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             [LOGO]    AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

         STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE -- GROSS

               (DO NOT USE THIS FORM FOR MULTI-TENANT PROPERTY)

1. BASIC PROVISIONS ("BASIC PROVISIONS")

   1.1 PARTIES: This Lease ("LEASE"), dated for reference purposes only, 
December 1, 1995 is made by and between Ronald G. Lee ("LESSOR") and Lee 
Pharmaceuticals, a California Corporation ("LESSEE"), (collectively the 
"PARTIES," or individually a "PARTY").

   1.2 PREMISES: That certain real property, including all improvements 
therein or to be provided by Lessor under the terms of this Lease, and 
commonly known by the street address of 1444 Santa Anita Avenue, South El 
Monte, CA 91733 located in the County of Los Angeles, State of California and 
generally described as (describe briefly the nature of the property) a 
concrete block, one story office and research facility, building approximately 
9,800 square feet ("PREMISES"). (See Paragraph 2 for further provisions.)

   1.3 TERM: 9 years and 11 months ("ORIGINAL TERM") commencing December 22, 
1995 ("COMMENCEMENT DATE") and ending November 30, 2005 ("EXPIRATION DATE"). 
(See Paragraph 3 for further provisions.)

   1.4 EARLY POSSESSION: ____________________________ ("EARLY POSSESSION DATE").
(See Paragraphs 3.2 and 3.3 for further provisions.)

   1.5 BASE RENT: $5,562.00 per month ("BASE RENT"), payable on the 1st day of 
each month commencing January 1, 1996 (See Paragraph 4 for further provisions.)

/ / If this box is checked, there are provisions in this Lease for the Base Rent
    to be adjusted.

   1.6 BASE RENT PAID UPON EXECUTION: $_________________________________________
as Base Rent for the period_____________________________________________________
_______________________________________________________________________________.

   1.7 SECURITY DEPOSIT: $5,562.00 ("SECURITY DEPOSIT"). (See Paragraph 5 for
further provisions.)

   1.8 PERMITTED USE: Epoxy resin formulation, research, testing, and other 
legal related usages. (See Paragraph 6 for further provisions.)

   1.9 INSURING PARTY: Lessor is the "INSURING PARTY." $_____ is the "BASE
PREMIUM." (See Paragraph 8 for further provisions.)

   1.10 REAL ESTATE BROKERS: The following real estate brokers (collectively, 
the "BROKERS") and brokerage relationships exist in this transaction and are 
consented to by the Parties (check applicable boxes): 
_____________________________________________________________________ represents

/ /Lessor exclusively ("LESSOR'S BROKER");  / / both Lessor and Lessee, and
_____________________________________________________________________ represents

/ / Lessee exclusively ("LESSEE'S BROKER");  / / both Lessee and Lessor. (See 
Paragraph 15 for further provisions.)

   1.11 GUARANTOR. The obligations of the Lessee under this Lease are to be 
guaranteed by___________________________________________________________________
_______________________________________________ ("GUARANTOR"). (See Paragraph 37
for further provisions.)

   1.12 ADDENDA. Attached hereto is an Addendum or Addenda consisting of
Paragraphs ___ through ___ and Exhibits ________________________________________
__________________________________ all of which constitute a part of this Lease.

2. PREMISES.

   2.1 LETTING. Lessor hereby leases to Lessee, and Lessee hereby leases from 
Lessor, the Premises, for the term, at the rental, and upon all of the terms, 
covenants and conditions set forth in this Lease. Unless otherwise provided 
herein, any statement of square footage set forth in this Lease, or that may 
have been used in calculating rental, is an approximation which Lessor and 
Lessee agree is reasonable and the rental based thereon is not subject to 
revision whether or not the actual square footage is more or less.

   2.2 CONDITION. Lessor shall deliver the Premises to Lessee clean and free 
of debris on the Commencement Date and warrants to Lessee that the existing 
plumbing, fire sprinkler system, lighting, air conditioning, heating, and 
loading doors, if any, in the Premises, other than those constructed by 
Lessee, shall be in good operating condition on the Commencement Date. If a 
non-compliance with said warranty exists as of the Commencement Date, Lessor 
shall, except as otherwise provided in this Lease, promptly after receipt of 
written notice from Lessee setting forth with specificity the nature and 
extent of such non-compliance, rectify same at Lessor's expense. If Lessee 
does not give Lessor written notice of a non-compliance with this warranty 
within thirty (30) days after the Commencement Date, correction of that 
non-compliance shall be the obligation of Lessee at Lessee's sole cost and 
expense.

   2.3 COMPLIANCE WITH COVENANTS, RESTRICTIONS AND BUILDING CODE. Lessor 
warrants to Lessee that the improvements on the Premises comply with all 
applicable covenants or restrictions of record and applicable building codes, 
regulations and ordinances in effect on the Commencement Date. Said warranty 
does not apply to the use to which Lessee will put the Premises or to any 
Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made or 
to be made by Lessee. If the Premises do not comply with said warranty, Lessor 
shall, except as otherwise provided in this Lease, promptly after receipt of 
written notice from Lessee setting forth with specificity the nature and 
extent of such non-compliance, rectify the same at Lessor's expense. If Lessee 
does not give Lessor written notice of a non-compliance with this warranty 
within six (6) months following the Commencement Date, correction of that 
non-compliance shall be the obligation of Lessee at Lessee's sole cost and 
expense.

   2.4 ACCEPTANCE OF PREMISES. Lessee hereby acknowledges: (a) that it has 
been advised by the Brokers to satisfy itself with respect to the condition of 
the Premises (including but not limited to the electrical and fire sprinkler 
systems, security, environmental aspects, compliance with Applicable Law, as 
defined in Paragraph 6.3) and the present and future suitability of the 
Premises for Lessee's intended use, (b) that Lessee has made such 
investigation as it deems necessary with reference to such matters and assumes 
all responsibility therefor as the same relate to Lessee's occupancy of the 
Premises and/or the term of this Lease, and (c) that neither Lessor, nor any 
of Lessor's agents, has made any oral or written representations or warranties 
with respect to the said matters other than as set forth in this Lease.

   2.5 LESSEE PRIOR OWNER/OCCUPANT. The warranties made by Lessor in this 
Paragraph 2 shall be at no force or effect if immediately prior to the date 
set forth in Paragraph 1.1 Lessee was the owner or occupant of the Premises. 
In such event, Lessee shall, at Lessee's sole cost and expense, correct any 
non-compliance of the Premises with said warranties.

3. TERM.

   3.1 TERM. The Commencement Date, Expiration Date and Original Term of this 
Lease are as specified in Paragraph 1.3.

   3.2 EARLY POSSESSION. If Lessee totally or partially occupies the Premises 
prior to the Commencement Date, the obligation to pay Base Rent shall be 
abated for the period of such early possession. All other terms of this Lease, 
however, shall be in effect during such period. Any such early possession 
shall not affect nor advance the Expiration Date of the Original Term. 

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   3.3 DELAY In POSSESSION. If for any reason Lessor cannot deliver possession 
of the Premises to Lessee as agreed herein by the Early Possession Date, if 
one is specified in Paragraph 1.4, or, if no Early Possession Date is 
specified, by the Commencement Date, Lessor shall not be subject to any 
liability therefor, nor shall such failure affect the validity of this Lease, 
or the obligations of Lessee hereunder, or extend the term hereof, but in such 
case, Lessee shall not, except as otherwise provided herein, be obligated to 
pay rent or perform any other obligation of Lessee under the terms of this 
Lease until Lessor delivers possession of the Premises to Lessee. If 
possession of the Premises is not delivered to Lessee within sixty (60) days 
after the Commencement Date, Lessee may, at its option, by notice in writing 
to Lessor within ten (10) days thereafter, cancel this Lease, in which event 
the Parties shall be discharged from all obligations hereunder; provided, 
however, that if such written notice by Lessee is not received by Lessor 
within said ten (10) day period, Lessee's right to cancel this Lease shall 
terminate and be of no further force or effect. Except as may be otherwise 
provided, and regardless of when the term actually commences, if possession is 
not tendered to Lessee when required by this Lease and Lessee does not 
terminate this Lease, as aforesaid, the period free of the obligation to pay 
Base Rent, if any, that Lessee would otherwise have enjoyed shall run from the 
date of delivery of possession and continue for a period equal to what Lessee 
would otherwise have enjoyed under the terms hereof, but minus any days of 
delay caused by the acts, changes or omissions of Lessee.

4. RENT.

   4.1 BASE RENT. Lessee shall cause payment of Base Rent and other rent or 
charges, as the same may be adjusted from time to time, to be received by 
Lessor in lawful money of the United States, without offset or deduction, on 
or before the day on which it is due under the terms of this Lease. Base Rent 
and all other rent and charges for any period during the term hereof which is 
for less than one (1) full calendar month shall be prorated based upon the 
actual number of days of the calendar month involved. Payment of Base Rent and 
other charges shall be made to Lessor at its address stated herein or to such 
other persons or at such other addresses as Lessor may from time to time 
designate in writing to Lessee.

5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution hereof 
the Security Deposit set forth in Paragraph 1.7 as security for Lessee's 
faithful performance of Lessee's obligations under this Lease. If Lessee fails 
to pay Base Rent or other rent or charges due hereunder, or otherwise Defaults 
under this Lease (as defined in Paragraph 13.1), Lessor may use, apply or 
retain all or any portion of said Security Deposit for the payment of any 
amount due Lessor or to reimburse or compensate Lessor for any liability, 
cost, expense, loss or damage (including attorneys' fees) which Lessor may 
suffer or incur by reason thereof. If Lessor uses or applies all or any 
portion of said Security Deposit, Lessee shall within ten (10) days after 
written request therefor deposit moneys with Lessor sufficient to restore said 
Security Deposit to the full amount required by this Lease. Any time the Base 
Rent increases during the term of this Lease, Lessee shall; upon written 
request from Lessor, deposit additional moneys with Lessor sufficient to 
maintain the same ratio between the Security Deposit and the Base Rent as 
those amounts are specified in the Basic Provisions. Lessor shall not be 
required to keep all or any part of the Security Deposit separate from its 
general accounts. Lessor shall, at the expiration or earlier termination of 
the term hereof and after Lessee has vacated the Premises, return to Lessee 
(or, at Lessor's option, to the last assignee, if any, of Lessee's interest 
herein), that portion of the Security Deposit not used or applied by Lessor. 
Unless otherwise expressly agreed in writing by Lessor, no part of the 
Security Deposit shall be considered to be held in trust, to bear interest or 
other increment for its use, or to be prepayment for any moneys to be paid by 
Lessee under this Lease.

6. USE.

   6.1 USE. Lessee shall use and occupy the Premises only for the purposes set 
forth in Paragraph 1.8, or any other use which is comparable thereto, and for 
no other purpose. Lessee shall not use or permit the use of the Premises in a 
manner that creates waste or a nuisance, or that disturbs owners and/or 
occupants of, or causes damage to, neighboring premises or properties. Lessor 
hereby agrees to not unreasonably withhold or delay its consent to any written 
request by Lessee, Lessees assignees or subtenants, and by prospective 
assignees and subtenants of the Lessee, its assignees and subtenants, for a 
modification of said permitted purpose for which the premises may be used or 
occupied, so long as the same will not impair the structural integrity of the 
improvements on the Premises, the mechanical or electrical systems therein, is 
not significantly more burdensome to the Premises and the improvements 
thereon, and is otherwise permissible pursuant to this Paragraph 6. If Lessor 
elects to withhold such consent, Lessor shall within five (5) business days 
give a written notification of same, which notice shall include an explanation 
of Lessor's reasonable objections to the change in use.

   6.2 HAZARDOUS SUBSTANCES.

       (a) REPORTABLE USES REQUIRE CONSENT. The term "HAZARDOUS SUBSTANCE" as 
used in this Lease shall mean any product, substance, chemical, material or 
waste whose presence, nature, quantity and/or intensity of existence, use, 
manufacture, disposal, transportation, spill, release or effect, either by 
itself or in combination with other materials expected to be on the Premises, 
is either; (i) potentially injurious to the public health, safety or welfare, 
the environment or the Premises, (ii) regulated or monitored by any 
governmental authority, or (iii) a basis for liability of Lessor to any 
governmental agency or third party under any applicable statute or common law 
theory. Hazardous Substance shall include, but not be limited to, 
hydrocarbons, petroleum, gasoline, crude oil or any products, by-products or 
fractions thereof. Lessee shall not engage in any activity in, on or about the 
Premises which constitutes a Reportable Use (as hereinafter defined) of 
Hazardous Substances without the express prior written consent of Lessor and 
compliance in a timely manner (at Lessee's sole cost and expense) with all 
Applicable Law (as defined in Paragraph 6.3). "REPORTABLE USE" shall mean (i) 
the installation or use of any above or below ground storage tank, (ii) the 
generation, possession, storage, use, transportation, or disposal of a 
Hazardous Substance that requires a permit from, or with respect to which a 
report, notice, registration or business plan is required to be filed with, 
any governmental authority. Reportable Use shall also include Lessee's being 
responsible for the presence in, on or about the Premises of a Hazardous 
Substance with respect to which any Applicable Law requires that a notice be 
given to persons entering or occupying the Premises or neighboring properties. 
Notwithstanding the foregoing, Lessee may, without Lessor's prior consent, but 
in compliance with all Applicable Law, use any ordinary and customary 
materials reasonably required to be used by Lessee in the normal course of 
Lessee's business permitted on the Premises, so long as such use is not a 
Reportable Use and does not expose the Premises or neighboring properties to 
any meaningful risk of contamination or damage or expose Lessor to any 
liability therefor. In addition, Lessor may (but without any obligation to do 
so) condition its consent to the use or presence of any Hazardous Substance, 
activity or storage tank by Lessee upon Lessee's giving Lessor such additional 
assurances as Lessor, in its reasonable discretion, deems necessary to protect 
itself, the public, the Premises and the environment against damage, 
contamination or injury and/or liability therefrom or therefor, including, but 
not limited to, the installation (and removal on or before Lease expiration or 
earlier termination) of reasonably necessary protective modifications to the 
Premises (such as concrete encasements) and/or the deposit of an additional 
Security Deposit under Paragraph 5 hereof.

