<PAGE>


                                                                   EXHIBIT 10.12

                                INDUSTRIAL LEASE
                        (SINGLE TENANT; NET; STAND-ALONE)

                                     BETWEEN

                               THE IRVINE COMPANY

                                       AND

                               ENDGATE CORPORATION


<PAGE>


                            INDEX TO INDUSTRIAL LEASE
                        (Single Tenant; Net; Stand-Alone)

                  ARTICLE I.         BASIC LEASE PROVISIONS

                  ARTICLE II.        PREMISES
                  Section 2.1        Leased Premises
                  Section 2.2        Acceptance of Premises
                  Section 2.3        Building Name and Address

                  ARTICLE III.       TERM
                  Section 3.1        General
                  Section 3.2        Delay in Possession

                  ARTICLE IV.        RENT AND OPERATING EXPENSES
                  Section 4.1        Basic Rent
                  Section 4.2        Operating Expenses
                  Section 4.3        Security Deposit

                  ARTICLE V.         USES
                  Section 5.1        Use
                  Section 5.2        Signs
                  Section 5.3        Hazardous Materials

                  ARTICLE VI.        SERVICES
                  Section 6.1        Utilities and Services
                  Section 6.2        Parking

                  ARTICLE VII.       MAINTAINING THE PREMISES
                  Section 7.1        Tenant's Maintenance and Repair
                  Section 7.2        Landlord's Maintenance and Repair
                  Section 7.3        Alterations
                  Section 7.4        Mechanic's Liens
                  Section 7.5        Entry and Inspection

                  ARTICLE VIII.      TAXES AND ASSESSMENTS ON TENANT's PROPERTY

                  ARTICLE IX.        ASSIGNMENT AND SUBLETTING
                  Section 9.1        Rights of Parties
                  Section 9.2        Effect of Transfer
                  Section 9.3        Sublease Requirements
                  Section 9.4        Certain Transfers

                  ARTICLE X.         INSURANCE AND INDEMNITY
                  Section 10.1       Tenant's Insurance
                  Section 10.2       Landlord's Insurance
                  Section 10.3       Tenant's Indemnity
                  Section 10.4       Landlord's Nonliability
                  Section 10.5       Waiver of Subrogation

                  ARTICLE XI.        DAMAGE OR DESTRUCTION
                  Section 11.2       Restoration
                  Section 11.2       Lease Governs

                  ARTICLE XII.       EMINENT DOMAIN
                  Section 12.1       Total or Partial Taking
                  Section 12.2       Temporary Taking
                  Section 12.3       Taking of Parking Area

                  ARTICLE XIII.      SUBORDINATION; ESTOPPEL CERTIFICATE;
                                     FINANCIAL
                  Section 13.1       Subordination
                  Section 13.2       Estoppel Certificate
                  Section 1.3.3      Financials

                  ARTICLE XIV.       DEFAULTS AND REMEDIES
                  Section 14.1       Tenant's Defaults
                  Section 14.2       Landlord's Remedies

                                     (i)
<PAGE>


                  Section 14.3       Late Payments
                  Section 14.4       Right of Landlord to Perform
                  Section 14.5       Default by Landlord
                  Section 14.6       Expenses and Legal Fees
                  Section 14.7       Waiver of Jury Trial
                  Section 14.8       Satisfaction of Judgment
                  Section 14.9       Limitation of Actions Against Landlord

                  ARTICLE XV.        END OF TERM
                  Section 15.1       Holding Over
                  Section 1.5.2      Merger on Termination
                  Section 15.3       Surrender of Premises; Removal of Property

                  ARTICLE XVI.       PAYMENTS AND NOTICES

                  ARTICLE XVII.      RULES AND REGULATIONS

                  ARTICLE XVIII      BROKER's COMMISSION

                  ARTICLE XIX.       TRANSFER OF LANDLORD's INTEREST

                  ARTICLE XX.        INTERPRETATION
                  Section 20.1       Gender and Number
                  Section 20.2       Headings
                  Section 20.3       Joint and Several Liability
                  Section 20.4       Successors
                  Section 20.5       Time of Essence
                  Section 20.6       Controlling Law
                  Section 20.7       Severability
                  Section 20.8       Waiver and Cumulative Remedies
                  Section 20.9       Inability to Perform
                  Section 20.10      Entire Agreement
                  Section 20.11      Quiet Enjoyment
                  Section 20.12      Survival

                  ARTICLE XXI.       EXECUTION AND RECORDING
                  Section 21.1       Counterparts
                  Section 21.2       Corporate and Partnership Authority
                  Section 21.3       Execution of Lease; No Option or Offer
                  Section 21.4       Recording
                  Section 21.5       Amendments
                  Section 21.6       Executed Copy
                  Section 21.7       Attachments

                  ARTICLE XXII.      MISCELLANEOUS
                  Section 22.1       Nondisclosure of Lease Terms
                  Section 22.2       Guaranty
                  Section 22.3       Changes Requested by Lender
                  Section 22.4       Mortgagee Protection
                  Section 22.5       Covenants and Conditions
                  Section 22.6       Security Measures
                  Section 22.7       Termination of Existing Lease



                  EXHIBITS
                  Exhibit A          Description of Premises
                  Exhibit A-1        Description of the Site
                  Exhibit B          Environmental Questionnaire
                  Exhibit C          Landlord's Disclosures
                  Exhibit D          Insurance Requirements
                  Exhibit E          Rules and Regulations
                  Exhibit X          Work Letter

                                      (ii)
<PAGE>


                              INDUSTRIAL LEASE
                        (Single Tenant; Net; Stand-Alone)

        THIS LEASE is made as of the 26TH day of MARCH _________ , 19 97 , by
and between THE IRVINE COMPANY, a Michigan corporation, hereafter called
"Landlord," and ENDGATE CORPORATION, a Delaware corporation, hereinafter called
"Tenant."

                        ARTICLE I. BASIC LEASE PROVISIONS

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

1.      Premises: The Premises are more particularly described in Section 2.1.

2.      Address of Buildings: 321 Soquel Way and 333 Soquel Way, Sunnyvale,
        California 94086

3.      Use of Premises: Research and development, light manufacturing, storage
        and distribution related to wireless communication technology, and
        general office uses.

4.      Commencement Date: June 1, 1997

5.      Lease Term: Sixty (60) months, plus such additional days as may be
        requited to cause this Lease to terminate on the final day of the
        calendar month.

6.      Basic Rent:

        Basic Rent is subject to adjustment as follows:

        Commencing on the first day of the thirteenth (l3th) month of the Lease
        Term, and every twelve (12) months thereafter (the "Rental Adjustment
        Date(s)"), the Basic Rent shall be increased by the percentage increase,
        if any, in the United States Department of Labor, Bureau of Labor
        Statistics, Consumer Price Index for all Urban Consumers, San
        Francisco-Oakland Area Average, all items (1982-84= 100) (the "Index").
        The adjustment shall be calculated by comparing the Index published for
        the third month preceding the applicable Rental Adjustment Date with the
        Index published for the third month preceding the last prior Rental
        Adjustment Date (or the third month preceding the Commencement Date in
        the case of the first rental adjustment), and the Basic Rent then in
        effect shall be increased by the amount of the percentage increase, if
        any, between those published Index amounts. In no event shall the Basic
        Rent be reduced by reason of such computation. If at any Rental
        Adjustment Date the Index shall not exist, Landlord may substitute
        another reasonable index published by any governmental agency. Landlord
        shall use diligent efforts to calculate and give Tenant notice of any
        such increase in the Basic Rent on or near each Rental Adjustment Date,
        and Tenant shall commence to pay the increased Basic Rent effective on
        the applicable Rental Adjustment Date. In the event Landlord is unable
        to deliver to Tenant the notice of the increased Basic Rent at least
        five (5) days prior to any Rental Adjustment Date, Tenant shall commence
        to pay the increased Basic Rent on the first day of the month following
        the delivery of such notice (the "Payment Date"), provided Landlord's
        notice has been given at least five (5) days in advance. Tenant shall
        also pay, together with the first payment of the increased Basic Rent,
        an. amount determined by multiplying the amount of the increase in Basic
        Rent times the number of months that have elapsed between the Rental
        Adjustment Date and the Payment Date.

        Notwithstanding the foregoing, the parties agree that as of any Rental
        Adjustment Date, the revised Basic Rent due to all cumulative increases
        pursuant to this paragraph shall neither (i) exceed the amount obtained
        by increasing the initial Basic Rent from the Commencement Date to said
        Rental Adjustment at the rate of seven percent (7%) per annum,
        compounded annually, nor (ii) be less than the amount obtained by
        increasing the initial Basic Rent from the Commencement Date to said
        Rental Adjustment Date at the rate of four percent (4%) per annum,
        compounded annually.

