Exhibit 10.28

 





                                LEASE AGREEMENT
                                 By And Between
                          Aetna Life Insurance Company,
                            a Connecticut corporation
                                  As Landlord
                                      And
                             Arthrocare Corporation,
                            a California corporation
                                   As Tenant
                             Dated March 25, 1998


<PAGE>

Table Of Contents

Basic Lease Information 
1.      Demise  
2.      Premises        
3.      Term    
4.      Rent    
5.      Utility Expenses        
6.      Late Charge     
7.      Security Deposit        
8.      Possession      
9.      Use Of Premises 
10.     Acceptance Of Premises 
11.     Surrender      
12.     Alterations And Additions      
13.     Maintenance and Repairs Of Premises    
14.     Landlord's Insurance   
15.     Tenant's Insurance     
16.     Indemnification 
17.     Subrogation     
18.     Signs   
19.     Free From Liens 
20.     Entry By Landlord       
21.     Destruction And Damage  
22.     Condemnation    
23.     Assignment And Subletting       
24.     Tenant's Default        
25.     Landlord's Remedies     
26.     Landlord's Right to Perform Tenant's Obligations        
27.     Attorney's Fees 
28.     Taxes   
29.     Effect Of Conveyance    
30.     Tenant's Estoppel Certificate   
31.     Subordination   
32.     Environmental Covenants 
33.     Notices 
34.     Waiver  
35.     Holding Over    
36.     Successors And Assigns  
37.     Time    
38.     Brokers 
39.     Limitation Of Liability 
40.     Financial Statements    
41.     Rules And Regulations   
42.     Mortgagee Protection    
43.     Entire Agreement        
44.     Interest        
45.     Construction    
46.     Representations And Warranties Of Tenant        
47.     Security        
48.     Jury Trial Waiver       

Exhibit
A       Diagram of the Premises
B       Commencement Date Memorandum
C       Rules and Regulations
D       Sign Criteria
E       Hazardous Materials Disclosure Certificate

<PAGE>
                                Lease Agreement
                            Basic Lease Information

Lease Date:                  March 25, 1998

Landlord:                    Aetna Life Insurance Company,
                             a Connecticut corporation

Landlord's Address:          c/o Allegis Realty Investors LLC

                             455 Market Street, Suite 1540
                             San Francisco, California 94105

All notices sent to Landlord under this Lease shall be sent to the above
address, with  copies to:

                             Insignia Commercial Group, Inc.
                             160 West Santa Clara Street, Suite 1350
                             San Jose, California 95113

Tenant:                      Arthrocare Corporation,
                             a California corporation

Tenant's Contact Person:     Christine Hanni, VP Finance and CFO

Tenant's Address             595 Pastoria Avenue
and Telephone Number:        Sunnyvale, California 94086
                             (408) 736-0224 

Premises Square Footage:     Approximately ten thousand (10,000) rentable
                             square feet

Premises Address:            840 Del Rey Avenue
                             Sunnyvale, California

Project:                     840 Del Rey Avenue and 846 Del  Rey Avenue,
                             Sunnyvale,  California,
                             together with the land on which the Project is 
                             situated and all Common Areas

Building (if not the 
same as the Project):        Same as the Project

Tenant's Proportionate 
Share of Project:            50% 

Tenant's Proportionate 
Share of Building:           50% 

Length of Term:              Commencement Date to February 28, 2002 

Estimated Commencement Date: June 15, 1998

Expiration Date:             February 28, 2002

Monthly Base Rent:      
        Months          Sq. Ft.      Mo. Base Rate       Monthly Base Rent
        -----------     -------      -------------       -----------------
        1-12            10,000       x   $1.75           =  $ 17,500.

        13-Exp.Date     Monthly Base Rent to be increased in accordance with the
                        Consumer Price Index Price (see Paragraph 4(a) of the 
                        Lease)

Prepaid Rent:           Seventeen Thousand Five Hundred  Dollars ($17,500.00)


Prepaid Additional Rent:     One Thousand Nine Hundred Thirty-Nine Dollars
                             ($1,939.00) 

Month to which Prepaid 
Base Rent and Additional
Rent will be Applied:        First (1st) month of the Term

Security Deposit:            Thirty-Five Thousand Dollars  ($35,000.00)

Permitted Use:               General office use and storage,  research and
                             development, manufacturing, distribution and 
                             marketing of medical devices

Unreserved Parking Spaces:   Thirty-five (35) nonexclusive and undesignated
                             parking spaces

Brokers:                     Randy Arrillaga and Mark Daschbach 
                             of Cornish & Carey Commercial (Landlord's Broker)

                             Jeff Arrillaga 
                             of Cornish & Carey Commercial(Tenant's  Broker)

<PAGE>
                                Lease Agreement

This Lease Agreement is made and entered into by and between  Landlord and
Tenant on the Lease Date.  The defined terms  used in this Lease which are
defined in the Basic Lease  Information attached to this Lease Agreement
("Basic Lease  Information") shall have the meaning and definition given  them
in the Basic Lease Information.  The Basic Lease  Information, the exhibits,
the addendum or addenda described  in the Basic Lease Information, and this
Lease Agreement are  and shall be construed as a single instrument and are 
referred to herein as the "Lease".

1.      Demise

In consideration for the rents and all other charges and  payments payable by
Tenant, and for the agreements, terms  and conditions to be performed by Tenant
in this Lease,  Landlord does hereby lease to Tenant, and Tenant does hereby 
hire and take from Landlord, the Premises described below  (the "Premises"),
upon the agreements, terms and conditions  of this Lease for the Term
hereinafter stated.

2.      Premises

The Premises demised by this Lease is located in that  certain building (the
"Building") specified in the Basic  Lease Information, which Building is
located in that certain  real estate development (the "Project") specified in
the  Basic Lease Information.  The Premises has the address and  contains the
square footage specified in the Basic Lease  Information.  The location and
dimensions of the Premises  are depicted on Exhibit A, which is attached hereto
and  incorporated herein by this reference; provided, however,  that any
statement of square footage set forth in this  Lease, or that may have been
used in calculating any of the  economic terms hereof, is an approximation
which Landlord  and Tenant agree is reasonable and, except as expressly set 
forth in Paragraph 4(c)(3) below, no economic terms based  thereon shall be
subject to revision whether or not the  actual square footage is more or less. 
Tenant shall have  the non-exclusive right (in common with the other tenants, 
Landlord and any other person granted use by Landlord) to  use the Common Areas
(as hereinafter defined), except that,  with respect to parking, Tenant shall
have only a license to  use the number of non-exclusive and undesignated
parking  spaces set forth in the Basic Lease Information in the  Project's
parking areas (the "Parking Areas"); provided,  however, that Landlord shall
not be required to enforce  Tenant's right to use such parking spaces; and,
provided  further, that the number of parking spaces allocated to  Tenant
hereunder shall be reduced on a proportionate basis  in the event any of the
parking spaces in the Parking Areas  are taken or otherwise eliminated as a
result of any  Condemnation (as hereinafter defined) or casualty event 
affecting such Parking Areas.  No easement for light or air  is incorporated in
the Premises.  For purposes of this  Lease, the term "Common Areas" shall mean
all areas and  facilities outside the Premises and within the exterior 
boundary line of the Project that are provided and  designated by Landlord for
the non-exclusive use of  Landlord, Tenant and other tenants of the Project and
their  respective employees, guests and invitees.

Landlord has the right, in  its sole discretion, from time  to time, to:

        (a)      make changes to the Common Areas, including,  without
limitation, changes in the location, size, shape and  number of driveways,
entrances, parking spaces, parking  areas, ingress, egress, direction of
driveways, entrances,  corridors and walkways;

        (b)      close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the  Premises remains available;

        (c)      add additional buildings and improvements to the Common Areas
or remove existing buildings or improvements therefrom;

        (d)      use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Project or any portion thereof; and

        (e)      do and perform any other acts or make any other changes in, to
or with respect to the Common Areas and the  Project as Landlord may, in its
sole discretion, deem to be  appropriate; provided, however, that in making the
changes  described in this subparagraph (e) and subparagraphs(a)  through(d)
above, Landlord shall not unreasonably interfere  with Tenant's use of the
Premises, materially diminish  Tenant's parking rights or materially increase
Tenant's  obligations under the Lease.

3.      Term

The term of this Lease (the "Term") shall be for the period  specified in the
Basic Lease Information, commencing on the  date Landlord delivers possession
of the Premises to Tenant  (the "Commencement Date"); provided, however, in no
event  shall the Commencement Date occur prior to the Estimated  Commencement
Date specified in the Basic Lease Information.   In the event the actual
Commencement Date is a date other  than the Estimated Commencement Date, then
Landlord and  Tenant shall promptly execute a Commencement Date Memorandum  in
the form attached hereto as Exhibit B, wherein the  parties shall specify the
Commencement Date.

4.      Rent

        (a)     Base Rent.  Tenant shall pay to Landlord, in  advance on the
first day of each month, without further  notice or demand and without offset,
rebate, credit or  deduction for any reason whatsoever, the monthly 
installments of rent specified in the Basic Lease  Information (the "Base
Rent").

The Base Rent under this Paragraph 4(a) shall be adjusted,  as stated below, on
the first anniversary of the  Commencement Date, and each anniversary
thereafter, to  reflect percentage increases in the cost of living.  The 
Consumer Price Index (U.S. Department of Labor Consumer  Price Index (all
items) for Urban Wage Earners and Clerical  Workers, San Francisco Bay Area
(1982-1984=100), hereinafter  referred to as the "Index") published for the
month  immediately preceding each such adjustment date (each, an  "Adjustment
Index") and the Index published for the month  immediately preceding the
Commencement Date of this Lease  ("Base Index") shall be compared and the
percentage  difference between the Adjustment Index and the Base Index  shall
be determined.  The initial Base Rent specified in the  Basic Lease Information
shall be increased by adding to said  initial Base Rent the percentage amount
of said initial Base  Rent equal to the percentage difference between the Base 
Index and the applicable Adjustment Index; provided,  however, in no event
shall the initial Base Rent hereunder  be increased by less than four percent
(4%) or more than  seven percent (7%) for any one year.  When the adjusted Base
Rent is determined after each adjustment date, Landlord  shall give Tenant
written notice indicating the amount  thereof and the method of computation. 
If the Consumer  Price Index is changed or discontinued, Landlord shall 
substitute an official index published by the Bureau of  Labor Statistics or
its successor or similar governmental  agency as may then be in existence and
shall be most nearly equivalent thereto.

Upon execution of this Lease, Tenant shall pay to Landlord  the Prepaid Rent
and first monthly installment of estimated  Additional Rent (as hereinafter
defined) specified in the  Basic Lease Information to be applied toward Base
Rent and  Additional Rent for the month of  the Term specified in the  Basic
Lease Information.

        (b)     Additional Rent.  This Lease is intended to be a  triple-net
Lease with respect to Landlord; and subject to  Paragraph 13(b) below and
except as otherwise expressly set  forth herein, the Base Rent owing hereunder
is (1) to be  paid by Tenant absolutely net of all costs and expenses  relating
to Landlord's ownership and operation of the  Project and the Building, and (2)
not to be reduced, offset  or diminished, directly or indirectly, by any cost,
charge  or expense payable hereunder by Tenant or by others in  connection with
the Premises, the Building and/or the  Project or any part thereof.  The
provisions of this  Paragraph 4(b) for the payment of Tenant's Proportionate 
Share(s) of Expenses (as hereinafter defined) are intended  to pass on to
Tenant its share of all such costs and  expenses except as expressly set forth
herein.  Except as  expressly set forth herein, in addition to the Base Rent, 
Tenant shall pay to Landlord, in accordance with this  Paragraph 4, Tenant's
Proportionate Share(s) of all costs  and expenses paid or incurred by Landlord
in connection with  the ownership, operation, maintenance, management and
repair  of the Premises, the Building and/or the Project or any part  thereof
(collectively, the "Expenses"), including, without  limitation, all the
following items (the "Additional Rent"):

                (1)     Taxes and Assessments.  All real estate  taxes and
assessments, which shall include any form of tax,  assessment, fee, license
fee, business license fee, levy,  penalty (if a result of Tenant's
delinquency), or tax (other  than net income, estate, succession, inheritance,
transfer  or franchise taxes), imposed by any authority having the  direct or
indirect power to tax, or by any city, county,  state or federal government or
any improvement or other  district or division thereof, whether such tax is (i)
determined by the area of the Premises, the Building and/or  the Project or any
part thereof, or the Rent and other sums  payable hereunder by Tenant or by
other tenants, including,  but not limited to, any gross income or excise tax
levied by  any of the foregoing authorities with respect to receipt of  Rent
and/or other sums due under this Lease; (ii) upon any  legal or equitable
interest of Landlord in the Premises, the  Building and/or the Project or any
part thereof; (iii) upon  this transaction or any document to which Tenant is a
party  creating or transferring any interest in the Premises, the  Building
and/or the Project; (iv) levied or assessed in lieu  of, in substitution for,
or in addition to, existing or  additional taxes against the Premises, the
Building and/or  the Project, whether or not now customary or within the 
contemplation of the parties; or (v) surcharged against the  parking area. 
Tenant and Landlord acknowledge that  Proposition 13 was adopted by the voters
of the State of  California in the June, 1978 election and that assessments, 
taxes, fees, levies and charges may be imposed by  governmental agencies for
such purposes as fire protection,  street, sidewalk, road, utility construction
and  maintenance, refuse removal and for other governmental  services which may
formerly have been provided without  charge to property owners or occupants. 
It is the intention  of the parties that all new and increased assessments, 
taxes, fees, levies and charges due to any cause whatsoever  are to be included
within the definition of real property  taxes for purposes of this Lease. 
"Taxes and assessments"  shall also include legal and consultants' fees, costs
and  disbursements incurred in connection with proceedings to  contest,
determine or reduce taxes, Landlord specifically  reserving the right, but not
the obligation, to contest by  appropriate legal proceedings the amount or
validity of any  taxes.

                (2)     Insurance.  All insurance premiums for the  Building
and/or the Project or any part thereof, including  premiums for "all risk" fire
and extended coverage  insurance, commercial general liability insurance, rent
loss  or abatement insurance, earthquake insurance, flood or  surface water
coverage, and other insurance as Landlord  deems necessary in its sole
discretion, and any deductibles  paid under policies of any such insurance.

                (3)     Utilities.  The cost of all Utilities (as  hereinafter
defined) serving the Premises, the Building and  the Project that are not
separately metered to Tenant, any  assessments or charges for Utilities or
similar purposes  included within any tax bill for the Building or the 
Project, including without limitation, entitlement fees,  allocation unit fees,
and/or any similar fees or charges and  any penalties (if a result of Tenant's
delinquency) related  thereto, and any amounts, taxes, charges, surcharges, 
assessments or impositions levied, assessed or imposed upon  the Premises, the
Building or the Project or any part  thereof, or upon Tenant's use and
occupancy thereof, as a  result of any rationing of Utility services or
restriction  on Utility use affecting the Premises, the Building and/or  the
Project, as contemplated in Paragraph 5 below  (collectively, "Utility
Expenses").

                (4)     Common Area Expenses.  All costs to  operate, maintain,
repair, replace, supervise, insure and  administer the Common Areas, including
supplies, materials,  labor and equipment used in or related to the operation
and  maintenance of the Common Areas, including parking areas  (including,
without limitation, all costs of resurfacing and  restriping parking areas),
signs and directories on the  Building and/or the Project, landscaping
(including  maintenance contracts and fees payable to landscaping 
consultants), amenities, sprinkler systems, sidewalks,  walkways, driveways,
curbs, lighting systems and security  services, if any, provided by Landlord
for the Common Areas,  and any charges, assessments, costs or fees levied by
any  association or entity of which the Project or any part  thereof is a
member or to which the Project or any part  thereof is subject.

                (5)     Parking Charges.  Any parking charges or  other costs
levied, assessed or imposed by, or at the  direction of, or resulting from
statutes or regulations, or  interpretations thereof, promulgated by any
governmental  authority or insurer in connection with the use or occupancy  of
the Building or the Project.

                (6)     Maintenance and Repair Costs.  Except for  costs which
are the responsibility of Landlord pursuant to  Paragraph 13(b) below or are
assumed by Tenant pursuant to  Paragraph 13(a) below, all costs to maintain,
repair, and  replace the Premises, the Building and/or the Project or any  part
thereof, including without limitation, (i) all costs  paid under maintenance,
management and service agreements  such as contracts for janitorial, security
and refuse  removal, (ii) all costs to maintain, repair and replace the  roof
coverings of the Building or the Project or any part  thereof,  (iii) all costs
to maintain, repair and replace  the heating, ventilating, air conditioning,
plumbing, sewer,  drainage, electrical, fire protection, life safety and 
security systems and other mechanical and electrical systems  and equipment
serving the Premises, the Building and/or the  Project or any part thereof
(collectively, the "Systems").

                (7)     Life Safety Costs.  All costs to install,  maintain,
repair and replace all life safety systems,  including, without limitation, all
fire alarm systems,  serving the Premises, the Building and/or the Project or
any  part thereof (including all maintenance contracts and fees  payable to
life safety consultants) whether such systems are  or shall be required by
Landlord's insurance carriers, Laws  (as hereinafter defined) or otherwise.