       (b) DUTY TO INFORM LESSOR. If Lessee knows, or has reasonable cause to 
believe, that a Hazardous Substance, or a condition involving or resulting 
from same, has come to be located in, on, under or about the Premises, other 
than as previously consented to by Lessor, Lessee shall immediately give 
written notice of such fact to Lessor. Lessee shall also immediately give 
Lessor a copy of any statement, report, notice, registration, application, 
permit, business plan, license, claim, action or proceeding given to, or 
received from, any governmental authority or private party, or persons 
entering or occupying the Premises, concerning the presence, spill, release, 
discharge of, or exposure to, any Hazardous Substance or contamination in, on, 
or about the Premises, including but not limited to all such documents as may 
be involved in any Reportable Uses involving the Premises. 

       (c) INDEMNIFICATION. Lessee shall indemnify, protect, defend and hold 
Lessor, its agents, employees, lenders and ground lessor, if any, and the 
Premises, harmless from and against any and all loss of rents and/or damages, 
liabilities, judgments, costs, claims, liens, expenses, penalties, permits and 
attorney's and consultant's fees arising out of or involving any Hazardous 
Substance or storage tank brought onto the Premises by or for Lessee or under 
Lessee's control. Lessee's obligations under this Paragraph 6 shall include, 
but not be limited to, the effects of any contamination or injury to person, 
property or the environment created or suffered by Lessee, and the cost of 
investigation (including consultant's and attorney's fees and testing), 
removal, remediation, restoration and/or abatement thereof, or of any 
contamination therein involved, and shall survive the expiration or earlier 
termination of this Lease. No termination, cancellation or release agreement 
entered into by Lessor and Lessee shall release Lessee from its obligations 
under this Lease with respect to Hazardous Substances or storage tanks, unless 
specifically so agreed by Lessor in writing at the time of such agreement.

   6.3 LESSEE'S COMPLIANCE WITH LAW. Except as otherwise provided in this 
Lease, Lessee, shall, at Lessee's sole cost and expense, fully, diligently and 
in a timely manner, comply with all "APPLICABLE LAW," which term is used in 
this Lease to include all laws, rules, regulations, ordinances, directives, 
covenants, easements and restrictions of record, permits, the requirements of 
any applicable fire insurance underwriter or rating bureau, and the 
recommendations of Lessor's engineers and/or consultants, relating in any 
manner to the Premises (including but not limited to matters pertaining to 
(i) industrial hygiene, (ii) environmental conditions on, in, under or about 
the Premises, including soil and groundwater conditions, and (iii) the use, 
generation, manufacture, production, installation, maintenance, removal, 
transportation, storage, spill or release of any Hazardous Substance or 
storage tank), now in effect or which may hereafter come into effect, and 
whether or not reflecting a change in policy from any previously existing 
policy. Lessee shall, within five (5) days after receipt of Lessor's written 
request, provide Lessor with copies of all documents and information, 
including, but not limited to, permits, registrations, manifests, 
applications, reports and certificates, evidencing Lessee's compliance with 
any Applicable Law specified by Lessor, and shall immediately upon receipt, 
notify Lessor in writing (with copies of any documents involved) of any 
threatened or actual claim, notice, citation, warning, complaint or report 
pertaining to or involving failure by Lessee or the Premises to comply with 
any Applicable Law.

   6.4 INSPECTION; COMPLIANCE. Lessor and Lessor's Lender(s) (as defined in 
Paragraph 8.3(a)) shall have the right to enter the Premises at any time, in 
the case of an emergency, and otherwise at reasonable times, for the purpose 
of inspecting the condition of the Premises and for verifying compliance by 
Lessee with this Lease and all Applicable Laws (as defined in Paragraph 6.3), 
and to employ experts and/or consultants in connection therewith and/or to 
advise Lessor with respect to Lessee's activities, including but not limited 
to the installation, operation, use, monitoring, maintenance, or removal of 
any Hazardous Substance or storage tank on or from the Premises. The costs and 
expenses of any such inspections shall be paid by the party requesting same, 
unless a Default or Breach of this Lease, violation of Applicable Law, or a 
contamination, caused or materially contributed to by Lessee is found to exist 
or be imminent, or unless the inspection is requested or ordered by a 
governmental authority as the result of any such existing or imminent 
violation or contamination. In any such case, Lessee shall upon request 
reimburse Lessor or Lessor's Lender, as the case may be, for the costs and 
expenses of such inspections.

7. MAINTENANCE; REPAIRS; UTILITY INSTALLATIONS; TRADE FIXTURES AND ALTERATIONS.

   7.1 LESSEE'S OBLIGATIONS.

       (a) Subject to the provisions of Paragraphs 2.2 (Lessor's warranty as 
to condition), 2.3 (Lessor's warranty as to compliance with covenants, etc),

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   7.2 (Lessor's obligations to repair), 9 (damage and destruction), and 14 
(condemnation), Lessee shall, at Lessee's sole cost and expense and at all 
times, keep the Premises and every part thereof in good order, condition and 
repair, (whether or not such portion of the Premises requiring repair, or the 
means of repairing the same, are reasonably or readily accessible to Lessee, 
and whether or not the need for such repairs occurs as a result of Lessee's 
use, any prior use, the elements or the age of such portion of the Premises), 
including, without limiting the generality of the foregoing, all equipment or 
facilities serving the Premises, such as plumbing, heating, air conditioning, 
ventilating, electrical, lighting facilities, boilers, fired or unfired 
pressure vessels, fire sprinkler and/or standpipe and hose or other automatic 
fire extinguishing system, including fire alarm and/or smoke detection systems 
and equipment, fire hydrants, fixtures, walls (interior and exterior), 
ceilings, floors, windows, doors, plate glass, skylights, landscaping, 
driveways, parking lots, fences, retaining walls, signs, sidewalks and 
parkways located in, on, about, or adjacent to the Premises, but excluding 
foundations, the exterior roof and the structural aspects of the Premises. 
Lessee shall not cause or permit any Hazardous Substance to be spilled or 
released in, on, under or about the Premises (including through the plumbing 
or sanitary sewer system) and shall promptly, at Lessee's expense, take all 
investigatory and/or remedial action reasonably recommended, whether or not 
formally ordered or required, for the cleanup of any contamination of, and for 
the maintenance, security and/or monitoring of, the Premises, the elements 
surrounding same, or neighboring properties, that was caused or materially 
contributed to by Lessee, or pertaining to or involving any Hazardous 
Substance and/or storage tank brought onto the Premises by or for Lessee or 
under its control. Lessee, in keeping the Premises in good order, condition 
and repair, shall exercise and perform good maintenance practices. Lessee's 
obligations shall include restorations, replacements or renewals when 
necessary to keep the Premises and all improvements thereon or a part thereof 
in good order, condition and state of repair. 

       (b) Lessee shall, at Lessee's sole cost and expense, procure and 
maintain contracts, with copies to Lessor, in customary form and substance 
for, and with contractors specializing and experienced in, the inspection, 
maintenance and service of the following equipment and improvements, if any, 
located on the Premises: (i) heating, air conditioning and ventilation 
equipment, (ii) boiler, fired or unfired pressure vessels, (iii) fire 
sprinkler and/or standpipe and hose or other automatic fire extinguishing 
systems, including fire alarm and/or smoke detection, (iv) landscaping and 
irrigation systems, (v) roof covering and drain maintenance and (vi) asphalt 
and parking lot maintenance.

   7.2 LESSOR'S OBLIGATIONS. Upon receipt of written notice of the need for 
such repairs and subject to Paragraph 13.5, Lessor shall, at Lessor's expense, 
keep the foundations, exterior roof and structural aspects of the Premises in 
good order, condition and repair, Lessor shall not, however, be obligated to 
paint the exterior surface of the exterior walls or to maintain the windows, 
doors or plate glass or the interior surface of exterior walls. Lessor shall 
not, in any event, have any obligation to make any repairs until Lessor 
receives written notice of the need for such repairs. It is the intention of 
the Parties that the terms of this Lease govern the respective obligations of 
the Parties as to maintenance and repair of the Premises. Lessee and Lessor 
expressly waive the benefit of any statute now or hereafter in effect to the 
extent it is inconsistent with the terms of this Lease with respect to, or 
which affords Lessee the right to make repairs at the expense of Lessor or to 
terminate this Lease by reason of, any needed repairs.

   7.3 UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS.

       (a) DEFINITIONS; CONSENT REQUIRED. The term "UTILITY INSTALLATIONS" is 
used in this Lease to refer to all carpeting, window coverings, air lines, 
power panels, electrical distribution, security, fire protection systems, 
communication systems, lighting fixtures, heating, ventilating, and air 
conditioning equipment, plumbing, and fencing in, on or about the Premises. 
The term "TRADE FIXTURES" shall mean Lessee's machinery and equipment that can 
be removed without doing material damage to the Premises. The term 
"ALTERATIONS" shall mean any modification of the improvements on the Premises 
from that which are  provided by Lessor under the terms of this Lease, other 
than Utility Installations or Trade Fixtures, whether by addition or deletion. 
"LESSEE OWNED ALTERATIONS AND/OR UTILITY INSTALLATIONS" are defined as 
Alterations and/or Utility Installations made by lessee that are not yet owned 
by Lessor as defined in Paragraph 7.4(a). Lessee shall not make any 
Alterations or Utility Installations in, on, under or about the Premises 
without Lessor's prior written consent. Lessee may, however, make 
non-structural Utility Installations to the interior of the Premises 
(excluding the roof), as long as they are not visible from the outside, do not 
involve puncturing, relocating or removing the roof or any existing walls, and 
the cumulative cost thereof during the term of this Lease as extended does not 
exceed $25,000.

       (b) CONSENT. Any Alterations or Utility Installations that Lessee shall 
desire to make and which require the consent of the Lessor shall be presented 
to Lessor in written form with proposed detailed plans. All consents given by 
Lessor, whether by virtue of Paragraph 7.3(a) or by subsequent specific 
consent, shall be deemed conditioned upon: (i) Lessee's acquiring all 
applicable permits required by governmental authorities, (ii) the furnishing 
of copies of such permits together with a copy of the plans and specifications 
for the Alteration or Utility Installation to Lessor prior to commencement of 
the work thereon, and (iii) the compliance by Lessee with all conditions of 
said permits in a prompt and expeditious manner. Any Alterations or Utility 
Installations by Lessee during the term of this Lease shall be done in a good 
and workmanlike manner, with good and sufficient materials, and in compliance 
with all Applicable Law. Lessee shall promptly upon completion thereof furnish 
Lessor with as-built plans and specifications therefor. Lessor may (but 
without obligation to do so) condition its consent to any requested Alteration 
or Utility Installation that costs $10,000 or more upon Lessee's providing 
Lessor with a lien and completion bond in an amount equal to one and one-half 
times the estimated cost of such Alteration or Utility Installation and/or 
upon Lessee's posting an additional Security Deposit with Lessor under 
Paragraph 36 hereof.

       (c) INDEMNIFICATION. Lessee shall pay, when due, all claims for labor 
or materials furnished or alleged to have been furnished to or for Lessee at 
or for use on the Premises, which claims are or may be secured by any 
mechanics' or materialmen's lien against the Premises or any interest therein. 
Lessee shall give Lessor not less than ten (10) days' notice prior to the 
commencement of any work in, on or about the Premises, and Lessor shall have 
the right to post notices of non-responsibility in or on the Premises as 
provided by law. If Lessee shall, in good faith, contest the validity of any 
such lien, claim or demand, then Lessee shall, at its sole expense defend and 
protect itself, Lessor and the Premises against the same and shall pay and 
satisfy any such adverse judgment that may be rendered thereon before the 
enforcement thereof against the Lessor or the Premises. If Lessor shall 
require, Lessee shall furnish to Lessor a surety bond satisfactory to Lessor 
in an amount equal to one and one-half times the amount of such contested lien 
claim or demand, indemnifying Lessor against liability for the same, as 
required by law for the holding of the Premises free from the effect of such 
lien or claim. In addition, Lessor may require Lessee to pay Lessor's 
attorney's fees and costs in participating in such action if Lessor shall 
decide it is to its best interest to do so.

   7.4 OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION.

       (a) OWNERSHIP. Subject to Lessor's right to require their removal or 
become the owner thereof as hereinafter provided in this Paragraph 7.4, all 
Alterations and Utility Additions made to the Premises by Lessee shall be the 
property of and owned by Lessee, but considered a part of the Premises. Lessor 
may, at any time and at its option, elect in writing to Lessee to be the owner 
of all or any specified part of the Lessee Owned Alterations and Utility 
Installations. Unless otherwise instructed per subparagraph 7.4(b) hereof, all 
Lessee Owned Alterations and Utility Installations shall, at the expiration or 
earlier termination of this Lease, become the property of Lessor and remain 
upon and be surrendered by Lessee with the Premises.

       (b) REMOVAL. Unless otherwise agreed in writing, Lessor may require that 
any or all Lessee Owned Alterations or Utility Installations be removed by the 
expiration or earlier termination of this Lease, notwithstanding their 
installation may have been consented to by Lessor. Lessor may require the 
removal at any time of all or any part of any Lessee Owned Alterations or 
Utility Installations made without the required consent of Lessor.

       (c) SURRENDER/RESTORATION. Lessee shall surrender the Premises by the 
end of the last day of the Lease term or any earlier termination date, with 
all of the improvements, parts and surfaces thereof clean and free of debris 
and in good operating order, condition and state of repair, ordinary wear and 
tear excepted. "ORDINARY WEAR AND TEAR" shall not include any damage or 
deterioration that would have been prevented by good maintenance practice or 
by Lessee performing all of its obligations under this Lease. Except as 
otherwise agreed or specified in writing by Lessor, the Premises, as 
surrendered, shall include the Utility Installations. The obligation of Lessee 
shall include the repair of any damage occasioned by the installation, 
maintenance or removal of Lessee's Trade Fixtures, furnishings, equipment, and 
Alterations and/or Utility Installations, as well as the removal of any 
storage tank installed by or for Lessee, and the removal, replacement, or 
remediation of any soil, material or ground water contaminated by Lessee, all 
as may then be required by Applicable Law and/or good service practice. 
Lessee's Trade Fixtures shall remain the property of Lessee and shall be 
removed by Lessee subject to its obligation to repair and restore the Premises 
per this Lease.

