EXHIBIT 10.15


                              BUILD-TO-SUIT LEASE




                   LANDLORD:    TPSC II LIMITED PARTNERSHIP

                   TENANT:      ADVANCED TISSUE SCIENCES, INC.

                   DATE:        October 15, 1997

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                              BUILD-TO-SUIT LEASE

                               TABLE OF CONTENTS


1.  PROPERTY                                                              6

      1.1   Lease of Property                                             6

      1.2   Landlord's Reserved Rights                                    7

      1.3   Title                                                         7

2.  TERM                                                                  7

      2.1   Term                                                          7

      2.2   Commencement Date                                             7

      2.3   Early Possession                                              8

      2.4   Delay In Possession                                           9

      2.5   Acknowledgment Of Lease Commencement                         10

      2.6   Holding Over                                                 10

      2.7   Option To Extend Term                                        11

3.  RENTAL                                                               11

      3.1   Basic Annual Rent                                            11

      3.2   Other Obligations                                            12

      3.3   Payments                                                     12

      3.4   Rent Increases                                               12

      3.5   Extension Terms                                              12

      3.6   Late Charge                                                  13

4.  DETERMINATION OF TOTAL PROJECT COST; ARBITRATION AND AUDIT           14

      4.1   Landlord's Statement of Total Project Cost; Tenant Review    14

      4.2   Arbitration of Dispute                                       14

5.  DESIGN AND CONSTRUCTION                                              15

      5.1   Construction of Improvements                                 15

      5.2   Condition of Property                                        15

      5.3   Compliance with Law                                          16

      5.4   Union Labor                                                  16

      5.5   City Business Cooperation Program                            16

6.  EXPANSION OPTION - LOT 27                                            16

      6.1   Option Grant                                                 16


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      6.2   First Refusal Right                                          18

7.  EXPANSION RIGHTS -- LOT 26                                           19

      7.1   First Refusal Right                                          19

      7.2   Exercise of Lot 27 Expansion Option During Pendency
              of Lot 27 Offer; Option on Lot 26                          20

      7.3   Carrying Costs                                               21

      7.4   Paydown                                                      22

8.  TAXES                                                                22

      8.1   Personal Property                                            22

      8.2   Real Property                                                22

9.  OPERATING EXPENSES                                                   23

      9.1   Liability For Operating Expenses                             23

      9.2   Definition Of Operating Expenses                             23

      9.3   Determination and Payment Of Operating Expenses              24

      9.4   Proration                                                    25

10. UTILITIES                                                            25

      10.1  Payment                                                      25

      10.2  Interruption                                                 25

11. ALTERATIONS; SIGNS                                                   26

      11.1  Right To Make Alterations                                    26

      11.2  Title To Alterations                                         26

      11.3  Tenant Fixtures                                              27

      11.4  No Liens                                                     27

      11.5  Signs                                                        27

12. MAINTENANCE AND REPAIRS                                              27

      12.1  Landlord's Work                                              27

      12.2  Tenant's Obligation For Maintenance                          27

13. USE OF PROPERTY                                                      28

      13.1  Permitted Use                                                28

      13.2  No Nuisance                                                  29

      13.3  Compliance With Laws                                         29

      13.4  Liquidation Sales                                            29

      13.5  Environmental Matters                                        29


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14. INSURANCE AND INDEMNITY                                              33

      14.1  Liability and Property Insurance                             33

      14.2  Waiver Of Subrogation                                        34

      14.3  Increase In Premiums                                         34

      14.4  Indemnification                                              34

      14.5  Blanket Policy                                               35

15. SUBLEASE AND ASSIGNMENT                                              35

      15.1  Assignment And Sublease Of Property                          35

      15.2  Rights Of Landlord                                           36

      15.3  Notice of Proposed Assignment or Sublease                    36

16. RIGHT OF ENTRY AND QUIET ENJOYMENT                                   36

      16.1  Right Of Entry                                               36

      16.2  Quiet Enjoyment                                              37

17. CASUALTY AND TAKING                                                  37

      17.1  Damage or Destruction                                        37

      17.2  Condemnation                                                 39

      17.3  Reservation Of Compensation                                  40

      17.4  Restoration Of Improvements                                  40

18. DEFAULT                                                              41

      18.1  Events Of Default                                            41

      18.2  Remedies Upon Tenant's Default                               42

      18.3  Remedies Cumulative                                          43

      18.4  Landlord Default                                             43

19. SUBORDINATION, ATTORNMENT AND SALE                                   43

      19.1  Subordination To Mortgage                                    43

      19.2  Sale Of Landlord's Interest                                  43

      19.3  Estoppel Certificates                                        43

      19.4  Subordination to CC&R's                                      44

      19.5  Mortgagee Protection                                         44

20. Intentionally  Deleted                                               44

21. MISCELLANEOUS                                                        44

      21.1  Notices                                                      44

      21.2  Successors And Assigns                                       45


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                                                                        Page
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      21.3  No Waiver                                                    45