                (8)     Management and Administration. All costs  for
management and administration of the Premises, the  Building and/or the Project
or any part thereof, including,  without limitation, a property management fee
(the  "Management Fee"), accounting, auditing, billing, postage,  salaries and
benefits for clerical and supervisory  employees, whether located on the
Project or off-site,  payroll taxes and legal and accounting costs and fees for
licenses and permits related to the ownership and operation  of the Project;
provided, however, that if Landlord shall  sell or otherwise convey the
Building to a person or entity  other than an Aetna Affiliate (as hereinafter
defined), then  the Management Fee shall not exceed a customary, market- based
property management fee for the market in which the  Building is located (the
"Relevant Market").  As used  herein, "Aetna Affiliate" means any person or
entity  affiliated, either directly or indirectly, with (i) Aetna  Life
Insurance Company ("Aetna"), (ii) Allegis Realty  Investors LLC ("Allegis"),
(iii) any fund, account or entity  established by Aetna or Allegis to hold
title to the  Building, or (iv) any affiliate of any of the foregoing.

Notwithstanding anything in this Paragraph 4(b) to the  contrary, with respect
to all sums payable by Tenant as  Additional Rent under this Paragraph 4(b) for
the  replacement of any item or the construction of any new item  in connection
with the physical operation of the Premises,  the Building or the Project
(i.e., HVAC, roof membrane or  coverings and parking area) which is a capital
item the  replacement of which would be capitalized under Landlord's 
commercial real estate accounting practices, Tenant shall be  required to pay
only its Proportionate Share(s) of the cost  of the item falling due within the
Term (including any  Renewal Term) based upon the amortization of the same over
the useful life of such item, as reasonably determined by  Landlord.

        (c)     Exclusions from Additional Rent.   Notwithstanding anything to
the contrary contained in  Paragraph 4(b) above, the following items shall be 
specifically excluded from the definition of "Expenses":

                (1)     Except as provided in Paragraph 4(c)(2)  above, costs
occasioned by fire, acts of God, or other  casualties or by the exercise of the
power of eminent  domain;

                (2)     Costs incurred to respond to any claim of  Hazardous
Material (as hereinafter defined) contamination or  damage, costs to remove any
Hazardous Materials from the  Project and any judgments or other costs
resulting from any  Hazardous Material releases; and

                (3)     Costs to install fire sprinklers in the  Premises;
provided, however, that if the installation of  such sprinklers is required as
a result of Tenant's actual  use of the Premises (as opposed to mere
occupancy), then  Tenant shall pay directly or shall reimburse Landlord for 
one hundred percent (100%) of the costs to procure and  install such sprinklers.

Nothing contained in this Paragraph 4(c) shall be deemed to  limit, modify or
otherwise affect Tenant's obligations under  any other provision of this Lease,
including, without  limitation, Paragraphs 16, 21, 22 and 32.

        (d)     Payment of Additional Rent.

                (1)     Upon commencement of this Lease, Landlord  shall submit
to Tenant an estimate of monthly Additional  Rent for the period between the
Commencement Date and the  following December 31 and Tenant shall pay such
estimated  Additional Rent on a monthly basis, in advance, on the first  day of
each month.  Tenant shall continue to make said  monthly payments until
notified by Landlord of a change  therein.  If at any time or times Landlord
determines that  the amounts payable under Paragraph 4(b) for the current  year
will vary from Landlord's estimate given to Tenant,  Landlord, by notice to
Tenant, may revise the estimate for  such year, and subsequent payments by
Tenant for such year  shall be based upon such revised estimate.  By April 1 of
each calendar year, Landlord shall endeavor to provide to  Tenant a statement
("Expense Statement") showing the actual  Additional Rent due to Landlord for
the prior calendar year,  to be prorated during the first year from the
Commencement  Date.  If the total of the monthly payments of Additional  Rent
that Tenant has made for the prior calendar year is  less than the actual
Additional Rent chargeable to Tenant  for such prior calendar year, then Tenant
shall pay the  difference in a lump sum within ten (10) days after receipt  of
such Expense Statement from Landlord.  Any overpayment by  Tenant of Additional
Rent for the prior calendar year shall  be credited towards the Additional Rent
next due.

                (2)     Landlord's then-current annual operating  and capital
budgets for the Building and the Project or the  pertinent part thereof shall
be used for purposes of  calculating Tenant's monthly payment of estimated
Additional  Rent for the current year, subject to adjustment as provided 
above.  Landlord shall make the final determination of  Additional Rent for the
year in which this Lease terminates  as soon as possible after termination of
such year.  Even  though the Term has expired and Tenant has vacated the 
Premises, Tenant shall remain liable for payment of any  amount due to Landlord
in excess of the estimated Additional  Rent previously paid by Tenant, and,
conversely, Landlord  shall promptly return to Tenant any overpayment.  Failure
of  Landlord to submit Expense Statements as called for herein  shall not be
deemed a waiver of Tenant's obligation to pay  Additional Rent as herein
provided.

                (3)     With respect to Expenses which Landlord  allocates to
the Building, Tenant's "Proportionate Share"  shall be the percentage set forth
in the Basic Lease  Information as Tenant's Proportionate Share of the
Building,  as adjusted by Landlord from time to time for a  remeasurement of or
increases in the physical size of the  Premises or the Building, or a decrease
in the size of the  Premises or Building resulting from casualty or 
condemnation.  With respect to Expenses which Landlord  allocates to the
Project as a whole or to only a portion of  the Project, Tenant's
"Proportionate Share" shall be, with  respect to Expenses which Landlord
allocates to the Project  as a whole, the percentage set forth in the Basic
Lease  Information as Tenant's Proportionate Share of the Project  and, with
respect to Expenses which Landlord allocates to  only a portion of the Project,
a percentage calculated by  Landlord from time to time in its sole discretion
and  furnished to Tenant in writing, in either case as adjusted  by Landlord
from time to time for a remeasurement of or  increases in the physical size of
the Premises or the  Project, or a decrease in the size of the Premises or 
Building resulting from casualty or condemnation.   Notwithstanding the
foregoing, Landlord may equitably adjust  Tenant's Proportionate Share(s) for
all or part of any item  of expense or cost reimbursable by Tenant that relates
to a  repair, replacement, or service that benefits only the  Premises or only
a portion of the Building and/or the  Project or that varies with the occupancy
of the Building  and/or the Project.  Without limiting the generality of the 
foregoing, Tenant understands and agrees that Landlord shall  have the right to
adjust Tenant's Proportionate Share(s) of  any Utility Expenses based upon
Tenant's use of the  Utilities or similar services as reasonably estimated and 
determined by Landlord based upon factors such as size of  the Premises and
intensity of use of such Utilities by  Tenant such that Tenant shall pay the
portion of such  charges reasonably consistent with Tenant's use of such 
Utilities and similar services.  If Tenant disputes any such  estimate or
determination of Utility Expenses, then Tenant  shall either pay the estimated
amount or cause the Premises  to be separately metered at Tenant's sole expense.

        (e)     Audit Rights.  Provided Tenant is not in Default  under the
terms of this Lease (nor is any event occurring  which with the giving of
notice or the passage of time, or  both, would constitute a Default hereunder),
Tenant, at its  sole expense subject to the last sentence of this Paragraph 
4(e), shall have the right within thirty (30) days after the  delivery of each
Expense Statement to review and audit  Landlord's books and records regarding
such Expense  Statement for the sole purpose of determining the accuracy  of
such Expense Statement.  Such review or audit shall be  performed by a
nationally recognized accounting firm that  calculates its fees with respect to
hours actually worked  and that does not discount its time or rate (as opposed
to a  calculation based upon percentage of recoveries or other  incentive or
contingent arrangement), shall take place  during normal business hours in the
office of Landlord or  Landlord's property manager and shall be completed
within  three (3) business days after the commencement thereof.  If  Tenant
does not so review or audit Landlord's books and  records, Landlord's Expense
Statement shall be final and  binding upon Tenant.  In the event that Tenant
determines on  the basis of its review of Landlord's books and records that 
the amount of Expenses paid by Tenant pursuant to this  Paragraph 4 for the
period covered by such Expense Statement  is less than or greater than the
actual amount properly  payable by Tenant under the terms of this Lease, Tenant
shall promptly pay any deficiency to Landlord or, if  Landlord concurs with the
results of such audit, Landlord  shall promptly refund any excess payment to
Tenant, as the  case may be.

        (f)     General Payment Terms.  The Base Rent,  Additional Rent and all
other sums payable by Tenant to  Landlord hereunder, any late charges assessed
pursuant to  Paragraph 6 below and any interest assessed pursuant to  Paragraph
45 below, are referred to as the "Rent".  All Rent  shall be paid without
deduction, offset or abatement in  lawful money of the United States of
America.  Checks are to  be made payable to Aetna Life Insurance Company and
shall be  mailed to:  Aetna Life Insurance Company, Allegis Business  Center,
Department #44820, San Francisco, California  94144- 4820 or to such other
person or place as Landlord may, from  time to time, designate to Tenant in
writing.  The Rent for  any fractional part of a calendar month at the
commencement  or termination of the Lease term shall be a prorated amount  of
the Rent for a full calendar month based upon a thirty  (30) day month.

5.      Utility Expenses

        (a)     Tenant shall pay the cost of all water, sewer  use, sewer
discharge fees and permit costs and sewer  connection fees, gas, heat,
electricity, refuse pick-up,  janitorial service, telephone and all materials
and services  or other utilities (collectively, "Utilities") billed or  metered
separately to the Premises and/or Tenant, together  with all taxes,
assessments, charges and penalties added to  or included within such cost. 
Tenant acknowledges that the  Premises, the Building and/or the Project may
become subject  to the rationing of Utility services or restrictions on 
Utility use as required by a public utility company,  governmental agency or
other similar entity having  jurisdiction thereof.  Tenant acknowledges and
agrees that  its tenancy and occupancy hereunder shall be subject to such 
rationing or restrictions as may be imposed upon Landlord,  Tenant, the
Premises, the Building and/or the Project, and  Tenant shall in no event be
excused or relieved from any  covenant or obligation to be kept or performed by
Tenant by  reason of any such rationing or restrictions.  Tenant agrees  to
comply with energy conservation programs implemented by  Landlord by reason of
rationing, restrictions or Laws.

        (b)     Landlord shall not be liable for any loss,  injury or damage to
property caused by or resulting from any  variation, interruption, or failure
of Utilities due to any  cause whatsoever, or from failure to make any repairs
or  perform any maintenance.  No temporary interruption or  failure of such
services incident to the making of repairs,  alterations, improvements, or due
to accident, strike, or  conditions or other events shall be deemed an eviction
of  Tenant or relieve Tenant from any of its obligations  hereunder.  In no
event shall Landlord be liable to Tenant  for any damage to the Premises or for
any loss, damage or  injury to any property therein or thereon occasioned by 
bursting, rupture, leakage or overflow of any plumbing or  other pipes
(including, without limitation, water, steam,  and/or refrigerant lines),
sprinklers, tanks, drains,  drinking fountains or washstands, or other similar
cause in,  above, upon or about the Premises, the Building, or the  Project.

6.      Late Charge

Notwithstanding any other provision of this Lease, Tenant  hereby acknowledges
that late payment to Landlord of Rent,  or other amounts due hereunder will
cause Landlord to incur  costs not contemplated by this Lease, the exact amount
of  which will be extremely difficult to ascertain.  If any Rent  or other sums
due from Tenant are not received by Landlord  or by Landlord's designated agent
within five (5) days after  their due date, then Tenant shall pay to Landlord a
late  charge equal to ten percent (10%) of such overdue amount,  plus any costs
and attorneys' fees incurred by Landlord by  reason of Tenant's failure to pay
Rent and/or other charges  when due hereunder. Landlord and Tenant hereby agree
that  such late charges represent a fair and reasonable estimate  of the cost
that Landlord will incur by reason of Tenant's  late payment and shall not be
construed as a penalty.   Landlord's acceptance of  such late charges shall not
constitute a waiver of Tenant's default with respect to such  overdue amount or
estop Landlord from exercising any of the  other rights and remedies granted
under this Lease.

Initials:  Landlord  /s/C.S.     Tenant /s/C.H.
                     -------            -------

7.      Security Deposit

Concurrently with Tenant's execution of the Lease, Tenant  shall deposit with
Landlord the Security Deposit specified  in the Basic Lease Information as
security for the full and  faithful performance of each and every term,
covenant and  condition of this Lease.  Landlord may use, apply or retain  the
whole or any part of the Security Deposit as may be  reasonably necessary (a)
to remedy Tenant's default in the  payment of any Rent, (b) to repair damage to
the Premises  caused by Tenant, (c) to clean the Premises upon termination  of
this Lease, (d) to reimburse Landlord for the payment of  any amount which
Landlord may reasonably spend or be  required to spend by reason of Tenant's
default, or (e) to  compensate Landlord for any other loss or damage which 
Landlord may suffer by reason of Tenant's default.  Should  Tenant faithfully
and fully comply with all of the terms,  covenants and conditions of this
Lease, within thirty (30)  days following the expiration of the Term, the
Security  Deposit or any balance thereof shall be returned to Tenant  or, at
the option of Landlord, to the last assignee of  Tenant's interest in this
Lease.  Landlord shall not be  required to keep the Security Deposit separate
from its  general funds and Tenant shall not be entitled to any  interest on
such deposit.  If Landlord so uses or applies  all or any portion of said
deposit, within five (5) days  after written demand therefor Tenant shall
deposit cash with  Landlord in an amount sufficient to restore the Security 
Deposit to the full extent of the above amount, and Tenant's  failure to do so
shall be a default under this Lease.  In  the event Landlord transfers its
interest in this Lease,  Landlord shall transfer the then remaining amount of
the  Security Deposit to Landlord's successor in interest, and  thereafter
Landlord shall have no further liability to  Tenant with respect to such
Security Deposit.

8.      Possession

        (a)     Tenant's Right of Possession.  Landlord shall  deliver
possession of the Premises to Tenant upon the  Commencement Date.

        (b)     Delay in Delivering Possession. If for any  reason whatsoever
Landlord cannot deliver possession of the  Premises to Tenant on or before the
Estimated Commencement  Date, this Lease shall not be void or voidable, nor
shall  Landlord, or Landlord's agents, advisors, employees,  partners,
shareholders, directors, invitees or independent  contractors (collectively,
"Landlord's Agents"), be liable  to Tenant for any loss or damage resulting
therefrom.   Tenant shall not be liable for Rent until Landlord delivers 
possession of the Premises to Tenant.  Notwithstanding  anything to the
contrary in this Lease, in the event that  Landlord shall fail to deliver
possession of the Premises to  Tenant by August 31, 1998, Tenant may, at its
discretion,  and as its sole and exclusive remedy for such failure,  terminate
this Lease by written notice to Landlord given not  later than September 10,
1998.

9.      Use Of Premises

        (a)     Permitted Use.  The use of the Premises by  Tenant and Tenant's
agents, advisors, employees, partners,  shareholders, directors, invitees and
independent  contractors (collectively, "Tenant's Agents") shall be  solely for
the Permitted Use specified in the Basic Lease  Information and for no other
use.  Tenant shall not permit  any objectionable or unpleasant odor, smoke,
dust, gas,  noise or vibration to emanate from or near the Premises.   The
Premises shall not be used to create any nuisance or  trespass, for any illegal
purpose, for any purpose not  permitted by Laws, for any purpose that would
invalidate the  insurance or increase the premiums for insurance on the 
Premises, the Building or the Project or for any purpose or  in any manner that
would interfere with other tenants' use  or occupancy of the Project.  If any
of Tenant's office  machines or equipment disturb any other tenant in the 
Building, then Tenant shall provide adequate insulation or  take such other
action as may be necessary to eliminate the  noise or disturbance.  Tenant
agrees to pay to Landlord, as  Additional Rent, any increases in premiums on
policies  resulting from Tenant's Permitted Use or any other use or  action by
Tenant or Tenant's Agents which increases  Landlord's premiums or requires
additional coverage by  Landlord to insure the Premises.  Tenant agrees not to 
overload the floor(s) of the Building.

        (b)     Compliance with Governmental Regulations and  Private
Restrictions.  Tenant and Tenant's Agents shall, at  Tenant's expense,
faithfully observe and comply with (1) all  municipal, state and federal laws,
statutes, codes, rules,  regulations, ordinances, requirements, and orders 
(collectively, "Laws"), now in force or which may hereafter  be in force
pertaining  to the Premises or Tenant's use of  the Premises, the Building or
the Project, provided,  however, that except as provided in Paragraph 9(c)
below,  Tenant shall not be required to make or, except as provided  in
Paragraph 4 above, pay for, structural changes to the  Premises or the Building
(including, without limitation,  seismic reinforcement and related alterations,
and the  removal of asbestos) not related to Tenant's specific use of  the
Premises unless the requirement for such changes is  imposed as a result of any
improvements or additions made or  proposed to be made at Tenant's request; (2)
all recorded  covenants, conditions and restrictions affecting the Project 
("Private Restrictions") now in force or which may hereafter  be in force; and
(3) any and all rules and regulations set  forth in Exhibit C and any other
rules and regulations now  or hereafter promulgated by Landlord related to
parking or  the operation of the Premises, the Building and/or the  Project
(collectively, the "Rules and Regulations").  The  judgment of any court of
competent jurisdiction, or the  admission of Tenant in any action or proceeding
against  Tenant, whether Landlord be a party thereto or not, that  Tenant has
violated any such Laws or Private Restrictions,  shall be conclusive of that
fact as between Landlord and  Tenant.

