<PAGE>
                                                                   EXHIBIT 10.22

                             INDUSTRIAL SPACE LEASE



                                    BETWEEN

                              RANCON INCOME FUND I
                        A CALIFORNIA LIMITED PARTNERSHIP


                                  ("LANDLORD")

                                      AND

                          WAKEFIELD ENGINEERING, INC.,
                             A DELAWARE CORPORATION

                                  ("TENANT")



                              September 29, 1995
<PAGE>
 
                               TABLE OF CONTENTS

<TABLE> 
<CAPTION> 
                                                                   Page
                                                                   ----
<S>                                                                <C> 
1.   TERM.......................................................      4
2.   POSSESSION.................................................      4
3.   ANNUAL BASIC RENT..........................................      4
4.   RENTAL ADJUSTMENT..........................................      5
5.   SECURITY DEPOSIT...........................................      5
6.   USE........................................................      6
7.   HAZARDOUS MATERIALS........................................      6
8.   NOTICES....................................................      9
9.   BROKERS....................................................      9
10.  HOLDING OVER...............................................      9
11.  TAXES ON TENANT'S PROPERTY.................................      9
12.  CONDITION OF PREMISES......................................     10
13.  ALTERATIONS................................................     10
14.  REPAIRS....................................................     10
15.  ENTRY BY LANDLORD..........................................     11
16.  UTILITIES AND SERVICES.....................................     11
17.  COMMON AREAS...............................................     12
18.  BANKRUPTCY.................................................     12
19.  INDEMNIFICATION............................................     12
20.  DAMAGE TO TENANT'S PROPERTY................................     12
21.  TENANT INSURANCE...........................................     13
22.  DAMAGE OR DESTRUCTION......................................     14
23.  EMINENT DOMAIN.............................................     15
24.  DEFAULTS AND REMEDIES......................................     15
25.  GOVERNMENT ENERGY OR UTILITY CONTROLS......................     17
26.  LIMITATION ON LIABILITY....................................     17
27.  TENANT IMPROVEMENTS........................................     17
28.  LANDLORD'S RESERVED RIGHTS.................................     17
29.  ASSIGNMENT AND SUBLETTING..................................     17
30.  MISCELLANEOUS..............................................     18
31.  OPTION TO RENEW............................................     23
32.  CONSTRUCTION...............................................     24
33.  RENT RETROACTIVE TO DECEMBER 1, 1994.......................     24
34.  RULES AND REGULATIONS......................................     24

                                      (i)
</TABLE> 
<PAGE>
 
                               TABLE OF EXHIBITS

EXHIBIT                         ITEM

A-1                             Site Plan of the Project

A-2                             Legal Description of the Premises




                                     (ii)
<PAGE>
 
                            INDUSTRIAL SPACE LEASE

     THIS INDUSTRIAL SPACE LEASE is made as of the 29th day of September, 1995
by and between Rancon Income Fund I, a California limited partnership
("Landlord"), and Wakefield Engineering, Inc., a Delaware corporation
("Tenant"), in consideration of the Rent as defined in Sections 3 and 4 herein
and the provisions of this Lease. Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord the "Premises" described below situated in those
certain buildings located at 28715 Via Montezuma and 27901 Front Street,
Temecula, California (collectively the "Building").

     The parties hereto agree that said letting and hiring is upon and subject 
to the terms, covenants and conditions herein set forth. Each party covenants, 
as a material part of the consideration of this Lease to keep and perform each 
and all of said terms, covenants and conditions for which said party is liable 
and that this Lease is made upon the condition of such performance.

                            BASIC LEASE PROVISIONS

     The following summary of the basic lease provisions ("Basic Lease 
Provisions") is hereby made a part of the ("Lease") for the purpose of setting 
forth information referred to in the Lease. In the event of any conflict, 
inconsistency or ambiguity created by or between the Basic Lease Provisions and 
the body of the Lease, which Landlord and Tenant acknowledge having read in 
full, the terms and conditions of the Lease shall govern.

<TABLE> 
<CAPTION> 
<S>  <C>                                                         <C> 
1.   Tenant's Trade Name:                                        Wakefield Engineering, Inc.

2.   Address of Premises, including Name of Office               28715 Via Montezuma & 27901 Front Street, Temecula, 
     Building, Floor and Suite Number                            California 92590.

3.   Use of Premises:                                            Industrial and general office use, and for no other use without
                                                                 the express written consent of Landlord.

4.   Lease Term:                                                 Ten (10) years.

              Options:                                           Two (2) five (5) year options to renew.

5.   Commencement Date:                                          December 1, 1994.

6.   Initial Annual Basic Rent:                                  $175,032.00 per year, payable in equal monthly installments of
                                                                 $14,586.00 during the Term, subject to adjustment pursuant to
                                                                 Section 3(b).

7.   Minimum Annual Increase in Basic Rent:                      Minimum two percent (2%) with a maximum of six percent
                                                                 (6%) per annum, subject to adjustment pursuant to Section 3(b).

8.   Tenant's Percentage of Building Direct Expense              100%.
     (That portion of the Building occupied by Tenant
     divided by the total square footage of the Building
     available for occupancy):

9.   Floor Area of Premises And Building:                        Agreed to be approximately 44,200 rentable square feet.

10.  Security Deposit:                                           $14,586.00 (does not include prepaid rent).

11.  Prepaid Rent:                                               N/A.

12.  Tenant Improvement Allowance:                               N/A.

13.  Broker(s):                                                  N/A.
</TABLE> 

                                      -1-
<PAGE>
 
<TABLE> 
<S>  <C>                                                         <C> 
14.  Address for Notice:                                         LANDLORD:
                                                                 Rancon Income Fund I
                                                                 c/o Glenborough Inland Realtv Corporation
                                                                 400 South El Camino Real
                                                                 San Mateo, CA  94402-1708
                                                                 Attn: Legal Department

                                                                 TENANT:

                                                                 Wakefield Engineering
                                                                 Attention: General Manager
                                                                 28715 Via Montezuma
                                                                 Temecula, CA 92590

     with copies to:                                             Robert W. Forman
                                                                 Greenberger & Forman
                                                                 1370 Avenue of the Americas
                                                                 New York, NY  10019-4602

15.  Address for Rent Payments and Copies of Notices:            Rancom Income Fund I
                                                                 c/o Glenborough Inland Realtv Corporation
                                                                 2740 South Bristol Street
                                                                 Suite 118
                                                                 Santa Ana, CA  92704

16.  Guarantor:                                                  N/A
</TABLE> 

                                      -2-
<PAGE>
 
                         ----------------------------

                            ADDITIONAL DEFINITIONS

     17. ADDITIONAL RENTAL. The term "Additional Rental" as used in this Lease
shall mean each and every payment described in this Lease which is required to
be paid by Tenant to Landlord other than the Annual Basic Rent.

     18. ADJUSTMENT DATE. The term "Adjustment Date" as used in this Lease shall
mean each anniversary of the Commencement Date.

     19. ALTERATIONS. The term "Alterations" as used in this Lease shall mean
any addition, modification or other alteration of the Premises.

     20. COMMON AREA. (Intentionally Omitted).

     21. DRIPLINE. The term "Dripline" as used in this Lease shall mean a line
surrounding a building which is defined by the point at which water dripping
from the roof of the building will naturally fall (i.e., a line which is located
directly below and follows the circumference of the outermost extension of the
eaves or other extension of the roof or of covered windows or entryways or other
extensions of the walls of such building).

     22. INDEX. The term "Index" as used in this Lease shall mean the United
States Department of Labor, Bureau of Labor Statistics Consumer Price Index for
All Urban Consumers, Los Angeles-Anaheim-Riverside Average Subgroup "All Items,"
(1982-84 = 100). If at any time the Index should not exist in the format recited
herein, Landlord shall substitute any official index published by the Bureau of
Labor Statistics, or successor or similar governmental agency, as may then be in
existence and shall, in Landlord's reasonable opinion, be most nearly equivalent
thereto.

     23. LANDLORD'S WORK. (Intentionally Omitted).

     24. PREMISES POSSESSION LETTER. The term "Premises Possession Letter" as
used in the Lease shall mean a Tenant's Estoppel Certificate in the form
attached hereto as Exhibit "F" to be delivered by Tenant within ten (10) days
                   -----------
following the date upon which possession of the Premises is delivered to Tenant.

     25. PROJECT. The term "Project" shall mean the development constructed on 
real property located in Temecula, California as shown on the site plan attached
hereto as Exhibit "A-1".
          ------------

     26. RENTAL. The term "Rental" as used in this Lease shall mean the total of
all payments described in this Lease which are required to be paid by Tenant to 
Landlord, including but not limited to the Annual Basic Rent and all items 
specifically described as Additional Rental Payments.

     27. RENTABLE AREA. The term "Rentable Area," as used in this Lease, shall 
mean all areas designated by Landlord for the exclusive use of a Tenant of the 
Project, measured from the Dripline and from the center of interior demising 
walls, and shall include, but not be limited to, restrooms, mezzanines, patios, 
warehouse or storage areas, clerical or office areas and employee areas.

     28. SUBSTANTIAL COMPLETION. (Intentionally Omitted).

     29. TENANT'S WORK. (Intentionally Omitted).

                                      -3-
<PAGE>
 
                            INDUSTRIAL SPACE LEASE


                                   1.  TERM

     The term of this Lease shall be for the period shown in Item 4 of the Basic
Lease Provisions.


                                2.  POSSESSION

     If for any reason Landlord is unable to deliver possession of the Premises 
to Tenant on the date scheduled for commencement of the term of this Lease, this
Lease shall not be void or voidable nor shall Landlord be liable to Tenant for 
any loss or damage resulting therefrom, but in such event Tenant shall not be 
liable for any Rental until Landlord tenders possession of the Premises to 
Tenant ready for occupancy. Within ten (10) days after delivery of the Premises 
to Tenant, Tenant shall deliver to Landlord an executed copy of Landlord's 
standard form Premises Possession letter, as attached hereto as Exhibit "F". If 
Landlord shall give Tenant permission to enter into possession of the Premises 
before the Commencement Date, that possession shall be subject to all the 
provisions of this Lease, including, without limitation, the payment of Annual 
Basic Rent, except to the extent expressly stated to the contrary by Landlord in
writing.


                             3.  ANNUAL BASIC RENT

     (a)  Tenant agrees to pay Landlord the Annual Basic Rent for the Premises 
shown in Item 6 of the Basic Lease Provisions, payable in advance on the first 
day of each calendar month during the Term. If the term of this Lease commences 
or ends on a day other than the first day of a calendar month, then the Rental 
for such period shall be prorated in the proportion that the number of days this
Lease is in effect during such period bears to thirty (30). In addition to the 
Annual Basic Rent, Tenant agrees to pay as additional Rental the amount of 
Rental adjustments and other charges required by this Lease. All Rental shall be
paid to Landlord, without prior demand and without any deduction or offset, in 
lawful money of the United States of America, at the address of Landlord 
designated in the Basic Lease Provisions or to such other person or at such 
other place as Landlord may from time to time designate in writing. No demand, 
notice or invoice shall be required.

     (b)  The Rental payable by Tenant shall be increased for each year of the 
term of this Lease by adjusting the Annual Basic Rent reserved in Section 3(a) 
to reflect any increase in the cost of living, which adjustment shall be 
determined as follows: On each Adjustment Date the most recently published Index
figure shall be determined (the "Comparison Index"). The monthly Rental payable
for the succeeding year of the Lease Term shall be the Annual Basic Rent
reserved under Section 3(a) increased by the same percentage, if any, by which
the Comparison Index figure shall have increased over the Consumer Price Index
figure for the month which is the most recently published prior to the
Commencement Date; provided, however, that the increase in Annual Basic Rent
shall in no event be less than two percent (2%) per annum nor more than six
percent (6%) per annum (pro-rated as required to account for any partial year
between the Commencement Date and the Adjustment Date).

     (c)  Tenant hereby acknowledges that the late payment by Tenant to Landlord
of Rental and other sums due hereunder will cause Landlord to incur costs not 
contemplated by this Lease, the exact amount of which will be extremely 
difficult to ascertain. Such 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 mortgage or trust deed covering the 
Building. Accordingly, if any installment of Rental or any other sum due from 
Tenant shall not be received by Landlord or Landlord's designee within five (5) 
days after the due date, then the unpaid amounts shall bear interest at the rate
of one and one-half percent (1-1/2%) per month from the date due to the date of 
payment (the "Late Charge"). The parties agree that such late charge represents 
a fair and reasonable estimate of the cost Landlord will incur by reason of late
payment by Tenant. Acceptance of such late charge by Landlord shall in no event
constitute a waiver of Tenant's default with respect to such overdue amount, nor
prevent Landlord from exercising any of the other rights and remedies granted
hereunder.