8. INSURANCE; INDEMNITY.

   8.1 PAYMENT OF PREMIUM INCREASES.

       (a) Lessee shall pay to Lessor any insurance cost increase ("INSURANCE 
COST INCREASE") occurring during the term of this Lease. "INSURANCE COST 
INCREASE" is defined as any increase in the actual cost of the insurance 
required under Paragraphs 8.2(b), 8.3(a) and 8.3(b). ("REQUIRED INSURANCE"), 
over and above the Base Premium, as hereinafter defined, calculated on an 
annual basis. "INSURANCE COST INCREASE" shall include, but not be limited to, 
increases resulting from the nature of Lessee's occupancy, any act or omission 
of Lessee, requirements of the holder of a mortgage or deed of trust covering 
the Premises, increased valuation of the Premises, and/or a premium rate 
increase. If the parties insert a dollar amount in Paragraph 1.9, such amount 
shall be considered the "BASE PREMIUM." In lieu thereof, if the Premises have 
been previously occupied, the "BASE PREMIUM" shall be the annual premium 
applicable to the most recent occupancy. If the Premises have never been 
occupied, the "BASE PREMIUM" shall be the lowest annual premium reasonably 
obtainable for the Required Insurance as of the commencement of the Original 
Term, assuming the most nominal use possible of the Premises. In no event, 
however, shall Lessee be responsible for any portion of the premium cost 
attributable to liability insurance coverage in excess of $1,000,000 procured 
under Paragraph 8.2(b) (Liability Insurance Carried By Lessor).

       (b) Lessee shall pay any such Insurance Cost Increase to Lessor within 
thirty (30) days after receipt by Lessee of a copy of the premium statement or 
other reasonable evidence of the amount due. If the insurance policies 
maintained hereunder cover other property besides the Premises, Lessor shall 
also deliver to Lessee a statement of the amount of such Insurance Cost 
Increase attributable only to the Premises showing in reasonable detail the 
manner in which such amount was computed. Premiums for policy periods 
commencing prior to, or extending beyond, the term of this Lease shall be 
prorated to coincide with the corresponding Commencement or Expiration of the 
Lease term.

   8.2 LIABILITY INSURANCE.

       (a) CARRIED BY LESSEE. Lessee shall obtain and keep in force during the 
term of this Lease a Commercial General Liability policy of insurance 
protecting Lessee and Lessor (as an additional insured) against claims for 
bodily injury, personal injury and property damage based upon, involving or 
arising out of the ownership, use, occupancy or maintenance of the Premises 
and all areas appurtenant thereto. Such insurance shall be on an occurrence 
basis providing single limit coverage in an amount not less than $1,000,000 
per occurrence with an "Additional Insured-Managers or Lessors of Premises" 

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Endorsement and contain the "Amendment of the Pollution Exclusion" for damage 
caused by heat, smoke or fumes from a hostile fire. The policy shall not 
contain any intra-insured exclusions as between insured persons or 
organizations, but shall include coverage for liability assumed under this 
Lease as an "insured contract" for the performance of Lessee's indemnity 
obligations under this Lease. The limits of said insurance required by this 
Lease or as carried by Lessee shall not, however, limit the liability of 
Lessee nor relieve Lessee of any obligation hereunder. All insurance to be 
carried by Lessee shall be primary to and not contributory with any similar 
insurance carried by Lessor, whose insurance shall be considered excess 
insurance only. 

       (b) CARRIED BY LESSOR. In the event Lessor is the Insuring 
Party, Lessor shall also maintain liability insurance described in Paragraph 
8.2(a), above, in addition to, and not in lieu of, the insurance required to 
be maintained by Lessee. Lessee shall not be named as an additional insured 
therein.

   8.3 PROPERTY INSURANCE-BUILDING, IMPROVEMENTS AND RENTAL VALUE.

       (a) BUILDING AND IMPROVEMENTS. The Insuring Party shall obtain and keep 
in force during the term of this Lease a policy or policies in the name of 
Lessor, with loss payable to Lessor and to the holders of any mortgages, deeds 
of trust or ground leases on the Premises ("LENDER(S)"), insuring loss or 
damages to the Premises. The amount of such insurance shall be equal to the 
full replacement cost of the Premises, as the same shall exist from time to 
time, or the amount required by Lenders, but in no event more than the 
commercially reasonable and available insurable value thereof if, by reason of 
the unique nature or age of the improvements involved, such latter amount is 
less than full replacement cost. Lessee Owned Alterations and Utility 
Installations shall be insured by Lessee under Paragraph 8.4. If the coverage 
is available and commercially appropriate, such policy or policies shall 
insure against all risks of direct physical loss or damage (except the perils 
of flood and/or earthquake unless required by a Lender), including coverage 
for any additional costs resulting from debris removal and reasonable amounts 
of coverage for the enforcement of any ordinance or law regulating the 
reconstruction or replacement of any undamaged sections of the Premises 
required to be demolished or removed by reason of the enforcement of any 
building, zoning, safety or land use laws as the result of a covered cause of 
loss, but not including plate glass insurance. Said policy or policies shall 
also contain an agreed valuation provision in lieu of any coinsurance clause, 
waiver of subrogation, and inflation guard protection causing an increase in 
the annual property insurance coverage amount by a factor of not less than the 
adjusted U.S. Department of Labor Consumer Price Index for All Urban Consumers 
for the city nearest to where the Premises are located.

       (b) RENTAL VALUE. Lessor shall, in addition, obtain and keep in force 
during the term of this Lease a policy or policies in the name of Lessor, with 
loss payable to Lessor and Lender(s), insuring the loss of the full rental and 
other charges payable by Lessee to Lessor under this Lease for one (1) year 
(including all real estate taxes, insurance costs, and any scheduled rental 
increases). Said insurance shall provide that in the event the Lease is 
terminated by reason of an insured loss, the period of indemnity for such 
coverage shall be extended beyond the date of the completion of repairs or 
replacement of the Premises, to provide for one full year's loss of rental 
revenues from the date of any such loss. Said insurance shall contain an 
agreed valuation provision in lieu of any coinsurance clause, and the amount 
of coverage shall be adjusted annually to reflect the projected rental income, 
property taxes, insurance premium costs and other expenses, if any, otherwise 
payable by Lessee, for the next twelve (12) month period.

       (c) ADJACENT PREMISES. If the Premises are part of a larger building, 
or if the Premises are part of a group of buildings owned by Lessor which are 
adjacent to the Premises, the Lessee shall pay for any increase in the 
premiums for the property insurance of such building or buildings if said 
increase is caused by Lessee's acts, omissions, use or occupancy of the 
Premises.

       (d) TENANT'S IMPROVEMENTS. Since Lessor is the Insuring Party, the 
Lessor shall not be required to insure Lessee Owned Alterations and Utility 
Installations unless the item in question has become the property of Lessor 
under the terms of this Lease.

   8.4 LESSEE'S PROPERTY INSURANCE. Subject to the requirements of Paragraph 
8.5, Lessee at its cost shall either by separate policy or, at Lessor's 
option, by endorsement to a policy already carried, maintain insurance 
coverage on all of Lessee's personal property, Lessee Owned Alterations and 
Utility Installations in, on, or about the Premises similar in coverage to 
that carried by the Insuring Party under Paragraph 8.3. Such insurance shall 
be full replacement cost coverage with a deductible of not to exceed $1,000 
per occurrence. The proceeds from any such insurance shall be used by Lessee 
for the replacement of personal property or the restoration of Lessee Owned 
Alterations and Utility Installations. Lessee shall be the Insuring Party with 
respect to the insurance required by this Paragraph 8.4 and shall provide 
Lessor with written evidence that such insurance is in force. 

   8.5 INSURANCE POLICIES. Insurance required hereunder shall be in companies 
duly licensed to transact business in the state where the Premises are 
located, and maintaining during the policy term a "General Policyholders 
Rating" of at least B+, V, or such other rating as may be required by a 
Lender having a lien on the Premises, as set forth in the most current issue 
of "Best's Insurance Guide." Lessee shall not do or permit to be done 
anything which shall invalidate the insurance policies referred to in this 
Paragraph 8. Lessee shall cause to be delivered to Lessor certified copies 
of, or certificates evidencing the existence and amounts of, the insurance, 
and with the additional insureds, required under Paragraph 8.2(a) and 8.4. No 
such policy shall be cancelable or subject to modification except after 
thirty (30) days prior written notice to Lessor. Lessee shall at least thirty 
(30) days prior to the expiration of such policies, furnish Lessor with 
evidence of renewals or "insurance binders" evidencing renewal thereof, or 
Lessor may order such insurance and charge the cost thereof to Lessee, which 
amount shall be payable by Lessee to Lessor upon demand.

   8.6 WAIVER OF SUBROGATION. Without affecting any other rights or remedies, 
Lessee and Lessor ("WAIVING PARTY") each hereby release and relieve the other, 
and waive their entire right to recover damages (whether in contract or in 
tort) against the other, for loss of or damage to the Waiving Party's property 
arising out of or incident to the perils required to be insured against under 
Paragraph 8. The effect of such releases and waives of the right to recover 
damages shall not be limited by the amount of insurance carried or required, 
or by any deductibles applicable thereto.

   8.7 INDEMNITY. Except for Lessor's negligence and/or breach of express 
warranties, Lessee shall indemnify, protect, defend and hold harmless the 
Premises, Lessor and its agents, Lessor's master or ground lessor, partners 
and Lenders, from and against any and all claims, loss of rents and/or 
damages, costs, liens, judgments, penalties, permits, attorney's and 
consultant's fees, expenses and/or liabilities arising out of, involving, or 
in dealing with, the occupancy of the Premises by Lessee, the conduct of 
Lessee's business, any act, omission or neglect of Lessee, its agents, 
contractors, employees or invitees, and out of any Default or Broach by Lessee 
in the performance in a timely manner of any obligation on Lessee's part to be 
performed under this Lease. The foregoing shall include, but not be limited 
to, the defense or pursuit of any claim or any action or proceeding involved 
therein, and whether or not (in the case of claims mad against Lessor) 
litigated and/or reduced to judgment, and whether well founded or not. In case 
any action or proceeding be brought against Lessor by reason of any of the 
foregoing matters, Lessee upon notice from Lessor shall defend the same at 
Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor shall 
cooperate with Lessee in such defense. Lessor need not have first paid any 
such claim in order to be so indemnified.

   8.8 EXEMPTION OF LESSOR FROM LIABILITY. Lessor shall not be liable for 
injury or damage to the person or goods, wares, merchandise or other property 
of Lessee, Lessee's employees, contractors, invitees, customers, or any other 
person in or about the Premises, whether such damage or injury is caused by or 
results from fire, steam, electricity, gas, water or rain, or from the 
breakage, leakage, obstruction or other defects of pipes, fire sprinklers, 
wires, appliances, plumbing, air conditioning or lighting fixtures, or from 
any other cause, whether the said injury or damage results from conditions 
arising upon the Premises or upon other portions of the building of which the 
Premises are a part, or from other sources or places, and regardless of 
whether the cause of such damage or injury or the means of repairing the same 
is accessible or net. Lessor shall not be liable for any damages arising from 
any act or neglect of any other tenant of Lessor. Notwithstanding Lessor's 
negligence or breach of this Lease, Lessor shall under no circumstances be 
liable for injury to Lessee's business or for any loss of income or profit 
therefrom.

9. DAMAGE or DESTRUCTION.

   9.1 DEFINITIONS.

       (a) "PREMISES PARTIAL DAMAGE" shall mean damage or destruction to the 
improvements on the Premises, other than Lessee Owned Alterations and Utility 
Installations, the repair cost of which damage or destruction is less than 50% 
of the then Replacement Cost of the Premises immediately prior to such damage 
or destruction, excluding from such calculation the value of the land and 
Lessee Owned Alterations and Utility Installations. 

       (b) "PREMISES TOTAL DESTRUCTION" shall mean damage or destruction to 
the Premises, other than Lessee Owned Alterations and Utility Installations 
the repair cost of which damage or destruction is 50% or more of the then 
Replacement Cost of the Premises immediately prior to such damage or 
destruction, excluding from such calculation the value of the land and Lessee 
Owned Alterations and Utility Installations.

       (c) "INSURED LOSS" shall mean damage or destruction to improvements on 
the Premises, other than Lessee Owned Alterations and Utility Installations, 
which was caused by an event required to be covered by the insurance described 
in Paragraph 8.3(a), irrespective of any deductible amounts or coverage limits 
involved.

       (d) "REPLACEMENT COST" shall mean the cost to repair or rebuild the 
improvements owned by Lessor at the time of the occurrence to their condition 
existing immediately prior thereto, including demolition, debris removal and 
upgrading required by the operation of applicable building codes, ordinances 
or laws, and without deduction for depreciation.

       (e) "HAZARDOUS SUBSTANCE CONDITION" shall mean the occurrence or 
discovery of a condition involving the presence of, or a contamination by, a 
Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the 
Premises.