        (c)     Compliance with Americans with Disabilities Act.   Landlord and
Tenant hereby agree and acknowledge that the  Premises, the Building and/or the
Project may be subject to,  among other Laws, the requirements of the Americans
with  Disabilities Act, a federal law codified at 42 U.S.C. 12101  et seq.,
including, but not limited to Title III thereof,  and all regulations and
guidelines related thereto, together  with any and all laws, rules,
regulations, ordinances, codes  and statutes now or hereafter enacted by local
or state  agencies having jurisdiction thereof, including all  requirements of
Title 24 of the State of California, as the  same may be in effect on the date
of this Lease and may be  hereafter modified, amended or supplemented
(collectively,  the "ADA").  Any Tenant Improvements to be constructed 
hereunder shall be in compliance with the requirements of  the ADA, and all
costs incurred for purposes of compliance  therewith shall be a part of and
included in the costs of  the Tenant Improvements.  Tenant shall be solely
responsible  for conducting its own independent investigation of this  matter
and for ensuring that the design of all Tenant  Improvements strictly complies
with all requirements of the  ADA.  Subject to reimbursement pursuant to
Paragraph 4  above, if any barrier removal work or other work is required  to
the Building, the Common Areas or the Project under the  ADA, then such work
shall be the responsibility of Landlord;  provided, if such work is required
under the ADA as a result  of Tenant's use of the Premises or any work or
Alteration  (as hereinafter defined) made to the Premises by or on  behalf of
Tenant, then such work shall be performed by  Landlord at the sole cost and
expense of Tenant.  Except as  otherwise expressly provided in this provision,
Tenant shall  be responsible at its sole cost and expense for fully and 
faithfully complying with all applicable requirements of the  ADA, including
without limitation, not discriminating  against any disabled persons in the
operation of Tenant's  business in or about the Premises, and offering or
otherwise  providing auxiliary aids and services as, and when, required  by the
ADA.  Within ten (10) days after receipt, Tenant  shall advise Landlord in
writing, and provide Landlord with  copies of (as applicable), any notices
alleging violation of  the ADA relating to any portion of the Premises, the 
Building or the Project; any claims made or threatened  orally or in writing
regarding noncompliance with the ADA  and relating to any portion of the
Premises, the Building,  or the Project; or any governmental or regulatory
actions or  investigations instituted or threatened regarding  noncompliance
with the ADA and relating to any portion of  the Premises, the Building or the
Project.  Tenant shall and  hereby agrees to protect, defend (with counsel
acceptable to  Landlord) and hold Landlord and Landlord's Agents harmless  and
indemnify Landlord and Landlord's Agents from and  against all liabilities,
damages, claims, losses, penalties,  judgments, charges and expenses (including
attorneys' fees,  costs of court and expenses necessary in the prosecution or 
defense of any litigation including the enforcement of this  provision) arising
from or in any way related to, directly  or indirectly, Tenant's or Tenant's
Agents' violation or  alleged violation of the ADA.  Tenant agrees that the 
obligations of Tenant herein shall survive the expiration or  earlier
termination of this Lease

10.     Acceptance Of Premises

        (a)     By entry hereunder, Tenant accepts the Premises  as suitable
for Tenant's intended use and as being in good  and sanitary operating order,
condition and repair, AS IS,  and without representation or warranty by
Landlord as to the  condition, use or occupancy which may be made thereof.  Any
exceptions to the foregoing must be by written agreement  executed by Landlord
and Tenant.

        (b)     Notwithstanding the terms of Paragraph 10(a)  above, Landlord
shall cause the HVAC, electrical and  plumbing systems serving the Premises to
be in good working  order and the roof on the Building to be in good condition 
on the Commencement Date.  Any claims by Tenant under the  preceding sentence
shall be made in writing not later than  the fifteenth (15th) day after the
Commencement Date.  In  the event Tenant fails to deliver a written claim to 
Landlord on or before such fifteenth (15th) day, then  Landlord shall be
conclusively deemed to have satisfied its  obligations under this Paragraph 10.

        (c)     Prior to the Commencement Date, Landlord shall  paint the
interior of the Premises with Building-standard  paint and install
Building-standard floor coverings therein.   Except for the foregoing, Landlord
shall have no obligation  to remodel, improve or otherwise alter the Premises
prior to  or after the Commencement Date.

11.     Surrender

Tenant agrees that on the last day of the Term, or on the  sooner termination
of this Lease, Tenant shall surrender the  Premises to Landlord (a) in good
condition and repair  (damage by acts of God, fire, and normal wear and tear 
excepted), but with all interior walls painted or cleaned so  they appear
painted, any carpets cleaned, all floors cleaned  and waxed, all non-working
light bulbs and ballasts replaced  and all roll-up doors and plumbing fixtures
in good  condition and working order, and (b) otherwise in accordance  with
Paragraph 32(h).  Normal wear and tear shall not  include any damage or
deterioration to the floors of the  Premises arising from the use of forklifts
in, on or about  the Premises (including, without limitation, any marks or 
stains on any portion of the floors), and any damage or  deterioration that
would have been prevented by proper  maintenance by Tenant, or Tenant otherwise
performing all of  its obligations under this Lease.  On or before the 
expiration or sooner termination of this Lease, (i) Tenant  shall remove all of
Tenant's Property (as hereinafter  defined) and Tenant's signage from the
Premises, the  Building and the Project and repair any damage caused by  such
removal, and (ii) Landlord may, by notice to Tenant  given not later than
ninety (90) days prior to the  Expiration Date (except in the event of a
termination of  this Lease prior to the scheduled Expiration Date, in which 
event no advance notice shall be required), require Tenant  at Tenant's expense
to remove any or all Alterations and to  repair any damage caused by such
removal.  Any of Tenant's  Property not so removed by Tenant as required herein
shall  be deemed abandoned and may be stored, removed, and disposed  of by
Landlord at Tenant's expense, and Tenant waives all  claims against Landlord
for any damages resulting from  Landlord's retention and disposition of such
property;   provided, however, that Tenant shall remain liable to  Landlord for
all costs incurred in storing and disposing of  such abandoned property of
Tenant.  All Tenant Improvements  and Alterations except those which Landlord
requires Tenant  to remove shall remain in the Premises as the property of 
Landlord.  If the Premises are not surrendered at the end of  the Term or
sooner termination of this Lease, and in  accordance with the provisions of
this Paragraph 11 and  Paragraph 32(h) below, Tenant shall continue to be 
responsible for the payment of Rent (as the same may be  increased pursuant to
Paragraph 35 below) until the Premises  are so surrendered in accordance with
said Paragraphs  (except to the extent that such defaults of Tenant are 
deminimis and can be fully cured with the Security Deposit  then held by
Landlord), and in any event Tenant shall  indemnify, defend and hold  Landlord
harmless from and  against any and all loss or liability resulting from delay 
by Tenant in so surrendering the Premises including, without  limitation, any
loss or liability resulting from any claim  against Landlord made by any
succeeding tenant or  prospective tenant founded on or resulting from such
delay  and losses to Landlord due to lost opportunities to lease  any portion
of the Premises to any such succeeding tenant or  prospective tenant, together
with, in each case, actual  attorneys' fees and costs.

12.     Alterations And Additions

        (a)     Tenant shall not make, or permit to be made, any  alteration,
addition or improvement (hereinafter referred to  individually as an
"Alteration" and collectively as the  "Alterations") to the Premises or any
part thereof without  the prior written consent of Landlord, which consent
shall  not be unreasonably withheld; provided, however, that  Landlord shall
have the right in its sole and absolute  discretion to consent or to withhold
its consent to any  Alteration which affects the structural portions of the 
Premises, the Building or the Project or the Systems serving  the Premises, the
Building and/or the Project or any portion  thereof (such Alterations described
in this proviso being  herein referred to as "Structural Alterations").  
Notwithstanding the foregoing, Tenant shall have the right  to make Alterations
(specifically excluding, however,  Structural Alterations) to the Premises with
prior notice to  but without the consent of Landlord, provided that such 
Alterations are constructed and performed in full compliance  with the terms of
Paragraphs 12(b) through (f) below and do  not exceed two thousand five hundred
dollars ($2,500) in  cost on an individual basis or five thousand dollars 
($5,000) in the aggregate over the Term of this Lease.

        (b)     Any Alteration to the Premises shall be at  Tenant's sole cost
and expense, in compliance with all  applicable Laws and all requirements
requested by Landlord,  including, without limitation, the requirements of any 
insurer providing coverage for the Premises or the Project  or any part
thereof, and in accordance with plans and  specifications approved in writing
by Landlord, and shall be  constructed and installed by a contractor approved
in  writing by Landlord, which approval shall not be  unreasonably withheld or
delayed.  As a further condition to  giving consent, Landlord may require
Tenant to provide  Landlord, at Tenant's sole cost and expense, a payment and 
performance bond in form acceptable to Landlord, in a  principal amount not
less than one and one-half times the  estimated costs of such Alterations, to
ensure Landlord  against any liability for mechanic's and materialmen's liens 
and to ensure completion of work.  Before Alterations may  begin, valid
building permits or other permits or licenses  required must be furnished to
Landlord, and, once the  Alterations begin, Tenant will diligently and
continuously  pursue their completion.  Landlord may monitor construction  of
the Alterations and Tenant shall reimburse Landlord for  its reasonable costs
(including, without limitation, the  costs of any construction manager retained
by Landlord) in  reviewing plans and documents and in monitoring  construction.
 Tenant shall maintain during the course of  construction, at its sole cost and
expense, builders' risk  insurance for the amount of the completed value of the
Alterations on an all-risk non-reporting form covering all  improvements under
construction, including building  materials, and other insurance in amounts and
against such  risks as Landlord shall reasonably require in connection  with
the Alterations.  In addition to and without limitation  on the generality of
the foregoing, Tenant shall ensure that  its contractor(s) procure and maintain
in full force and  effect during the course of construction a "broad form" 
commercial general liability and property damage policy of  insurance naming
Landlord, Tenant and Landlord's lenders as  additional insureds.  The minimum
limit of coverage of the  aforesaid policy shall be in the amount of not less
than One  Million Dollars ($1,000,000.00) for injury or death of one  person in
any one accident or occurrence and in the amount  of not less than One Million
Dollars ($1,000,000.00) for  injury or death of more than one person in any one
accident  or occurrence, and shall contain a severability of interest  clause
or a cross liability endorsement.  Such insurance  shall further insure
Landlord and Tenant against liability  for property damage of at least One
Million Dollars  ($1,000,000.00).

        (c)     All Alterations, including, but not limited to,  heating,
lighting, electrical, air conditioning, fixed  partitioning, drapery, wall
covering and paneling, built-in  cabinet work and carpeting installations made
by Tenant,  together with all property that has become an integral part  of the
Premises or the Building, shall at once be and become  the property of
Landlord, and shall not be deemed trade  fixtures or Tenant's Property.  If
requested by Landlord,  Tenant will pay, prior to the commencement of
construction,  an amount determined by Landlord necessary to cover the  costs
of demolishing such Alterations and/or the cost of  returning the Premises and
the Building to its condition  prior to such Alterations.

        (d)     No private telephone systems and/or other  related computer or
telecommunications equipment or lines  may be installed without Landlord's
prior written consent,  which consent shall not be unreasonably withheld;
provided,  however, that Landlord shall have the right in its sole and 
absolute discretion to consent or to withhold its consent to  any such
installation which affects the structural portions  of the Premises, the
Building or the Project or the Systems  serving the Premises, the Building
and/or the Project or any  portion thereof.  If Landlord gives such consent,
all  equipment must be installed within the Premises and, at the  request of
Landlord made at any time prior to the expiration  of the Term, removed upon
the expiration or sooner  termination of this Lease and the Premises restored
to the  same condition as before such installation.

        (e)     Notwithstanding anything herein to the contrary,  before
installing any equipment or lights which generate an  undue amount of heat in
the Premises, or if Tenant plans to  use any high-power usage equipment in the
Premises, Tenant  shall obtain the written permission of Landlord.  Landlord 
may refuse to grant such permission unless Tenant agrees to  pay the costs to
Landlord for installation of supplementary  air conditioning capacity or
electrical systems necessitated  by such equipment.

        (f)     Tenant agrees not to proceed to make any  Alterations,
notwithstanding consent from Landlord to do so,  until Tenant notifies Landlord
in writing of the date Tenant  desires to commence construction or installation
of such  Alterations and Landlord has approved such date in writing,  in order
that Landlord may post appropriate notices to avoid  any liability to
contractors or material suppliers for  payment for Tenant's improvements. 
Tenant will at all times  permit such notices to be posted and to remain posted
until  the completion of work.

13.     Maintenance and Repairs Of Premises

        (a)     Maintenance by Tenant.  Throughout the Term,  Tenant shall, at
its sole expense, (1) keep and maintain in  good order and condition the
Premises, and repair and  replace every part thereof, including glass, windows,
window  frames, window casements, skylights, interior and exterior  doors, door
frames and door closers; interior lighting  (including, without limitation,
light bulbs and ballasts),  the plumbing and electrical systems exclusively
serving the  Premises, all communications systems serving the Premises, 
Tenant's signage, interior demising walls and partitions,  equipment, interior
painting and interior walls and floors,  and the roll-up doors, ramps and dock
equipment, including,  without limitation, dock bumpers, dock plates, dock
seals,  dock levelers and dock lights located in or on the Premises  (excepting
only those portions of the Building or the  Project to be maintained by
Landlord, as provided in  Paragraph 13(b) below), (2) furnish all expendables, 
including light bulbs, paper goods and soaps, used in the  Premises, and (3)
keep and maintain in good order and  condition, repair and replace all of
Tenant's security  systems in or about or serving the Premises and, except to 
the extent that Landlord notifies Tenant in writing of its  intention to
arrange for such monitoring, cause the fire  alarm systems serving the Premises
to be monitored by a  monitoring or protective services firm approved by
Landlord  in writing.  Tenant shall not do nor shall Tenant allow  Tenant's
Agents to do anything to cause any damage,  deterioration or unsightliness to
the Premises, the Building  or the Project.

        (b)     Maintenance by Landlord. Subject to the  provisions of
Paragraphs 13(a), 21 and 22, and further  subject to Tenant's obligation under
Paragraph 4 to  reimburse Landlord, in the form of Additional Rent, for 
Tenant's Proportionate Share(s) of the cost and expense of  the following
items, Landlord agrees to repair and maintain  the following items: the roof
coverings (provided that  Tenant installs no additional air conditioning or
other  equipment on the roof that damages the roof coverings, in  which event
Tenant shall pay all costs resulting from the  presence of such additional
equipment); the Systems serving  the Premises and the Building, excluding the
plumbing and  electrical systems exclusively serving the Premises; and the 
Parking Areas, pavement, landscaping, sprinkler systems,  sidewalks, driveways,
curbs, and lighting systems in the  Common Areas.  Subject to the provisions of
Paragraphs  13(a), 21 and 22, Landlord, at its own cost and expense,  agrees to
repair and maintain the following items:  the  structural portions of the roof
(specifically excluding the  roof coverings), the foundation, the footings, the
floor  slab, and the load bearing walls and exterior walls of the  Building
(excluding any glass and any routine maintenance,  including, without
limitation, any painting, sealing,  patching and waterproofing of such walls). 
Notwithstanding  anything in this Paragraph 13 to the contrary, Landlord  shall
have the right to either repair or to require Tenant  to repair any damage to
any portion of the Premises, the  Building and/or the Project caused by or
created due to any  act, omission, negligence or willful misconduct of Tenant
or  Tenant's Agents and to restore the Premises, the Building  and/or the
Project, as applicable, to the condition existing  prior to the occurrence of
such damage;  provided, however,  that in the event Landlord elects to perform
such repair and  restoration work, Tenant shall reimburse Landlord upon  demand
for all costs and expenses incurred by Landlord in  connection therewith. 
Landlord's obligation hereunder to  repair and maintain is subject to the
condition precedent  that Landlord shall have received  written notice of the 
need for such repairs and maintenance and a reasonable time  to perform such
repair and maintenance.  Tenant shall  promptly report in writing to Landlord
any defective  condition known to it which Landlord is required to repair,  and
failure to so report such defects shall make Tenant  responsible to Landlord
for any liability incurred by  Landlord by reason of such condition.

        (c)     Tenant's Waiver of Rights.  Tenant hereby  expressly waives all
rights to make repairs at the expense  of Landlord or to terminate this Lease,
as provided for in  California Civil Code Sections 1941 and 1942, and 1932(1), 
respectively, and any similar or successor statute or law in  effect or any
amendment thereof during the Term.

14.     Landlord's Insurance

Landlord shall purchase and keep in force fire, extended  coverage and "all
risk" insurance covering the Building and  the Project.  Tenant shall, at its
sole cost and expense,  comply with any and all reasonable requirements
pertaining  to the Premises, the Building and the Project of any insurer 
necessary for the maintenance of reasonable fire and  commercial general
liability insurance, covering the  Building and the Project.  Landlord, at
Tenant's cost, may  maintain "Loss of Rents" insurance, insuring that the Rent 
will be paid in a timely manner to Landlord for a period of  at least twelve
(12) months if the Premises, the Building or  the Project or any portion
thereof are destroyed or rendered  unusable or inaccessible by any cause
insured against under  this Lease.

15.     Tenant's Insurance

        (a)     Commercial General Liability Insurance.  Tenant  shall, at
Tenant's expense, secure and keep in force a  "broad form" commercial general
liability insurance and  property damage policy covering the Premises, insuring
Tenant, and naming Landlord, Landlord's investment advisors  and agents from
time to time, including, without limitation,  Allegis Realty Investors LLC, and
Landlord's lenders as  additional insureds, against any liability arising out
of  the ownership, use, occupancy or maintenance of the  Premises.  The minimum
limit of coverage of such policy  shall be in the amount of not less than Three
Million  Dollars ($3,000,000.00) for injury or death of one person in  any one
accident or occurrence and in the amount of not less  than Three Million
Dollars ($3,000,000.00) for injury or  death of more than one person in any one
accident or  occurrence, shall include an extended liability endorsement 
providing contractual liability coverage (which shall  include coverage for
Tenant's indemnification obligations in  this Lease), and shall contain a
severability of interest  clause or a cross liability endorsement.  Such
insurance  shall further insure Landlord and Tenant against liability  for
property damage of at least Three Million Dollars  ($3,000,000.00).  Landlord
may from time to time require  reasonable increases in any such limits if
Landlord believes  that additional coverage is necessary or desirable.  The 
limit of any insurance shall not limit the liability of  Tenant hereunder.  No
policy maintained by Tenant under this  Paragraph 15(a) shall contain a
deductible greater than two  thousand five hundred dollars ($2,500.00).  No
policy shall  be cancelable or subject to reduction of coverage without  thirty
(30) days prior written notice to Landlord, and loss  payable clauses shall be
subject to Landlord's approval.   Such policies of insurance shall be issued as
primary  policies and not contributing with or in excess of coverage  that
Landlord may carry, by an insurance company authorized  to do business in the
State of California for the issuance  of such type of insurance coverage and
rated A:XIII or  better in Best's Key Rating Guide.