     (d)  In the event of any two consecutive late payments of Rental within any
twelve (12) month period, Landlord shall have the option (i) to require that 
beginning with the first payment of Rental next due, Rental shall no longer be 
paid in monthly installments but shall be payable quarterly three (3) months in 
advance, and also to require that Tenant increase the amount, if any, of the 
security deposit required under this Lease by: (i) one hundred percent (100%), 
or (ii) one full month's Rental, whichever is greater, which additional security
deposit shall be retained by Landlord and may be applied by Landlord in the 
manner provided in this Lease.

                                      -4-
<PAGE>
 
     (e)  In the event that at any time during the term of this Lease any 
governmental law, rule or regulation prohibits or postpones in whole or in part
any increase in the Rental or in the payment of other sums payable by Tenant 
hereunder to be made pursuant to this Lease, then, and in either of such events,
such increase or payment shall be made to the maximum extent permissible by law 
at the time provided in this Lease, and/or at any time or times thereafter such 
increase or payment, or any portion thereof, may lawfully be made and any such 
increase in Rental, or any portion thereof, or the sums payable hereunder, or 
portions thereof, the payment of which has been so prohibited or postponed, 
shall thereafter become due and payable to the maximum extent and at the 
earliest time or times permitted by law.

                             4. RENTAL ADJUSTMENT

     (a)  For the purpose of this Section 4, the following terms are defined as 
follows:

          (i)  TENANT'S PERCENTAGE: The amount shown in Item 8 of the Basic 
               Lease Provisions.

         (ii)  DIRECT EXPENSES: The term "Direct Expenses" shall include:

               (1) All real and personal property taxes and assessments imposed
by any governmental authority or agency on the Building and the land on which
the Building is located (including a pro rata portion of any taxes levied on any
common areas); any assessments levied in lieu of taxes; any non-progressive tax
on or measured by gross Rentals received from the Rental of space in the
Building; and other costs levied or assessed by, or at the direction of, any
federal, state, or local government authority or private association in
connection with the use or occupancy of the Premises or the Common Area serving
the Premises; the parking facilities serving the Premises; any tax on this
transaction or any document to which Tenant is a party creating or transferring
an interest in the Premises, and any expenses, including costs of attorneys or
experts, reasonably incurred by Landlord in seeking reduction by the taxing
authority of the above-referenced taxes, less tax refunds obtained as a result
of an application for review thereof; but shall not include any net income,
franchise, capital stock, estate or inheritance taxes.

               (2) All property and casualty insurance, including but not
limited to the perils of fire, flood, earthquake, extended coverage, vandalism,
malicious mischief, special extended coverage, ("All Risk") and sprinkler
leakage, insuring full replacement cost on the Building and the land on which
the Building is located in such amounts and against such hazards and
contingencies as necessary to fully insure and protect such interests; provided,
however, Landlord shall not be obligated to insure any furniture, equipment, or
other property placed in the Premises by or at the expense of Tenant. Tenant and
Landlord shall provide certification of insurance to the other party upon
request with thirty (30) days prior written notice.

               (3) Amortization of such capital improvements as Landlord may
have installed, which are mutually beneficial to Landlord and Tenant: (a) for
the purpose of reducing operating costs to the extent of savings or (b) to
comply with governmental rules and regulations promulgated after commencement of
construction of the Building.

     (b)  Within thirty (30) days of receipt of a statement from Landlord 
specifying the Direct Expenses to be paid by Tenant, to which shall be attached 
a copy of Landlord's receipt therefor, if any, Tenant shall pay such Direct 
Expenses as Additional Rental.

     (c)  Even though the term has expired and Tenant has vacated the Premises, 
when the final determination is made of Direct Expenses for the year in which 
this Lease terminates, Tenant shall immediately pay to Landlord Tenant's 
proportionate share of Direct Expenses not previously assessed for the portion 
of the year that Tenant occupied the property.

                              5. SECURITY DEPOSIT

     Tenant has deposited with Landlord the sum shown in Item 10 of the Basic
Lease Provisions to be held by Landlord as security for the faithful performance
by Tenant of all of Tenant's obligations hereunder. If Tenant defaults with
respect to any provision of this Lease, including but not limited to the
provisions relating to the payment of Rental, Landlord may, but shall not be
required to, use, apply or retain all or any part of this security deposit for
the payment of any Rental or any other sum in default, or for the payment of any
other amount which Landlord may spend or become obligated to spend by reason of
Tenant's default or to compensate Landlord for any other loss or damage which
Landlord may suffer by reason of Tenant's default to the full extent permitted
by law. If any portion of the deposit is so used or applied, Tenant shall,
within five (5) days after written demand therefor, deposit cash with Landlord
in an amount sufficient to restore the security deposit to its original amount
so that the amount of security deposit held by Landlord shall be at all times
the sum proportionate to current Rental as the original security deposit was to
the original Rental. Tenant's failure to do so shall be a material breach of
this Lease. Landlord shall not be required to keep this security deposit
separate from its general funds, and Tenant shall not

                                      -5-
<PAGE>
 
be entitled to interest on such deposit. If Tenant shall fully and faithfully 
perform all of its obligations under this Lease, the security deposit of any 
balance thereof shall be returned to Tenant (or, at Landlord's option, to the 
last transferee of Tenant's interest hereunder) within fourteen (14) days after 
expiration of the Lease Term and Tenant's delivery of the Premises to Landlord, 
provided that Landlord may retain the security deposit until such time as any 
amount due from Tenant in accordance with Sections 4 and 13 hereof has been 
determined and paid in full. Should Landlord sell its interest in the Premises 
during the term hereof and if Landlord deposits with the purchaser thereof the 
then unappropriated funds deposited by Tenant as set forth above, Landlord shall
then be fully and finally discharged from any further liability with respect to 
such deposit. Landlord shall pay interest upon said deposit at the rate of 5%
              ---------------------------------------------------------------- 
per annum, simple interest; said interest shall be payable by landlord 
----------------------------------------------------------------------
simultaneously with the payment of the security deposit, as provided herein.
----------------------------------------------------------------------------


                                    6. USE

     Tenant shall use the Premises for that use shown as Item 3 of the Basic
Lease Provisions and shall not use or permit the Premises to be used solely for
any other purpose without the prior written consent of Landlord which consent
may be withheld in Landlord's sole discretion. Tenant shall not use or occupy
the Premises in violation of law or of the certificate of occupancy issued for
the Building, and shall, upon written notice from Landlord, discontinue any use
of the Premises which is declared by any governmental authority having
jurisdiction to be a violation of law or of said certificate of occupancy.
Tenant shall comply with any direction of any governmental authority having
jurisdiction which shall, by reason of the nature of Tenant's use or occupancy
of the Premises, impose any duty upon Tenant or Landlord with respect to the
Premises or with respect to the use or occupation thereof. A judgment of any
court of competent jurisdiction or the admission by Tenant in any action or
proceeding against Tenant that Tenant has violated any such laws, ordinances,
regulations, rules and/or directions in the use of the Premises shall be deemed
to be a conclusive determination of that fact as between Landlord and Tenant.
Tenant shall not do or permit to be done anything which will invalidate or
increase the cost of any fire, extended coverage or any other insurance policy
covering the Building and/or property located therein and shall comply with all
rules, orders, regulations and requirements of the National Fire Protection
Association or any other organization performing a similar function. Tenant
shall promptly, upon demand, reimburse Landlord for any additional premium
charged for such policy by reason of Tenant's failure to comply with the
provisions of this Section, but such reimbursement shall not be construed as
curing Tenant's default for failing to comply with the provisions of this
Section. Tenant shall not do or permit anything to be done in or about the
Premises which will in any way obstruct or interfere with the rights of other
tenants or occupants of the Building, or injure or annoy them, or use or allow
the Premises to be used for any improper, immoral, unlawful or objectionable
purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about
the Premises. Tenant shall not commit or suffer to be committed any waste in or
upon the Premises.


                            7. HAZARDOUS MATERIALS

     Tenant shall not engage in any activity on or about the Premises that
violates any Environmental Law, and shall promptly at Tenant's sole cost and
expense, take all investigatory and/or remedial action reasonably required by
Landlord or ordered or required by any governmental agency or Environmental Law
for clean-up and removal of any contamination involving any Hazardous Material
created, caused directly or indirectly or materially contributed to by Tenant.
The term "Environmental Law" shall mean any federal, state or local law,
statute, ordinance or regulation pertaining to health, industrial hygiene or the
environmental conditions on, under or about the Premises, including without
limitation, (i) the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA"), 42 USC Sections 9601 et seq.; (ii) the
                                                       ------
Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 USC Sections 6901 
et seq.; (iii) California Health and Safety Code Sections 25100 et seq.; (iv) 
------                                                          ------
the Safe Drinking Water and Toxic Enforcement Act of 1986, California Health 
and Safety Code Section 25249.5 et seq.; (v) the Federal Water Pollution Control
                                ------
Act, 33 USC Sections 1251 et seq.; (vi) the Porter-Cologne Water Quality Control
                          ------
Act, California Water Code Section 13000 et seq.; and (vii) California Civil 
                                         ------
Code Section 3479 et seq.; (viii) the Toxic Substance Control Act, 15 USC 
                  ------
sections 2601 et seq.; (ix) the California Hazardous Substance Account Act, 
              ------
Health and Safety Code sections 25330 et seq.; (x) the California Health and 
                                      ------
Safety Code sections 25280 et seq. (Underground Storage of Hazardous 
                           ------
Substances); (xi) the California Hazardous Waste Management Act, Health and 
Safety Code sections 25170g et seq.; and (xii) the California Health and Safety 
                            ------
Code Sections 2550 et seq. (Hazardous Materials Release Response Plans and 
                   ------
Inventory), all as amended, or any other federal, state or local statute, law, 
ordinance, resolution, code, rule, regulation, order or decree regulating,
relating to, or imposing liability or standards of conduct concerning any
hazardous, toxic, or dangerous waste, substance or material, as now, or at any
time hereafter in effect. The term "Hazardous Material" includes, without
limitation, any material or substance which is (i) defined or listed as a
"hazardous waste," "extremely hazardous waste," "restrictive hazardous waste" or
"hazardous substance" or considered a waste, condition of pollution or nuisance
under the Environmental Laws; (ii) petroleum or a petroleum product or fraction
thereof; (iii) asbestos; (iv) substances known by the State of California to
cause cancer and/or reproductive toxicity; and/or (v) any substance, product,
waste or other material of any nature whatsoever which may give use to liability
under any of the above statutes or under any statutory or common law theory
based on negligence, trespass, intentional tort, nuisance or strict liability or
under any reported decisions of a state or federal court. It is the intent of
the parties hereto to construe the terms "Hazardous Materials" and
"Environmental Laws" in their broadest sense. Tenant shall provide all notices
required pursuant to the Safe Drinking Water and Toxic Enforcement Act of 1986,
California Health and Safety Code Section 25249.5 et seq. Tenant shall not bring
                                                  ------
onto, create or dispose of, or store in or about the Premises or the Project,
including

                                      -6-
<PAGE>
 
but not limited to its sewage or storm drain systems, any Hazardous Materials, 
in violation of any applicable environmental law, rule or regulation.

  Tenant shall promptly give Landlord (i) a copy of any notice, correspondence
or information it receives from any federal, state, or other government
authority regarding Hazardous Materials on, under or about the Premises or
Hazardous Materials which affect or may affect the Premises, or regarding any
action instituted, completed or threatened by any such governmental authority
concerning Hazardous Materials which affect or may affect the Premises, (ii)
written notice of any knowledge or information Tenant obtains regarding
Hazardous Materials on, under or about the Premises or expenses or losses
incurred or expected to be incurred by Tenant, third party or any governmental
agency to study, assess, contain, or remove any Hazardous Materials on, under,
about or near the Premises for which Tenant may be liable or for which a lien
may be imposed on the Premises, (iii) written notice of any knowledge or
information Tenant obtains regarding the release or discovery of Hazardous
Materials on, under or about the Premises of other sites owned, occupied or
operated by Tenant or any person for whose conduct Tenant is or may be
responsible, or whose liability may result in a lien on or otherwise affect the
Premises, (iv) written notice of all claims made or threatened by any third
party against Tenant or the Premises relating to damage, contribution, cost
recovery compensation, loss or injury resulting from any Hazardous Materials,
and (v) written notice of Tenant's discovery of any occurrence or condition on
any real property adjoining or in the vicinity of the Premises that could the
Premises to be classified as "border zone property" under the provisions of
California Health and Safety sections 25220 cl seq. or any regulation adopted
                                            -------
in accordance therewith, or to be otherwise subject to any restrictions on the
ownership, occupancy, transferability or use of the Premises under any of the
statutes cited above or any regulation adopted pursuant thereto.