7.      Guarantor(s): N/A

                                       1
<PAGE>


8.      Floor Area of Premises: approximately 29,792 rentable square feet

9.      Security Deposit:

10.     Broker(s): None

11.     Additional Insurance: Insignia Commercial Group, Inc.

12.     Address for Payments and Notices:


LANDLORD                                          TENANT

INSIGNIA COMMERCIAL GROUP, INC.                   ENDGATE CORPORATION
160 West Santa Clara Street                       321 Soquel Way
Suite 1350                                        Sunnyvale, CA 94086
San Jose, CA 95113

with a copy of notices to:

IRVINE INDUSTRIAL COMPANY
P.O. Box 6370
Newport Beach, CA 92658-6370
Attn: Vice President, Industrial Operations

13.     Tenant's Liability Insurance Requirement: $5,000,000.00

14.     Estimated Space Plan Approval Date: N/A

Exhibits:
        A      Description of Premises             E      Rules and Regulations
        A-1    Description of the Site             X      Work Letter
        B      Environmental Questionnaire
        C      Landlord's Disclosures
        D      Insurance Requirements


                                       2
<PAGE>


                              ARTICLE II. PREMISES

        SECTION 2.1. LEASED PREMISES. Landlord leases to Tenant and Tenant
leases from Landlord the premises shown on EXHIBIT A (the "Premises"), including
the buildings identified in Item 2 of the Basic Lease Provisions (which together
with the underlying real property, shall either collectively or individually as
the context may require, be called the "Building"), and containing approximately
the floor area set forth in Item 8 of the Basic Lease Provisions. The Building
is located on the site (the "Site") shown on EXHIBIT A-1 attached hereto.

        SECTION 2.2. ACCEPTANCE OF PREMISES. Tenant acknowledges that neither
Landlord nor any representative of Landlord has made any representation or
warranty with respect to the Premises or the Building or the suitability or
fitness of either for any purpose, including without limitation any
representations or warranties regarding zoning or other land use matters. Tenant
further acknowledges that neither Landlord nor any representative of Landlord
has agreed to undertake any alterations or additions or construct any
improvements to the Premises except as expressly provided in this Lease. The
taking of possession or use of the Premises by Tenant for any purpose other than
construction shall conclusively establish that the Premises and the Building
were in satisfactory condition and in conformity with the provisions of this
Lease in all respects, except for those matters which Tenant shall have brought
to Landlord's attention on a written punch list. The list shall be limited to
any items required to be accomplished by Landlord under the Work letter attached
as EXHIBIT X, and shall be delivered to Landlord within sixty (60) days after
the term ("Term") of this Lease commences as provided in Article III below. If
no items are required of Landlord under the Work Letter, by taking possession of
the Premises Tenant accepts the improvements in their existing condition, and
waives any right or claim against Landlord arising out of the condition of the
Premises. Nothing contained in this Section shall affect the commencement of the
Term or the obligation of Tenant to pay rent. Landlord shall diligently complete
all punch list items of which it is notified as provided above.

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

                                ARTICLE III. TERM

        SECTION 3.1. GENERAL. The Term shall be for the period shown in Item 5
of the Basic Lease Provisions. Subject to the provisions of Section 3.2 below,
the Term shall commence ("Commencement Date") on the earlier of (a) the date
upon which all relevant governmental authorities have approved the Tenant
Improvements in accordance with applicable building codes, as evidenced by
written approval thereof in accordance with the building permits issued, for the
Tenant Improvements or issuance of a temporary or final certificate of occupancy
for the Premises, or (b) the date Tenant acquires possession or commences use of
the Premises for any purpose other than construction of Tenant Improvements by
Tenant under the Work Letter. Within ten (10) days after possession of the
Premises is tendered to Tenant, the parties shall memorialize on a form provided
by Landlord the actual Commencement Date and the expiration date ("Expiration
Date") of this Lease. Tenant's faille to execute that form shall not affect the
validity of Landlord's determination of those dates.

        SECTION 3.2. DELAY IN POSSESSION. If Landlord, for any reason
whatsoever, cannot deliver possession of the Premises to Tenant on or before the
Estimated Commencement Date, this Lease shall not be void or voidable nor shall
Landlord be liable to Tenant for any resulting loss or damage. However, Tenant
shall not be liable for any rent and the Commencement Date shall not occur until
Landlord delivers possession of the Premises and the Premises are in fact
available for Tenant's occupancy with any Tenant Improvements that have been
approved as per Section 3.1(a) above, except that if Landlord's failure to so
deliver possession on the Estimated Commencement Date is attributable to any
action or inaction by Tenant (including without limitation any Tenant Delay
described in the Work Letter, if any, attached to this Lease), then the
Commencement Date shall not be advanced to the date on which possession of the
Premises is tendered to Tenant, and Landlord shall be entitled to full
performance by Tenant (including the payment of rent) from the date Landlord
would have been able to deliver the Premises to Tenant but for Tenant's
delay(s).

                     ARTICLE IV. RENT AND OPERATING EXPENSES

        SECTION 4.1. BASIC RENT. From and after the Commencement Date, Tenant
shall pay to Landlord without deduction or offset, Basic Rent for the Premises
in the total amount shown (including subsequent adjustments, if any) in Item 6
of the Basic Lease Provisions. Any rental adjustment shown in Item 6 shall be
deemed to occur on the specified monthly anniversary of the Commencement Date,
whether or not that date occurs at the end of a calendar month. The rent shall
be due and payable in advance commencing on the Commencement Date (as prorated
for any partial month) and continuing thereafter on the first day of each

                                       3
<PAGE>


successive calendar month of the Term. No demand, notice or invoice shall be
required for the payment of Basic Rent. An installment of rent in the amount of
one (1) full month's Basic Rent at the initial rate specified in Item 6 of the
Basic Lease Provisions shall be delivered to Landlord concurrently with Tenant's
execution of this Lease and shall be applied against the Basic Rent lust due
hereunder.

        SECTION 4.2.   OPERATING EXPENSES.

               (a)      Tenant shall pay to Landlord, as additional rent,
"Building Costs" and "Property Taxes," as those terms are defined below,
incurred by Landlord in the operation of the Building. For convenience of
reference, Property Taxes and Building Costs shall be referred to collectively
as "Operating Expenses".

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

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

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

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

               (f)      The term "Building Costs" shall include all expenses of
operation and maintenance of the Building and all landscaping, walkways, parking
areas and lighting of the Site to the extent such expenses are not billed to and
paid directly by Tenant, and shall include the following charges by way of
illustration but not limitation: water and sewer charges; insurance premiums or
reasonable premium equivalents should Landlord elect to self-insure any risk
that Landlord is authorized to insure hereunder; license, permit, and inspection
fees; heat; light; power; air conditioning; supplies; materials; equipment;
tools; the cost of any environmental, insurance, tax or other consultant
utilized by Landlord in connection with the Building; costs incurred in
connection with compliance of any laws or changes in laws applicable to the
Building; the cost of any capital investments (other than tenant improvements
for specific tenants) to the extent of the amortized amount thereof over the
useful life of such capital investments calculated at a market cost of funds,
all as determined by Landlord, for each such year of useful life during the
Term; labor; reasonably allocated wages and salaries, fringe benefits, and
payroll taxes for administrative and other personnel directly applicable to the
Building, including both Landlord's personnel and outside personnel; any expense
incurred pursuant to Sections 6.1, 6.2, 7.2, and 10.2; and a reasonable
overhead/management fee for the professional operation of the Building.
Notwithstanding anything to the contrary contained herein, the amount of such
overhead/management fee to be charged to Tenant shall be determined by
multiplying the actual fee charged (which from time to time may be with respect
to the Building only or the Building together with other properties owned by
Landlord and/or its affiliates) by a fraction, the numerator of which is the
floor area of the Premises (as set forth in Item No. 8 of the Basic Lease
Provisions) and the denominator of which is the total square footage of space
charged with

                                       4
<PAGE>


such fee actually leased to tenants (including Tenant). It is understood that
Building Costs shall include competitive charges for direct services provided by
any subsidiary or division of Landlord, and may include the Building's or the
Site's proportionate share of the cost of maintenance or repair contracts which
cover the Building and/or the Site and other buildings and/or projects in
Landlord's portfolio, as reasonably allocated by Landlord. Notwithstanding
anything herein to the contrary, the following shall not be included in Building
Costs: (i) the cost of containing, removing or otherwise remediating any
contamination of the Building (including the underlying land and ground water)
by any toxic or hazardous material (including, without limitation, asbestos and
"PCB's") unless such contamination was caused by Tenant, Tenant's employees,
agents or invitees, and (ii) capital expenditures, except that the items
described in Subsections 4.2(f) (i) and (ii) shall be included in Building Costs
to the extent amortized over their useful life.

