing practice; (4) any proposed 
subtenant or assignee demonstrates that it is financially responsible by 
submission to Landlord of all reasonable information as Landlord may request 
concerning the proposed subtenant or assignee, including, but not limited to, a 
balance sheet of the proposed subtenant or assignee as of a date within ninety 
(90) days of the request for Landlord's consent, statements of income or profit 
and loss of the proposed subtenant or assignee for the two-year period 
preceding the request for Landlord's consent, and/or a certification signed by 
the proposed subtenant or assignee that it has not been evicted or been in 
arrears in rent at any other leased premises for the 3-year period preceding 
the request for Landlord's consent; (5) any proposed subtenant or assignee 
demonstrates to Landlord's reasonable satisfaction a record of successful 
experience in business; (6) the proposed assignee or subtenant is not an 
existing tenant of the Building or Project or a prospect with whom Landlord is 
negotiating to become a tenant at the Building or Project; and (7) the proposed 
transfer will not impose additional burdens or adverse tax effects on Landlord. 
If Tenant has any exterior sign rights under this Lease, such rights are 
personal to Tenant and may not be assigned or transferred to any assignee of 
this Lease or subtenant of the Premises without Landlord's prior written 
consent, which may be withheld in Landlord's sole and absolute discretion.

            If Landlord consents to the proposed transfer, Tenant may within 
ninety (90) days after the date of the consent effect the transfer upon the 
terms described in the information furnished to Landlord; provided that any 
material change in the terms shall be subject to Landlord's consent as set 
forth in this Section. Landlord shall approve or disapprove any requested 
transfer within thirty (30) days following receipt of Tenant's written request, 
the information set forth above, and the fee set forth below.

      (c)   Notwithstanding the provisions of Subsection (b) above, in lieu of 
consenting to a proposed assignment or subletting, Landlord may elect to (i) 
sublease the Premises (or the portion proposed to be subleased), or take an 
assignment of Tenant's interest in this Lease, upon the same terms as offered 
to the proposed subtenant or assignee (excluding terms relating to the purchase 
of personal property, the use of Tenant's name or the continuation of Tenant's 
business), or (ii) terminate this Lease as to the portion of the Premises 
proposed to be subleased or assigned with a proportionate abatement in the rent 
payable under this Lease, effective on the date that the proposed sublease or 
assignment would have become effective. Landlord may thereafter, at its option, 
assign or re-let any space so recaptured to any third party, including without 
limitation the proposed transferee of Tenant.

      (d)   Tenant agrees that fifty percent (50%) of any amounts paid by the 
assignee or subtenant, however described, in excess of (i) the Basic Rent 
payable by Tenant hereunder, or in the case of a sublease of a portion of the 
Premises, in excess of the Basic Rent reasonably allocable to such portion, 
plus (ii) Tenant's direct out-of-pocket costs which Tenant certifies to 
Landlord have been paid to provide occupancy related services to such assignee 
or subtenant of a nature commonly provided by landlords of similar space, shall 
be the property of Landlord and such amounts shall be payable directly to 
Landlord by the assignee or subtenant or, at Landlord's option, by Tenant. At 
Landlord's request, a written agreement shall be entered into by and among 
Tenant, Landlord and the proposed assignee or subtenant confirming the 
requirements of this subsection.

      (e)   Tenant shall pay to Landlord a fee of Five Hundred Dollars 
($500.00) if and when any transfer hereunder is requested by Tenant. Such fee 
is hereby acknowledged as a reasonable amount to reimburse Landlord for its 
costs of review and evaluation of a proposed assignee/sublessee, and Landlord 
shall not be obligated to commence such review and evaluation unless and until 
such fee is paid.

      SECTION 9.2. EFFECT OF TRANSFER. No subletting or assignment, even with 
the consent of Landlord, shall relieve Tenant of its obligation to pay rent and 
to perform all its other obligations under this Lease. Moreover, Tenant shall 
indemnify and hold Landlord harmless, as provided in Section 10.3, for any act 
or omission by an assignee or subtenant. Each assignee, other than Landlord, 
shall be deemed to assume all obligations of Tenant under this Lease and shall 
be liable jointly and severally with Tenant for the payment of all rent, and 
for the due performance of all of Tenant's obligations, under this Lease. No 
transfer shall be binding on Landlord unless any document memorializing the 
transfer is delivered to Landlord and both the assignee/subtenant and Tenant 
deliver to Landlord an executed consent to transfer instrument prepared by 
Landlord and consistent with the requirements of this Article. The acceptance 
by Landlord of any payment due under this Lease from any other person shall not 
be deemed to be a waiver by Landlord of any provision of this Lease or to be a 
consent to any transfer. Consent by Landlord to one or more transfers shall not 
operate as a waiver or estoppel to the future enforcement by Landlord of its 
rights under this Lease.

      SECTION 9.3. SUBLEASE REQUIREMENTS. The following terms and conditions 
shall apply to any subletting by Tenant of all or any part of the Premises and 
shall be deemed included in each sublease:

            (a)   Each and every provision contained in this Lease (other than 
with respect to the payment of rent hereunder) is incorporated by reference 
into and made a part of such sublease, with "Landlord" hereunder meaning the 
sublandlord therein and "Tenant" hereunder meaning the subtenant therein.

            (b)   Tenant hereby irrevocably assigns to Landlord all of Tenant's 
interest in all rentals and income arising from any sublease of the Premises, 
and Landlord may collect such rent and income and apply same toward Tenant's 
obligations under this Lease; provided, however, that until a default occurs in 
the performance of Tenant's obligations under this Lease, Tenant shall have the 
right to receive and collect the sublease rentals. Landlord shall not, by 
reason of this assignment or the collection of sublease rentals, be deemed 
liable to the subtenant for the performance of any of Tenant's obligations 
under the sublease. Tenant hereby irrevocably authorizes and directs any 
subtenant, upon


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<PAGE>   11
receipt of a written notice from Landlord stating that an uncured default 
exists in the performance of Tenant's obligations under this Lease, to pay to 
Landlord all sums then and thereafter due under the sublease. Tenant agrees 
that the subtenant may rely on that notice without any duty of further inquiry 
and notwithstanding any notice or claim by Tenant to the contrary. Tenant shall 
have no right or claims against the subtenant or Landlord for any rentals so 
paid to Landlord.

          (c)  In the event of the termination of this Lease, Landlord may, at 
its sole option, take over Tenant's entire interest in any sublease and, upon
notice from Landlord, the subtenant shall attorn to Landlord. In no event,
however, shall Landlord be liable for any previous act or omission by Tenant
under the sublease or for the return of any advance rental payments or deposits
under the sublease that have not been actually delivered to Landlord, nor shall
Landlord be bound by any sublease modification executed without Landlord's
consent or for any advance rental payment by the subtenant in excess of one
month's rent. The general provisions of this Lease, including without limitation
those pertaining to insurance and indemnification, shall be deemed incorporated
by reference into the sublease despite the termination of this Lease.