   9.2 PARTIAL DAMAGE-INSURED LOSS. If a Premises Partial Damage that is an 
Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such 
damage (but not Lessee's Trade Fixtures or Lessee Owned Alterations and 
Utility Installations) as soon as reasonably possible and this Lease shall 
continue in full force and effect. Notwithstanding the foregoing, if the 
required insurance was not in force or the insurance proceeds are not 
sufficient to effect such repair, the Insuring Party shall promptly contribute 
the shortage in proceeds as and when required to complete said repairs. In the 
event, however, the shortage in proceeds was due to the fact that, by reason 
of the unique nature of the improvements, full replacement cost insurance 
coverage was not commercially reasonable and available, Lesser shall have no 
obligation to pay for the shortage in insurance proceeds or to fully restore 
the unique aspects of the Premises unless Lessee provides Lessor with the 
funds to cover same, or adequate assurance thereof, within ten (10) days 
following receipt of written notice of such shortage and request therefor. If 
Lessor receives said funds or adequate assurance thereof within said ten (10) 
day period, the party responsible for making the repairs shall complete them 
as soon as reasonably possible and this Lease shall remain in full force and 
effect. If Lessor does not receive such funds or assurance within said period, 
Lessor may nevertheless elect by written notice to Lessee within ten (10) days 
thereafter to make such restoration and repair as is commercially reasonable 
with Lessor paying any shortage in proceeds, in which case this Lease shall 
remain in full force and effect. If in such case Lessor does not so elect, 
then this Lease shall terminate sixty (60) days following the occurrence of 
the damage or destruction. Unless otherwise agreed, Lessee shall in no event 
have any right to reimbursement from Lessor for any funds contributed by 
Lessee to repair

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any such damage or destruction. Premises Partial Damage due to flood or 
earthquake shall be subject to Paragraph 9.3 rather than Paragraph 9.2, 
notwithstanding that there may be some insurance coverage, but the net 
proceeds of any such insurance shall be made available for the repairs if 
made by either Party.

   9.3 PARTIAL DAMAGE - UNINSURED LOSS. If a Premises Partial Damage that is 
not an Insured Loss occurs, unless caused by a negligent or willful act of 
Lessee (in which event Lessee shall make the repairs at Lessee's expense and 
this Lease shall continue in full force and effect, but subject to Lessor's 
rights under Paragraph 13), Lessor may at Lessor's option, either; (i) repair 
such damage as soon as reasonably possible at Lessor's expense, in which 
event this Lease shall continue in full force and effect, or (ii) give 
written notice to Lessee within thirty (30) days after receipt by Lessor of 
knowledge of the occurrence of such damage of Lessor's desire to terminate 
this Lease as of the date sixty (60) days following the giving of such 
notice. In the event Lessor elects to give such notice of Lessor's intention 
to terminate this Lease, Lessee shall have the right within ten (10) days 
after the receipt of such notice to give written notice to Lessor of Lessee's 
commitment to pay for the repair of such damage totally at Lessee's expense 
and without reimbursement from Lessor. Lessee shall provide Lessor with the 
required funds or satisfactory assurance thereof within thirty (30) days 
following Lessee's said commitment. In such event this Lease shall continue 
in full force and effect, and Lessor shall proceed to make such repairs as 
soon as reasonably possible and the required funds are available. If Lessee 
does not give such notice and provide the funds or assurance thereof within 
the times specified above, this Lease shall terminate as of the date 
specified in Lessor's notice of termination.

   9.4 TOTAL DESTRUCTION. Notwithstanding any other provision hereof, if a 
Premises Total Destruction occurs (including any destruction required by any 
authorized public authority), this Lease shall terminate sixty (60) days 
following the date of such Premises Total Destruction, whether or not the 
damage or destruction is an Insured Loss or was caused by a negligent or 
willful act of Lessee. In the event, however, that the damage or destruction 
was caused by Lessee, Lessor shall have the right to recover Lessor's damages 
from Lessee except as released and waived in Paragraph 8.6.

   9.5 DAMAGE NEAR END OF TERM. If at any time during the last six (6) months 
of the term at this Lease there is damage for which the cost to repair 
exceeds one (1) month's Base Rent, whether or not an Insured Loss, Lessor 
may, at Lessor's option, terminate this Lease effective sixty (60) days 
following the date of occurrence of such damage by giving written notice to 
Lessee of Lessor's election to do so within thirty (30) days after the date 
of occurrence of such damage. Provided, however, if Lessee at that time has 
an exercisable option to extend this Lease or to purchase the Premises, then 
Lessee may preserve this Lease by, within twenty (20) days following the 
occurrence of the damage, or before the expiration of the time provided in 
such option for its exercise, whichever is earlier ("EXERCISE PERIOD"), (i) 
exercising such option and (ii) providing Lessor with any shortage in 
insurance proceeds (or adequate assurance thereof) needed to make the 
repairs. If Lessee duly exercises such option during said Exercise Period and 
provides Lessor with funds (or adequate assurance thereof) to cover any 
shortage in insurance proceeds, Lessor shall, at Lessor's expense repair such 
damage as soon as reasonably possible and this Lease shall continue in full 
force and effect. If Lessee fails to exercise such option and provide such 
funds or assurance during said Exercise Period, then Lessor may at Lessor's 
option terminate this Lease as of the expiration of said sixty (60) day 
period following the occurrence of such damage by giving written notice to 
Lessee of Lessor's election to do so within ten (10) days after the 
expiration of the Exercise Period, notwithstanding any term or provision in 
the grant of option to the contrary.

   9.6 ABATEMENT AT RENT; LESSEE'S REMEDIES.

       (a) In the event of damage described in Paragraph 9.2 (Partial Damage 
-Insured), whether or not Lessor or Lessee repairs or restores the Premises, 
the Base Rent, Real Property Taxes, insurance premiums, and other charges, if 
any, payable by Lessee hereunder for the period during which such damage, its 
repair or the restoration continues (not to exceed the period for which 
rental value insurance is required under Paragraph 8.3(b)), shall be abated 
in proportion to the degree to which Lessee's use of the Premises is 
impaired. Except for abatement of Base Rent, Real Property Taxes, insurance 
premiums, and other charges, if any, as aforesaid, all other obligations of 
Lessee hereunder shall be performed by Lessee, and Lessee shall have no claim 
against Lessor for any damage suffered by reason of any such repair or 
restoration.

       (b) If Lessor shall be obligated to repair or restore the Premises 
under the provisions of this Paragraph 9 and shall not commence, in a 
substantial and meaningful way, the repair or restoration of the Premises 
within ninety (90) days after such obligation shall accrue, Lessee may, at any 
time prior to the commencement of such repair or restoration, give written 
notice to Lessor and to any Lenders of which Lessee has actual notice of 
Lessee's election to terminate this Lease on a date not less than sixty (60) 
days following the giving of such notice. If Lessee gives such notice to 
Lessor and such Lenders and such repair or restoration is not commenced within 
thirty (30) days after receipt of such notice, this Lease shall terminate as 
of the date specified in said notice. If Lessor or a Lender commences the 
repair or restoration of the Premises within thirty (30) days after receipt of 
such notice, this Lease shall continue in full force and effect. "COMMENCE" as 
used in this Paragraph shall mean either the unconditional authorization of 
the preparation of the required plans, or the beginning of the actual work on 
the Premises, whichever first occurs.

   9.7 HAZARDOUS SUBSTANCE CONDITIONS. If a Hazardous Substance Condition 
occurs, unless Lessee is legally responsible therefor (in which case Lessee 
shall make the investigation and remediation thereof required by Applicable 
Law and this Lease shall continue in full force and effect, but subject to 
Lessor's rights under Paragraph 13), Lessor may at Lessor's option either (i) 
investigate and remediate such Hazardous Substance Condition, if required, as 
soon as reasonably possible at Lessor's expense, in which event this Lease 
shall continue in full force and effect, or (ii) if the estimated cost to 
investigate and  remediate such condition exceeds twelve (12) times the then 
monthly Base Rent or $100,000, whichever is greater, give written notice to 
Lessee within thirty (30) days after receipt by Lessor of knowledge of the 
occurrence of such Hazardous Substance Condition of Lessor's desire to 
terminate this Lease as of the date sixty (60) days following the giving of 
such notice. In the event Lessor elects to give such notice of Lessor's 
intention to terminate this Lease, Lessee shall have the right within ten (10) 
days after the receipt of such notice to give written notice to Lessor of 
Lessee's commitment to pay for the investigation and remediation of such 
Hazardous Substance Condition totally at Lessee's expense and without 
reimbursement from Lessor except to the extent of an amount equal to twelve 
(12) times the then monthly Base Rent or $100,000, whichever is greater. 
Lessee shall provide Lessor with the funds required of Lessee or satisfactory 
assurance thereof within thirty (30) days following Lessee's said commitment. 
In such event this Lease shall continue in full force and effect, and Lessor 
shall proceed to make such investigation and remediation as soon as reasonably 
possible and the required funds are available. If Lessee does not give such 
notice and provide the required funds or assurance thereof within the times 
specified above, this Lease shall terminate as of the date specified in 
Lessor's notice of termination. If a Hazardous Substance Condition occurs for 
which Lessee is not legally responsible, there shall be abatement of Lessee's 
obligations under this Lease to the same extent as provided in Paragraph 
9.6(a) for a period of not to exceed twelve (12) months.

   9.8 TERMINATION - ADVANCE PAYMENTS. Upon termination of this Lease pursuant 
to this Paragraph 9, an equitable adjustment shall be made concerning advance 
Base Rent and any other advance payments made by Lessee to Lessor. Lessor 
shall, in addition, return to Lessee so much of Lessee's Security Deposit as 
has not been, or is not then required to be, used by Lessor under the terms of 
this Lease.

   9.9 WAIVE STATUTES. Lessor and Lessee agree that the terms of this Lease 
shall govern the effect of any damage to or destruction of the Premises with 
respect to the termination of this Lease and hereby waive the provisions of 
any present or future statute to the extent inconsistent herewith.

10. REAL PROPERTY TAXES.

   10.1 (a) PAYMENT OF TAXES. Lessor shall pay the Real Property Taxes, as 
defined in Paragraph 10.2, applicable to the Premises; provided, however, that 
Lessee shall pay, in addition to rent, the amount, if any, by which Real 
Property Taxes applicable to the Premises increase over the fiscal tax year 
during which the Commencement Date occurs ("TAX INCREASE"). Subject to 
Paragraph 10.1(b), payment of any such Tax Increase shall be made by Lessee 
within thirty (30) days after receipt of Lessor's written statement setting 
forth the amount due and the computation thereof. Lessee shall promptly 
furnish Lessor with satisfactory evidence that such taxes have been paid. If 
any such taxes to be paid by Lessee shall cover any period of time prior to or 
after the expiration or earlier termination of the term hereof, Lessee's share 
of such taxes shall be equitably prorated to cover only the period of time 
within the tax fiscal year this Lease is in effect, and Lessor shall reimburse 
Lessee for any overpayment after such proration.

       (b) ADVANCE PAYMENT. In order to insure payment when due and before 
delinquency of any or all Real Property Taxes, Lessor reserves the right, at 
Lessor's option, to estimate the current Real Property Taxes applicable to 
the Premises, and to require such current year's Tax Increase to be paid in 
advance to Lessor by Lessee, either; (i) in a lump sum amount equal to the 
amount due, at least twenty (20) days prior to the applicable delinquency 
date, or (ii) monthly in advance with the payment of the Base Rent. If Lessor 
elects to require payment monthly in advance, the monthly payment shall be 
that equal monthly amount which, over the number of months remaining before 
the month in which the applicable tax installment would become delinquent 
(and without interest thereon), would provide a fund large enough to fully 
discharge before delinquency the estimated Tax Increase to be paid. When the 
actual amount of the applicable Tax Increase is known, the amount of such 
equal monthly advance payment shall be adjusted as required to provide the 
fund needed to pay the applicable Tax Increase before delinquency. If the 
amounts paid to Lessor by Lessee under the provisions of this Paragraph are 
insufficient to discharge the obligations of Lessee to pay such Tax Increase 
as the same becomes due, Lessee shall pay to Lessor, upon Lessor's demand, 
such additional sums as are necessary to pay such obligation. All moneys paid 
to Lessor under this Paragraph may be intermingled with other moneys of 
Lessor and shall not bear interest. In the event of a Breach by Lessee in the 
performance of the obligations of Lessee under this Lease, then any balance 
of funds paid to Lessor under the provisions of this Paragraph may, subject 
to proration as provided in Paragraph 10.1(a), at the option of Lessor, be 
treated as an additional Security Deposit under Paragraph 5.

       (c) ADDITIONAL IMPROVEMENTS. Notwithstanding Paragraph 10.1(a) hereof, 
Lessee shall pay to Lessor upon demand therefor the entirety of any increase 
in real Property Taxes assessed by reason of Alterations or Utility 
Installations placed upon the Premises by Lessee or at Lessee's request.

   10.2 DEFINITION OF "REAL PROPERTY TAXES." As used herein, the term "REAL 
PROPERTY TAXES" shall include any form of real estate tax or assessment, 
general, special, ordinary or extraordinary, and any license fee, commercial 
rental tax, improvement bond or bonds, levy or tax (other than inheritance, 
personal income or estate taxes) imposed upon the Premises by any authority 
having the direct or indirect power to tax, including any city, state or 
federal government, or any school, agricultural, sanitary, fire, street, 
drainage or other improvement district thereof, levied against any legal or 
equitable interest of Lessor in the Premises or in the real property of which 
the Premises are a part, Lessor's right to rent or other income therefrom, 
and/or Lessor's business of leasing the Premises. The term "REAL PROPERTY 
TAXES" shall also include any tax, fee, levy, assessment or charge, or any 
increase therein, imposed by reason of events occurring, or changes in 
applicable law taking effect, during the term of this Lease, including but not 
limited to a change in the ownership of the Premises or in the improvements 
thereon, the execution of this Lease, or any modification, amendment or 
transfer thereof, and whether or not contemplated by the Parties.

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   10.3 JOINT ASSESSMENT. If the Premises are not separately assessed, 
Lessee's liability shall be an equitable proportion of the Real Property Taxes 
for all of the land and improvements included within the tax parcel assessed, 
such proportion to be determined by Lessor from the respective valuations 
assigned in the assessor's work sheets or such other information as may be 
reasonably available. Lessor's reasonable determination thereof, in good 
faith, shall be conclusive.

   10.4 PERSONAL PROPERTY TAXES. Lessee shall pay prior to delinquency all 
taxes assessed against and levied upon Lessee Owned Alterations, utility 
Installations, Trade Fixtures, furnishings, equipment and all personal 
property of Lessee contained in the Premises or elsewhere. When possible, 
Lessee shall cause its Trade Fixtures, furnishings, equipment and all other 
personal property to be assessed and billed separately from the real property 
of Lessor. If any of Lessee's said personal property shall be assessed with 
Lessor's real property, Lessee shall pay Lessor the taxes attributable to 
Lessee within ten (10) days after receipt of a written statement setting forth 
the taxes applicable to Lessee's property or, At Lessor's option, as provided 
in Paragraph 10.1(b).

