HAVEN GATEWAY CENTRE
                                INDUSTRIAL LEASE





                                    BETWEEN

                               HAVEN GATEWAY LLC,
                      A DELAWARE LIMITED LIABILITY COMPANY



                                      AND

                                 OAKLEY, INC.,
                            A WASHINGTON CORPORATION



                                   AS TENANT

<PAGE>

                               TABLE OF CONTENTS
                               -----------------
<TABLE>
<S>                                                                                    <C>
SECTION 1: DEFINITIONS ..............................................................   1
        1.1   Definitions ...........................................................   1
        1.2   Access Laws ...........................................................   1
        1.3   Additional Rent .......................................................   1
        1.4   Intentionally Omitted .................................................   1
        1.5   Base Rent .............................................................   1
        1.6   Brokers ...............................................................   2
        1.7   Building ..............................................................   2
        1.8   Business Day ..........................................................   2
        1.9   Claims ................................................................   2
        1.10  Commencement Date .....................................................   2
        1.11  Estimated Operating Costs Allocable to the Premises ...................   2
        1.12  Events of Default .....................................................   2
        1.13  Excess Allowance ......................................................   2
        1.14  Governmental Agency ...................................................   2
        1.15. Governmental Requirements .............................................   2
        1.16  Hazardous Substance(s) ................................................   2
        1.17  Land ..................................................................   2
        1.18  Landlord ..............................................................   2
        1.19  Landlord's Agents .....................................................   2
        1.20  Lease Term ............................................................   2
        1.21  Manager ...............................................................   2
        1.22  Manager's Address .....................................................   2
        1.23  Operating Costs .......................................................   2
        1.24  Operating Costs Allocable to the Premises .............................   2
        1.25  Parking Rights ........................................................   2
        1.26  Permitted Use .........................................................   3
        1.27  Intentionally Omitted .................................................   3
        1.28  Prepaid Rent ..........................................................   3
        1.29  Premises ..............................................................   3
        1.30  Prime Rate ............................................................   3
        1.31  Project ...............................................................   3
        1.32  Property Taxes ........................................................   3
        1.33  Security Deposit ......................................................   3
        1.34  Tenant ................................................................   3
        1.35  Tenant Alterations ....................................................   3
        1.36  Tenant Improvement Allowance ..........................................   3
        1.37  Tenant Improvements ...................................................   3
        1.38  Tenant's Agents .......................................................   4
        1.39  Tenant's Pro Rata Share ...............................................   4
        1.40  Year ..................................................................   4

SECTION 2: PREMISES AND TERM ........................................................   4
        2.1   Lease of Premises .....................................................   4
        2.2   Lease Term ............................................................   4
        2.3   Tenant Improvements ...................................................   4
        2.4   Tenant's Contribution to Tenant Improvement Costs .....................   4
        2.5   Condition of Premises "AS-IS" .........................................   4
        2.6   Memorandum of Commencement Date .......................................   4
        2.7   Use and Conduct of Business ...........................................   4
        2.8   Compliance with Governmental Requirements and Rules and Regulations ...   5

SECTION 3: BASE RENT, ADDITIONAL RENT AND OTHER SUMS PAYABLE UNDER LEASE. ...........   5
        3.1   Payment of Rental .....................................................   5


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<PAGE>

        3.2   Base Rent .............................................................   5
        3.3   Security Deposit ......................................................   5
        3.4   Additional Rent .......................................................   6
              3.4.1  Rental Adjustment for Estimated Operating Costs ................   6
              3.4.2  Actual Costs ...................................................   6
              3.4.3  Determination of Operating Costs ...............................   7
              3.4.4  End of Term ....................................................   7
              3.4.5  Definitions ....................................................   7
              3.4.6  Janitorial Services ............................................   9
              3.4.7  Additional Rent ................................................   9
              3.4.8  Operating Cost Audit ...........................................   9
        3.5   Utilities .............................................................  10
        3.6   Holdover ..............................................................  10
        3.7   Late Charge ..........................................................   10
        3.8   Default Rate ..........................................................  11

SECTION 4: GENERAL PROVISIONS .......................................................  11
        4.1   Maintenance and Repair by Landlord ....................................  11
        4.2   Maintenance and Repair by Tenant ......................................  11
        4.3   Common Areas/Security .................................................  12
        4.4   Tenant Alterations ....................................................  13
        4.5   Tenant's Work Performance .............................................  13
        4.6   Surrender of Possession ...............................................  14
        4.7   Removal of Property ...................................................  14
        4.8   Access ................................................................  15
        4.9   Damage or Destruction .................................................  15
              4.9.1  Restoration of Premises ........................................  15
              4.9.2  Damage in Excess of Fifty Percent ..............................  16
              4.9.3  Termination of Lease by Mortgage Holder's Election .............  16
              4.9.4  Destruction Near End of Term ...................................  16
              4.9.5  Waiver .........................................................  16
              4.9.6  Termination by Tenant ..........................................  16
        4.10  Condemnation ..........................................................  16
        4.11  Parking ...............................................................  17
        4.12  Indemnification .......................................................  17
        4.13  Tenant Insurance ......................................................  17
              4.13.1 Form of Policies ...............................................  17
              4.13.2 Approval of Insurer ............................................  18
              4.13.3 Landlord Obtained Insurance ....................................  18
        4.14  Landlord's Insurance ..................................................  18
        4.15  Waiver of Subrogation .................................................  18
        4.16  Assignment and Subletting by Tenant ...................................  18
              4.16.1 Restrictions on Transfer .......................................  18
              4.16.2 Landlord Consent, Procedure ....................................  19
              4.16.3 Landlord Consent, Relevant Factors .............................  19
              4.16.4 Notice Regarding Landlord's Consent ............................  20
              4.16.5 Restriction of Transfer of Interests in Tenant .................  20
              4.16.6 Excess Rent ....................................................  20
              4.16.7 Recapture ......................................................  20
        4.17  Assignment by Landlord ................................................  21
        4.18  Estoppel Certificates and Financial Statements ........................  21
        4.19  Modification for Lender ...............................................  21
        4.20  Hazardous Substances ..................................................  21
        4.21  Access Laws ...........................................................  22
              4.21.1 Notice to Landlord of Violation ................................  22
              4.21.2 Prohibited Acts ................................................  22
              4.21.3 Tenant Responsibility ..........................................  22


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<PAGE>

              4.21.4 Landlord Responsibility ........................................  22
              4.21.5 Indemnity of Landlord ..........................................  23
                     4.21.6 Inconsistent Provisions of Law ..........................  23
        4.22 Quiet Enjoyment ........................................................  23
        4.23 Signs ..................................................................  23
        4.24 Subordination ..........................................................  23
        4.25 Workers Compensation Immunity ..........................................  24
        4.26 Brokers ................................................................  24
        4.27 Exculpation and Limitation of Liability ................................  24
        4.28 Intentionally Omitted ..................................................  24
        4.29 Mechanic's Liens and Tenant's Personal Property Taxes ..................  24
              4.29.1 Mechanic's Liens ...............................................  24
              4.29.2 Personal Property Taxes ........................................  25
        4.30 Landlord's Security Interest ...........................................  25

SECTION 5: DEFAULT AND REMEDIES .....................................................  25
        5.1   Events of Default .....................................................  25
              5.1.1  Events of Default ..............................................  25
              5.1.2  Notice of Default ..............................................  26
              5.1.3  Notice to Landlord Regarding Tenant Default ....................  26
              5.1.4  Treatment as Unexpired Lease ...................................  26
        5.2   Remedies ..............................................................  26
              5.2.1  Remedies; Termination and Recovery of Possession ...............  26
              5.2.2  Remedies; Recover Rent as it Becomes Due .......................  27
              5.2.3  Succession to Tenant Rights ....................................  27
              5.2.4  Rights and Remedies Cumulative .................................  27
              5.2.5  Money Damages Upon Reletting ...................................  27
              5.2.6  Remedies Nonexclusive ..........................................  28
        5.3   Right to Perform ......................................................  28
        5.4   Landlord's Default ....................................................  28
        5.5   Acceptance of Rent Without Waiving Rights .............................  28

SECTION 6: MISCELLANEOUS PROVISIONS .................................................  28
        6.1   Notices ...............................................................  28
        6.2   Attorney's Fees and Expenses ..........................................  29
        6.3   No Accord and Satisfaction ............................................  29
        6.4   Successors; Joint and Several Liability ...............................  29
        6.5   Choice of Law .........................................................  29
        6.6   No Waiver of Remedies .................................................  29
        6.7   Offer to Lease ........................................................  29
        6.8   Force Majeure .........................................................  30
        6.9   Landlord's Consent ....................................................  30
        6.10  Severability; Captions ................................................  30
        6.11  Interpretation ........................................................  30
        6.12  Incorporation of Prior Agreement; Amendments ..........................  30
        6.13  Authority .............................................................  30
        6.14  Time of Essence .......................................................  30
        6.15  Survival of Obligations ...............................................  30
        6.16  Consent to Service ....................................................  30
        6.17  Landlord's Authorized Agents ..........................................  30
        6.18  Edison License ........................................................  31
        6.19  Waiver of Jury Trial ..................................................  31
</TABLE>


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<PAGE>

<TABLE>
<CAPTION>
LISTING OF EXHIBITS
<S>               <C>

Exhibit A         Legal Description of the Land
Exhibit B         Drawing Showing Location of the Premises
Exhibit C         Work Letter and Construction Agreement
Exhibit D         Form of Memorandum of Commencement Date
Exhibit E         Rules and Regulations
</TABLE>


                                       iv
<PAGE>

                     HAVEN GATEWAY CENTRE INDUSTRIAL LEASE




THIS HAVEN GATEWAY CENTRE INDUSTRIAL LEASE (this "Lease") is made as of November
10, 2000, by and between


"LANDLORD"  HAVEN GATEWAY LLC, a Delaware limited liability company

            and

"TENANT"    OAKLEY, INC., a Washington corporation



                             SECTION 1: DEFINITIONS


1.1      DEFINITIONS: Each underlined term in this section shall have the
         meaning set forth next to that underlined term.

1.2      ACCESS LAWS: The Americans With Disabilities Act of 1990 (including the
         Americans with Disabilities Act Accessibility Guidelines for Building
         and Facilities) and all other Governmental Requirements relating to the
         foregoing.

1.3      ADDITIONAL RENT: Defined in paragraph captioned "ADDITIONAL RENT".

1.4      INTENTIONALLY OMITTED.

1.5      BASE RENT: Base Rent shall be as follows:


         Monthly Base Rent:


         Lease Months           Monthly Base Rent
         ------------           -----------------
         1-30                   $38,016.00
         31-60                  $40,936.14


         Annual Base Rent:


         Lease Months           Annual Base Rent
         ------------           ----------------
         1-30                   $456,192.00
         31-60                  $491,233.68


<PAGE>


1.6      BROKERS: Tenant was represented in this transaction by Zuvich Cannon
         Associates, a licensed real estate broker. Landlord was represented in
         this transaction by Investment Development Services and Cushman and
         Wakefield, licensed real estate brokers.
1.7      BUILDING: A free standing industrial building located on the Land,
         commonly known as 4000 E. Philadelphia Street, Ontario, California.
         Landlord and Tenant stipulate that the Building contains 118,800
         rentable square feet. Such square footage shall be binding and
         conclusive on Tenant for all purposes under this Lease.
1.8      BUSINESS DAY: Calendar days, except for Saturdays and Sundays and
         holidays when banks are closed in Washington, D.C.
1.9      CLAIMS: An individual and collective reference to any and all claims,
         demands, damages, injuries, losses, liens, liabilities, penalties,
         fines, lawsuits, actions, other proceedings and expenses (including
         attorney's fees and expenses incurred in connection with the proceeding
         whether at trial or on appeal).
1.10     COMMENCEMENT DATE: The earlier of (a) the date Tenant first commences
         to conduct business in the Premises, or (b) January 1, 2001.
1.11     ESTIMATED OPERATING COSTS ALLOCABLE TO THE PREMISES: Defined in
         paragraph captioned "ADDITIONAL RENT".
1.12     EVENTS OF DEFAULT: One or more of those events or states of facts
         defined in the paragraph captioned "EVENTS OF DEFAULT".
1.13     EXCESS ALLOWANCE: Defined in the Work Letter attached hereto as Exhibit
         "C".
1.14     GOVERNMENTAL AGENCY: The United States of America, the state in which
         the Land is located, any county, city, district, municipality or other
         governmental subdivision, court or agency or quasi-governmental agency
         having jurisdiction over the Land and any board, agency or authority
         associated with any such governmental entity, including the fire
         department having jurisdiction over the Land.
1.15     GOVERNMENTAL REQUIREMENTS: Any and all statutes, ordinances, codes,
         laws, rules, regulations, orders and directives of any Governmental
         Agency as now or later amended.
1.16     HAZARDOUS SUBSTANCE(S): Asbestos, PCBs, petroleum or petroleum-based
         chemicals or substances, urea formaldehyde or any chemical, material,
         element, compound, solution, mixture, sub-stance or other matter of any
         kind whatsoever which is now or later defined, classified, listed,
         designated or regulated as hazardous, toxic or radioactive by any
         Governmental Agency.
1.17     LAND: The land upon which the Building is located in County of San
         Bernadino, City of Ontario, State of California, as legally described
         in EXHIBIT A attached to this Lease.
1.18     LANDLORD: The limited liability company named on the first page of this
         Lease, or its successors and assigns as provided in paragraph captioned
         "ASSIGNMENT BY LANDLORD".
1.19     LANDLORD'S AGENTS: Any and all partners, affiliates, officers, agents,
         employees, trustees, members, investment advisors and consultants of
         Landlord.
1.20     LEASE TERM: Commencing on the Commencement Date, and ending sixty (60)
         months later, provided that, if the Commencement Date is a date other
         than the first day of a calendar month, the Lease Term shall be
         extended by the number of days remaining in the month in which the
         Commencement Date occurs.
1.21     MANAGER: Investment Development Services, Inc., or its replacement, as
         specified by written notice from Landlord to Tenant.
1.22     MANAGER'S ADDRESS: 888 West Sixth Street, 9th Floor, Los Angeles,
         California 90017, which address may be changed by written notice from
         Landlord to Tenant.
1.23     OPERATING COSTS: Defined in paragraph captioned "ADDITIONAL RENT".
1.24     OPERATING COSTS ALLOCABLE TO THE PREMISES: Defined in paragraph
         captioned "ADDITIONAL RENT".
1.25     PARKING RIGHTS: As of the Commencement Date, Tenant shall be permitted
         to use one hundred thirty-seven (137) parking spaces at the Project on
         a non-exclusive basis. Tenant is aware and agrees that the final number
         of parking spaces may change if required by any Governmental Authority.


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<PAGE>

1.26     PERMITTED USE: Warehousing and distribution of apparel, footwear and
         related accessories, so long as such use is consistent with (i) the
         applicable zoning for the Project, (ii) first-class industrial
         multi-tenant buildings of the same or similar use as the Building and
         located in the metropolitan area in which the Building is located, and
         (iii) Governmental Requirements.
1.27     INTENTIONALLY OMITTED.
1.28     PREPAID RENT: $38,016.00, to be applied toward Base Rent and Additional
         Rent for the first full calendar month of the Lease Term or to the
         first calendar month in which full Base Rent and Additional Rent is
         due.
1.29     PREMISES: The Premises consist of the entire Building. Landlord and
         Tenant hereby stipulate that the Premises consist of 118,800 rentable
         square feet. Such square footage shall be binding and conclusive on
         Tenant for all purposes under this Lease. Landlord and Tenant
         acknowledge and agree that the term "Premises" is used interchangeably
         with the term "Building" throughout this Lease.
1.30     PRIME RATE: Defined in paragraph captioned "Default Rate".
1.31     PROJECT: The Haven Gateway Centre within which the Building and Land
         are located, which Project shall consist of approximately 73.64 acres
         and, when completed, estimated to be approximately 1,526,242 rentable
         square feet, as the same may be adjusted by Landlord from time to time.
         If the amount of rentable square feet of the Project is adjusted, then
         Tenant's Pro Rata Share of the Project shall be equitably adjusted by
         Landlord accordingly.
1.32     PROPERTY TAXES: (1) Any form of ad valorem real or personal property
         tax or assessment imposed by any Governmental Agency on the Land,
         Building, related improvements or any personal property owned by
         Landlord associated with the Building or Land; (2) any other form of
         tax or assessment, license fee, license tax, tax or excise on rent or
         any other levy, charge, expense or imposition made or required by any
         Governmental Agency on any interest of Landlord in the Building, Land,
         related improvements or personal property; (3) any fee for services
         charged by any Governmental Agency for any services such as fire
         protection, street, sidewalk and road maintenance, refuse collection,
         school systems or other services provided or formerly provided to
         property owners and residents within the general area of the Land; (4)
         any governmental impositions allocable to or measured by the area of
         any or all of the Building, Land, related improvements or personal
         property, or the amount of any base rent, additional rent or other sums
         payable under any lease for any or all of the Building, Land, related
         improvements or personal property, including any tax on gross receipts
         or any excise tax or other charges levied by any Governmental Agency
         with respect to the possession, leasing, operation, maintenance,
         alteration, repair, use or occupancy of any or all of the Land or
         Building, related improvements or personal property or the rent earned
         by any part of or interest in the Building or Land, related
         improvements or personal property; (5) any impositions by any
         Governmental Agency on any transaction evidenced by a lease of any or
         all of the Building or Land, related improvements or personal property
         or charge with respect to any document to which Landlord is a party
         creating or transferring an interest or an estate in any or all of the
         Building or Land, related improvements or personal property; and (6)
         any increase in any of the foregoing based upon construction of
         improvements or change of ownership of any or all of the Land, related
         improvements or personal property. Property Taxes shall not include
         taxes on Landlord's net income or any inheritance, estate or gift
         taxes.
1.33     SECURITY DEPOSIT: Thirty Eight Thousand Sixteen and 00/100 Dollars
         ($38,016.00).
1.34     TENANT: The person or entity(ies) named on the first page of this
         Lease.
1.35     TENANT ALTERATIONS: Defined in paragraph captioned "TENANT
         ALTERATIONS".
1.36     TENANT IMPROVEMENT ALLOWANCE: The maximum amount (subject to the Excess
         Allowance) to be expended by Landlord, if any, for the cost of Tenant
         Improvements (including architectural, engineering, permitting and
         space planning fees), which maximum shall not exceed Two Hundred Seven
         Thousand Nine Hundred and 00/100 Dollars ($207,900.00).
1.37     TENANT IMPROVEMENTS: Those alterations or improvements to the Premises
         in the Premises which are in accordance with and subject to the terms
         and conditions of the Work Letter Agreement attached hereto as EXHIBIT
         C.

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<PAGE>


1.38     TENANT'S AGENTS: Any and all officers, partners, contractors,
         subcontractors, consultants, licensees, agents, concessionaires,
         subtenants, servants, employees, customers, guests, invitees or
         visitors of Tenant.
1.39     TENANT'S PRO RATA SHARE: One Hundred Percent (100%) of Operating Costs
         for the Building and Seven and 79/100 Percent (7.79%) of Operating
         Costs for the Project.
1.40     YEAR: A calendar year commencing January 1 and ending December 31.

                          SECTION 2: PREMISES AND TERM

2.1      LEASE OF PREMISES. Landlord leases the Premises to Tenant, and Tenant
         leases the Premises from Landlord, upon the terms and conditions set
         forth in this Lease.
2.2      LEASE TERM. The Lease Term shall be for the period stated in the
         definition of that term, unless earlier terminated as provided in this
         Lease.
2.3      TENANT IMPROVEMENTS. Tenant shall construct the Tenant Improvements
         pursuant to the Work Letter attached as EXHIBIT C.
2.4      TENANT'S CONTRIBUTION TO TENANT IMPROVEMENT COSTS. If the cost of the
         Tenant Improvements exceeds the Tenant Improvement Allowance and Excess
         Allowance, if any is utilized by Tenant, then Tenant shall pay for such
         excess at its sole cost and expense, and Landlord shall have no
         responsibility whatsoever in connection with the same. All Tenant
         Improvements, regardless of which party constructed them, shall become
         the property of Landlord and shall remain upon and be surrendered with
         the Premises upon the expiration or earlier termination of this Lease;
         PROVIDED THAT, at Landlord's election and upon notice to Tenant, Tenant
         shall be required to remove all or any portion of the Tenant
         Improvements upon the expiration or earlier termination of this Lease;
         provided however, that Tenant shall not be required to remove the
         initial Tenant Improvements set forth on Exhibit "F" attached hereto,
         provided the same are Project standard, as reasonably determined by
         Landlord.
2.5      CONDITION OF PREMISES "AS-IS". Tenant hereby agrees that the Premises
         shall be taken "as is", "with all faults", without any representations
         or warranties, and Tenant hereby agrees and warrants that it has
         investigated and inspected the condition of the Premises and the
         suitability of same for Tenant's purposes, and Tenant does hereby waive
         and disclaim any objection to, cause of action based upon, or claim
         that its obligations hereunder should be reduced or limited because of
         the condition of the Premises or the suitability of same for Tenant's
         purposes. Tenant acknowledges that neither Landlord nor any agent nor
         any employee of Landlord has made any representations or warranty with
         respect to the Premises or Project or with respect to the suitability
         of either for the conduct of Tenant's business, and Tenant expressly
         warrants and represents that Tenant has relied solely on its own
         investigation and inspection of the Premises and the Project in its
         decision to enter into this Lease and let the Premises in an "as is"
         condition. Landlord shall assign to Tenant, on a non-exclusive basis,
         to the extent assignable, all warranties and guaranties provided to
         Landlord with respect to any major equipment and materials furnished
         exclusively to the Premises, and Landlord shall use commercially
         reasonable efforts to assist Tenant, at no cost or expense to Landlord,
         with Tenant's enforcement of any warranties or guaranties that have
         been so assigned to Tenant. The taking of possession of the Premises by
         Tenant shall conclusively establish that the Premises and the Project
         were at such time in satisfactory condition.
2.6      MEMORANDUM OF COMMENCEMENT DATE. At Landlord's election and request,
         Tenant shall execute a Memorandum of Commencement Date in the form
         attached as EXHIBIT D. In no event shall Tenant record this Lease or
         the Memorandum of Commencement Date.
2.7      USE AND CONDUCT OF BUSINESS. The Premises are to be used only for the
         Permitted Uses, and for no other business or purpose without the prior
         consent of Landlord. Landlord makes no representation or warranty as to
         the suitability of the Premises for Tenant's intended use. Tenant
         shall, at its own cost and expense, obtain and maintain any and all
         licenses, permits, and approvals necessary or appropriate for its use,
         occupation and operation of the Premises. Tenant's inability to obtain
         or maintain any such license, permit or approval necessary or
         appropriate for its use, occupation or operation of the Premises shall
         not relieve it of its obligations under this Lease,


                                       4
<PAGE>

         including the obligation to pay Base Rent and Additional Rent. No act
         shall be done in or about the Premises that is unlawful or that will
         increase the existing rate of insurance on any or all of the Land or
         Building. Tenant shall not commit or allow to be committed or exist:
         (a) any waste upon the Premises, (b) any public or private nuisance, or
         (c) any act or condition which may disturb the quiet enjoyment of any
         other tenant in the Project, violate any of Landlord's contracts
         affecting any or all of the Land or Building or Project, create or
         contribute to any work stoppage, strike, picketing, labor disruption or
         dispute, interfere in any way with the business of Landlord or any
         other tenant in the Project or with the rights or privileges of any
         contractors, subcontractors, licensees, agents, concessionaires,
         subtenants, servants, employees, customers, guests, invitees or
         visitors or any other persons lawfully in and upon the Land or Project,
         or causes any impairment or reduction of the good will or reputation of
         the Land or Project. Tenant shall not, without the prior consent of
         Landlord, which shall not be unreasonably withheld, use any apparatus,
         machinery, device or equipment in or about the Premises which will
         cause any substantial noise or vibration or any increase in the normal
         consumption level of electric power. If any of Tenant's apparatus,
         machinery, equipment or devices should disturb the quiet enjoyment of
         any other tenant in the Project, then Tenant shall provide, at its sole
         cost and expense, adequate insulation or take other such action,
         including removing such apparatus, machinery, equipment or devices, as
         may be necessary to eliminate the disturbance.
2.8      COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS AND RULES AND REQUISITIONS.
         Tenant shall comply with all Governmental Requirements relating to the
         Premises (including, without limitation, Tenant's use, occupancy and
         operation thereof) and all other covenants, conditions and restrictions
         and other matters of record, and Tenant shall observe such reasonable
         rules and regulations as may be adopted and published by Landlord from
         time to time for the safety, care and cleanliness of the Building, and
         for the preservation of good order in the Building, including the Rules
         and Regulations attached to this Lease as EXHIBIT E.