     SECTION 9.4.   CERTAIN TRANSFERS. The sale of all or substantially all of 
Tenant's assets (other than bulk sales in the ordinary course of business) or, 
if Tenant is a corporation, an unincorporated association, or a partnership, 
the transfer, assignment or hypothecation of any stock or interest in such 
corporation, association, or partnership in the aggregate of twenty-five 
percent (25%) (except for publicly traded shares of stock constituting a 
transfer of twenty-five percent (25%) or more in the aggregate, so long as no 
change in the controlling interest of Tenant occurs as a result thereof) shall 
be deemed an assignment within the meaning and provisions of this Article. 
Notwithstanding the foregoing, Landlord's consent shall not be required for the 
assignment of this Lease as a result of a merger by Tenant with or into another 
entity, so long as (i) the net worth of the successor entity after such merger 
is at least equal to the greater of the net worth of Tenant as of the execution 
of this Lease by Landlord or the net worth of Tenant immediately prior to the 
date of such merger, evidence of which, satisfactory to Landlord, shall be 
presented to Landlord prior to such merger, (ii) Tenant shall provide to 
Landlord, prior to such merger, written notice of such merger and such 
assignment documentation and other information as Landlord may request in 
connection therewith, and (iii) all of the other terms and requirements of this 
Article shall apply with respect to such assignment.


                       ARTICLE X. INSURANCE AND INDEMNITY

     SECTION 10.1.  TENANT'S INSURANCE. Tenant, at its sole cost and expense, 
shall provide and maintain in effect the insurance described in Exhibit D. 
Evidence of that insurance must be delivered to Landlord prior to the 
Commencement Date.

     SECTION 10.2.  LANDLORD'S INSURANCE. Landlord may, at its election, 
provide any or all of the following types of insurance, with or without 
deductible and in amounts and coverages as may be determined by Landlord in its 
discretion: "all risk" property insurance, subject to standard exclusions, 
covering the Building or Project, and such other risks as Landlord or its 
mortgagees may from time to time deem appropriate, including leasehold 
improvements made by Landlord, and commercial general liability coverage. 
Landlord shall not be required to carry insurance of any kind on Tenant's 
property, including leasehold improvements, trade fixtures, furnishings, 
equipment, plate glass, signs and all other items or personal property, and 
shall not be obligated to repair or replace that property should damage occur. 
All proceeds of insurance maintained by Landlord upon the Building and Project 
shall be the property of Landlord, whether or not Landlord is obligated to or 
elects to make any repairs. At Landlord's option, Landlord may self-insure all 
or any portion of the risks for which Landlord elects to provide insurance 
hereunder.

     SECTION 10.3.  TENANT'S INDEMNITY. To the fullest extent permitted by law, 
Tenant shall defend, indemnify, protect, save and hold harmless Landlord, its 
agents, and any and all affiliates of Landlord, including, without limitation, 
any corporations or other entities controlling, controlled by or under common 
control with Landlord, from and against any and all claims, liabilities, costs 
or expenses arising either before or after the Commencement Date from Tenant's 
use or occupancy of the Premises, the Building or the Common Areas, or from the 
conduct of its business, or from any activity, work, or thing done, permitted 
or suffered by Tenant or its agents, employees, invitees or licensees in or 
about the Premises, the Building or the Common Areas, or from any default in 
the performance of any obligation on Tenant's part to be performed under this 
Lease, or from any act or negligence of Tenant or its agents, employees, 
visitors, patrons, guests, invitees or licensees. Landlord may, at its option, 
require Tenant to assume Landlord's defense in any action covered by this 
Section through counsel satisfactory to Landlord. The provisions of this 
Section shall expressly survive the expiration or sooner termination of this 
Lease.

     SECTION 10.4.  LANDLORD'S NONLIABILITY. Landlord shall not be liable to 
Tenant, its employees, agents and invitees, and Tenant hereby waives all claims 
against Landlord for loss of or damage to any property, or loss or interruption 
of business or income, or any other loss, cost, damage, injury or liability 
whatsoever (including without limitation any consequential damages and lost 
profit or opportunity costs) resulting from, but not limited to, Acts of God, 
acts of civil disobedience or insurrection, acts or omissions of other tenants 
within the Project or their agents, employees, contractors, guests or invitees, 
fire, explosion, falling plaster, steam, gas, electricity, water or rain which 
may leak or flow from or into any part of the Premises or from the breakage, 
leakage, obstruction or other defects of the pipes, sprinklers, wires, 
appliances, plumbing, air conditioning, electrical works or other fixtures in 
the Building, whether the damage or injury results from conditions arising in 
the Premises or in other portions of the Building. It is understand that any 
such condition may require the temporary evacuation or closure of all or a 
portion of the Building. Except as provided in Sections 11.1 and 12.1 below, 
there shall be no abatement of rent and no liability of Landlord by reason of 
any injury



                                       11
<PAGE>   12
to or interference with Tenant's business (including without limitation 
consequential damages and lost profit or opportunity costs) arising from the 
making of any repairs, alterations or improvements to any portion of the 
Building, including repairs to the Premises, nor shall any related activity by 
Landlord constitute an actual or constructive eviction; provided, however, that 
in making repairs, alterations or improvements, Landlord shall interfere as 
little as reasonably practicable with the conduct of Tenant's business in the 
Premises. Neither Landlord nor its agents shall be liable for interference 
with light or other similar intangible interests. Tenant shall immediately 
notify Landlord in case of fire or accident in the Premises, the Building or 
the Project and of defects in any improvements or equipment.

     SECTION 10.5. WAIVER OF SUBROGATION. Landlord and Tenant each hereby 
waives all rights of recovery against the other and the other's agents on 
account of loss and damage occasioned to the property of such waiving party to 
the extent only that such loss or damage is required to be insured against 
under any "all risk" property insurance policies required by this Article X; 
provided however, that (i) the foregoing waiver shall not apply to the extent 
of Tenant's obligations to pay deductibles under any such policies and this 
Lease, and (ii) if any loss is due to the act, omission or negligence or 
willful misconduct of Tenant or its agents, employees, contractors, guests or 
invitees, Tenant's liability insurance shall be primary and shall cover all 
losses and damages prior to any other insurance hereunder. By this waiver it is 
the intent of the parties that neither Landlord nor Tenant shall be liable to 
any insurance company (by way of subrogation or otherwise) insuring the other 
party for any loss or damage insured against under any "all-risk" property 
insurance policies required by this Article, even though such loss or damage 
might be occasioned by the negligence of such party, its agents, employees, 
contractors, guests or invitees. The provisions of this Section shall not limit 
the indemnification provisions elsewhere contained in this Lease.

                        ARTICLE XI. DAMAGE OR DESTRUCTION

     SECTION 11.1. RESTORATION.