      21.4  Severability                                                 45

      21.5  Litigation Between Parties                                   45

      21.6  Surrender                                                    45

      21.7  Interpretation                                               45

      21.8  Entire Agreement                                             46

      21.9  Governing Law                                                46

      21.10 No Partnership                                               46

      21.11 Financial Information                                        46

      21.12 Costs                                                        46

      21.13 Time                                                         46

      21.14 Brokers                                                      46

      21.15 Memorandum Of Lease                                          46

      21.16 Corporate Authority                                          46

      21.17 Execution and Delivery                                       46

      21.18 Survival                                                     46

      21.19 Confidentiality                                              46

            EXHIBITS
            --------

EXHIBIT A        Real Property Description (Site)
EXHIBIT B        Site Plan
EXHIBIT C        Work Letter
EXHIBIT D        Estimated Construction Schedule
EXHIBIT E        Acknowledgment of Lease Commencement
EXHIBIT F        Forms of Subordination, Attornment and Nondisturbance
                 Agreement and Estoppel Certificate
EXHIBIT G        Lot 27: Legal Description and Site Plan
EXHIBIT H        Lot 26: Legal Description and Site Plan
EXHIBIT I        Radioactive Materials
EXHIBIT J        Synopsis of Relevant Provisions
EXHIBIT K        Contractor/Subcontractor Requirements


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                              BUILD-TO-SUIT LEASE
                              -------------------

     THIS BUILD-TO-SUIT LEASE ("Lease") is made and entered into as of the
15th day of October, 1997, by and between TPSC II LIMITED PARTNERSHIP, a
Delaware limited partnership ("Landlord"), and ADVANCED TISSUE SCIENCES, INC.,
a Delaware corporation ("Tenant").

                          THE PARTIES AGREE AS FOLLOWS:

                                  DEFINITIONS
                                  -----------

     Actual Tender Date means the date Landlord actually tenders possession of
the Property to Tenant with the Interior Improvements Substantially Completed.

     Annual Operating Expense Statement means a statement showing, in
reasonable detail, the actual Operating Expenses for the previous calendar
year.

     Basic Annual Rent means base rent due from Tenant for its use of the
Property, on a triple net basis, in an amount equal to twelve and one-half
percent (12.5%) of the Total Project Cost, (all as described and determined in
accordance with the Work Letter) increased as provided in this Lease
(including, but not limited to, increases pursuant to Paragraph 3.4 hereof).

     Carrying Costs means

         (a)  with respect to Lot 27, all costs incurred by Landlord with
     respect to its acquisition, ownership and financing of Lot 27 which
     shall be limited to the following: (i) interest expense on the aggregate
     of $3,476,000, consisting of the purchase price (being $3,450,000) and
     acquisition cost of Lot 27 (in the amount of $26,400), with interest
     calculated at the Prime Rate plus one percent (1%); (ii) real property
     taxes, assessments and insurance on or allocable to the Expansion
     Building and/or Lot 27 (provided, however, that Carrying Costs shall not
     include any increase in taxes or assessments attributable to a change in
     ownership of Lot 27); (iii) assessments, dues and the like payable under
     the Existing CC&Rs or to TOPSCA; and (iv) any maintenance of Lot 27
     effected at the written request of Tenant, required under the Existing
     CC&R's or required by any governmental body or entity having
     jurisdiction over Lot 27;

         (b)  with respect to Lot 28, all costs incurred by Landlord with
     respect to its acquisition, ownership and financing of Lot 28 which
     shall be limited to the following: (i) interest expense on the aggregate
     of $2,871,798, consisting of the purchase price (being $2,850,000) and
     acquisition cost of Lot 28 (in the amount of $21,798), with interest
     calculated at the Prime Rate plus one percent (1%); (ii) real property
     taxes, assessments and insurance on or allocable to Lot 28 (provided,
     however, that Carrying Costs shall not include any increase in taxes or
     assessments attributable to a change in ownership of Lot 28); and (iii)
     assessments, dues and the like payable under the Existing CC&Rs or to
     TOPSCA; and

         (c)  with respect to Lot 26, all costs incurred by Lot 26 Owner with
     respect to its acquisition, ownership and financing of Lot 26 which
     shall be limited to the following: (i) interest expense on the aggregate
     of $1,904,901, consisting of the purchase price (being $1,890,000) and
     acquisition cost of Lot 26 (in the amount of $14,901), with interest
     calculated at the Prime Rate plus one percent (1%); (ii) real property
     taxes, assessments and insurance on or allocable to Lot 26 (provided,
     however, that Carrying Costs shall not include any increase in taxes or
     assessments attributable to a change in ownership of Lot 26); (iii)
     assessments, dues and the like payable under the Existing CC&Rs or to
     TOPSCA; and (iv) any maintenance of Lot 26 effected at the written
     request of Tenant, required under the Existing CC&R's or required by any
     governmental body or entity having jurisdiction over Lot 26.