     Tenant shall at its own expense procure, maintain in effect and comply with
all conditions of any and all permits, licenses and other governmental and 
regulatory approvals required for Tenant's use of the Premises including, 
without limitation, discharge of (appropriately treated) materials or wastes 
into or through any sanitary sewer serving the Premises. Except as discharged 
into the sanitary sewer in strict accordance and conformity with all applicable 
Hazardous Materials Laws, Tenant shall not store any Hazardous Materials on the 
Premises and shall cause any and all Hazardous Materials removed from the 
Premises to be removed and transported solely by duly licensed haulers to duly
licensed facilities for final disposal of such materials and wastes. On any
manifest for removal of Hazardous Materials Tenant and not Landlord shall be
identified as the owner of the Hazardous Materials. Tenant shall in all respects
handle, treat, deal with and manage any and all Hazardous Materials in, on,
under or about the Premises in total conformity with all applicable Hazardous
Materials Laws and prudent industry practices regulating management of such
Hazardous Materials. Upon expiration or earlier termination of the term of the
Lease, Tenant shall cause all Hazardous Materials to be removed from the
Premises and transported for use, storage or disposal in accordance and
compliance with all applicable Hazardous Materials Laws. Tenant shall not take
any remedial action in response to the presence of any Hazardous Material in or
about the Premises nor enter into any settlement agreement consent degree or
other compromise in respect to any claims relating to any Hazardous Materials in
any way connected with the Premises without first notifying Landlord of Tenant's
intention to do so and affording Landlord ample opportunity to appear, intervene
or otherwise appropriately assert and protect Landlord's interest with respect
thereto.

     Tenant shall deliver to Landlord any and all documents and information
relating to any of the following:

        (i)  Any regulatory inquiry or non-routine inspection, formal or 
informal, and all investigations and potential investigations by any private or
governmental representative, regarding any aspect of the Premises, including,
without limitation, the presence of any Hazardous Materials on the Premises or
the migration thereof from or to other property;

       (ii)  Any actual spills, releases or discharges of Hazardous Materials 
(including, without limitation, any preexisting spills, release or discharges of
which Tenant may become aware): (i) occurring as a result of any activity
relating to the operation of the Premises, whether on or off the Premises, or
(ii) which have occurred on the Premises at any time:

      (iii)  Any enforcement, cleanup, removal or other governmental or 
regulatory action instituted, completed or threatened pursuant to any Hazardous
Materials Laws;

       (iv)  Any claim made or threatened by any person against Tenant or the 
Premises relating to damage, contribution, cost recovery, compensation, loss or
injury resulting from or claimed to result from any Hazardous Materials;

        (v)  All matters of which Tenant is required to give notice pursuant to 
Section 25359.7 of the California Health and Safety Code; and 

       (vi)  Any reports including draft reports made to any environmental
agency arising out of or in connection with any Hazardous Materials in or
removed from the Premises, including any complaints, notices, warnings or
asserted violations in connection therewith. Tenant shall also supply to
Landlord as promptly as possible, and in any event within three (3) business
days after Tenant first receives or sends the same, with copies of all claims,
reports, complaints, notices, warnings, or asserted violations relating in any
way to the Premises or Tenant's use thereof. Tenant shall promptly deliver to
Landlord copies of hazardous waste manifests reflecting the legal and proper
disposal of all Hazardous Materials removed from the Premises.

                                      -7-
<PAGE>
 
     Landlord shall have the right to join and participate in, as a party if it
so elects, any legal proceedings or actions affecting the Premises initiated in
connection with breach of any Hazardous Materials Law by Tenant and have its
attorneys' fees in connection therewith paid by Tenant.
      
     Tenant shall indemnify, defend (by counsel reasonably acceptable to
Landlord), protect, and hold Landlord, and each of Landlord's partners,
directors, officers, employees, agents, attorneys, lenders, successors and
assigns free and harmless from and against any and all claims, liabilities,
penalties, forfeitures, losses or expenses (including, without limitation, any
consequential damages), losses, liens, liabilities, penalties, fines, lawsuits,
other proceedings, costs and expenses including, without limitation, costs
incurred in connection with any administrative proceedings fees of environmental
engineers or consultants and attorneys' fees and court costs, or death of or
injury to any person or damage to any property whatsoever, arising from or
caused in whole or in part, directly or indirectly, by:

        (i) The presence in, on, under or about the Premises or discharge in or
from the Premises of any Hazardous Materials resulting from Tenant's use,
analysis, storage, transportation, disposal, release, threatened release,
discharge or generation of Hazardous Materials to, in, on, under about or from
the Premises, during the term of the Lease, or any residual discharges
thereafter due to Tenant's use or on behalf of tenant during the lease term;
           
       (ii) Tenant's violation or alleged violation of any Hazardous Materials
Law;

      (iii) All foreseeable and unforeseeable consequences including, without
limitation, loss of rents and liabilities arising in connection with third-party
claims and actions, directly or indirectly arising out of the tenant's use,
generation, handling, storage or disposal of Hazardous Materials by Tenant, or
on behalf of tenant, not otherwise reimbursed by insurance.

       (iv) Any required or necessary repair, removal, cleanup or detoxification
and the preparation of any closure or other required plans, whether such action
is required or necessary prior to or allowing transfer of title to the Property,
to the full extent that such action is attributable, directly or indirectly, to
the presence or use, generation, storage, handling, release, threatened release
or disposal of Hazardous Materials on or about the Premises, by tenant or on
behalf of tenant;

        (v) Any reduction in the realized or realizable value of the Property to
the full extent that any such reduction in the realized or realizable value of
the Property is attributable, directly or indirectly to the presence or use,
generation, storage, release, threatened release or disposal of Hazardous
Materials on the Premises, by tenant or on behalf of tenant; or

     Any action taken by Landlord to enforce the duties, liabilities and
obligations of Tenant under this Lease. Tenant's obligations hereunder shall
include, without limitation, and whether foreseeable or unforeseeable, all costs
of any required or necessary repair, cleanup or detoxification or
decontamination of the Premises and the preparation and implementation of any
closure, remedial action or other required plans in connection therewith, and
shall survive the expiration or earlier termination of the term of the Lease.
For purposes of the release and indemnity provisions hereof, any acts or
omissions of Tenant, or by employees, agents, assignees, contractors or
subcontractors of Tenant or others acting for or on behalf of Tenant (whether or
not they are negligent, intentional, willful or unlawful) shall be strictly
attributable to Tenant. This indemnification obligation shall survive the
termination of this Lease.
      
     The foregoing provisions shall not prohibit the ordinary use of Hazardous
Materials normally used in businesses similar to Tenant's, provided the amount
of such Hazardous Materials does not exceed permitted levels or reportable
quantities under applicable Environmental Laws and the use of such Hazardous
Materials strictly complies with all applicable Environmental Laws.

Environmental Audit:
--------------------

     Within 30 days after Landlord delivers a request in writing to Tenant,
Tenant shall cause to be prepared and delivered to Landlord, at Tenant's
expense, a site assessment and report, or an update of any previously prepared
site assessment and report, for the Premises prepared by a qualified, state
registered, professional environmental auditor acceptable to Landlord. Landlord
may request such a report not more often than once in any two year period, or
more frequently in the event of default by Tenant or whatever Landlord knows of
or suspects the presence, release, threat of release, placement on, under or
about the Premises, or the use, manufacture, handling, generation, storage,
treatment, discharge, burial or disposal on, under or about the Premises, or the
transportation to or from the Premises, or any Hazardous Material. Unless the
Landlord waives in writing any particular element, the assessment and report or
update shall include, but not be limited to (i) a description of the presence,
location and amount of Hazardous Materials and underground storage tanks on,
under or about the Premises and any property adjacent to or in the vicinity of
the Premises, (ii) a review and audit of the books, records, permits, notices,
citations, orders and data of Tenant and all occupants of the Premises relating
to Hazardous Materials or underground storage tanks on, under or about the
Premises and any property adjacent to or in the vicinity of the Premises,
including historical data and records if not covered in any prior report
Landlord has received, (iii) a review and report on any records or listings of
any governmental agency concerning Hazardous Materials or underground storage
tanks on, under or about the Premises and any property adjacent to or in the
vicinity of the Premises, (iv) an investigation and report on the history of
ownership and use of the Premises and property adjacent to or in the vicinity of
the Premises, unless covered in any prior report Tenant has received, (v) a
report of interviews with the current tenants and occupants of the Premises
concerning the use of the Premises, (vi) an evaluation of the likelihood of any
soil                                      

                                      -8-
<PAGE>
 
or groundwater contamination of the Premises with Hazardous Materials, (vii) 
estimated costs of removing any Hazardous Materials and (viii) any other 
information or recommendations Landlord may reasonable require. 
Notwithstanding the foregoing, Landlord may request an environmental audit at 
any time during the term of this Lease, or any extension thereof, at Landlord's 
expense.


                                  8. NOTICES

        Any notice, demand, consent, approval or other communication required or
permitted to be given hereunder must be in writing and may be given by personal 
delivery or by mail, and if given by mail shall be deemed sufficiently given if
sent by U.S. mail, postage prepaid, or by overnight courier service such as
Federal Express, Express Mail or the like, addressed to Tenant at the Premises,
or to Landlord at its address set forth in the Basic Lease Provisions. Any
notice, request, demand, direction or other communication sent by facsimile
transmission must be confirmed within forty eight (48) hours by letter mailed or
delivered in accordance with the foregoing in order to be deemed effective.
Either party may specify a different address for notice purposes by written
notice to the other except that the Landlord may in any event use the Premises
as Tenant's address for notice purposes.


                                  9. BROKERS

        Tenant warrants that it has had no dealings with any real estate broker
or agent in connection with the negotiation of this Lease, except as set forth
as Item 13 of the Basic Lease Provisions, whose commission shall be payable by
Landlord, and that it knows of no other real estate broker or agent who is or
might be entitled to a commission in connection with this Lease. If Tenant has
dealt with any other person or real estate broker with respect to leasing or
renting space in the Building, Tenant shall be solely responsible for the
payment of any fees due said person or firm and tenant shall indemnify and hold
Landlord free and harmless against any liability in respect thereto, including
attorneys' fees and costs.


                               10. HOLDING OVER

        If Tenant holds over after the expiration or earlier termination of the
term hereof without the express written consent of Landlord, Tenant shall become
a Tenant at sufferance only, at a rental rate equal to one hundred fifty percent
(150%) of the Rental in effect upon the date of such expiration (subject to 
adjustment as provided in Section 4 hereof and prorated on a daily basis), and 
otherwise subject to the terms, covenants and conditions herein specified, so 
far as applicable. Acceptance by Landlord of Rental after such expiration or 
earlier termination shall not result in a renewal of this Lease.  The foregoing 
provisions of this Section 10 are in addition to and do not affect Landlord's 
right of re-entry or any rights of Landlord hereunder or as otherwise provided 
by law. 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 
claim made by any succeeding tenant founded on or resulting from such failure to
surrender and any attorneys' fees and costs.


                        11. TAXES ON TENANT'S PROPERTY

        (a)     Tenant shall be liable for and shall pay, at least ten (10) days
before delinquency, all taxes, assessments, license fees and other similar 
charges levied against any personal property or trade fixtures placed by Tenant 
or at Tenant's direction in or about the Premises.  Within ten days of demand by
Landlord Tenant shall furnish Landlord with satisfactory evidence of these 
payments.  If any such taxes on Tenant's personal property or trade fixtures are
levied against Landlord or Landlord's property or if the assessed value of the 
Premises is increased by the inclusion therein of a value placed upon such 
personal property or trade fixtures of Tenant and if Landlord, after written 
notice to Tenant, pays the taxes based upon such increased assessment, which 
Landlord shall have the right to do regardless of the validity thereof, but 
only under proper protest if requested by Tenant. Tenant shall, within ten (10)
days of written demand, reimburse Landlord for the taxes so levied against 
Landlord, or the portion of such taxes resulting from such increase in the 
assessment.