        (b)     Personal Property Insurance.  Tenant shall  maintain in full
force and effect on all of its personal  property, furniture, furnishings,
trade or business fixtures  and equipment (collectively, "Tenant's Property")
on the  Premises, a policy or policies of fire and extended coverage  insurance
with standard coverage endorsement to the extent  of the full replacement cost
thereof.  No such policy shall  contain a deductible greater than two thousand
five hundred  dollars ($2,500.00).  During the term of this Lease the  proceeds
from any such policy or policies of insurance shall  be used for the repair or
replacement of the fixtures and  equipment so insured.  Landlord shall have no
interest in  the insurance upon Tenant's equipment and fixtures and will  sign
all documents reasonably necessary in connection with  the settlement of any
claim or loss by Tenant.  Landlord  will not carry insurance on Tenant's
possessions.

        (c)     Worker's Compensation Insurance; Employer's  Liability
Insurance.  Tenant shall, at Tenant's expense,  maintain in full force and
effect worker's compensation  insurance with not less than the minimum limits
required by  law, and employer's liability insurance with a minimum limit  of
coverage of One Million Dollars ($1,000,000).

        (d)     Evidence of Coverage.  Tenant shall deliver to  Landlord
certificates of insurance and true and complete  copies of any and all
endorsements required herein for all  insurance required to be maintained by
Tenant hereunder at  the time of execution of this Lease by Tenant.  Tenant 
shall, at least thirty (30) days prior to expiration of each  policy, furnish
Landlord with certificates of renewal or  "binders" thereof.  Each certificate
shall expressly provide  that such policies shall not be cancellable or
otherwise  subject to modification except after thirty (30) days prior  written
notice to Landlord and the other parties named as  additional insureds as
required in this Lease (except for  cancellation for nonpayment of premium, in
which event  cancellation shall not take effect until at least ten (10)  days
notice has been given to Landlord).

16.     Indemnification

        (a)     Of Landlord.  Tenant shall indemnify and hold  harmless
Landlord and Landlord's Agents against and from any  and all claims,
liabilities, judgments, costs, demands,  causes of action and expenses
(including, without  limitation, reasonable attorneys' fees) arising from (1)
the  use of the Premises, the Building or the Project by Tenant  or Tenant's
Agents, or from any activity done, permitted or  suffered by Tenant or Tenant's
Agents in or about the  Premises, the Building or the Project, and (2) any act,
neglect, fault, willful misconduct or omission of Tenant or  Tenant's Agents,
or from any breach or default in the terms  of this Lease by Tenant or Tenant's
Agents, and (3) any  action or proceeding brought on account of any matter in 
items (1) or (2), except in each instance solely to the  extent arising out of
the gross negligence or willful  misconduct of Landlord.  If any action or
proceeding is  brought against Landlord by reason of any such claim, upon 
notice from Landlord, Tenant shall defend the same at  Tenant's expense by
counsel reasonably satisfactory to  Landlord.  As a material part of the
consideration to  Landlord, Tenant hereby releases Landlord and Landlord's 
Agents from responsibility for, waives its entire claim of  recovery for and
assumes all risk of (i) damage to property  or injury to persons in or about
the Premises, the Building  or the Project from any cause whatsoever (except
that which  is caused by the gross negligence or willful misconduct of 
Landlord or Landlord's Agents or by the failure of Landlord  to observe any of
the terms and conditions of this Lease, if  such failure has persisted for an
unreasonable period of  time after written notice of such failure), or (ii)
loss  resulting from business interruption or loss of income at  the Premises. 
The obligations of Tenant under this  Paragraph 16 shall survive any
termination of this Lease.

        (b)     No Impairment of Insurance.  The foregoing  indemnity shall not
relieve any insurance carrier of its  obligations under any policies required
to be carried by  either party pursuant to this Lease, to the extent that such 
policies cover the peril or occurrence that results in the  claim that is
subject to the foregoing indemnity.

17.     Subrogation

Notwithstanding anything to the contrary in this Lease,  Landlord and Tenant
hereby mutually waive any claim against  the other and its Agents for any loss
or damage to any of  their property located on or about the Premises, the 
Building or the Project that is caused by or results from  perils covered by
property insurance required to be carried  by the respective parties pursuant
to this Lease, to the  extent of the proceeds of such insurance actually
received  with respect to such loss or damage, whether or not due to  the
negligence of the other party or its Agents.  Because  the foregoing waivers
will preclude the assignment of any  claim by way of subrogation to an
insurance company or any  other person, each party now agrees to immediately
give to  its insurer written notice of the terms of these mutual  waivers and
shall have their insurance policies endorsed to  prevent the invalidation of
the insurance coverage because  of these waivers.  Nothing in this Paragraph 17
shall  relieve a party of liability to the other for failure to  carry
insurance required by this Lease.

18.     Signs

Tenant shall not place or permit to be placed in, upon, or  about the Premises,
the Building or the Project any exterior  lights, decorations, balloons, flags,
pennants, banners,  advertisements or notices, or erect or install any signs, 
windows or door lettering, placards, decorations, or  advertising media of any
type which can be viewed from the  exterior the Premises without obtaining
Landlord's prior  written consent or without complying with Landlord's signage 
criteria specified on Exhibit D hereto, as the same may be  modified by
Landlord from time to time, and with all  applicable Laws, and will not
conduct, or permit to be  conducted, any sale by auction on the Premises or
otherwise  on the Project.  Subject to the foregoing, Tenant shall be  entitled
to place an identification sign on the existing  monument in front of the
Building.  Tenant shall remove any  sign, advertisement or notice placed on the
Premises, the  Building or the Project by Tenant upon the expiration of the 
Term or sooner termination of this Lease, and Tenant shall  repair any damage
or injury to the Premises, the Building or  the Project caused thereby, all at
Tenant's expense.  If any  signs are not removed, or necessary repairs not
made,  Landlord shall have the right to remove the signs and repair  any damage
or injury to the Premises, the Building or the  Project at Tenant's sole cost
and expense.

19.     Free From Liens

Tenant shall keep the Premises, the Building and the Project  free from any
liens arising out of any work performed,  material furnished or obligations
incurred by or for Tenant.   In the event that Tenant shall not, within ten
(10) days  following the imposition of any such lien, cause the lien to  be
released of record by payment or posting of a proper  bond, Landlord shall have
in addition to all other remedies  provided herein and by law the right but not
the obligation  to cause same to be released by such means as it shall deem 
proper, including payment of the claim giving rise to such  lien.  All such
sums paid by Landlord and all expenses  incurred by it in connection therewith
(including, without  limitation, attorneys' fees) shall be payable to Landlord
by  Tenant upon demand.  Landlord shall have the right at all  times to post
and keep posted on the Premises any notices  permitted or required by law or
that Landlord shall deem  proper for the protection of Landlord, the Premises,
the  Building and the Project, from mechanics' and materialmen's  liens. 
Tenant shall give to Landlord at least five (5)  business days' prior written
notice of commencement of any  repair or construction on the Premises.

20.     Entry By Landlord

Tenant shall permit Landlord and Landlord's Agents to enter  into and upon the
Premises at all reasonable times, upon  twenty-four (24) hours notice (except
in the case of an  emergency, for which no notice shall be required), and 
subject to Tenant's reasonable security arrangements, for  the purpose of
inspecting the same or showing the Premises  to prospective purchasers, lenders
or tenants or to alter,  improve, maintain and repair the Premises or the
Building as  required or permitted of Landlord under the terms hereof, or  for
any other business purpose, without any rebate of Rent  and without any
liability to Tenant for any loss of  occupation or quiet enjoyment of the
Premises thereby  occasioned (except for actual damages resulting from the 
gross negligence or willful misconduct of Landlord); and  Tenant shall permit
Landlord to post notices of non- responsibility and ordinary "for sale" or "for
lease" signs.   No such entry shall be construed to be a forcible or  unlawful
entry into, or a detainer of, the Premises, or an  eviction of Tenant from the
Premises.  Landlord may  temporarily close entrances, doors, corridors,
elevators or  other facilities without liability to Tenant by reason of  such
closure in the case of an emergency and when Landlord  otherwise deems such
closure necessary.

21.     Destruction And Damage

        (a)     If the Premises are damaged by fire or other  perils covered by
extended coverage insurance, Landlord  shall, at Landlord's option:

                (1)     In the event of total destruction (which  shall mean
destruction or damage in excess of thirty-three  percent (33%) of the full
insurable value thereof) of the  Premises, elect either to commence promptly to
repair and  restore the Premises and prosecute the same diligently to 
completion, in which event this Lease shall remain in full  force and effect;
or not to repair or restore the Premises,  in which event this Lease shall
terminate. Landlord shall  give Tenant written notice of its intention within
sixty  (60) days after the date (the "Casualty Discovery Date")  Landlord
obtains actual knowledge of such destruction.  If  Landlord elects not to
restore the Premises, this Lease  shall be deemed to have terminated as of the
date of such  total destruction.

                (2)     In the event of a partial destruction  (which shall
mean destruction or damage to an extent not  exceeding thirty-three percent
(33%) of the full insurable  value thereof) of the Premises for which Landlord
will  receive insurance proceeds sufficient to cover the cost to  repair and
restore such partial destruction and, if the  damage thereto is such that the
Premises may be  substantially repaired or restored to its condition existing 
immediately prior to such damage or destruction within one  hundred eighty
(180) days from the Casualty Discovery Date,  Landlord shall commence and
proceed diligently with the work  of repair and restoration, in which event the
Lease shall  continue in full force and effect.  If such repair and 
restoration requires longer than one hundred eighty (180)  days or if the
insurance proceeds therefor (plus any amounts  Tenant may elect or is obligated
to contribute) are not  sufficient to cover the cost of such repair and
restoration,  Landlord may elect either to so repair and restore, in which 
event the Lease shall continue in full force and effect, or  not to repair or
restore, in which event the Lease shall  terminate.  In either case, Landlord
shall give written  notice to Tenant of its intention within sixty (60) days 
after the Casualty Discovery Date.  If Landlord elects not  to restore the
Premises, this Lease shall be deemed to have  terminated as of the date of such
partial destruction.

                (3)     Notwithstanding anything to the contrary  contained in
this Paragraph, in the event of damage to the  Premises occurring during the
last twelve (12) months of the  Term, Landlord may elect to terminate this
Lease by written  notice of such election given to Tenant within thirty (30) 
days after the Casualty Discovery Date.

        (b)     If the Premises are damaged by any peril not  covered by
extended coverage insurance, and the cost to  repair such damage exceeds any
amount Tenant may agree to  contribute, Landlord may elect either to commence
promptly  to repair and restore the Premises and prosecute the same  diligently
to completion, in which event this Lease shall  remain in full force and
effect; or not to repair or restore  the Premises, in which event this Lease
shall terminate.   Landlord shall give Tenant written notice of its intention 
within sixty (60) days after the Casualty Discovery Date.   If Landlord elects
not to restore the Premises, this Lease  shall be deemed to have terminated as
of the date on which  Tenant surrenders possession of the Premises to Landlord,
except that if the damage to the Premises materially impairs  Tenant's ability
to continue its business operations in the  Premises, then this Lease shall be
deemed to have terminated  as of the date such damage occurred.

        (c)     Notwithstanding anything to the contrary in this  Paragraph 22,
Landlord shall have the option to terminate  this Lease, exercisable by notice
to Tenant within sixty  (60) days after the Casualty Discovery Date, in each of
the  following instances:

                (1)     If more than thirty-three percent (33%) of  the full
insurable value of the Building or the Project is  damaged or destroyed,
regardless of whether or not the  Premises are destroyed.

                (2)     If the Building or the Project or any  portion thereof
is damaged or destroyed and the repair and  restoration of such damage requires
longer than one hundred  eighty (180) days from the Casualty Discovery Date.

                (3)     If the Building or the Project or any  portion thereof
is damaged or destroyed and the insurance  proceeds therefor are not sufficient
to cover the costs of  repair and restoration.

                (4)     If the Building or the Project or any  portion thereof
is damaged or destroyed during the last  twelve (12) months of the Term.

        (d)     In the event of repair and restoration as herein  provided, the
monthly installments of Base Rent shall be  abated proportionately as
reasonably determined by Landlord  in the ratio which Tenant's use of the
Premises is impaired  during the period of such repair or restoration;
provided,  however, that Tenant shall not be entitled to such abatement  to the
extent that such damage or destruction resulted from  the acts of Tenant or
Tenant's Agents.  Except as expressly  provided in the immediately preceding
sentence with respect  to abatement of Base Rent, Tenant shall have no claim 
against Landlord for, and hereby releases Landlord and  Landlord's Agents from
responsibility for and waives its  entire claim of recovery for any cost, loss
or expense  suffered or incurred by Tenant as a result of any damage to  or
destruction of the Premises, the Building or the Project  or the repair or
restoration thereof, including, without  limitation, any cost, loss or expense
resulting from any  loss of use of the whole or any part of the Premises, the 
Building or the Project and/or any inconvenience or  annoyance occasioned by
such damage, repair or restoration.

        (e)     If Landlord is obligated to or elects to repair  or restore as
herein provided, Landlord shall repair or  restore only the initial tenant
improvements, if any,  constructed by Landlord in the Premises pursuant to the 
terms of this Lease, substantially to their condition  existing immediately
prior to the occurrence of the damage  or destruction; and Tenant shall
promptly repair and  restore, at Tenant's expense, Tenant's Alterations which 
were not constructed by Landlord.

        (f)     Notwithstanding anything to the contrary in this  Paragraph 21,
(i) Landlord shall notify Tenant within forty- five (45) days following the
Casualty Discovery Date of the  length of time Landlord reasonably estimates to
be necessary  for repair or restoration of any damage or destruction; and  (ii)
Tenant shall have the right to terminate the Lease  within fifteen (15) days
following receipt of such notice if  restoration or repair of the Premises is
estimated by  Landlord to take more than one hundred eighty (180) days.

        (g)     Tenant hereby waives the provisions of  California Civil Code
Section 1932(2) and Section 1933(4)  which permit termination of a lease upon
destruction of the  leased premises, and the provisions of any similar law now 
or hereinafter in effect, and the provisions of this  Paragraph 22 shall govern
exclusively in case of such  destruction.

22.     Condemnation

        (a)     If twenty-five percent (25%) or more of either  the Premises,
the Building or the Project or the parking  areas for the Building or the
Project is taken for any  public or quasi-public purpose by any lawful
governmental  power or authority, by exercise of the right of  appropriation,
inverse condemnation, condemnation or eminent  domain, or sold to prevent such
taking (each such event  being referred to as a "Condemnation"), Landlord may,
at its  option, terminate this Lease as of the date title vests in  the
condemning party.  If twenty-five percent (25%) or more  of the Premises is
taken and if the Premises remaining after  such Condemnation and any repairs by
Landlord would be  untenantable for the conduct of Tenant's business 
operations, as reasonably determined by Tenant, Tenant shall  have the right to
terminate this Lease as of the date title  vests in the condemning party.  If
either party elects to  terminate this Lease as provided herein, such election
shall  be made by written notice to the other party given within  thirty (30)
days after the nature and extent of such  Condemnation have been finally
determined.  If neither  Landlord nor Tenant elects to terminate this Lease to
the  extent permitted above, Landlord shall promptly proceed to  restore the
Premises, to the extent of any Condemnation  award received by Landlord, to
substantially the same  condition as existed prior to such Condemnation,
allowing  for the reasonable effects of such Condemnation, and a  proportionate
abatement shall be made to the Base Rent  corresponding to the time during
which, and to the portion  of the floor area of the Premises (adjusted for any
increase  thereto resulting from any reconstruction) of which, Tenant  is
deprived on account of such Condemnation and restoration,  as reasonably
determined by Landlord.  Except as expressly  provided in the immediately
preceding sentence with respect  to abatement of Base Rent, Tenant shall have
no claim  against Landlord for, and hereby releases Landlord and  Landlord's
Agents from responsibility for and waives its  entire claim of recovery for any
cost, loss or expense  suffered or incurred by Tenant as a result of any 
Condemnation or the repair or restoration of the Premises,  the Building or the
Project or the parking areas for the  Building or the Project following such
Condemnation,  including, without limitation, any cost, loss or expense 
resulting from any loss of use of the whole or any part of  the Premises, the
Building, the Project or the parking areas  and/or any inconvenience or
annoyance occasioned by such  Condemnation, repair or restoration.  The
provisions of  California Code of Civil Procedure Section 1265.130, which 
allows either party to petition the Superior Court to  terminate the Lease in
the event of a partial taking of the  Premises, the Building or the Project or
the parking areas  for the Building or the Project, and any other applicable 
law now or hereafter enacted, are hereby waived by Tenant.