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     CC&Rs means recorded covenants, conditions, easements, and restrictions
affecting the Site and the Torrey Pines Science Center Signage Guidelines.

     Commencement Date means that date Tenant takes possession of the
Property for purposes other than installing furniture, fixtures and equipment
and similar work preparatory to the commencement of Tenant's business, but
not later than thirty (30) days after the Actual Tender Date.

     Completion Notice means a written notice of the date that Landlord
believes the Tenant Improvement Work will be Substantially Completed (a) with
respect to office space in the Initial Building, and (b) with respect to the
entire Initial Building.  Landlord shall use its reasonable best efforts to
give written notice to Tenant at least thirty (30) days prior to such
Substantial Completion dates.

     Existing CC&R's means CC&R's recorded as of the date of this Lease.

     FF&E/Trade Fixtures shall mean furniture, fixtures and equipment,
including, but not limited to, trade fixtures, to be installed in the Initial
Building but which are not to be purchased or installed by Landlord.  After
Substantial Completion, Tenant shall update Exhibit "E" to reflect the actual
FF&E/Trade Fixtures.

     Force Majeure shall mean any prevention, delay or stoppage of work or any
other obligation to be performed by Landlord or Tenant hereunder arising after
the date this Lease is executed and delivered which is due to strikes by any
trade or trades affecting the Project in any way (including, but not limited
to, any materials or equipment ordered for the Project, and the
transportation, delivery or installation of any material or equipment for the
Project) other than as a result of Project specific conditions, labor disputes
by any trade or trades affecting the Project in any way (including, but not
limited to, any materials or equipment ordered for the Project, and the
transportation, delivery or installation of any material or equipment for the
Project) other than as a result of Project specific conditions, acts of God,
acts or failures to act of public agencies that cause delays despite the
applicable party's diligent efforts, freight embargoes due to generally
prevailing market conditions, rainy or stormy weather, inability to obtain
supplies, materials, fuels, machinery or equipment due to generally prevailing
market conditions, fire or other causes or contingencies beyond the reasonable
control of Landlord or Tenant, as applicable.  Force Majeure shall also
include delays that occur despite Landlord's due diligence to apply for and
process applications and obtain permits or approvals due to the actions or
inaction of governmental authorities controlling the permitting of the Project
and of the reviewing bodies of the Coastal Development Permit or the actions
of private citizens or groups which alter the course of or results of the
Coastal Development Permit approval or any other governmental approvals.
Notwithstanding anything to the contrary contained herein, the party claiming
any delay due to Force Majeure shall make reasonable efforts to mitigate the
delay (for example obtaining substitute materials or suppliers) and shall
provide written notice to the other within five (5) business days after the
claiming party learns of such delay.  The claiming party shall not be entitled
to any delay due to Force Majeure to the extent such claiming party fails to
use reasonable efforts to mitigate such delay.  In addition, if the claiming
party fails to give such written notice to the other party, the claiming party
shall not be entitled to claim any delay due to Force Majeure for any period
prior to the date that claiming party actually gives such notice to the other
party.

     Improvements means the Initial Building and the other improvements to be
constructed on the Site pursuant to Paragraph 5 hereof and the Work Letter.

     Initial Building means the building to be constructed, pursuant to
Paragraph 5 hereof and the Work Letter, on the Site, to consist of a two-
story building containing approximately 104,000 square feet.

     Interior Improvements shall mean all interior systems including partition
systems, interior floors and hardware, interior finishes, telecommunications
cabling, building alarm system wiring, life safety alarm system wiring, HVAC,
plumbing and electrical systems (including feeders from the meter section, and
main distribution panels), life safety  systems, dock equipment and garage
equipment as set forth in the Construction Documents therefor; all as

                                   2
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included in the Project Budget and paid for by Landlord (but subject to
maximum payments by Landlord pursuant to Section 12.1 of the Work Letter).
Emergency generators, boiler, cooling tower and trash and truck dock, are
also budgeted from Interior Improvements.

     Landlord means TPSC II Limited Partnership, a Delaware limited partner-
ship.

     Lease means this Build-To-Suit Lease, as amended from time to time,
and all exhibits (including, but not limited to, the Work Letter).

     Lender means any entity which makes a loan to Landlord secured by the
Property.