    11. UTILITIES. Lessee shall pay for all water, gas, heat, light, power, 
telephone, trash disposal and other utilities and services supplied to the 
Premises, together with any taxes thereon. if any such services are not 
separately metered to Lessee, Lessee shall pay a reasonable proportion, to be 
determined by Lessor, of all charges jointly metered with other premises.

12. ASSIGNMENT AND SUBLETTING.

   12.1 LESSOR'S CONSENT REQUIRED.

       (a) Lessee shall not voluntarily or by operation of law assign, 
transfer, mortgage or otherwise transfer or encumber (collectively, 
"assignment") or sublet all or any part of Lessee's interest in this Lease or 
in the Premises without Lessor's prior written consent given under and subject 
to the terms of Paragraph 36.

       (b) A change in the control of Lessee shall constitute an assignment 
requiring lessor's consent. The transfer, on a cumulative basis, of 
twenty-five percent (25%) or more of the voting control of lessee shall 
constitute a change in control for this purpose.

       (c) The involvement of Lessee or its assets in any transaction, or 
series of transactions (by way of merger, sale, acquisition, financing, 
refinancing, transfer, leveraged buy-out or otherwise), whether or not a 
formal assignment or hypothecation of this Lease or Lessee's assets occurs, 
which results or will result in a reduction of the Net Worth of Lessee, as 
hereinafter defined, by an amount equal to or greater than twenty-five percent 
(25%) of such Net Worth of Lessee as it was represented to lessor at the time 
of the execution by lessor of this lease or at the time of the most recent 
assignment to which lessor has consented, or as it exists immediately prior to 
said transaction or transactions constituting such reduction, at whichever 
time said Net Worth of Lessee was or is greater, shall be considered an 
assignment of this Lease by Lessee to which Lessor may reasonably withhold its 
consent. "Net Worth of Lessee" for purposes of this Lease shall be the net 
worth of Lessee (excluding any guarantors) established under generally 
accepted accounting principles consistently applied.

       (d) An assignment or subletting of Lessee's interest in this Lease 
without Lessor's specific prior written consent shall, At Lessor's option, be 
a Default curable after notice per Paragraph 13.1(c), or a noncurable Breach 
without the necessity of any notice and grace period. If Lessor elects to 
treat such unconsented to assignment or subletting as a noncurable Breach, 
Lessor shall have the right to either: (i) terminate this Lease, or (ii) upon 
thirty (30) days written notice ("Lessor's Notice"), increase the monthly Base 
Rent to fair market rental value or one hundred ten percent (110%) of the Base 
Rent then in effect, whichever is greater. Pending determination of the new 
fair market rental value, if disputed by Lessee, Lessee shall pay the amount 
set forth in Lessor's Notice, with any overpayment credited against the next 
installment(s) of Base Rent coming due, and any underpayment for the period 
retroactively to the effective date of the adjustment being due and payable 
immediately upon the determination thereof. Further, in the event of such 
Breach and market value adjustment, (i) the purchase price of any option to 
purchase the Premises held by Lessee shall be subject to similar adjustment to 
the then fair market value (without the Lease being considered an encumbrance 
or any deduction for depreciation or obsolescence, and considering the 
Premises at its highest and best use and in good condition), or one hundred 
ten percent (110%) of the price previously in effect, whichever is greater, 
(ii) any index-oriented rental or price adjustment formulas contained in this 
Lease shall be adjusted to require that the base index be determined with 
reference to the index applicable to the time of such adjustment, and (iii) 
any fixed rental adjustments scheduled during the remainder of the Lease term 
shall be increased in the same ratio as the new market rental bears to the 
Base Rent in effect immediately prior to the market value adjustment.

       (e) Lessee's remedy for any breach of this Paragraph 12.1 by Lessor 
shall be limited to compensatory damages and injunctive RELIEF.

   12.2 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.

       (a) Regardless of Lessor's consent, any assignment or subletting shall 
not: (i) be effective without the express written assumption by such assignee 
or sublessee of the obligations of lessee under this Lease, (ii) release 
Lessee of any obligations hereunder, or (iii) alter the primary liability of 
Lessee for the payment of Base Rent and other sums due Lessor hereunder or for 
the performance of any other obligations to be performed by Lessee under this 
Lease.

       (b) Lessor may accept any rent or performance of Lessee's obligations 
from any person other than Lessee pending approval or disapproval of an 
assignment. Neither a delay in the approval or disapproval of such assignment 
nor the acceptance of any rent or performance shall constitute a waiver or 
estoppel of Lessor's right to exercise its remedies for the Default or Breach 
by Lessee of any of the terms, covenants or conditions of this Lease.

       (c) The consent of Lessor to any assignment or subletting shall not 
constitute a consent to any subsequent assignment or subletting by Lessee or 
to any subsequent or successive assignment or subletting by the sublessee. 
However, Lessor may consent to subsequent sublettings and assignments of the 
sublease or any amendments or modifications thereto without notifying Lessee 
or anyone else liable on the Lease or sublease and without obtaining their 
consent, and such action shall not relieve such persons from liability under 
this Lease or sublease.

       (d) In the event of any Default or Breach of Lessee's obligations under 
this Lease, Lessor may proceed directly against Lessee, any Guarantors or any 
one else responsible for the performance of the Lessee's obligations under 
this Lease, including the sublessee, without first exhausting Lessor's 
remedies against any other person or entity responsible therefor to Lessor, or 
any security held by Lessor or Lessee.

       (e) Each request for consent to an assignment or subletting shall be in 
writing, accompanied by information relevant to Lessor's determination as to 
the financial and operational responsibility and appropriateness of the 
proposed assignee or sublessee, including but not limited to the intended use 
and/or required modification of the Premises, if any, together with a 
non-refundable deposit of $1,000 or ten percent (10%) of the current monthly 
Base Rent, whichever is greater, as reasonable consideration for Lessor's 
considering and processing the request for consent. Lessee agrees to provide 
Lessor with such other or additional information and/or documentation as may 
be reasonably requested by Lessor.

       (f) Any assignee of, or sublessee under, this Lease shall, by reason of 
accepting such assignment or entering into such sublease, be deemed, for the 
benefit of Lessor, to have assumed and agreed to conform and comply with each 
and every term, covenant, condition and obligation herein to be observed or 
performed by Lessee during the term of said assignment or sublease, other than 
such obligations as are contrary to or inconsistent with provisions of an 
assignment or sublease to which Lessor has specifically consented in writing.

       (g) The occurrence of a transaction described in Paragraph 12.1(c) 
shall give Lessor the right (but not the obligation) to require that the 
Security Deposit be increased to an amount equal to six (6) times the then 
monthly Base Rent, and Lessor may make the actual receipt by Lessor of the 
amount required to establish such Security Deposit a condition to Lessor's 
consent to such transaction.

       (h) Lessor, as a condition to giving its consent to any assignment or 
subletting, may require that the amount and adjustment structure of the rent 
payable under this Lease be adjusted to what is then the market value and/or 
adjustment structure for property similar to the Premises as then constituted. 

   12.3 ADDITIONAL TERMS AND CONDITIONS APPLICABLE to SUBLETTING. The 
following terms and conditions shall apply to any subletting by LESSEE of all 
or any part of the Premises and shall be deemed included in all subleases 
under this Lease whether or not expressly incorporated therein:

       (a) Lessee hereby assigns and transfers to Lessor all of Lessee's 
interest in all rentals and income arising from any sublease of all or a 
portion of the Premises heretofore or hereafter made by Lessee, and Lessor may 
collect such rent and income and apply same toward Lessee's obligations under 
this Lease; provided, however, that until a Breach (as defined in Paragraph 
13.1) shall occur in the performance of Lessee's obligations under this Lease, 
Lessee may, except as otherwise provided in this Lease, receive, collect and 
enjoy the rents accruing under such sublease. Lessor shall not, by reason of 
this or any other assignment of such sublease to Lessor, nor by reason of the 
collection of the rents from a sublessee, be deemed liable to the sublessee 
for any failure of Lessee to perform and comply with any of Lessee's 
obligations to such sublessee under such sublease. Lessee hereby irrevocably 
authorizes and directs any such sublessee, upon receipt of a written notice 
from Lessor stating that a Breach exists in the performance of Lessee's 
obligations under this Lease, to pay to Lessor the rents and other charges due 
and to become due under the sublease. Sublessee shall rely upon any such 
statement and request from Lessor and shall pay such rents and other charges 
to Lessor without any obligation or right to inquire as to whether such Breach 
exists and notwithstanding any notice from or claim from Lessee to the 
contrary. LeSSEE shall have no right or claim against said sublessee, or, 
until the Breach has been cured, against Lessor, for any such rents and other 
charges so paid by said sublessee to Lessor. 

       (b) In the event of a Breach by Lessee in the performance of its 
obligations under this Lease, Lessor, at its option and without any obligation 
to do so, may require any sublessee to attorn to Lessor, in which event Lessor 
shall undertake the obligations of the sublessor under such sublease from the 
time of the exercise of said option to the expiration of such sublease; 
provided, however, Lessor shall not be liable for any prepaid rents or 
security deposit paid by such sublessee to such sublessor or for any other 
prior Defaults or Breaches of such sublessor under such sublease.

       (c) Any matter or thing requiring the consent of the sublessor under a 
sublease shall also require the consent of Lessor herein.

       (d) No sublessee shall further assign or sublet all or any part of the 
Premises without Lessor's prior written consent.

       (e) Lessor shall deliver a copy of any notice of Default or Breach by 
Lessee to the sublessee, who shall have the right to cure the Default of 
Lessee within the grace period, if any, specified in such notice. The 
sublessee shall have a right of reimbursement and offset from and against 
Lessee for any such Defaults cured by the sublessee.

13. DEFAULT; BREACH; REMEDIES.

   13.1 DEFAULT; BREACH. Lessor and Lessee agree that if an attorney is 
consulted by Lessor in connection with a Lessee Default or Breach (as 
hereinafter defined), $350.00 is a reasonable minimum sum per such occurrence 
for legal services and costs in the preparation and service of a notice of 
Default,

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and that Lessor may include the cost of such services and costs in said notice 
as rent due and payable to cure said Default. A "DEFAULT" is defined as a 
failure by the Lessee to observe, comply with or perform any of the terms, 
covenants, conditions or rules applicable to Lessee under this Lease. A 
"BREACH" is defined as the occurrence of any one or more of the following 
Defaults, and, where a grace period for cure after notice is specified herein, 
the failure by Lessee to cure such Default prior to the expiration of the 
applicable grace period, shall entitle Lessor to pursue the remedies set forth 
in Paragraphs 13.2 and/or 13.3:

       (a) The vacating of the Premises without the intention to reoccupy 
same, or the abandonment of the Premises.

       (b) Except as expressly otherwise provided in this Lease, the failure 
by Lessee to make any payment of Base Rent or any other monetary payment 
required to be made by Lessee hereunder, whether to Lessor or to a third 
party, as and when due, the failure by Lessee to provide Lessor with 
reasonable evidence of insurance or surety bond required under this Lease, or 
the failure of Lessee to fulfill any obligation under this Lease which 
endangers or threatens life or property, where such failure continues for a 
period of three (3) days following written notice thereof by or on behalf of 
Lessor to Lessee.

       (c) Except as expressly otherwise provided in this Lease, the failure 
by Lessee to provide Lessor with reasonable written evidence (in duly executed 
original form, if applicable) of (i) compliance with applicable law per 
Paragraph 6.3, (ii) the inspection, maintenance and service contracts required 
under Paragraph 7.1(b), (iii) the recission of an unauthorized assignment or 
subletting per Paragraph 12.1(b), (iv) a Tenancy Statement per Paragraphs 16 
or 37, (v) the subordination or non-subordination of this Lease per Paragraph 
30, (vi) the guaranty of the performance of Lessee's obligations under this 
Lease if required under Paragraphs 1.11 and 37, (vii) the execution of any 
document requested under Paragraph 42 (easements), or (viii) any other 
documentation or information which Lessor may reasonably require of Lessee 
under the terms of this Lease, where any such failure continues for a period 
of ten (10) days following written notice by or on behalf of Lessor to Lessee.

       (d) A Default by Lessee as to the terms, covenants, conditions or 
provisions of this Lease, or of the rules adopted under Paragraph 40 hereof, 
that are to be observed, complied with or performed by Lessee, other than 
those described in subparagraphs (a), (b) or (c), above, where such Default 
continues for a period of thirty (30) days after written notice thereof by or 
on behalf of Lessor to Lessee; provided, however, that if the nature of 
Lessee's Default is such that more than thirty (30) days are reasonably 
required for its cure, then it shall not be deemed to be a Breach of this 
Lease by Lessee if Lessee commences such cure within said thirty (30) day 
period and thereafter diligently prosecutes such cure to completion.

       (e) The occurrence of any of the following events: (i) The making by 
lessee of any general arrangement or assignment for the benefit of creditors; 
(ii) Lessee's becoming a "debtor" as defined in 11 U.S.C. Section 101 or any 
successor statute thereto (unless, in the case of a petition filed against 
Lessee, the same is dismissed within sixty (60) days); (iii) the appointment 
of a trustee or receiver to take possession of substantially all of Lessee's 
assets located at the Premises or of Lessee's interest in this Lease, where 
possession is not restored to Lessee within thirty (30) days; or (iv) the 
attachment, execution or other judicial seizure of substantially all of 
Lessee's assets located at the Premises or of Lessee's interest in this Lease, 
where such seizure is not discharged within thirty (30) days; provided, 
however, in the event that any provision of this subparagraph (e) is contrary 
to any applicable law, such provision shall be of no force or effect, and not 
affect the validity of the remaining provisions.

       (f) The discovery by Lessor that any financial statement given to 
Lessor by Lessee or any Guarantor of Lessee's obligations hereunder was 
materially false.