    SECTION 3: BASE RENT, ADDITIONAL RENT AND OTHER SUMS PAYABLE UNDER LEASE

3.1      PAYMENT OF RENTAL. Tenant agrees to pay Base Rent, Additional Rent and
         any other sum due under this Lease to Landlord without demand,
         deduction, credit, adjustment or offset of any kind or nature, in
         lawful money of the United States when due under this Lease, at the
         offices of Manager at Manager's Address, or to such other party or at
         such other place as Landlord may from time to time designate in
         writing.
3.2      BASE RENT. On execution of this Lease, Tenant shall pay to Landlord the
         amount specified in the definition of Prepaid Rent for the month
         specified in the definition of that term. Tenant agrees to pay Base
         Rent to Landlord without demand, in advance on or before the first day
         of each calendar month of the Lease Term. Base Rent for any partial
         month at the beginning or end of the Lease Term shall be prorated. Base
         Rent for any partial month at the beginning of the Lease Term shall be
         paid by Tenant on the Commencement Date.
3.3      SECURITY DEPOSIT. On execution of this Lease, Tenant shall pay to
         Landlord the sum specified in the definition of the term Security
         Deposit, as security for the full and faithful payment of all sums due
         under this Lease and the full and faithful performance of every
         covenant and condition of this Lease to be performed by Tenant. If
         Tenant shall breach or default with respect to any payment obligation
         or other covenant or condition of this Lease, Landlord may apply all or
         any part of the Security Deposit to the payment of any sum in default
         or any damage suffered by Landlord as a result of such breach or
         default, and in such event, Tenant shall, upon demand by Landlord,
         deposit with Landlord the amount so applied so that Landlord shall have
         the full Security Deposit on hand at all times during the Lease Term.
         In the event Tenant defaults on its obligations to pay Base Rent,
         Additional Rent or any other sum beyond seven (7) days from when due on
         more than two occasions during any twelve (12) month period, Landlord
         may, at any time thereafter require an increase in the Security Deposit
         by an amount equal to one hundred percent (100%) of the amount
         specified in the definition of the term Security Deposit and Tenant
         shall immediately deposit such additional amount with Landlord upon
         Landlord's demand. Following such increase, the definition of the term
         Security Deposit shall refer to the amount of the Security Deposit
         prior to the increase plus the increased amount. The remedy of
         increasing the Security Deposits for Tenant's multiple


                                       5
<PAGE>

         defaults shall be in addition to and not a substitute for any of
         Landlord's other rights and remedies under this Lease or applicable
         Law. Additionally, Landlord's use or application of all or any portion
         of the Security Deposit shall not impair any other rights or remedies
         provided under this Lease or under applicable law and shall not be
         construed as a payment of liquidated damages. If Tenant shall have
         fully compiled with all of the covenants and conditions of this Lease,
         the remaining Security Deposit shall be repaid to Tenant, without
         interest, within thirty (30) Business Days after the expiration of this
         Lease. Tenant may not mortgage, assign, transfer or encumber the
         Security Deposit and any such act on the part of Tenant shall be
         without force or effect. In the event any bankruptcy, insolvency,
         reorganization or other creditor-debtor proceedings shall be instituted
         by or against Tenant, the Security Deposit shall be deemed to be
         applied first to the payment of Base Rent, Additional Rent and all
         other sums payable under this Lease to Landlord for all periods prior
         to the institution of such proceedings and the balance, if any, may be
         retained by Landlord and applied against Landlord's damages. In the
         event of a sale or transfer of Landlord's estate or interest in the
         Land and Building, Landlord shall have the right to transfer the
         Security Deposit to the vendee or the transferee, and, provided that
         Landlord transfers the Security Deposit to such vendee or transferee,
         Landlord shall be considered released by Tenant from all liability for
         the return of the Security Deposit. Provided the security deposit is
         received by the transferee, or the transferee is otherwise credited in
         the amount of the security deposit, Tenant shall look solely to the
         transferee for the return of the Security Deposit, and it is agreed
         that all of the foregoing shall apply to every transfer or assignment
         made of the Security Deposit to a new transferee. No mortgagee or
         purchaser of any or all of the Building at any foreclosure proceeding
         brought under the provisions of any mortgage shall (regardless of
         whether the Lease is at the time in question subordinated to the lien
         of any mortgage) be liable to Tenant or any other person for any or all
         of such sum (or any other or additional security deposit or other
         payment made by Tenant under the provisions of this Lease), unless
         Landlord has actually delivered it in cash to such mortgagee or
         purchaser, as the case may be. In the event of any rightful and
         permitted assignment of Tenant's interest in this Lease, the Security
         Deposit shall be deemed to be held by Landlord as a deposit made by the
         assignee, and Landlord shall have no further liability to the assignor
         with respect to the return or the Security Deposit.
                No right or remedy available to Landlord in this Lease shall
         preclude or extinguish any other right to which Landlord may be
         entitled. It is understood that if Tenant fails to perform its
         obligations and to take possession of the Premises as provided in this
         Lease, the Prepaid Rent and the Security Deposit shall not be deemed
         liquidated damages. Landlord may apply such sums to reduce Landlord's
         damages and such application of funds shall not preclude Landlord from
         recovering from Tenant all additional damages incurred by Landlord.
3.4      ADDITIONAL RENT. Definitions of certain terms used in this paragraph
         are set forth in subparagraph 3.4.5. Tenant agrees to pay to Landlord,
         as additional rent as computed in this paragraph (individually and
         collectively the "Additional Rent"), all Operating Costs Allocable to
         the Premises. Tenant acknowledges that this is intended to be a
         triple net lease.
         3.4.1  RENTAL ADJUSTMENT FOR ESTIMATED OPERATING COSTS. Landlord shall
                furnish Tenant a written statement of Estimated Operating Costs
                Allocable to the Premises for each Year and the amount payable
                monthly by Tenant for such Costs shall be computed as follows:
                one-twelfth (1/12) of the amount of Estimated Operating Costs
                Allocable to the Premises shall be Additional Rent and shall be
                paid monthly by Tenant for each month during such Year after the
                Commencement Date. If such written statement is furnished after
                the commencement of the Year (or as to the first Year during the
                Lease Term, after the Commencement Date), Tenant shall also make
                a retroactive lump-sum payment to Landlord equal to the monthly
                payment amount multiplied by the number of months during the
                Year (or as to the first Year during the Lease Term, after the
                Commencement Date) for which no payment was paid.
                Notwithstanding the foregoing, Landlord reserves the right, from
                time to time during each Year, to revise the Estimated Operating
                Costs Allocable to the Premises and upon notice to Tenant of
                such revision, Tenant shall adjust its payment to Landlord under
                this subparagraph 3.4.1 accordingly.
         3.4.2  ACTUAL COSTS. After the close of each Year, Landlord shall
                deliver to Tenant a written statement setting forth the
                Operating Costs Allocable to the Premises during the preceding


                                       6
<PAGE>

                Year. If such Operating Costs Allocable to the Premises for any
                Year exceed the Estimated Operating Costs Allocable to the
                Premises paid by Tenant to Landlord pursuant to subparagraph
                3.4.1 for such Year (the "Excess"), Tenant shall pay the amount
                of such Excess to Landlord within twenty (20) Business Days
                after receipt of such statement by Tenant; provided however,
                that if such statement for the first year or second year of the
                initial Lease Term only indicate that an Excess of more than
                Twenty-Five Thousand Dollars ($25,000.00) exists, then Tenant
                may, at its option (the "Amortization Option"), upon written
                notice to Landlord within five (5) days after Tenant's receipt
                of such statement, pay such Excess (for the 1st or 2nd year, as
                applicable, only) over a period of four (4) consecutive months
                (commencing on the 1st day of the month immediately following
                Tenant's receipt of the statement) in equal monthly
                installments, with 10% interest. Notwithstanding anything to the
                contrary contained herein, the Amortization Option shall be null
                and void after the second year of the initial Lease Term (and
                not any extension thereof). If such statement shows the
                Operating Costs Allocable to the Premises to be less than the
                Estimated Operating Costs Allocable to the Premises paid by
                Tenant to Landlord pursuant to subparagraph 3.4.1, then the
                amount of such overpayment shall be paid by Landlord to Tenant
                within twenty (20) Business Days following the date of such
                statement or, at Landlord's option, shall be credited towards
                the installment(s) of Additional Rent next coming due from
                Tenant.
         3.4.3  DETERMINATION OF OPERATING COSTS. The determination of Operating
                Costs Allocable to the Premises shall be made by Landlord.
         3.4.4  END OF TERM. If this Lease shall terminate on a day other than
                the last day of a Year, (a) Landlord shall estimate the
                Operating Costs Allocable to the Premises for such Year
                predicated on the most recent reliable information available to
                Landlord; (b) the amount determined under clause (a) of this
                sentence shall be prorated by multiplying such amount by a
                fraction, the numerator of which is the number of days within
                the Lease Term in such Year and the denominator of which is 360;
                (c) If the clause (b) amount exceeds the Estimated Operating
                Costs Allocable to the Premises paid by Tenant for the last Year
                in the Lease Term, then Tenant shall pay the excess to Landlord
                within twenty (20) Business Days after Landlord's delivery to
                Tenant of a statement for such excess; and (d) if the Estimated
                Operating Costs Allocable to the Premises paid by Tenant for the
                last Year in the Lease Term exceeds the clause (b) amount, then
                Landlord shall refund to Tenant the excess within the twenty
                (20) Business Day period described in clause (c) if Tenant Is
                not then in default of any of its obligations under this Lease.
                Landlord's and Tenant's obligations under this paragraph shall
                survive the expiration or other termination of this Lease.
         3.4.5  DEFINITIONS. Each underlined term in this subparagraph shall
                have the meaning set forth next to that underlined term:
                (a)  ESTIMATED OPERATING COSTS ALLOCABLE TO THE PREMISES.
                Landlord's estimate of Operating Costs Allocable to the Premises
                for a Year to be given by Landlord to Tenant pursuant to
                subparagraph 3.4.1.
                (b)  OPERATING COSTS. All expenses paid or incurred by
                Landlord in connection with the ownership, operation,
                maintenance and/or repair of: (i) the Building; (ii) the
                Project, provided that for purposes of this Lease, such expenses
                shall be limited to that amount of operating costs for the
                entire Project which is fairly and equitably allocated by
                Landlord, in its reasonable discretion, to the Building; and
                (iii) the personal property used in conjunction with such
                maintenance, operation, ownership and repair, including, without
                limitation, all expenses reasonably paid or incurred by Landlord
                for: (a) common area utilities, including electricity, water,
                gas, sewers, fire sprinkler charges, refuse collection,
                telephone charges, cable television or other electronic or
                microwave signal reception, steam, heat, cooling or any service
                which is now or in the future reasonably considered a utility
                and which are not payable directly by tenants in the Building;
                (b) supplies; (c) cleaning and janitorial services (including
                window washing), landscaping and landscaping maintenance
                (including irrigating, trimming, mowing, fertilizing, seeding
                and replacing plants), and other commercially reasonable
                services; (d) security services, if any; (e) insurance; (f)


                                       7
<PAGE>

                management fees, provided that the property management fee shall
                not exceed three percent (3%) of the gross rental income for the
                Building; (g) Property Taxes, reasonable tax consultant fees and
                expenses (not to materially exceed the reduction in taxes
                anticipated to be secured), and reasonable costs of appeals of
                any Property Taxes; (h) services of independent contractors; (i)
                compensation (including employment taxes and fringe benefits) of
                all persons who perform duties in connection with any service,
                repair, maintenance, replacement or improvement or other work
                included in this subparagraph; (j) license, permit and
                inspection fees; (k) assessments and special assessments due to
                deed restrictions, declarations or owners associations or other
                means of allocating costs of a larger tract of which the Land is
                a part; (l) rental of any machinery or equipment; (m) reasonable
                audit fees and accounting services related to the Building, and
                charges for the computation of the rents and charges payable by
                tenants in the Building (but only to the extent the cost of such
                fees and services are in addition to the cost of the management
                fee); (n) the cost of capital improvements, repairs or
                replacements (amortized, as set forth below in this Section
                3.4.5(b)); (o) maintenance and service contracts; (p)
                maintenance and repair of the roof and roof membranes, (q) costs
                incurred by Landlord for compliance with Access Laws, as set
                forth in the paragraph entitled "Access Laws"; (r) elevator
                service and repair, if any; (s) business taxes and license fees;
                (t) maintenance and repair of the HVAC system in the Building
                and Project; (u) all payments payable to Edison (defined below)
                or its successors or assigns pursuant to the Edison License
                (defined below); and (v) any other commercially reasonable
                expense or charge which in accordance with generally accepted
                accounting and management principles would be considered an
                expense of maintaining, operating, owning or repairing the
                Building and the Project. Without limiting the foregoing,
                Operating Costs shall include replacement of roofs and roof
                membranes; exterior painting; parking area resurfacing,
                resealing and restriping parking areas and driveways; upgrading
                of the HVAC systems in the Building, and other capital
                improvements to the Building or to the Project if such costs set
                forth earlier in this sentence are to be equitably allocated as
                provided above in this subparagraph; PROVIDED THAT, such
                capital improvements, whether installed before or after the
                Commencement Date, shall be amortized with market interest over
                their estimated useful lives as reasonably determined by
                Landlord and only the amortization installments and interest
                attributable to the Lease Term shall be an Operating Cost under
                this Lease.
                     Operating Costs shall not include any of the following:
                     A.   Interest and amortization of funds borrowed by
                          Landlord for items other than capital improvements;
                     B.   Leasing commissions and advertising and space planning
                          expenses incurred in procuring tenants;
                     C.   Salaries, wages, or other compensation paid to
                          officers or executives of Landlord in their capacities
                          as officers and executives.
                     D.   Costs of damage and repairs to the extent recovered
                          under any warranty or insurance policy carried by
                          Landlord in connection with the Building or common
                          areas;
                     E.   Any and all costs of any kind or character for any
                          injuries, damage and repairs necessitated by the
                          negligence or willful misconduct of Landlord or
                          Landlord's employees, contractors or agents;
                     F.   Landlord's general overhead expenses not related to
                          the Project;
                     G.   Payments of principal or interest or any mortgage,
                          ground rents (other than payments under the Edison
                          License) including commissions and legal fees
                          associated with financing;
                     H.   Depreciation or accelerated cost recovery of the
                          Building or any equipment;
                     I.   Costs, including permit, license and inspection
                          fees, incurred in renovating or otherwise improving,
                          decorating, painting or altering space for other
                          tenants or other occupants or vacant space in the
                          Project;
                     J.   Costs incurred due to violation by Landlord or any
                          other tenant of the Building of the terms and
                          conditions of any lease;


                                       8
<PAGE>

                     K.   The costs of any service provided to other tenant(s)
                          of the Project to the extent Landlord receives direct
                          reimbursement therefor (including excess electricity
                          consumption);
                     L.   Charitable or political donations by Landlord;
                     M.   Any cost or expense related to the testing for,
                          removal, transportation, or storage of Hazardous
                          Substances from the Building, except to the extent
                          caused by or required as a result of the acts or
                          omissions of Tenant or Tenant's Agents;
                     N.   Interest, penalties or other costs arising out of
                          Landlord's failure to make timely payment of its
                          obligations;
                     O.   Attorneys' fees and costs of settlement judgments and
                          payments in lieu thereof arising from disputes with
                          tenants in connection with the leasing of space at the
                          Project;
                     P.   Amounts paid to subsidiaries or affiliates of Landlord
                          for goods and/or services in the Building to the
                          extent the same materially exceed the costs of such
                          goods and/or services rendered by unaffiliated third
                          parties on a competitive basis; and
                     Q.   Expenses which are not treated as operating expenses
                          by the majority of other landlords in comparable first
                          class, Class "A" industrial buildings comparable in
                          location and condition to the Building and located
                          within the general vicinity of the Ontario, California
                          area, all as reasonably determined by Landlord.
                If less than one hundred percent (100%) of the net rentable area
                of the Building is occupied by tenants at all times during any
                Year, then Operating Costs for such Year shall include all
                additional costs and expenses that Landlord reasonably
                determines would have been incurred had one hundred percent
                (100%) of the Building been occupied at all times during such
                Year by tenants.
                (c)  OPERATING COSTS ALLOCABLE TO THE PREMISES. The product of
                Tenant's Pro Rata Share times Operating Costs.
         3.4.6  JANITORIAL SERVICES. Notwithstanding anything to the contrary
                contained in this Lease, Tenant shall contract directly with a
                janitorial service and shall pay for all janitorial services
                used on or for the Premises.
         3.4.7  ADDITIONAL RENT. Any sums payable under this Lease pursuant to
                this paragraph or otherwise shall be Additional Rent and, in the
                event of nonpayment of such sums, Landlord shall have the same
                rights and remedies with respect to such nonpayment as it has
                with respect to nonpayment of the Base Rent due under this
                Lease.
         3.4.8  OPERATING COST AUDIT. Landlord shall maintain records concerning
                estimated and actual Operating Costs Allocable to the Premises
                for no less than twelve (12) months following the period covered
                by the statement or statements furnished Tenant, after which
                time Landlord may dispose of such records. Provided that Tenant
                is not then in default of its obligation to pay Base Rent,
                Additional Rent or other payments required to be made by it
                under this Lease and provided that Tenant is not otherwise in
                default under this Lease, Tenant may, at Tenant's sole cost and
                expense, cause a Qualified Person (as defined below) to inspect
                Landlord's records. Such inspection, if any, shall be conducted
                no more than once each Year, during Landlord's normal business
                hours within sixty (60) Business Days after receipt of
                Landlord's written statement of Operating Costs Allocable to the
                Premises for the previous year, and upon Tenant first furnishing
                Landlord written notice of the inspection, if any, at least
                fifteen (15) Business Days in advance of such inspection. Any
                errors disclosed by the review shall be promptly corrected by
                Landlord; provided, however, that if Landlord disagrees with any
                such claimed errors, Landlord shall have the right to cause
                another review to be made by an auditor of Landlord's choice. In
                the event the results of the review of records (taking into
                account, if applicable, the results of any additional review
                caused by Landlord) reveal that Tenant has overpaid obligations
                for a preceding period, the amount of such overpayment shall be
                credited against Tenant's subsequent installment of Base Rent,
                Additional Rent or other payments due to Landlord


                                       9
<PAGE>

                under the Lease. In the event that such results show that Tenant
                has underpaid its obligations for a preceding period, the amount
                of such underpayment shall be paid by Tenant to Landlord with
                the next succeeding installment obligation of estimated
                Operating Costs Allocable to the Premises. If the actual
                Operating Costs Allocable to the Premises for any given Year
                were improperly computed and if the actual Operating Costs
                Allocable to the Premises are overstated by more than 5%,
                Landlord shall reimburse Tenant for the cost of its audit. A
                "QUALIFIED PERSON" means an accountant or other person
                experienced in accounting for income and expenses of industrial
                projects, who is engaged solely by Tenant on terms which do not
                entail any compensation based or measured in any way upon any
                savings in Additional Rent or reduction in Operating Costs
                Allocable to the Premises achieved through the inspection
                process described in this subparagraph.
3.5      UTILITIES. Tenant shall contract directly and pay for all water,
         gas, heat, light, power, telephone, telecommunications, sewer, fire
         sprinkler charges and other utilities used on or from the Premises
         together with any taxes, penalties, surcharges or similar charges
         relating to such utilities. If any such service is not separately
         metered to the Premises, the cost therefor shall be an Operating Cost
         under this Lease. If Tenant desires to use the services of a provider
         of local telephone or telecommunication services whose equipment is not
         then servicing the Building, no such provider shall be permitted to
         install its lines or other equipment within the Building without the
         prior written consent of Landlord, which consent shall not be
         unreasonably withheld.
3.6      HOLDOVER. If Landlord agrees in writing that Tenant may hold over after
         the expiration or earlier termination of this Lease, unless the parties
         hereto otherwise agree in writing as to the terms of such holding over,
         the holdover tenancy shall be subject to termination by Landlord or
         Tenant at any time upon not less than thirty (30) days' prior written
         notice. If Tenant holds over without the consent of Landlord, the same
         shall be a tenancy at will terminable at any time, and Tenant shall be
         liable to Landlord for, and Tenant shall indemnify, protect, defend and
         hold Landlord harmless from and against, any damages, liabilities,
         losses, costs, expenses or claims suffered or caused by such holdover,
         including damages and costs related to any successor tenant of the
         Premises to whom Landlord could not deliver possession of the Premises
         when promised. If Tenant provides Landlord with at least six (6) months
         prior written notice that Tenant will hold over (the "Holdover
         Notice"), and provided that Landlord consents to such holding over,
         then during the first two (2) months of any such holdover tenancy with
         consent, Tenant shall pay to Landlord from time to time upon demand, an
         amount equal to one hundred twenty five percent (125%) of the then
         applicable Base Rent, plus all Additional Rent and other sums payable
         under this Lease, and be bound by all the terms, covenants and
         conditions specified in this Lease, as so far applicable; during any
         subsequent months of any such holdover tenancy with consent, Tenant
         shall pay to Landlord from time to time upon demand, an amount equal to
         one hundred fifty percent (150%) of the then applicable Base Rent, plus
         all Additional Rent and other sums payable under this Lease, and be
         bound by all the terms, covenants and conditions specified in this
         Lease, as so far applicable. If Tenant does not provide Landlord with
         the Holdover Notice, then during any holdover tenancy with Landlord's
         consent, Tenant shall pay to Landlord from time to time upon demand, an
         amount equal to one hundred fifty percent (150%) of the then applicable
         Base Rent, plus all Additional Rent and other sums payable under this
         Lease, and be bound by all the terms, covenants and conditions
         specified in this Lease, as so far applicable. During any holdover
         tenancy without Landlord's consent, Tenant shall pay to Landlord from
         time to time upon demand, an amount equal to two hundred percent (200%)
         of the then applicable Base Rent, plus all Additional Rent and other
         sums payable under this Lease, and be bound by all the terms, covenants
         and conditions specified in this Lease, as so far applicable.
         Notwithstanding anything to the contrary contained in this Section 3.6,
         no holding over by Tenant, whether with or without consent of Landlord,
         shall operate to extend this Lease. The preceding provisions of this
         Paragraph 3.6 shall not be construed as Landlord's consent to any
         holding over by Tenant.
3.7      LATE CHARGE. If Tenant fails to make any payment of Base Rent,
         Additional Rent or other amount within seven (7) days from when due
         under this Lease, a late charge is immediately due and payable by
         Tenant equal to five percent (5%) of the amount of any such payment.
         Landlord and Tenant agree that this charge compensates Landlord for the
         administrative costs caused by the delinquency. The parties agree that
         Landlord's damage would be difficult to compute and the


                                       10
<PAGE>


         amount stated in this paragraph represents a reasonable estimate of
         such damage. Assessment or payment of the late charge contemplated in
         this paragraph shall not excuse or cure any Event of Default or breach
         by Tenant under this Lease or impair any other right or remedy provided
         under this Lease or under law.
3.8      DEFAULT RATE. Any Base Rent, Additional Rent or other sum payable
         under this Lease which is not paid when due shall bear interest at a
         rate equal to the lesser of: (a) the published prime rate of Riggs Bank
         N.A., or such other national banking institution designated by Landlord
         if such bank ceases to publish a prime rate (the "PRIME RATE"), then in
         effect, plus four (4) percentage points, or (b) the maximum rate of
         interest per annum permitted by applicable law (the "DEFAULT RATE"),
         but the payment of such interest shall not excuse or cure any Event of
         Default or breach by Tenant under this Lease or impair any other right
         or remedy provided under this Lease or under law.