     Lot 26 means that certain real estate in Torrey Pines Site and Center,
the legal description of which is set forth on Exhibit H annexed hereto, which
real property is subject to the Lot 26 Expansion Option and Lot 26 Refusal
Right as set forth in Paragraph 7 hereof.  Fee simple title to Lot 26 is
currently is held by TPSC Holdings Limited Partnership, a Delaware limited
partnership.

     Lot 26 Exercise Notice means the written notice to Landlord by which
Tenant exercises the Lot 26 Expansion Option, all as referred to in Paragraph
7.2(a).

     Lot 26 Exercise Period has the meaning set forth in Paragraph 7.2 hereof.

     Lot 26 Expansion Building means the improvements to be constructed on
Lot 26 which shall consist of a single building which shall not be less than
60,000 square feet nor more than 65,000 square feet unless Landlord consents,
all as referred to in Paragraph 7.2(a).

     Lot 26 Expansion Building Delivery Date means the date for delivery of the
Lot 26 Expansion Building as further referred to in Paragraph 7.2(a) hereof.

     Lot 26 Expansion Option has the meaning set forth in Paragraph 7.2 hereof.

     Lot 26 Lease has the meaning set forth in Paragraphs 7.1 and 7.2(b)(ii)
hereof.

     Lot 26 Offer Notice has the meaning set forth in Paragraph 7.1(b).

     Lot 26 Owner means TPSC Holdings Limited Partnership, a Delaware limited
partnership.

     Lot 26 Refusal Right has the meaning set forth in Paragraph 7.1(a)
hereof.

     Lot 26 Refusal Term has the meaning set forth in Paragraph 7.1(a) hereof.

     Lot 27 means the real estate described on Exhibit G annexed hereto.

     Lot 27 Exercise Notice means the written notice to Landlord by which
Tenant exercises the Lot 27 Expansion Option, all as referred to in Paragraph
6.1(a).

     Lot 27 Exercise Period has the meaning set forth in Paragraph 6.1 hereof.

     Lot 27 Expansion Building(s) means the improvements to be constructed on
Lot 27 after Tenant's exercise of its Lot 27 Expansion Option, which building or
buildings shall not be less than 102,000 square feet nor more than 124,400
square feet unless Landlord consents, all as referred to in Paragraph 6.2(a);
if there is more than one building, no building shall be less than 45,000
square feet.

     Lot 27 Expansion Building Delivery Date means the date for delivery of the
Lot 27 Expansion Building as referred to in Paragraph 6.1(a)(i)  hereof.

     Lot 27 Expansion Option has the meaning set forth in Paragraph 6.1 hereof.

     Lot 27 Lease means a lease of Lot 27 to be negotiated and executed as
provided in Paragraphs 6.1 or 6.2, as applicable, hereof.

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     Lot 27 Offer Notice has the meaning set forth in Paragraph 6.2(b) hereof.

     Lot 27 Refusal Right has the meaning set forth in Paragraph 6.2(a) hereof.

     Lot 27 Refusal Term has the meaning set forth in Paragraph 6.2(a) hereof.

     Management Fee means an annual fee of one percent (1%) of the Basic Annual
Rent for the first full year of this Lease, beginning on the Commencement
Date, which fee shall escalate annually, on a cumulative basis, in an amount
equal to three percent (3%) of the prior year's fee, each increase being
effective on each anniversary of the Commencement Date; such fee shall be
included in Operating Expenses.

     MSDS's means Material Safety Data Sheets.

     Offer has the meaning set forth in Paragraphs 6.2(b) and 7.1(b).

     Offeror means a person or entity, other than Tenant, from which Landlord
has received or to whom Landlord delivers a bona fide written offer, which
Landlord wishes to accept, to purchase/sell or otherwise develop or lease Lot
26 or Lot 27, all as referred to in Paragraph 7.2 or 6.2, respectively.

     Office Space Annual Rent means an amount equal to 12.5% of the sum of
(a) the Project Budget, in effect at the time Tenant takes possession of the
office area (reduced by the portion thereof attributable to tenant improve-
ments) multiplied by the Office Space Percentage, plus (b) $35.00 multiplied
by the size (in square feet) of the office area.

     Office Space Percentage means a fraction, the denominator of which shall be
the aggregate area of the Initial Building and the numerator of which shall be
the  square  footage  of  the  office  area.

     Operating Expenses means the total costs and expenses incurred by or
allocable to Landlord for ownership, operation and maintenance of the Improve-
ments and the Property, all as more fully set forth in Paragraph 9.2 hereof.

     Outside Areas means the parking areas, driveways, sidewalks, landscaped
areas and other portions of the Site that lie outside the exterior walls of
the Initial Building, as depicted on the site plan attached hereto as Exhibit
B.

     Parcel shall mean any other land, developed or undeveloped, owned by
Landlord, or any affiliate of Landlord, within the Torrey Pines Science Center.