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

        SECTION 4.3. SECURITY DEPOSIT. Concurrently with Tenant's delivery of
this Lease, Tenant shall deposit with Landlord the sum, if any, stated in Item 9
of the Basic Lease Provisions, to be held by Landlord as security for the full
and faithful performance of Tenant's obligations under this Lease (the "Security
Deposit"). Subject to the last sentence of this Section, the Security Deposit
shall be understood and agreed to be the property of Landlord upon Landlord's
receipt thereof, and may be utilized by Landlord in its discretion towards the
payment of all prepaid expenses by Landlord for which Tenant would be required
to reimburse Landlord under this Lease, including without limitation brokerage
commissions and Tenant Improvement costs. Upon any default by Tenant, including
specifically Tenant's failure to pay rent or to abide by its obligations under
Sections 7.1 and 15.3 below, whether or not Landlord is informed of or has
knowledge of the default, the Security Deposit shall be deemed to be
automatically and immediately applied, without waiver of any rights Landlord may
have under this Lease or at law or in equity as a result of the default, as a
setoff for full or partial compensation for that default. If any portion of the
Security Deposit is applied after a default by Tenant, Tenant shall within five
(5) days after written demand by Landlord deposit cash with Landlord in an
amount sufficient to restore the Security Deposit to its original amount.
Landlord shall not be required to keep this Security Deposit separate from its
general funds, and Tenant shall not be entitled to interest on the Security
Deposit. If Tenant fully performs its obligations under this Lease, the Security
Deposit or any balance thereof shall be returned to Tenant (or, at Landlord's
option, to the last assignee of Tenant's interest in this Lease) after the
expiration of the Term, provided that Landlord may retain the Security Deposit
to the extent and until such time as all amounts due from Tenant in accordance
with this Lease have been determined and paid in full. Tenant hereby authorizes
Landlord to retain any remaining balance of the security deposit funded to
Landlord under the Existing Lease (as determined in Section 22.7), which balance
shall be applied by Landlord to offset the sums owing from Tenant under this
Section 4.3.

                                 ARTICLE V. USES

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

                                       5
<PAGE>


accordance with the provisions thereof. Tenant shall promptly upon demand
reimburse Landlord for any additional insurance premium charged by reason of
Tenant's failure to comply with the provisions of this Section, and shall
indemnify Landlord from any liability and/or expense resulting from Tenant's
noncompliance. Notwithstanding any of the foregoing. Tenant shall not be
responsible for making any structural changes to the Premises or seismic
upgrades or improvements in, order to bring the Premises into compliance with
any laws, codes, ordinances, orders or regulations, unless (i) such changes are
necessitated as a direct result of Tenant's particular use of the Premises or
(ii) the requirements for such changes are triggered as a result of any action
by Tenant on the Premises, excluding the initial Tenant improvements; provided,
however, that the costs of any such structural changes or seismic upgrades or
improvements completed by Landlord after completion of the improvements set
forth in EXHIBIT X shall be amortized over the useful life and included in
Building Costs.

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

        SECTION 52.  HAZARDOUS MATERIALS.

               (a)      For purposes of this Lease, the term "Hazardous
Materials" includes (i) any "hazardous materials" as defined in Section
2.5501(n) of the California Health and Safety Code, (ii) any other substance or
matter which results in liability to any person or entity from exposure to such
substance or matter under any statutory or common law theory, and (iii) any
substance or matter which is in excess of permitted levels set forth in any
federal, California or local law or regulation pertaining to any hazardous or
toxic substance, material or waste.

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

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

                                       6
<PAGE>


remedial and corrective actions, and abatement of Hazardous Materials; and all
complaints, pleadings and other legal documents filed by or against Tenant
related to Tenant's use, handing, storage, release and/or disposal of Hazardous
Materials.

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

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

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

                                       7
<PAGE>


                              ARTICLE VI. SERVICES

        SECTION 6.1. UTILITIES AND SERVICES. Tenant shall be responsible for and
shall pay promptly, directly to the appropriate supplier, all charges for water,
gas, electricity, sewer, heat, light, power, telephone, refuse pickup,
janitorial service, interior landscape maintenance and all other utilities,
materials and services furnished directly to Tenant or the Premises or used by
Tenant in, on or about the Premises during the Term, together with any taxes
thereon. Landlord shall not be liable for damages or otherwise for any failure
or interruption of any utility or other service furnished to the Premises, and
no such failure or interruption shall be deemed an eviction or entitle Tenant to
terminate this Lease or withhold or abate any rent due hereunder. Landlord shall
at all reasonable times have free access to all electrical and mechanical
installations of Landlord.

        SECTION 6.2. PARKING. Tenant shall be entitled to the number of vehicle
parking spaces on the Site. Tenant shall not permit or allow any vehicles that
belong to or are controlled by Tenant or Tenant's employees, suppliers,
shippers, customers or invitees to be loaded, unloaded or parked in areas other
than those designated by Landlord for such activities. If Tenant permits or
allows any of the prohibited activities described above, then Landlord shall
have the right, without notice, in addition to such other rights and remedies
that Landlord may have, to remove or tow away the vehicle involved and charge
the costs to Tenant. Parking shall be limited to striped parking stalls, and no
parking shall be permitted in any driveways, access ways or in any similar area.
Nothing contained in this Lease shall be deemed to create liability upon
Landlord for any damage to motor vehicles of visitors or employees, for any loss
of property from within those motor vehicles, or for any injury to Tenant, its
visitors or employees, unless ultimately determined to be caused by the sole
active negligence or willful misconduct of Landlord, its agents, servants and
employees. Landlord shall have the right to establish, and from time to time
amend, and to enforce against all users all reasonable rules and regulations
(including the designation of areas for employee parking) that Landlord may deem
necessary and advisable for the proper and efficient operation and maintenance
of parking. Landlord shall have the right to construct, maintain and operate
lighting facilities within the parking areas; to change the area, level,
location and arrangement of the parking areas and improvements therein; and to
do and perform such other acts in and to the parking areas and improvements
therein as, in the use of good business judgment, Landlord shall determine to be
advisable. Parking areas shall be used only for parking vehicles. Washing,
waxing, cleaning or servicing of vehicles, or the storage of vehicles for
24-hour periods, is prohibited unless otherwise authorized by Landlord. Tenant
shall be liable for any damage to the parking areas caused by Tenant or Tenant's
employees, suppliers, shippers, customers or invitees, including without
limitation damage from excess oil leakage. Tenant shall have no right to install
any fixtures, equipment or personal property in the parking areas.

                      ARTICLE VII. MAINTAINING THE PREMISES

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

        SECTION 7.2. LANDLORD'S MAINTENANCE AND REPAIR. Subject to Section 7.1
and Article XI, Landlord shall provide service, maintenance and repair with
respect to the roof, foundations, and footings of the Building, all landscaping,
walkways, parking areas, exterior lighting of the Site, and the exterior
surfaces of the exterior walls of the Building, except that Tenant at its
expense shall make all repairs which Landlord deems reasonably necessary as a
result of the act or negligence of Tenant, its agents, employees, invitees,
subtenants or contractors. Landlord shall have the right to employ or designate
any reputable person or firm, including any employee or agent of Landlord or any
of Landlord's affiliates or divisions, to perform any service, repair or
maintenance function. Landlord need not make any other improvements or repairs
except as