        (b)     Landlord shall be entitled to any and all  compensation,
damages, income, rent, awards, or any interest  therein whatsoever which may be
paid or made in connection  with any Condemnation, and Tenant shall have no
claim  against Landlord for the value of any unexpired term of this  Lease or
otherwise; provided, however, that Tenant shall be  entitled to receive any
award separately allocated by the  condemning authority to Tenant for Tenant's
relocation  expenses or the value of Tenant's Property (specifically  excluding
fixtures, Alterations and other components of the  Premises which under this
Lease or by law are or at the  expiration of the Term will become the property
of  Landlord), provided that such award does not reduce any  award otherwise
allocable or payable to Landlord.

23.     Assignment And Subletting

        (a)     Tenant shall not voluntarily or by operation of  law,
(1)mortgage, pledge, hypothecate or encumber this Lease  or any interest
herein, (2) assign or transfer this Lease or  any interest herein, sublease the
Premises or any part  thereof, or any right or privilege appurtenant thereto,
or  allow any other person (the employees and invitees of Tenant  excepted) to
occupy or use the Premises, or any portion  thereof, without first obtaining
the written consent of  Landlord, which consent shall not be withheld
unreasonably  provided that (i) Tenant is not then in Default under this  Lease
nor is any event then occurring which with the giving  of notice or the passage
of time, or both, would constitute  a Default hereunder, and (ii) Tenant has
not previously  assigned or transferred this Lease or any interest herein or 
subleased the Premises or any part thereof.  When Tenant  desires Landlord's
consent to such assignment or subletting,  it shall notify Landlord of such
request in writing (a  "Request Notice") and shall provide to Landlord in the 
Request Notice the name and address of the proposed assignee  or subtenant and
the nature and character of the business of  the proposed assignee or subtenant
and shall provide current  and prior financial statements for the proposed
assignee or  subtenant, which financial statements shall be audited to  the
extent available and shall in any event be prepared in  accordance with
generally accepted accounting principles.   Tenant shall also provide Landlord
with a copy of the  proposed sublease or assignment agreement, including all 
material terms and conditions thereof.  Except in the case  of an assignment or
sublease to a Tenant Affiliate (as  hereinafter defined), Landlord shall have
the option, to be  exercised within thirty (30) days of receipt of the 
foregoing, to (1) terminate this Lease as of the  commencement date stated in
the proposed sublease or  assignment, (2) sublease or take an assignment, as
the case  may be, from Tenant of the interest, or any portion thereof,  in this
Lease and/or the Premises that Tenant proposes to  assign or sublease, on the
same terms and conditions as  stated in the proposed sublet or assignment
agreement, (3)  consent to the proposed assignment or sublease, or (4)  refuse
its consent to the proposed assignment or sublease,  providing that such
consent shall not be unreasonably  withheld so long as Tenant is not then in
Default under this  Lease nor is any event then occurring which with the giving
of notice or the passage of time, or both, would constitute  a Default
hereunder.  Notwithstanding the foregoing, in the  event Landlord elects to
terminate this Lease or enter into  a sublease or assignment with Tenant as
provided in the  foregoing clauses (1) and (2), respectively, then Tenant 
shall have ten (10) days to rescind its Request Notice by  delivery to Landlord
of a notice of rescission (a  "Rescission Notice").  If Tenant fails to deliver
a  Rescission Notice to Landlord in a timely manner as provided  herein, then
in addition to terminating this Lease or  entering into a sublease or
assignment with Tenant, as the  case may be, Landlord shall have the additional
right to  negotiate directly with Tenant's proposed assignee or  subtenant and
to enter into a direct lease or occupancy  agreement with such party on such
terms as shall be  acceptable to Landlord in its sole and absolute discretion, 
and Tenant hereby waives any claims against Landlord related  thereto,
including, without limitation, any claims for any  compensation or profit
related to such lease or occupancy  agreement.

        (b)     Notwithstanding anything to the contrary  contained in
Paragraph 23(a) above, Tenant shall have the  right with the consent of
Landlord, which consent shall not  be unreasonably withheld, to assign this
Lease or to  sublease the Premises or any part thereof to a Tenant  Affiliate. 
In the event Tenant proposes to enter into an  assignment or sublease with a
Tenant Affiliate, then Tenant  shall provide Landlord with the information
required to be  delivered pursuant to said Paragraph 23(a).  Landlord shall 
have the option, to be exercised within thirty (30) days of  receipt of the
foregoing, to (1) consent to the proposed  assignment or sublease, or (2)
refuse its consent to the  proposed assignment or sublease, providing that such
consent  shall not be unreasonably withheld.  For purposes of this  Paragraph
23, a "Tenant Affiliate" shall mean an entity that  controls, is controlled by
or is under common control with,  Tenant; and a party shall be deemed to
"control" another  party for purposes of the aforesaid definition only if the 
first party owns more than fifty percent (50%) of the stock  or other
beneficial interests of the second party.

        (c)     Without otherwise limiting the criteria upon  which Landlord
may withhold its consent under Paragraphs  23(a) and (b) above, Landlord shall
be entitled to consider  all reasonable criteria including, but not limited to,
the  following:  (1) whether or not the proposed subtenant or  assignee is
engaged in a business which, and the use of the  Premises will be in an manner
which, is in keeping with the  then character and nature of all other tenancies
in the  Project, (2) whether the use to be made of the Premises by  the
proposed subtenant or assignee will conflict with any  so-called "exclusive"
use then in favor of any other tenant  of the Building or the Project, and
whether such use would  be prohibited by any other portion of this Lease,
including,  but not limited to, any rules and regulations then in  effect, or
under applicable Laws, and whether such use  imposes a greater load upon the
Premises and the Building  and Project services then imposed by Tenant, (3) the
business reputation of the proposed individuals who will be  managing and
operating the business operations of the  assignee or subtenant, and the
long-term financial and  competitive business prospects of the proposed
assignee or  subtenant, and (4) the creditworthiness and financial  stability
of the proposed assignee or subtenant in light of  the responsibilities
involved.  In any event, Landlord may  withhold its consent to any assignment
or sublease, if  (i) the actual use proposed to be conducted in the Premises 
or portion thereof conflicts with the provisions of  Paragraph 9(a) or (b)
above or with any other lease which  restricts the use to which any space in
the Building or the  Project may be put, or (ii) the proposed assignment or 
sublease requires alterations, improvements or additions to  the Premises or
portions thereof.

        (d)     If Landlord approves an assignment or subletting  as herein
provided, Tenant shall pay to Landlord, as  Additional Rent, the difference, if
any, between (1) the  Base Rent plus Additional Rent allocable to that part of
the  Premises affected by such assignment or sublease pursuant to  the
provisions of this Lease, and (2) the rent and any  additional rent actually
paid by the assignee or sublessee  to Tenant, less reasonable and customary
market-based  leasing commissions and reasonable legal fees, if any,  incurred
by Tenant in connection with such assignment or  sublease, which costs shall,
for purposes of the aforesaid  calculation, be amortized on a straight-line
basis over the  term of such assignment or sublease.  Tenant shall use its 
best efforts to collect all sums due from said assignee or  sublessee.  The
assignment or sublease agreement, as the  case may be, after approval by
Landlord, shall not be  amended without Landlord's prior written consent, and
shall  contain a provision directing the assignee or subtenant to  pay the rent
and other sums due thereunder directly to  Landlord upon receiving written
notice from Landlord that  Tenant is in default under this Lease with respect
to the  payment of Rent.  In the event that, notwithstanding the  giving of
such notice, Tenant collects any rent or other  sums from the assignee or
subtenant, then Tenant shall hold  such sums in trust for the benefit of
Landlord and shall  immediately forward the same to Landlord.  Landlord's 
collection of such rent and other sums shall not constitute  an acceptance by
Landlord of attornment by such assignee or  subtenant.  A consent to one
assignment, subletting,  occupation or use shall not be deemed to be a consent
to any  other or subsequent assignment, subletting, occupation or  use, and
consent to any assignment or subletting shall in no  way relieve Tenant of any
liability under this Lease.  Any  assignment or subletting without Landlord's
consent shall be  void, and shall, at the option of Landlord, constitute a 
Default under this Lease.

        (e)     Notwithstanding any assignment or subletting,  Tenant and any
guarantor or surety of Tenant's obligations  under this Lease shall at all
times remain fully responsible  and liable for the payment of the Rent and for
compliance  with all of Tenant's other obligations under this Lease 
(regardless of whether Landlord's approval has been obtained  for any such
assignment or subletting).

        (f)     Tenant shall pay Landlord's reasonable fees  (including,
without limitation, the fees of Landlord's  counsel), not to exceed $1,500 per
transaction, incurred in  connection with Landlord's review and processing of 
documents regarding any proposed assignment or sublease.

        (g)     Notwithstanding anything in this Lease to the  contrary, in the
event Landlord consents to an assignment or  subletting by Tenant in accordance
with the terms of this  Paragraph 23, Tenant's assignee or subtenant shall have
no  right to further assign this Lease or any interest therein  or thereunder
or to further sublease all or any portion of  the Premises.  In furtherance of
the foregoing, Tenant  acknowledges and agrees on behalf of itself and any
assignee  or subtenant claiming under it (and any such assignee or  subtenant
by accepting such assignment or sublease shall be  deemed to acknowledge and
agree) that no sub-subleases or  further assignments of this Lease shall be
permitted at any  time.

        (h)     Tenant acknowledges and agrees that the  restrictions,
conditions and limitations imposed by this  Paragraph 23 on Tenant's ability to
assign or transfer this  Lease or any interest herein, to sublet the Premises
or any  part thereof, to transfer or assign any right or privilege  appurtenant
to the Premises, or to allow any other person to  occupy or use the Premises or
any portion thereof, are, for  the purposes of California Civil Code Section
1951.4, as  amended from time to time, and for all other purposes,  reasonable
at the time that the Lease was entered into, and  shall be deemed to be
reasonable at the time that Tenant  seeks to assign or transfer this Lease or
any interest  herein, to sublet the Premises or any part thereof, to  transfer
or assign any right or privilege appurtenant to the  Premises, or to allow any
other person to occupy or use the  Premises or any portion thereof.

24.     Tenant's Default

The occurrence of any one of the following events shall  constitute an event of
default on the part of Tenant  ("Default"):

        (a)     The vacation or abandonment of the Premises by  Tenant for a
period of ten (10) consecutive days or any  vacation or abandonment of the
Premises by Tenant which  would cause any insurance policy to be invalidated or
otherwise lapse, or the failure of Tenant to continuously  operate Tenant's
business in the Premises, in each of the  foregoing cases irrespective of
whether or not Tenant is  then in monetary default under this Lease.  Tenant
agrees to  notice and service of notice as provided for in this Lease  and
waives any right to any other or further notice or  service of notice which
Tenant may have under any statute or  law now or hereafter in effect;

        (b)     Failure to pay any installment of Rent or any  other monies due
and payable hereunder, said failure  continuing for a period of three (3) days
after the same is due;

        (c)     A general assignment by Tenant or any guarantor  or surety of
Tenant's obligations hereunder (collectively,  "Guarantor") for the benefit of
creditors;

        (d)     The filing of a voluntary petition in bankruptcy  by Tenant or
any Guarantor, the filing by Tenant or any  Guarantor of a voluntary petition
for an arrangement, the  filing by or against Tenant or any Guarantor of a
petition,  voluntary or involuntary, for reorganization, or the filing  of an
involuntary petition by the creditors of Tenant or any  Guarantor, said
involuntary petition remaining undischarged  for a period of sixty (60) days;

        (e)     Receivership, attachment, or other judicial  seizure of
substantially all of Tenant's assets on the  Premises, such attachment or other
seizure remaining  undismissed or undischarged for a period of sixty (60) days 
after the levy thereof;

        (f)     Death or disability of Tenant or any Guarantor,  if Tenant or
such Guarantor is a natural person, or the  failure by Tenant or any Guarantor
to maintain its legal  existence, if Tenant or such Guarantor is a corporation,
partnership, limited liability company, trust or other legal  entity;

        (g)     Failure of Tenant to execute and deliver to  Landlord any
estoppel certificate, subordination agreement,  or lease amendment within the
time periods and in the manner  required by Paragraphs 30 or 31 or 42, and/or
failure by  Tenant to deliver to Landlord any financial statement within  the
time period and in the manner required by Paragraph 40;

        (h)     An assignment or sublease, or attempted  assignment or
sublease, of this Lease or the Premises by  Tenant contrary to the provision of
Paragraph 24, unless  such assignment or sublease is expressly conditioned upon
Tenant having received Landlord's consent thereto;

        (i)     Failure of Tenant to restore the Security  Deposit to the
amount and within the time period provided in  Paragraph 7 above;

        (j)     Failure in the performance of any of Tenant's  covenants,
agreements or obligations hereunder (except those  failures specified as events
of Default in subparagraphs  (b), (l) or (m) above or any other subparagraphs
of this  Paragraph 25, which shall be governed by such other  Paragraphs),
which failure continues for ten (10) days after  written notice thereof from
Landlord to Tenant, provided  that, if Tenant has exercised reasonable
diligence to cure  such failure and such failure cannot be cured within such 
ten (10) day period despite reasonable diligence, Tenant  shall not be in
default under this subparagraph so long as  Tenant thereafter diligently and
continuously prosecutes the  cure to completion and actually completes such
cure within  forty-five (45) days after the giving of the aforesaid  written
notice;

        (k)     Chronic delinquency by Tenant in the payment of  Rent, or any
other periodic payments required to be paid by  Tenant under this Lease. 
"Chronic delinquency" shall mean  failure by Tenant to pay Rent, or any other
payments  required to be paid by Tenant under this Lease within three  (3) days
after written notice thereof for any three (3)  months (consecutive or
nonconsecutive) during any period of  twelve (12) months.  In the event of a
Chronic delinquency,  in addition to Landlord's other remedies for Default 
provided in this Lease, at Landlord's option, Landlord shall  have the right to
require that Rent be paid by Tenant  quarterly, in advance;

        (l)     Chronic overuse by Tenant or Tenant's Agents of  the number of
undesignated parking spaces set forth in the  Basic Lease Information. 
"Chronic overuse" shall mean use  by Tenant or Tenant's Agents of a number of
parking spaces  greater than the number of parking spaces set forth in the 
Basic Lease Information more than three (3) times during the  Term after
written notice by Landlord;

        (m)     Any insurance required to be maintained by  Tenant pursuant to
this Lease shall be canceled or  terminated or shall expire or be reduced or
materially  changed, except as permitted in this Lease; and

        (n)     Any failure by Tenant to discharge any lien or  encumbrance
placed on the Project or any part thereof in  violation of this Lease within
ten (10) days after the date  such lien or encumbrance is filed or recorded
against the  Project or any part thereof.

Tenant agrees that any notice given by Landlord pursuant to  Paragraph 25(j),
(k) or (l) above shall satisfy the  requirements for notice under California
Code of Civil  Procedure Section 1161, and Landlord shall not be required  to
give any additional notice in order to be entitled to  commence an unlawful
detainer proceeding.

25.     Landlord's Remedies

        (a)     Termination.  In the event of any Default by  Tenant, then in
addition to any other remedies available to   Landlord at law or in equity and
under this Lease, Landlord  shall have the immediate option to terminate this
Lease and  all rights of Tenant hereunder by giving written notice of  such
intention to terminate.  In the event that Landlord  shall elect to so
terminate this Lease then Landlord may  recover from Tenant:

                (1)     the worth at the time of award of any  unpaid Rent and
any other sums due and payable which have  been earned at the time of such
termination; plus

                (2)     the worth at the time of award of the  amount by which
the unpaid Rent and any other sums due and  payable which would have been
earned after termination until  the time of award exceeds the amount of such
rental loss  Tenant proves could have been reasonably avoided; plus

                (3)     the worth at the time of award of the  amount by which
the unpaid Rent and any other sums due and  payable for the balance of the term
of this Lease after the  time of award exceeds the amount of such rental loss
that  Tenant proves could be reasonably avoided; plus

                (4)     any other amount necessary to compensate  Landlord for
all the detriment proximately caused by  Tenant's failure to perform its
obligations under this Lease  or which in the ordinary course would be likely
to result  therefrom, including, without limitation, (A) any costs or  expenses
incurred by Landlord (1) in retaking possession of  the Premises; (2) in
maintaining, repairing, preserving,  restoring, replacing, cleaning, altering,
remodeling or  rehabilitating the Premises or any affected portions of the 
Building or the Project, including such actions undertaken  in connection with
the reletting or attempted reletting of  the Premises to a new tenant or
tenants; (3) for leasing  commissions, advertising costs and other expenses of 
reletting the Premises; or (4) in carrying the Premises,  including taxes,
insurance premiums, utilities and security  precautions; (B) any unearned
brokerage commissions paid in  connection with this Lease; (C) reimbursement of
any  previously waived or abated Base Rent or Additional Rent or  any free rent
or reduced rental rate granted hereunder; and  (D) any concession made or paid
by Landlord to the benefit  of Tenant in consideration of this Lease including,
but not  limited to, any moving allowances, contributions, payments  or loans
by Landlord for tenant improvements or build-out  allowances or assumptions by
Landlord of any of Tenant's  previous lease obligations; plus

                (5)     such reasonable attorneys' fees incurred  by Landlord
as a result of a Default, and costs in the event  suit is filed by Landlord to
enforce such remedy; and plus

                (6)     at Landlord's election, such other amounts  in addition
to or in lieu of the foregoing as may be  permitted from time to time by
applicable law.

As used in subparagraphs (1) and (2) above, the "worth at  the time of award"
is computed by allowing interest at an  annual rate equal to twelve percent
(12%) per annum or the  maximum rate permitted by law, whichever is less.  As
used  in subparagraph (3) above, the "worth at the time of award"  is computed
by discounting such amount at the discount rate  of the Federal Reserve Bank of
San Francisco at the time of  award, plus one percent (1%).  Tenant waives
redemption or  relief from forfeiture under California Code of Civil  Procedure
Sections 1174 and 1179, or under any other  pertinent present or future Law, in
the event Tenant is  evicted or Landlord takes possession of the Premises by 
reason of any Default of Tenant hereunder.