          (a) If the Building of which the Premises are a part is damaged, 
Landlord shall repair that damage as soon as reasonably possible, at its 
expense, unless: (i) Landlord reasonably determines that the cost of repair is 
not covered by Landlord's fire and extended coverage insurance plus such 
additional amounts Tenant elects, at its option, to contribute, excluding 
however the deductible (for which Tenant shall be responsible for Tenant's 
Share); (ii) Landlord reasonably determines that the Premises cannot, with 
reasonable diligence, be fully repaired by Landlord (or cannot be safely 
repaired because of the presence of hazardous factors, including without 
limitation Hazardous Materials, earthquake faults, and other similar dangers) 
within two hundred seventy (270) days after the date of the damage; (iii) an 
event of default by Tenant has occurred and is continuing at the time of such 
damage; or (iv) the damage occurs during the final twelve (12) months of the 
Term. Should Landlord elect not to repair the damage for one of the preceeding 
reasons, Landlord shall so notify Tenant in writing within sixty (60) days 
after the damage occurs and this Lease shall terminate as of the date of that 
notice.

          (b)  Unless Landlord elects to terminate this Lease in accordance 
with subsection (a) above, this Lease shall continue in effect for the 
remainder of the Term; provided that so long as Tenant is not in default under 
this Lease, if the damage is so extensive that Landlord reasonably determines 
that the Premises cannot, with reasonable diligence, be repaired by Landlord 
(or cannot be safely repaired because of the presence of hazardous factors, 
earthquake faults, and other similar dangers) so as to allow Tenant's 
substantial use and enjoyment of the Premises within two hundred seventy (270) 
days after the date of damage, then Tenant may elect to terminate this Lease by 
written notice to Landlord within the sixty (60) day period stated in 
subsection (a).

          (c)  Commencing on the date of any damage to the Building, and ending 
on the sooner of the date the damage is repaired or the date this Lease is 
terminated, the rental to be paid under this Lease shall be abated in the same 
proportion that the floor area of the Premises that is rendered unusable by 
the damage from time to time bears to the total floor area of the Premises, but 
only to the extent that any business interruption insurance proceeds are 
received by Landlord therefor from Tenant's insurance described in Exhibit D.

          (d)  Notwithstanding the provisions of subsections (a), (b) and (c) 
of this Section, and subject to the provisions of Section 10.5 above, the cost 
of any repairs shall be borne by Tenant, and Tenant shall not be entitled to 
rental abatement or termination rights, if the damage is due to the fault or 
neglect of Tenant or its employees, subtenants, invitees or representatives. In 
addition, the provisions of this Section shall not be deemed to require 
Landlord to repair any improvements or fixtures that Tenant is obligated to 
repair or insure pursuant to any other provision of this Lease.

          (e)  Tenant shall fully cooperated with Landlord in removing Tenant's 
personal property and any debris from the Premises to facilitate all 
inspections of the Premises and the making of any repairs. Notwithstanding 
anything to the contrary contained in this Lease, if Landlord in good faith 
believes there is a risk of injury to persons or damage to property from entry 
into the Building or Premises following any damage or destruction thereto, 
Landlord may restrict entry into the Building or the Premises by Tenant, its 
employees, agents and contractors in a non-discriminatory manner, without being 
deemed to have violated Tenant's rights of quiet enjoyment to, or made an 
unlawful detainer of, or evicted Tenant from, the Premises. Upon request, 
Landlord shall consult with Tenant to determine if there are safe methods of 
entry into the Building or the Premises solely in order to allow Tenant to 
retrieve files, data in computers, and necessary inventory, subject however to 
all indemnities and waivers of liability from Tenant to Landlord contained in 
this Lease and any additional indemnities and waivers of liability which 
Landlord may require.


                                       12
<PAGE>   13
     SECTION 11.2. LEASE GOVERNS. Tenant agrees that the provisions of this 
Lease, including without limitation Section 11.1, shall govern any damage or 
destruction and shall accordingly supersede any contrary statute or rule of law.


                          ARTICLE XII. EMINENT DOMAIN

     SECTION 12.1. TOTAL OR PARTIAL TAKING. If all or a material portion of the 
Premises is taken by any lawful authority by exercise of the right of eminent 
domain, or sold to prevent a taking, either Tenant or Landlord may terminate 
this Lease effective as of the date possession is required to be surrendered to 
the authority. In the event title to a portion of the Building or Project, 
other than the Premises, is taken or sold in lieu of taking, and if Landlord 
elects to restore the Building in such a way as to alter the Premises 
materially, either party may terminate this Lease, by written notice to the 
other party, effective on the date of vesting of title. In the event neither 
party has elected to terminate this Lease as provided above, then Landlord 
shall promptly, after receipt of a sufficient condemnation award, proceed to 
restore the Premises to substantially their condition prior to the taking, and 
a proportionate allowance shall be made to Tenant for the rent corresponding to 
the time during which, and to the part of the Premises of which, Tenant is 
deprived on account of the taking and restoration. In the event of a taking, 
Landlord shall be entitled to the entire amount of the condemnation award 
without deduction for any estate or interest of Tenant; provided that nothing 
in this Section shall be deemed to give Landlord any interest in, or prevent 
Tenant from seeking any award against the taking authority for, the taking of 
personal property and fixtures belonging to Tenant or for relocation or 
business interruption expenses recoverable from the taking authority.

     SECTION 12.2. TEMPORARY TAKING. No temporary taking of the Premises shall 
terminate this Lease or give Tenant any right to abatement of rent, and any 
award specifically attributable to a temporary taking of the Premises shall 
belong entirely to Tenant. A temporary taking shall be deemed to be a taking of 
the use or occupancy of the Premises for a period of not to exceed one hundred 
eighty (180) days.

     SECTION 12.3. TAKING OF PARKING AREA. In the event there shall be a taking 
of the parking area such that Landlord can no longer provide sufficient parking 
to comply with this Lease, Landlord may substitute reasonably equivalent 
parking in a location reasonably close to the Building; provided that if 
Landlord fails to make that substitution within one hundred eighty (180) days 
following the taking and if the taking materially impairs Tenant's use and 
enjoyment of the Premises, Tenant may, at its option, terminate this Lease by 
written notice to Landlord. If this Lease is not so terminated by Tenant, there 
shall be no abatement of rent and this Lease shall continue in effect.


         ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS

     SECTION 13.1. SUBORDINATION. At the option of Landlord, this Lease shall be
either superior or subordinate to all ground or underlying leases, mortgages and
deeds of trust, if any, which may hereafter affect the Building, and to all
renewals, modifications, consolidations, replacements and extensions thereof;
provided, that so long as Tenant is not in default under this Lease, this Lease
shall not be terminated or Tenant's quiet enjoyment of the Premises disturbed in
the event of termination of any such ground or underlying lease, or the
foreclosure of any such mortgage or deed of trust, to which Tenant has
subordinated this Lease pursuant to this Section. In the event of a termination
or foreclosure, Tenant shall become a tenant of and attorn to the
successor-in-interest to Landlord upon the same terms and conditions as are
contained in this Lease, and shall execute any instrument reasonably required by
Landlord's successor for that purpose. Tenant shall also, upon written request
of Landlord, execute and deliver all instruments as may be required from time to
time to subordinate the rights of Tenant under this Lease to any ground or
underlying lease or to the lien of any mortgage or deed of trust (provided that
such instruments include the nondisturbance and attornment provisions set forth
above), or, if requested by Landlord, to subordinate, in whole or in part, any
ground or underlying lease or the lien of any mortgage or deed of trust to this
Lease.