     Prime Rate means the highest rate of interest announced from time to
time by Chase Manhattan Bank, Citibank N.A., or Bank of America as its "prime
rate", changing as and when such rate changes, unless a lesser rate shall
then be the maximum rate permissible by law with respect thereto, in which
event such lesser rate shall be charged.

     Project Schedule means the Project Schedule annexed to the Work Letter.

     Projected Monthly Basic Annual Rent shall mean $264,855.

     Property means the Improvements and the Site.

     Qualified CPA means an independent Certified Public Accountant with at
least ten (10) years experience in construction matters from a "Big 6"
accounting firm affiliated with neither party.

     Refusal Term means that period as described in Paragraph 6.2(a).

     Rent means Basic Annual Rent (as modified from time to time pursuant
hereto) and such other sums as may be due and payable by Tenant to Landlord
hereunder, other than Operating Expenses and Taxes.

                                   4
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     Site means the real property described in Exhibit A attached hereto on
which the Initial Building will be constructed.

     Site Improvements means improvements to the Site, other than the Building
Shell and Core or Interior Improvements, as specified in the plans and
specifications and including, but not limited to, site lighting, flag poles,
underground utilities, on-grade parking, landscaping and outdoor seating
areas.

     Start of Construction means the date upon which mass excavation begins
on the Project.  Landlord and Tenant agree construction of the Project shall
begin immediately following the completion of, and Tenant approval of, the
Construction Documents, approval by Landlord and Tenant of the GMP Change
Order for such mass excavation and Landlord's obtaining building permits and
government approvals required to commence construction.

     Substantially Completed or Substantial Completion (or any other variant
of such terms) shall mean:

         (a)  with respect to the Project: (i) receipt by Landlord and delivery
to Tenant of written certification from the Architect that the Improvements
have been completed in accordance with the Final Construction Documents
(except for Punch List work and minor changes outlined in Section 10.3 of the
Work Letter); and (ii) approval to occupy, or its functional equivalent, is
obtained from the City of San Diego and all other applicable governmental
authorities; and

         (b)  with respect to the office area: (i) receipt by Landlord and
delivery to Tenant of written certification from the Architect that the
Building Shell and Core, Site Improvements to the extent necessary for
Tenant's use of the office area and, to the extent of the office area, the
Interior Improvements, all have been completed in accordance with the
Construction Documents (except for Punch List work and minor changes outlined
in Section 10.3 of the Work Letter); and (ii) approval to occupy, or its
functional equivalent, is obtained from the City of San Diego and from any
other applicable government authorities.

     Target Commencement Date means November 27, 1998, subject to adjustment
as provided herein and in the Work Letter.

     Target Start of Construction Date means November 21, 1997, subject to
adjustment as provided herein and in the Work Letter.

     Target Substantial Completion Date for Office Area of Initial Building
means September 30, 1998, subject to adjustment as provided herein and in the
Work Letter.

     Target Substantial Completion Date for Initial Building means October 25,
1998, subject to adjustment as provided herein and in the Work Letter.

     Taxes means all taxes, assessments and the like as set forth in Paragraph
8 hereof.

     Tenant means ADVANCED TISSUE SCIENCES, INC., a Delaware corporation, and
its permitted successors and assigns.

     Tenant Delay means any action or failure to act of or by Tenant after the
date this Lease is executed and delivered which causes or results in a delay
in Substantial Completion of the Improvements, including, but not limited to,
the following (all further subject to Force Majeure delays):  (i) material
errors or omissions in Tenant's information or communications to Landlord or
design team which affect the schedules for design or documentation; or  (ii)
Tenant's failure to adhere to the dates or timing for delivery, response or
other actions as set forth in the Work Letter or the Project Schedule (to the
extent any delay is not caused by Landlord's failure to act in accordance with
the Project Schedule, Landlord's failure to adhere to applicable law in
existence at the time of entering into the Lease or Landlord's defective
work); or (iii) any Tenant requested change to the approved Construction
Documents after the scheduled decision periods in Section 7 of the Work Letter
("Project Decisions") (to the extent any delay is not caused by Landlord's
failure to act upon or process any such request in a reasonably diligent
manner,

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Landlord's failure to adhere to applicable law in existence at the time of
entering into the Lease or Landlord's defective work); (iv) a Tenant Delay as
described in Paragraphs 2.2(b) and 2.3 hereof; or (v) Tenant's presence on or
about the Property to the extent not permitted under this Lease or the Work
Letter.  Notwithstanding anything to the contrary contained herein, Landlord
shall provide written notice to Tenant within five (5) business days after
Landlord learns  of such delay.  Landlord shall not be entitled to any delay
due to Tenant Delay for any period prior to the date Landlord delivers such
notice to Tenant if Landlord fails to do so within such five (5) business day
period.