                                       8
<PAGE>


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

       SECTION 7.3. ALTERATIONS. Tenant shall make no alterations, additions or
improvements to the Premises without the prior written consent of Landlord,
which consent may be given or withheld in Landlord's sole discretion.
Notwithstanding the foregoing. Landlord shall not unreasonably withhold its
consent to any alterations, additions or improvements to the Premises which cost
less than One Dollar ($1.00) per square foot of the improved portions of the
Premises (excluding warehouse square footage) and do not (i) affect the exterior
of the Building or outside areas (or be visible from adjoining sites), or (ii)
affect or penetrate any of the structural portions of the Building, including
but not limited to the roof, or (iii) require any change to the basic floor plan
of the Premises, any change to any structural or mechanical systems of the
Premises, or any governmental permit as a prerequisite to the construction
thereof, or (iv) interfere in any manner with the proper functioning of or
Landlord's access to any mechanical, electrical, plumbing or HVAC systems,
facilities or equipment located in or serving the Building, or (v) diminish the
value of the Premises. Landlord may impose, as a condition to its consent, any
requirements that Landlord in its discretion may deem reasonable or desirable,
including but not limited to a requirement that all work be covered by a lien
and completion bond satisfactory to Landlord and requirements as to the manner,
time, and contractor for performance of the work if the work costs in excess of
twenty-five thousand dollars ($25,000.00). Tenant shall obtain all required
permits for the work and shall perform the work in compliance with all
applicable laws, regulations and ordinances, all covenants, conditions and
restrictions affecting the Premises, and the Rules and Regulations (hereafter
defined). Tenant understands and agrees that Landlord shall be entitled to a
supervision fee in the amount of five percent (5%) of the cost of the work to
the extent that Landlord is involved in either supervising or accomplishing the
work. If any governmental entity requires, as a condition to any proposed
alterations, additions or improvements to the Premises by Tenant, that
improvements be made to the outside areas, and if Landlord consents to such
improvements to the outside areas, then Tenant shall, at Tenant's sole expense,
make such required improvements to the outside areas in such manner, utilizing
such materials, and with such contractors (including. if required by Landlord,
Landlord's contractors) as Landlord may require in its sole discretion. Under no
circumstances shall Tenant make any improvement which incorporates any Hazardous
Materials, including without limitation asbestos-containing construction
materials into the Premises. Any request for Landlord's consent shall be made in
writing and shall contain architectural plans describing the work in detail
reasonably satisfactory to Landlord. Unless Landlord otherwise agrees in
writing, all alterations, additions or improvements affixed to the Premises
(excluding moveable trade fixtures and furniture) shall become the property of
Landlord and shall be surrendered, with the Premises at the end of the Term,
except that Landlord may, by notice to Tenant, require Tenant to remove by the
Expiration Date, or sooner termination date of this Lease, all or any
alterations, decorations, fixtures, additions, improvements and the Like
installed either by Tenant or by Landlord at Tenant's request and to repair any
damage to the Premises arising from that removal. Except as otherwise provided
in this Lease or in any Exhibit to this Lease, should Landlord make any
alteration or improvement to the Premises for Tenant, Landlord shall be entitled
to prompt reimbursement from Tenant for all costs incurred.

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

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

                                       9
<PAGE>


to be a forcible or unlawful entry into, or a detainer of, the Premises, or any
eviction of Tenant from the Premises.

            ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANT'S PROPERTY

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

                     ARTICLE IX. ASSIGNMENT AND SUBLETTING

        SECTION 9.1.  RIGHTS OF PARTIES.

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

               (b)      If Tenant desires to transfer an interest in this Lease,
it shall first notify Landlord of its desire and shall submit in writing to
Landlord: (i) the name and address of the proposed transferee; (ii) the nature
of any proposed subtenant's or assignee's business to be carried on in the
Premises; (iii) the terms and provisions of any proposed sublease or assignment,
including a copy of the proposed assignment or sublease form; (iv) evidence of
insurance of the proposed assignee or subtenant complying with the requirements
of EXHIBIT D hereto; (v) a completed Environmental Questionnaire from the
proposed assignee or subtenant; and (vi) any other information requested by
Landlord and reasonably related to the transfer. Except as provided in
Subsection (e) of this Section, Landlord shall ant unreasonably withhold its
consent, provided: (1) the use of the Premises will be consistent with the
provisions of this Lease; (2) the proposed assignee or subtenant has not been
required by any prior landlord, lender or governmental authority to take
remedial action in connection with Hazardous Materials contaminating a property
arising out of the proposed assignee's or subtenant's actions or use of the
property in question and is not subject to any enforcement order issued by any
governmental authority in connection with the use, disposal or storage of a
Hazardous Material; (3) at Landlord's election, insurance requirements shall be
brought into conformity with Landlord's then current leasing practice; (4) any
proposed subtenant or assignee demonstrates that it is financially responsible
by submission to Landlord of all reasonable information as Landlord may request
concerning the proposed subtenant or assignee, including, but not limited to, a
balance sheet of the proposed subtenant or assignee as of a date within ninety
(90) days of the request for Landlord's consent and statements of income or
profit and loss of the proposed subtenant or assignee for the two-year period
preceding the request for Landlord's consent, and/or a certification signed by
the proposed subtenant or assignee that it has not been evicted or been in
arrears in rent at any other leased premises for the 3-year period preceding the
request for Landlord's consent; (5) any proposed subtenant or assignee
demonstrates to Landlord's reasonable satisfaction a record of successful
experience in business; and (6) the proposed transfer

                                       10
<PAGE>


will not impose additional burdens or adverse tax effects on Landlord. If Tenant
has any exterior sign rights under this Lease, such rights are personal to
Tenant and may not be assigned or transferred to any assignee of this Lease or
subtenant of the Premises without Landlord's prior written consent, which may be
withheld in Landlord's sole and absolute discretion.

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

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

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

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

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

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

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

               (b)      Tenant hereby irrevocably assigns to Landlord all of
Tenant's interest in all rentals and income arising from any sublease of the
Premises, and Landlord may collect such rent and income and apply same toward
Tenant's obligations under this Lease; provided, however, that until a default
occurs in the performance of Tenant's obligations under this Lease, Tenant shall
have the right to receive and collect the sublease rentals. Landlord shall not,
by reason of this assignment or the collection of sublease rentals, be deemed
liable to the subtenant for the performance of any of Tenant's obligations under
the sublease. Tenant hereby irrevocably authorizes and directs any subtenant,
upon receipt of a written notice from Landlord stating that an uncured default
exists in the performance of Tenant's obligations under this Lease, to pay to
Landlord all sums then and thereafter due under the sublease. Tenant agrees that
the subtenant may rely on that notice without any duty of further inquiry and
notwithstanding any notice or claim by Tenant to the contrary. Tenant shall have
no right or claim against the subtenant or Landlord for any rentals so paid to
Landlord.

               (c)      In the event of the termination of this Lease, Landlord
may, at its sole option, take over Tenant's entire interest in any sublease and,
upon notice from Landlord, the subtenant shall attorn to Landlord.

                                       11
<PAGE>


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

        SECTION 9.4. CERTAIN TRANSFERS. The sale of all or substantially all of
Tenant's assets (other than bulk sales in the ordinary course of business) or,
if Tenant is a corporation, an unincorporated association, or a partnership, the
transfer, assignment or hypothecation of any stock or interest in such
corporation, association, or partnership in the aggregate of twenty-five percent
(25%) (except for publicly traded shares of stock constituting a transfer of
twenty-five percent (25%) or more in the aggregate, so long as no change in the
controlling interest of Tenant occurs as a result thereof shall be deemed an
assignment within the meaning and provisions of this Article. Notwithstanding
the foregoing, Landlord's consent shall not be required for the assignment of
this Lease as a result of a merger by Tenant with or into another entity, so
long as (i) the net worth of the successor entity after such merger is at least
equal to the greater of the net worth of Tenant as of the execution of this
Lease by Landlord or the net worth of Tenant immediately prior to the date of
such merger, evidence of which, satisfactory to Landlord, shall be presented to
Landlord prior to such merger, (ii) Tenant shall provide to Landlord, prior to
such merger, written notice of such merger and such assignment documentation and
other information as Landlord may request in connection therewith, and (iii) all
of the other terms and requirements of this Article shall apply with respect to
such assignment. Notwithstanding anything to the contrary contained in this
Lease, Landlord agrees that Tenant may assign this Lease or sublet the Premises,
or any portion thereof, without Landlord's consent, to any entity which
controls, is controlled by, or is under common control with Tenant, to any
entity which results from a merger or consolidation with Tenant, to any entity
engaged in a joint venture with Tenant; or to any entity which acquires
substantially all of the stock or assets of Tenant, (hereinafter each a
"Permitted Transfer"); provided, however, all such activities shall only be
allowed to the extent that the assignee or sublessee has a net worth equal to or
greater than Tenant. In addition, any sale or transfer of the capital stock of
Tenant shall be deemed a Permitted Transfer if (1) such sale or transfer occurs
in connection with any BONA FIDE financing or capitalization for the benefit of
Tenant, or (2) Tenant becomes a publicly traded corporation, or (3) such sale or
transfer is made to any publicly traded corporation; provided, however, any such
action shall only be considered a Permitted Transfer if the transfer or sale is
to an entity with a net worth equal to or greater than Tenant. Without limiting
the generality, of the foregoing, Landlord shall have no right to terminate the
Lease in connection with, and shall have no right to any sums or other economic
consideration resulting from, any Permitted Transfer.