        (b)     Continuation of Lease.  In the event of any  Default by Tenant,
then in addition to any other remedies  available to Landlord at law or in
equity and under this  Lease, Landlord shall have the remedy described in 
California Civil Code Section 1951.4 (Landlord may continue  this Lease in
effect after Tenant's Default and abandonment  and recover Rent as it becomes
due, provided Tenant has the  right to sublet or assign, subject only to
reasonable  limitations).  In addition, Landlord shall not be liable in  any
way whatsoever for its failure or refusal to relet the  Premises.  For purposes
of this Paragraph 26(b), the  following acts by Landlord will not constitute
the  termination of Tenant's right to possession of the Premises:

                (1)     Acts of maintenance or preservation or  efforts to
relet the Premises, including, but not limited  to, alterations, remodeling,
redecorating, repairs,  replacements and/or painting as Landlord shall consider
advisable for the purpose of reletting the Premises or any  part thereof; or

                (2)     The appointment of a receiver upon the  initiative of
Landlord to protect Landlord's interest under  this Lease or in the Premises.

        (c)     Re-entry.  In the event of any Default by  Tenant, Landlord
shall also have the right, with or without  terminating this Lease, in
compliance with applicable law,  to re-enter the Premises and remove all
persons and property  from the Premises; such property may be removed and
stored  in a public warehouse or elsewhere at the cost of and for  the account
of Tenant.

        (d)     Reletting.  In the event of the abandonment of  the Premises by
Tenant or in the event that Landlord shall  elect to re-enter as provided in
Paragraph 26(c) or shall  take possession of the Premises pursuant to legal
proceeding  or pursuant to any notice provided by law, then if Landlord  does
not elect to terminate this Lease as provided in  Paragraph 26(a), Landlord may
from time to time, without  terminating this Lease, relet the Premises or any
part  thereof for such term or terms and at such rental or rentals  and upon
such other terms and conditions as Landlord in its  sole discretion may deem
advisable with the right to make  alterations and repairs to the Premises in
Landlord's sole  discretion.  In the event that Landlord shall elect to so 
relet, then rentals received by Landlord from such reletting  shall be applied
in the following order: (1) to reasonable  attorneys' fees incurred by Landlord
as a result of a  Default and costs in the event suit is filed by Landlord to 
enforce such remedies; (2) to the payment of any  indebtedness other than Rent
due hereunder from Tenant to  Landlord; (3) to the payment of any costs of such
reletting;  (4) to the payment of the costs of any alterations and  repairs to
the Premises; (5) to the payment of Rent due and  unpaid hereunder; and (6) the
residue, if any, shall be held  by Landlord and applied in payment of future
Rent and other  sums payable by Tenant hereunder as the same may become due 
and payable hereunder.  Should that portion of such rentals  received from such
reletting during any month, which is  applied to the payment of Rent hereunder,
be less than the  Rent payable during the month by Tenant hereunder, then 
Tenant shall pay such deficiency to Landlord.  Such  deficiency shall be
calculated and paid monthly.  Tenant  shall also pay to Landlord, as soon as
ascertained, any  costs and expenses incurred by Landlord in such reletting or 
in making such alterations and repairs not covered by the  rentals received
from such reletting.

        (e)     Termination.  No re-entry or taking of  possession of the
Premises by Landlord pursuant to this  Paragraph 26 shall be construed as an
election to terminate  this Lease unless a written notice of such intention is 
given to Tenant or unless the termination thereof is decreed  by a court of
competent jurisdiction.  Notwithstanding any  reletting without termination by
Landlord because of any  Default by Tenant, Landlord may at any time after such
reletting elect to terminate this Lease for any such  Default.

        (f)     Cumulative Remedies.  The remedies herein  provided are not
exclusive and Landlord shall have any and  all other remedies provided herein
or by law or in equity.

        (g)     No Surrender.  No act or conduct of Landlord,  whether
consisting of the acceptance of the keys to the  Premises, or otherwise, shall
be deemed to be or constitute  an acceptance of the surrender of the Premises
by Tenant  prior to the expiration of the Term, and such acceptance by 
Landlord of surrender by Tenant shall only flow from and  must be evidenced by
a written acknowledgment of acceptance  of surrender signed by Landlord.  The
surrender of this  Lease by Tenant, voluntarily or otherwise, shall not work a 
merger unless Landlord elects in writing that such merger  take place, but
shall operate as an assignment to Landlord  of any and all existing subleases,
or Landlord may, at its  option, elect in writing to treat such surrender as a
merger  terminating Tenant's estate under this Lease, and thereupon  Landlord
may terminate any or all such subleases by  notifying the sublessee of its
election so to do within five  (5) days after such surrender.

26.     Landlord's Right to Perform Tenant's Obligations

        (a)     Without limiting the rights and remedies of  Landlord contained
in Paragraph 25 above, if Tenant shall be  in Default in the performance of any
of the terms,  provisions, covenants or conditions to be performed or  complied
with by Tenant pursuant to this Lease, then  Landlord may at Landlord's option,
without any obligation to  do so, and without notice to Tenant perform any such
term,  provision, covenant, or condition, or make any such payment  and
Landlord by reason of so doing shall not be liable or  responsible for any loss
or damage thereby sustained by  Tenant or anyone holding under or through
Tenant or any of  Tenant's Agents.

Without limiting the rights of Landlord under Paragraph  26(a) above, Landlord
shall have the right at Landlord's  option, without any obligation to do so, to
perform any of  Tenant's covenants or obligations under this Lease without 
notice to Tenant in the case of an emergency, as determined  by Landlord in its
sole and absolute judgment, or if  Landlord otherwise determines in its sole
discretion that  such performance is necessary or desirable for the  protection
or preservation of property or the preservation  of the rights and interests or
safety of other tenants of  the Building or the Project.

        (b)     If Landlord performs any of Tenant's obligations  hereunder in
accordance with this Paragraph 26, the full  amount of the cost and expense
incurred or the payment so  made or the amount of the loss so sustained shall 
immediately be owing by Tenant to Landlord, and Tenant shall  promptly pay to
Landlord upon demand, as Additional Rent,  the full amount thereof with
interest thereon from the date  of payment by Landlord at the lower of (1) ten
percent (10%)  per annum, or (2) the highest rate permitted by applicable  law.

27.     Attorney's Fees

        (a)     If either party hereto fails to perform any of  its obligations
under this Lease or if any dispute arises  between the parties hereto
concerning the meaning or  interpretation of any provision of this Lease, then
the  defaulting party or the party not prevailing in such  dispute, as the case
may be, shall pay any and all costs and  expenses incurred by the other party
on account of such  default and/or in enforcing or establishing its rights 
hereunder, including, without limitation, court costs and  reasonable
attorneys' fees and disbursements.  Any such  attorneys' fees and other
expenses incurred by either party  in enforcing a judgment in its favor under
this Lease shall  be recoverable separately from and in addition to any other 
amount included in such judgment, and such attorneys' fees  obligation is
intended to be severable from the other  provisions of this Lease and to
survive and not be merged  into any such judgment.

        (b)     Without limiting the generality of Paragraph  27(a) above, if
Landlord utilizes the services of an  attorney for the purpose of collecting
any Rent due and  unpaid by Tenant or in connection with any other breach of 
this Lease by Tenant, Tenant agrees to pay Landlord's actual  attorneys' fees,
regardless of the fact that no legal action  may be commenced or filed by
Landlord.

28.     Taxes

Tenant shall be liable for and shall pay, prior to  delinquency, all taxes
levied against Tenant's Property. If  any Alteration installed by Tenant or any
of Tenant's  Property is assessed and taxed with the Project or Building, 
Tenant shall pay such taxes to Landlord within ten (10) days  after delivery to
Tenant of a statement therefor.

29.     Effect Of Conveyance

The term "Landlord" as used in this Lease means, from time  to time, the then
current owner of the Building or the  Project containing the Premises, so that,
in the event of  any sale of the Building or the Project, Landlord shall be 
and hereby is entirely freed and relieved of all covenants  and obligations of
Landlord hereunder, and it shall be  deemed and construed, without further
agreement between the  parties and the purchaser at any such sale, that the 
purchaser of the Building or the Project has assumed and  agreed to carry out
any and all covenants and obligations of  Landlord hereunder so long as such
purchaser assumes in  writing at the time of such purchase the covenants and 
obligations of Landlord hereunder arising from and after the  date of purchase.

30.     Tenant's Estoppel Certificate

From time to time, upon written request of Landlord, Tenant  shall execute,
acknowledge and deliver to Landlord or its  designee, a written certificate
stating (a) the date this  Lease was executed, the Commencement Date of the
Term and  the date the Term expires; (b) the date Tenant entered into 
occupancy of the Premises; (c) the amount of Rent and the  date to which such
Rent has been paid; (d) that this Lease  is in full force and effect and has
not been assigned,  modified, supplemented or amended in any way (or, if 
assigned, modified, supplemented or amended, specifying the  date and terms of
any agreement so affecting this Lease);  (e) that this Lease represents the
entire agreement between  the parties with respect to Tenant's right to use and
occupy  the Premises (or specifying such other agreements, if any);  (f) that
all obligations under this Lease to be performed by  Landlord as of the date of
such certificate have been  satisfied (or specifying those as to which Tenant
claims  that Landlord has yet to perform); (g) that all required  contributions
by Landlord to Tenant on account of Tenant's  improvements have been received
(or stating exceptions  thereto); (h) that on such date there exist no defenses
or  offsets that Tenant has against the enforcement of this  Lease by Landlord
(or stating exceptions thereto); (i) that  no Rent or other sum payable by
Tenant hereunder has been  paid more than one (1) month in advance (or stating 
exceptions thereto); (j) that security has been deposited  with Landlord,
stating the original amount thereof and any  increases thereto; and (k) any
other matters evidencing the  status of this Lease that may be required either
by a lender  making a loan to Landlord to be secured by a deed of trust 
covering the Building or the Project or by a purchaser of  the Building or the
Project.  Any such certificate delivered  pursuant to this Paragraph 30 may be
relied upon by a  prospective purchaser of Landlord's interest or a mortgagee 
of Landlord's interest or assignee of any mortgage upon  Landlord's interest in
the Premises. If Tenant shall fail to  provide such certificate within ten (10)
days of receipt by  Tenant of a written request by Landlord  as herein
provided,  such failure shall, at Landlord's election, constitute a  Default
under this Lease, and Tenant shall be deemed to have  given such certificate as
above provided without  modification and shall be deemed to have admitted the 
accuracy of any information supplied by Landlord to a  prospective purchaser or
mortgagee.

31.     Subordination

Landlord shall have the right to cause this Lease to be and  remain subject and
subordinate to any and all mortgages,  deeds of trust and ground leases, if any
("Encumbrances")  that are now or may hereafter be executed covering the 
Premises, or any renewals, modifications, consolidations,  replacements or
extensions thereof, for the full amount of  all advances made or to be made
thereunder and without  regard to the time or character of such advances,
together  with interest thereon and subject to all the terms and  provisions
thereof; provided only, that in the event of  termination of any such ground
lease or upon the foreclosure  of any such mortgage or deed of trust, so long
as Tenant is  not in default, the holder thereof ("Holder") shall agree to 
recognize Tenant's rights under this Lease as long as Tenant  shall pay the
Rent and observe and perform all the  provisions of this Lease to be observed
and performed by  Tenant. Within ten (10) days after Landlord's written 
request, Tenant shall execute, acknowledge and deliver any  and all reasonable
documents required by Landlord or the  Holder to effectuate such subordination.
 If Tenant fails to  do so, such failure shall constitute a Default by Tenant 
under this Lease.  Notwithstanding anything to the contrary  set forth in this
Paragraph 31, Tenant hereby attorns and  agrees to attorn to any person or
entity purchasing or  otherwise acquiring the Premises at any sale or other 
proceeding or pursuant to the exercise of any other rights,  powers or remedies
under such Encumbrance.

32.     Environmental Covenants

        (a)     Prior to executing this Lease, Tenant has  completed, executed
and delivered to Landlord a Hazardous  Materials Disclosure Certificate
("Initial Disclosure  Certificate"), a fully completed copy of which is
attached  hereto as Exhibit E and incorporated herein by this  reference. 
Tenant covenants, represents and warrants to  Landlord that the information on
the Initial Disclosure  Certificate is true and correct and accurately
describes the  Hazardous Materials which will be manufactured, treated,  used
or stored on or about the Premises by Tenant or  Tenant's Agents.  Tenant
shall, on each anniversary of the  Commencement Date and at such other times as
Tenant desires  to manufacture, treat, use or store on or about the Premises 
new or additional Hazardous Materials which were not listed  on the Initial
Disclosure Certificate, complete, execute and  deliver to Landlord an updated
Disclosure Certificate (each,  an "Updated Disclosure Certificate") describing
Tenant's  then current and proposed future uses of Hazardous Materials  on or
about the Premises, which Updated Disclosure  Certificates shall be in the same
format as that which is  set forth in Exhibit E or in such updated format as
Landlord  may require from time to time.  Tenant shall deliver an  Updated
Disclosure Certificate to Landlord not less than  thirty (30) days prior to the
date Tenant intends to  commence the manufacture, treatment, use or storage of
new  or additional Hazardous Materials on or about the Premises,  and Landlord
shall have the right to approve or disapprove  such new or additional Hazardous
Materials in its sole and  absolute discretion.  Tenant shall make no use of
Hazardous  Materials on or about the Premises except as described in  the
Initial Disclosure Certificate or as otherwise approved  by Landlord in writing
in accordance with this Paragraph  32(a). 

        (b)     As used in this Lease, the term "Hazardous  Materials" shall
mean and include any substance that is or  contains (1) any "hazardous
substance" as now or hereafter  defined in  101(14) of the Comprehensive
Environmental  Response, Compensation, and Liability Act of 1980, as  amended
("CERCLA") (42 U.S.C.  9601 et seq.) or any  regulations promulgated under
CERCLA; (2) any "hazardous  waste" as now or hereafter defined in the Resource 
Conservation and Recovery Act, as amended ("RCRA") (42  U.S.C.  6901 et seq.)
or any regulations promulgated under  RCRA; (3) any substance now or hereafter
regulated by the  Toxic Substances Control Act, as amended ("TSCA") (15 U.S.C. 
 2601 et seq.) or any regulations promulgated under TSCA;  (4) petroleum,
petroleum by-products, gasoline, diesel fuel,  or other petroleum hydrocarbons;
(5) asbestos and asbestos- containing material, in any form, whether friable or
non- friable; (6) polychlorinated biphenyls; (7) lead and lead- containing
materials; or (8) any additional substance,  material or waste (A) the presence
of which on or about the  Premises (i) requires reporting, investigation or 
remediation under any Environmental Laws (as hereinafter  defined), (ii) causes
or threatens to cause a nuisance on  the Premises or any adjacent area or
property or poses or  threatens to pose a hazard to the health or safety of 
persons on the Premises or any adjacent area or property, or  (iii) which, if
it emanated or migrated from the Premises,  could constitute a trespass, or (B)
which is now or is  hereafter classified or considered to be hazardous or toxic
under any Environmental Laws.

        (c)     As used in this Lease, the term "Environmental  Laws" shall
mean and include (1) CERCLA, RCRA and TSCA; and  (2) any other federal, state
or local laws, ordinances,  statutes, codes, rules, regulations, orders or
decrees now  or hereinafter in effect relating to (A) pollution, (B) the 
protection or regulation of human health, natural resources  or the
environment, (C) the treatment, storage or disposal  of Hazardous Materials, or
(D) the emission, discharge,  release or threatened release of Hazardous
Materials into  the environment.

        (d)     Tenant agrees that during its use and occupancy  of the
Premises it will (1) not (A) permit Hazardous  Materials to be present on or
about the Premises except in a  manner and quantity necessary for the ordinary
performance  of Tenant's business or (B) release, discharge or dispose of  any
Hazardous Materials on, in, at, under, or emanating  from, the Premises, the
Building or the Project; provided,  however, that Tenant shall have the right
to use and dispose  of de minimis amounts of cleaning materials, toner fluids 
and other typical office and janitorial supplies, provided  that the same are
necessary for the conduct of Tenant's  business operations in the Premises and
are used and  disposed of at all times in full compliance with all 
Environmental Laws; (2) comply with all Environmental Laws  relating to the
Premises and the use of Hazardous Materials  on or about the Premises and not
engage in or permit others  to engage in any activity at the Premises in
violation of  any Environmental Laws; and (3) immediately notify Landlord  of
(A) any inquiry, test, investigation or enforcement  proceeding by any
governmental agency or authority against  Tenant, Landlord or the Premises,
Building or Project  relating to any Hazardous Materials or under any 
Environmental Laws or (B) the occurrence of any event or  existence of any
condition that would cause a breach of any  of the covenants set forth in this
Paragraph 32.

        (e)     If Tenant's use of Hazardous Materials on or  about the
Premises results in a release, discharge or  disposal of Hazardous Materials
on, in, at, under, or  emanating from, the Premises, the Building or the
Project,  Tenant agrees to investigate, clean up, remove or remediate  such
Hazardous Materials in full compliance with (1) the  requirements of (A) all
Environmental Laws and (B) any  governmental agency or authority responsible
for the  enforcement of any Environmental Laws; and (2) any  additional
requirements of Landlord that are reasonably  necessary to protect the value of
the Premises, the Building  or the Project.