                         SECTION 4: GENERAL PROVISIONS

4.1      MAINTENANCE AND REPAIR BY LANDLORD. Subject to the paragraphs
         captioned "DAMAGE OR DESTRUCTION" and "CONDEMNATION", Landlord shall
         maintain the public and common areas of the Project in reasonably good
         order and condition, except ordinary wear and tear, and except for
         damage occasioned by the act or omission of Tenant or Tenant's Agents
         which shall be paid for entirely by Tenant upon written demand by
         Landlord. In the event any or all of the Project becomes in need of
         maintenance or repair which Landlord is required to make under this
         Lease, Tenant shall immediately give written notice to Landlord, and
         Landlord shall not be obligated in any way to commence such maintenance
         or repairs until a commercially reasonable time elapses after
         Landlord's receipt of such notice. Tenant hereby waives the benefit of
         Sections 1941 and 1942 of the California Civil Code and any other
         statute providing a right to make repairs and deduct the cost thereof
         from the rent. Tenant waives any right to terminate this Lease or
         offset or abate Base Rent or Additional Rent or any other charges due
         hereunder by reason of any failure of Landlord to make repairs to the
         Premises.
             Notwithstanding the foregoing, if Tenant provides written notice to
         Landlord of an event or circumstance which requires the action of
         Landlord with respect to repair and/or maintenance, and such repair
         and/or maintenance is of an urgent or critical nature and there is an
         imminent threat to the health and safety of Tenant's employees or of
         substantial damage to Tenant's property, and Landlord fails to provide
         such action within a reasonable period of time, given the circumstances
         (taking into account whether an emergency exists), after the receipt of
         such notice, but in any event not later than twenty (20) days after
         receipt of such notice unless such repair would normally take longer
         and Landlord has commenced said repair work within said twenty (20) day
         period, then Tenant may proceed to take the required action (provided
         that and only so long as such action is necessary for the health and
         safety of Tenant's employees or to the property of Tenant and such work
         is made in accordance with the provisions of Sections 4.4 and 4.5 of
         this Lease, other than the required consent to the alterations set
         forth therein) upon delivery of an additional ten (10) business days'
         notice to Landlord specifying that Tenant is taking such required
         action, and if such action was required under the terms of the Lease to
         be taken by Landlord and was not taken by Landlord within such ten (10)
         day period, then Tenant shall be entitled to prompt reimbursement by
         Landlord of Tenant's actual reasonable costs in taking such action. In
         no event, however, shall Tenant be permitted to take any action or
         perform any work which will affect the Building systems, the structural
         integrity of the Building, the roof of the Building or the exterior of
         the Building. Further, if Landlord does not deliver a detailed written
         objection to Tenant within thirty (30) days after receipt of an invoice
         by Tenant of its costs of taking action which Tenant claims should have
         been taken by Landlord, and if such invoice from Tenant sets forth a
         reasonably particularized breakdown of its costs and expenses in
         connection with taking such action on behalf of Landlord and is
         accompanied by lien releases from all contractors performing such
         action or work, then Tenant shall be entitled to deduct from Base Rent
         payable by Tenant under this Lease, the amount set forth in such
         invoice. If, however, Landlord, acting reasonably, delivers to Tenant
         within thirty (30) days after receipt of Tenant's invoice, a written
         objection to the payment of such invoice, then Tenant shall not be
         entitled to such deduction from rent, but as Tenant's sole and
         exclusive remedy, Tenant may resort to applicable judicial proceedings
         in order to claim actual damages.


                                       11
<PAGE>


4.2      MAINTENANCE AND REPAIR BY TENANT. Except as is expressly set forth
         as Landlord's responsibility pursuant to the paragraph captioned
         "MAINTENANCE AND REPAIR BY LANDLORD," Tenant shall at Tenant's sole
         cost and expense keep and maintain all portions of the Premises in good
         condition and repair, other than ordinary wear and tear, including
         interior painting, cleaning of the interior side of all exterior glass,
         plumbing and utility fixtures and installations, carpets and floor
         coverings, all interior wall surfaces and coverings including tile and
         paneling, replacement of all broken windows (including without
         limitation any exterior windows), exterior and interior doors, roof
         penetrations and membranes in connection with any Tenant installations
         on the roof including satellite dishes, light bulb replacement and
         interior preventative maintenance. If Tenant fails to maintain or
         repair the Premises in accordance with this paragraph, then Landlord
         may, but shall not be required to, enter the Premises upon ten (10)
         Business Days prior written notice to Tenant (or immediately without
         any notice in the case of an emergency) to perform such maintenance or
         repair at Tenant's sole cost and expense. Tenant shall pay to Landlord
         the cost of such maintenance or repair plus a twelve and one-half
         percent (12.5%) administration fee, within ten (10) Business Days of
         written demand from Landlord. Tenant shall, at its own cost and
         expense, enter into a regularly scheduled preventive
         maintenance/service contract with a maintenance contractor for
         servicing all hot water, heating and air conditioning systems and
         equipment located within or dedicated solely to the Premises. The
         maintenance contractor and the contract must be approved by Landlord,
         which approval shall not be unreasonably withheld. Landlord shall
         maintain and replace all heating and air conditioning systems not
         solely serving the Premises, and all costs associated therewith shall
         be included as part of Operating Costs, in accordance with Section 3.4
         above; provided however, that notwithstanding anything to the contrary
         contained herein, at Landlord's option, Landlord shall maintain the
         heating, ventilating and air conditioning systems and equipment
         exclusively serving the Premises, and all costs associated with such
         maintenance by Landlord shall be paid for by Tenant as Additional Rent
         upon demand by Landlord. The service contracts shall include all
         services recommended by the equipment manufacturer within the
         operation/maintenance manual and shall become effective (and a copy
         thereof delivered to Landlord) within thirty (30) days following the
         date Tenant takes possession of the Premises.
4.3      COMMON AREAS/SECURITY. The common areas of the Building and Project
         shall be subject to Landlord's sole management and control. Without
         limiting the generality of the immediately preceding sentence, Landlord
         reserves the exclusive right as it deems necessary or desirable to
         install, construct, remove, maintain and operate lighting systems,
         facilities, improvements, equipment and signs on, in or to all parts of
         the common areas; change the number, size, height, layout, or locations
         of walks, driveways and truckways or parking areas now or later forming
         a part of the Land or Building; make alterations or additions to the
         Building or common area; close temporarily all or any portion of the
         common areas to make repairs, changes or to avoid public dedication,
         provided that, except in the event of emergency, Landlord does not
         unreasonably interfere with Tenant's use of the Premises in connection
         therewith; grant easements to which the Land will be subject, replat,
         subdivide, or make other changes to the Land; place, relocate and
         operate utility lines through, over or under the Land and Building; and
         use or permit the use of all or any portion of the roofs of the
         Building, provided that, except in the event of emergency, Landlord
         does not unreasonably interfere with Tenant's use of the Premises in
         connection therewith. Landlord has no duty or obligation to provide any
         security services in, on or around the Premises, Land or Building, and
         Tenant recognizes that security services, if any, provided by Landlord
         will be for the sole benefit of Landlord and the protection of
         Landlord's property and under no circumstances shall Landlord be
         responsible for, and Tenant waives any rights with respect to, Landlord
         providing security or other protection for Tenant or Tenant's Agents or
         property in, on or about the Land or Building. Subject to Landlord's
         prior approval, Tenant may, at its sole cost and expense, install,
         establish and maintain security services within the Premises; PROVIDED
         THAT such security services, including, without limitation, any
         apparatus, facilities, equipment or people utilized in connection with
         the provision of such security services, comply with the Governmental
         Requirements and shall not cause the Building or the Project to be out
         of compliance with the Governmental Requirements. Notwithstanding the
         foregoing, any such security services installed, established or
         maintained by Tenant must not affect or impact any portion of the
         Building, Land or the Project other than the Premises and shall not in
         any way limit or interfere with Landlord's ability to exercise its
         rights as provided in the paragraph captioned "ACCESS". Tenant's rights
         under this



                                       12
<PAGE>


         subparagraph are subject to all the obligations, limitations and
         requirements as set forth in the paragraphs captioned "TENANT
         ALTERATIONS" and "TENANT'S WORK PERFORMANCE". Landlord reserves the
         right to relocate parking areas and driveways and to build additional
         improvements in the common areas so long as Tenant's Parking Rights are
         maintained and so long as, except in the event of emergency, Landlord
         does not unreasonably interfere with Tenant's use of the Premises in
         connection therewith.
4.4      TENANT ALTERATIONS. Tenant shall not make any alterations,
         additions or improvements in or to the Premises, or make changes to
         locks on doors, or add, disturb or in any way change the roof of the
         Premises, any floor covering, wall covering, fixtures, plumbing or
         wiring (individually and collectively "TENANT ALTERATIONS"), without
         first obtaining the consent of Landlord which may not be unreasonably
         withheld or delayed, except that Landlord may withhold its approval in
         its sole and absolute discretion if the Tenant Alterations will affect,
         as determined by Landlord, the structure or exterior of the Building,
         or the Building systems. Tenant shall deliver to Landlord full and
         complete plans and specifications for any proposed Tenant Alterations
         and, if consent by Landlord is given, all such work shall be performed
         at Tenant's expense by Landlord or by Tenant, at Landlord's election.
         Tenant shall pay to Landlord all costs incurred by Landlord for any
         architectural, engineering, supervisory and/or legal services in
         connection with any Tenant Alterations including, without limitation,
         Landlord's review of the plans and specifications for the Tenant
         Alterations. Without limiting the generality of the foregoing, Landlord
         may require Tenant (if Landlord has elected to require Tenant to
         perform the Tenant Alterations), at Tenant's sole cost and expense, to
         obtain and provide Landlord with proof of insurance coverage and a
         payment and performance bond, in forms, amounts and by companies
         acceptable to Landlord. Should Tenant make any Tenant Alterations
         without Landlord's prior written consent, or without satisfaction of
         any conditions established by Landlord, Landlord shall have the right,
         in addition to and without limitation of any right or remedy Landlord
         may have under this Lease, at law or in equity, to require Tenant to
         remove some or all of the Tenant Alterations at Tenant's sole cost and
         expense and restore the Premises to the same condition existing prior
         to undertaking the Tenant Alterations, or, at Landlord's election,
         Landlord may remove such Tenant Alterations and restore the Premises at
         Tenant's expense. All Tenant Alterations to the Premises, regardless of
         which party constructed them or paid for them, shall become the
         property of Landlord and shall remain upon and be surrendered with the
         Premises upon the expiration or earlier termination of this Lease;
         provided, however, at Landlord's sole election, Tenant shall be
         obligated, at its sole cost and expense, to remove all (or such portion
         as Landlord shall designate) of the Tenant Alterations and repair any
         damage resulting from such removal and return the Premises to the same
         condition existing prior to the undertaking upon the expiration or
         earlier termination of this Lease. Tenant shall have the right (which
         right specifically does not extend to the initial Tenant Improvements
         constructed in the Premises by Tenant), at the time it requests
         Landlord's consent and delivers all plans and specifications to any
         Tenant Alteration to make a written request that Landlord notify Tenant
         whether Tenant shall be obligated to remove the applicable Tenant
         Alteration at the end of the Lease Term, in which event Tenant shall
         only be obligated to remove (i) those Tenant Alterations that Landlord
         notified Tenant it must remove at the end of the Lease Term at the same
         time of and in connection with Tenant's requested approval of the
         Tenant Alterations, and (ii) those Tenant Alterations that Tenant did
         not seek or did not obtain Landlord's written consent to leave in place
         at the end of the Lease Term, and that Landlord requires Tenant to
         remove. If Tenant fails to remove any such Tenant Alterations as
         required by Landlord's consent, Landlord may do so and Tenant shall pay
         the entire cost thereof to Landlord within ten (10) Business Days after
         Tenant's receipt of Landlord's written demand therefor. Tenant shall
         reimburse Landlord, upon receipt of demand therefor, for all out of
         pocket costs and expenses incurred by Landlord during its review of
         Tenant's plans and specifications (regardless of whether Landlord
         approves Tenant's request) and Tenant's construction. Nothing contained
         in this paragraph or the paragraph captioned "TENANT'S WORK
         PERFORMANCE" shall be deemed a waiver of the provisions of the
         paragraph captioned "MECHANIC'S LIENS."
4.5      TENANT'S WORK PERFORMANCE. If Tenant is permitted to perform Tenant
         Alterations in accordance with the provisions of this Lease, Landlord
         may, in its reasonable discretion, require that Tenant provide a
         payment and performance bond (not to exceed the total costs of the
         Tenant Alterations)


                                       13
<PAGE>


         to cover the entire work to be performed, which bond must be in form,
         amount and by a company acceptable to Landlord. Any permitted Tenant
         Alterations or any other permitted work to be performed by Tenant in
         the Premises (including, without limitation, any initial improvements
         in the Premises, if Tenant is to perform any of the Tenant
         Improvements) shall be performed by contractors employed by Tenant
         under one or more construction contracts, in form and content
         reasonably approved in advance in writing by Landlord, which approval
         shall be subject to Landlord's discretion. The prime contractor and the
         respective subcontractors of any tier shall all: (a) be parties to, and
         bound by, a collective bargaining agreement with a labor organization
         affiliated with the Building and Construction Trades Council of the AFL
         CIO and (b) employ only members of such labor organizations to perform
         work within their respective jurisdictions. Landlord's prior written
         approval of Tenant's contractors and subcontractors shall be required,
         and provided that the foregoing requirements in (a) and (b) are fully
         satisfied, then such approval shall not be unreasonably withheld or
         delayed. Tenant's contractors, workers and suppliers shall work in
         harmony with and not interfere with workers or contractors of Landlord
         or other tenants of Landlord. If Tenant's contractors, workers or
         suppliers do, in the opinion of Landlord, cause such disharmony or
         interference, Landlord's consent to the continuation of such work may
         be withdrawn upon written notice to Tenant. All Tenant Alterations
         shall be (1) completed in accordance with the plans and specifications
         approved by Landlord; (2) completed in accordance with all Governmental
         Requirements; (3) carried out promptly in a good and workmanlike
         manner; (4) of all new materials; and (5) free of defect in materials
         and workmanship. Tenant shall pay for all damage to the Building,
         Project and Land caused by Tenant or Tenant's Agents. Tenant shall
         indemnify, defend and hold harmless Landlord and Landlord's Agents from
         any Claims arising as a result of the Tenant Alterations or any defect
         in design, material or workmanship of any Tenant Alterations.
4.6      SURRENDER OF POSSESSION. Tenant shall, at the expiration or earlier
         termination of this Lease, surrender and deliver the Premises to
         Landlord in as good condition as when received by Tenant from Landlord
         or as later improved, reasonable use and wear excepted, and free from
         all tenancies or occupancies by any person.
4.7      REMOVAL OF PROPERTY. Unless otherwise agreed to in writing by Landlord,
         Tenant agrees that there are and shall be no trade fixtures in the
         Premises owned by Tenant. Upon expiration or earlier termination of
         this Lease, Tenant may remove its personal property, office supplies,
         office furniture and equipment and racks and conveyors if (a) such
         items are readily moveable and are not attached to the Premises; (b)
         such removal is completed prior to the expiration or earlier
         termination of this Lease; (c) Tenant is not in default of any covenant
         or condition of this Lease at the time of such removal; and (d) Tenant
         immediately repairs all damage caused by or resulting from such
         removal. All other property in the Premises and any Tenant Alterations
         (including, wall-to-wall carpeting, paneling, wall covering or lighting
         fixtures and apparatus) or any other article affixed to the floor,
         walls, ceiling or any other part of the Premises, shall become the
         property of Landlord and shall remain upon and be surrendered with the
         Premises; provided, however, at Landlord's sole election, Tenant shall
         be obligated, at its sole cost and expense, to remove all (or such
         portion as Landlord shall designate, subject to Section 4.4 above) of
         the Tenant Alterations and all (or such portion as Landlord shall
         designate, subject to Section 2.4 above) of the Tenant Improvements
         constructed in the Premises and repair any damage resulting from such
         removal. Tenant waives all rights to any payment or compensation for
         such Tenant Alterations. If Tenant shall fail to remove any of its
         property of any nature from the Premises or Land at the expiration or
         earlier termination of this Lease or when Landlord has the right of
         re-entry, Landlord may, at its option, remove and store such property
         without liability for loss of or damage to such property, such storage
         to be for the account and at the expense of Tenant. If Tenant fails to
         pay the cost of storing any such property, Landlord may, at its option,
         after it has been stored for a period of twenty (20) Business Days or
         more, sell or permit to be sold, any or all such property at public or
         private sale (and Landlord may become a purchaser at such sale), In
         such manner and at such times and places as Landlord in its sole
         discretion may deem proper, without notice to Tenant, and Landlord
         shall apply the proceeds of such sale: FIRST, to the cost and expense
         of such sale, including reasonable attorney's fees actually incurred;
         SECOND, to the payment of the costs or charges for storing any such
         property; THIRD, to the payment of any other sums of money which may
         then be or later become due Landlord from Tenant under this Lease; and,
         FOURTH, the balance, if any, to


                                       14
<PAGE>

         Tenant.
4.8      ACCESS. Tenant shall permit Landlord and Landlord's Agents to enter
         into the Premises at any time on at least one (1) Business Day's notice
         (except in case of emergency, in which case no notice shall be
         required), for the purpose of inspecting the same or for the purpose of
         repairing, altering or improving the Premises. Nothing contained in
         this paragraph shall be deemed to impose any obligation upon Landlord
         not expressly stated elsewhere in this Lease. When reasonably
         necessary, Landlord may temporarily close Building or Land entrances,
         Building doors or other facilities, without liability to Tenant by
         reason of such closure and without such action by Landlord being
         construed as an eviction of Tenant or as relieving Tenant from the duty
         of observing or performing any of the provisions of this Lease.
         Landlord shall have the right to enter the Premises at any time during
         the Lease Term for the purpose of showing the Premises to prospective
         tenants and to erect on the Premises a suitable sign indicating the
         Premises are available. Tenant shall give written notice to Landlord at
         least twenty (20) Business Days prior to vacating the Premises and
         shall arrange to meet with Landlord for a joint inspection of the
         Premises prior to vacating. In the event of Tenant's failure to give
         such notice or arrange such joint inspection, Landlord's inspection at
         or after Tenant's vacating the Premises shall be conclusively deemed
         correct for purposes of determining Tenant's responsibility for repairs
         and restoration. Landlord shall not be liable for the consequences of
         admitting by passkey, or refusing to admit to the Premises, Tenant or
         any of Tenant's Agents, or other persons claiming the right of
         admittance.
4.9      DAMAGE OR DESTRUCTION.
         4.9.1  RESTORATION OF PREMISES. If the Premises are damaged by fire,
                earthquake or other casualty, Tenant shall give immediate
                written notice thereof to Landlord. If Landlord estimates that
                the damage can be repaired in accordance with the then
                established Governmental Requirements within two hundred ten
                (210) days after Landlord is notified by Tenant of such damage
                and if there are sufficient insurance proceeds available to
                repair such damage, then Landlord shall proceed with reasonable
                diligence to restore the Premises to substantially the condition
                which existed prior to the damage and this Lease shall not
                terminate. If, in Landlord's estimation, the damage cannot be
                repaired within such 210 day period or if there are insufficient
                insurance proceeds available to repair such damage, Landlord may
                elect in its absolute discretion to either: (a) terminate this
                Lease or (b) restore the Premises to substantially the condition
                which existed prior to the damage and this Lease will continue.
                If Landlord restores the Premises under this paragraph, then (1)
                the Lease Term shall be extended for the time required to
                complete such restoration, (2) Tenant shall pay to Landlord,
                upon demand, Tenant's Pro Rata Share of any applicable
                commercially reasonable deductible amount specified under
                Landlord's insurance and (3) Landlord shall not be required to
                repair or restore Tenant Improvements, Tenant Alterations, or
                any or all furniture, fixtures, equipment, inventory,
                improvements or other property which was in or about the
                Premises at the time of the damage and was not owned by
                Landlord. Base Rent and Additional Rent due under this Lease
                during any untenantable period hereunder shall be abated in
                proportion to the portion of the Premises rendered untenable
                during the untenantable period. Tenant agrees to look to the
                provider of Tenant's insurance for coverage for the loss of
                Tenant's use of the Premises and any other related losses or
                damages incurred by Tenant during any reconstruction period.
                Notwithstanding anything to the contrary contained in Section
                4.9.1 or 4.9.3 relating to insufficient insurance proceeds, if
                the estimated cost of repair of such casualty exceeds the amount
                of the insurance proceeds which are payable to Landlord for the
                restoration of the Premises (the "Uninsured Cost of Repair"),
                Landlord and Tenant agree as follows: (a) if the Uninsured Cost
                of Repair (including any deductible) is less than Ten Thousand
                Dollars ($10,000.00) and Landlord does not have another basis
                for terminating this Lease (e.g., the repair will take longer
                than 210 days or the casualty occurs during the final twelve
                (12) months of the Lease Term), then this Lease shall not
                terminate, and the provisions of Section 4.9.1 governing
                Landlord's restoration of the Premises shall apply (which shall
                include, without limitation, Tenant's obligation to pay Tenant's
                Pro Rata Share of the applicable deductible); and (b) if the
                Uninsured Cost of Repair (including any deductible) is more than
                Ten Thousand Dollars ($10,000.00), then Landlord may elect in
                its absolute