                       ARTICLE X. INSURANCE AND INDEMNITY

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

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

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

        SECTION 10.4. LANDLORD'S NONLIABILITY. Landlord shall not be liable to
Tenant, its employees, agents and invitees, and Tenant hereby waives all claims
against Landlord for loss of or damage to any property,

                                       12
<PAGE>


or any injury to any person, or loss or interruption of business or income, or
any other loss, cost, damage, injury or liability whatsoever (including without
limitation any consequential damages and lost profit or opportunity costs)
resulting from, but not limited to, Acts of God, acts of civil disobedience or
insurrection, fire, explosion, falling plaster, steam, gas, electricity, water
or rain which may leak or flow from or into any part of the Budding or from the
breakage, leakage, obstruction or other defects of the pipes, sprinklers, wires,
appliances, plumbing, air conditioning, electrical works or other fixtures in
the Building, unless any such loss, cost, damage, injury or liability results
from Landlord's negligence or willful misconduct. It is understood that any such
condition may require the temporary evacuation or closure of all or a portion of
the Building. Except as provided in Sections 11.1 and 12.1 below, there shall be
no abatement of rent and no liability of Landlord by reason of any injury to or
interference with Tenant's business (including without limitation consequential
damages and lost profit or opportunity costs) arising from the making of any
repairs, alterations or improvements to any portion of the Building, including
repairs to the Premises, nor shall any related activity by Landlord constitute
an actual or constructive eviction; provided, however, that in making repairs,
alterations or improvements, Landlord shall interfere as little as reasonably
practicable with the conduct of Tenant's business in the Premises. Neither
Landlord nor its agents shall be liable for interference with light or other
similar intangible interests. Tenant shall immediately notify Landlord in case
of flue or accident in the Premises or the Building and of defects in any
improvements or equipment.

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

                        ARTICLE XI. DAMAGE OR DESTRUCTION

                           SECTION 11.1. RESTORATION.

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

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

               (c)      Commencing on the date of any damage to the Building,
and ending on the sooner of the date the damage is repaired or the date this
Lease is terminated, the rental to be paid under this Lease shall be abated to
the extent Tenant's use of the Premises is impaired, but only to the extent that
any business interruption insurance proceeds are received by Landlord therefor
from Tenant's insurance described in EXHIBIT D.

               (d)      Notwithstanding the provisions of subsections (a), (b)
and (c) of this Section, and subject to the provisions of Section 10.5 above,
the cost of any repairs shall be borne by Tenant, and Tenant shall not be
entitled to rental abatement or termination rights, if the damage is due to the
fault or neglect of Tenant or its employees, subtenants, invitees or
representatives. In addition, the provisions of this Section shall not be

                                       13
<PAGE>


deemed to require Landlord to repair any improvements or fixtures that Tenant is
obligated to repair or insure pursuant to any other provision of this Lease.

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

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

                           ARTICLE XII. EMINENT DOMAIN

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

        SECTION 12.2. TEMPORARY TAKING. No temporary taking of the Premises
shall terminate this Lease or give Tenant any right to abatement of rent, and
any award specifically attributable to a temporary taking of the Premises shall
belong entirely to Tenant. a temporary taking shall be deemed to be a taking of
the use or occupancy of the Premises for a period of not to exceed sixty (60)
days.

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

          ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS

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

                                       14
<PAGE>


or the lien of any mortgage or deed of trust to this Lease.

        SECTION 13.2. ESTOPPEL, CERTIFICATE.

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

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

                            SECTION 13.3. FINANCIALS.

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

               (b)      Tenant acknowledges that Landlord is relying on the
Statements in its determination to enter into this Lease, and Tenant represents
to landlord, which representation shall be deemed made on the date of this Lease
and again on the Commencement Date, that no material change in the financial
condition of Tenant, as reflected in the Statements, has occurred since the date
Tenant delivered the Statements to Landlord. The Statements, including the
Statements through June 30, 1996 which Tenant has delivered In Landlord, are
represented and warranted by Tenant to be materially correct and to accurately
and fully reflect Tenant's true financial condition as of the date of submission
by any Statements to Landlord.

                       ARTICLE XIV. DEFAULTS AND REMEDIES

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

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

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

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

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

               (e)      The failure or inability by Tenant to observe or perform
any of the express or implied covenants or provisions of this Lease to be
observed or performed by Tenant, other than as specified in any other subsection
of this Section, where the failure continues for a period of thirty (30) days
after written notice from Landlord to Tenant or such shorter period as is
specified in any other provision of this Lease; provided, however, that any such
notice shall be in lieu of, and not in addition to, any notice required under
California Code of Civil Procedure Section 1161 and l161(a) as amended. However,
if the nature of the failure is such that more than thirty (30) days are
reasonably required for its cure, then Tenant shall not be deemed to be in
default if Tenant commences the cure within thirty (30) days, and thereafter
diligently pursues the cure to completion.

                                       15
<PAGE>


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

                       SECTION 14.2. LANDLORD'S REMEDIES.

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

                        (i)    Landlord  may  terminate  Tenant's  right to
possession of the Premises by any lawful means, in which case this Lease shall
terminate and Tenant shall immediately surrender possession of the Premises to
Landlord. Such termination shall not affect any accrued obligations of Tenant
under this Lease. Upon termination, Landlord shall have the right to reenter the
Premises and remove all persons and property. Landlord shall also be entitled to
recover from Tenant:

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

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

                               (3)    The worth at the time of award of the
amount by which the unpaid rent and additional rent for the balance of the Term
after the time of award exceeds the amount of such loss that Tenant proves could
be reasonably avoided;

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

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

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

               (b)      The various rights and remedies reserved to Landlord in
this Lease or otherwise shall be cumulative and, except as otherwise provided by
California law, Landlord may pursue any or all of its rights and remedies at the
same time.

                                       16
<PAGE>


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

        SECTION 14.3. LATE PAYMENTS.

               (a)      Any rent due under this Lease that is not received by
Landlord within five (5) days of the date when due shall bear interest at the
maximum rate permitted by law from the date due until fully paid. The payment of
interest shall not cure any default by Tenant under this Lease. In addition,
Tenant acknowledges that the late payment by Tenant to Landlord of rent will
cause Landlord to incur costs not contemplated by this Lease, the exact amount
of which will be extremely difficult and impracticable to ascertain. Those costs
may include, but are not limited to, administrative, processing and accounting
charges, and late charges which may be imposed on Landlord by the terms of any
ground lease, mortgage or trust deed covering the Premises. Accordingly, if any
rent due from Tenant shall not be received by Landlord or Landlord's designee
within five (5) days after the date due, then Tenant shall pay to Landlord, in
addition to the interest provided above, a late charge in a sum equal to the
greater of five percent (5%) of the amount overdue or Two Hundred Fifty Dollars
($250.00) for each delinquent payment. Acceptance of a late charge by Landlord
shall not constitute a waiver of Tenant's default with respect to the overdue
amount, nor shall it prevent Landlord from exercising any of its other rights
and remedies.

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

        SECTION 14.4. RIGHT OF LANDLORD TO PERFORM. All covenants and agreements
to be performed by Tenant under this Lease shall be performed at Tenant's sole
cost and expense and without any abatement of rent or right of set-off. If
Tenant fails to pay any sum of money, other than rent, or fails to perform any
other act on its part to be performed under this Lease, and the failure
continues beyond any applicable grace period set forth in Section 14.1, then in
addition to any other available remedies, Landlord may, at its election make the
payment or perform the other act on Tenant's part. Landlord's election to make
the payment or perform the act on Tenant's part shall not give rise to any
responsibility of Landlord to continue making the same or similar payments or
performing the same or similar acts. Tenant shall, within five (5) days after
demand by Landlord, reimburse Landlord for all sums paid by Landlord and all
necessary incidental costs, together with interest at the maximum rate permitted
by law from the date of the payment by Landlord. Landlord shall have the same
rights and remedies if Tenant fails to pay those amounts as Landlord would have
in the event of a default by Tenant in the payment of rent.

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

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

                                       17
<PAGE>


the prevailing party shall be entitled to recover as a part of the action its
reasonable attorneys' fees, and all other costs. The prevailing party for the
purpose of this paragraph shall be determined by the trier of the facts.

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

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

        SECTION 14.9. LIMITATION OF ACTIONS AGAINST LANDLORD. Any claim, demand
or right of any kind by Tenant which is based upon or arises in connection with
this Lease shall be barred unless Tenant commences an action thereon within
twelve (12) months after the date that the act, omission, event or default upon
which the claim, demand or right arises, has occurred.

                             ARTICLE XV. END OF TERM

        SECTION 15.1. HOLDING OVER. This Lease shall terminate without further
notice upon the expiration of the Term, and any holding over by Tenant after the
expiration shall ant constitute a renewal or extension of this Lease, or give
Tenant any rights under this Lease, except when in writing signed by both
parties. If Tenant holds over for any period after the expiration (or earlier
termination) of the Term without the prior written consent of Landlord, such
possession shall constitute a tenancy at sufferance only; such holding over with
the prior written consent of Landlord shall constitute a month-to-month tenancy
commencing on the first (1st) day following the termination of this Lease. In
either of such events, possession shall be subject to all of the terms of this
Lease, except that the monthly Basic Rent shall be the greater of (a) one
hundred seventy-five percent (175%) of the Basic Rent for the month immediately
preceding the date of termination or (b) the then currently scheduled Basic Rent
for comparable space in the Building. If Tenant fails to surrender the Premises
upon the expiration of this Lease despite demand to do so by Landlord, Tenant
shall indemnify and hold Landlord harmless from all loss or liability, including
without limitation, any claims made by any succeeding tenant relating to such
failure to surrender. Acceptance by Landlord of rent after the termination shall
not constitute a consent to a holdover or result in a renewal of this Lease. The
foregoing provisions of this Section are in addition to and do not affect
Landlord's right of re-entry or any other rights of Landlord under this Lease or
at law.