     Tenant Improvement Work means "Interior Improvements" as defined above.

     Tenant's Operating Cost Share means the portion of Operating Expenses
which must be paid by Tenant, being one hundred percent (100%), except as
otherwise provided in Paragraph 9.1.

     Tender Date means the date Landlord tenders possession of (a) the office
area of the Initial Building or (b) the Initial Building, as applicable, to
Tenant with the Improvements Substantially Completed.  The Tender Date shall
be within two (2) days after Substantial Completion of the applicable building
area.

     TOPSCA means Torrey Pines Science Center Association for Unit 2, a
California not-for-profit mutual benefit corporation, organized and existing
under, and pursuant to, the Existing  CC&Rs.

     Total Project Cost means the total of all costs of the entire Project
which shall consist of only the following: cost of site acquisitions, and
Landlord's actual out-of-pocket costs to design, construct and finance the
Project, consisting of the Land purchase price in the amount of $2,850,000.00
and related costs of acquisition, insurance, costs related to acceleration of
the Project Schedule as contemplated by Section 2.6(c) of the Work Letter,
costs incurred by Landlord pursuant to Paragraph 2.2(b) (concerning early use
of office area) hereof for maintenance and repair, costs of carry, interest,
cost of permits, expense of the loans obtained by Landlord for the Project,
landscaping, all sums paid to contractors or subcontractors, all costs and
expenses required to be paid to obtain necessary governmental permits and
approvals, engineering and architectural fees, the Project Management Fee,
cost deriving from Force Majeure, real estate, sales and use taxes, testing
and inspection costs required by governmental authorities to obtain permits
and approvals, utility costs and any other cost included in the Project Budget
and utilized in conjunction with the Project.  Any utility company rebates
received by Landlord during the Development Period, either in cash or by
credit against utility bills, and any payment by Tenant pursuant to Section
12.5 of the Work Letter shall be deducted from Total Project Costs.  Total
Project Costs shall not include any of the following: (a) defects in design or
construction unless the design responds to and satisfies any performance
criteria provided by Tenant and otherwise is not defective; (b) costs
attributable to Landlord's default (except for delays which are subject to
Paragraph 2.4(a)) unless same are minor, typical for similar construction
projects and do not materially detrimentally affect the construction of the
Improvements; provided however, that this subsection (b) shall not affect the
application of Paragraph 2.4(a) hereof; (c) any management fee (except the
Project Management Fee described in Section 12.4 of the Work Letter); (d) any
administrative fee or other overhead expense of Landlord; (e) any items which
are not in the Project Budget; or (f) costs that are specifically designated
to be costs borne by Landlord.  Landlord may utilize contingencies and line
item cost savings against any cost overrun which does not derive from
Landlord's default hereunder to the extent provided in Section 2.4 of the Work
Letter.

     Work Letter means the work letter attached hereto as Exhibit C, as same
may be amended from time to time.

                            1.  PROPERTY
                                --------

     1.1   Lease of Property.
           -----------------

     Landlord leases to Tenant and Tenant hires and leases from Landlord, on
the terms, covenants and conditions hereinafter set forth, the real property
described in Exhibit A attached

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<PAGE>


hereto (the "Site") and the building (the "Initial  Building") to be
constructed, pursuant to Paragraph 5 hereof and the Work Letter attached
hereto as Exhibit C (the "Work Letter"), on the Site, to consist of a two-
story building containing approximately 104,000 rentable square feet.  The
area of the Initial Building shall be measured in accordance with a standard
reasonably acceptable to Landlord and Tenant.  Landlord represents that it
has adequate financial resources to perform its obligations under this Lease.
The location of the Initial Building on the Site is intended to be
substantially as shown on the site plan attached hereto as Exhibit B.  The
Initial Building and the other improvements to be constructed pursuant to
Paragraph 5 hereof and the Work Letter on the Site are sometimes referred to
collectively herein as the "Improvements," and the Improvements and the Site
are sometimes referred to collectively herein as the "Property."  The parking
areas, driveways, sidewalks, landscaped areas and other portions of the Site
that lie outside the exterior walls of the Initial Building, as depicted on
the site plan attached hereto as Exhibit B, are sometimes referred to herein
as the "Outside  Areas."  The Site is part of the Torrey Pines Science Center
in La Jolla, California.