        (b)     If the tenant improvements in the Premises, whether installed, 
and/or paid for by Landlord or Tenant and whether or not affixed to the real 
property so as to become a part thereof, are assessed for real property tax 
purposes at a valuation higher than the valuation at which Tenant Improvements 
conforming to Landlord's average cost of construction of tenant improvements in 
the Building ("Building Standard") in other space in the Building are assessed, 
then the real property taxes and assessments levied against Landlord on 
Landlord's Property as a result of such excess assessed valuation may, at the 
Landlord's option, be deemed to be taxes levied against the

                                     
                                      -9-
<PAGE>
 

personal property of Tenant, and shall, under such circumstances, be governed by
the provisions of Section 11(a) above. If the records of the County Assessor are
available and sufficiently detailed to serve as a basis for determining whether 
said tenant improvements are assessed at a higher valuation than Landlord's 
"Building Standard," such records shall be binding on both the Landlord and the 
Tenant. If the records of the County Assessor are not available or sufficiently 
detailed to serve as a basis for making said determination, the actual cost of 
construction shall be used.

                           12. CONDITION OF PREMISES

     By entry hereunder, Tenant accepts the Premises as being in good and 
sanitary order, condition and repair. Tenant's taking of possession of the 
Premises shall conclusively establish that as of the date of taking possession,
the Premises and the Building are in good order and satisfactory condition, 
except for such matters as to which Tenant gave Landlord notice on or before the
Commencement Date. NO PROMISE OF LANDLORD TO ALTER, REMODEL, REPAIR OR IMPROVE 
THE PREMISES, THE BUILDING OR THE PROJECT AND NO REPRESENTATION, EXPRESS OR 
IMPLIED, RESPECTING ANY MATTER OR THING RELATED TO THE PREMISES, BUILDING, OR 
PROJECT OR THIS LEASE, (INCLUDING, WITHOUT LIMITATION, THE CONDITION OF THE 
PREMISES, Building OR PROJECT) OR THE SUITABILITY OF EITHER FOR THE CONDUCT OF 
TENANTS BUSINESS HAVE BEEN MADE TO TENANT BY LANDLORD OR ITS BROKER OR SALES 
AGENT, OTHER THAN AS MAY BE CONTAINED HEREIN OR IN A SEPARATE EXHIBIT OR RIDER 
SIGNED BY LANDLORD AND TENANT.

                                13. ALTERATIONS

     (a)  Tenant shall make no Alterations, additions or improvements in or to 
the Premises without Landlord's prior written consent and subject to such other 
conditions which Landlord may reasonable require. Tenant agrees that there shall
be no construction of partitions or other obstructions which might interfere 
with Landlord's free access to mechanical installations or service facilities of
the Building or interfere with the moving of Landlord's equipment to or from the
enclosures containing said installations and facilities. All such work shall be 
done at such times and in such manner as Landlord may from time to time 
designate, and, at the option of Landlord, under Landlord's supervision. Tenant 
covenants and agrees that all work done by Tenant shall be performed in full 
compliance with all laws, rules, orders, ordinances, regulations and 
requirements of all governmental agencies, offices, and boards having 
jurisdiction, and in full compliance with the rules, regulations and 
requirements of the National Fire Protection Association, and of any similar 
body. Before commencing any work, Tenant shall give Landlord at least twenty 
(20) days written notice of the proposed commencement of such work and shall, if
required by Landlord, secure at Tenant's own cost and expense, a completion and 
lien indemnity bond, satisfactory to Landlord, for said work. Tenant further 
covenants and agrees that any mechanic's lien recorded against the Premises or 
against the Building for work claimed to have been done for, or materials 
claimed to have been furnished to, Tenant will be discharged by Tenant, by bond 
or otherwise, within thirty (30) days after the filing thereof, at the cost and 
expense of Tenant. All Alterations, additions or improvements upon the Premises 
made by either party, including (without limiting the general of the foregoing) 
all wall covering, built-in cabinet work, paneling and the like, shall, unless 
Landlord elects otherwise, become the property of Landlord, and shall remain 
upon, and be surrendered with the Premises, as a part thereof, at the end of the
term hereof, except that Landlord may, by written notice to Tenant, require 
Tenant to remove all partitions, counters, railing and the like installed by 
Tenant, and Tenant shall repair all damage resulting from such removal or, at 
Landlord's option, shall pay to Landlord all costs arising from such removal.

     (b)  Unless Landlord otherwise agrees in writing, all such Alterations, 
additions or improvements affixed or built into the Premises (but excluding 
moveable trade fixtures and furniture) shall become the property of Landlord and
shall be surrendered with the Premises, as a part thereof, at the end of the 
Lease term, except that Landlord may, by written notice to Tenant given at 
least twenty (20) days prior to the end of the Lease term, require Tenant to 
remove all or any Alterations, decorations, additions, improvements and the like
installed by Tenant, and to repair the Premises, or at Landlord's option to pay 
all costs in relation to any damage to the Premises arising from such removal. 
Any fixtures, furnishing or other personal property remaining after possession 
of the premises is returned to Landlord shall be the sole and exclusive property
of Landlord and Tenant shall be liable for all costs incurred for removal.

                                  14. REPAIRS

     (a)  Tenant, at its expense, shall maintain and keep the Premises and each 
and every part thereof (except only that portion of the Premises, if any, that 
Landlord expressly elects to maintain and so notifies Tenant in writing, in 
which case such maintenance shall be done at Tenant's expense), including, 
without limitation, all utility pipes and conduit, fixtures, heating, 
ventilating and air conditioning equipment exclusively serving the Premises, all
signs, locks, doors, door frames, door checks, windows, window frames, 
storefronts, skylights

                                     -10-


<PAGE>
 
and other openings in the roof or exterior walls and floor coverings in a first
class order, condition and repair and shall make replacements necessary to keep
the Premises in this condition. All replacements shall be of quality equal to or
exceeding that of the original. Tenant shall make any and all repairs suggested
at the time of the annual maintenance/inspections. Should Tenant fail to
commence these repairs and replacements or otherwise maintain the Premises
within three (3) days after written demand by Landlord, or shall Tenant commence
but fail to complete any repairs or replacements within a twenty (20) day period
after written demand by Landlord, Landlord may make the repairs or replacements
and shall be promptly reimbursed by Tenant for the cost thereof, together with
interest at the maximum lawful rate from the date of commencement of the work.
Tenant shall repair promptly at its expense any damage to the Premises caused by
Tenant or its agents or employees or caused by installation or removal of
Tenant's personal property. Tenant shall maintain in good condition and repair
the roofs and HVAC system.

     (b)  Landlord shall maintain in good condition and repair the foundations 
and exterior surfaces of the exterior walls of all buildings (exclusive of 
doors, door frames, door checks, windows, window frames, store fronts, sky 
lights and other openings therein). Tenant waives the provisions of Section 1941
and 1942 of the Civil Code of the State of California, or any superseding 
statute, and of any other law permitting Tenant to make repairs at Landlord's 
expense.

                             15. ENTRY BY LANDLORD

     Landlord reserves and shall at any and all times have the right to enter
the Premises upon twenty four (24) hours prior notice to Tenant (except in the
case of an emergency, in which case no notice is necessary) to inspect the same,
and any other service to be provided by Landlord to Tenant hereunder, including,
without limitation, to name the Building and Project and to change the name or
street address of the Building or Project to install and maintain all signs on
the exterior and interior of the Building and Project, to enter the Premises for
the purpose of making inspections, repairs, Alterations, additions or
improvements to the Premises or to the Building (including, without limitation,
checking, calibrating, adjusting or balancing controls and other parts of the
HVAC system), and to take all steps as may be necessary or desirable for the
safety, protection maintenance or preservation of the Premises or the Building
or Landlord's interest therein, or as may be necessary or desirable for the
operation or improvement of the Building or in order to comply with laws, orders
or requirements of governmental or other authority and to show the Premises to
prospective purchasers or tenants, to post notices of non-responsibility, all
without being deemed guilty of any eviction of Tenant without abatement of
Rental. Landlord may, in order to carry out such purposes, erect scaffolding and
other necessary structures where reasonably required by the character of the
work to be performed, provided that the business of Tenant shall be interfered
with as little as is reasonably practicable. Tenant hereby waives any claim for
damages for any injury or inconvenience to or interference with Tenant's
business, any loss of occupancy or quiet enjoyment of the Premises, and any
other loss in, upon and about the Premises. Landlord shall at all times have and
retain a key with which to unlock all doors in the Premises, excluding Tenant's
vaults and safes. Landlord shall have the right to use any and all means which
Landlord may deemed proper to open said doors in an emergency in order to obtain
entry to the Premises. Any entry to the Premises obtained by Landlord by any of
said means, or otherwise, shall not be construed or deemed to be a forcible or
the unlawful entry into the Premises, or an eviction of Tenant form the Premises
or any portion thereof, and any damages caused on account thereof, shall by paid
by Tenant.

                          16. UTILITIES AND SERVICES

     Tenant shall make all arrangements for and to pay directly to the 
appropriate utility company all charges for utility services supplied to Tenant 
for Tenant's use in or about the Premises including, but not limited to, gas, 
electricity, water, sewer, trash, waste disposal and telephone, and for all 
connection charges, fees or taxes. Landlord may contract with a trash disposal 
service serving the entire Project, in which event Tenant shall dispose of all 
ordinary and usual trash using containers designated by Landlord, and shall, in 
addition, pay to Landlord Tenant's Percentage of the cost of such trash disposal
services. Tenant shall be responsible for all costs and expenses relating to the
disposal of extraordinary types or amounts of trash not included within a trash 
disposal contract entered into by Landlord. The failure or interruption of any 
utility or service shall neither render Landlord liable in damages or otherwise 
entitle Tenant to terminate this Lease or discontinue making payments of Annual 
Basic Rent or Additional Rental. If Tenant fails to pay any charges referred to 
in this Article when due, Landlord may pay the charge, and Tenant agrees to 
reimburse Landlord for any amount paid by Landlord plus interest thereon at the 
maximum legal rate allowed under applicable law.

                                     -11-
<PAGE>
 
                                17. COMMON AREAS

                            (Intentionally Omitted)


                                18. BANKRUPTCY

      If Tenant shall file a petition for relief under any provision of the
Federal Bankruptcy Code as then in effect, or any involuntary bankruptcy
proceedings are initiated against Tenant and such proceeding shall not have been
dismissed within thirty (30) days from the date thereof, or if a receiver or
trustee shall be appointed of Tenant's property and the order appointing such
receiver or trustee shall not be set aside or vacated within thirty (30) days
after the entry thereof, or if Tenant shall assign Tenant's estate or assets for
the benefit of creditors, or if this Lease shall, by operation of law or
otherwise, pass to any person or person other than Tenant, then in any such
event Landlord may terminate this Lease, if Landlord so elects, with or without
notice of such election and with or without entry or action by Landlord. In such
case, notwithstanding any other provisions of this Lease, Landlord, in addition
to any and all rights and remedies allowed by law or equity, shall, upon such
termination, be entitled to recover damages in the amount provided in Section 24
hereof. Neither Tenant nor any person claiming through or under Tenant or by
virtue of any statute or order of any court shall be entitled to possession of
the Premises but shall surrender the Premises to Landlord. Nothing contained
herein shall limit or prejudice the right of Landlord to recover damages by
reason of any such termination equal to the maximum allowed by any statute or
rule of law in effect at the time when, and governing the proceedings in which,
such damages are to be provided; whether or not such amount is greater, equal
to, or less than the amount of damages recovered under the provisions of this
Section 18.