       (g) If the performance of Lessee's obligations under this Lease is 
guaranteed: (i) the death of a guarantor, (ii) the termination of a 
guarantor's liability with respect to this Lease other than in accordance with 
the terms of such guaranty, (iii) a guarantor's becoming insolvent or the 
subject of a bankruptcy filing, (iv) a guarantor's refusal to honor the 
guaranty, or (v) a guarantor's breach of its guaranty obligation on an 
anticipatory breach basis, and Lessee's failure, within sixty (60) days 
following written notice by or on behalf of Lessor to Lessee of any such 
event, to provide Lessor with written alternative assurance or security, 
which, when coupled with the then existing resources of Lessee, equals or 
exceeds the combined financial resources of Lessee and the guarantors that 
existed at the time of execution of this Lease.

  13.2 REMEDIES. If Lessee fails to perform any affirmative duty or obligation 
of Lessee under this Lease, within ten (10) days after written notice to 
Lessee (or in case of an emergency, without notice), Lessor may at its option 
(but without obligation to do so), perform such duty or obligation on Lessee's 
behalf, including but not limited to the obtaining of reasonably required 
bonds, insurance policies, or governmental licenses, permits or approvals. The 
costs and expenses of any such performance by Lessor shall be due and payable 
by Lessee to Lessor upon invoice therefor. If any check given to Lessor by 
Lessee shall not be honored by the bank upon which it is drawn, Lessor, at its 
option, may require all future payments to be made under this Lease by Lessee 
to be made only by cashier's check. In the event of a Breach of this Lease by 
Lessee, as defined in Paragraph 13.1, with or without further notice or 
demand, and without limiting Lessor in the exercise of any right or remedy 
which Lessor may have by reason of such Breach, Lessor may: 

       (a) Terminate Lessee's right to possession of the Premises by any 
lawful means, in which case this Lease and the term hereof shall terminate and 
Lessee shall immediately surrender possession of the Premises to Lessor. In 
such event Lessor shall be entitled to recover from Lessee: (i) the worth at 
the time of the award of the unpaid rent which had been earned at the time of 
termination; (ii) the worth at the time of award of the amount by which the 
unpaid rent which would have been earned after termination until the time of 
award exceeds the amount of such rental loss that the Lessee proves could have 
been reasonably avoided; (iii) the worth at the time of award of the amount by 
which the unpaid rent for the balance of the term after the time of award 
exceeds the amount of such rental loss that the Lessee proves could be 
reasonably avoided; and (iv) any other amount necessary to compensate Lessor 
for all the detriment proximately caused by the Lessee's failure to perform 
its obligations under this Lease or which in the ordinary course of things 
would be likely to result therefrom, including but not limited to the cost of 
recovering possession of the Premises, expenses of reletting, including 
necessary renovation and alteration of the Premises, reasonable attorneys' 
fees, and that portion of the leasing commission paid by Lessor applicable to 
the unexpired term of this Lease. The worth at the time of award of the amount 
referred to in provision (iii) of the prior sentence shall be computed by 
discounting such amount at the discount rate of the Federal Reserve Bank of 
San Francisco at the time of award plus one percent (1%). Efforts by Lessor to 
mitigate damages caused by Lessee's Default or Breach of this Lease shall not 
waive Lessor's right to recover damages under this Paragraph. If termination 
of this Lease is obtained through the provisional remedy of unlawful detainer, 
Lessor shall have the right to recover in such proceeding the unpaid rent and 
damages as are recoverable therein, or Lessor may reserve therein the right to 
recover all or any part thereof in a separate suit for such rent and/or 
damages. If a notice and grace period required under subparagraphs 13.1(b), 
(c) or (d) was not previously given, a notice to pay rent or quit, or to 
perform or quit, as the case may be, given to Lessee under any statute 
authorizing the forfeiture of leases for unlawful detainer shall also 
constitute the applicable notice for grace period purposes required by 
subparagraphs 13.1(b), (c) or (d). In such case, the applicable grace period 
under subparagraphs 13.1(b), (c) or (d) and under the unlawful detainer 
statute shall run concurrently after the one such statutory notice, and the 
failure of Lessee to cure the Default within the greater of the two such grace 
periods shall constitute both an unlawful detainer and a Breach of this Lease 
entitling Lessor to the remedies provided for in this Lease and/or by said 
statute.

       (b) Continue the Lease and Lessee's right to possession in effect (in 
California under California Civil Code Section 1951.4) after Lessee's Breach 
and abandonment and recover the rent as it becomes due, provided Lessee has 
the right to sublet or assign, subject only to reasonable limitations. See 
Paragraphs 12 and 36 for the limitations on assignment and subletting which 
limitations Lessee and Lessor agree are reasonable. Acts of maintenance or 
preservation, efforts to relet the Premises, or the appointment of a receiver 
to protect the Lessor's interest under the Lease, shall not constitute a 
termination of the Lessee's right to possession.

       (c) Pursue any other remedy now or hereafter available to Lessor under 
the laws or judicial decisions of the state wherein the Premises are located.

       (d) The expiration or termination of this Lease and/or the termination 
of Lessee's right to possession shall not relieve Lessee from liability under 
any indemnity provisions of this Lease as to matters occurring or accruing 
during the term hereof or by reason of Lessee's occupancy of the Premises.

   13.3 INDUCEMENT RECAPTURE IN EVENT OF BREACH. Any agreement by Lessor for 
free or abated rent or other charges applicable to the Premises, or for the 
giving or paying by Lessor to or for Lessee of any cash or other bonus, 
inducement or consideration for Lessee's entering into this Lease, all of 
which concessions are hereinafter referred to as "INDUCEMENT PROVISIONS," 
shall be deemed conditioned upon Lessee's full and faithful performance of all 
of the terms, covenants and conditions of this Lease to be performed or 
observed by Lessee during the term hereof as the same may be extended. Upon 
the occurrence of a Breach of this Lease by Lessee, as defined in Paragraph 
13.1, any such inducement Provision shall automatically be deemed deleted from 
this Lease and of no further force or effect, and any rent, other charge, 
bonus, inducement or consideration theretofore abated, given or paid by Lessor 
under such an Inducement Provision shall be immediately due and payable by 
Lessee to Lessor, and recoverable by Lessor as additional rent due under this 
Lease, notwithstanding any subsequent cure of said Breach by Lessee. The 
acceptance by Lessor of rent or the cure of the Breach which initiated the 
operation of this Paragraph shall not be deemed a waiver by Lessor of the 
provisions of this Paragraph unless specifically so stated in writing by 
Lessor at the time of such acceptance.

   13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by Lessee 
to Lessor of rent and other sums due hereunder will cause Lessor to incur 
costs not contemplated by this Lease, the exact amount of which will be 
extremely difficult to ascertain. Such costs include, but are not limited to, 
processing and accounting charges, and late charges which may be imposed upon 
Lessor by the terms of any ground lease, mortgage or trust deed covering the 
Premises. Accordingly, if any installment of rent or any other sum due from 
Lessee shall not be received by Lessor or Lessor's designee within five (5) 
days after such amount shall be due, then, without any requirement for notice 
to Lessee, Lessee shall pay to Lessor a late charge equal to six percent (6%) 
of such overdue amount. The parties hereby agree that such late charge 
represents a fair and reasonable estimate of the costs Lessor will incur by 
reason of late payment by Lessee. Acceptance of such late charge by Lessor 
shall in no event constitute a waiver of Lessee's Default or Breach with 
respect to such overdue amount, nor prevent Lessor from exercising any of the 
other rights and remedies granted hereunder. In the event that a late charge 
is payable hereunder, whether or not collected, for three (3) consecutive 
installments of Base Rent, then notwithstanding Paragraph 4.1 or any other 
provision of this Lease to the contrary, Base Rent shall, at Lessor's option, 
become due and payable quarterly in advance.

   13.5 BREACH BY LESSOR. Lessor shall not be deemed in breach of this Lease 
unless Lessor fails within a reasonable time to perform an obligation required 
to be performed by Lessor. For purposes of this Paragraph 13.5, a reasonable 
time shall in no event be less than thirty (30) days after receipt by Lessor, 
and by the holders of any ground lease, mortgage or deed of trust covering the 
Premises whose name and address shall have been furnished Lessee in writing 
for such purpose, of written notice specifying wherein such obligation of 
Lessor has not been performed; provided, however, that if the nature of 
Lessor's obligation is such that more than thirty (30) days after such notice 
are reasonably required for its performance, then Lessor shall not be in 
breach of this Lease if performance is commenced within such thirty (30) day 
period and thereafter diligently pursued to completion.

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14. CONDEMNATION. If the Premises or any portion thereof are taken under the 
power of eminent domain or sold under the threat of the exercise of said power 
(all of which are herein called "CONDEMNATION"), this Lease shall terminate as 
to the part so taken as of the date the condemning authority takes title or 
possession, whichever first occurs. If more than ten percent (10%) of the 
floor area of the Premises, or more than twenty-five percent (25%) of the land 
area not occupied by any building, is taken by condemnation, Lessee may, at 
Lessee's option, to be exercised in writing within ten (10) days after Lessor 
shall have given Lessee written notice of such taking (or in the absence of 
such notice, within ten (10) days after the condemning authority shall have 
taken possession) terminate this Lease as of the date the condemning authority 
takes such possession. If Lessee does not terminate this Lease in accordance 
with the foregoing, this Lease shall remain in full force and effect as to the 
portion of the Premises remaining, except that the Base Rent shall be reduced 
in the same proportion as the rentable floor area of the Premises taken bears 
to the total rentable floor area of the building located on the Premises. No 
reduction of Base Rent shall occur if the only portion of the Premises taken 
is land on which there is no building. Any award for the taking of all or any 
part of the Premises under the power of eminent domain or any payment made 
under threat of the exercise of such power shall be the property of Lessor, 
whether such award shall be made as compensation for diminution in value of 
the leasehold or for the taking of the fee, or as severance damages; provided, 
however, that Lessee shall be entitled to any compensation separately awarded 
to Lessee for Lessee's relocation expenses and/or loss of Lessee's Trade 
Fixtures. In the event that this Lease is not terminated by reason of such 
condemnation, Lessor shall to the extent of its net severance damages 
received, over and above the legal and other expenses incurred by Lessor in 
the condemnation matter, repair any damage to the Premises caused by such 
condemnation, except to the extent that Lessee has been reimbursed therefor by 
the condemning authority. Lessee shall be responsible for the payment of any 
amount in excess of such net severance damages required to complete such 
repair.

15. BROKER'S FEE.

   15.1 The Brokers named in Paragraph 1.10 are the procuring causes of this 
Lease.

   15.2 Upon execution of this Lease by both Parties, Lessor shall pay to said 
Brokers jointly, or in such separate shares as they may mutually designate in 
writing, a fee as set forth in a separate written agreement between Lessor and 
said Brokers (or in the event there is no separate written agreement between 
Lessor and said Brokers, the sum of $     ) for brokerage services rendered by 
said Brokers to Lessor in this transaction.

   15.3 Unless Lessor and Brokers have otherwise agreed in writing, Lessor 
further agrees that: (a) if Lessee exercises any Option (as defined in 
Paragraph 39.1) or any Option subsequently granted which is substantially 
similar to an Option granted to Lessee in this Lease, or (b) if Lessee 
acquires any rights to the Premises or other premises described in this Lease 
which are substantially similar to what Lessee would have acquired had an 
Option herein granted to Lessee been exercised, or (c) if Lessee remains in 
possession of the Premises, with the consent of Lessor, after the expiration 
of the term of this Lease after having failed to exercise an Option, or (d) if 
said Brokers are the procuring cause of any other lease or sale entered into 
between the Parties pertaining to the Premises and/or any adjacent property in 
which Lessor has an interest, or (e) if Base Rent is increased, whether by 
agreement or operation of an escalation clause herein, then as to any of said 
transactions, Lessor shall pay said Brokers a fee in accordance with the 
schedule of said Brokers in effect at the time of the execution of this Lease.

    15.4 Any buyer or transferee of Lessor's interest in this Lease, whether 
such transfer is by agreement or by operation of law, shall be deemed to have 
assumed Lessor's obligation under this Paragraph 15. Each Broker shall be a 
third party beneficiary of the provisions of this Paragraph 15 to the extent 
of its interest in any commission arising from this Lease and may enforce that 
right directly against Lessor and its successors.

   15.5 Lessee and Lessor each represent and warrant to the other that it has 
had no dealings with any person, firm, broker or finder (other than the 
Brokers, if any named in Paragraph 1.10) in connection with the negotiation of 
this Lease and/or the consummation of the transaction contemplated hereby, and 
that no broker or other person, firm or entity other than said named Brokers 
is entitled to any commission or finder's fee in connection with said 
transaction. Lessee and Lessor do each hereby agree to indemnify, protect, 
defend and hold the other harmless from and against liability for compensation 
or charges which may be claimed by any such unnamed broker, finder or other 
similar party by reason of any dealings or actions of the indemnifying Party, 
including any costs, expenses, attorneys' fees reasonably incurred with 
respect thereto.

   15.6 Lessor and Lessee hereby consent to and approve all agency 
relationships, including any dual agencies, indicated in Paragraph 1.10.

16. TENANCY STATEMENT.

   16.1 Each Party (as "RESPONDING PARTY") shall within ten (10) days after 
written notice from the other Party (the "REQUESTING PARTY") execute, 
acknowledge and deliver to the Requesting Party a statement in writing in form 
similar to the then most current "TENANCY STATEMENT" form published by the 
American Industrial Real Estate Association, plus such additional information, 
confirmation and/or statements as may be reasonably requested by the 
Requesting Party.

   16.2 If Lessor desires to finance, refinance, or sell the Premises, any 
part thereof, or the building of which the Premises are a part, Lessee and all 
Guarantors of Lessee's performance hereunder shall deliver to any potential 
lender or purchaser designated by Lessor such financial statements of Lessee 
and such Guarantors as may be reasonably required by such lender or purchaser, 
including but not limited to Lessee's financial statements for the past three 
(3) years. All such financial statements shall be received by Lessor and such 
lender or purchaser in confidence and shall be used only for the purposes 
herein set forth.