     1.2   Landlord's Reserved Rights.
           --------------------------

     To the extent reasonably necessary to permit Landlord to exercise any
rights of Landlord and discharge any obligations of Landlord under this Lease,
Landlord shall have, in addition to the right of entry set forth in Paragraph
16.1 hereof, the following rights: (i) to close temporarily any of such areas
for maintenance or other reasonable purposes, provided that reasonable parking
and reasonable access to the Initial Building remain available; (ii) to use
such areas while engaged in making additional improvements, repairs or
alterations to the Property, or any portion thereof or any adjacent property;
(iii) to permit access to the Site, or any parts thereof, as are required or
permitted pursuant to any law, statute, ordinance, rule, regulation or the
like or, subject to Paragraph 1.3 below, by any recorded agreement, bearing on
the Property; (iv) to grant easements or licenses on, under or over the Site,
or portions thereof; and (v) to do and perform such other acts with respect to
such areas and the Property as may be necessary or appropriate; provided,
however, that notwithstanding anything to the contrary in this Paragraph 1.2,
Landlord's exercise of its rights hereunder, (w) shall not have any material
adverse permanent effect on the use of or access to the Improvements nor
visibility therefrom nor the amount of parking, (x) shall not cause any
material diminution of Tenant's rights, nor any material increase of Tenant's
obligations, under this Lease or with respect to the Improvements, (y) shall
not authorize Landlord to make any material, permanent alterations in the
Improvements without the prior written consent of Tenant, which consent shall
not be unreasonably withheld or delayed, and (z) shall be conducted in such a
manner as to minimize, to the extent reasonably possible, any disruption and
any adverse effect on Tenant's business operations on the Site, it being
agreed that Landlord and Tenant shall confer as to the scheduling of any work
or disruption and that Tenant's approval thereof shall not be unreasonably
withheld or delayed.

     1.3   Title.

     Landlord has delivered to Tenant, who acknowledges receipt and review,
a copy of a Policy of Title Insurance concerning the property dated May 7,
1997.  Landlord shall not at any time after the date hereof permit or create
any additional exceptions to title or any modification to any existing
exceptions which will materially and adversely affect Tenant's rights and
obligations under this Lease; Landlord shall provide to Tenant a copy of any
instrument creating a new exception or modifying any existing exception prior
to such instrument becoming effective.  Any mortgage, deed of trust or
similar encumbering instrument shall not be deemed to violate the provisions
of this Paragraph 1.3 if same is permitted pursuant to Paragraph 19 hereof.
Other than as shown on the Policy of Title Insurance, Landlord is not aware
of any other exception affecting title.  Notwithstanding the immediately
preceding sentence, in the event Landlord breaches such representation, and
such exception has no adverse effect on Tenant's use of the Project as
permitted herein, such breach shall not be a default by Landlord under this
Lease and Tenant shall not be entitled to any remedies therefor.

                               2.  TERM
                                   ----

     2.1   Term.  The term of this Lease shall commence on the Commencement
Date and shall end on the day immediately preceding the date fifteen (15)
years thereafter, unless sooner terminated or extended (if applicable) as
hereinafter provided.


     2.2   Commencement Date.
           -----------------

                                  7
<PAGE>

           (a)   Commencement Date; Tender Date; Target Commencement Date.
                 --------------------------------------------------------
The "Commencement Date" shall be the date Tenant takes possession of the
Property for purposes other than installing furniture, fixtures and equipment
and similar work preparatory to the commencement of Tenant's business, but not
later than thirty (30) days after the Actual Tender Date of the entire Initial
Building.  On the Actual Tender Date, all construction personnel, equipment
and materials that materially interfere with Tenant's fixturization, move-in
or other use of the Property, shall be removed from the Property.  Landlord
shall use its reasonable best efforts to achieve the Target Commencement Date
and to give Tenant at least thirty (30) days prior written notice ("Completion
Notice") of the dates the Tenant Improvement Work will be Substantially
Completed (a) with respect to the office space (as referred to in Paragraph
2.2(b) hereof), and (b) with respect to the entire Initial Building.  Carrying
Costs with respect to Lot 28 shall no longer accrue or be included in Total
Project Cost effective as of the Commencement Date.