     SECTION 13.2. ESTOPPEL CERTIFICATE.

          (a)  Tenant shall, at any time upon not less than ten (10) days prior 
written notice from Landlord, execute, acknowledge and deliver to Landlord, in 
any form that Landlord may reasonably require, a statement in writing (i) 
certifying that this Lease is unmodified and in full force and effect (or, if 
modified, stating the nature of the modification and certifying that this 
Lease, as modified, is in full force and effect) and the dates to which the 
rental, additional rent and other charges have been paid in advance, if any, 
and (ii) acknowledging that, to Tenant's knowledge, there are no uncured 
defaults on the part of Landlord, or specifying each default if any are 
claimed, and (iii) setting forth all further information that Landlord may 
reasonably require. Tenant's statement may be relied upon by any prospective 
purchaser or encumbrancer of all or any portion of the Building or Project.

          (b)   Notwithstanding any other rights and remedies of Landlord, 
Tenant's failure to deliver any estoppel statement within the provided time 
shall be conclusive upon Tenant that (i) this Lease is in full force and 
effect, without modification except as may be represented by Landlord, (ii) 
there are no uncured defaults in Landlord's performance, and (iii) not more 
than one month's rental has been paid in advance.



                                       13
<PAGE>   14
     SECTION 13.3 FINANCIALS.

          (a)  Tenant shall deliver to Landlord, prior to the execution of this 
Lease and thereafter at any time upon Landlord's request, Tenant's current tax 
returns and financial statements, certified true, accurate and complete by the 
chief financial officer of Tenant, including a balance sheet and profit and 
loss statement for the most recent prior year (collectively, the "Statements"), 
which Statements shall accurately and completely reflect the financial 
condition of Tenant. Landlord agrees that it will keep the Statements 
confidential, except that Landlord shall have the right to deliver the same to 
any proposed purchaser of the Building or Project, and to any encumbrancer of 
all or any portion of the Building or Project.

          (b)  Tenant acknowledges that Landlord is relying on the Statements 
in its determination to enter into this Lease, and Tenant represents to 
Landlord, which representation shall be deemed made on the date of this Lease 
and again on the Commencement Date, that no material change in the financial 
condition of Tenant, as reflected in the Statements, has occurred since the date
Tenant delivered the Statements to Landlord. The Statements are represented and 
warranted by Tenant to be correct and to accurately and fully reflect Tenant's 
true financial condition as of the date of submission by any Statements to 
Landlord.


                       ARTICLE XIV. DEFAULTS AND REMEDIES

     SECTION 14.1.  TENANT'S DEFAULTS. In addition to any other event of 
default set forth in this Lease, the occurrence of any one or more of the 
following event shall constitute a default by Tenant:

          (a)  The failure by Tenant to make any payment of rent or additional 
rent required to be made by Tenant, as and when due, where the failure 
continues for a period of three (3) days after written notice from Landlord to 
Tenant; provided, however, that any such notice shall be in lieu of, and not in 
addition to, any notice required under California Code of Civil Procedure 
Section 1161 and 1161(a) as amended. For purposes of these default and remedies 
provisions, the term "additional rent" shall be deemed to include all amounts 
of any type whatsoever other than Basic Rent to be paid by Tenant pursuant to 
the terms of this Lease.

          (b)  Assignment, sublease, encumbrance or other transfer of the Lease 
by Tenant, either voluntarily or by operation of law, whether by judgment, 
execution, transfer by intestacy or testacy, or other means, without the prior 
written consent of Landlord.

          (c)  The discovery by Landlord that any financial statement provided 
by Tenant, or by any affiliate, successor or guarantor of Tenant, was 
materially false.

          (d)  The failure of Tenant to timely and fully provide any 
subordination agreement, estoppel certificate or financial statements in 
accordance with the requirements of Article XIII.

          (e)  The failure or inability by Tenant to observe or perform any of 
the express or implied covenants or provisions of this Lease to be observed or 
performed by Tenant, other than as specified in any other subsection of this 
Section, where the failure continues for a period of thirty (30) days after 
written notice from Landlord to Tenant or such shorter period as is specified 
in any other provision of this Lease; provided, however, that any such notice 
shall be in lieu of, and not in addition to, any notice required under 
California Code of Civil Procedure Section 1161 and 1161(a) as amended. 
However, if the nature of the failure is such that more than thirty (30) days 
are reasonably required by its cure, then Tenant shall not be deemed to be in 
default if Tenant commences the cure within thirty (30) days, and thereafter 
diligently pursues the cure to completion.

          (f)  (i) The making by Tenant of any general assignment for the 
benefit of creditors; (ii) the filing by or against Tenant of a petition to 
have Tenant adjudged a Chapter 7 debtor under the Bankruptcy Code or to have 
debts discharged or a petition for the reorganization or arrangement under any 
law relating to bankruptcy (unless, in the case of a petition filed against 
Tenant, the same is dismissed within thirty (30) days); (iii) the appointment of
a trustee or receiver to take possession of substantially all of Tenant's 
assets located at the Premises or of Tenant's interest in this Lease, if 
possession is not restored to Tenant within thirty (30) days; (iv) the 
attachment, execution or other judicial seizure of substantially all of 
Tenant's assets located at the Premises or of Tenant's interest in this Lease, 
where the seizure is not discharged within thirty (30) days; or (v) Tenant's 
convening of a meeting of its creditors for the purpose of effecting a 
moratorium upon or composition of its debts. Landlord shall be deemed to have 
knowledge of any event described in this subsection unless notification in 
writing is received by Landlord, nor shall there be any presumption 
attributable to Landlord of Tenant's insolvency. In the event that any 
provision of this subsection is contrary to applicable law, the provision shall 
be of no force or effect.

     SECTION 14.2. LANDLORD'S REMEDIES.