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

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

                                       18
<PAGE>


                        ARTICLE XVI. PAYMENTS AND NOTICES

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

                       ARTICLE XVII. RULES AND REGULATIONS

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

                       ARTICLE XVIII. BROKER'S COMMISSION

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

                  ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST

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

                                       19
<PAGE>


                           ARTICLE XX. INTERPRETATION

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

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

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

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

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

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

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

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

        SECTION 20.9. INABILITY TO PERFORM. In the event that either party shall
be delayed or hindered in or prevented from the performance of any work or in
performing any act required under this Lease by reason of any cause beyond the
reasonable control of that party, then the performance of the work or the doing
of the act shall be excused for the period of the delay and the time for
performance shall be extended for a period equivalent to the period of the
delay. The provisions of this Section shall ant operate to excuse Tenant from
the prompt payment of rent or from the timely performance of any other
obligation under this Lease within Tenant's reasonable control.

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

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

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

                                       20
<PAGE>


                      ARTICLE XXI. EXECUTION AND RECORDING

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

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

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

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

        SECTION 212. AMENDMENTS. No amendment or termination of this Lease shall
be effective unless in writing signed by authorized signatories of Tenant and
Landlord, or by their respective successors in interest. No actions; policies,
oral or informal arrangements, business dealings or other course of conduct by
or between the parties shall be deemed to modify this Lease in any respect.

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

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

                           ARTICLE XXII MISCELLANEOUS

        SECTION 22.1. NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and
agrees that the terms of this Lease are confidential and constitute proprietary
information of Landlord. Disclosure of the terms could adversely affect the
ability of Landlord to negotiate other leases and impair Landlord's relationship
with other tenants. Accordingly, Tenant agrees that it, and its partners,
officers, directors, employees and attorneys, shall not intentionally and
voluntarily disclose the terms and conditions of this Lease to any other tenant
or apparent prospective tenant of the Landlord, either directly or indirectly,
without the prior written consent of Landlord, provided, however, that Tenant
may disclose the terms to prospective subtenants or assignees under this Lease.

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

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

        SECTION 22.4. MORTGAGEE PROTECTION. No act or failure to act on the part
of Landlord which would otherwise entitle Tenant to be relieved of its
obligations hereunder or to terminate this Lease shall result in such a release
or termination unless (a) Tenant has given notice by registered or certified
mail to any beneficiary of a deed of trust or mortgage covering the Premises
whose address has been furnished to Tenant and (b) such beneficiary is afforded
a reasonable opportunity to cure the default by Landlord (which in no event
shall be less than sixty (60) days), including, if necessary to effect the cure,
time to obtain possession of the Premises by power of sale or judicial
foreclosure provided that such foreclosure remedy is diligently pursued. Tenant
agrees that each beneficiary of a deed of trust or mortgage covering the
Premises is an express third party beneficiary hereof, Tenant shall have no
right or claim for the collection of any deposit from such beneficiary or from
any purchaser at a foreclosure sale unless such beneficiary or purchaser shall
have actually received and not refunded the deposit, and Tenant shall comply
with any written directions by any beneficiary

                                       21
<PAGE>


to pay rent due hereunder directly to such beneficiary without determining
whether an event of default exists under such beneficiary's deed of trust.

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

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

    SECTION 22.7. TERMINATION OF EXISTING LEASE. Landlord and Tenant's
predecessor-in-interest, Endgate Technology Corporation, a California
corporation, are currently parties to an industrial space lease dated July 22,
1994 for the Building located at 321 Sequel Way, Sunnyvale, California, which
lease was amended by First Amendment to Lease dated June 17, 1996 (as amended,
the "Existing Lease"). The parties agree that the Existing Lease shall terminate
effective as of the day preceding the Commencement Date of this Lease, provided
that such termination shall not relieve Tenant of (a) any accrued obligation or
liability under the Existing Lease as of said termination date, or (b) any
obligation under the Existing Lease which was reasonably intended to survive the
exploration or termination thereof. Any advance rental paid by Tenant under the
Existing Lease shall be rebated by Landlord or applied to the rent due
hereunder.

LANDLORD:                                  TENANT
THE IRVlNE COMPANY,                        ENDGATE CORPORATION,
a Michigan corporation                     a Delaware corporation



By: /s/ Clarence W. Barker,                By /s/ Edward A. Keible
   -----------------------------------        --------------------------
    Clarence W. Barker                        Name Edward A. Keible
                                                   ------------------------
    President, Irvine Industrial Company      Title President & CEO
                                                    ----------------------
    a division of the Irving Company

By: /s/ John C. Tsu                        By /s/ Julianne M. Biagini
   -------------------------------------      --------------------------
    John C. Tsu                            Name Julianne M. Biagini
    Assistant Secretary                         ------------------------
                                           Title VP Administration Of Controller
                                                 -------------------------------


                                       22
<PAGE>




                                    EXHIBIT A

                             DESCRIPTION OF PREMISES


<PAGE>


                             DESCRIPTION OF PREMISES

                                  [FLOOR PLAN]


<PAGE>


                             DESCRIPTION OF THE SITE

                                   [SITE PLAN]


<PAGE>


                                    EXHIBIT B

                            IRVINE INDUSTRIAL COMPANY
                         HAZARDOUS MATERIALS SURVEY FORM

        The purpose of this form is to obtain information regarding the use of
hazardous substances on Irvine Industrial Company property. Prospective tenants
and contractors should answer the questions in light of their proposed
operations on the premises. Existing tenants and contractors should answer the
questions as they relate to ongoing operations on the premises and should update
any information previously submitted.

        If additional space is needed to answer the questions, you may attach
separate sheets of paper to this form. When completed, the form should be sent
to the following address:

                          ----------------------------
                          ----------------------------
                          ----------------------------
                           (insert address of Property
                               Management Company)

        Your cooperation in this matter is appreciated. If you have any
questions, please do not to call [insert name of Property Manager] at [insert
phone number] for assistance.

1.      GENERAL INFORMATION

        Name of Responding Company:
                                   --------------------------------------------

        Check all that apply:Tenant( ) Contractor( )Prospective ( ) Existing( )

        Mailing Address:
                        -------------------------------------------------------

        Contact Person & Title:
                               ------------------------------------------------

        Telephone Number: (  )
                              -------------------------------------------------

        Address of Leased Premises:
                                   --------------------------------------------

        Length of Lease or Contract Term:
                                         --------------------------------------

        Describe the proposed operations to take place on the property,
        including principal products manufactured or services to be conducted.
        Existing tenants and contractors should describe any proposed changes to
        ongoing operations.

        -----------------------------------------------------------------------

        -----------------------------------------------------------------------

2.      STORAGE OF HAZARDOUS MATERIALS

        2.1    Will any hazardous materials be used or stored on-site?

        Wastes                      Yes ( )               No ( )
        Chemical Products           Yes ( )               No ( )
        Biological Hazards          Yes ( )               No ( )
        Infectious Wastes           Yes ( )               No ( )
        Radioactive Materials       Yes ( )               No ( )


2.2     List any hazardous materials to be used or stored, the quantities that
        will be on site at any given time, and the location and method of
        storage (e.g., bottles in storage closet on the premises).




                                       1
<PAGE>


                               LOCATION AND METHOD

         WASTE/PRODUCTS      OF STORAGE        QUANTITY

         --------------      --------------    --------------
         --------------      --------------    --------------
         --------------      --------------    --------------

2.3     Is any underground storage of hazardous substances proposed or
        currently conducted on the premises? Yes ( ) No ( )

        If yes, describe the materials to be stored, and the size and
        construction of the tank. Attach copies of any permits obtained For the
        underground storage of such substances.

3.      SPILLS

        3.1    During the past year, have any spills occurred on the premises?
               Yes ( ) No ( ) If so, please describe the spill and attach the
               results of any testing conducted to determine the extent of such
               spills.

        3.2    Were any agencies notified in connection with such spills?
               Yes ( ) No ( ) If so, attach copies of any spill reports or other
               correspondence with regulatory agencies.

        3.3    Were any clean-up actions undertaken in connection with the
               spills? Yes ( ) No ( ) If so, briefly describe the actions taken.
               Attach copies of any clearance letters obtained From any
               regulatory agencies involved and the results of any final soil or
               groundwater sampling done upon completion of the clean-up work.