                                       15
<PAGE>

                discretion to terminate this Lease unless Tenant commits (and
                provides Landlord with the necessary funds) to pay for the
                Uninsured Cost of Repair greater than Ten Thousand Dollars
                ($10,000.00) plus Tenant's Pro Rata Share of the applicable
                deductible, in which event this Lease shall not terminate
                (unless Landlord elects to terminate pursuant to another basis
                to do so (e.g., the repair will take longer than 210 days or the
                casualty occurs during the final twelve (12) months of the Lease
                Term) and the provisions of Section 4.9.1 governing Landlord's
                restoration of the Premises shall apply, which shall include,
                without limitation, Tenant's obligation to pay Tenant's Pro Rata
                Share of the applicable deductible).
         4.9.2  DAMAGE IN EXCESS OF FIFTY PERCENT. If the Building is
                damaged by fire, earthquake or other casualty and more than
                fifty percent (50%) of the Building is rendered untenantable,
                without regard to whether the Premises are affected by such
                damage, Landlord may in its absolute discretion and without
                limiting any other options available to Landlord under this
                Lease or otherwise, elect to terminate this Lease by notice in
                writing to Tenant within forty (40) Business Days after the
                occurrence of such damage. Such notice shall be effective sixty
                (60) days after receipt by Tenant unless a later date is set
                forth in Landlord's notice.
         4.9.3  TERMINATION OF LEASE BY MORTGAGE HOLDER'S ELECTION.
                Notwithstanding anything contained in this Lease to the
                contrary, if there is damage to the Building and the holder of
                any indebtedness secured by a mortgage or deed of trust covering
                any such property requires that the insurance proceeds be
                applied to such indebtedness or the insurance proceeds are
                otherwise inadequate to complete the repair of the damages to
                the Building or both, then Landlord shall have the right to
                terminate this Lease by delivering written notice of termination
                to Tenant within fifteen (15) Business Days after such
                requirement is made by such holder, and the Lease shall
                terminate as of the date specified by such holder.
         4.9.4  DESTRUCTION NEAR END OF TERM. Notwithstanding the
                foregoing, if the Building or the Project are wholly or
                partially damaged or destroyed within the final twelve (12)
                months of the Term, Landlord may, at its option, elect to
                terminate this Lease upon written notice given to Tenant within
                thirty (30) days following such damage or destruction.
         4.9.5  WAIVER. Tenant waives the provisions of any statutes
                presently existing or hereafter enacted (including, without
                limitation, California Civil Code sections 1932 and 1933) which
                relate to termination of leases when the thing leased is
                destroyed and agrees that such event will be governed by the
                terms of this Lease.
         4.9.6. TERMINATION BY TENANT. Notwithstanding anything to the
                contrary set forth in this Section 4.9 above, within sixty (60)
                days after the date of any such damage or destruction, Landlord
                shall endeavor to notify Tenant of the estimated time to
                complete the repairs and restoration of the Premises and
                Project, as estimated by an independent contractor approved by
                Landlord (the "Landlord Response Notice"). Notwithstanding
                anything to the contrary set forth in the proceeding paragraph,
                if Landlord notifies Tenant that the estimated time to complete
                the repairs or restoration will exceed two hundred ten (210)
                days from the date of such damage or destruction, Tenant may
                terminate this Lease effective as of the date of such damage or
                destruction by delivering written notice thereof to Landlord
                within thirty (30) days after receipt of Landlord's Response
                Notice. If the Lease is not terminated as provided above, and
                the repairs and restoration are not completed within two hundred
                ten (210) days after the damage or destruction, Tenant may
                deliver written notice to Landlord stating that if the repairs
                and restoration are not completed within thirty (30) days
                thereafter, Tenant will terminate the Lease. If the repairs and
                restoration are not completed within thirty (30) days after
                Tenant delivers such notice to Landlord, Tenant may terminate
                the Lease effective as of the date of such damage or destruction
                by delivering written notice thereof to Landlord.
4.10     CONDEMNATION. If all of the Premises, are taken by eminent domain
         or by conveyance in lieu thereof, this Lease shall automatically
         terminate as of the date the physical taking occurs, and all Base Rent,
         Additional Rent and other sums payable under this Lease shall be paid
         to that date. In case of taking of a part of the Premises not required
         for the Tenant's reasonable use of the Premises, then this Lease shall
         continue in full force and effect and the Base Rent shall be equitably
         reduced based on the proportion by which the floor area of the Premises
         is reduced, such

                                       16
<PAGE>


         reduction in Base Rent to be effective as of the date the physical
         taking occurs. Additional Rent and all other sums payable under this
         Lease shall not be abated but Tenant's Pro Rata Share may be
         redetermined as equitable under the circumstances. Landlord reserves
         all rights to damages or awards for any taking by eminent domain
         relating to the Premises, Land and the unexpired term of this Lease.
         Tenant assigns to Landlord any right Tenant may have to such damages or
         award and Tenant shall make no claim against Landlord for damages for
         termination of its leasehold interest or interference with Tenant's
         business. Tenant shall have the right, however, to claim and recover
         from the condemning authority compensation for any loss to which Tenant
         may be entitled for Tenant's moving expenses or other relocation costs;
         PROVIDED THAT, such expenses or costs may be claimed only if they are
         awarded separately in the eminent domain proceedings and not as a part
         of the damages recoverable by Landlord. Tenant waives all rights it may
         have under California Code of Civil Procedure section 1265.130, or
         otherwise, to terminate this Lease based on a partial condemnation.
4.11     PARKING. Tenant shall have the exclusive privilege to use the
         parking spaces allocated to the Building. Tenant's parking privileges
         shall be subject to the rules and regulations relating to parking
         adopted by Landlord from time to time. Landlord shall have no
         obligation whatsoever to monitor, secure or police the use of the
         parking or other common areas.
4.12     INDEMNIFICATION. Tenant shall indemnify, defend and hold harmless
         Landlord and Landlord's Agents from and against any and all Claims,
         arising in whole or in part out of (a) the possession, use or occupancy
         of the Premises or the business conducted in the Premises, (b) any act,
         omission or negligence of Tenant or Tenant's Agents, or (c) any breach
         or default under this Lease by Tenant. Neither Landlord nor Landlord's
         Agents shall, to the extent permitted by law, have any liability to
         Tenant or to Tenant's Agents, for any Claims arising out of any cause
         whatsoever, including repair to any portion of the Premises;
         interruption in the use of the Premises or any equipment therein; any
         accident or damage resulting from any use or operation by Landlord,
         Tenant or any person or entity of heating, cooling, electrical,
         sewerage or plumbing equipment or apparatus; termination of this Lease
         by reason of damage to the Premises; fire, robbery, theft, vandalism,
         mysterious disappearance or any other casualty; actions of any other
         tenant of the Building or of any other person or entity; inability to
         furnish any service required of Landlord as specified in this Lease; or
         leakage in any part of the Premises from rain, ice or snow, or from
         drains, pipes or plumbing fixtures in the Premises; except for Claims
         arising solely out of the negligence or willful misconduct of Landlord
         in failing to repair or maintain the Building as required by this Lease
         after notice by Tenant as required by the paragraph captioned
         "MAINTENANCE AND REPAIR BY LANDLORD"; PROVIDED THAT, in no event shall
         Landlord be responsible for any interruption to Tenant's business or
         for any indirect or consequential losses suffered by Tenant or Tenant's
         Agents. The obligations of this paragraph shall be subject to the
         paragraph entitled "WAIVER OF SUBROGATION."
4.13     TENANT INSURANCE.
         4.13.1      FORM OF POLICIES. Tenant shall, throughout the Lease Term,
                at its own expense, keep and maintain in full force and effect
                the following policies, each of which shall be endorsed as
                needed to provide that the insurance afforded by these policies.
                is primary and that all insurance carried by Landlord is
                strictly excess and secondary and shall not contribute with
                Tenant's liability insurance:
                (a)A policy of commercial general liability insurance, including
                   a contractual liability endorsement covering Tenant's
                   obligations under the paragraph captioned "INDEMNIFICATION",
                   insuring against claims of bodily injury and death or
                   property damage or loss with a combined single limit at the
                   Commencement Date of this Lease of not less than One Million
                   Dollars ($1,000,000.00) per occurrence and Two Million
                   Dollars ($2,000,000.00) in the aggregate, which limit shall
                   be reasonably increased during the Lease Term at Landlord's
                   request to reflect both increases in liability exposure
                   arising from inflation as well as from changing use of the
                   Premises or changing legal liability standards, which policy
                   shall be payable on an "occurrence" rather than a "claims
                   made" basis, and which policy identifies Landlord and Manager
                   and, at Landlord's request, Landlord's mortgage lender(s) or
                   investment advisors, as additional named insureds;


                                       17
<PAGE>


                (b)A policy of extended property insurance (what is commonly
                   called "all risk") covering Tenant's Improvements and
                   Tenant's Alterations, furniture, fixtures, equipment,
                   inventory, and other personal property located on the
                   Premises for one hundred percent (100%) of the current
                   replacement value of such property;
                (c)Business interruption insurance in an amount sufficient to
                   cover costs, damages, lost income, expenses, Base Rent,
                   Additional Rent and all other sums payable under this Lease,
                   should any or all of the Premises not be usable for a period
                   of up to twelve (12) months;
                (d)A policy of worker's compensation insurance as required by
                   law and employer's liability insurance with limits of no less
                   than One Million Dollars ($1,000,000); and
                (e)A policy of comprehensive automobile liability insurance,
                   including loading and unloading, and covering owned,
                   non-owned and hired vehicles, with limits of no less than One
                   Million Dollars ($1,000,000) per occurrence.
         4.13.2      APPROVAL OF INSURER. All insurance policies required under
                this paragraph shall be with companies with a Best rating of
                AXII or better and each policy shall provide that it is not
                subject to cancellation or reduction in coverage except after
                thirty (30) days' written notice to Landlord. Tenant shall
                deliver to Landlord and, at Landlord's request Landlord's
                mortgage lender(s), prior to the Commencement Date and from time
                to time thereafter, certificates evidencing the existence and
                amounts of all such policies.
         4.13.3      LANDLORD OBTAINED INSURANCE. If Tenant fails to acquire or
                maintain any insurance or provide any certificate required by
                this paragraph, Landlord may, but shall not be required to,
                obtain such insurance or certificates and the costs associated
                with obtaining such insurance or certificates shall be payable
                by Tenant to Landlord on demand.
4.14     LANDLORD'S INSURANCE. Landlord shall, throughout the Lease Term, keep
         and maintain in full force and effect the following insurance, which
         insurance may, at Landlord's discretion, contain such deductibles as
         Landlord deems appropriate:
         (a)    A policy of commercial general liability insurance, insuring
         against claims of bodily injury and death or property damage or loss
         with a combined single limit at the Commencement Date of not less than
         Five Million Dollars ($5,000,000.00), which policy shall be payable on
         an "occurrence" rather than a "claims made" basis; and
         (b)    A policy of extended property insurance (what is commonly called
         "all risk") covering the Building and Landlord's personal property, if
         any, located on the Property in the amount of one hundred percent
         (100%) of the then current replacement value of such property.
         (c)    Landlord may, but shall not be required to, maintain other
         types of insurance as Landlord deems appropriate (with such deductibles
         as Landlord deems appropriate), including, but not limited to, property
         insurance coverage for earthquakes and floods in such amounts as
         Landlord deems appropriate. Such policies may be "blanket" policies
         which cover other properties owned by Landlord.
4.15     WAIVER OF SUBROGATION. Notwithstanding anything in this Lease to the
         contrary, Landlord and Tenant hereby each waive and release the other
         from any and all Claims or any loss or damage that may occur to the
         Land, Building or personal property located therein, by reason of fire
         or other casualty regardless of cause or origin, including the
         negligence or misconduct of Landlord, Tenant, Landlord's Agents or
         Tenant's Agents, but only to the extent of the insurance proceeds paid
         to such releasor under its policies of insurance or, if it fails to
         maintain the required policies, the insurance proceeds that would have
         been paid to such releasor if it had maintained such policies. Each
         party to this Lease shall promptly give to its insurance company
         written notice of the mutual waivers contained in this subparagraph,
         and shall cause its insurance policies to be properly endorsed, if
         necessary, to prevent the invalidation of any insurance coverages by
         reason of the mutual waivers contained in this subparagraph.
4.16     ASSIGNMENT AND SUBLETTING BY TENANT.
         4.16.1      RESTRICTIONS ON TRANSFER. Tenant shall not have the right
                to assign, transfer, mortgage or encumber this Lease in whole or
                in part, nor sublet the whole or any part of the Premises, nor
                allow the occupancy of all or any part of the Premises by
                another,



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                without first obtaining Landlord's consent, which consent may
                not be unreasonably withheld. Notwithstanding any permitted
                assignment or subletting, Tenant shall at all times remain
                directly, primarily and fully responsible and liable for the
                payment of all sums payable under this Lease and for compliance
                with all of its other obligations as tenant under this Lease.
                Upon the occurrence of an Event of Default, if the Premises or
                any part of the Premises are then subject to an assignment or
                subletting, Landlord, in addition to any other remedies provided
                in this Lease or by law, may at its option collect directly from
                such assignee or subtenant all rents becoming due to Tenant
                under such assignment or sublease and apply such rents against
                any sums due to Landlord from Tenant under this Lease, and no
                such collection shall be construed to constitute a novation or
                release of Tenant from the further performance of Tenant's
                obligations under this Lease. Tenant makes an absolute
                assignment to Landlord of such assignments and subleases and any
                rent, security deposits and other sums payable under such
                assignments and subleases as collateral to secure the
                performance of the obligations of Tenant under this Lease.
         4.16.2      LANDLORD CONSENT, PROCEDURE. In the event Tenant desires to
                assign this Lease or to sublet all or any portion of the
                Premises, Tenant shall give written notice of such desire to
                Landlord setting forth the name of the proposed subtenant or
                assignee, the proposed term, the nature of the proposed
                subtenant's or assignee's business to be conducted on the
                Premises, the rental rate, and any other particulars of the
                proposed subletting or assignment that Landlord may reasonably
                request. Without limiting the preceding sentence, Tenant shall
                also provide Landlord with: (a) such financial information as
                Landlord may request concerning the proposed subtenant or
                assignee, including recent financial statements certified as
                accurate and complete by a certified public accountant and by
                the president, managing partner or other appropriate officer of
                the proposed subtenant or assignee; (b) proof satisfactory to
                Landlord that the proposed subtenant or assignee will
                immediately occupy and thereafter use the entire Premises (or
                any sublet portion of the Premises) for the remainder of the
                Lease Term (or for the entire term of the sublease, if shorter)
                in compliance with the terms of this Lease; and (c) a copy of
                the proposed sublease or assignment or letter of intent. Tenant
                shall pay to Landlord, upon Landlord's demand therefor,
                Landlord's reasonable attorneys' fees incurred in the review of
                such documentation and in documenting Landlord's consent, plus
                an administrative fee of $1,000.00 for processing such proposed
                assignment or sublease. Receipt of such fees shall not obligate
                Landlord to approve the proposed assignment or sublease.
         4.16.3      LANDLORD CONSENT, RELEVANT FACTORS. In determining whether
                to grant or withhold consent to a proposed assignment or
                sublease, Landlord may consider, and weigh, any factor it deems
                relevant in its reasonable discretion. Without limiting what may
                be construed as a factor considered by Landlord, Tenant agrees
                that any one or more of the following will be proper grounds for
                Landlord's disapproval of a proposed assignment or sublease:
                (a) The proposed assignee or subtenant does not, in Landlord's
                good faith judgment, have financial worth or creditworthiness
                equal to or greater than that of Tenant as of the execution date
                of this Lease or sufficient financial worth to insure full and
                timely performance under this Lease;
                (b) Landlord has received insufficient evidence of the financial
                worth or creditworthiness of the proposed assignee or subtenant
                to make the determination set forth in clause (b);
                (c) The proposed assignee or subtenant has a reputation for
                disputes in contractual relations, failure to observe and
                perform its contractual obligations in a timely and complete
                manner or for negative business relations in the business
                community for or otherwise as a tenant of property or otherwise;
                (d) Landlord has received from any prior lessor of the proposed
                assignee or subtenant a negative report concerning such prior
                lessor's experience with the proposed assignee or subtenant;
                (e) Landlord has had prior negative leasing experience with the
                proposed assignee or


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<PAGE>


                subtenant;
                (f) The use of the Premises by the proposed assignee or
                subtenant will not be identical with the Permitted Uses;
                (g) In Landlord's judgment, the proposed assignee or subtenant
                is engaged in a business, or the Premises or any part of the
                Premises will be used in a manner, that is not in keeping with
                the then standards of the Building, or that is not compatible
                with the businesses of other tenants in the Building, or that is
                inappropriate for the Project, or that will violate any negative
                covenant as to use contained in any other lease of space in the
                Project;
                (h) The use of the Premises by the proposed assignee or
                subtenant will violate any Governmental Requirement or create a
                violation of Access Laws;
                (i) Tenant is in default of any obligation of Tenant under this
                Lease, or Tenant has defaulted under this Lease on three (3) or
                more occasions during the twenty-four (24) months preceding the
                date that Tenant shall request such consent;
                (j) Landlord does not reasonably approve of any of the tenant
                improvements required for the proposed assignee or subtenant; or
                (k) Landlord has had negotiations with the proposed assignee or
                subtenant, in the six (6) months preceding Tenant's request,
                regarding the leasing of space by such proposed assignee or
                subtenant in the Project.
         4.16.4      NOTICE REGARDING LANDLORD'S CONSENT. Within fifteen (15)
                Business Days after Landlord's receipt of all required
                information to be supplied by Tenant pursuant to this paragraph,
                Landlord shall notify Tenant of Landlord's approval, disapproval
                or conditional approval of any proposed assignment or subletting
                or of Landlord's election to require recapture as described
                below. Landlord shall have no obligation to respond unless and
                until all required information has been submitted. In the event
                Landlord approves of any proposed assignment or subletting,
                Tenant and the proposed assignee or sublessee shall execute and
                deliver to Landlord an assignment (or subletting) and assumption
                agreement in form and content satisfactory to Landlord in its
                sole discretion.
         4.16.5      RESTRICTION OF TRANSFER OF INTERESTS IN TENANT. Any
                transfer, assignment or hypothecation of any of the stock or
                interest in, or the assets of, Tenant which is either: (a)
                greater than fifty percent (50%) of such stock, interest or
                assets, or (b) intended as a subterfuge denying Landlord the
                benefits of this paragraph, shall be deemed to be an assignment
                within the meaning and provisions of this paragraph and shall be
                subject to the provisions of this paragraph.
         4.16.6      EXCESS RENT. If Landlord consents to any assignment or
                sublease and Tenant receives rent or any other consideration,
                either initially or over the term of the assignment or sublease,
                in excess of the Base Rent and Additional Rent (or, in the case
                of a sublease of a portion of the Premises, in excess of the
                Base Rent paid by Tenant on a square footage basis under this
                Lease), Tenant shall pay to Landlord fifty percent (50%) of such
                excess.
         4.16.7      RECAPTURE. Landlord shall have the right to recapture the
                Premises or the applicable portion thereof (a "RECAPTURE") by
                giving written notice of such Recapture to Tenant within fifteen
                (15) Business Days after receipt of Tenant's written request for
                Landlord's consent to such proposed assignment or subletting;
                provided however, that Landlord shall not have such recapture
                right in the case of a sublease, not intended as a subterfuge,
                for less than fifty percent (50%) of the Premises (and
                when combined with other subleases in effect is for less than
                50% of the Premises) when the term of such sublease
                unconditionally expires with at least one (1) year remaining in
                the initial Lease Term. Tenant shall have no right to retract
                its request for Landlord's consent to assign or sublease once
                such request has been made. Such Recapture shall terminate this
                Lease as to the applicable space effective on the prospective
                effective date of assignment or subletting, which shall be the
                last day of a calendar month and shall not be earlier than
                forty-five (45) Business Days after receipt of Tenant's request
                hereunder. If less than the entire Premises are recaptured,
                Landlord and Tenant agree that this Lease shall remain in full
                force and effect with respect to that remaining area not
                recaptured by Landlord. Tenant agrees to