          (a)  In the event of any default by Tenant, or in the event of the 
abandonment of the Premises by Tenant, then in addition to any other remedies 
available to Landlord, Landlord may exercise the following remedies:

               (i)  Landlord may terminate Tenant's rights to possession of the 
Premises by any lawful means, in which case this Lease shall terminate and 
Tenant shall immediately surrender possession of the Premises to



                                       14

<PAGE>   15
Landlord. Such termination shall not affect any accrued obligations of Tenant 
under this Lease. Upon termination, Landlord shall have the right to reenter 
the Premises and remove all persons and property. Landlord shall also be 
entitled to recover from Tenant:

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

                        (2)   The worth at the time of award of the amount by
which the unpaid rent and additional rent which would have been earned after
termination until the time of award exceeds the amount of such 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 and additional rent for the balance of the Term after the
time of award exceeds the amount of such loss that Tenant proves could be
reasonably avoided;

                        (4)   Any other amount necessary to compensate Landlord
for all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result from Tenant's default, including, but not limited to, the cost
of recovering possession of the Premises, refurbishment of the Premises,
marketing costs, commissions and other expenses of reletting, including
necessary repair, the unamortized portion of any brokerage commissions funded by
Landlord in connection with this Lease, reasonable attorneys' fees, and any
other reasonable costs; and

                        (5)   At Landlord s election, all other amounts in
addition to or in lieu of the foregoing as may be permitted by law. The term
"rent" as used in this Lease shall be deemed to mean the Basic Rent and all
other sums required to be paid by Tenant to Landlord pursuant to the terms of
this Lease. Any sum, other than Basic Rent, shall be computed on the basis of
the average monthly amount accruing during the twenty-four (24) month period
immediately prior to default, except that if it becomes necessary to compute
such rental before the twenty-four (24) month period has occurred, then the
computation shall be on the basis of the average monthly amount during the
shorter period. As used in subparagraphs (1) and (2) above, the "worth at the
time of award" shall be computed by allowing interest at the rate of ten percent
(10%) per annum. As used in subparagraph (3) above, the "worth at the time of
award" shall be computed by discounting the amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%).

                  (ii)  Landlord may elect not to terminate Tenant's right to
possession of the Premises, in which event Landlord may continue to enforce all
of its rights and remedies under this Lease, including the right to collect all
rent as it becomes due. Efforts by the Landlord to maintain, preserve or relet
the Premises, or the appointment of a receiver to protect the Landlord's
interests under this Lease, shall not constitute a termination of the Tenant's
right to possession of the Premises. In the event that Landlord elects to avail
itself of the remedy provided by this subsection (ii), Landlord shall not
unreasonably withhold its consent to an assignment or subletting of the Premises
subject to the reasonable standards for Landlord's consent as are contained in
this Lease.

            (b)   Landlord shall be under no obligation to observe or perform 
any covenant of this Lease on its part to be observed or performed which 
accrues after the date of any default by Tenant unless and until the default is 
cured by Tenant, it being understood and agreed that the performance by 
Landlord of its obligations under this Lease are expressly conditioned upon 
Tenant's full and timely performance of its obligations under this Lease. The 
various rights and remedies reserved to Landlord in this Lease or otherwise 
shall be cumulative and, except as otherwise provided by California law, 
Landlord may pursue any or all of its rights and remedies at the same time.

            (c)   No delay or omission of Landlord to exercise any right or 
remedy shall be construed as a waiver of the right or remedy or of any default 
by Tenant. The acceptance by Landlord of rent shall not be a (i) waiver of any 
preceding breach or default by Tenant of any provision of this Lease, other 
than the failure of Tenant to pay the particular rent accepted, regardless of 
Landlord's knowledge of the preceding breach or default at the time of 
acceptance of rent, or (ii) a waiver of Landlord's right to exercise any remedy 
available to Landlord by virtue of the breach or default. The acceptance of any 
payment from a debtor in possession, a trustee, a receiver or any other person 
acting on behalf of Tenant or Tenant's estate shall not waive or cure a default 
under Section 14.1. No payment by Tenant or receipt by Landlord of a lesser 
amount than the rent required by this Lease shall be deemed to be other than a 
partial payment on account of the earliest due stipulated rent, nor shall any 
endorsement or statement on any check or letter be deemed an accord and 
satisfaction and Landlord shall accept the check or payment without prejudice 
to Landlord's right to recover the balance of the rent or pursue any other 
remedy available to it. No act or thing done by Landlord or Landlord's agents 
during the Term shall be deemed an acceptance of a surrender of the Premises, 
and no agreement to accept a surrender shall be valid unless in writing and 
signed by Landlord. No employee of Landlord or of Landlord's agents shall have 
any power to accept the keys to the Premises prior to the termination of this 
Lease, and the delivery of the keys to any employee shall not operate as a 
termination of the Lease or a surrender of the Premises.

      SECTION 14.3. LATE PAYMENTS.

            (a)   Any rent due under this Lease that is not received by 
Landlord within five (5) days of the date when due shall bear interest at the 
maximum rate permitted by law from the date due until fully paid. The payment 
of interest shall not cure any default by Tenant under this Lease. In addition, 
Tenant acknowledges that the late payment by Tenant to Landlord of rent will 
cause Landlord to incur costs not contemplated by this Lease, the exact amount 
of


                                       15
<PAGE>   16
which will be extremely difficult and impracticable to ascertain. Those costs 
may include, but are not limited to, administrative, processing and accounting 
charges, and late charges which may be imposed on Landlord by the terms of any 
ground lease, mortgage or trust deed covering the Premises. According, if any 
rent due from Tenant shall not be received by Landlord or Landlord's designee 
within five (5) days after the date due, then Tenant shall pay to Landlord, in 
addition to the interest provided above, a late charge in a sum equal to the 
greater of five percent (5%) of the amount overdue or Two Hundred Fifty Dollars 
($250.00) for each delinquent payment. Acceptance of a late charge by Landlord 
shall not constitute a waiver of Tenant's default with respect to the overdue 
amount, nor shall it prevent Landlord from exercising any of its other rights 
and remedies.

          (c)  Following each second consecutive installment of rent that is 
not paid within five (5) days following notice of nonpayment from Landlord, 
Landlord shall have the option (i) to require that beginning with the first 
payment of rent next due, rent shall no loner be paid in monthly installments 
but shall be payable quarterly three (3) months in advance and/or (ii) to 
require that Tenant increase the amount, if any, of the Security Deposit by one 
hundred percent (100%). Should Tenant deliver to Landlord, at any time during 
the Term, two (2) or more insufficient checks, the Landlord may require that 
all monies then and thereafter due from Tenant be paid to Landlord by cashier's 
check.

          SECTION 14.4. RIGHT OF LANDLORD TO PERFORM. All covenants and 
agreements to be performed by Tenant under this Lease shall be performed at 
Tenant's sole cost and expense and without any abatement of rent or right of 
set-off. If Tenant fails to pay any sum of money, other than rent, or fails to 
perform any other act on its part to be performed under this Lease, and the 
failure continues beyond any applicable grace period set forth in Section 14.1, 
then in addition to any other available remedies, Landlord may, at its election 
make the payment or perform the other act on Tenant's part. Landlord's election 
to make the payment or perform the act on Tenant's part shall not give rise to 
any responsibility of Landlord to continue making the same or similar payments 
or performing the same or similar acts. Tenant shall, promptly upon demand by 
Landlord, reimburse Landlord for all sums paid by Landlord and all necessary 
incidental costs, together with interest at the maximum rate permitted by law 
from the date of the payment by Landlord. Landlord shall have the same rights 
and remedies if Tenant fails to pay those amounts as Landlord would have in the
event of a default by Tenant in the payment of rent.

     SECTION 14.5. DEFAULT BY LANDLORD. Landlord shall not be deemed to be in 
default in the performance of any obligation under this Lease unless and until 
it has failed to perform the obligation within thirty (30) days after written 
notice by Tenant to Landlord specifying in reasonable detail the nature and 
extent of the failure; provided, however, that if the nature of Landlord's 
obligation is such that more than thirty (30) days are required for its 
performance, then Landlord shall not be deemed to be in default if it commences 
performance within the thirty (30) day period and thereafter diligently pursues 
the cure to completion.