        (f)     Upon reasonable notice to Tenant, Landlord may  inspect the
Premises and surrounding areas for the purpose  of determining whether there
exists on or about the Premises  any Hazardous Material or other condition or
activity that  is in violation of the requirements of this Lease or of any 
Environmental Laws.  Such inspections may include, but are  not limited to,
entering the Premises or adjacent property  with drill rigs or other machinery
for the purpose of  obtaining laboratory samples.  Landlord shall not be
limited  in the number of such inspections during the Term of this  Lease.  In
the event (1) such inspections reveal the  presence of any such Hazardous
Material or other condition  or activity in violation of the requirements of
this Lease  or of any Environmental Laws, or (2) Tenant or its Agents 
contribute or knowingly consent to the presence of any  Hazardous Materials in,
on, under, through or about the  Premises, the Building or the Project or
exacerbate the  condition of or the conditions caused by any Hazardous 
Materials in, on, under, through or about the Premises, the  Building or the
Project, Tenant shall reimburse Landlord for  the cost of such inspections
within ten (10) days of receipt  of a written statement therefor.  Tenant will
supply to  Landlord such historical and operational information  regarding the
Premises and surrounding areas as may be  reasonably requested to facilitate
any such inspection and  will make available for meetings appropriate personnel
having knowledge of such matters.  Tenant agrees to give  Landlord at least
sixty (60) days' prior notice of its  intention to vacate the Premises so that
Landlord will have  an opportunity to perform such an inspection prior to such 
vacation.  The right granted to Landlord herein to perform  inspections shall
not create a duty on Landlord's part to  inspect the Premises, or liability on
the part of Landlord  for Tenant's use, storage, treatment or disposal of 
Hazardous Materials, it being understood that Tenant shall  be solely
responsible for all liability in connection  therewith.

        (g)     Landlord shall have the right, but not the  obligation, prior
or subsequent to a Default, without in any  way limiting Landlord's other
rights and remedies under this  Lease, to enter upon the Premises, or to take
such other  actions as it deems necessary or advisable, to investigate,  clean
up, remove or remediate any Hazardous Materials or  contamination by Hazardous
Materials present on, in, at,  under, or emanating from, the Premises, the
Building or the  Project in violation of Tenant's obligations under this  Lease
or under any Environmental Laws.  Notwithstanding any  other provision of this
Lease, Landlord shall also have the  right, at its election, in its own name or
as Tenant's  agent, to negotiate, defend, approve and appeal, at Tenant's 
expense, any action taken or order issued by any  governmental agency or
authority with regard to any such  Hazardous Materials or contamination by
Hazardous Materials.   All costs and expenses paid or incurred by Landlord in
the  exercise of the rights set forth in this Paragraph 32 shall  be payable by
Tenant upon demand.

        (h)     Tenant shall surrender the Premises to Landlord  upon the
expiration or earlier termination of this Lease  free of debris, waste or
Hazardous Materials placed on,  about or near the Premises by Tenant or
Tenant's Agents, and  in a condition which, with respect to Tenant's use and 
occupancy of the Premises, complies with all Environmental  Laws and any
additional requirements of Landlord that are  reasonably necessary to protect
the value of the Premises,  the Building or the Project, including, without
limitation,  the obtaining of any closure permits or other governmental 
permits or approvals related to Tenant's use of Hazardous  Materials in or
about the Premises.  Tenant's obligations  and liabilities pursuant to the
provisions of this Paragraph  32 shall survive the expiration or earlier
termination of  this Lease.  If it is determined by Landlord that the 
condition of all or any portion of the Premises, the  Building, and/or the
Project is not in compliance with the  provisions of this Lease with respect to
Hazardous  Materials, including, without limitation, all Environmental  Laws,
at the expiration or earlier termination of this  Lease, then at Landlord's
sole option, Landlord may require  Tenant to hold over possession of the
Premises until Tenant  can surrender the Premises to Landlord in the condition
in  which the Premises existed as of the Commencement Date and  prior to the
appearance of such Hazardous Materials except  for normal wear and tear,
including, without limitation, the  conduct or performance of any closures as
required by any  Environmental Laws.  The burden of proof hereunder shall be 
upon Tenant.  For purposes hereof, the term "normal wear and  tear" shall not
include any deterioration in the condition  or diminution of the value of any
portion of the Premises,  the Building, and/or the Project in any manner
whatsoever  related to directly, or indirectly, Hazardous Materials.   Any such
holdover by Tenant will be with Landlord's consent,  will not be terminable by
Tenant in any event or  circumstance and will otherwise be subject to the
provisions  of Paragraph 35 of this Lease.

        (i)     Tenant agrees to indemnify and hold harmless  Landlord from and
against any and all claims, losses  (including, without limitation, loss in
value of the  Premises, the Building or the Project), liabilities and  expenses
(including attorney's fees) sustained by Landlord  attributable to (1) any
Hazardous Materials placed on or  about the Premises, the Building or the
Project by Tenant or  Tenant's Agents, or (2) Tenant's breach of any provision
of  this Paragraph 32.

        (j)     Notwithstanding anything in this Paragraph 32 to  the contrary,
Tenant shall not be responsible for the  removal or remediation of, and shall
not be required to  indemnify Landlord against any claims or losses resulting 
from, (i) any Hazardous Materials placed or disposed of on  the Premises by
third parties prior to the Commencement  Date, or (ii) any Hazardous Materials
that migrate on to the  Premises from adjacent properties during the Term of
this  Lease, except in either case to the extent that Tenant or  Tenant's
Agent's exacerbate the condition of or the  conditions caused by such Hazardous
Materials.

        (k)     The provisions of this Paragraph 32 shall  survive the
expiration or earlier termination of this Lease.

33.     Notices

All notices and demands which are required or may be  permitted to be given to
either party by the other hereunder  shall be in writing and shall be sent by
United States mail,  postage prepaid, certified, or by personal delivery or 
overnight courier, addressed to the addressee at Tenant's  Address or
Landlord's Address as specified in the Basic  Lease Information, or to such
other place as either party  may from time to time designate in a notice to the
other  party given as provided herein.  Copies of all notices and  demands
given to Landlord shall additionally be sent to  Landlord's property manager at
the address specified in the  Basic Lease Information or at such other address
as Landlord  may specify in writing from time to time.  Notice shall be  deemed
given upon actual receipt (or attempted delivery if  delivery is refused ), if
personally delivered, or one (1)  business day following deposit with a
reputable overnight  courier that provides a receipt, or on the third (3rd) day
following deposit in the United States mail in the manner  described above.

34.     Waiver

The waiver of any breach of any term, covenant or condition  of this Lease
shall not be deemed to be a waiver of such  term, covenant or condition or of
any subsequent breach of  the same or any other term, covenant or condition
herein  contained.  The subsequent acceptance of Rent by Landlord  shall not be
deemed to be a waiver of any preceding breach  by Tenant, other than the
failure of Tenant to pay the  particular rental so accepted, regardless of 
Landlord's  knowledge of such preceding breach at the time of acceptance  of
such Rent.  No delay or omission in the exercise of any  right or remedy of
Landlord in regard to any Default by  Tenant shall impair such a right or
remedy or be construed  as a waiver.  Any waiver by Landlord of any Default
must be  in writing and shall not be a waiver of any other Default  concerning
the same or any other provisions of this Lease.

35.     Holding Over

Any holding over after the expiration of the Term, without  the express written
consent of Landlord, shall constitute a  Default and, without limiting
Landlord's remedies provided  in this Lease, such holding over shall be
construed to be a  tenancy at sufferance, at a rental rate equal to the greater
of one hundred fifty percent (150%) of the fair market  rental value for the
Premises as determined by Landlord or  two hundred percent (200%) of the Base
Rent last due in this  Lease, plus Additional Rent, and shall otherwise be on
the  terms and conditions herein specified, so far as applicable;  provided,
however, in no event shall any renewal or  expansion option or other similar
right or option contained  in this Lease be deemed applicable to any such
tenancy at  sufferance.  If the Premises are not surrendered at the end  of the
Term or sooner termination of this Lease, and in  accordance with the
provisions of Paragraphs 11 and 32(h),  Tenant shall indemnify, defend and hold
 Landlord harmless  from and against any and all loss or liability resulting 
from delay by Tenant in so surrendering the Premises  including, without
limitation, any loss or liability  resulting from any claim against Landlord
made by any  succeeding tenant or prospective tenant founded on or  resulting
from such delay and losses to Landlord due to lost  opportunities to lease any
portion of the Premises to any  such succeeding tenant or prospective tenant,
together with,  in each case, actual attorneys' fees and costs.

36.     Successors And Assigns

The terms, covenants and conditions of this Lease shall,  subject to the
provisions as to assignment, apply to and  bind the heirs, successors,
executors, administrators and  assigns of all of the parties hereto.  If Tenant
shall  consist of more than one entity or person, the obligations  of Tenant
under this Lease shall be joint and several.

37.     Time

Time is of the essence of this Lease and each and every  term, condition and
provision herein.

38.     Brokers

Landlord and Tenant each represents and warrants to the  other that neither it
nor its officers or agents nor anyone  acting on its behalf has dealt with any
real estate broker  except the Brokers specified in the Basic Lease Information
in the negotiating or making of this Lease, and each party  agrees to indemnify
and hold harmless the other from any  claim or claims, and costs and expenses,
including  attorneys' fees, incurred by the indemnified party in  conjunction
with any such claim or claims of any other  broker or brokers to a commission
in connection with this  Lease as a result of the actions of the indemnifying
party.

39.     Limitation Of Liability

Tenant agrees that, in the event of any default or breach by  Landlord with
respect to any of the terms of the Lease to be  observed and performed by
Landlord (1) Tenant shall look  solely to the then-current landlord's interest
in the  Building for the satisfaction of Tenant's remedies for the  collection
of a judgment (or other judicial process)  requiring the payment of money by
Landlord; (2) no other  property or assets of Landlord, its partners,
shareholders,  officers, directors, employees, investment advisors, or any 
successor in interest of any of them (collectively, the  "Landlord Parties")
shall be subject to levy, execution or  other enforcement procedure for the
satisfaction of Tenant's  remedies; (3) no personal liability shall at any time
be  asserted or enforceable against the Landlord Parties; and  (4) no judgment
will be taken against the Landlord Parties.  The provisions of this section
shall apply only to the  Landlord and the parties herein described, and shall
not be  for the benefit of any insurer nor any other third party.

40.     Financial Statements

Within ten (10) days after Landlord's request, Tenant shall  deliver to
Landlord the then current financial statements of  Tenant (including interim
periods following the end of the  last fiscal year for which annual statements
are available),  prepared or compiled by a certified public accountant, 
including a balance sheet and profit and loss statement for  the most recent
prior year, all prepared in accordance with  generally accepted accounting
principles consistently  applied.

41.     Rules And Regulations

Tenant agrees to comply with such reasonable rules and  regulations as Landlord
may adopt from time to time for the  orderly and proper operation of the
Building and the  Project.  Such rules may include but shall not be limited to 
the following:  (a) restriction of employee parking to a  limited, designated
area or areas; and (b) regulation of the  removal, storage and disposal of
Tenant's refuse and other  rubbish at the sole cost and expense of Tenant.  The
then  current rules and regulations shall be binding upon Tenant  upon delivery
of a copy of them to Tenant.  Landlord shall  not be responsible to Tenant for
the failure of any other  person to observe and abide by any of said rules and 
regulations.  Landlord's current rules and regulations are  attached to this
Lease as Exhibit C.

42.     Mortgagee Protection

        (a)     Modifications for Lender. If, in connection with  obtaining
financing for the Project or any portion thereof,  Landlord's lender shall
request reasonable modifications to  this Lease as a condition to such
financing, Tenant shall  not unreasonably withhold, delay or defer its consent
to  such modifications, provided such modifications do not  materially
adversely affect Tenant's rights or increase  Tenant's obligations under this
Lease.

        (b)     Rights to Cure. Tenant agrees to give to any trust deed or
mortgage holder ("Holder"), by registered  mail, at the same time as it is
given to Landlord, a copy of  any notice of default given to Landlord, provided
that prior  to such notice Tenant has been notified, in writing, (by way  of
notice of assignment of rents and leases, or otherwise)  of the address of such
Holder.  Tenant further agrees that  if Landlord shall have failed to cure such
default within  the time provided for in this Lease, then the Holder shall 
have an additional twenty (20) days after expiration of such  period, or after
receipt of such notice from Tenant (if such  notice to the Holder is required
by this Paragraph 42(b)),  whichever shall last occur within which to cure such
default  or if such default cannot be cured within that time, then  such
additional time as may be necessary if within such  twenty (20) days, any
Holder has commenced and is diligently  pursuing the remedies necessary to cure
such default  (including but not limited to commencement of foreclosure 
proceedings, if necessary to effect such cure), in which  event this Lease
shall not be terminated.

43.     Entire Agreement

This Lease, including the Exhibits and any Addenda attached  hereto, which are
hereby incorporated herein by this  reference, contains the entire agreement of
the parties  hereto, and no representations, inducements, promises or 
agreements, oral or otherwise, between the parties, not  embodied herein or
therein, shall be of any force and  effect.

44.     Interest

Any installment of Rent and any other sum due from Tenant  under this Lease
which is not received by Landlord within  ten (10) days from when the same is
due shall bear interest  from the date such payment was originally due under
this  Lease until paid at an annual rate equal to ten percent  (10%).  Payment
of such interest shall not excuse or cure  any Default by Tenant.  In addition,
Tenant shall pay all  costs and attorneys' fees incurred by Landlord in
collection  of such amounts.

45.     Construction

This Lease shall be construed and interpreted in accordance  with the laws of
the State of California.  The parties  acknowledge and agree that no rule of
construction to the  effect that any ambiguities are to be resolved against the
drafting party shall be employed in the interpretation of  this Lease,
including the Exhibits and any Addenda attached  hereto.  All captions in this
Lease are for reference only  and shall not be used in the interpretation of
this Lease.   Whenever required by the context of this Lease, the singular 
shall include the plural, the masculine shall include the  feminine, and vice
versa.  If any provision of this Lease  shall be determined to be illegal or
unenforceable, such  determination shall not affect any other provision of this
Lease and all such other provisions shall remain in full  force and effect.

46.     Representations And Warranties Of Tenant

Tenant hereby makes the following representations and  warranties, each of
which is material and being relied upon  by Landlord, is true in all respects
as of the date of this  Lease, and shall survive the expiration or termination
of  the Lease.

        (a)     If Tenant is an entity, Tenant is duly  organized, validly
existing and in good standing under the  laws of the state of its organization
and the persons  executing this Lease on behalf of Tenant have the full right 
and authority to execute this Lease on behalf of Tenant and  to bind Tenant
without the consent or approval of any other  person or entity.  Tenant has
full power, capacity,  authority and legal right to execute and deliver this
Lease  and to perform all of its obligations hereunder.  This Lease  is a
legal, valid and binding obligation of Tenant,  enforceable in accordance with
its terms.

        (b)     Tenant has not (1) made a general assignment for  the benefit
of creditors, (2) filed any voluntary petition  in bankruptcy or suffered the
filing of an involuntary  petition by any creditors, (3) suffered the
appointment of a  receiver to take possession of all or substantially all of 
its assets, (4) suffered the attachment or other judicial  seizure of all or
substantially all of its assets, (5)  admitted in writing its inability to pay
its debts as they  come due, or (6) made an offer of settlement, extension or 
composition to its creditors generally.

47.     Security

        (a)     Tenant acknowledges and agrees that, while  Landlord may engage
security personnel to patrol the  Building or the Project, Landlord is not
providing any  security services with respect to the Premises, the Building  or
the Project and that Landlord shall not be liable to  Tenant for, and Tenant
waives any claim against Landlord  with respect to, any loss by theft or any
other damage  suffered or incurred by Tenant in connection with any 
unauthorized entry into the Premises or any other breach of  security with
respect to the Premises, the Building or the  Project.

        (b)     Tenant hereby agrees to the exercise by Landlord  and
Landlord's Agents, within their sole discretion, of such  security measures as,
but not limited to, the evacuation of  the Premises, the Building or the
Project for cause,  suspected cause or for drill purposes, the denial of any 
access to the Premises, the Building or the Project and  other similarly
related actions that it deems necessary to  prevent any threat of property
damage or bodily injury.  The  exercise of such security measures by Landlord
and  Landlord's Agents, and the resulting interruption of service  and
cessation of Tenant's business, if any, shall not be  deemed an eviction or
disturbance of Tenant's use and  possession of the Premises, or any part
thereof, or render  Landlord or Landlord's Agents liable to Tenant for any 
resulting damages or relieve Tenant from Tenant's  obligations under this Lease.

48.     Jury Trial Waiver

Tenant hereby waives any right to trial by jury with respect  to any action or
proceeding (i) brought by Landlord, Tenant  or any other party, relating to (A)
this Lease and/or any  understandings or prior dealings between the parties
hereto,  or (B) the Premises, the Building or the Project or any part  thereof,
or (ii) to which Landlord is a party.  Tenant  hereby agrees that this Lease
constitutes a written consent  to waiver of trial by jury pursuant to the
provisions of  California Code of Civil Procedure Section 631, and Tenant  does
hereby constitute and appoint Landlord its true and  lawful attorney-in-fact,
which appointment is coupled with  an interest, and Tenant does hereby
authorize and empower  Landlord, in the name, place and stead of Tenant, to
file  this Lease with the clerk or judge of any court of competent 
jurisdiction as a statutory written consent to waiver of  trial by jury.

Landlord and Tenant have executed and delivered this Lease  as of the Lease
Date specified in the Basic Lease  Information.