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<PAGE>


                surrender that portion of the Premises recaptured by Landlord in
                accordance with the terms and conditions of this Lease.
4.17     ASSIGNMENT BY LANDLORD. Landlord shall have the right to transfer and
         assign, in whole or in part, its rights and obligations under this
         Lease and in any and all of the Land or Building. If Landlord sells or
         transfers any or all of the Building, Landlord and Landlord's Agents
         shall, upon consummation of such sale or transfer, be released
         automatically from any liability relating to obligations or covenants
         under this Lease to be performed or observed after the date of such
         transfer, and in such event, Tenant agrees to look solely to Landlord's
         successor-in-interest with respect to such liability; PROVIDED THAT, as
         to the Security Deposit and Prepaid Rent, Landlord shall not be
         released from liability therefor unless Landlord has delivered (by
         direct transfer or credit against the purchase price) the Security
         Deposit or Prepaid Rent to its successor-in-interest.
4.18     ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS. Tenant shall, from time
         to time, upon the written request of Landlord, execute, acknowledge and
         deliver to Landlord or its designee a written statement stating: (a)
         the date this Lease was executed and the date it expires; (b) the date
         Tenant entered into occupancy of the Premises; (c) the amount of
         monthly Base Rent and Additional Rent and the date to which such Base
         Rent and Additional Rent have been paid; and (d) certifying that (1)
         this Lease is in full force and effect and has not been assigned,
         modified, supplemented or amended in any way (or specifying the date of
         the agreement so affecting this Lease); (2) Landlord is not in breach
         of this Lease (or, if so, a description of each such breach) and that
         no event, omission or condition has occurred which would result, with
         the giving of notice or the passage of time or both, in a breach of
         this Lease by Landlord; (3) this Lease represents the entire agreement
         between the parties with respect to the Premises; (4) all required
         contributions by Landlord to Tenant on account of Tenant Improvements
         have been received; (5) on the date of execution, there exist no
         defenses or offsets which the Tenant has against the enforcement of
         this Lease by the Landlord; (6) no Base Rent, Additional Rent or other
         sums payable under this Lease have been paid in advance except for Base
         Rent and Additional Rent for the then current month or any prepaid rent
         as specified on the Estoppel Certificate; (7) no security has been
         deposited with Landlord (or, if so, the amount of such security); (8)
         it is intended that any Tenant's statement may be relied upon by a
         prospective purchaser or mortgagee of Landlord's interest or an
         assignee of any such mortgagee; and (9) such other information as may
         be reasonably requested by Landlord. If Tenant fails to respond within
         five (5) Business Days of its receipt of a written request by Landlord
         as provided in this paragraph, such shall be a breach of this Lease and
         Tenant shall be deemed to have admitted the accuracy of any information
         supplied by Landlord to a prospective purchaser, mortgagee or assignee.
         In addition, Tenant shall, from time to time, upon the written request
         of Landlord, deliver to or cause to be delivered to Landlord or its
         designee then current financial statements (including a statement of
         operations and balance sheet) certified as accurate by a certified
         public accountant and prepared in conformance with generally accepted
         accounting principles for (i) Tenant, (ii) any entity which owns a
         controlling interest in Tenant, (iii) any entity the controlling
         interest of which is owned by Tenant, (iv) any successor entity to
         Tenant by merger or operation of law, and (v) any guarantor of this
         Lease.
4.19     MODIFICATION FOR LENDER. If, in connection with obtaining
         construction, interim or permanent financing for the Building or Land,
         Landlord's lender, if any, shall request reasonable modifications to
         this Lease as a condition to such financing, Tenant will not
         unreasonably withhold or delay its consent to such modifications;
         PROVIDED THAT, such modifications do not increase the obligations of
         Tenant under this Lease or materially adversely affect Tenant's rights
         under this Lease.
4.20     HAZARDOUS SUBSTANCES.
         4.20.1      Tenant agrees that neither Tenant, any of Tenant's
                Agents nor any other person will store, place, generate,
                manufacture, refine, handle, or locate on, in, under or around
                the Land or Building any Hazardous Substance, except for
                storage, handling and use of reasonable quantities and types of
                cleaning fluids and office supplies in the Premises in the
                ordinary course and the prudent conduct of Tenant's business in
                the Premises, PROVIDED THAT, (a) the storage, handling and use
                of such permitted Hazardous Substances must at all times conform
                to all Governmental Requirements and to applicable fire, safety
                and insurance requirements; (b) the types and quantities of
                permitted Hazardous Sub-stances which are stored in the Premises
                must be reason-able and appropriate to the nature and



                                       21
<PAGE>


                size of Tenant's operation in the Premises and reasonable and
                appropriate for a first-class building of the same or similar
                use and in the same market area as the Building; (c) no
                Hazardous Substance shall be spilled or disposed of on, in,
                under or around the Land or Building or otherwise discharged
                from the Premises or any area adjacent to the Land or Building;
                and (d) in no event will Tenant be permitted to store, handle or
                use on, in, under or around the Premises any Hazardous Substance
                which will increase the rate of fire or extended coverage
                insurance on the Land or Building, unless: (1) such Hazardous
                Substance and the expected rate increase have been specifically
                disclosed in writing to Landlord; (2) Tenant has agreed in
                writing to pay any rate increase related to each such Hazardous
                Substance; and (3) Landlord has approved in writing each such
                Hazardous Substance, which approval shall be subject to
                Landlord's discretion.
         4.20.2      Tenant shall indemnify, defend and hold harmless Landlord
                and Landlord's Agents from and against any and all Claims
                arising out of any breach of any provision of this paragraph,
                which expenses shall also include laboratory testing fees,
                personal injury claims, clean-up costs and environmental
                consultants' fees. Tenant agrees that Landlord may be
                irreparably harmed by Tenant's breach of this paragraph and that
                a specific performance action may appropriately be brought by
                Landlord; PROVIDED THAT, Landlord's election to bring or not
                bring any such specific performance action shall in no way
                limit, waive, impair or hinder Landlord's other remedies against
                Tenant.
         4.20.3      As of the execution date of this Lease, Tenant represents
                and warrants to Landlord that, except as otherwise disclosed by
                Tenant to Landlord, Tenant has no intent to bring any Hazardous
                Substances on, in or under the Premises except for the type and
                quantities authorized in the first paragraph of the paragraph
                captioned "HAZARDOUS SUBSTANCES."
4.21     ACCESS LAWS.
         4.21.1      NOTICE TO LANDLORD OF VIOLATION. Tenant agrees to notify
                Landlord immediately if Tenant receives notification or
                otherwise becomes aware of: (a) any condition or situation on,
                in, under or around the Land or Building which may constitute a
                violation of any Access Laws or (b) any threatened or actual
                lien, action or notice that the Land or Building is not in
                compliance with any Access Laws. If Tenant is responsible for
                such condition, situation, lien, action or notice under this
                paragraph, Tenant's notice to Landlord shall include a statement
                as to the actions Tenant proposes to take in response to such
                condition, situation, lien, action or notice
         4.21.2      PROHIBITED ACTS. Tenant shall not alter or permit any
                assignee or subtenant or any other person to alter the Premises
                in any manner which would violate any Access Laws or increase
                Landlord's responsibilities for compliance with Access Laws,
                without the prior approval of the Landlord. In connection with
                any such approval, Landlord may require a certificate of
                compliance with Access Laws from an architect, engineer or other
                person acceptable to Landlord. Tenant agrees to pay the
                reasonable fees incurred by such architect, engineer or other
                third party in connection with the issuance of such certificate
                of compliance. Landlord's consent to any proposed Tenant
                Alteration shall (a) not relieve Tenant of its obligations or
                indemnities contained in this paragraph or this Lease or (b) be
                construed as a warranty that such proposed alternation complies
                with any Access Law.
         4.21.3      TENANT RESPONSIBILITY. Tenant shall be solely responsible
                for all costs and expenses relating to or incurred in connection
                with: (a) failure of the Premises to comply with the Access
                Laws, subject to the second paragraph of 4.21.4; and (b)
                bringing the Building and the common areas of the Building into
                compliance with Access Laws, if and to the extent such
                noncompliance arises out of or relates to: (1) Tenant's use of
                the Premises, including the hiring of employees; (2) any Tenant
                Alterations to the Premises; or (3) any Tenant Improvements
                constructed in the Premises at the request of Tenant, regardless
                of whether such improvements are constructed prior to or after
                the Commencement Date.
         4.21.4      LANDLORD RESPONSIBILITY. Landlord shall be responsible
                for all costs and expenses relating to or incurred in connection
                with bringing the common areas of the



                                       22
<PAGE>


                Building into compliance with Access Laws, unless such costs and
                expenses are Tenant's responsibility as provided in the
                preceding subparagraph. Any cost or expense paid or incurred by
                Landlord to bring the Premises or common areas of the Building
                into compliance with Access Laws which is not Tenant's
                responsibility under the preceding subparagraphs shall be
                amortized over the useful economic life of the improvements
                (not to exceed ten (10) years) using an amortization rate of
                twelve percent (12%) per annum, and shall be an Operating Cost
                for purposes of this Lease.
                     Landlord shall also be responsible for causing the Premises
                to be in compliance with the Americans With Disabilities Act of
                1990 (the "ADA") as of the date of this Lease. All costs
                incurred in order to cause the Premises to comply with such laws
                are hereinafter referred to as "Compliance Costs".
                Notwithstanding the foregoing, Tenant shall be responsible for
                all Compliance Costs resulting from or triggered by (i) Tenant's
                particular use of the Premises, or (ii) any alterations,
                improvements, repairs or additions made with respect to the
                Premises by or for Tenant, or (iii) the Tenant Improvements, or
                (iv) acts or omissions of Tenant or Tenant's Agents.
         4.21.5      INDEMNITY OF LANDLORD. Tenant agrees to indemnify, defend
                and hold harmless Landlord and Landlord's Agents from and
                against any and all Claims arising out of or relating to any
                failure of Tenant or Tenant's Agents to comply with Tenant's
                obligations under this paragraph.
         4.21.6      INCONSISTENT PROVISIONS OF LAW. The provisions of this
                paragraph shall supersede any other provisions in this Lease
                regarding Access Laws, to the extent inconsistent with the
                provisions of any other paragraphs.
4.22     QUIET ENJOYMENT. Landlord covenants that Tenant, upon paying Base Rent,
         Additional Rent and all other sums payable under this Lease and
         performing all covenants and conditions required of Tenant under this
         Lease shall and may peacefully have, hold and enjoy the Premises
         without hindrance or molestation by Landlord, subject to the terms of
         this Lease, any ground lease, mortgage or deed of trust and all matters
         of record now or hereafter encumbering the Premises or the Project.
4.23     SIGNS. Subject to compliance with all Governmental Requirements and all
         matters of record, Tenant shall have the right to install, at Tenant's
         sole cost and expense, Project standard signage on the exterior of the
         Building. The exact size, appearance and location of such signs shall
         be subject to Landlord's prior written approval and shall be consistent
         with Landlord's existing sign criteria then in existence for the
         Building. Any and all costs in connection with the permitting,
         fabrication, installation, maintenance and removal of Tenant's sign
         (including the cost of removal of the sign and repair to the Building
         caused by such removal) shall be borne by Tenant. Tenant agrees to
         maintain any such sign, awning, canopy, decoration, lettering,
         advertising matter or other thing as may be approved, in good condition
         at all times. Tenant shall not inscribe an inscription, or post, place,
         or in any manner display any sign, notice, picture, placard or poster,
         or any advertising matter whatsoever, anywhere in or about the Land or
         Building at places visible (either directly or indirectly as an outline
         or shadow on a glass pane) from anywhere outside the Premises without
         first obtaining Landlord's consent. Upon vacation of the Premises on
         the expiration or earlier termination of this Lease, Tenant shall be
         responsible, at its sole cost, for the removal of such sign or signs
         and the repair, painting and/or replacement of the structure to which
         the sign or signs were attached, including discoloration caused by such
         installation or removal. If Tenant fails to perform such work, Landlord
         may cause the same to be performed, and the cost thereof shall be
         Additional Rent immediately due and payable upon rendition of a bill
         therefor.
4.24     SUBORDINATION. Provided Tenant is given written assurance in the
         applicable lender's standard subordination, non-disturbance and
         attornment form, Tenant subordinates this Lease and all rights of
         Tenant under this Lease to any mortgage, deed of trust, ground lease or
         vendor's lien, or similar instrument which may from time to time be
         placed upon the Premises (and all renewals, modifications, replacements
         and extensions of such encumbrances), and each such mortgage, deed of
         trust, ground lease or lien or other instrument shall be superior to
         and prior to this Lease. At the request of Landlord, the holder of such
         mortgage or deed of trust or any ground Lessor, Tenant shall execute,
         acknowledge and deliver promptly in recordable form any instrument or
         subordination agreement that Landlord or such holder may request;
         provided, however, such



                                       23
<PAGE>


         instrument shall include a nondisturbance provision on the standard
         form of the applicable lender or ground lessor. Notwithstanding the
         foregoing, the holder or beneficiary of such mortgage, deed of trust,
         ground lease, vendor's lien or similar instrument shall have the right
         to subordinate or cause to be subordinated any such mortgage, deed of
         trust, ground lease, vendor's lien or similar instrument to this Lease.
         Tenant further covenants and agrees that if the lender or ground lessor
         acquires the Premises as a purchaser at any foreclosure sale or
         otherwise, Tenant shall recognize and attorn to such party as landlord
         under this Lease, and shall make all payments required hereunder to
         such new landlord without deduction or set-off and, upon the request of
         such purchaser or other successor, execute, deliver and acknowledge
         documents confirming such attornment. Tenant waives the provisions of
         any law or regulation, now or hereafter in effect, which may give or
         purport to give Tenant any right to terminate or otherwise adversely
         affect this Lease or the obligations of Tenant hereunder in the event
         that any such foreclosure or termination or other proceeding is
         prosecuted or completed.
4.25     WORKERS COMPENSATION IMMUNITY. If and to the extent that Tenant is
         obligated to indemnify, defend or hold harmless Landlord or Landlord's
         Agents from any Claims arising from its use of the Premises or any act
         or failure to act by Tenant or Tenant's Agents or otherwise, Tenant
         expressly waives, to and in favor of Landlord and Landlord's Agents,
         its statutory workers compensation act employers immunity relative to
         any injury to an employee or employees of Tenant.
4.26     BROKERS. Each party to this Lease shall indemnify, defend and hold
         harmless the other party from and against any and all Claims asserted
         against such other party by any real estate broker, finder or
         intermediary relating to any act of the indemnifying party in
         connection with this Lease.
4.27     EXCULPATION AND LIMITATION OF LIABILITY. Landlord has executed this
         Lease by its trustee signing solely in a representative capacity.
         Notwithstanding anything contained in this Lease to the contrary,
         Tenant confirms that the covenants of Landlord are made and intended,
         not as personal covenants of the trustee, or for the purpose of binding
         the trustee personally, but solely in the exercise of the
         representative powers conferred upon the trustee by its principal.
         Liability with respect to the entry and performance of this Lease by or
         on behalf of Landlord, however it may arise, shall be asserted and
         enforced only against Landlord's estate and equity interest in the
         Building. Neither Landlord nor any of Landlord's Agents shall have any
         personal liability in the event of any claim against Landlord arising
         out of or in connection with this Lease, the relationship of Landlord
         and Tenant or Tenant's use of the Premises. Further, in no event
         whatsoever shall any Landlord's Agent have any liability or
         responsibility whatsoever arising out of or in connection with this
         Lease, the relationship of Landlord and Tenant or Tenant's use of the
         Premises. Any and all personal liability, if any, beyond that which may
         be asserted under this paragraph, is expressly waived and released by
         Tenant and by all persons claiming by, through or under Tenant.
4.28     INTENTIONALLY OMITTED.
4.29     MECHANIC'S LIENS AND TENANT'S PERSONAL PROPERTY TAXES.
         4.29.1      MECHANIC'S LIENS. Tenant shall have no authority, express
                or implied, to create or place any lien or encumbrance of any
                kind or nature whatsoever upon, or in any manner to bind, the
                interest of Landlord or Tenant in the Premises or to charge the
                rentals payable under this Lease for any Claims in favor of any
                person dealing with Tenant, including those who may furnish
                materials or perform labor for any construction or repairs.
                Tenant shall pay or cause to be paid all sums legally due and
                payable by it on account of any labor performed or materials
                furnished in connection with any work performed on the Premises
                on which any lien is or can be validly and legally asserted
                against its leasehold Interest in the Premises and Tenant shall
                indemnify, defend and hold harmless Landlord from any and all
                Claims arising out of any such asserted Claims. Tenant agrees to
                give Landlord immediate written notice of any such Claim. Tenant
                shall notify Landlord in writing at least ten (10) Business Days
                in advance of any work to be done on, in, or about the Premises.
                In the event of such scheduled work, whether Landlord received
                notice from Tenant or not, Landlord shall have the right, at any
                time and from time to time, to enter the Premises to post
                notices of non-responsibility in such locations as Landlord
                deems appropriate. Notwithstanding anything in this Lease to the
                contrary, Landlord shall not be required to notify Tenant in
                advance of entering the Premises for the purpose of posting the
                notices of non-responsibility.


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<PAGE>


         4.29.2      PERSONAL PROPERTY TAXES. Tenant shall be liable for all
                taxes levied or assessed against personal property, furniture or
                fixtures placed by Tenant in the Premises. If any such taxes for
                which Tenant is liable are levied or assessed against Landlord
                or Landlord's property and Landlord elects to pay them or if the
                assessed value of Landlord's property is increased by inclusion
                of such personal property, furniture or fixtures and Landlord
                elects to pay the taxes based on such increase, Tenant shall
                reimburse Landlord for the sums so paid by Landlord, upon demand
                by Landlord.
4.30     LANDLORD'S SECURITY INTEREST. In addition to any statutory lien for
         rent in Landlord's favor, Landlord shall have and Tenant hereby grants
         to Landlord a continuing security interest for all Base Rent,
         Additional Rent and other sums becoming due under this Lease from
         Tenant, upon all goods, wares, equipment, fixtures, furniture,
         inventory, accounts, intangibles, chattel paper and other personal
         property of Tenant situated in the Premises, and such property shall
         not be removed therefrom without the consent of Landlord until all
         arrearages in Base Rent, Additional Rent and other sums due under this
         Lease shall first have been paid and discharged. On the occurrence of
         an Event of Default, Landlord shall have, in addition to any other
         remedies provided herein or by law, all rights and remedies under the
         Uniform Commercial Code, including, the right to sell the property
         described in this paragraph at public or private sale upon five (5)
         Business Days notice to Tenant. Tenant hereby agrees to execute such
         financing statements and other instruments necessary or desirable in
         Landlord's discretion to perfect the security interest hereby created
         and shall deliver such financing statement to Landlord for filing with
         the appropriate Secretary of State. Any statutory lien for rent is not
         waived, and the express contractual lien granted in this paragraph
         constitutes a security agreement and is in addition and supplementary
         to such statutory lien.

                        SECTION 5: DEFAULT AND REMEDIES

5.1      EVENTS OF DEFAULT.
         5.1.1  Events of Default. The occurrence of any one or more of the
                following events shall constitute a material default and breach
                of this Lease by Tenant ("Event of Default"):
                (a) vacation or abandonment of all or any portion of the
                Premises;
                (b) failure by Tenant to make any payment of Base Rent,
                Additional Rent or any other sum payable by Tenant under this
                Lease within five (5) Business Days after written notice from
                Landlord that the same is due;
                (c) failure by Tenant to observe or perform any covenant or
                condition of this Lease, other than the making of payments,
                where such failure shall continue for a period of twenty (20)
                Business Days after written notice from Landlord;
                (d) (1) the making by Tenant of any general assignment or
                general arrangement for the benefit of creditors; (2) the
                filing by or against Tenant of a petition in bankruptcy,
                including reorganization or arrangement, unless, in the case of
                a petition filed against Tenant, unless the same is dismissed
                within twenty (20) Business Days; (3) the appointment of a
                trustee or receiver to take possession of substantially all of
                Tenant's assets located in the Premises or of Tenant's interest
                in this Lease; (4) any execution, levy, attachment or other
                process of law against Tenant's interest in this Lease, unless
                the same is dismissed within twenty (20) Business Days; (5)
                adjudication that Tenant is bankrupt; (6) the making by Tenant
                of a transfer in fraud of creditors; or (7) the failure of
                Tenant to generally pay its debts as they become due;
                (e) any information furnished by or on behalf of Tenant to
                Landlord in connection with the entry of this Lease is
                determined to have been materially false, misleading or
                incomplete when made;
                (f) any assignment, subletting or other transfer for which the
                prior consent of Landlord is required under this Lease and has
                not been obtained; or
                (g) Tenant's failure to observe or perform according to the
                provisions of Sections 4.18 or 4.24 within two (2) days after
                written notice from Landlord that Tenant has failed to observe
                or perform according to the same.




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<PAGE>


         5.1.2  NOTICE OF DEFAULT. When this Lease requires service of a
                notice, that notice shall replace rather than supplement any
                equivalent or similar statutory notice, including any notices
                required by Code of Civil Procedure section 1161 or any similar
                or successor statute. When a statute requires service of a
                notice in a particular manner, service of that notice (or a
                similar notice required by this Lease) in the manner required by
                paragraph 6.1 shall replace and satisfy the statutory
                service-of-notice procedures, including those required by Code
                of Civil Procedure section 1162 or any similar or successor
                statute.
         5.1.3  NOTICE TO LANDLORD REGARDING TENANT DEFAULT. Tenant shall
                notify Landlord promptly of any Event of Default or any facts,
                conditions or events which, with the giving of notice or passage
                of time or both, would constitute an Event of Default.
         5.1.4  TREATMENT AS UNEXPIRED LEASE. If a petition in bankruptcy
                is filed by or against Tenant, and if this Lease is treated as
                an "unexpired lease" under applicable bankruptcy law in such
                proceeding, then Tenant agrees that Tenant shall not attempt nor
                cause any trustee to attempt to extend the applicable time
                period within which this Lease must be assumed or rejected.
5.2      REMEDIES. If any Event of Default occurs, Landlord may at any time
         after such occurrence, with or without notice or demand except as
         stated in this paragraph, and without limiting Landlord in the exercise
         of any right or remedy at law which Landlord may have by reason of such
         Event of Default, exercise the rights and remedies, either singularly
         or in combination, as are specified or described in the subparagraphs
         of this paragraph. Landlord's duty to mitigate damages shall be as set
         forth in applicable California law, and shall not be expanded in any
         manner by any provision of this Lease.
         5.2.1  REMEDIES: TERMINATION AND RECOVERY OF POSSESSION. Landlord
                may terminate this Lease and recover possession of the Premises,
                in which case Tenant shall immediately surrender possession of
                the Premises to Landlord and, in addition to any other rights
                and remedies Landlord may have at law and in equity, Landlord
                shall have the following rights:
                (a) To re-enter the Premises then or at any time thereafter and
                remove all persons and property and possess the Premises,
                without prejudice to any other remedies Landlord may have by
                reason of Tenant's default or of such termination, and Tenant
                shall have no further claim hereunder.
                (b) To recover all damages incurred by Landlord by reason of the
                default, including without limitation (i) the worth at the
                time of the award of the payments, including interest, owed by
                Tenant to Landlord under this Lease that were earned or accrued
                but unpaid at the time of termination; (ii) the worth at the
                time of the award of the amount by which the payments owed by
                Tenant to Landlord under the Lease that would have been earned
                or accrued after the date of termination until the time of the
                award exceeds the amount of the loss of payments owed by Tenant
                to Landlord under this Lease for the same period that Tenant
                affirmatively proves could have been reasonably avoided; (iii)
                the worth at the time of the award of the amount by which the
                payments owed by Tenant to Landlord for the balance of the Term
                after the time of the award exceeds the amount of the loss of
                payments owed by Tenant for the same period that Tenant proves
                could have been reasonably avoided; (iv) all costs incurred by
                Landlord in retaking possession of the Premises and restoring
                them to good order and condition; (v) all costs, including
                without limitation brokerage commissions, advertising costs and
                restoration and remodeling costs, incurred by Landlord in
                reletting the Premises; plus (vi) any other amount, including
                without limitation attorneys' fees and audit expenses, necessary
                to compensate Landlord for all detriment proximately caused by
                Tenant's failure to perform its obligations under this Lease or
                which in the ordinary course of things would be likely to result
                therefrom. "The worth at the time of the award," as used in
                clauses (i) and (ii) of this paragraph, is to be determined by
                computing interest as to each unpaid payment owed by Tenant to
                Landlord under the Lease, at the highest interest rate permitted
                by law. "The worth at the time of the award," as referred to in
                clause (iii) of this paragraph, is to be determined by
                discounting such amount, as of the time of award, by the
                discount rate of the Federal Reserve Bank at the time of the
                award plus one percent (1%).