17. LESSOR'S LIABILITY. The term "LESSOR" as used herein shall mean the owner 
or owners at the time in question of the fee title to the Premises, or, if 
this is a sublease, of the Lessee's interest in the prior lease. In the event 
of a transfer of Lessor's title or interest in the Premises or in this Lease, 
Lessor shall deliver to the transferee or assignee (in cash or by credit) any 
unused Security Deposit held by Lessor at the time of such transfer or 
assignment. Except as provided in Paragraph 15, upon such transfer or 
assignment and delivery of the Security Deposit, as aforesaid, the prior 
Lessor shall be relieved of all liability with respect to the obligations 
and/or covenants under this Lease thereafter to be performed by the Lessor. 
Subject to the foregoing, the obligations and/or covenants in this Lease to be 
performed by the Lessor shall be binding only upon the Lessor as hereinabove 
defined.

18. SEVERABILITY. The invalidity of any provision of this Lease, as determined 
by a court of competent jurisdiction, shall in no way affect the validity of 
any other provision hereof.

19. INTEREST ON PAST-DUE OBLIGATIONS. Any monetary payment due Lessor 
hereunder, other than late charges, not received by Lessor within thirty (30) 
days following the date on which it was due, shall bear interest from the 
thirty-first (31st) day after it was due at the rate of 12% per annum, but not 
exceeding the maximum rate allowed by law, in addition to the late charge 
provided for in Paragraph 13.4.

20. TIME OF ESSENCE. Time is of the essence with respect to the performance of 
all obligations to be performed or observed by the Parties under this Lease. 

21. RENT DEFINED. All monetary obligations of Lessee to Lessor under the terms 
of this Lease are deemed to be rent.

22. NO PRIOR OR OTHER AGREEMENTS; BROKER DISCLAIMER. This Lease contains all 
agreements between the Parties with respect to any matter mentioned herein, 
and no other prior or contemporaneous agreement or understanding shall be 
effective. Lessor and Lessee each represents and warrants to the Brokers that 
it has made, and is relying solely upon, its own investigation as to the 
nature, quality, character and financial responsibility of the other Party to 
this Lease and as to the nature, quality and character of the Premises. 
Brokers have no responsibility with respect thereto or with respect to any 
default or breach hereof by either Party.

23. NOTICES.

   23.1 All notices required or permitted by this Lease shall be in writing 
and may be delivered in person (by hand or by messenger or courier service) or 
may be sent by regular, certified or registered mail or U.S. Postal Service 
Express Mail, with postage prepaid, or by facsimile transmission, and shall be 
deemed sufficiently given if served in a manner specified in this Paragraph 
23. The addresses noted adjacent to a Party's signature on this Lease shall 
be that Party's address for delivery or mailing of notice purposes. Either 
Party may by written notice to the other specify a different address for 
notice purposes, except that upon Lessee's taking possession of the Premises, 
the Premises shall constitute Lessee's address for the purpose of mailing or 
delivering notices to Lessee. A copy of all notices required or permitted to 
be given to Lessor hereunder shall be concurrently transmitted to such party 
or parties at such addresses as Lessor may from time to time hereafter 
designate by written notice to Lessee.

   23.2 Any notice sent by registered or certified mail, return receipt 
requested, shall be deemed given on the date of delivery shown on the receipt 
card, or if no delivery date is shown, the postmark thereon. If sent by regular 
mail the notice shall be deemed given forty-eight (48) hours after the same is 
addressed as required herein and mailed with postage prepaid. Notices 
delivered by United States Express Mail or overnight courier that guarantees 
next day delivery shall be deemed given twenty-four (24) hours after delivery 
of the same to the United States Postal Service or courier. If any notice is 
transmitted by facsimile transmission or similar means, the same shall be 
deemed served or delivered upon telephone confirmation of receipt of the 
transmission thereof, provided a copy is also delivered via delivery or mail. 
If notice is received on a Sunday or legal holiday, it shall be deemed 
received on the next business day.

24. WAIVERS. No waiver by Lessor of the Default or Breach of any term, 
covenant or condition hereof by Lessee, shall be deemed a waiver of any other 
term, covenant or condition hereof, or of any subsequent Default or Breach by 
Lessee of the same or of any other term, covenant or condition hereof. 
Lessor's consent to, or approval of, any act shall not be deemed to render 
unnecessary the obtaining of Lessor's consent to, or approval of, any 
subsequent or similar act by Lessee, or be construed as the basis of an 
estoppel to enforce the provision or provisions of this Lease requiring such 
consent. Regardless of Lessor's knowledge of a Default or Breach at the time 
of accepting rent, the acceptance of rent by Lessor shall not be a waiver of 
any preceding Default or Breach by Lessee of any provision hereof, other than 
the failure of Lessee to pay the particular rent so accepted. Any payment 
given Lessor by Lessee may be accepted by Lessor on account of moneys or 
damages due Lessor, notwithstanding any qualifying statements or conditions 
made by Lessee in connection therewith, which such statements and/or 
conditions shall be of no force or effect whatsoever unless specifically 
agreed to in writing by Lessor at or before the time of deposit of such 
payment.

25. RECORDING. Either Lessor or Lessee shall, upon request of the other, 
execute, acknowledge and deliver to the other a short form memorandum of this 
Lease for recording purposes. The Party requesting recordation shall be 
responsible for payment of any fees or taxes applicable thereto.


                                                                  Initials_____
                                                                          _____

GROSS                               PAGE 8

<PAGE>

26. NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of the 
Premises or any part thereof beyond the expiration or earlier termination of 
this Lease.

27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed 
exclusive but shall, wherever possible, be cumulative with all other remedies 
at law or in equity.

28. COVENANTS AND CONDITIONS. All provisions of this Lease to be observed or 
performed by Lessee are both covenants and conditions.

29. BINDING EFFECT; CHOICE OF LAW. This Lease shall be binding upon the 
parties, their personal representatives, successors and assigns and be 
governed by the laws of the State in which the Premises are located. Any 
litigation between the Parties hereto concerning this Lease shall be initiated 
in the county in which the Premises are located.

30. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.

   30.1 SUBORDINATION. This Lease and any Option granted hereby shall be 
subject and subordinate to any ground lease, mortgage, deed of trust, or other 
hypothecation or security device (collectively, "SECURITY DEVICE"), now or 
hereafter placed by Lessor upon the real property of which the Premises are a 
part, to any and all advances made on the security thereof, and to all 
renewals, modifications, consolidations, replacements and extensions thereof. 
Lessee agrees that the Lenders holding any such Security Device shall have no 
duty, liability or obligation to perform any of the obligations of Lessor 
under this Lease, but that in the event of Lessor's default with respect to 
any such obligation, Lessee will give any Lender whose name and address have 
been furnished Lessee in writing for such purpose notice of Lessor's default 
and allow such Lender thirty (30) days following receipt of such notice for 
the cure of said default before invoking any remedies Lessee may have by 
reason thereof. If any Lender shall elect to have this Lease and/or any Option 
granted hereby superior to the lien of its Security Device and shall give 
written notice thereof to Lessee, this Lease and such Options shall be deemed 
prior to such Security Device, notwithstanding the relative dates of the 
documentation or recordation thereof.

   30.2 ATTORNMENT. Subject to the non-disturbance provisions of Paragraph 
30.3, Lessee agrees to attorn to a Lender or any other party who acquires 
ownership of the Premises by reason of a foreclosure of a Security Device, and 
that in the event of such foreclosure, such new owner shall not: (i) be liable 
for any act or omission of any prior lessor or with respect to events 
occurring prior to acquisition of ownership, (ii) be subject to any offsets or 
defenses which Lessee might have against any prior lessor, or (iii) be bound 
by prepayment of more than one (1) month's rent.

   30.3 NON-DISTURBANCE. With respect to Security Devices entered into by 
Lessor after the execution of this Lease, Lessee's subordination of this Lease 
shall be subject to receiving assurance (a "NON-DISTURBANCE AGREEMENT") from 
the Lender that Lessee's possession and this Lease, including any options to 
extend the term hereof, will not be disturbed so long as Lessee is not in 
Breach hereof and attorns to the record owner of the Premises.

   30.4 SELF-EXECUTING. The agreements contained in this Paragraph 30 shall be 
effective without the execution of any further documents; provided, however, 
that, upon written request from Lessor or a Lender in connection with a sale, 
financing or refinancing of the Premises, Lessee and Lessor shall execute such 
further writings as may be reasonably required to separately document any such 
subordination or non-subordination, attornment and/or non-disturbance 
agreement as is provided for herein.

31. ATTORNEY'S FEES. If any Party or Broker brings an action or proceeding to 
enforce the terms hereof or declare rights hereunder, the Prevailing Party (as 
hereafter defined) or Broker in any such proceeding, action, or appeal 
thereon, shall be entitled to reasonable attorney's fees. Such fees may be 
awarded in the same suit or recovered in a separate suit, whether or not such 
action or proceeding is pursued to decision or judgment. The term, "PREVAILING 
PARTY" shall include, without limitation, a Party or Broker who substantially 
obtains or defeats the relief sought, as the case may be, whether by 
compromise, settlement, judgment, or the abandonment by the other Party or 
Broker of its claim or defense. The attorney's fee award shall not be computed 
in accordance with any court fee schedule, but shall be such as to fully 
reimburse all attorney's fees reasonably incurred. Lessor shall be entitled to 
attorney's fees, costs and expenses incurred in the preparation and service of 
notices of Default and consultations in connection therewith, whether or not a 
legal action is subsequently commenced in connection with such Default or 
resulting Breach.

32. LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Lessor's agents 
shall have the right to enter the Premises at any time, in the case of an 
emergency, and otherwise at reasonable times for the purpose of showing the 
same to prospective purchasers, lenders, or lessees, and making such 
alterations, repairs, improvements or additions to the Premises or to the 
building of which they are a part, as Lessor may reasonably deem necessary. 
Lessor may at any time place on or about the Premises or building any ordinary 
"For Sale" signs and Lessor may at any time during the last one hundred twenty 
(120) days of the term hereof place on or about the Premises any ordinary "For 
Lease" signs. All such activities of Lessor shall be without abatement of rent 
or liability to Lessee.

33. AUCTIONS. Lessee shall not conduct, nor permit to be conducted, either 
voluntarily or involuntarily, any auction upon the Premises without first 
having obtained Lessor's prior written consent. Notwithstanding anything to 
the contrary in this Lease, Lessor shall not be obligated to exercise any 
standard of reasonableness in determining whether to grant such consent.

34. SIGNS. Lessee shall not place any sign upon the Premises, except that 
Lessee may, with Lessor's prior written consent, install (but not on the roof) 
such signs as are reasonably required to advertise Lessee's own business. The 
installation of any sign on the Premises by or for Lessee shall be subject to 
the provisions of Paragraph 7 (Maintenance, Repairs, Utility Installations, 
Trade Fixtures and Alterations). Unless otherwise expressly agreed herein, 
Lessor reserves all rights to the use of the roof and the right to install, 
and all revenues from the installation of, such advertising signs on the 
Premises, including the roof, as do not unreasonably interfere with the 
conduct of Lessee's business.

35. TERMINATION; MERGER. Unless specifically stated otherwise in writing by 
Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual 
termination or cancellation hereof, or a termination hereof by Lessor for 
breach by Lessee, shall automatically terminate any sublease or lesser estate 
in the Premises; provided, however, Lessor shall, in the event of any such 
surrender, termination or cancellation, have the option to continue any one or 
all of any existing subtenancies. Lessor's failure within ten (10) days 
following any such event to make a written election to the contrary by written 
notice to the holder of any such lesser interest, shall constitute Lessor's 
election to have such event constitute the termination of such interest.

36. CONSENTS.

       (a) Except for Paragraph 33 hereof (Auctions) or as otherwise provided 
herein, wherever in this Lease the consent of a Party is required to an act by 
or for the other Party, such consent shall not be unreasonably withheld or 
delayed. Lessor's actual reasonable costs and expenses (including but not 
limited to architects', attorneys', engineers' or other consultants' fees) 
incurred in the consideration of, or response to, a request by Lessee for any 
Lessor consent pertaining to this Lease or the Premises, including but not 
limited to consents to an assignment, a subletting or the presence or use of a 
Hazardous Substance, practice or storage tank, shall be paid by Lessee to 
Lessor upon receipt of an invoice and supporting documentation therefor. 
Subject to Paragraph 12.2(a) (applicable to assignment or subletting), Lessor 
may, as a condition to considering any such request by Lessee, require that 
Lessee deposit with Lessor an amount of money (in addition to the Security 
Deposit held under Paragraph 5) reasonably calculated by Lessor to represent 
the cost Lessor will incur in considering and responding to Lessee's request. 
Except as otherwise provided, any unused portion of said deposit shall be 
refunded to Lessee without interest. Lessor's consent to any act, assignment 
of this Lease or subletting of the Premises by Lessee shall not constitute an 
acknowledgement that no Default or Breach by Lessee of this Lease exists, nor 
shall such consent be deemed a waiver of any then existing Default or Breach, 
except as may be otherwise specifically stated in writing by Lessor at the 
time of such consent.

       (b) All conditions to Lessor's consent authorized by this Lease are 
acknowledged by Lessee as being reasonable. The failure to specify herein any 
particular condition to Lessor's consent shall not preclude the imposition by 
Lessor at the time of consent of such further or other conditions as are then 
reasonable with reference to the particular matter for which consent is being 
given.

37. GUARANTOR.

   37.1 If there are to be any Guarantors of this Lease per Paragraph 1.11, 
the form of the guaranty to be executed by each such Guarantor shall be in the 
form most recently published by the American Industrial Real Estate 
Association, and each said Guarantor shall have the same obligations as Lessee 
under this Lease, including but not limited to the obligation to provide the 
Tenancy Statement and information called for by Paragraph 16.