4.      WASTE MANAGEMENT

        4.1    List the waste, if any, generated or to be generated at the
               premises, whether it is as hazardous waste, biological or
               radioactive hazard, its hazard class and the quantity generated
               on a monthly basis.

         Waste            Hazard Class      Quantity/Month

         --------------   --------------    --------------
         --------------   --------------    --------------
         --------------   --------------    --------------
         --------------   --------------    --------------

4.2     Describe the method(s) of disposal for each waste. Indicate where and
        how often disposal will take place.
        -----------------------------------------------------------------------
        -----------------------------------------------------------------------
        -----------------------------------------------------------------------

4.3     Is any treatment or processing of hazardous, infectious or radioactive
        wastes currently conducted or proposed to be conducted at the premises?
        Yes ( ) No ( )

           If yes, please describe any existing or proposed treatment methods.
        -----------------------------------------------------------------------
        -----------------------------------------------------------------------

4.4     Attach copies of any hazardous waste permits or licenses issued to
        your company with respect to its operations on the premises.

5.      WASTEWATER TREATMENT/DISCHARGE

        5.1    Do you discharge industrial waste water to:

                       storm drain?                 sewer?
               -------                      -------
                       surface water?               no industrial discharge
               -------                      -------

        5.2    Is your industrial wastewater treated before discharge?
               Yes ( ) NO ( )

               If yes, describe the type of treatment conducted.

                                       2
<PAGE>



        5.3    Attach copies of any wastewater discharge permits issued to
               your company with respect to its operations on the premises.

6.      AIR DISCHARGES

        6.1    Do you have any air filtration systems or stacks that discharge
               into the air? Yes ( ) No( )

        6.2    Do you operate any equipment that require air emissions permits?
               Yes ( ) No ( )

        6.3    Attach copies of any air discharge permits pertaining to these
               operations.

7.      HAZARDOUS MATERIAL DISCLOSURES

        7.1    Does your company handle an aggregate of at least 500 pounds,
               55 gallons or 200 cubic feet or hazardous material at any given
               time? If so, state law requires that you prepare a hazardous
               materials management plan. Yes ( ) No ( )

        7.2    Has your company prepared a hazardous materials management
               plan ("business plan") pursuant to state and Orange County Fire
               Department requirements? Yes ( ) No( ) If so, attach a copy of
               the business plan.

        7.3    Are any of the chemicals used in your operations regulated
               under Proposition 6.5? Yes ( ) No ( ) If so, describe the actions
               taken, or proposed actions to be taken, to comply with
               Proposition 65 requirements.

        7.4    Is your company subject to OSHA Hazard Communication
               Standard Requirements? Yes ( ) No ( ) If so, describe the
               procedures followed to comply with these requirements.

8.      ENFORCEMENT ACTIONS, COMPLAINTS

        8.1    Has your company ever been subject to any agency enforcement
               actions, administrative orders, or consent decrees?
               Yes ( ) No ( )
               If so, describe the actions and any continuing compliance
               obligations imposed as a result of these action.

        8.2    Has your company ever received requests for information, notice
               or demand letters, or any other inquiries regarding its
               operations? Yes ( ) No ( )

        8.3    Have there ever been, or are there now pending, any lawsuits
               against your company regarding any environmental or health and
               safety concerns? Yes ( ) No ( )

        8.4    Has an environmental audit ever been conducted at your
               company's current facility? Yes ( ) No ( ) If so, discuss the
               results of the audit.

        8.5    Have there been any problems or complaints from neighbors at
               your company's current facility? Yes ( ) No ( )



                                            By:
                                               --------------------------------
                                            Name:
                                                 ------------------------------
                                            Title:
                                                  -----------------------------



                                            Date:
                                                 ------------------------------


                                       3
<PAGE>


                                    EXHIBIT C

                               LANDLORD DISCLOSURE

                           [INTENTIONALLY LEFT BLANK]

                                       1
<PAGE>



                                    EXHIBIT D

                               TENANT's INSURANCE

    The following standards for Tenant's insurance shall be in effect at the
Premises. Landlord reserves the right to adopt reasonable nondiscriminatory
modifications and additions to those standards. Tenant agrees to obtain and
present evidence to Landlord that it has fully complied with the insurance
requirements.

        l.       Tenant shall, at its sole cost and expense, commencing on the
date Tenant is given access to the Premises for any purpose and during the
entire Term, procure, pay for and keep in full force and effect: (i) commercial
general liability insurance with respect to the Premises and the operations of
or on behalf of Tenant in, on or about the Premises, including but not limited
to personal injury, owned and nonowned automobile, blanket contractual,
independent contractors, broad form property damage (with an exception to any
pollution exclusion with respect to damage arising out of heat, smoke or fumes
from a hostile fire), fire and water legal liability, products liability (if a
product is sold from the Premises), liquor law liability (if alcoholic beverages
are sold, served or consumed within the Premises), and severability of interest,
which policy(ies) shall be written on an "occurrence" basis and far not less
than the amount set forth in Item 13 of the Basic Lease Provisions, with a
combined single limit (with a $50,000 minimum limit on fire legal liability) per
occurrence for bodily injury, death, and property damage liability, or the
current limit of liability carried by Tenant, whichever is greater, and subject
to such increases in amounts as Landlord may determine from time to time; (ii)
workers' compensation insurance coverage as required by law, together with
employers' liability insurance; (iii) with respect to improvements, alterations,
and the like required or permitted to be made by Tenant under this lease,
builder's all-risk insurance, in an amount equal to the replacement cost of the
work; (iv) insurance against fire, vandalism, malicious mischief and such other
additional perils as may be included in a standard "all risk" form in general
use in Orange County, California, insuring Tenant's leasehold improvements,
trade fixtures, furnishings, equipment and items of personal property of Tenant
located in the Premises, in an amount equal to not less than ninety percent
(90%) of their actual replacement cost (with replacement cost endorsement); and
(v) business interruption insurance in amounts satisfactory to cover one (1)
year of loss. In no event shall the limits of any policy be considered as
limiting the liability of Tenant under this Lease.

        2.       In the event Landlord consents to Tenant's use, generation or
storage of Hazardous Materials on, under or about the Premises pursuant to
Section 5.3 of this Lease, Landlord shall have the continuing right to require
Tenant, at Tenant's sole cost and expense (provided the same is available for
purchase upon commercially reasonable terms), to purchase insurance specified
and approved by Landlord, with coverage not less than Five Million Dollars
($5,000,000.00), insuring (i) any Hazardous Materials shall be removed from the
Premises, (ii) the Premises shall he restored to a clean, healthy, safe and
sanitary condition, and (iii) any liability of Tenant, Landlord and Landlord's
offices, directors, shareholders, agents, employees and representatives, arising
from such Hazardous Materials.

        3.       All policies of insurance required to be carried by Tenant
pursuant to this EXHIBIT D containing a deductible exceeding Ten Thousand
Dollars ($10,000.00) per occurrence must be approved in writing by Landlord
prior to the issuance of such policy. Tenant shall lie solely responsible for
the payment of all deductibles.

        4.       All policies of insurance required to be carried by Tenant
pursuant to this EXHIBIT D shall be written by responsible insurance companies
authorized to do business in the State of California and with a Best's rating of
not less than "A" subject to final acceptance and approval by Landlord. Any
insurance required of Tenant may be furnished by Tenant under any blanket policy
carried by it or under a separate policy, so long as (i) the Premises are
specifically covered (by rider, endorsement or otherwise), (ii) the limits of
the policy are applicable on a "per location" basis to the Premises and provide
for restoration of the aggregate limits, and (iii) the policy otherwise complies
with the provisions of this EXHIBIT D. a true and exact copy of each paid up
policy evidencing the insurance (appropriately authenticated by the insurer) or
a certificate of insurance, certifying that the policy has been issued, provides
the coverage required by this EXHIBIT D and contains the required provisions,
shall be delivered to Landlord prior to the date Tenant is given the right of
possession of the Premises. Proper evidence of the renewal of any insurance
coverage shall also be delivered to Landlord not less than thirty (30) days
prior to the expiration of the coverage. Landlord may at any time, and from time
to time, inspect and/or copy any and all insurance policies required by this
Lease.

        5.       Each policy evidencing insurance required to he carried by
Tenant pursuant to this EXHIBIT D shall contain the following provisions and/or
clauses satisfactory to Landlord: (i) a provision that the policy and the
coverage provided shall be primary and that any coverage carried by Landlord
shall be noncontributory with respect to any policies carried by Tenant except
as to workers' compensation insurance; (ii) a provision including Landlord, the
Additional Insureds identified in item 11 of the Basic Lease Provisions, and any
other parties in

                                       1
<PAGE>


interest designated by Landlord as an additional insured, except as to workers'
compensation insurance; (iii) a waiver by the insurer of any right to
subrogation against Landlord, its agents, employees, contractors and
representatives which arises or might arise by reason of any payment under the
policy or by reason of any act or omission of Landlord, its agents, employees,
contractors or representatives; and (iv) a provision that the insurer will not
cancel or change the coverage provided by the policy without first giving
Landlord thirty (30) days prior written notice.