                                       26
<PAGE>


                (c) To remove, at Tenant's sole risk, any and all personal
                property in the Premises and place such in a public or private
                warehouse or elsewhere at the sole cost and expense and in the
                name of Tenant. Any such warehouser shall have all of the rights
                and remedies provided by law against Tenant as owner of such
                property. If Tenant shall not pay the cost of such storage
                within thirty (30) days following Landlord's demand, Landlord
                may, subject to the provisions of applicable law, sell any or
                all such property at a public or private sale in such manner and
                at such times and places as Landlord deems proper, without
                notice to or demand upon Tenant. Tenant waives all claims for
                damages caused by Landlord's removal, storage or sale of the
                property and shall indemnify and hold Landlord free and harmless
                from and against any and all loss, cost and damage, including
                without limitation court costs and attorneys' fees. Tenant
                hereby irrevocably appoints Landlord as Tenant's
                attorney-in-fact, coupled with an interest, with all rights and
                powers necessary to effectuate the provisions of this
                subparagraph 5.2.
         5.2.2  REMEDIES: RECOVER RENT AS IT BECOMES DUE. Landlord may
                elect, in its absolute discretion, to maintain Tenant's right to
                possession, in which case this Lease shall continue in effect
                whether or not Tenant shall have abandoned the Premises. In such
                event, Landlord may enforce all of Landlord's rights and
                remedies under this Lease, including the right to recover rent
                as it becomes due hereunder, and, at Landlord's election, to
                re-enter and relet the Premises on such terms and conditions as
                Landlord deems appropriate. Without limiting the generality of
                the foregoing, Landlord shall have the remedy described in
                California Civil Code Section 1951.4 (lessor may continue lease
                in effect after lessee's breach and abandonment and recover rent
                as it becomes due, if lessee has right to sublet or assign,
                subject only to reasonable limitations). Landlord may execute
                any lease made pursuant hereto in its own name, and Tenant shall
                have no right to collect any such rent or other proceeds.
                Landlord's re-entry and/or reletting of the Premises, or any
                other acts, shall not be deemed an acceptance of surrender of
                the Premises or Tenant's interest therein, a termination of this
                Lease or a waiver or release of Tenant's obligations hereunder.
                Landlord shall have the same rights with respect to Tenant's
                improvements and personal property as under Section 5.2.1 above,
                even though such re-entry and/or reletling do not constitute
                acceptance of surrender of the Premises or termination of this
                Lease.
         5.2.3  SUCCESSION TO TENANT RIGHTS. Whether or not Landlord
                elects to terminate this Lease on account of any default by
                Tenant, Landlord may:
                (a)       Terminate any sublease, license, concession, or other
                consensual arrangement for possession entered into by Tenant and
                affecting the Premises.
                (b)       Choose to succeed to Tenant's interest in such an
                arrangement. If Landlord elects to succeed to Tenant's interest
                in such an arrangement, Tenant shall, as of the date of notice
                by Landlord of that election, have no further right to or
                interest in, the rent or other consideration receivable under
                that arrangement.
         5.2.4  RIGHTS AND REMEDIES CUMULATIVE. None of the foregoing
                remedial actions, singly or in combination, shall be construed
                as an election by Landlord to terminate this Lease unless
                Landlord has in fact given Tenant written notice that this Lease
                is terminated; an act by Landlord to maintain or preserve the
                Premises; any efforts by Landlord to relet the Premises; any
                repairs or alterations made by Landlord to the Premises;
                re-entry, repossession or reletting of the Premises by Landlord
                pursuant to this paragraph; or the appointment of a receiver,
                upon the initiative of Landlord, to protect Landlord's interest
                under this Lease. If Landlord takes any of the foregoing
                remedial action without terminating this Lease, Landlord may
                nevertheless at any time after taking any such remedial action
                terminate this Lease by written notice to Tenant.
         5.2.5  MONEY DAMAGES UPON RELETTING. If Landlord relets the
                Premises, Landlord shall apply the revenue from such reletting
                as follows: FIRST, to the payment of any indebtedness other than
                Base Rent, Additional Rent or any other sums payable under this
                Lease by Tenant to Landlord; SECOND, to the payment of any cost
                of reletting (including finders' fees and leasing commissions);
                THIRD, to the payment of the cost of any alterations,
                improvements,



                                       27
<PAGE>


                maintenance and repairs to the Premises; and FOURTH, to the
                payment of Base Rent, Additional Rent and other sums due and
                payable and unpaid under this Lease. Landlord shall hold and
                apply the residue, if any, to payment of future Base Rent,
                Additional Rent and other sums payable under this Lease as the
                same become due, and shall deliver the eventual balance, if any,
                to Tenant. Should revenue from letting during any month, after
                application pursuant to the foregoing provisions, be less than
                the sum of the Base Rent, Additional Rent and other sums payable
                under this Lease and Landlord's expenditures for the Premises
                during such month. Tenant shall be obligated to pay such
                deficiency to Landlord as and when such deficiency arises.
         5.2.6  REMEDIES NONEXCLUSIVE. Pursuit of any of the foregoing
                remedies shall not preclude Landlord's pursuit of any of the
                other remedies provided in this Lease or by law (all such
                remedies being cumulative), nor shall pursuit by Landlord of any
                remedy provided in this Lease constitute a forfeiture or waiver
                of any Base Rent, Additional Rent or other sum payable under
                this Lease or of any damages accruing to Landlord by reason of
                the violation of any of the covenants or conditions contained in
                this Lease.
5.3      RIGHT TO PERFORM. If Tenant shall fail to pay any sum of money, other
         than Base Rent or Additional Rent, required to be paid by it under this
         Lease or shall fail to perform any other act on its part to be
         performed under this Lease, and such failure shall continue for ten
         (10) Business Days after notice of such failure by Landlord, or such
         shorter time if reasonable under the circumstances, Landlord may, but
         shall not be obligated to, and without waiving or releasing Tenant from
         any obligations of Tenant, make such payment or perform such other act
         on Tenant's part to be made or performed as provided in this Lease.
         Landlord shall have (in addition to any other right or remedy of
         Landlord) the same rights and remedies in the event of the nonpayment
         of sums due under this paragraph as in the case of default by Tenant in
         the payment of Base Rent.
5.4      LANDLORD'S DEFAULT. Landlord shall not be in default under this Lease
         unless Landlord fails to perform obligations required of Landlord
         within twenty (20) Business Days after written notice is delivered by
         Tenant to Landlord and to the holder of any mortgages or deeds of trust
         (collectively, "LENDER") covering the Premises whose name and address
         shall have theretofore been furnished to Tenant in writing, specifying
         the obligation which Landlord has failed to perform; provided, however,
         that if the nature of Landlord's obligation is such that more than
         twenty (20) Business Days are required for performance, then Landlord
         shall not be in default if Landlord or Lender commences performance
         within such twenty (20) Business Day period and thereafter diligently
         prosecutes the same to completion. All obligations of Landlord
         hereunder shall be construed as covenants, not conditions. In the event
         of any default, breach or violation of Tenant's rights under this Lease
         by Landlord, Tenant's exclusive remedies shall be an action for
         specific performance or an action for actual damages. Tenant hereby
         waives the benefit of any laws granting it the right to perform
         Landlord's obligation, a lien upon the property of Landlord and/or upon
         rent due Landlord, or the right to terminate this Lease or withhold
         rent or any other amounts due hereunder on account of any Landlord
         default.
5.5      ACCEPTANCE OF RENT WITHOUT WAIVING RIGHTS. Under the paragraph
         captioned "NO WAIVER OF REMEDIES", Landlord may accept Tenant's
         payments without waiving any rights under this Lease, including rights
         under a previously served notice of default. If Landlord accepts
         partial payments which cumulatively are less than the sum owed after
         serving a notice of default, Landlord may nevertheless commence and
         pursue an action to enforce rights and remedies under the previously
         serviced notice of default without giving Tenant any further notice or
         demand.

                      SECTION 6: MISCELLANEOUS PROVISIONS

6.1      NOTICES. Any notice, approval, consent, request or written
         communication required or permitted to be delivered under this Lease
         shall be: (a) in writing; (b) transmitted by personal delivery, express
         or courier service, United States Postal Service in the manner
         described below; and (c) deemed to be delivered on the earlier of the
         date received or four (4) Business Days after having been deposited in
         the United States Postal Service, postage prepaid. Such writings shall
         be addressed to Landlord or Tenant, as the case may be, at the
         respective designated addresses set forth




                                       28
<PAGE>


         opposite their signatures, or at such other address(es) as they may,
         after the execution date of this Lease, specify by written notice
         delivered in accordance with this paragraph, with copies to the persons
         at the addresses, if any, designated opposite each party's signature.
         Those notices which contain a notice of breach or default or a demand
         for performance may be sent by any of the methods described in clause
         (b) above, but if transmitted by personal delivery or electronic means,
         shall also be sent concurrently by certified or registered mail, return
         receipt requested.
6.2      ATTORNEY'S FEES AND EXPENSES. In the event either party requires the
         services of an attorney in connection with enforcing the terms of this
         Lease, or in the event suit is brought for the recovery of Base Rent,
         Additional Rent or any other sums payable under this Lease or for the
         breach of any covenant or condition of this Lease, or for the
         restitution of the Premises to Landlord or the eviction of Tenant
         during the Lease Term or after the expiration or earlier termination of
         this Lease, the prevailing party shall be entitled to a reasonable sum
         for attorney's and paralegal's fees incurred at the trial or appellate
         levels and for all costs and expenses associated with such levels. The
         prevailing party shall be determined under Civil Code section
         1717(b)(1) or any successor statute.
6.3      NO ACCORD AND SATISFACTION. No payment by Tenant or receipt by Landlord
         of an amount less than the Base Rent or Additional Rent or any other
         sum due and payable under this Lease shall be deemed to be other than a
         payment on account of the Base Rent, Additional Rent or other such sum,
         nor shall any endorsement or statement on any check or any letter
         accompanying any check or payment be deemed an accord and satisfaction,
         nor preclude Landlord's right to recover the balance of any amount
         payable or Landlord's right to pursue any other remedy provided in this
         Lease or at law.
6.4      SUCCESSORS: JOINT AND SEVERAL LIABILITY. Except as provided in the
         paragraph captioned "EXCULPATION AND LIMITATION OF LIABILITY" and
         subject to the paragraph captioned "ASSIGNMENT AND SUBLETTING BY
         LANDLORD," all of the covenants and conditions contained in this
         Lease shall apply to and be binding upon Landlord and Tenant and their
         respective heirs, executors, administrators, successors and
         assigns. In the event that more than one person, partnership, company,
         corporation or other entity is included in the term "Tenant," then each
         such person, partnership, company, corporation or other entity shall
         be jointly and severally liable for all obligations of Tenant under
         this Lease.
6.5      CHOICE OF LAW. This Lease shall be construed and governed by the laws
         of the state of California. Tenant consents to Landlord's venue in
         Orange County, California for any legal proceeding brought by Landlord
         or Tenant to enforce the terms of this Lease.
6.6      NO WAIVER OF REMEDIES. The waiver by Landlord or Tenant of any covenant
         or condition contained in this Lease shall not be deemed to be a waiver
         of any subsequent breach of such covenant or condition nor shall any
         custom or practice which may develop between the parties in the
         administration of this Lease be construed to waive or lessen the rights
         of Landlord or Tenant to insist on the strict performance by the other
         party of all of the covenants and conditions of this Lease. No act or
         thing done by Landlord or Landlord's Agents during the Lease Term shall
         be deemed an acceptance or a surrender of the Premises, and no
         agreement to accept a surrender of the Premises shall be valid unless
         made in writing and signed by Landlord. The mention in this Lease of
         any particular remedy shall not preclude Landlord from any other remedy
         it might have, either under this Lease or at law, nor shall the waiver
         of or redress for any violation of any covenant or condition in this
         Lease or in any of the rules or regulations attached to this Lease or
         later adopted by Landlord, prevent a subsequent act, which would have
         originally constituted a violation, from having all the force and
         effect of an original violation. The receipt by Landlord of Base Rent,
         Additional Rent or any other sum payable under this Lease with
         knowledge of a breach of any covenant or condition in this Lease shall
         not be deemed a waiver of such breach. The failure of Landlord to
         enforce any of the rules and regulations attached to this Lease or
         later adopted, against Tenant or any other tenant in the Project, shall
         not be deemed a waiver. Any waiver by Landlord or Tenant, as the case
         may be, must be in writing and signed by Landlord or Tenant, as the
         case may be, to be effective.
6.7      OFFER TO LEASE. The submission of this Lease to Tenant or its broker or
         other agent does not constitute an offer to Tenant to lease the
         Premises. This Lease shall have no force or effect until: (a) it is
         executed and delivered by Tenant to Landlord; and (b) it is executed
         and delivered by Landlord to Tenant.


                                       29
<PAGE>


6.8      FORCE MAJEURE. Except for monetary obligations (including, without
         limitation, Tenant's obligations to pay Base Rent, Additional Rent and
         all other charges due under this Lease), in the event that Landlord or
         Tenant shall be delayed, hindered in or prevented from the performance
         of any act or obligation required under this Lease by reason of acts of
         God, strikes, lockouts, labor troubles or disputes, inability to
         procure or shortage of materials or labor, failure of power or
         utilities, delay in transportation, fire, vandalism, accident, flood,
         severe weather, other casualty, Governmental Requirements, riot,
         insurrection, civil commotion, sabotage, explosion, war, natural or
         local emergency, acts or omissions of others, including the other party
         hereto, or other reasons of a similar or dissimilar nature not solely
         the fault of, or under the exclusive control of, Landlord or Tenant, as
         applicable, then performance of such act shall be excused for the
         period of the delay and the period for the performance of any such act
         shall be extended for the period equivalent to the period of such
         delay.
6.9      LANDLORD'S CONSENT. Unless otherwise provided in this Lease, whenever
         Landlord's consent, approval or other action is required under the
         terms of this Lease, such consent, approval or action shall be subject
         to Landlord's judgment or discretion exercised in good faith and shall
         be delivered in writing.
6.10     SEVERABILITY: CAPTIONS. If any clause or provision of this Lease is
         determined to be illegal, invalid, or unenforceable under present or
         future laws, the remainder of this Lease shall not be affected by such
         determination, and in lieu of each clause or provision that is
         determined to be illegal, invalid or unenforceable, there be added as a
         part of this Lease a clause or provision as similar in terms to such
         illegal, invalid or unenforceable clause or provision as may be
         possible and be legal, valid and enforceable. Headings or captions in
         this Lease are added as a matter of convenience only and in no way
         define, limit or otherwise affect the construction or interpretation of
         this Lease.
6.11     INTERPRETATION. Whenever a provision of this Lease uses the term (a)
         "include" or "including", that term shall not be limiting but shall be
         construed as illustrative, (b) "covenant," that term shall include any
         covenant, agreement, term or provision, and (c) "at law," that term
         shall mean at law or in equity, or both. This Lease shall be given a
         fair and reasonable interpretation of the words contained in it without
         any weight being given to whether a provision was drafted by one party
         or its counsel.
6.12     INCORPORATION OF PRIOR AGREEMENTS: AMENDMENTS. This Lease contains all
         of the agreements of the parties to this Lease 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 provision of this Lease may be amended or added to except
         by an agreement in writing signed by the parties to this Lease or their
         respective successors in interest.
6.13     AUTHORITY. If Tenant is a partnership, company, corporation or other
         entity, each individual executing this Lease on behalf of Tenant
         represents and warrants to Landlord that he or she is duly authorized
         to so execute and deliver this Lease and that all partnership, company,
         corporation or other entity actions and consents required for execution
         of this Lease have been given, granted or obtained. If Tenant is a
         partnership, company, corporation or other business organization, it
         shall, within ten (10) Business Days after demand by Landlord, deliver
         to Landlord satisfactory evidence of the due authorization of this
         Lease and the authority of the person executing this Lease on its
         behalf.
6.14     TIME OF ESSENCE. Time is of the essence with respect to the
         performance of every covenant and condition of this Lease.
6.15     SURVIVAL OF OBLIGATIONS. Notwithstanding anything contained in this
         Lease to the contrary or the expiration or earlier termination of this
         Lease, any and all obligations of either party accruing prior to the
         expiration or termination of this Lease shall survive the expiration or
         earlier termination of this Lease, and either party shall promptly
         perform all such obligations whether or not this Lease has expired or
         terminated. Such obligations shall include any and all indemnity
         obligations set forth in this Lease.
6.16     CONSENT TO SERVICE. Tenant irrevocably consents to the service of
         process of any action or proceeding at the address of the Premises.
         Nothing in this paragraph shall affect the right to serve process in
         any other manner permitted by law.
6.17     LANDLORD'S AUTHORIZED AGENTS. Notwithstanding anything contained in the
         Lease to the contrary,


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<PAGE>


         including without limitation, the definition of Landlord's Agents, only
         officers of Riggs Bank N.A., are authorized to amend, renew or
         terminate this Lease, or to compromise any of Landlord's claims under
         this Lease or to bind Landlord in any manner. Without limiting the
         effect of the previous sentence, no property manager or broker shall be
         considered an authorized agent of Landlord to amend, renew or terminate
         this Lease or to compromise any of Landlord's claims under this Lease
         or to bind Landlord in any manner.
6.18     EDISON LICENSE. Notwithstanding anything to the contrary set forth in
         this Lease, Tenant acknowledges that pursuant to that certain license
         agreement affecting the Project (the Edison License") entered into by
         and between Southern California Edison Company ("Edision") and
         Landlord's affiliate, South of Edison, LLC (a preliminary draft of
         which Tenant acknowledges as having been received by Tenant), certain
         payments will be made by Landlord to Edison in consideration of the
         Project owner's right to build along Edison's right of way at the
         Project. Tenant hereby agrees to comply with the terms and conditions
         of the Edison License to the extent they apply to areas covered by the
         terms of this Lease. Tenant further agrees that, notwithstanding
         anything to the contrary contained in this Lease, all payments and
         other charges under the Edison License shall be included as part of
         Operating Costs for the Building.

                  [Remainder of Page Intentionally Left Blank]


                                       31
<PAGE>


6.19     WAIVER OF JURY TRIAL. LANDLORD AND TENANT BY PLACING THEIR INITIALS AT
         THE END OF THIS PARAGRAPH HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE
         RIGHTS TO TRIAL BY JURY OF ANY CONTRACT OR TORT CLAIM, COUNTERCLAIM,
         CROSS-COMPLAINT, OR CAUSE OF ACTION IN ANY ACTION, PROCEEDING,
         COUNTERCLAIM, OR HEARING BROUGHT BY EITHER PARTY AGAINST THE OTHER ON
         ANY MATTER ARISING OUT OF OR RELATING IN ANY WAY TO THIS LEASE, THE
         RELATIONSHIP OF LANDLORD AND TENANT, OR TENANT'S USE OR OCCUPANCY OF
         THE PREMISES, INCLUDING ANY CLAIM OF INJURY OR DAMAGE OR THE
         ENFORCEMENT OF ANY REMEDY UNDER ANY CURRENT OR FUTURE LAW, STATUTE,
         REGULATION, CODE OR ORDINANCE.

         [Landlord's Initials]:            [Tenant's Initials]: /s/ JEK
                                ----------                      ----------

         IN WITNESS WHEREOF, this Lease has been executed the day and year first
         above set forth.

<TABLE>
<S>                                              <C>
DESIGNATED ADDRESS FOR LANDLORD                  LANDLORD

Haven Gateway LLC                                HAVEN GATEWAY LLC, a Delaware limited liability
c/o Riggs & Company,                             company
a Division of Riggs Bank, N.A.
808 17th Street N.W.                             By: Riggs & Company, a division of Riggs Bank
Washington D.C. 20006                                N.A., as Trustee of the Multi-Employer
Attn: Senior Asset Manager                           Property Trust, Its Sole Member
Voice: 202-835-4997
Facsimile: 202-835-6887
                                                     By:
                                                         -----------------------
                                                     Name:
                                                           ---------------------
                                                     Its:
                                                          ----------------------
WITH COPY TO MANAGER:

Investment Development Services, Inc.
Attn: Property Management
888 West Sixth Street, 9th Floor
Los Angeles, California 90017
Voice: 213-362-9300
Facsimile: 213-627-9937

DESIGNATED ADDRESS FOR TENANT:                   TENANT:

The Premises.                                    OAKLEY, INC., a Washington corporation


                                                 By:   /s/ Jon E. Krause
                                                     ----------------------------------
                                                 Name: JON E. KRAUSE
                                                       --------------------------------
                                                 Its:  VICE PRESIDENT OF OPERATIONS
                                                      ---------------------------------

                                                 By:   /s/ Thomas George
                                                     ----------------------------------
                                                 Name: THOMAS A. GEORGE
                                                       --------------------------------
                                                 Its:  CFO
                                                      ---------------------------------
</TABLE>


                                       32
<PAGE>


                            LANDLORD ACKNOWLEDGMENT


                          )
DISTRICT OF COLUMBIA      )ss.
                          )



         On this _______ day of _________________, 200___, before me personally
appeared __________________________, to me known to be a
_____________________________ of Riggs & Company, a division of Riggs Bank N.A.,
the Trustee of the Multi-Employer Property Trust, the national banking
association that executed the within and foregoing instrument, and acknowledged
said instrument to be the free and voluntary act and deed of said national
banking association as trustee, for the uses and purposes therein mentioned, and
on oath stated that ____________ was authorized to execute said instrument.


         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year first above written.


                          ------------------------------------------------------
                          Name:
                               -------------------------------------------------
                          NOTARY PUBLIC in and for the District of Columbia,
                          residing at                        . My appointment
                                      -----------------------
                          expires:                           .
                                  ---------------------------



                                       33
<PAGE>


                [COMPLETE APPROPRIATE ACKNOWLEDGMENT FOR TENANT]

                       TENANT ACKNOWLEDGMENT (INDIVIDUAL)


__________________________  )
                            )ss.
__________________________  )


         On this _____ day of __________,200___, before me, a Notary Public in
and for the _____________________ of ______________________, personally appeared
_______________________, to me known to be the individual(s) described in and
who executed the within and foregoing instrument, and acknowledged that
s/he/they signed the same as his/her/their free and voluntary act and deed, for
the uses and purposes therein mentioned.