   37.2 It shall constitute a Default of the Lessee under this Lease if any 
such Guarantor fails or refuses, upon reasonable request by Lessor to give: 
(a) evidence of the due execution of the guaranty called for by this Lease, 
including the authority of the Guarantor (and of the party signing on 
Guarantor's behalf) to obligate such Guarantor on said guaranty, and including 
in the case of a corporate Guarantor, a certified copy of a resolution of its 
board of directors authorizing the making of such guaranty, together with a 
certificate of incumbency showing the signature of the persons authorized to 
sign on its behalf, (b) current financial statements of Guarantor as may from 
time to time be requested by Lessor, (c) a Tenancy Statement, or (d) written 
confirmation that the guaranty is still in effect.

38. QUIET POSSESSION. Upon payment by Lessee of the rent for the Premises and 
the observance and performance of all of the covenants, conditions and 
provisions on Lessee's part to be observed and performed under this Lease, 
Lessee shall have quiet possession of the Premises for the entire term hereof 
subject to all of the provisions of this Lease.

39. OPTIONS.

   39.1 DEFINITION. As used in this Paragraph 39 the word "OPTION" has the 
following meaning: (a) the right to extend the term of this Lease or to renew 
this Lease or to extend or renew any Lease that Lessee has on other property 
of Lessor; (b) the right of first refusal to lease the Premises or the right 
of first offer to lease the Premises or the right of first refusal to lease 
other property of Lessor or the right of first offer to lease other property 
of Lessor; (c) the right to purchase the Premises, or the right of first 
refusal to purchase the Premises, or the right of first offer to purchase the 
Premises, or the right to purchase other property of Lessor, or the right of 
first refusal to purchase other property of Lessor, or the right of first 
offer to purchase other property of Lessor.

   39.2 OPTIONS PERSONAL TO ORIGINAL LESSEE. Each Option granted to Lessee in 
this Lease is personal to the original Lessee named in Paragraph 1.1 hereof, 
and cannot be voluntarily or involuntarily assigned or exercised by any person 
or entity other than said original Lessee while the original Lessee.


                                                                  Initials_____
                                                                          _____

GROSS                               PAGE 9

<PAGE>

is in full and actual possession of the premises and without the intention of 
thereafter assigning or subletting. The options, if any, herein granted to 
Lessee are not assignable, either as a part of an assignment of this lease or 
separately or apart therefrom, and no Option may be separated from this lease 
in any manner, by reservation or otherwise.

   39.3 MULTIPLE OPTIONS. In the event that Lessee has any Multiple Options to 
extend or renew this Lease, a later Option cannot be exercised unless the 
prior Options to extend or renew this Lease have been validly exercised.

   39.4 EFFECT OF DEFAULT ON OPTIONS.

       (a) Lessee shall have no right to exercise an Option, notwithstanding 
any provision in the grant of Option to the contrary: (i) during the period 
commencing with the giving of any notice of Default under Paragraph 13.1 and 
continuing until the noticed Default is cured, or (ii) during the period of 
time any monetary obligation due Lessor from Lessee is unpaid (without regard 
to whether notice thereof is given Lessee), or (iii) during the time Lessee is 
in Breach of this Lease, or (iv) in the event that Lessor has given to Lessee 
three (3) or more notices of Default under Paragraph 13.1, whether or not the 
Defaults are cured, during the twelve (12) month period immediately preceding 
the exercise of the Option. 

       (b) The period of time within which an Option may be exercised shall 
not be extended or enlarged by reason of Lessee's inability to exercise an 
Option because of the provisions of Paragraph 39.4(a).

       (c) All rights of Lessee under the provisions of an Option shall 
terminate and be of no further force or effect, notwithstanding Lessee's due 
and timely exercise of the Option, if, after such exercise and during the term 
of this Lease, (i) Lessee fails to pay to Lessor a monetary obligation of 
Lessee for a period of thirty (30) days after such obligation becomes due 
(without any necessity of Lessor to give notice thereof to Lessee), or (ii) 
Lessor gives to Lessee three (3) or more notices of Default under Paragraph 
13.1 during any twelve (12) month period, whether or not the Defaults are 
cured, or (iii) if Lessee commits a Breach of this Lease.

40. MULTIPLE BUILDINGS. If the Premises are part of a group of buildings 
controlled by Lessor, Lessee agrees that it will abide by, keep and observe 
all reasonable rules and regulations which Lessor may make from time to time 
for the management, safety, care, and cleanliness of the grounds, the parking 
and unloading of vehicles and the preservation of good order, as well as for 
the convenience of other occupants or tenants of such other buildings and 
their invitees, and that Lessee will pay its fair share of common expenses 
incurred in connection therewith.

 41. SECURITY MEASURES. Lessee hereby acknowledges that the rental payable to 
Lessor hereunder does not include the cost of guard service or other security 
measures, and that Lessor shall have no obligation whatsoever to provide same. 
Lessee assumes all responsibility for the protection of the Premises, Lessee, 
its agents and invitees and their property from the acts of third parties.

42. RESERVATIONS. Lessor reserves to itself the right, from time to time, to 
grant, without the consent or joinder of Lessee, such easements, rights and 
dedications that Lessor deems necessary, and to cause the recordation of 
parcel maps and restrictions, so long as such easements, rights, dedications, 
maps and restrictions do not unreasonably interfere with the use of the 
Premises by Lessee. Lessee agrees to sign any documents reasonably requested 
by Lessor to effectuate any such easement rights, dedication, map or 
restrictions.

43. PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to any 
amount or sum of money to be paid by one Party to the other under the 
provisions hereof, the Party against whom the obligation to pay the money is 
asserted shall have the right to make payment "under protest" and such payment 
shall not be regarded as a voluntary payment and there shall survive the right 
on the part of said Party to institute suit for recovery of such sum. If it 
shall be adjudged that there was no legal obligation on the part of said Party 
to pay such sum or any part thereof, said Party shall be entitled to recover 
such sum or so much thereof as it was not legally required to pay under the 
provisions of this Lease.

44. AUTHORITY. If either Party hereto is a corporation, trust, or general or 
limited partnership, each individual executing this Lease on behalf of such 
entity represents and warrants that he or she is duly authorized to execute 
and deliver this Lease on its behalf. If Lessee is a corporation, trust or 
partnership, Lessee shall, within thirty (30) days after request by Lessor, 
deliver to Lessor evidence satisfactory to Lessor of such authority.

45. CONFLICT. Any conflict between the printed provisions of this Lease and 
the typewritten or handwritten provisions shall be controlled by the 
typewritten or handwritten provisions.

46. OFFER. Preparation of this Lease by Lessor or Lessor's agent and 
submission of same to Lessee shall not be deemed an offer to lease to Lessee. 
This Lease is not intended to be binding until executed by all Parties hereto.

47. AMENDMENTS. This lease may be modified only in writing, signed by the 
parties in interest at the time of the modification. The parties shall amend 
this Lease from time to time to reflect any adjustments that are made to the 
Base Rent or other rent payable under this Lease. As long as they do not 
materially change Lessee's obligations hereunder, Lessee agrees to make such 
reasonable non-monetary modifications to this Lease as may be reasonably 
required by an institutional, insurance company, or pension plan Lender in 
connection with the obtaining of normal financing or refinancing of the 
property of which the Premises are a part.

48. MULTIPLE PARTIES. Except as otherwise expressly provided herein, if more 
than one person or entity is named herein as either Lessor or Lessee, the 
obligations of such Multiple Parties shall be the joint and several 
responsibility of all persons or entities named herein as such Lessor or 
Lessee.

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM 
AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR 
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE 
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY 
REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH 
RESPECT TO THE PREMISES.

   IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR SUBMISSION TO
   YOUR ATTORNEY FOR HIS APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED TO
   EVALUATE THE CONDITION OF THE PROPERTY AS TO THE POSSIBLE PRESENCE OF
   ASBESTOS, STORAGE TANKS OR HAZARDOUS SUBSTANCES. NO REPRESENTATION OR
   RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
   OR BY THE REAL ESTATE BROKER(S) OR THEIR AGENTS OR EMPLOYEES AS TO THE
   LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE
   TRANSACTION TO WHICH IT RELATES; THE PARTIES SHALL RELY SOLELY UPON THE
   ADVICE OF THEIR OWN COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS
   LEASE. IF THE SUBJECT PROPERTY IS LOCATED IN A STATE OTHER THAN
   CALIFORNIA, AN ATTORNEY FROM THE STATE WHERE THE PROPERTY IS LOCATED
   SHOULD BE CONSULTED.

The parties hereto have executed this Lease at the place on the dates specified
above to their respective signatures.


Executed at  South El Monte, California  Executed at  South El Monte, California
on           December 4, 1995            on           December 4, 1995
by LESSOR:                               by LESSEE:
             Ronald G. Lee                            Lee Pharmaceuticals
             President                                Michael L. Agresti 

By  /s/ Ronald G. Lee                     By  /s/ Michael L. Agresti
   _____________________________________    ____________________________________
Name Printed: Ronald G. Lee              Name Printed: Lee Pharmaceuticals
                                                       Michael L. Agresti
Title:        President                  Title:        Vice President - Finance

By ____________________________________  By_____________________________________
Name Printed:__________________________  Name Printed:__________________________
Title:_________________________________  Title:_________________________________
Address:_______________________________  Address:_______________________________
_______________________________________  _______________________________________
Tel. No.(___)_______Fax No.(___)_______  Tel. No.(___)_______Fax No.(___)_______

NOTICE: These forms are often modified to meet changing requirements
        of law and industry needs. Always write or call to make sure you are
        utilizing the most current form: American Industrial Real Estate
        Association, 700 South Flower Street, Suite 600, Los Angeles, CA
        90017. (213) 687-8777. Fax No. (213) 687-8616.

              -C- COPYRIGHT 1990 - BY AMERICAN INDUSTRIAL REAL ESTATE
                        ASSOCIATION. ALL RIGHTS RESERVED.

               NO PART OF THESE WORKS MAY BE REPRODUCED IN ANY FORM WITHOUT
                            PERMISSION IN WRITING.             FORM 105G-R-12/91


GROSS                               PAGE 10

<PAGE>

                                 ADDENDUM TO
                          STANDARD INDUSTRIAL LEASE

            Dated             December 1, 1995
            By and Between    Ronald G. Lee, LESSOR
                              and Lee Pharmaceuticals, LESSEE

49. Lessee agrees to accept the premises "as is". Any alterations or 
improvements shall be done at Lessee's sole cost and expense.

50. Addendum to Lease: The parties hereto agree that the Addendum to this 
Lease attached hereto has been executed concurrently with the execution of 
this Lease and made a part of the same by reference.

51. Security Deposit: There is no security deposit required for the Lease of 
building per Paragraph #5 of this Lease.

<PAGE>

                                 ADDENDUM TO
                          STANDARD INDUSTRIAL LEASE


            Dated             December 1, 1995
            By and Between    Ronald G. Lee, LESSOR
                              and Lee Pharmaceuticals, LESSEE

52. RENT ESCALATIONS

    (a) On April 1, 1997, April 1, 1999, April 1, 2001, April 1, 2003, 
April 1, 2005, Option period April 1, 2007, April 1, 2009 the monthly rent 
payable under paragraph 4 of the attached Lease shall be adjusted by the 
increase, if any, from the date this Lease commenced, in the Consumer Price 
Index of the Bureau of Labor Statistics of the U.S. Department of Labor for 
all Urban Consumers Los Angeles-Long Beach-Anaheim, California (1967=100), 
"All Items", herein referred to as "C.P.I."

    (b) The monthly rent, payable in accordance with paragraph (a) of this 
Addendum shall be calculated as follows: the rent payable for the first month 
of the term of this Lease, as set forth in paragraph 4 of the attached Lease, 
shall be multiplied by a fraction the numerator of which shall be the C.P.I. 
of the calendar month during which the adjustment is to take effect, and the 
denominator of which shall be the C.P.I, for the calendar month in which the 
original Lease term commences. The sum so calculated shall constitute the new 
monthly rent hereunder, but in no event, shall such new monthly rent be less 
than the rent payable for the month immediately preceding the date for rent 
adjustment.

    (c) Pending receipt of the required C.P.I. and determination of the actual 
adjustment, Lessee shall pay an estimated adjusted rental, as reasonably 
determined by Lessor by reference to the then available C.P.I. information. 
Upon notification of the actual adjustment after publication of the required 
C.P.I., any overpayment shall be credited against the next installment of rent 
due, and any underpayment shall be immediately due and payable by Lessee. 
Lessor's failure to request payment of an estimated or actual rent adjustment 
shall not constitute a waiver of the right to any adjustment provided for in 
the Lease or this addendum.

    (d) In the event the compilation and/or publication of the C.P.I. shall be 
transferred to any other governmental department or bureau or agency or shall 
be discontinued, then the index most nearly the same as the C.P.I. shall be 
used to make such calculation. In the event that Lessor and Lessee cannot 
agree on such alternative index, then the matter shall be submitted for 
decision to the American Arbitration Association in accordance with the then 
rules of said association and the decision of the arbitrators shall be 
binding upon the parties. The cost of said Arbitrators shall be paid equally 
by Lessor and Lessee.

53. OPTION TO EXTEND TERM:

    Providing Lessee is not in default of any of the provisions of this 
Lease, either at the time of the exercise of the option or at the time of the 
commencement of the applicable extension period hereunder, Lessee may elect 
to extend the term of this Lease for one (1) additional five (5) year period 
by delivering to Lessor at least one hundred eighty (180) days before the end 
of the original term a written notice of such election; otherwise this 
extension agreement will therefore become null and void. The term of this Lease
shall thereupon be extended in accordance with Lessee's election, which 
extension period shall begin on the day immediately following the last day of 
the original term of the Lease. The extension periods hereunder shall be 
subject to all the terms and conditions of this lease, except that the basic 
rent for the five (5) year extension period shall be increased by the 
percentage increase in the U.S. Department of Labor's Consumer Price Index Los 
Angeles/Long Beach/Anaheim area (All Items) - All Urban Consumers ("Index"), as 
designated in RENT ESCALATION ADDENDUM Paragraph # 52 .

54.  Lessee agrees to indemnify the Lessor (owner) of any and all claims 
regarding water contamination, pollution, etc. in consideration of lessor 
buying the building.

Initials: _____                                                  Initials: _____
          _____                                                            _____


                               RENT ESCALATIONS