     SECTION 14.6. EXPENSES AND LEGAL FEES. All sums reasonably incurred by 
Landlord in connection with any event of default by Tenant under this Lease or 
holding over of possession by Tenant after the expiration or earlier 
termination of this Lease, including without limitation all costs, expenses and 
actual accountants, appraisers, attorneys and other professional fees, and any 
collection agency or other collection charges, shall be due and payable by 
Tenant to Landlord on demand, and shall bear interest at the rate of ten 
percent (10%) per annum. Should either Landlord or Tenant bring any action in 
connection with this Lease, the prevailing party shall be entitled to recover 
as a part of the action its reasonable attorneys' fees, and all other costs. 
The prevailing party for the purpose of this paragraph shall be determined by 
the trier of the facts.

     SECTION 14.7. WAIVER OF JURY TRIAL. LANDLORD AND TENANT EACH ACKNOWLEDGES 
THAT IT IS AWARE OF AND HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH 
RESPECT TO ITS RIGHTS TO TRIAL BY JURY, AND EACH PARTY DOES HEREBY EXPRESSLY 
AND KNOWINGLY WAIVE AND RELEASE ALL SUCH RIGHTS TO TRIAL BY JURY IN ANY ACTION, 
PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO AGAINST THE OTHER 
(AND/OR AGAINST ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR SUBSIDIARY OR 
AFFILIATED ENTITIES) ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY 
CONNECTED WITH THIS LEASE, TENANT'S USE OR OCCUPANCY OF THE PREMISES, AND/OR 
ANY CLAIM OF INJURY OR DAMAGE.

     SECTION 14.8. SATISFACTION OF JUDGMENT. The obligations of Landlord do not 
constitute the personal obligations of the individual partners, trustees, 
directors, officers or shareholders of Landlord or its constituent partners. 
Should Tenant recover a money judgment against Landlord, such judgment shall be 
satisfied only out of the proceeds of sale received upon execution of such 
judgment and levied thereon against the right, title and interest of Landlord 
in the Project and out of the rent or other income from such property 
receivable by Landlord or out of consideration received by Landlord from the 
sale or other disposition of all or any part of Landlord's right, title or 
interest in the Project and no action for any deficiency may be sought or 
obtained by Tenant.

     SECTION 14.9. LIMITATION OF ACTIONS AGAINST LANDLORD. Any claim, demand or 
right of any kind by Tenant which is based upon or arises in connection with 
this Lease shall be barred unless Tenant commences an action thereon within six 
(6) months after the date that the act, omission, event or default upon which 
the claim, demand or right arises, has occurred.



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<PAGE>   17
                            ARTICLE XV. END OF TERM

     SECTION 15.1.  HOLDING OVER. This Lease shall terminate without further 
notice upon the expiration of the Term, and any holding over by Tenant after 
the expiration shall not constitute a renewal or extension of this Lease, or 
give Tenant any rights under this Lease, except when in writing signed by both 
parties. If Tenant holds over for any period after the expiration (or earlier 
termination) of the Term without the prior written consent of Landlord, such 
possession shall constitute a tenancy at sufferance only; such holding over 
with the prior written consent of Landlord shall constitute a month-to-month 
tenancy commencing on the first (1st) day following the termination of this 
Lease. In either or such events, possession shall be subject to all of the 
terms of this Lease, except that the monthly Basic Rent shall be the greater of 
(a) two hundred percent (200%) of the Basic Rent for the month immediately 
preceding the date of termination or (b) the then currently scheduled Basic 
Rent for comparable space in the Building. If Tenant fails to surrender the 
Premises upon the expiration of this Lease despite demand to do so by Landlord, 
Tenant shall indemnify and hold Landlord harmless from all loss or liability, 
including without limitation, any claims made by any succeeding tenant relating 
to such failure to surrender. Acceptance by Landlord to rent after the 
termination shall not constitute a consent to a holdover or result in a renewal 
of this Lease. The foregoing provisions of this Section are in addition to and 
do not affect Landlord's right of re-entry or any other rights of Landlord 
under this Lease or at Law.

     SECTION 15.2.  MERGER ON TERMINATION. The voluntary or other surrender of 
this Lease by Tenant, or a mutual termination of this Lease, shall terminate 
any or all existing subleases unless Landlord, at its option, elects in writing
to treat the surrender or termination as an assignment to it of any or all 
subleases affecting the Premises.

     SECTION 15.3.  SURRENDER OF PREMISES; REMOVAL OF PROPERTY. Upon the 
Expiration Date or upon any earlier termination of this Lease, Tenant shall quit
and surrender possession of the Premises to Landlord in as good order, condition
and repair as when received or as hereafter may be improved by Landlord or
Tenant, reasonable wear and tear and repairs which are Landlord's obligation
excepted, and shall, without expense to Landlord, remove or cause to be removed
from the Premises all personal property, improvements constructed by Tenant that
Landlord require be removed in accordance with the terms of this Lease, and
debris, except for any items or improvements that Landlord may by written
authorization allow to remain. Tenant shall repair all damage to the Premises
resulting from the removal, which repair shall include the patching and filling
of holes and repair of structural damage, provided that Landlord may instead
elect to repair any structural damage at Tenant's expense. If Tenant shall fail
to comply with the provisions of this Section, Landlord may effect the removal
and/or make any repairs, and the cost to Landlord shall be additional rent
payable by Tenant upon demand. If Tenant fails to remove Tenant's personal
property from the Premises upon the expiration of the Term, Landlord may remove,
store, dispose of and/or retain such personal property, at Landlord's option, in
accordance with then applicable laws, all at the expense of Tenant. If requested
by Landlord, Tenant shall execute, acknowledge and deliver to Landlord an
instrument in writing releasing and quitclaiming to Landlord all right, title
and interest of Tenant in the Premises.

                       ARTICLE XVI. PAYMENTS AND NOTICES

     All sums payable by Tenant to Landlord shall, be paid, without deduction 
or offset, in lawful money of the United States to Landlord at its address set 
froth in Item 12 of the Basic Lease Provisions, or at any other place as 
Landlord may designate in writing. Unless this Lease expressly provides 
otherwise, as for example in the payment of rent pursuant to Section 4.1, all 
payments shall be due and payable within five (5) days after demand. All 
payments requiring proration shall be prorated on the basis of a thirty (30) 
day month and a three hundred sixty (360) day year. Any notice, election, 
demand, consent, approval or other communication to be given or other document 
to be delivered by either party to the other may be delivered in person or by 
courier or overnight delivery service to the other party, or may be deposited 
in the United States mail, duly registered or certified, postage prepaid, 
return receipt requested, and addressed to the other party at the address set 
forth in Item 12 of the Basic Lease Provisions, or if to Tenant, at that 
address or, from and after the Commencement Date, at the Premises (whether or 
not Tenant has departed from, abandoned or vacated the Premises), or may be 
delivered by telegram, telex or telecopy, provided that receipt thereof is 
telephonically confirmed. Either party may, by written notice to the other, 
served in the manner provided in this Article, designate a different address. 
If any notice or other document is sent by mail, it shall be deemed served or 
delivered twenty-four (24) hours after mailing. If more than one person or 
entity is named as Tenant under this Lease, service of any notice upon any one 
of them shall be deemed as service upon all of them.