    6.           In the event that Tenant fails to procure, maintain and/or pay
for, at the times and for the durations specified in this EXHIBIT D, any
insurance required by this EXHIBIT D, or fails to carry insurance required by
any governmental authority, Landlord may at its election procure that insurance
and pay the premiums, in which event Tenant shall repay Landlord all sums paid
by Landlord, together with interest at the maximum rate permitted by law and any
related costs or expenses incurred by Landlord, within ten (10) days following
Landlord's written demand to Tenant.

                                       2
<PAGE>



                                   EXHIBIT E.

                              RULES AND REGULATIONS

           This Exhibit sets forth the rules and regulations governing Tenant's
use of the Premises leased to Tenant pursuant to the terms, covenants and
conditions of the Lease to which this Exhibit is attached and therein made part
thereof. In the event of any conflict or inconsistency between this Exhibit and
the Lease, the Lease shall control.

               1.       Tenant shall not place anything or allow anything to be
placed near the glass of any window, door, partition or wall which may appear
unsightly from outside the Premises.

               2.       The walls, walkways, sidewalks, entrance passages,
courts and vestibules shall not be obstructed or used for any purpose other than
ingress and egress of pedestrian travel to and from the Premises, and shall not
be used for loitering or gathering, or to display, store or place any
merchandise, equipment or devices, or for any other purpose. The walkways,
entrance passageways, courts, vestibules and roof are not for the use of the
general public and Landlord shall in all cases retain the right to control and
prevent access thereto by all persons whose presence in the judgment of the
Landlord shall be prejudicial to the safety, character, reputation and interests
of the Building and its tenants, provided that nothing herein contained shall be
construed to prevent such access to persons with whom Tenant normally deals in
the ordinary course of Tenant's business unless such persons are engaged in
illegal activities. No tenant or employee or invitee of any tenant shall be
permitted upon the roof of the Building.

               3.       No awnings or other projection shall be attached to the
outside walls of the Building. No security bars or gates, curtains, blinds,
shades or screens shall be attached to or hung in, or used in connection with,
any window or door of the Premises without the prior written consent of
Landlord. Neither the interior nor exterior of any windows shall be coated or
otherwise sunscreened without the express written consent of Landlord.

               4.       Tenant shall not mark, nail, paint, drill into, or in
any way deface any part of the Premises or the Building. Tenant shall not lay
linoleum, tile, carpet or other similar floor covering so that the same shall be
affixed to the floor of the Premises in any manner except as approved by
Landlord in writing. The expense of repairing any damage resulting from a
violation of this rule or removal of any floor covering shall be borne by
Tenant.

               5.       The toilet rooms, urinals, wash bowls and other plumbing
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 thrown
therein. The expense of any breakage, stoppage or damage resulting from the
violation of this rule shall be borne by the tenant who, or whose employees or
invitees, caused it.

               6.       Landlord shall direct electricians as to the manner and
location of any future telephone wiring. No boring or cutting for wires will be
allowed without the prior consent of Landlord. The locations of the telephones,
call boxes and other office equipment affixed to the Premises shall be subject
to the prior written approval of Landlord.

               7.       The Premises shall not be used for the storage of
merchandise except as such storage may be incidental to the permitted use of the
Premises. No exterior storage shall be allowed at any time without the prior
written approval of Landlord. The Premises shall not be used for cooking or
washing clothes without the prior written consent of Landlord, or for lodging or
sleeping or for any immoral or illegal purposes.

               8.       Tenant shall not make, or permit to be made, any
unseemly or disturbing noises or disturb or interfere with occupants of this or
neighboring buildings or premises or those having business with them, whether by
the use of any musical instrument, radio, phonograph, noise, or otherwise.
Tenant shall not use, keep or permit to be used, or kept, any foul or obnoxious
gas or substance in the Premises or permit or suffer the Premises to be used or
occupied in any manner offensive or objectionable to Landlord or other occupants
of this or neighboring buildings or premises by reason of any odors, fumes or
gases.

               9.       No animals shall be permitted at any time within the
Premises.

               10.      Tenant shall not use the name of the Building or the
Project in connection with or in promoting or advertising the business of
Tenant, except as Tenant's address, without the written consent of Landlord.
Landlord shall have the right to prohibit any advertising by any Tenant which,
in Landlord's reasonable opinion, tends to impair the reputation of the Project
or its desirability for its intended uses, and upon written notice from Landlord
any Tenant shall refrain from or discontinue such advertising.

               11.      Canvassing, soliciting, peddling, parading, picketing,
demonstrating or otherwise engaging in any conduct that unreasonably impairs the
value or use of the Premises or the Project are prohibited and each Tenant shall
cooperate to prevent the same.

                                       1
<PAGE>



               12.      No equipment of any type shall be placed on the Premises
which in Landlord's opinion exceeds the load limits of the floor or otherwise
threatens the soundness of the structure or improvements of the Building.

               13.      No air conditioning unit or other similar apparatus
shall be installed or used by any Tenant without the prior written consent of
Landlord.

               14.      No aerial antenna shall be erected on the roof or
exterior walls of the Premises, or on the grounds, without in each instance, the
prior written consent of Landlord. Any aerial or antenna so installed without
such written consent shall be subject to removal by Landlord at any time without
prior notice at the expense of the Tenant, and Tenant shall upon Landlord's
demand pay a removal fee to Landlord of not less than $200.00.

               15.      The entire Premises, including vestibules, entrances,
doors, fixtures, windows and plate glass, shall at all times be maintained in a
safe, neat and clean condition by Tenant. All trash, refuse and waste materials
shall be regularly removed from the Premises by Tenant and placed in the
containers at the locations designated by Landlord for refuse collection. All
cardboard boxes must be "broken down" prior to being placed in the trash
container. All styrofoam chips must be bagged or otherwise contained prior to
placement in the trash container, so as not to constitute a nuisance. Pallets
may not be disposed of in the trash container or enclosures. The burning of
trash, refuse or waste materials is prohibited.

               16.      Tenant shall use at Tenant's cost such pest
extermination contractor as Landlord may direct and at such intervals ms
landlord may require.

               17.      All keys for the Premises shall be provided to Tenant by
Landlord and Tenant shall return to Landlord any of such keys so provided upon
the termination of the Lease. Tenant shall not change locks or install other
locks on doors of the Premises, without the prior written consent of Landlord.
In the event of loss of any keys furnished by Landlord for Tenant, Tenant shall
pay to Landlord the costs thereof.

               18.      No person shall enter or remain within the Project while
intoxicated or under the influence of liquor or drugs. Landlord shall have the
right to exclude or expel from the Project any person who, in the absolute
discretion of Landlord, is under the influence of liquor or drugs.

               Landlord reserves the right to amend or supplement the foregoing
Rules and Regulations and to adopt and promulgate additional rules and
regulations applicable to the Premises. Notice of such rules and regulations and
amendments and supplements thereto, if any, shall be given to the Tenant.

                                       2
<PAGE>


                                    EXHIBIT X

                                   WORK LETTER

        321 SOQUEL WAY

        Tenant shall take possession of the Premises located at 321 Soquel Way
in their existing condition, "AS-IS", and waives any right or claim against
Landlord arising out of the condition of said Premises.

                                 333 SOQUEL WAY

        Landlord hereby agrees to install new carpet in the Premises located at
333 Soquel Way and to repaint the interior of said Premises. All materials and
finishes utilized in completing the aforementioned work shall be Landlord's
building standard. Landlord's total contribution for such work shall not exceed
Forty-Four Thousand Six Hundred Eighty-Eight Dollars ($44,688.00). Any excess
cost shall be borne solely by Tenant and shall be paid to Landlord within ten
(10) days following Landlord's billing for such excess cost.

        In addition to the foregoing, Landlord shall ensure that the HVAC system
serving the Premises located at 333 Soquel Way is in good operating condition as
of the Commencement Date of this Lease. Landlord's total contribution for the
HVAC work shall not exceed Forty-Four Thousand Six Hundred Eighty-Eight Dollars
($44,688.00). Any excess cost shall be borne solely by Tenant and shall be paid
to Landlord within ten (10) days following Landlord's billing for such excess
cost.

        Landlord shall cause the above improvements to be completed (i) in a
good and workmanlike manner using new material and (ii) in accordance with
applicable laws.

                                    EXHIBIT X
<PAGE>


                             DESCRIPTION OF PREMISES

                                  [FLOOR PLAN]

                                    EXHIBIT A
                                    To Lease