                              19. INDEMNIFICATION

      Tenant shall indemnify, defend and hold Landlord, its agents, employees,
and affiliates harmless from all claims arising from Tenant's use of the
Premises or the conduct of its business or from any activity, work, or thing
done, permitted or suffered by Tenant in or about Premises. Tenant shall further
indemnify, defend and hold Landlord, its agents, employees, and affiliates
harmless from all claims arising from any breach or default in the performance
of any obligation to be performed by Tenant under the terms of this Lease, or
arising from any act, neglect, fault or omission of Tenant or of its agents or
employees, and from and against all costs, attorneys' fees, expenses and
liabilities incurred in or about such claim or any action or proceeding brought
thereon. In case any action or proceeding shall be brought against Landlord, its
agents, employees, and affiliates by reason of any such claim, Tenant upon
notice from Landlord shall defend the same at Tenant's expense by counsel
approval in writing by Landlord. Tenant, as a material part of the consideration
to Landlord, hereby assumes all risk of damage to property or injury to person
in, upon or about the Premises caused by the negligence or misconduct of Tenant
or Tenant's employees, agents,and affiliates, except that which is caused by the
failure of Landlord to observe any of the terms and conditions of this Lease
where such failure has persisted for an unreasonable period of time after
written notice of such failure. Notwithstanding the foregoing, Tenant shall not
be required to defend, indemnify, and hold harmless Landlord from any liability
for injury, loss, accident, claims or damage to any person or property resulting
principally from the negligence or willful misconduct of Landlord, its agents,
contractors, servants, employees, or licensees in connection with Landlord's
activities on the Premises. Landlord agrees to defend, indemnify, and hold
harmless Tenant from and against any and all claim arising principally from the
negligence or willful misconduct of Landlord, its agents, contractors, servants,
employees and licensees. Such exclusion from Tenant's indemnity obligation and
such agreement by Landlord to indemnify Tenant are not intended to and shall not
relieve any insurance carrier of its obligations under policies required to be
carried by Tenant pursuant to this Lease to the extent such policies cover the
alleged negligence or willful misconduct of Landlord or its agents, contractors,
servants, employees or licensees; provided, however, that this sentence shall in
no way be construed to imply the availability of any double or duplicate
coverage following the primary liability of such carrier.

                        20. DAMAGE TO TENANT'S PROPERTY

      Notwithstanding anything contained in this Lease to the contrary, Landlord
or its agents shall not be liable for (i) any damage to any property entrusted
to employees of the building, (ii) loss or damage to any property by theft or
otherwise, (iii) any injury or damage to persons or property resulting from
fire, explosion, falling plaster, steam, gas, electricity, water or rain which
may leak from any part of the Building or from pipes, appliances or plumbing
work therein or from the roof, street or sub-surface or from any other place or
resulting from dampness or (iv) any other cause whatsoever except ins ofar as
the same may be caused by the negligence or willful misconduct of Landlord, its
agents, employees or affiliates. Landlord or its agents shall not be liable for
interference with light or other incorporated hereditaments, nor shall Landlord
be liable for any latent defect in the Premises or in the Building or in the
Project. Tenant shall give prompt notice to Landlord in case of fire or
accidents in the Premises or in the Building or of defects therein or in the
fixtures or equipment.

                                     -12-

<PAGE>
 
                             21. TENANT INSURANCE

     (a)  Tenant shall, during the term hereof and any other period of 
occupancy, at its sole cost and expense, keep in full force and effect the 
following insurance, with the Landlord as a named additional insured:

          (i)  Standard form property insurance insuring against the perils of 
fire, extended coverage, vandalism, malicious mischief, special extended 
coverage ("All Risk") and sprinkler leakage. This insurance policy shall be upon
all property owned by Tenant, for which Tenant is legally liable or that was 
installed at Tenant's expense, and which is located in the Building including, 
without limitation, furniture, fittings, installations, fixtures, and any other 
personal property, in an amount not less than ninety percent (90%) of the full 
replacement cost thereof. In the event that there shall be a dispute as to the 
amount which comprises full replacement cost, such dispute shall be submitted by
the parties to arbitration before the American Arbitration Association for 
resolution.

          (ii) Business Interruption Insurance in amounts acceptable to 
Landlord.

         (iii) Plate glass insurance covering all plate glass on the Premises at
full replacement value.

          (iv) Comprehensive General Liability Insurance insuring Tenant against
any liability arising out of the lease, use, occupancy or maintenance of the
Premises and all areas appurtenant thereto. Such insurance shall be in the
amount of not less than $1,000,000 Combined Single Limit for injury to, or death
of one or more persons in an occurrence, and for damage to tangible property
(including loss of use) in an occurrence, with such liability amount to be
adjusted from year to year to reflect increases in the Index. The policy shall
insure the hazards of premises and operations, independent contractors,
contractual liability (covering the Indemnity contained in Section 18 hereof)
and shall (1) name Landlord as an additional insured, (2) contain a cross
liability provision, and (3) contain a provision that "the insurance provided
the Landlord hereunder shall be primary and non-contributing with any other
insurance available to the Landlord."

          (v)  Workers' Compensation and Employer's Liability insurance as 
required by state law.

          (vi) Any other form or forms of insurance as Landlord or any 
mortgagees of Landlord may reasonably require from time to time in form, in 
amounts and for insurance risks against which a prudent tenant would protect 
itself.

         (vii) Any insurance policies deemed reasonably necessary by Landlord 
with regard to Tenant's or Tenants' contractors' construction of Tenant's Work, 
as well as with regard to the construction of Alterations allowed by this Lease,
including, but not limited to, contingent liability and "all risks" builders 
risk insurance, in amounts determined by Landlord to be commercially reasonable.

     (b)  All policies shall be written in a form satisfactory to Landlord and 
shall be taken out with insurance companies holding a General Policyholders
Rating of "A" and a Financial Rating of "V" or better, as set forth in the most
current issue of Bests Insurance Guide. Within ten (10) days after the execution
of this Lease, Tenant shall deliver to Landlord copies of policies or
certificates evidencing the existence of the amounts and forms of coverage
satisfactory to landlord. No such policy shall be cancelable or reducible in
coverage except after thirty (30) days prior written notice to Landlord, Tenant
shall, within ten (10) days prior to the expiration of such policies, furnish
Landlord with renewals or "binders" thereof, or Landlord may order such
insurance and charge the cost thereof to Tenant as additional Rental. If
Landlord obtains any insurance that is the responsibility of Tenant under this
section. Landlord shall deliver to Tenant a written statement setting forth the
cost of any such insurance and showing in reasonable detail the manner in which
it has been computed.

     (c)  Landlord makes no representation that the limits of liability 
specified to be carried by Tenant under this Lease are adequate to protect 
Tenant against Tenant's undertaking under this Lease, and in the event Tenant 
believes that any such insurance coverage called for under this Lease is 
insufficient, Tenant shall provide at its own expense such additional insurance 
as Tenant deems adequate.

     (d)  Tenant hereby releases Landlord from any and all liability from or to 
Tenant of every kind and nature which may result from the perils of fire, 
lightning or extended coverage perils and which may cause damage to any property
of Tenant within the Building or the Project. Insurance carried by Tenant 
against loss or damage by fire or other casualty shall contain a clause whereby 
the insurer waives its right of subrogation against Landlord. Tenant shall also 
obtain and furnish evidence to Landlord of the waiver by Tenant's worker's 
compensation carrier of any right of subrogation against Landlord.

     Tenant and Landlord each hereby release and relieve the other, and waive
their entire right of recovery against the other for loss or damage arising out
of or incident to the perils insured against under Section 21 which perils occur
in, on or about the Premises, whether due to the negligence of Landlord or
Tenant or their agents, employees, contractors and/or invitees. Tenant and
Landlord shall, upon obtaining the policies of insurance required hereunder,
give notice to the insurance carrier or carriers that the foregoing mutual
waiver of subrogation is contained in this Lease.

                                     -13-
<PAGE>
 
                           22. DAMAGE OR DESTRUCTION

     (a)   In the event the Building is damaged by fire or other perils covered 
by Landlord's insurance, Landlord shall:

           (i)   In the event of total destruction, at the Landlord's option, as
soon as reasonably possible thereafter, commence repair, reconstruction and
restoration of the Building and/or the Premises and prosecute the same
diligently to completion, in which event this Lease shall remain in full force
and effect; or within ninety (90) days after such damage, elect not to so
repair, reconstruct or restore the Building and/or the Premises, in which event
this Lease shall terminate. In either event, Landlord shall give Tenant written
notice of its intention within said ninety (90) day period. In the event
Landlord elects not the restore the Building and/or the Premises, this Lease
shall be deemed to have terminated as of the date of such total destruction.

          (ii)   In the event of a partial destruction of the Building and/or 
Premises, to an extent not exceeding twenty five percent (25%) of the full value
thereof, and if the damage thereto is such that the Building and/or the Premises
may be repaired, reconstructed or restored within a period of ninety (90) days
from the date of the happening of such casualty and if Landlord will receive
insurance proceeds sufficient to cover the costs of such repairs, then Landlord
shall commence and proceed diligently with the work of repair, reconstruction
and restoration and this Lease shall continue in full force and effect. If such
work or repair, reconstruction and restoration shall require a period longer
than ninety (90) days or exceeds twenty five percent (25%) of the full insurance
value thereof, or if said insurance proceeds will not be sufficient to cover the
cost of such repairs, then Landlord either may elect to so repair, reconstruct
or restore and the Lease shall continue in full force and effect or Landlord may
elect not to repair, reconstruct or restore and the Lease shall then terminate.
Under any of the conditions of this Subsection 22(a)(ii), Landlord shall give
written notice to Tenant of its intention within said ninety (90) day period. In
the event Landlord elects not to restore the Building and/or the Premises, this
Lease shall be deemed to have terminated as of the date of such partial
destruction.

     (b)   Upon any termination of this Lease under any of the provisions of 
this Section 22, the parties shall be released without further obligation to the
other from the date possession of the Premises is surrendered to Landlord except
for items which have therefore accrued and are then unpaid.

     (c)   In the event of repair, reconstruction and restoration by Landlord 
as herein provided, the Rental payable under this Lease shall be abated
proportionally with the degree to which Tenant's use of the Premises is impaired
during the period of such repair, reconstruction or restoration. Tenant shall
not be entitled to any compensation or damages for loss in the use of the whole
or any part of the Premises and/or any inconvenience or annoyance occasioned by
such damage, repair, reconstruction or restoration.

     (d)   Tenant shall not be released from any of its obligations under this
Lease except to the extent and upon the conditions expressly stated in this
Section 22. Notwithstanding anything to the contrary contained in this 
Section 22, if Landlord is delayed or prevented from repairing or restoring the
damaged Premises within one hundred eighty (180) days after the occurrence of
such damage or destruction by reason of acts of God, war, governmental
restrictions, inability to procure the necessary labor or materials, or other
cause beyond the control of Landlord, Landlord shall be relieved of its
obligation to make such repairs or restoration and Tenant shall be released from
its obligations under this Lease as of the end of said one hundred eighty (180)
day period.

     (e)   If damage is due to any cause other than fire or other peril covered 
by extended coverage insurance, Landlord may elect to terminate this Lease.

     (f)   If Landlord is obligated to or elects to repair or restore as herein 
provided, Landlord shall be obligated to make repair or restoration only of
those portions of the Building and the Premises which were originally provided
at Landlord's expense, and the repair and restoration of items not provided at
Landlord's expense shall be the obligation of Tenant.

     (g)   Notwithstanding anything to the contrary contained in this 
Section 22, Landlord shall not have any obligation whatsoever to repair,
reconstruct or restore the Premises when the damage resulting from any casualty
covered under this Section 22 occurs during the last twenty four (24) months of
the term of this Lease or any extension hereof.

     (h)   If the then existing laws do not permit the restoration described 
herein, Landlord may terminate this Lease by giving written notice to Tenant, in
which event this Lease shall terminate thirty (30) days following Tenant's
receipt of such notice.

     (i)   The provisions of Sections 1932(2) and 1933(4) of the California
Civil Code, which permit termination of a lease upon destruction of the Leased
Premises, are hereby waived by Tenant and the provisions of this Section shall
govern in cases of such destruction.