         WITNESS my hand and official seal hereto affixed the day and year first
as above written.

                          ------------------------------------------------------
                          Name:
                               -------------------------------------------------
                          NOTARY PUBLIC in and for the District of Columbia,
                          residing at                        . My appointment
                                      -----------------------
                          expires:                           .
                                  ---------------------------

[NOTARIAL SEAL]


                                       34
<PAGE>


                      TENANT ACKNOWLEDGMENT (PARTNERSHIP)


__________________________  )
                            )ss.
__________________________  )


         On this _____ day of __________ 200___, before me, a Notary Public in
and for the _____________________ of __________________, personally appeared
_______________________________, the ___________________________________of
________________________________________, a ___________________________________
partnership, the partnership that executed the within and foregoing instrument,
and acknowledged said instrument to be the free and voluntary act and deed of
said partnership for the uses and purposes therein mentioned, and on oath stated
that s/he/they was/were authorized to execute said instrument.

         WITNESS my hand and official seal hereto affixed the day and year first
as above written.

                          ------------------------------------------------------
                          Name:
                               -------------------------------------------------
                          NOTARY PUBLIC in and for the District of Columbia,
                          residing at                        . My appointment
                                      -----------------------
                          expires:                           .
                                  ---------------------------

[NOTARIAL SEAL]



                                       36
<PAGE>


CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT

State of California       )
County of     Orange      )ss.
          ----------------)

On November 10, 2000 before me, /s/ Gina Carrillo, Notary Public              ,
   -----------------            -----------------------------------------------
                                Name and Title of Officer (e.g.,"Jane Doe,
                                              Notary Public")

personally appeared  /s/ Jon Krause and Tom George                             ,
                     ----------------------------------------------------------
                                             Name(s) of Signer(s)


                     /X/  personally known to me
                     / /  proved to me on the basis of satisfactory evidence

                     to be the person(s) whose name(s) is/are subscribed to the
                     within instrument and acknowledged to me that he/she/they
[NOTARIAL SEAL]      executed the same in his/her/their authorized
                     capacity(ies), and that by his/her/their signature(s) on
                     the instrument the person(s), or the entity upon behalf of
                     which the person(s) acted, executed the instrument.

                     WITNESS my hand and official seal.

                     /s/ Gina Carrillo
                     -----------------------------------------------------------
                                Signature of Notary Public
Place Notary Seal Above

------------------------------------OPTIONAL------------------------------------

THOUGH THE INFORMATION BELOW IS NOT REQUIRED BY LAW, IT MAY PROVE VALUABLE TO
PERSONS RELYING ON THE DOCUMENT AND COULD PREVENT FRAUDULENT REMOVAL AND
REATTACHMENT OF THIS FORM TO ANOTHER DOCUMENT.

DESCRIPTION OF ATTACHED DOCUMENT
Title or Type of Document:
                          ------------------------------------------------------

Document Date:                                    Number of Pages:
              ----------------------------------                   -------------

Signer(s) Other Than Named Above:
                                 -----------------------------------------------

CAPACITY(IES) CLAIMED BY SIGNER
Signer's Name:
              ------------------------------------     RIGHT THUMBPRINT
/ / Individual                                         OF SIGNER
/ / Corporate Officer - Title(s):_________________     Top of thumb here
/ / Partner - / / Limited / / General
/ / Attorney in Fact
/ / Trustee
/ / Guardian or Conservator
/ / Other:
          ----------------------------------------

Signer Is Representing:
                       ---------------------------------------------------------




<PAGE>


                      TENANT ACKNOWLEDGMENT (CORPORATION)


__________________________  )
                            )ss.
__________________________  )


         On this _____ day of ___________,200___, before me, a Notary Public in
and for the _____________________________________, personally appeared
_______________________, the ________________________________________ of
____________________________________________, the ______________________________
corporation that executed the within and foregoing instrument, and acknowledged
said instrument to be the free and voluntary act and deed of said corporation
for the uses and purposes therein mentioned, and on oath stated that s/he/they
was/were authorized to execute said instrument.

         WITNESS my hand and official seal hereto affixed the day and year first
as above written.

                          ------------------------------------------------------
                          Name:
                               -------------------------------------------------
                          NOTARY PUBLIC in and for the State of California,
                          residing at                        . My appointment
                                      -----------------------
                          expires:                           .
                                  ---------------------------

[NOTARIAL SEAL]



                                       36
<PAGE>


                               EXHIBIT A to Lease

                           LEGAL DESCRIPTION OF LAND




                                     Ex. A
                                       1


<PAGE>



                                  EXHIBIT "B"


                                   [GRAPHIC]

                                   SITE PLAN

                                   BUILDING 7
                          HAVEN GATEWAY BUSINESS PARK
                             in ONTARIO, CALIFORNIA
                         -------------------------------
                         INVESTMENT DEVELOPMENT SERVICES

<PAGE>



                               EXHIBIT C to Lease

                     WORK LETTER AND CONSTRUCTION AGREEMENT


         This Work Letter and Construction Agreement ("Work Letter") shall set
forth the terms and conditions relating to the construction of the Premises.
This Work Letter is essentially organized chronologically and addresses the
issues of the construction of the PrEmises, in sequence, as such issues will
arise during the actual construction of the Premises. All references in this
Work Letter to Articles or Sections of "this Lease" shall mean the relevant
portions of the Lease to which this Work Letter is attached as EXHIBIT C, and
all references in this Work Letter to Sections of "this Work Letter" shall mean
the relevant portions of this Work Letter. All general contractors and all
subcontractors in connection with the Tenant Improvements shall satisfy those
union labor requirements set forth in the Lease in the paragraph captioned
"TENANT'S WORK PERFORMANCE"; provided however, that with respect to the
installation in the Premises of Tenant's racking and conveyors, if union labor
is not available to perform the installation of such trade fixtures, Tenant may
utilize the services of any other qualified sub-contractors which normally and
regularly perform similar work in similar industrial buildings and who are
reasonably approved by Landlord in writing in accordance with Section 4.1.2
below. The Tenant Improvement Allowance and Excess Allowance may only be used
for items of general construction to be permanently affixed to the Premises, but
not personal property or trade fixtures.

                                   SECTION 1

                   DELIVERY OF THE PREMISES AND BASE BUILDING

         Upon the full execution and delivery of this Lease by Landlord and
Tenant, Landlord shall deliver the Premises and "Base Building", as that term is
defined below, to Tenant, and Tenant shall accept the Premises and Base Building
from Landlord in their presently existing "as-is" condition. The "Base Building"
shall consist of those portions of the Premises which were in existence prior to
the construction of tenant improvements in the Premises.

                                   SECTION 2

                              TENANT IMPROVEMENTS

         2.1    TENANT IMPROVEMENT ALLOWANCE. (a) Tenant shall be entitled to a
one-time tenant improvement allowance ("Tenant Improvement Allowance") in the
amount of Two Hundred Seven Thousand Nine Hundred and 00/100 Dollars
($207,900.00), for the cost relating to the initial design and the actual cost
of constructing the Tenant's improvements, which are permanently affixed to the
Premises ("Tenant Improvements"). Except as set forth below, in no event shall
Landlord be obligated to make disbursements pursuant to this Tenant Work Letter
in a total amount which exceeds the Tenant Improvement Allowance.

         (b)    If the cost of the Tenant Improvements is budgeted to exceed the
Tenant Improvement Allowance, Tenant may request in writing, within thirty (30)
days after the date of the Lease, that Landlord pay up to an additional Two
Hundred Seven Thousand Nine Hundred arid 00/100 Dollars ($207,900.00) (the
"Excess Allowance") to be utilized solely for the construction of the Tenant
Improvements. Tenant shall repay the Excess Allowance to Landlord as follows:
concurrently with its payments to Landlord of monthly Base Rent, Tenant shall
pay the amounts necessary to fully amortize the Excess Allowance over the
initial Lease Term, together with interest at the rate of eleven percent (11%)
per annum, with such amortized payments being due and payable by Tenant monthly
(together with Base Rent) commencing on the Commencement Date and continuing
through the expiration of the initial Lease Term. If the Lease is canceled or
terminated for any reason prior to the expiration of the full initial term, then
the unamortized Excess Allowance shall become immediately due and payable to
Landlord. If Tenant timely requests the Excess Allowance, then the Excess
Allowance shall be deemed part of the Tenant Improvement Allowance


                                     EX. C
                                       1


<PAGE>


for purposes of this Work Letter Agreement. Upon Landlord's demand, Tenant shall
execute an amendment to the Lease, on Landlord's form, to reflect the additional
rent.

         2.2    DISBURSEMENT OF THE TENANT IMPROVEMENT ALLOWANCE

                2.2.1     TENANT IMPROVEMENT ALLOWANCE ITEMS. Except as
otherwise set forth in this Tenant Work Letter, the Tenant Improvement Allowance
shall be disbursed by Landlord only for the following items and costs
(collectively the "Tenant Improvement Allowance Items"):

                2.2.1.1   Notwithstanding anything to the contrary set forth
herein, costs for the payment of the fees of the "Architect" and the
"Engineers," as those terms are defined in SECTION 3.1 of this Tenant Work
Letter, shall not exceed an aggregate amount equal to $3.50 for each usable
square foot of space in the Premises;

                2.2.1.2   The payment of plan check, permit and license fees
relating to construction of the Tenant Improvements;

                2.2.1.3   The cost of construction of the Tenant Improvements,
including, without limitation, testing and inspection costs and trash removal
costs, and contractors' fees and general conditions;

                2.2.1.4   The cost of any changes in the Base Building when such
changes are required by the Construction Drawings (including if such changes are
due to the fact that such work is prepared on an unoccupied basis), such cost to
include all direct architectural and/or engineering fees and expenses incurred
in connection therewith;

                2.2.1.5   The cost of any changes to the Construction Drawings
or Tenant Improvements required by Code;

                2.2.1.6   Sales and use taxes and Title 24 fees; and

                2.2.1.7   Payment to Landlord of a construction supervisor fee
equal to three percent (3%) of the construction costs of the Tenant Improvements
covered by the Tenant Improvement Allowance.

                2.2.1.8   All other costs to be expended by Tenant and
reasonably approved Landlord in connection with the construction of the Tenant
Improvements.

         2.2.2  DISBURSEMENT OF TENANT IMPROVEMENT ALLOWANCE. During the
construction of the Tenant Improvements, Landlord shall make monthly
disbursements of the Tenant Improvement Allowance for Tenant Improvement
Allowance Items for the benefit of Tenant and shall authorize the release of
monies for the benefit of Tenant as follows:

                2.2.2.1   MONTHLY DISBURSEMENTS. On or before the twenty-fifth
(25th) day of each calendar month, during the construction of the Tenant
Improvements, Tenant shall deliver to Landlord: (i) a request for payment of the
"Contractor," as that term is defined in SECTION 4.1 of this Tenant Work Letter,
approved by Tenant, in a form to be provided by Landlord, showing the schedule,
by trade, of percentage of completion of the Tenant Improvements in the
Premises, detailing the portion of the work completed and the portion not
completed; (ii) invoices from all of "Tenant's Agents," as that term is defined
in SECTION 4.1.2 of this Tenant Work Letter, for labor rendered and materials
delivered to the Premises; (iii) executed mechanic's lien releases from all of
Tenant's Agents which shall comply with the appropriate provisions, as
reasonably determined by Landlord, of California Civil Code Section 3262(d); and
(iv) all other information reasonably requested by Landlord. Tenant's request
for payment shall be deemed Tenant's acceptance and approval of the work
furnished and/or the materials supplied as set forth in Tenant's payment
request. On or before the last day of the following month, Landlord shall
deliver a check to Tenant made jointly

                                     Ex. C
                                       2


<PAGE>

payable to Contractor and Tenant in payment of the lesser of: (A) the amounts
so requested by Tenant, as set forth in this SECTION 2.2.2.1, above, less a
ten percent (10%) retention (the aggregate amount of such retentions to be
known as the "Final Retention"), and (B) the balance of any remaining
available portion of the Tenant Improvement Allowance (not including the
Final Retention), provided that Landlord does not dispute any request for
payment based on a non-compliance of any work with the "Approved Working
Drawings," as that term is defined in SECTION 3.4 below, or due to any
substandard work. Landlord's payment of such amounts shall not be deemed
Landlord's approval or acceptance of the work furnished or materials supplied
as set forth in Tenant's payment request.

                2.2.2.2   FINAL RETENTION. Subject to the provisions of this
Tenant Work Letter, a check for the Final Retention payable jointly to Tenant
and Contractor shall be delivered by Landlord to Tenant following the completion
of construction of the Premises, provided that (i) Tenant delivers to Landlord a
waiver and release in accordance with the terms of California Civil Code Section
3262(d)(2) and a waiver and release in accordance with either California Civil
Code Section 3262(d)(3) or Section 3262(d)(4), (ii) Landlord has determined that
no substandard work exists which adversely affects the mechanical, electrical,
plumbing, heating, ventilating and air conditioning, life-safety or other
systems of the Project, the curtain wall of the Project, the structure or
exterior appearance of the Project, or any other tenant's use of such other
tenant's leased premises in the Project and (iii) Architect delivers to
Landlord a certificate, in a form reasonably acceptable to Landlord, certifying
that the construction of the Tenant Improvements in the Premises has been
substantially completed.

                2.2.2.3   OTHER TERMS. Landlord shall only be obligated to make
disbursements from the Tenant Improvement Allowance to the extent costs are
incurred by Tenant for Tenant Improvement Allowance items. All Tenant
Improvement Allowance Items for which the Tenant Improvement Allowance has been
made available shall be deemed Landlord's property under the terms of this
Lease.

                                   SECTION 3

                             CONSTRUCTION DRAWINGS

         3.1    SELECTION OF ARCHITECT/CONSTRUCTION DRAWINGS. Tenant shall
retain an architect approved by Landlord (the "Architect") to prepare the
Construction Drawings. Tenant shall retain the engineering consultants
reasonably approved by Landlord (the "Engineers") to prepare all plans and
engineering working drawings relating to the structural, mechanical, electrical,
plumbing, HVAC, life-safety, and sprinkler work in the Premises, which work is
not part of the Bass Building. The plans and drawings to be prepared by
Architect and the Engineers hereunder shall be known collectively as the
"Construction Drawings". All Construction Drawings shall comply with the drawing
format and specifications acceptable to Landlord. Tenant and Architect shall
verify, in the field, the dimensions and conditions as shown on the relevant
portions of the base building plans, and Tenant and Architect shall be solely
responsible for the same, and Landlord shall have no responsibility in
connection therewith. Landlord's review of the Construction Drawings as set
forth In this SECTION 3, shall be for its sole purpose and shall not imply
Landlord's review of the same, or obligate Landlord to review the same, for
quality, design, Code compliance or other like matters. Accordingly,
notwithstanding that any Construction Drawings are reviewed by Landlord or its
space planner, architect, engineers and consultants, and notwithstanding any
advice or assistance which may be rendered to Tenant by Landlord or Landlord's
space planner, architect, engineers, and consultants, Landlord shall have no
liability whatsoever in connection therewith and shall not be responsible for
any omissions or errors contained in the Construction Drawings, and Tenant's
waiver and indemnity set forth in this Lease shall specifically apply to the
Construction Drawings.

         3.2    APPROVED WORKING DRAWINGS. Landlord shall approve (or
disapprove) working drawings prepared by Architect within five (5) days after
Landlord receives the final Working Drawings (the "Approved Working Drawings").
Tenant shall submit the same to the City of Ontario and diligently pursue its
receipt of all applicable building permits. Tenant hereby agrees that neither
Landlord nor Landlord's consultants shall be responsible for obtaining any
building permit or certificate of occupancy for the Premises and that


                                     EX. C
                                       3


<PAGE>


obtaining the same shall be Tenant's responsibility; provided, however, that
Landlord shall cooperate with Tenant in executing permit applications and
performing other ministerial acts reasonably necessary to enable Tenant to
obtain any such permit or certificate of occupancy. No changes, modifications or
alterations in the Approved Working Drawings may be made without the prior
written consent of Landlord, which consent may not be unreasonably withheld.

                                   SECTION 4

                    CONSTRUCTION OF THE TENANT IMPROVEMENTS

         4.1    TENANT'S SELECTION OF CONTRACTORS.

                4.1.1     THE CONTRACTOR. A general contractor shall be retained
by Tenant to construct the Tenant Improvements and Tenant shall contract
directly with such "Contractor". Landlord may file a Notice of
Non-Responsibility regarding payments under Tenant's contract with the
Contractor. Such general contractor ("Contractor") shall be selected by Tenant
from a list of general contractors supplied by Tenant and reasonably approved by
Landlord.

                4.1.2     TENANT'S AGENTS. All subcontractors, laborers,
materialmen, and suppliers used by Tenant (such subcontractors, laborers,
materialmen, and suppliers, and the Contractor to be known collectively as
"Tenant's Agents") must be approved in writing by Landlord, which approval shall
not be unreasonably withheld or delayed. If Landlord does not approve any of
Tenant's proposed subcontractors, laborers, materialmen or suppliers, Tenant
shall submit other proposed subcontractors, laborers, materialmen or suppliers
for Landlord's written approval.

        4.2     CONSTRUCTION OF TENANT IMPROVEMENTS BY TENANT'S AGENCY.

                4.2.1     CONSTRUCTION CONTRACTS COST BUDGET. Prior to Tenant's
execution of the construction contract and general conditions with Contractor
(the "Contract"), Tenant shall submit the Contract to Landlord for its approval
with regard to proper insurance and licensing requirements and any other areas
which may adversely affect Landlord's interest in the Project, and which
approval shall not be unreasonably withheld or delayed by more than five (5)
business days after Landlord's receipt of the Contract. Prior to the
commencement of the construction of the Tenant Improvements, and after Tenant
has accepted all bids for the Tenant Improvements, Tenant shall provide Landlord
with a detailed breakdown, by trade, of the final costs to be incurred or which
have been incurred in connection with the design and construction of the Tenant
Improvements to be performed by or at the direction of Tenant or the Contractor,
which costs form a basis for the amount of the Contract (the "Final Costs").
Prior to the commencement of construction of the Tenant Improvements, Tenant
shall supply Landlord with cash in an amount (the "Over-Allowanced Amount")
equal to the difference between the amount of the Final Costs and the amount
of the Tenant Improvement Allowance (less any portion thereof already disbursed
by Landlord, or in the process of being disbursed by Landlord, on or before the
commencement of construction of the Tenant Improvements). The Over-Allowance
Amount shall be disbursed by Landlord prior to the disbursement of any of the
then remaining portion of the Tenant Improvement Allowance, and such
disbursement shall be pursuant to the same procedure as the Tenant Improvement
Allowance. In the event that, after the Final Costs have been delivered by
Tenant to Landlord, the costs relating to the design and construction of the
Tenant Improvements shall change, any additional costs necessary to such design
and construction in excess of the Final Costs, shall be paid by Tenant to
Landlord immediately as an addition to the Over-Allowance Amount or at
Landlord's option. Tenant shall make payments for such additional costs out of
its own funds, but Tenant shall continue to provide Landlord with the documents
described in SECTION 2.2.2.1 (i), (ii), (iii) AND (iv) of this Tenant Work
Letter, above, for Landlord's approval, prior to Tenant paying such costs.

                4.2.2     TENANT'S AGENTS.



                                     Ex. C
                                       4


<PAGE>


                          4.2.2.1       LANDLORD'S GENERAL CONDITIONS FOR
TENANT'S AGENTS AND TENANT IMPROVEMENT WORK. Tenant's and Tenant's Agent's
construction of the Tenant Improvements shall comply with the following: (i) the
Tenant Improvements shall be constructed in strict accordance with the Approved
Working Drawings; (ii) Tenant's Agents shall submit schedules of all work
relating to the Tenant's Improvements to Contractor and Contractor shall, within
five (5) business days of receipt thereof, inform Tenant's Agents of any changes
which are necessary thereto, and Tenant's Agents shall adhere to such corrected
schedule; and (iii) Tenant shall abide by all rules made by Landlord's Project
manager with respect to the use of freight, loading dock and service elevators,
storage of materials, coordination of work with the contractors of other
tenants, and any other matter in connection with this Tenant Work Letter,
including, without limitation, the construction of the Tenant Improvements.

                          4.2.2.2       INDEMNITY. Tenant's indemnity of
Landlord as set forth in this Lease shall also apply with respect to any and all
costs, losses, damages, injuries and liabilities related in any way to any act
or omission of Tenant or Tenant's Agents, or anyone directly or indirectly
employed by any of them, or in connection with Tenant's non-payment of any
amount arising out of the Tenant Improvements and/or Tenant's disapproval of all
or any portion of any request for payment. Such indemnity by Tenant, as set
forth in this Lease, shall also apply with respect to any and all costs, losses,
damages, injuries and liabilities related in any way to Landlord's performance
of any ministerial acts reasonably necessary (i) to permit Tenant to complete
the Tenant Improvements, and (ii) to enable Tenant to obtain any Project permit
or certificate of occupancy for the Premises.

                          4.2.2.3       REQUIREMENTS OF TENANT'S AGENTS. Each of
Tenant's Agents shall guarantee to Tenant and for the benefit of Landlord that
the portion of the Tenant Improvements for which it is responsible shall be free
from any defects in workmanship and materials for a period of not less than one
(1) year from the date of completion thereof. Each of Tenant's Agents shall be
responsible for the replacement or repair, without additional charge, of all
work done or furnished in accordance with its contract that shall become
defective within one (1) year after the later to occur of (i) completion of the
work performed by such contractor or subcontractors and (ii) the Commencement
Date. The correction of such work shall include, without additional charge, all
additional expenses and damages incurred in connection with such removal or
replacement of all or any part of the Tenant Improvements, and/or the Project
and/or common areas that may be damaged or disturbed thereby. All such
warranties or guarantees as to materials or workmanship of or with respect to
the Tenant Improvements shall be contained in the Contract or subcontract and
shall be written such that such guarantees or warranties shall inure to the
benefit of both Landlord and Tenant, as their respective interests may appear,
and can be directly enforced by either. Tenant covenants to give to Landlord any
assignment or other assurances which maybe necessary to effect such right of
direct enforcement.