                      ARTICLE XVII. RULES AND REGULATIONS

     Tenant agrees to observe faithfully and comply strictly with the Rules and 
Regulations, attached as Exhibit E, and any reasonable and nondiscriminatory 
amendments, modifications and/or additions as may be adopted and published by 
written notice to tenants by Landlord for the safety, care, security, good 
order, or cleanliness of the Premises, Building, Project and Common Areas. 
Landlord shall not be liable to Tenant for any violation of the Rules and 
Regulations or the breach of any covenant or condition in any lease by any 
other tenant or such tenant's agents, employees, contractors, guests or 
invitees. One or more waivers by Landlord of any breach of the Rules and 
Regulations by Tenant or by any other tenant(s) shall not be a waiver of any 
subsequent breach of that rule or any other. Tenant's


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<PAGE>   18
failure to keep and observe the Rules and Regulations shall constitute a 
default under this Lease. In the case of any conflict between the Rules and 
Regulations and this Lease, this Lease shall be controlling.

                       ARTICLE XVIII. BROKER'S COMMISSION

     The parties recognize as the broker(s) who negotiated this Lease the 
firm(s), if any, whose name(s) is (are) stated in Item 10 of the Basic Lease 
Provisions, and agree that Landlord shall be responsible for the payment of 
brokerage commissions to those broker(s) unless otherwise provided in this 
Lease. Tenant warrants that it has had no dealings with any other real estate 
broker or agent in connection with the negotiation of this Lease, and Tenant 
agrees to indemnify and hold Landlord harmless from any cost, expense or 
liability (including reasonable attorneys' fees) for any compensation, 
commissions or charges claimed by any other real estate broker or agent 
employed or claiming to represent or to have been employed by Tenant in 
connection with the negotiation of this Lease. The foregoing agreement shall 
survive the termination of this Lease. If Tenant fails to take possession of 
the Premises or if this Lease otherwise terminates prior to the Expiration 
Date as a result of failure of performance by Tenant, Landlord shall be 
entitled to recover from Tenant the unamortized portion of any brokerage 
commission funded by Landlord in addition to any other damages in which 
Landlord may be entitled. 

                  ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST

     In the event of any transfer of Landlord's interest in the Premises, the 
transferor shall be automatically relieved of all obligations on the part of 
Landlord accruing under this Lease from and after the date of the transfer, 
provided that any funds held by the transferor in which Tenant has an interest 
shall be turned over, subject to that interest, to the transferee and Tenant is 
notified of the transfer as required by law. No holder of a mortgage and/or 
deed of trust to which this Lease is or may be subordinate, and no landlord 
under a so-called sale-leaseback, shall be responsible in connection with the 
Security Deposit, unless the mortgagee or holder of the deed of trust or the 
landlord actually receives the Security Deposit. It is intended that the 
covenants and obligations contained in this Lease on the part of Landlord 
shall, subject to the foregoing, be binding on Landlord, its successors and 
assigns, only during and in respect to their respective successive periods of 
ownership.

                           ARTICLE XX. INTERPRETATION

     SECTION 20.1. GENDER AND NUMBER. Whenever the context of this Lease 
requires, the words "Landlord" and "Tenant" shall include the plural as well as 
the singular, and words used in neuter, masculine or feminine genders shall 
include the others.

     SECTION 20.2. HEADINGS. The captions and headings of the articles and 
sections of this Lease are for convenience only, are not a part of this Lease 
and shall have no effect upon its construction or interpretation.

     SECTION 20.3. JOINT AND SEVERAL LIABILITY. If more than one person or 
entity is named as Tenant, the obligations imposed upon each shall be joint and 
several and the act of or notice from, or notice or refund to, or the signature 
of, any one or more of them shall be binding on all of them with respect to the 
tenancy of this Lease, including, but not limited to, any renewal, extension, 
termination or modification of this Lease.

     SECTION 20.4. SUCCESSORS. Subject to Articles IX and XIX, all rights and 
liabilities given to or imposed upon Landlord and Tenant shall extend to and 
bind their respective heirs, executors, administrators, successors and assigns. 
Nothing contained in this Section is intended, or shall be construed, to grant 
to any person other than Landlord and Tenant and their successors and assigns 
any rights or remedies under this Lease.

     SECTION 20.5. TIME OF ESSENCE. Time is of the essence with respect to the 
performance of every provision of this Lease.

     SECTION 20.6. CONTROLLING LAW. This Lease shall be governed by and 
interpreted in accordance with the laws of the State of California.

     SECTION 20.7. SEVERABILITY. If any term or provision of this Lease, the 
deletion of which would not adversely affect the receipt of any material 
benefit by either party or the deletion of which is consented to by the party 
adversely affected, shall be held invalid or unenforceable to any extent, the 
remainder of this Lease shall not be affected and each term and provision of 
this Lease shall be valid and enforceable to the fullest extent permitted by 
law.

     SECTION 20.8. WAIVER AND CUMULATIVE REMEDIES. One or more waivers by 
Landlord or Tenant of any breach of any term, covenant or condition contained 
in this Lease shall not be a waiver of any subsequent breach of the same or any 
other term, covenant or condition. Consent to any act by one of the parties 
shall not be deemed to render unnecessary the obtaining of that party's consent 
to any subsequent act. No breach by Tenant of this Lease shall be deemed to 
have been waived by Landlord unless the waiver is in a writing signed by 
Landlord. The rights and

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<PAGE>   19
remedies of Landlord under this Lease shall be cumulative and in addition to 
any and all other rights and remedies which Landlord may have.

       SECTION 20.9.  INABILITY TO PERFORM. In the event that either party shall
be delayed or hindered in or prevented from the performance of any work or in 
performing any act required under this Lease by reason of any cause beyond the 
reasonable control of that party, then the performance of the work or the doing 
of the act shall be excused for the period of the delay and the time for 
performance shall be extended for a period equivalent to the period of the 
delay. The provisions of this Section shall not operate to excuse Tenant from 
the prompt payment of rent or from the timely performance of any other 
obligation under this Lease within Tenant's reasonable control.

       SECTION 20.10.  ENTIRE AGREEMENT. This Lease and its exhibits and other 
attachments cover in full each and every agreement of every kind between the 
parties concerning the Premises, the Building, and the Project, and all 
preliminary negotiations, oral agreements, understandings and/or practices, 
except those contained in this Lease, are superseded and of no further effect. 
Tenant waives its rights to rely on any representations or promises made by 
Landlord or others which are not contained in this Lease. No verbal agreement 
or implied covenant shall be held to modify the provisions of this Lease, any 
statute, law, or custom to the contrary notwithstanding.