                                     -14-
<PAGE>
 
                              23. EMINENT DOMAIN

     (a)  In case all of the Premises, or such part thereof as shall 
substantially interfere with Tenant's use and occupancy thereof, shall be taken 
for any public or quasi-public purpose by any lawful power or authority by 
exercise of the right of appropriation, condemnation or eminent domain, or sold 
to prevent such taking, either party shall have the right to terminate this 
Lease effective as of the date possession is required to be surrendered to said 
authority by giving thirty (30) days written notice to the other party. The 
Annual Basic Rent shall be prorated to the termination date. If this Lease 
continues in force upon such partial taking, the Annual Basic Rent and Tenant's 
Proportionate Share shall be equitably adjusted according to the remaining 
Rentable Area of the Premises and Project. Landlord shall restore the Premises 
to substantially their same condition prior to such partial taking, (except with
respect to property originally installed at Tenant's sole cost and expense) and 
a proportionate allowance shall be made to Tenant for the Rental corresponding 
to the time during which, and to the part of the Premises of which, Tenant shall
be so deprived on account of such taking and restoration. In the event of any
taking, partial or whole, all of the proceeds of any award, judgment or
settlement payable by the condemning authority shall be the exclusive property
of Landlord, and Tenant hereby assigns to landlord all of its right, title and
interest in any award, judgment or settlement from such condemning authority.
Tenant, however, shall have the right, to the extent that the right shall not
reduce or prejudice Landlord's award, to claim from the condemning authority,
but not from Landlord, such compensation as may be recoverable by Tenant in its
own right for relocation expenses and damage to Tenant's personal property.

     (b)  No temporary taking of the Premises and/or of Tenant's rights therein 
or under this Lease shall terminate this Lease or give Tenant any right to 
abatement of Rental hereunder, any award made to Tenant by reason of any such 
temporary taking shall belong entirely to Tenant and Landlord shall not be 
entitled to share therein. A temporary taking shall be deemed to be taking of 
the use or occupancy of the Premises for a period of not to exceed one hundred 
eighty (180) days.

     (c)  In the event there shall be a taking of the parking area such that 
Landlord can no longer comply with the terms of this Lease, Landlord may 
substitute therefor reasonably equivalent parking in a location reasonably close
to the Premises; provided that if landlord fails to make such substitution 
within one hundred eighty (180) days following such taking. Tenant may, at its 
option, terminate this Lease by notice to Landlord. If this Lease is not so 
terminated by Tenant, there shall be no reduction, change or abatement of any 
Rental or other charge payable by Tenant hereunder and this Lease shall continue
in full force and effect.

                           24. DEFAULTS AND REMEDIES

     (a)  The occurrence of any one or more of the following events shall 
constitute a default hereunder by Tenant:

          (i)  The vacation or abandonment of the Premises by Tenant. 
Abandonment is herein defined to include, but is not limited to, any absence by 
Tenant from the Premises for five (5) business days or longer while in default 
of any provision of this Lease.

         (ii)  The failure by Tenant to make any payment of Annual Basic Rent or
Additional Rental or any other payment required to be made by Tenant hereunder, 
as and when due, where such failure shall continue for a period of three (3) 
business days after receipt of written notice thereof by Tenants; 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 regarding 
unlawful detainer actions.

         (iii) The failure by Tenant, as may be determined by Landlord, to 
observe or perform any of the express or implied non-monetary covenants or 
provisions of this Lease to be observed or preformed by Tenant, other than as 
specified in Subsection 24(a)(i) or (ii) above, where such failure shall 
continue for a period of ten (10) days after written notice thereof from 
Landlord to Tenant. Any such notice shall be in lieu of, and not in addition to,
any notice required under California Code of Civil Procedure Section 1161 
regarding unlawful detainer actions. If the nature of Tenant's default is such 
that more than ten (10) days are reasonably required for its cure, then Tenant 
shall not be deemed to be in default if Tenant shall commence such cure within 
said ten (10) day period and thereafter diligently prosecute such cure to 
completion, which completion shall occur not later than sixty (60) days from the
date of such notice from Landlord.

         (iv)  (1) The making by Tenant of any general assignment for the 
benefit of creditors: (2) the filing by or against Tenant of a petition for
relief under the Federal Bankruptcy Code (unless in the case of a petition filed
against Tenant, the same is dismissed within thirty (30) days): (3) 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,
where possession is not restored to Tenant within thirty (30) days: or (4) 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 such
seizure is not discharged within thirty (30) days.

                                     -15-
<PAGE>
 
     (b)  In the event of any such default by Tenant, in addition to any other 
remedies available to Landlord at law or in equity, Landlord shall have the 
immediate option to terminate this Lease and all rights of Tenant hereunder.  In
the event that Landlord shall elect to so terminate this Lease then Landlord may
recover from Tenant:

          (i)  the worth at the time of award of any unpaid Rental which has 
been earned at the time of such termination; plus

          (ii) the worth at the time of award of the amount by which the 
unpaid Rental which would have been earned after termination until the time 
of award exceeds the amount of such Rental loss that Tenant proves could have 
been reasonably avoided; plus

          (iii) the worth at the time of award of the amount by which the unpaid
Rental for the balance of the term after the time of award exceeds the amount of
such Rental loss that Tenant proves could be reasonably avoided; plus

          (iv) if Tenant shall fail to take possession of the Premises or fail 
to commence the payment of monthly Rental payments as herein required, or if 
Landlord terminates the Lease or terminates Tenant's right to possession of the 
Premises by any lawful means, due to Tenant's default or breach of the Lease 
or the covenants and obligations of Tenant, Landlord shall have the right, 
without affecting any of its other rights under this Lease, to recover from 
Tenant all broker commissions and fees, if any, paid by Landlord in connection 
with this Lease; plus

          (v)  any other amount necessary to compensate Landlord for all the 
detriment proximately caused by Tenant's failure to perform Tenant's obligations
under this Lease or which in the ordinary course of things would be likely to 
result therefrom.

     As used in Subsection 24(b)(i) and (ii) above the "worth at the time of 
award" is computed by allowing interest at a rate equal to two percent (2%) in 
excess of the "prime rate" of the Bank of America N.T. & S.A. as of the time of 
award, not to exceed, however, the maximum rate permitted by law.  As used in 
Subsection 24(b)(iii) above, the "worth at the time of award" is computed by 
discounting such amount at the discount rate of the Federal Reserve Bank of San 
Francisco at the time of award plus one percent (1%).

     (c)  In the event of any such default by Tenant, Landlord shall also have
the right, with or without terminating this Lease, to re-enter the Premises and
remove all persons and property from the Premises; such property may be removed
and stored in a public warehouse or elsewhere at the cost of and for the account
of Tenant. No re-entry or taking possession of the Premises by Landlord pursuant
to this Section 24(c) shall be construed as an election to terminate this lease
unless a written notice of such intention is given to Tenant or unless the
termination thereof is decreed by a court of competent jurisdiction; provided,
however, that Landlord may, at any time thereafter, elect to terminate this
Lease for such previous and uncured breach by notifying Tenant in writing that
Tenant's right to possession of the Premises has been terminated.

     (d)  Landlord shall also have the remedy described in California Civil Code
Section 1951.4 (Landlord may continue Lease in effect after Tenant's breach and
abandonment and recover Rental as it becomes due, if Tenant has right to sublet
or assign, subject only to reasonable limitations).

     (e)  All rights, options and remedies of Landlord contained in this Lease
shall be construed and held to be cumulative, and no one of them shall be
exclusive of the other, and Landlord shall have the right to pursue any or all
of such remedies or any other remedy or relief which may be provided by law,
whether or not stated in this Lease. No waiver of any default of Tenant
hereunder shall be implied from any acceptance by Landlord or any Rental or
other payments due hereunder or any omission by landlord to take any action on
account of such default if such default persists or is repeated, and no express
waiver shall affect defaults other than as specified in said waiver. The
consent or approval of Landlord to or of any act by Tenant requiring Landlord's
consent or approval shall not be deemed to waive or render unnecessary
Landlord's consent or approval to or of any subsequent similar acts by Tenant.

     (f)  Nothing in this Section shall be deemed to affect Tenant's indemnity 
of Landlord for liability or liabilities based upon occurrences prior to the 
termination of this Lease for personal injuries or property damage under the 
indemnification clause or clauses contained in this Lease.  Such covenants of 
indemnification shall survive the termination of this Lease.


                  25.  GOVERNMENT ENERGY OR UTILITY CONTROLS

     In the event of imposition of federal, state, or local government controls,
rules, regulations, or restrictions on the use of consumption of energy or 
water or other utilities during the Term, both Landlord and Tenant shall be 
bound thereby.  Landlord shall have the right to enforce compliance therewith 
including the right of entry into the Premises to effect compliance.  Should any
government agency or subdivision thereof impose a tax or surcharge of any kind 
on, against, or with respect to the use or consumption of energy, water or 
other utilities or parking areas or the number of parking spaces in the Project,
this tax or surcharge shall be included as a Direct Expense

                                     -16-














































<PAGE>
 
under Section 4 (a) (iii). If any governmental agency or subdivision thereof
imposes any restrictions or regulations on the use of vehicles by tenants in the
Project and/or by their employees, contractors and invitees. Tenant shall at no
cost to Landlord cooperate with and abide by those restrictions.


                          26. LIMITATION ON LIABILITY

     In consideration of the benefits accruing hereunder, Tenant and all 
successors and assigns covenant and agree that, in the event of any actual or 
alleged failure, breach or default hereunder by Landlord:

     (a)  The sole and exclusive remedy shall be against the Landlord's interest
in the Building:

     (b)  No partner of Landlord, either general or limited, shall be sued or 
named as a party in any suit or action (except as may be necessary to secure 
jurisdiction of the partnership);

     (c)  No partner of Landlord, either general or limited, shall be required 
to answer or otherwise plead to any service of process;

     (d)  No judgment will be taken against any partner of Landlord, either 
general or limited;

     (e)  Any judgment taken against any partner of Landlord may be vacated and 
set aside at any time nune pro tune;

     (f)  No writ of execution will ever be levied against the assets of any 
partner of Landlord, either general or limited; and 

     (g)  These covenants and agreements are enforceable both by Landlord and 
also by any partner of Landlord.


                           27.  TENANT IMPROVEMENTS

                            (Intentionally Omitted)

                            See Section 32 hereof.


                       28.  LANDLORD'S RESERVED RIGHTS.

     Provided Landlord does not unreasonably interfere with Tenant's use of the 
Premises, Landlord reserves the right to use the exterior demising walls of the 
Premises and the area between the finished ceiling of the Premises and the slab 
of the Building floor or roof thereabove and between the finished floor of the 
Premises and the foundation or finished ceiling of the portion of the Building 
therebelow together with the right to locate or relocate (both vertically and 
horizontally), install, use, maintain, repair, replace pipes, utility lines, 
ducts, conduits, flues, refrigerant lines, drains, sprinkler mains and valves, 
access panels, wires and apportenant meters and equipment included in the 
Premises or outside the Premises; change the boundary lines of the Project.


                        29.  ASSIGNMENT AND SUBLETTING

      Except as set forth in this Section 29, Tenant agrees for itself and its
permitted successors and assigns that it will not (a) assign or otherwise
transfer, mortgage or otherwise encumber this Lease or any of its rights
hereunder; (b) sublet the Premises or any part thereof or permit the occupancy
or use of the Premises or any part thereof by any person other than Tenant;
and/or (c) permit the assignment or other transfer of this Lease or any of
Tenant's rights hereunder by operation of law (each of the events referred to in
the foregoing clauses [a], [b] and [c] being hereinafter referred to as a
"Transfer"), without the prior written consent of Landlord in each instance
first obtained, which consent shall not be unreasonably denied, delayed, or
withheld, and any consent given shall not constitute a consent to any subsequent
Transfer. If Tenant is a partnership any change in the makeup of the
partnership, whether voluntary or involuntary, which results in an ownership
interest in the partnership of more than fifty percent (50%) being held by
parties who were not partners as of the commencement of this Lease, or the
dissolution of the partnership, shall be deemed a Transfer. Any attempt to
Transfer without Landlord's

                                     -17-
<PAGE>
 
consent shall not null and void and shall not confer any rights upon any 
purported transferee, assignee, mortgagee, sublessee, or occupant. No Transfer, 
regardless of whether Landlord's consent has been granted or withheld, shall be 
deemed to release Tenant from any of its obligations hereunder or to alter, 
impair or release the obligations of any person guaranteeing the obligations of 
Tenant hereunder.

     Not withstanding the foregoing, Landlord's consent shall not be deemed to 
be unreasonably withheld if consent is withheld for failure to satisfy each of 
the following conditions: (a) Tenant shall remain fully liable during the 
unexpired term of this Lease; (b) any such assignment, sublease or transfer 
shall be subject to all of the terms, covenants and conditions of this Lease; 
(c) such assignee, sublessee, or transferee shall expressly assume the 
obligations of Tenant under the Lease by a document reasonably satisfactory to 
Landlord; (d) the assignee, sublessee or transferee shall be at least as credit 
worthy as is Tenant as of the date of this Lease; and (e) the assignee, 
sublessee or transferee's proposed use of the Premises shall be substantially 
equivalent to Tenant's use of the Premises.