                     4.2.2.3.1     LIEN-FREE BASIS. Tenant's Contractor and
agents shall perform all work on a lien-free basis. If a lien is filed or
recorded against the Project due to, or in any way associated with, the
construction of the Tenant Improvements, Tenant agrees to have such lien
released of record (in a manner and form approved by Landlord) within five
(5) days of Landlord's notice to Tenant regarding same. If Tenant fails to
cause the release of such lien within such five (5) day period to Landlord's
satisfaction, Landlord may cause the removal of such lien, and Tenant agrees
to repay Landlord for all costs and expenses incurred by Landlord to release
the lien (including, but not limited to, the payment of the amount stated in
the lien, any filing, processing, recording and attorneys' fees) within ten
(10) days of Landlord's request therefor, and such amount shall be considered
Additional Rent due under the Lease. If Tenant falls to pay Landlord as
aforesaid, such failure shall be deemed an uncured noticed material default
under the Lease, and Landlord may pursue any remedy provided for under the
Lease, at law or in equity.

         4.2.2.4     INSURANCE REQUIREMENTS

                     4.2.2.4.1     GENERAL COVERAGES. All of
Tenant's Agents shall carry worker's compensation insurance covering all of
their respective employees, and shall also carry public liability insurance,
including property damage, all with limits, in form and with companies as are
required to be



                                     Ex. C
                                       5


<PAGE>


carried by Tenant as set forth in this Lease.

                     4.2.2.4.2     SPECIAL COVERAGES. Tenant shall carry
"Builder's All Risk" insurance in an amount approved by Landlord covering the
construction of the Tenant Improvements, and such other insurance as Landlord
may require, it being understood and agreed that the Tenant Improvements shall
be insured by Tenant pursuant to this Lease immediately upon completion thereof.
Such insurance shall be in amounts and shall include such extended coverage
endorsements as may be reasonably required by Landlord including, but not
limited to, the requirement that all of Tenant's Agents shall carry excess
liability and Products and Completed Operating Coverage insurance, each in
amounts not less than $500,000 for each incident, $1,000,000 in aggregate, and
in form and with companies as are required to be carried by Tenant as set forth
in this Lease.

                     4.2.2.4.3     GENERAL TERMS. Certificates for all insurance
carried pursuant to this SECTION 4.2.2.4 shall be delivered to Landlord before
the commencement of construction of the Tenant Improvements and before the
Contractor's equipment is moved onto the site. All such policies of insurance
must contain a provision that the company writing said policy will give Landlord
thirty (30) days prior written notice of any cancellation or lapse of the
effective date or any reduction in the amounts of such insurance. In the event
that the Tenant Improvements are damaged by any cause during the course of the
construction thereof, Tenant shall immediately repair the same at Tenant's sole
cost and expense. Tenant's Agents shall maintain all of the foregoing insurance
coverage in force until the Tenant Improvements are fully completed and accepted
by Landlord, except for any Products and Completed Operation Coverage insurance
required by Landlord, which is to be maintained for two (2) years following
completion of the work and acceptance by Landlord and Tenant. All policies
carried under this SECTION 4.2.2.4 shall insure Landlord and Tenant, as their
interests may appear, as well as Contractor and Tenant's Agents. All insurance,
except Workers' Compensation, maintained by Tenant's Agents shall preclude
subrogation claims by the insurer against anyone insured thereunder. Such
insurance shall provide that it is primary insurance as respects the owner and
that any other insurance maintained by owner is excess and noncontributing with
the insurance required hereunder. The requirements for the foregoing insurance
shall not derogate from the provisions for indemnification of Landlord by Tenant
under SECTION 4.2.2.2 of this Tenant Work Letter.

                4.2.3     GOVERNMENTAL COMPLIANCE. The Tenant Improvements shall
comply in all respects with the following: (i) the Code and other state,
federal, city or quasi-governmental laws, codes, ordinances and regulations, as
each may apply according to the rulings of the controlling public official,
agent or other person; (ii) applicable standards of the American Insurance
Association (formerly, the National Board of Fire Underwriters) and the National
Electrical Code; and (iii) Project material manufacturer's specifications.

                4.2.4     INSPECTION BY LANDLORD. Landlord shall have the right
to inspect the Tenant Improvements at all times, provided however, that
Landlord's failure to inspect the Tenant Improvements shall in no event
constitute a waiver of any of Landlord's rights hereunder nor shall Landlord's
inspection of the Tenant Improvements constitute Landlord's approval of the
same. Should Landlord disapprove any portion of the Tenant Improvements,
Landlord shall notify Tenant in writing of such disapproval and shall specify
the items disapproved. Any defects or deviations in, and/or disapproval by
Landlord of, the Tenant Improvements shall be rectified by Tenant at no expense
to Landlord, provided however, that in the event Landlord determines that a
defect or deviation exists or disapproves of any matter in connection with any
portion of the Tenant Improvements and such defect, deviation or matter might
adversely affect the mechanical, electrical, plumbing, heating, ventilating and
air conditioning or life-safety systems of the Project, the structure or
exterior appearance of the Project or any other tenant's use of such other
tenant's leased premises, Landlord may, take such action as Landlord deems
necessary, at Tenant's expense and without incurring any liability on Landlord's
part, to correct any such defect, deviation and/or matter, including, without
limitation, causing the cessation of performance of the construction of the
Tenant Improvements until such time as the defect, deviation and/or matter is
corrected to Landlord's satisfaction.

                4.2.5     MEETINGS. Commencing upon the execution of this Lease,
Tenant and Landlord



                                     Ex. C
                                       6


<PAGE>

shall hold meetings as required at a reasonable time, with the Architect and the
Contractor regarding the progress of the preparation of Construction Drawings
and the construction of the Tenant Improvements, which meetings shall be held at
a location designated by the partners, and Landlord and/or its agents shall
receive prior notice of, and shall have the right to attend, all such meetings,
and, upon Landlord's request, certain of Tenant's Agents shall attend such
meeting's One such meeting each month shall include the review of Contractor's
current request for payment.

         4.3    NOTICE OF COMPLETION: COPY OF "AS BUILT" PLANS. Within ten (10)
days after completion of construction of the Tenant Improvements, Tenant shall
cause a Notice of Completion to be recorded in the office of the Recorder of the
County of Los Angeles in accordance with Section 3093 of the Civil Code of the
State of California or any successor statute, and shall furnish a copy thereof
to Landlord upon such recordation. If Tenant fails to do so, Landlord may
execute and file the same on behalf of Tenant as Tenant's agent for such
purpose, at Tenant's sole cost and expense. At the conclusion of construction,
(i) Tenant shall cause the Architect and Contractor (A) to update the Approved
Working Drawings as necessary to reflect all changes made to the Approved
Working Drawings during the course of construction, (B) to certify to the best
of their knowledge that the "record-set" of as-built drawings are true and
correct, which certification shall survive the expiration or termination of this
Lease, and (C) to deliver to Landlord two (2) sets of copies of such as-built
drawings within ninety (90) days following issuance of a certificate of
occupancy for the Premises, and (ii) Tenant shall deliver to Landlord a copy of
all warranties, guaranties, and operating manuals and information relating to
the improvements, equipment, and systems in the Premises.

                                   SECTION 5

                                 MISCELLANEOUS

         5.1    TENANT'S REPRESENTATIVE. Tenant has designated Dean Wilkinson as
its sole representative with respect to the matters set forth in this Tenant
Work Letter, who shall have full authority and responsibility to act on behalf
of the Tenant as required in this Tenant Work Letter.

         5.2    LANDLORD'S REPRESENTATIVE. Landlord shall designate an
individual as its sole representative with respect to the matters set forth in
this Tenant Work Letter, who, until further notice to Tenant, shall have full
authority and responsibility to act on behalf of the Landlord as required in
this Tenant Work Letter.

         5.3    TIME OF THE ESSENCE IN THIS TENANT WORK LETTER. Unless otherwise
indicated, all references herein to a "number of days" shall mean and refer to
calendar days. If any item requiring approval is timely disapproved by Landlord,
the procedure for preparation of the document and approval thereof shall be
repeated until the document is approved by Landlord.

         5.4    TENANT'S LEASE DEFAULT. Notwithstanding any provision to the
contrary contained in this Lease, if an event of default as described in the
Lease or this Tenant Work Letter has occurred at any time on or before the
substantial completion of the Premises, then (i) in addition to all other rights
and remedies granted to Landlord pursuant to this Lease, Landlord shall have the
right to withhold payment of all or any portion of the Tenant Improvement
Allowance and/or Landlord may cause Contractor to cease the construction of the
Premises (in which case, Tenant shall be responsible for any delay in the
substantial completion of the Premises caused by such work stoppage), and (ii)
all other obligations of Landlord under the terms of this Tenant Work Letter
shall be forgiven until such time as such default is cured pursuant to the terms
of this Lease (in which case, Tenant shall be responsible for any delay in the
substantial completion of the Premises caused by such inaction by Landlord).

         5.6    CONSTRUCTION DEFECTS. Landlord shall have no responsibility for
the Tenant Improvements and Tenant will remedy, at Tenant's own expense, and be
responsible for any and all defects in the Tenant Improvements that may appear
during or after the completion thereof whether the same shall affect the Tenant
Improvements in particular or any parts of the Premises in general. Tenant shall
indemnify, hold


                                     EX. C
                                       7


<PAGE>


harmless and reimburse Landlord for any costs or expenses incurred by Landlord
by reason of any defect in any portion of the Tenant Improvements constructed by
Tenant or Tenant's contractor or subcontractors, or by reason of inadequate
cleanup following completion of the Tenant Improvements.

         5.7    COORDINATION OF LABOR. All of Tenant's contractors,
subcontractors, employees, servants and agents must work in harmony with and
shall not interfere with any labor employed by Landlord, or Landlord's
contractors or by any other tenant or its contractors with respect to any
portion of the Project.

         5.8    WORK IN ADJACENT AREAS. Any work to be performed in areas
adjacent to the Premises shall be performed only after obtaining Landlord's
express written permission, and shall be done only if an agent or employee of
Landlord is present; Tenant will reimburse Landlord for the expense of any such
employee or agent.

         5.9    HVAC SYSTEMS. Tenant agrees to be entirely responsible for the
maintenance or the balancing of any heating, ventilating or air conditioning
system installed by Tenant and/or maintenance of the electrical or plumbing work
installed by Tenant and/or for maintenance of lighting fixtures, partitions,
doors, hardware or any other installations made by Tenant.

         5.10   APPROVAL OF PLANS. Landlord will not check Tenant drawings for
building code compliance. Approval of the Construction Drawings by Landlord is
not a representation that the drawings are in compliance with the requirements
of governing authorities, and it shall be Tenant's responsibility to meet and
comply with all federal, state, and local code requirements. Approval of the
Construction Drawings does not constitute assumption of responsibility by
Landlord or its architect for their accuracy, sufficiency or efficiency, and
Tenant shall be solely responsible for such matters.

         5.11   BOOKS AND RECORD. At its option, Landlord, at any time within
three (3) years after final disbursement of the Tenant Improvement Allowance to
Tenant, and upon at least ten (10) days prior written notice to Tenant, may
cause an audit to be made of Tenant's books and records relating to Tenant's
expenditures in connection with the construction of the Tenant Improvements.
Tenant shall maintain complete and accurate books and records in accordance with
generally accepted accounting principles of these expenditures for at least
three (3) years. Tenant shall make available to Landlord's auditor at the
Premises within ten (10) business days following Landlord's notice requiring the
audit, all books and records maintained by Tenant pertaining to the construction
and completion of the Tenant Improvements. In addition to all other remedies
which Landlord may have pursuant to the Lease, Landlord may recover from Tenant
the reasonable cost of its audit if the audit discloses that Tenant falsely
reported to Landlord expenditures which were not in fact made or falsely
reported a material amount of any expenditure or the aggregate expenditures.

                                     Ex. C
                                       8


<PAGE>


                               EXHIBIT D to Lease

                    FORM OF MEMORANDUM OF COMMENCEMENT DATE


         Haven Gateway LLC, a Delaware limited liability company, as Landlord,
and ______________________________________________________ as Tenant, executed
that certain Lease dated as of ___________________________,200___ (the "Lease").

         The Lease contemplates that upon satisfaction of certain conditions
Landlord and Tenant will agree and stipulate as to certain provisions of the
Lease. All such conditions precedent to that stipulation have been satisfied.

         Landlord and Tenant agree as follows:

         1.     The Commencement Date at the Lease is__________________________.

         2.     The Termination Date of the Lease is __________________________.

         3.     The Premises consist of ___________________rentable square feet.

         4.     Base Rent is as follows:
                _____________________ through ___________; $ _________ per month
                _____________________ through ___________; $ _________ per month
                _____________________ through ___________; $ _________ per month
                _____________________ through ___________; $ _________ per month


         5.     Tenant's Pro Rata Share is ______________ percent (__________%).

IN WITNESS WHEREOF, the parties have caused this Memorandum to be duly executed
as of  _______________________________,200__________.

<TABLE>
<CAPTION>
LANDLORD:                                         TENANT:
---------                                         -------
<S>                                               <C>
Haven Gateway, LLC, a Delaware limited liability  ___________________________, a
company                                           ______________________________

By:                                               By:
   ----------------------------------                ---------------------------
Name:                                             Name:
   ----------------------------------                ---------------------------
Its:                                              Its:
   ----------------------------------                ---------------------------
</TABLE>


                                      EX.D
                                       1


<PAGE>


                               EXHIBIT E to Lease

                             RULES AND REGULATIONS

         1.     No sign, placard, picture, advertisement, name or notice shall
be installed or displayed on any part of the outside or inside of the Building
or Land without the prior written consent of the Landlord. Landlord shall have
the right to remove, at Tenant's expense and without notice, any sign installed
or displayed in violation of this rule. All approved signs or lettering on doors
and walls shall be printed, painted, affixed or inscribed at the expense of
Tenant by a person chosen by Landlord.
         2.     If Landlord objects in writing to any curtains, blinds, shades,
screens or hanging plants or other similar objects attached to or used in
connection with any window or door of the Premises, Tenant shall immediately
discontinue such use. No awning shall be permitted on any part of the Premises.
Tenant shall not place anything against or near glass partitions or doors or
windows which may appear unsightly from outside the Premises.
         3.     Tenant shall not obstruct any sidewalk, halls, passages, exits,
entrances, elevators, escalators, or stairways of the Building. The halls,
passages, exits, entrances, elevators, escalators and stairways are not open to
the general public. Landlord shall in all cases retain the right to control and
prevent access to such areas of all persons whose presence in the judgment of
Landlord would be prejudicial to the safety, character, reputation and interest
of the Land, Building and the Building's tenants; provided that, nothing in this
Lease contained shall be construed to prevent such access to persons with whom
any Tenant normally deals in the ordinary course of its business, unless such
persons are engaged in illegal activities. Tenant shall not go upon the roof of
the Building.
         4.     The directory of the Building will be provided exclusively for
the display of the name and location of tenants only, and Landlord reserves the
right to exclude any other names therefrom.
         5.     All cleaning and janitorial services for the Premises shall be
provided exclusively by Tenant, at Tenant's sole cost. Tenant shall not cause
any unnecessary labor by carelessness or indifference to the good order and
cleanliness of the Premises. Landlord shall not in any way be responsible to any
Tenant for any loss of property on the Premises, however occurring, or for any
damage to any Tenant's property by the janitor or any other person.
         6.     Landlord will furnish Tenant, free of charge, two (2) keys to
each door lock in the Premises. Landlord may make a reasonable charge for any
additional keys. Tenant shall not make or have made additional keys, and Tenant
shall not alter any lock or install a new additional lock or bolt on any door of
its Premises. Tenant may, upon the prior written consent of Landlord, re-key the
Premises, provided that Tenant provides Landlord with copies of all keys
immediately upon such re-keying. Tenant, upon the termination of its tenancy,
shall deliver to Landlord the keys of all doors which have been furnished to
Tenant, and in the event of loss of any keys so furnished, shall pay Landlord
therefor.
         7.     If Tenant requires telegraphic, telephonic, computer circuits,
burglar alarm or similar services, it shall first obtain Landlord's approval,
which shall not be unreasonably withheld, and shall pay the entire cost of such
installation(s).
         8.     Tenant shall not place a load upon any floor of the Premises
which exceeds the load per square foot which such floor was designed to carry
and which is allowed by Governmental Requirements. Landlord shall have the right
to prescribe the weight, size and position of all equipment, materials,
furniture or other property brought into the Building. Heavy objects shall, if
considered necessary by Landlord, stand on such platforms as determined by
Landlord to be necessary to properly distribute the weight. Business machines
and mechanical equipment belonging to Tenant, which cause noise or vibration
that may be transmitted to the structure of the Building or to any space in the
Building or to any other tenant in the Building, shall be placed and maintained
by Tenant, at Tenant's expense, on vibration eliminators or other devices
sufficient to eliminate noise or vibration. The persons employed to move such
equipment in or out of the Building must be acceptable to Landlord. Landlord
will not be responsible for loss of, or damage to, any such equipment or other
property from any cause, and all damage done to the Building by maintaining or
moving such equipment or other property shall be repaired at the expense of
Tenant.
         9.     Tenant shall not use or keep in the Premises any kerosene,
gasoline or inflammable or combustible fluid or material other than those
limited quantities permitted by the Lease. Tenant shall not use or permit to be
used in the Premises any foul or noxious gas or substance, or permit or allow
the Premises to be occupied or used in a manner offensive or objectionable to
Landlord or other occupants of


                                     Ex. E
                                       1


<PAGE>


the Building by reason of noise, odors or vibrations nor shall Tenant bring into
or keep in or about the Premises any birds or animals.
         10.    Tenant agrees to cooperate fully to assure the most effective
operation of the heating and air-conditioning and to comply with any
governmental energy-saving rules, laws or regulations of which Tenant has actual
notice.
         11.    Landlord reserves the right, exercisable without notice and
without liability to Tenant, to change the name and street address of the
Building.
         12.    Landlord reserves the right to exclude from the Building
between the hours of 6 p.m. and 7 a.m. the following day, or such other hours as
may be established from time to time by Landlord, and on Sundays and legal
holidays, any person unless that person is known to the person or employee in
charge of the Building and has a pass or is properly identified. Tenant shall be
responsible for all persons for whom it requests passes and shall be liable to
Landlord for all acts of such persons. Landlord shall not be liable for damages
for any error with regard to the admission to or exclusion from the Building of
any person. Landlord reserves the right to prevent access to the Building in
case of invasion, mob, riot, public excitement or other commotion by closing the
doors or by other appropriate action.
         13.    Tenant shall close and lock the doors of its Premises and
entirely shut off all water faucets or other water apparatus, and electricity,
gas or air outlets before Tenant and its employees leave the Premises. Tenant
shall be responsible for any damage or injuries sustained by other tenants or
occupants of the Building or by Landlord for noncompliance with this rule.
         14.    Intentionally Omitted.
         15.    The toilet rooms, toilets, urinals, wash bowls and other
apparatus shall not be used for any purpose other than that for which they were
constructed and no foreign substance of any kind whatsoever shall be deposited
in them. The expenses of any breakage, stoppage or damage resulting from the
violation of this rule shall be borne by Tenant if it or its employees or
invitees shall have caused it.
         16.    Tenant shall not sell, or permit the sale at retail, of
newspapers, magazines, periodicals, theater tickets or any other goods or
merchandise to the general public in or on the Premises. Tenant shall not make
any room-to-room solicitation of business from other tenants in the Building.
Tenant shall not use the Premises for any business or activity other than that
specifically provided for in the Lease.
         17.    Tenant shall not install any radio or television antenna,
loudspeaker or other device on the roof or exterior wells of the Building
without the prior written consent of Landlord, as set forth in Section 4.4 of
the Lease. Tenant shall not interfere with radio or television broadcasting or
reception from or in the Building or elsewhere.
         18.    Intentionally Omitted.
         19.    Intentionally Omitted.
         20.    Canvassing, soliciting and distribution of handbills or any
other written material, and peddling in the Building or Land are prohibited, and
Tenant shall cooperate to prevent the same.
         21.    Landlord reserves the right to exclude or expel from the
Building and Land any person who, in Landlord's judgment, is intoxicated, under
the influence of liquor or drugs or in violation of any of these Rules and
Regulations.
         22.    Tenant shall store all of its trash and garbage within the
Premises. Tenant shall not place in any trash box or receptacle any material
which cannot be disposed of in the ordinary and customary manner of trash and
garbage disposal. All garbage and refuse disposal shall be made in accordance
with directions issued from time to time by Landlord.
         23.    The Premises shall not be used for lodging or any improper or
immoral or objectionable purpose. No cooking shall be done or permitted by
Tenant, except that use by Tenant of Underwriters' Laboratory approved equipment
for brewing coffee, tea, hot chocolate and similar beverages shall be permitted;
provided that, such equipment and its use is in accordance with all Governmental
Requirements.
         24.    Tenant shall not use in the Premises or in the public halls of
the Building any hand truck except those equipped with rubber fires and side
guards or such other material-handling equipment as Landlord may approve. Tenant
shall not bring any other vehicles of any kind into the Building.
         25.    Without the prior written consent of Landlord, Tenant shall not
use the name of the Building in connection with or in promoting or advertising
the business of Tenant except as Tenant's address.
         26.    Tenant shall comply with all safety, fire protection and
evacuation procedures and regulations established by Landlord or any
governmental agency.



                                     Ex. E
                                       2


<PAGE>

         27.    Tenant assumes any and all responsibility for protecting the
Premises from theft, robbery and pilferage, which includes keeping doors locked
and other means of entry to the Premises closed.
         28.    The requirements of Tenant will be attended to only upon
appropriate application to the Manager of the Building by an authorized
individual. Employees of Landlord are not required to perform any work or do
anything outside of their regular duties unless under special instructions from
Landlord, and no employee of Landlord is required to admit Tenant to any space
other than the Premises without specific instructions from Landlord.
         29.    Tenant shall not leave vehicles in the parking areas overnight
nor park any vehicles in the Building parking areas other than automobiles,
motorcycles, motor driven or nonmotor driven bicycles or four-wheeled trucks.
         30.    Landlord may waive any one or more of these Rules and
Regulations for the benefit of Tenant or any other tenant, but no such waiver by
Landlord shall be construed as a waiver of such Rules and Regulations in favor
of any other person, nor prevent Landlord from thereafter revoking such waiver
and enforcing any such Rules and Regulations against any or all of the tenants
of the Building.
         31.    These Rules and Regulations are in addition to, and shall not be
construed to in any way modify or amend, in whole or in part, the covenants and
conditions of any lease of premises in the Building. If any provision of these
Rules and Regulations conflicts with any provision of the Lease, the terms of
the Lease shall prevail.
         32.    Landlord reserves the right to make such other and reasonable
Rules and Regulations as, in its judgment, may from time to time be needed for
safety and security, the care and cleanliness of the Building and Land and the
preservation of good order in the Building. Tenant agrees to abide by all the
Rules and Regulations stated in this exhibit and any additional rules and
regulations which are so made by Landlord.
         33.    Tenant shall be responsible for the observance of all of the
foregoing rules by Tenant and Tenants Agents.


                                     Ex. E
                                       3