       SECTION 20.11.  QUIET ENJOYMENT. Upon the observance and performance of 
all the covenants, terms and conditions on Tenant's part to be observed and 
performed, and subject to the other provisions of this Lease, Tenant shall 
peaceably and quietly hold and enjoy the Premises for the Term without 
hindrance or interruption by Landlord or any other person claiming by or 
through Landlord.

       SECTION 20.12.  SURVIVAL. All covenants of Landlord or Tenant which 
reasonably would be intended to survive the expiration or sooner termination of 
this Lease, including without limitation any warranty or indemnity hereunder, 
shall so survive and continue to be binding upon and inure to the benefit of 
the respective parties and their successors and assigns.


                     ARTICLE XXI.  EXECUTION AND RECORDING

       SECTION 21.1.  COUNTERPARTS. This Lease may be executed in one or more 
counterparts, each of which shall constitute an original and all of which shall 
be one and the same agreement.

       SECTION 21.2.  CORPORATE AND PARTNERSHIP AUTHORITY. If Tenant is a 
corporation or partnership, each individual executing this Lease on behalf of 
the corporation or partnership represents and warrants that he is duly 
authorized to execute and deliver this Lease on behalf of the corporation or 
partnership, and that this Lease is binding upon the corporation or partnership 
in accordance with its terms. Tenant shall, at Landlord's request, deliver a 
certified copy of its board of directors' resolution or partnership agreement 
or certificate authorizing or evidencing the execution of this Lease.

       SECTION 21.3.  EXECUTION OF LEASE; NO OPTION OR OFFER. The submission 
of this Lease to Tenant shall be for examination purposes only, and shall not 
constitute an offer to or option for Tenant to lease the Premises. Execution of 
this Lease by Tenant and its return to Landlord shall not be binding upon 
Landlord, notwithstanding any time interval, until Landlord has in fact 
executed and delivered this Lease to Tenant, it being intended that this Lease 
shall only become effective upon execution by Landlord and delivery of a fully 
executed counterpart to Tenant.

       SECTION 21.4.  RECORDING. Tenant shall not record this Lease without the 
prior written consent of Landlord. Tenant, upon the request of Landlord, shall 
execute and acknowledge a "short form" memorandum of this Lease for recording 
purposes.

       SECTION 21.5.  AMENDMENTS. No amendment or termination of this Lease 
shall be effective unless in writing signed by authorized signatories of Tenant 
and Landlord, or by their respective successors in interest. No actions, 
policies, oral or informal arrangements, business dealings or other course of 
conduct by or between the parties shall be deemed to modify this Lease in any 
respect.

       SECTION 21.6.  EXECUTED COPY. Any fully executed photocopy or similar 
reproduction of this Lease shall be deemed an original for all purposes.

       SECTION 21.7.  ATTACHMENTS. All exhibits, amendments, riders and addenda 
attached to this Lease are hereby incorporated into and made a part of this 
Lease.


                          ARTICLE XXII. MISCELLANEOUS

       SECTION 22.1.  NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and 
agrees that the terms of this Lease are confidential and constitute proprietary 
information of Landlord. Disclosure of the terms could adversely affect the 
ability of Landlord to negotiate other leases and impair Landlord's 
relationship with other tenants.


                                       19
<PAGE>   20
Accordingly, Tenant agrees that it, and its partners, officers, directors, 
employees and attorneys, shall not intentionally and voluntarily disclose the 
terms and conditions of this Lease to any other tenant or apparent prospective 
tenant of the Building or Project, either directly or indirectly, without the 
prior written consent of Landlord, provided, however, that Tenant may disclose 
the terms to prospective subtenants or assignees under this Lease.

      SECTION 22.2 GUARANTY. As a condition to the execution of this Lease by 
Landlord, the obligations, covenants and performance of the Tenant as herein 
provided shall be guaranteed in writing by the Guarantor(s) listed in Item 7 of 
the Basic Lease Provisions, if any, on a form of guaranty provided by Landlord.

      SECTION 22.3 CHANGES REQUESTED BY LENDER. If, in connection with 
obtaining financing for the Project, the lender shall request reasonable 
modifications in this Lease as a condition to the financing, Tenant will not 
unreasonably withhold or delay its consent, provided that the modifications do 
not materially increase the obligations of Tenant or materially and adversely 
affect the leasehold interest created by this Lease.

      SECTION 22.4 MORTGAGEE PROTECTION.  No act or failure to act on the part 
of Landlord which would otherwise entitle Tenant to be relieved of its
obligations hereunder or to terminate this Lease shall result in such a release
or termination unless (a) Tenant has given notice by registered or certified
mail to any beneficiary of a deed of trust or mortgage covering the Building
whose address has been furnished to Tenant and (b) such beneficiary is afforded
a reasonable opportunity to cure the default by Landlord (which in no event
shall be less than sixty (60) days), including, if necessary to effect the cure,
time to obtain possession of the Building by power of sale or judicial
foreclosure provided that such foreclosure remedy is diligently pursued. Tenant
agrees that each beneficiary of a deed of trust or mortgage covering the
Building is an express third party beneficiary hereof, Tenant shall have no
right or claim for the collection of any deposit from such beneficiary or from
any purchaser at a foreclosure sale unless such beneficiary or purchaser shall
have actually received and not refunded the deposit, and Tenant shall comply
with any written directions by any beneficiary to pay rent due hereunder
directly to such beneficiary without determining whether an event of default
exists under such beneficiary's deed of trust.

      SECTION 22.5 COVENANTS AND CONDITIONS. All of the provisions of this 
Lease shall be construed to be conditions as well as covenants as though the 
words specifically expressing or imparting covenants and conditions were used 
in each separate provision.

      SECTION 22.6 SECURITY MEASURES. Tenant hereby acknowledges that Landlord 
shall have no obligation whatsoever to provide guard service or other security 
measures for the benefit of the Premises or the Project. Tenant assumes all 
responsibility for the protection of Tenant, its agents, invitees and property 
from acts of third parties. Nothing herein contained shall prevent Landlord, at 
its sole option, from providing security protection for the Project or any part 
thereof, in which event the cost thereof shall be included within the 
definition of Project Costs.

  
LANDLORD:                                       TENANT:

THE IRVINE COMPANY                              SIONIX CORPORATION,
                                                a Utah corporation
                                     [SEAL]

By: /s/ CLARENCE W. BARKER                      By: /s/ JAMES HOUTZ
   ----------------------------                    -----------------------------
   Clarence W. Barker,                             Name: James Houtz
   President, Irvine Industrial Company,                ------------------------
   a division of The Irvine Company                Title: President/COO
                                                         -----------------------

By: /s/ GARY A. VACCARO                         By: /s/ JOAN HOROWITZ
   ----------------------------                    -----------------------------
   Gary A. Vaccaro,                                Name: Joan Horowitz
   Senior Vice President, Finance                       ------------------------
                                                   Title: Secretary Treasurer
                                                         -----------------------


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