     Notwithstanding anything contained in this section, in the event that, at 
any time during the Term, Tenant desires to transfer this Lease in whole or in 
part, by operation of law or otherwise, Tenant shall submit to Landlord in 
writing, in the form and content acceptable to Landlord in Landlord's sole 
discretion (a) the name and address of the proposed subtenant or assignee; (b) a
reasonably detailed statement of the proposed subtentant's or assignee's 
business; (c) reasonably detailed financial references and information 
concerning the financial condition of the proposed subtenant or assignee 
covering such time periods as requested by Landlord; and (d) a copy of the 
proposed sublease or assignment.

     Tenant shall deliver to Landlord, within thirty (30) days after Landlord's 
written consent has been received, (a) a duplicate original sublease, duly 
executed by Tenant and the subtenant, or instrument of assignment duly executed 
by Tenant, as the case may be, in form and substance as approved by Landlord and
(b) in case of an assignment, as instrument in form and substance as approved by
Landlord, duly executed by the assignee and the Tenant, in which such assignee 
shall agree to assume, observe, perform and to be personally bound by, all of 
Tenant's obligations under this Lease.

     Any sums or other economic consideration received by Tenant as a result of 
subleasing or assignment, however demonstrated under the assignment or sublease 
which exceed in the aggregate (i) the total sums which Tenant is obligated to 
pay to Landlord is under this Lease (prorated to reflect obligations allowable 
to any portion of the Premises subleased) plus (ii) any real estate brokerage 
commissions or fees payable in connection with such assignment or subleasing and
provided that Tenant is not in default under any other term or condition of this
Lease shall be paid to Tenant.

                           MISCELLANEOUS PROVISIONS

     30.1  ATTORNEYS' FEES

     (a)     If Landlord shall bring suit for possession of the Premises, for
the recovery of any sum due under this Lease, or because of the breach of any
provision of this Lease, or for any other relief against Tenant hereunder, or in
the event of any other litigation between the parties with respect to this
Lease, then all costs and expenses, including reasonable attorneys' fees,
incurred by the prevailing party therein shall be paid by the other party, which
obligation on the part of the other party shall be deemed to have accrued on the
date of the commencement of such action and shall be enforceable whether or not
the action is prosecuted to judgment.

     (b)     If either party (the "Named Party") is named as a defendant in any 
action arising out of a matter with respect to which the other party (the "Other
Party") is obligated to indemnify the Named Party pursuant to the terms of this 
Lease, the Other Party shall pay to the Named Party its costs and expenses 
incurred in such suit, including reasonable attorneys' fees.

     30.2  CONFIDENTIALITY

     Tenant acknowledges and agrees that the terms of this Lease are 
confidential and constitute proprietary information of Landlord. Tenant agrees 
that it, and its partners, directors, employees and attorneys shall not disclose
the terms and conditions of this Lease to any other person (except disclosures 
as required by regulations) without the prior written consent of Landlord; 
provided, however, that Tenant may disclose the terms hereof to the independent 
accountants who audit its financial statements, or as otherwise required in the 
ordinary course of Tenant's business. It is understood and agreed that damages 
would be an inadequate remedy for the breach of this provision by Tenant, and 
Landlord shall have the right to specific performance of this provision and to 
injunctive relief to prevent its breach or continued breach.

                                     -18-
<PAGE>
 
     30.3 DEFINITION OF LANDLORD

     The term "Landlord," as used in this Lease, so far as covenants or 
obligations on the part of Landlord are concerned, shall be limited to mean 
and include only the owner or owners, at the time in question, of the fee title 
of the Premises or the lessees under any ground lease, if any. In the event of 
any transfer, assignment or other conveyance or transfers of any such title. 
Landlord herein named (and in case of any subsequent transfers or conveyances, 
the then grantor) shall be automatically freed and relieved from and after the
date of such transfer, assignment or conveyance of all liability as respects the
performance of any covenants or obligations on the part of Landlord contained in
this Lease thereafter to be performed. Without further agreement, the transferee
of such titles shall be deemed to have assumed and agreed to observe and perform
any and all obligations of Landlord hereunder, during its ownership of the
Premises. Landlord may transfer its interest in the Premises without the consent
of Tenant and such transfer or subsequent transfer shall not be deemed a
violation on Landlord's part of any of the terms and conditions of this Lease.

     30.4 ESTOPPEL CERTIFICATE

     (a)  Within ten (10) days following any written request which Landlord may 
make from time to time, Tenant shall execute and deliver to Landlord its most 
recent quarterly financial statement of Tenant in a form acceptable to Landlord 
(including both a balance sheet and an income statement), together with a 
written statement certifying:

          (i)    The date of commencement of this Lease;

          (ii)   The fact that this Lease is unmodified and in full force and 
effect (or, if there have been modifications hereto, that this Lease is in full 
force and effect, and stating the date and nature of such modifications);

          (iii)  The date to which the Rental and other sums payable under this 
Lease have been paid;

          (iv)   That there are no current defaults under this Lease by either 
Landlord or Tenant except as specified in Tenant's statement;

          (v)    That Tenant has accepted possession of the Premises; and

          (vi)   Such other matters reasonably requested by Landlord.

          Landlord and Tenant intend that any statement delivered pursuant to 
this Section 30.4 may be relied upon by any mortgagee, beneficiary, purchaser or
prospective purchaser of the Building of any interest therein.

     (b)  Tenant's failure to deliver such statement within such time shall be 
conclusive upon Tenant:

          (i)    That this Lease is in full force and effect, without 
modification except as may be represented by Landlord;

          (ii)   That there are no uncured defaults in Landlord's performance 
and that Tenant has no rights of offset against Landlord; and

          (iii)  That no more than one (1) month's Rental has been paid in 
advance.

          (iv)   That Tenant has accepted possession of the Premises.

     30.5 EXAMINATION OF LEASE

     Submission of this instrument for examination or signature by Tenant does 
not constitute a reservation of or option for lease, and it is not effective as 
a lease or otherwise until approved by the General Partner of Landlord and 
execution by and delivery to both Landlord and Tenant.

     30.6 FORCE MAJEURE

     Any prevention, delay or stoppage of work to be performed by Landlord or 
Tenant which is due to strikes, labor disputes, inability to obtain labor, 
materials, equipment or reasonable substitutes therefor, acts of God, 
governmental restrictions or regulations or controls, judicial orders, enemy or 
hostile government actions, civil commotion, fire or other casualty, or other 
causes beyond the reasonable

                                     -19-
<PAGE>
 
control of the party obligated to perform hereunder, shall excuse performance of
the work by that party for a period equal to the duration of that prevention, 
delay or stoppage, except where such performance is the payment of Basic Rent or
other charges to be paid by Tenant pursuant to the provisions of this Lease.

     30.7  FUTURE PLANNING

     Landlord may adopt any name it may select for the Building and/or the 
Project, and Landlord reserves the right to change the name and/or address of 
the Building and/or Project at any time. Tenant shall not use the name of the 
Building, the Project or such development for any purpose other than as the 
address of the business to be conducted by Tenant in the Premises, and Tenant 
shall not acquire any property right in or to any name which contains said word 
combination as a part thereof.

     30.8  GOVERNING LAW

     This Lease shall be construed and enforced in accordance with the laws of 
the State of California. The language in all parts of this Lease shall in all 
cases be construed as a whole according to its fair meaning and not strictly for
or against either Landlord or Tenant.

     30.9  GUARANTY

           (Intentionally Omitted).

     30.10 IDENTIFICATION OF TENANT

     If Tenant is a corporation or partnership, each individual executing this 
Lease on behalf of the corporation or partnership represents and warrants that 
he or she 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. If Tenant is a corporation, the person executing this Lease on 
behalf of Tenant hereby covenants and warrants that (a) Tenant is a duly 
qualified corporation and all steps have been taken prior to the date hereof to 
qualify Tenant to do business in the State where the Project is situated, (b) 
all franchise and corporate taxes have been paid to date.

     30.11 MODIFICATION FOR LENDER

     If, in connection with obtaining construction, interim or permanent 
financing for the Building or the Building, the lender shall request reasonable 
modifications in this Lease as a condition to such financing, Tenant will not 
unreasonably withhold, delay or defer its consent thereto, provided that such 
modifications do not increase the obligations of Tenant hereunder or adversely 
affect the leasehold interest hereby created or Tenant's rights hereunder.

     30.12 MORTGAGE PROTECTION

     In the event of any default on the part of Landlord, Tenant will give 
notice by registered or certified mail to any beneficiary of a deed of trust or 
mortgage covering the Premises whose address shall have been furnished to 
Tenant, and shall offer such beneficiary, or mortgagee a reasonable opportunity 
to cure the default, including time to obtain possession of the Premises by 
power of sale or a judicial foreclosure, if such should prove necessary to 
effect a cure. 

     30.13 PARKING

     The use by Tenant, its employees and invitees, of the parking facilities of
the Building shall be subject to such other agreement between Landlord and 
Tenant as may hereinafter be established.

     Nothing contained herein shall be deemed to create liability upon Landlord 
for any damage to motor vehicles of customers or employees or from loss of 
property from within such motor vehicles.

                                     -20-
<PAGE>
 
     30.14 PERFORMANCE BY TENANT

     All covenants and agreements to be performed by Tenant under any of the
terms of this Lease shall be performed by Tenant at Tenant's sole cost and
expense and without any abatement of Rental. If Tenant shall fail to perform any
other act on its part to be performed hereunder, and such failure shall continue
for ten (10) days after notice thereof by Landlord, Landlord may, without
waiving or releasing Tenant from obligations of Tenant, but shall not be
obligated to, make any such payment or perform any such other act to be made or
performed by Tenant (unless there is a reasonable likelihood of imminent harm to
person or property as a result of Tenant's failure, in which event Landlord may
act immediately). All sums so paid by Landlord and all necessary incidental
costs together with interest thereon at the maximum rate permissible by law,
from the date of such payment by Landlord, shall be payable to Landlord on
demand. Tenant covenants to pay any such sums, and Landlord shall have (in
addition to any other right or remedy of Landlord) all rights and remedies in
the event of the non-payment thereby Tenant as are set forth in Section 24
hereof.

     30.15 PRIOR AGREEMENT/AMENDMENTS

     This Lease contains all of the Agreements of the parties hereto with 
respect to any matter covered or mentioned in this Lease, and no prior agreement
or understanding pertaining to any such matter shall be effective for any 
purpose. No provisions of this Lease may be amended or added in except by an 
agreement in writing signed by the parties hereto or their respective successors
in interest.

     30.16 QUIET ENJOYMENT

     Upon Tenant paying the Rental required to be paid under this Lease, and 
paying all other charges and performing and/or complying with all terms and 
conditions contained herein to be performed or complied with by Tenant, Tenant 
shall be entitled to the peaceful and quiet enjoyment of the Premises during the
term of this Lease subject to the terms of this Lease and to any mortgage, lease
or other agreement to which this Lease may subordinate.

     30.17 RECORDING 

     Neither Landlord not Tenant shall record this Lease nor a short form 
memorandum thereof without the consent of the other.

     30.18 RIDERS

     Clauses, plats and riders, if any signed by Landlord and Tenant and affixed
in this Lease are a part hereof.

     30.19 RIGHT TO SHOW PREMISES

     During the last one hundred twenty (120) days of the Term, Landlord shall 
have the right to enter upon the Premises to show same to prospective tenants 
and to post appropriate "for rent" signs. Landlord shall have the right to enter
upon the Premises at any time during the term to show the same to prospective 
purchasers of all or any portion of the Project.

     30.20 RULES AND REGULATIONS

     Tenant shall faithfully observe and comply with the "Rules and 
Regulations," identified in Section 34 hereof, and all reasonable and 
nondiscriminatory modifications thereof and additions thereto from time to time 
put into effect by Landlord.

     30.21 SEVERABILITY

     Any provision of this Lease which shall prove to be invalid, void or 
illegal in no way affects, impairs or invalidates any other provision hereof, 
and such other provisions shall remain in full force and effect.