Landlord:              Aetna Life Insurance Company,
                       a Connecticut corporation

By:                    Allegis Realty Investors LLC
                       Its Investment Advisor and Agent

By:                    /s/ Cynithia Stevenin 
                       -----------------------
Print Name:            Cynthia Stevenin
Its:                   Vice President

Tenant:                Arthrocare Corporation,
                       a California corporation

By:                    /s/ Christine Hanni
                       -----------------------
Print Name:            Christine Hanni
Its:                   V.P. Finance and Chief Financial Officer

By:                    /s/ Michael A. Baker
                       -----------------------
Print Name:            Michael A. Baker
Its:                   President and Chief Executive Officer


<PAGE>
                                   Exhibit A
                            Diagram Of The Premises

                    [Diagram depicting layout of premises.]


<PAGE>
                                   Exhibit B
                          Commencement Date Memorandum

Landlord:              Aetna Life Insurance Company
Tenant:                Arthrocare Corporation
Lease Date:            March 25, 1998
Premises:              Located at 840 Del Rey Avenue, Sunnyvale, California 

Tenant hereby accepts the Premises as being in  the condition required under
the Lease.

The Commencement Date of the Lease is hereby established as March 25, 1998.


Tenant:                Arthrocare Corporation,
                       a California corporation

By:                    /s/ Christine Hanni
                       -----------------------
Print Name:            Christine Hanni
Its:                   V.P. Finance and Chief Financial Officer


Approved and Agreed:

Landlord:              Aetna Life Insurance Company,
                       a Connecticut corporation

By:                    Allegis Realty Investors LLC
                       Its Investment Advisor and Agent

By:                    /s/ Cynithia Stevenin 
                       -----------------------
Print Name:            Cynthia Stevenin
Its:                   Vice President


<PAGE>
                                   Exhibit C
                             Rules and Regulations

This exhibit, entitled "Rules and Regulations," is and shall  constitute
Exhibit C to the Lease Agreement, dated as of the  Lease Date, by and between
landlord and Tenant for the  Premises.  The terms and conditions of this
Exhibit C are  hereby incorporated into and are made a part of the Lease.  
Capitalized terms used, but not otherwise defined, in this  Exhibit C have the
meanings ascribed to such terms in the  Lease.

(1)     Tenant shall not use any method of heating or  air conditioning other
than that supplied by Landlord  without the consent of Landlord.

(2)     All window coverings installed by Tenant and  visible from the outside
of the building require the prior  written approval of Landlord.

(3)     Tenant shall not use, keep or permit to be used  or kept any foul or
noxious gas or substance or any  flammable or combustible materials on or
around the  Premises, except to the extent that Tenant is permitted to  use the
same under the terms of Paragraph 32 of the Lease.

(4)     Tenant shall not alter any lock or install any  new locks or bolts on
any door at the Premises without the  prior consent of Landlord.

(5)     Tenant shall not make any duplicate keys without  the prior consent of
Landlord.

(6)     Tenant shall park motor vehicles in parking  areas designated by
Landlord except for loading and  unloading.  During those periods of loading
and unloading,  Tenant shall not unreasonably interfere with traffic flow 
around the Building or the Project and loading and unloading  areas of other
tenants.  Tenant shall not park motor  vehicles in designated parking areas
after the conclusion of  normal daily business activity.

(7)     Tenant shall not disturb, solicit or canvas any  tenant or other
occupant of the Building or Project and  shall cooperate to prevent same.

(8)     No person shall go on the roof without  Landlord's permission.

(9)     Business machines and mechanical equipment  belonging to Tenant which
cause noise or vibration that may  be transmitted to the structure of the
Building, to such a  degree as to be objectionable to Landlord or other
tenants,  shall be placed and maintained by Tenant, at Tenant's  expense, on
vibration eliminators or in noise-dampening  housing or other devices
sufficient to eliminate noise or  vibration.

(10)    All goods, including material used to store  goods, delivered to the
Premises of Tenant shall be  immediately moved into the Premises and shall not
be left in  parking or receiving areas overnight.

(11)    Tractor trailers which must be unhooked or  parked with dolly wheels
beyond the concrete loading areas  must use steel plates or wood blocks under
the dolly wheels  to prevent damage to the asphalt paving surfaces.  No 
parking or storing of such trailers will be permitted in the  auto parking
areas of the Project or on streets adjacent  thereto.

(12)    Forklifts which operate on asphalt paving areas  shall not have solid
rubber tires and shall only use tires  that do not damage the asphalt.

(13)    Tenant is responsible for the storage and  removal of all trash and
refuse.  All such trash and refuse  shall be contained in suitable receptacles
stored behind  screened enclosures at locations approved by Landlord.

(14)    Tenant shall not store or permit the storage or  placement of goods or
merchandise in or around the common  areas surrounding the Premises.  No
displays or sales of  merchandise shall be allowed in the parking lots or other
common areas.

(15)    Tenant shall not permit any animals, including  but not limited to, any
household pets, to be brought or  kept in or about the Premises, the Building,
the Project or  any of the common areas.

Initials:
Tenant:   /s/C.H.
          -------
Landlord: /s/C.S.       
          -------

<PAGE>
                                   Exhibit D
                                 Sign Criteria


                   [Diagram, Descrption and Criteria of Sign]


<PAGE>
                                   Exhibit E
                  Hazardous Materials Disclosure Certificate

Your cooperation in this matter is appreciated.  Initially,  the information
provided by you in this Hazardous Materials  Disclosure Certificate is
necessary for the Landlord to  evaluate your proposed uses of the premises (the
"Premises")  and to determine whether to enter into a lease agreement  with you
as tenant.  If a lease agreement is signed by you  and the Landlord (the "Lease
Agreement"), on an annual basis  in accordance with the provisions of Paragraph
32 of the  Lease Agreement, you are to provide an update to the  information
initially provided by you in this certificate.   Any questions regarding this
certificate should be directed  to, and when completed, the certificate should
be delivered  to:

Landlord:                        Aetna Life Insurance Company
                                 c/o Allegis Realty Investors LLC
                                 455 Market Street, Suite 1540
                                 San Francisco, California 94105
                                 Attention: Cynthia Stevenin
                                 Phone: (415) 538-4800

Name of (Prospective) Tenant:    Arthrocare Corporation
Mailing Address:                 595 N. Pastoria Avenue
                                 Sunnyvale , CA 94086

Contact Person, Title and Telephone Number(s):  
                                 Christine Hanni, VP Finance and CFO
                                 (408) 736-0224

Contact Person for Hazardous Waste Materials Management and  Manifests and
Telephone Number(s):             Gwen Taylor
                                 (408) 736-0224

Address of (Prospective) Premises:      
                                 840 Del Rey Avenue
                                 Sunnyvale , CA 94086

Length of (Prospective) initial Term:   
                                 Until February 28, 2002


<PAGE>
1.      General Information:

Describe the proposed operations to take place in, on, or  about the Premises,
including, without limitation, principal  products processed, manufactured or
assembled, and services  and activities to be provided or otherwise conducted. 
Existing tenants should describe any proposed changes to on- going operations.

Research and development and manufacturing of disposable medical devices as
well as general and administrative activities.


2.      Storage and Disposal of Hazardous Materials:

        2.1     Will any Hazardous Materials (as hereinafter  defined) be used,
                generated, treated, stored or  disposed of in, on or about the
                Premises? Existing tenants should describe any Hazardous 
                Materials which continue to be used, generated,  treated,
                stored or disposed of in, on or about the Premises.

                Wastes                   X   Yes       _____ No
                Chemical Products        X   Yes       _____ No
                Other                  _____ Yes       _____ No

                If Yes is marked, please explain:   Various chemicals are 
                used in the R&D areas - acetone, various adhesives, alcohol,
                and saline.

        2.2     If Yes is marked in Section 2.1, attach a list  of any
                Hazardous Materials to be used,  generated, treated, stored or
                disposed of in, on or about the Premises, including the
                applicable  hazard class and an estimate of the quantities of
                such Hazardous Materials to be present on or  about the
                Premises at any given time; estimated  annual throughput; the
                proposed location(s) and  method of storage (excluding nominal
                amounts of ordinary household cleaners and janitorial supplies
                which are not regulated by any  Environmental Laws, as
                hereinafter defined); and  the proposed location(s) and
                method(s) of treatment or disposal for each Hazardous Material,
                including, the estimated frequency, and the proposed
                contractors or subcontractors.  Existing tenants should attach
                a list setting forth the information requested above and such
                list should include actual data from on-going operations and
                the identification of any variations in such information from
                the prior year's certificate.

                 On attached list, the locations marked C and E are to be moved
                 to the Del Rey premises.   

3.      Storage Tanks and Sumps

        3.1     Is any above or below ground storage or  treatment of gasoline,
                diesel, petroleum, or other Hazardous Materials in tanks or
                sumps proposed in, on or about the Premises?  Existing  tenants
                should describe any such actual or  proposed activities.

                _____ Yes         X   No

                If Yes is marked, please explain:

4       Waste Management

        4.1     Has your company been issued an EPA Hazardous  Waste Generator
                I.D. Number?  Existing tenants should describe any additional
                identification  numbers issued since the previous certificate.

                  X   Yes       _____ No

        4.2     Has your company filed a biennial or quarterly  reports as a
                hazardous waste generator?   Existing tenants should describe
                any new reports filed.

                  X   Yes       _____ No

                If yes, attach a copy of the most recent report filed.

5.      Wastewater Treatment and Discharge

        5.1     Will your company discharge wastewater or other  wastes to:

                _____ storm drain?
                _____ sewer? 
                _____ surface water?
                  X   no wastewater or other wastes discharged.

                Existing tenants should indicate any actual discharges.  If so,
                describe the nature of any  proposed or actual discharge(s).

        5.2     Will any such wastewater or waste be treated  before discharge?

                N/A

                If yes, describe the type of treatment proposed  to be
                conducted.  Existing tenants should  describe the actual
                treatment conducted.

6.      Air Discharges

        6.1     Do you plan for any air filtration systems or  stacks to be
                used in your company's operations  in, on or about the Premises
                that will discharge  into the air; and will such air emissions
                be  monitored?  Existing tenants should indicate  whether or
                not there are any such air filtration  systems or stacks in use
                in, on or about the  Premises which discharge into the air and 
                whether such air emissions are being monitored.

                _____ Yes         X   No

                If yes, please describe:        

        6.2     Do you propose to operate any of the following types  of
                equipment, or any other equipment requiring an air emissions
                permit?  Existing  tenants should specify any such equipment
                being operated in, on or about the Premises.

                _____ Spray booth(s) 
                _____ Incinerator(s)
                _____ Dip tank(s)
                _____ Other (Please describe)
                _____ Drying oven(s)
                  X   No Equipment Requiring Air Permits

                If yes, please describe:

        6.3     Please describe (and submit copies of with this  Hazardous
                Materials Disclosure Certificate) any  reports you have filed
                in the past thirty-six  months with any governmental or quasi-
                governmental agencies or authorities related to  air discharges
                or clean air requirements and any  such reports which have been
                issued during such  period by any such agencies or authorities
                with respect to you or your business operations.

                N/A

7.      Hazardous Materials Disclosures

        7.1     Has your company prepared or will it be required  to prepare a
                Hazardous Materials management plan  ("Management Plan") or
                Hazardous Materials  Business Plan and Inventory ("Business
                Plan")  pursuant to Fire Department or other  governmental or
                regulatory agencies'  requirements?  Existing tenants should
                indicate  whether or not a Management Plan is required and has
                been prepared.

                  X   Yes       _____ No

                If yes, attach a copy of the Management Plan or  Business Plan.
                Existing tenants should attach a  copy of any required updates
                to the Management Plan or Business Plan.

        7.2     Are any of the Hazardous Materials, and in  particular
                chemicals, proposed to be used in  your operations in, on or
                about the Premises  listed or regulated under Proposition 65?  
                Existing tenants should indicate whether or not  there are any
                new Hazardous Materials being so  used which are listed or
                regulated under Proposition 65.

                  X   Yes       _____ No

                If yes, please explain:   IPA is used as a sterilizer/cleaner 
                for work surfaces; glutaraldehyde is used as a decontamination
                sterilizer but will not be used in 840 Del Rey building.


8.      Enforcement Actions and Complaints

        8.1     With respect to Hazardous Materials or  Environmental Laws, has
                your company ever been  subject to any agency enforcement
                actions,  administrative orders, or consent decrees or has 
                your company received requests for information,  notice or
                demand letters, or any other inquiries  regarding its
                operations?  Existing tenants  should indicate whether or not
                any such actions,  orders or decrees have been, or are in the 
                process of being, undertaken or if any such  requests have been
                received.

                _____ Yes         X   No

                If yes, describe the actions, orders or decrees  and any
                continuing compliance obligations  imposed as a result of these
                actions, orders or  decrees and also describe any requests,
                notices  or demands, and attach a copy of all such  documents. 
                Existing tenants should describe and  attach a copy of any new
                actions, orders,  decrees, requests, notices or demands not 
                already delivered to Landlord pursuant to the  provisions of
                Paragraph 32 of the Lease Agreement.

        8.2     Have there ever been, or are there now pending,  any lawsuits
                against your company regarding any  environmental or health and
                safety concerns?

                _____ Yes         X   No

                If yes, describe any such lawsuits and attach  copies of the
                complaint(s), cross-complaint(s),  pleadings and other
                documents related thereto as  requested by Landlord.  Existing
                tenants should  describe and attach a copy of any new 
                complaint(s), cross-complaint(s), pleadings and  other related
                documents not already delivered to  Landlord pursuant to the
                provisions of Paragraph  32 of the Lease Agreement.

        8.3     Have there been any problems or complaints from  adjacent
                tenants, owners or other neighbors at  your company's current
                facility with regard to environmental or health and safety
                concerns?   Existing tenants should indicate whether or not 
                there have been any such problems or complaints  from adjacent
                tenants, owners or other neighbors  at, about or near the
                Premises and the current  status of any such problems or
                complaints.

                _____ Yes         X   No

                If yes, please describe.  Existing tenants  should describe any
                such problems or complaints  not already disclosed to Landlord
                under the  provisions of the signed Lease Agreement and the 
                current status of any such problems or complaints.

9.      Permits and Licenses

        9.1     Attach copies of all permits and licenses issued  to your
                company with respect to its proposed  operations in, on or
                about the Premises,  including, without limitation, any
                Hazardous  Materials permits, wastewater discharge permits, 
                air emissions permits, and use permits or  approvals.  Existing
                tenants should attach  copies of any new permits and licenses
                as well  as any renewals of permits or licenses  previously
                issued.

As used herein, "Hazardous Materials" shall mean and include  any substance
that is or contains (a) any "hazardous  substance" as now or hereafter defined
in  101(14) of the  Comprehensive Environmental Response, Compensation, and 
Liability Act of 1980, as amended ("CERCLA") (42 U.S.C.   9601 et seq.) or any
regulations promulgated under CERCLA;  (b) any "hazardous waste" as now or
hereafter defined in the  Resource Conservation and Recovery Act, as amended
("RCRA")  (42 U.S.C.  6901 et seq.) or any regulations promulgated  under
RCRA; (c) any substance now or hereafter regulated by  the Toxic Substances
Control Act, as amended ("TSCA") (15  U.S.C.  2601 et seq.) or any regulations
promulgated under  TSCA; (d) petroleum, petroleum by-products, gasoline, diesel
fuel, or other petroleum hydrocarbons; (e) asbestos and  asbestos-containing
material, in any form, whether friable  or non-friable; (f) polychlorinated
biphenyls; (g) lead and  lead-containing materials; or (h) any additional
substance,  material or waste (A) the presence of which on or about the 
Premises (i) requires reporting, investigation or  remediation under any
Environmental Laws (as hereinafter  defined), (ii) causes or threatens to cause
a nuisance on  the Premises or any adjacent property or poses or threatens  to
pose a hazard to the health or safety of persons on the  Premises or any
adjacent property, or (iii) which, if it  emanated or migrated from the
Premises, could constitute a  trespass, or (B) which is now or is hereafter
classified or  considered to be hazardous or toxic under any Environmental 
Laws; and "Environmental Laws" shall mean and include (a)  CERCLA, RCRA and
TSCA; and (b) any other federal, state or  local laws, ordinances, statutes,
codes, rules, regulations,  orders or decrees now or hereinafter in effect
relating to  (i) pollution, (ii) the protection or regulation of human  health,
natural resources or the environment, (iii) the  treatment, storage or disposal
of Hazardous Materials, or  (iv) the emission, discharge, release or threatened
release  of Hazardous Materials into the environment.

The undersigned hereby acknowledges and agrees that this  Hazardous Materials
Disclosure Certificate is being  delivered to Landlord in connection with the
evaluation of a  Lease Agreement and, if such Lease Agreement is executed, 
will be attached thereto as an exhibit.  The undersigned  further acknowledges
and agrees that if such Lease Agreement  is executed, this Hazardous Materials
Disclosure Certificate  will be updated from time to time in accordance with 
Paragraph 32 of the Lease Agreement.  The undersigned  further acknowledges and
agrees that the Landlord and its  partners, lenders and representatives may,
and will, rely  upon the statements, representations, warranties, and 
certifications made herein and the truthfulness thereof in  entering into the
Lease Agreement and the continuance  thereof throughout the term, and any
renewals thereof, of  the Lease Agreement. I [print name] Christine Hanni,
acting with full authority to bind the (proposed) Tenant and  on behalf of the
(proposed) Tenant, certify, represent and  warrant that the information
contained in this certificate  is true and correct.

Arthrocare Corporation,
a California corporation

By:       /s/ Christine Hanni            
          ---------------------
Title:    Vice President, Finance and Chief Financial Officer
Date:     March 25, 1998

Initials:

Tenant:    /s/ C.H.
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Landlord:  /s/ C.S.             
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