                                     -21-
<PAGE>
 
          30.22  SIGNS

          Landlord may affix a sign (restricted solely to Tenant's name as set
forth in Item 1 of the Basic Lease Provisions or such other name as may be
consented to in advance in writing, by Landlord), to the exterior surface
entryway of the Premises. Except with the prior written approval of Landlord,
which approval may be withheld in Landlord's sole discretion. Tenant shall not
place or allow to be placed, erected or maintained any sign, decal, placard
name, insignia, trade name, description, flashing, moving or hanging lettering,
or any other descriptive words or advertising matter of any kind or description
(herein collectively, "sign" or "signs") on any exterior door, wall, window or
roof of the Premises or of the Building, or on the glass of any window or door
of the Building, or on any sidewalk or other location outside the Building, or
within any entrance to the Premises. If Tenant places or causes to be placed or
maintained any of the foregoing, the same may be removed by Landlord at Tenant's
expense without notice and without such removal constituting a breach of this
Lease or entitling Tenant to claim damages on account thereof.

          30.23  SUBORDINATION

          Without the necessity of any additional document being executed by 
Tenant for the purpose of effecting a subordination, and at the election of 
Landlord or any mortgagee with a lien on the Building, or any ground Lessor with
respect to the Building, this Lease shall be subject and subordinate at all 
times to:

          (a)  All ground Leases or underlying leases which may now exist or
hereafter be executed affecting the Building or the land upon which the Building
is situated or both, and

          (b)  The lien of any mortgage or deed of trust which may now exist or 
hereafter be executed in any amount for which the Building, land, ground leases,
or Landlord's interest or estate in any of said items is specified as security.

               Notwithstanding the foregoing, Landlord shall have the right to
subordinate or cause to be subordinated any such ground leases or underlying
leases or any such liens to this Lease. In the event that any ground lease or
underlying lease terminates for any reason or any mortgage or deed of trust is
foreclosed or a conveyance in lieu of foreclosure is made for any reason, Tenant
shall, notwithstanding any subordination, attorn and become the Tenant of the
successor in interest to Landlord. Tenant covenants and agrees to execute and
deliver, upon demand by Landlord, and in the form reasonably requested by
Landlord, any additional documents evidencing the priority or subordination of
this Lease with respect to any such ground leases or underlying leases or the
lien of any such mortgage or deed of trust. Any subordination or atornement by
Tenant hereunder shall entitle Tenant to receive a non-disturbance agreement
from the Landlord's successor in interest, which terms and provisions shall
comply with the provisions of this Lease.

                         30.24  SUCCESSORS AND ASSIGNS

          Except as otherwise provided in this Lease, all of the covenants, 
conditions and provisions of this Lease shall be binding upon and shall inure to
the benefit of the parties hereto and their respective heirs, personal 
representatives, successors and assigns.

                         30.25  SURRENDER OF PREMISES

          The voluntary or other surrender of the Lease by Tenant, or a mutual 
cancellation thereof, shall not work a merger, and shall, at the option of the 
Landlord, operate as an assignment to it of any or all subleases or subtenancies
and all fixtures located within the Premises.

          Tenant, on the expiration date, shall peaceably surrender the Premises
to Landlord in broom clean condition and in as good condition as when Tenant 
took possession, except for (a) reasonable wear and tear, (b) loss by fire or 
other casualty, and (c) loss by condemnation.  Tenant shall, on Landlord's 
request, remove Tenant's property on or before the expiration date and promptly 
repair all damage to the Premises or Building caused by such removal.

          If Tenant shall abandon or surrender the Premises, or be dispossessed 
by process of law, or otherwise, after notice to Tenant in accordance with 
California Law, any of Tenant's property left on the Premises shall be deemed to
be abandoned and, at Landlord's option, Landlord may treat such property in 
accordance with law.  If Landlord elects to remove all or any part of Tenant's 
property, the cost of removal, including repairing any damage to the Premises or
Building caused by that removal, shall be paid by Tenant.  On the Expiration 
Date Tenant shall surrender all keys to the Premises.

                                     -22-

                

<PAGE>
 
     30.26  TERMS AND HEADINGS

     The words "Landlord" and "Tenant" as used herein shall include the plural 
as well as the singular. Words used in any gender include other genders. The 
Section headings of this Lease are not a part of this Lease and shall have no 
effect upon the construction or interpretation of any part hereof.

     30.27  TIME

     Time is of the essence with respect to the performance of every provision 
of this Lease in which time or performance is a factor, provided, however, 
either party shall be excused for any delays or defaults by that party in the 
performance of this Lease unavoidably caused by the act of the other, the act of
any agent of the other, the act of any governmental authority, the act of any 
public enemy, acts of God, the elements, war, war defense conditions, 
litigation, strikes, walkouts, or other causes beyond that party's control 
(other than financial inability). Each party shall use reasonable diligence to 
avoid any such delay or default and to resume performance under this Lease as 
promptly as possible after any such delay or default.

     30.28  WAIVER

     The waiver by either party of any breach of any term, covenant or condition
herein contained shall not be deemed to be a waiver of any subsequent breach of 
the same or any other term, covenant or condition herein contained, nor shall 
any custom or practice which may grow up between the parties in the 
administration of the term hereby be deemed a waiver of or in any way affect 
the right of either party to insist upon the performance by the other party in 
strict accordance with said terms. The subsequent acceptance of Rental hereunder
by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant
of any term, covenant or condition of this Lease, other than the failure of 
Tenant to pay the particular Rental so accepted, regardless of Landlord's 
knowledge of such preceding breach at the time of acceptance of such Rental.


                             31.  OPTION TO RENEW

     Tenant is hereby granted the option to extend the term of this Lease for 
two (2) five (5) year periods, hereinafter referred to a the "First Extended 
Term" and the "Second Extended Term", respectively, by giving notice of exercise
of the option ("Option Notice") to Landlord at least six (6) months, but not 
more than one (1) year, before the expiration of the Basic Term or the First 
Extended Term, as the case may be; provided, however, that if Tenant is in 
default on the date of giving any such Option Notice, or if any event has 
occurred that but for the passage of time or the giving of notice, or both, 
would constitute a material default, the Option Notice shall be totally 
ineffective, and provided further, that if Tenant is in default or if any event 
has occurred that but for the passage of time or the giving of notice, or both, 
would constitute a default, on the date that the First Extended Term or the 
Second Extended Term (collectively the "Extended Terms") would otherwise 
commence, at Landlord's option, such Extended Term shall not commence and this 
Lease shall expire at the end of the Basic Term, or at the end of the First 
Extended Term, as the case may be. In the event Tenant gives notice of exercise 
of option, which notice is ineffective for any reason stated herein, Landlord 
shall provide Tenant with prompt written notice of rejection of such notice of 
exercise of option. Tenant shall have no other right to extend the term beyond 
the Second Extended Term described herein. During the Extended Terms all of the 
terms and provisions contained herein shall apply except that commencing at the 
beginning of each Extended Term, the Annual Basic Rent shall be increased to an 
amount equal to ninety-five percent (95%) of the fair market Rental ("FMR") for 
the Premises unless Tenant elects to arbitrate the fair market rental, as set 
forth herein. Landlord shall notify Tenant of the FMR within sixty (60) days 
after receipt of Tenant's Option Notice. Tenant shall then have sixty (60) days 
following Tenant's receipt of Landlord's determination of the FMR within which 
to confirm or to revoke its election to renew the Lease. If Tenant fails to 
revoke its election, Tenant's consent to FMR shall be deemed given and the Lease
shall be deemed extended. If Tenant elects arbitrate the issue of FMR, such 
dispute shall be resolved by means of banding arbitration in accordance with the
commercial arbitration rules of the American Arbitration Association. 
Arbitration shall be conducted by a sole M.A.I. appraiser appointed by the 
American Arbitration Association. Landlord and Tenant shall split the cost of 
arbitration. Thereafter, Rental shall be increased annually (the "Extended Term 
Adjustment Date") based upon increases (if any) in the Index, but in no event 
shall the increase be less than two percent (2%) or greater than six percent 
(6%). The most recent Index in publication prior to the Extended Term, shall be 
the Base Index. On each Extended Term Adjustment Date, the Annual Rental shall 
be increased by a percentage equal to the percentage increase, if any, in the 
most recent Index in publication prior to the Extended Term Adjustment Date (the
"Comparison Index") over the Base Index ("Adjusted Annual Rental"). When the 
Adjusted Annual Rental payable as of each Extended Term Adjustment Date is 
determined, Landlord shall give Tenant written notice of such Adjusted Annual 
Rental and the manner in which it was computed.

                                     -23-
<PAGE>
 
                               32.  CONSTRUCTION

     (a)  Tenant shall submit plans and specifications for the installation of a
new roof and HVAC system at the premises and shall select the contractors to
perform such work, which will be subject to Landlord's approval. Landlord shall
contract with the contractors and will pay for the roof and HVAC installation up
to a combined total expenditure of $150,000. Any cost in excess of $150,000
shall be borne by Tenant.

     (b)  Landlord and Tenant agree that Tenant shall have the right to expand 
the existing premises by approximately 20,000 feet.  If Tenant makes such 
election, Landlord and Tenant shall confer and negotiate with respect to the 
terms and conditions of such expansion.

                   33.  RENT RETROACTIVE TO DECEMBER 1, 1994

     Tenant has been paying rent at the rate of $17,061.20 from 1/1/94 to
12/31/94 and $18,397.10 from 1/1/95 to 10/31/95 per month, which is in excess of
the rent provided for this Lease, which is to be effective December 1, 1994.
Tenant shall receive credit for the full amount of the excess rent paid from
December 1, 1994 through the present, and such credit shall be applied against
the next rent payments that become due.


                          34.  RULES AND REGULATIONS

     Neither Tenant nor any of Tenant's Employees shall at any time bring or
keep within the Premises or the Building any flammable, combustible or explosive
fluid, chemical substance, or material, except to the extent that the same may
be required for the use expressly permitted in the Lease for the Premises. To
the extent that flammable, combustible or explosive fluids, chemical substances
or materials are maintained by Tenant within the Premises, the quantities
maintained shall be reasonably limited and the manner of storage shall be that
which is appropriate under the circumstances to maintain the safety and well
being of the Premises, the Building and any individuals occupying either the
Premises or the Building. The manner of storage shall be subject to Landlord's
reasonable approval. Electric space heaters shall not be used at any time by
Tenant.

     Tenant shall faithfully observe and comply with the terms of any and all 
covenants, conditions and restrictions recorded against the Property.

     The term Tenant shall be defined to include and encompass Tenant's
 Employees and Tenant's contractors.

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

     By execution hereof, each signatory certifies that this document has been 
approved by the party for which he is signing, and that he is duly authorized to
execute this document on behalf of such party.

LANDLORD:              RANCON INCOME FUND I,
                a California limited partnership       

                       Rancon Income Partners I, L.P.
                ----------------------------------------------------
                       Rancon Income Partners I, L.P.,
                       General Partner
                                
                       By:      Glenborough Inland Realty Corporation
                                a California Corporation,
                                Its Attorney in Fact


                                By: /s/ Sandra L. Boyle
                                    ------------------------------
                           Its:     Senior Vice President     
                                   -----------------------------

                                     -24-
<PAGE>
 
        TENANT:         WAKEFIELD ENGINEERING, INC.
                        a Delaware corporation

                        By: /s/ Harry Chase
                           ------------------------------------------
                            President

                        Its:
                            -----------------------------------------
                             [Title]

                        By:
                           ------------------------------------------
                             [Type Name]

                        Its:
                            -----------------------------------------
                             [Title]









































          PLEASE NOTE:  If Tenant is a corporation, the authorized officers must
sign on behalf of the corporation and indicate the capacity in which they are 
signing.  The Lease must be executed by the president or vice-president and the 
secretary or assistant secretary, unless the bylaws or a resolution of the board
of directors shall otherwise provide, in which event the bylaws or a certified 
copy of the resolution, as the case may be, must be attached to this Lease.


                                     -25-
















<PAGE>
 
                           [PLOT PLAN APPEARS HERE]


                              27901 FRONT STREET
                             TEMECULA, CALIFORNIA












                                  Exhibit A-1
<PAGE>
 
                                  EXHIBIT "A"

27901 Front Street, Temecula, California, and adjacent vacant lot and described
as Lots 4 and 5 of Tract 3841 as shown by Map on file in Book 61, pages 75-76,
official records of Riverside County, California. Lot 4 consists of
approximately 67,518 square feet of land improved with a one-story concrete 
tilt-up building containing approximately 25,000 square feet. Lot 5 is an
unimproved parcel consisting of approximately 54,014 square feet which provides
parking for and access to the loading dock of the building on lot 4.

                                  Exhibit A-2