           (b)   Early Use of Office Area.  Tenant may elect, in its sole and
                 ------------------------
absolute discretion, to commence occupancy of the office space within the
Initial Building prior to the Commencement Date upon issuance of a temporary
certificate of occupancy and Substantial Completion of the office space.
Landlord shall provide Tenant with written notice of the date upon which
Landlord anticipates Substantial Completion of the office area portion of the
Project, and shall continue to keep Tenant advised of progress towards such
Substantial Completion; Landlord shall use its good faith best effort to
provide notice of anticipated Substantial Completion at least thirty (30) days
prior to such Substantial Completion.  Tenant shall provide Landlord with at
least fifteen (15) days written notice before taking such occupancy of the
office space.  If Tenant so elects to occupy such office space, then all terms
and conditions of this Lease which are applicable upon and during Tenant's
occupancy shall have immediate effect with the following exceptions which
shall have effect only until the Commencement Date: (i) Tenant shall pay a
monthly base rent (in lieu of Basic Annual Rent) equal to one-twelfth (1/12)
of the Office Space Annual Rent for each month (pro-rata for partial months)
of such occupancy until the Commencement Date; (ii) Tenant shall pay a portion
of Operating Expenses (excluding therefrom the Management Fee and the costs of
maintenance and repair) equal to the product of the aggregate Operating
Expenses multiplied by the Office Space Percentage; (iii) Tenant shall pay a
portion of Taxes equal to the aggregate of Taxes multiplied by the Office
Space Percentage; and (iv) Landlord shall effect all necessary maintenance and
repair, the cost of same being added to the Project Budget (either by
inclusion of a new line item, addition of the costs to an existing line item
or some combination) and shall be a component of Total Project Cost.  Tenant's
use and occupancy of the office space shall be conducted in such a manner so
as minimize interference with or delay of Landlord's construction of any
remaining portion of the Project, and Tenant shall coordinate and cooperate
with Landlord and its contractors in this regard.  Tenant shall permit
Landlord reasonable access to the office area for purposes of effecting
construction of the Project.  Any delay in construction or Substantial
Completion of the Property shall be a Tenant Delay if resulting from Tenant's
failure to permit such reasonable access, Tenant's failure to comply with any
reasonable directive from Landlord relating to construction of the Project or
any default by Tenant under this Lease.  Early use of the office area pursuant
to this Paragraph 2.2(b) shall not affect the Commencement Date.  From and
after the date Tenant's obligation to pay rent on the office area begins, for
purposes of calculating Total Project Costs, the portion of  Carrying Costs of
Lot 28 based on the ratio between the Office Space Annual Rent and the Basic
Annual Rent for the entire Premises shall no longer continue to accrue.

     2.3   Early Possession.  In addition to Tenant's rights and obligations
           ----------------
pursuant to Paragraph 2.2(b) hereof, Tenant shall have the nonexclusive right
to occupy and take possession of the Property from and after Substantial
Completion of Building Shell and Core, subject to the approval of Landlord
and its contractor (which approval shall not be unreasonably withheld or
delayed and shall be deemed to be given unless Landlord shall deliver written
notice of disapproval within ten (10) business days of receipt of Tenant's
notice or request) solely for the purpose of staging for installation and
installing fixtures and equipment, moving furniture into the Property and
performing other similar work preparatory to the commencement of Tenant's
business on the Property, and Tenant shall not be required to pay Rent or
Operating Expenses by reason of such early access until the Commencement Date
otherwise occurs.  Landlord shall give Tenant written notice of the date upon
which Landlord anticipates Substantial Completion of

                                  8
<PAGE>


Building Shell and Core, and shall continue to keep Tenant advised of progress
towards such Substantial Completion; Landlord shall use its best efforts to
provide such notice at least thirty (30) days in advance of such Substantial
Completion.  Tenant shall not unreasonably interfere with or delay Landlord's
contractors by any such early access, occupancy or possession and shall
coordinate and cooperate with Landlord and its contractors (who shall
similarly coordinate and cooperate with Tenant and its contractors) to
minimize any interference or delay by Tenant with respect to the Landlord's
work, and shall indemnify, defend and hold harmless Landlord and its agents
and employees from and against any and all claims, demands, liabilities,
actions, losses, costs and expenses, including (but not limited to) reasonable
attorneys' fees, to the extent not covered by insurance, resulting from
Tenant's negligence or willful misconduct in connection with such early entry
on the Property.  Any delay in construction or Substantial Completion of the
Property resulting from Tenant's failure to comply with any reasonable
directive from Landlord related to construction of the Project or any default
by Tenant under this Lease shall be a Tenant Delay.

     2.4   Delay In Possession.
           -------------------

           The dates and time periods set forth in this Paragraph 2.4 are not
subject to extension for delays due to Force Majeure except as otherwise
expressly provided herein.

           (a)   Landlord's Work; Target Commencement Date.  Landlord agrees to
                 -----------------------------------------
use its best reasonable efforts to complete promptly its portion of the work
described in Paragraph 5.1 and the Work Letter; provided, however, except as
provided herein, Landlord shall not be liable for any damages caused by any
delay in the completion of such work, nor shall any such delay affect the
validity of this Lease or the obligations of Tenant hereunder.  To the extent
Substantial Completion of the Project is delayed more than sixty (60) days
beyond the Target Commencement Date, for reasons other than Force Majeure and
Tenant Delay, *




           (b)   Relation to Matrix Lease.  In addition, Landlord acknowledges
                 ------------------------
that under Tenant's existing Industrial Multi-Tenant Lease dated July 15,
1996, with Matrix Pharmaceutical, Inc. (the "Matrix Lease"), *





               * (i)  Completion Notice.
                      -----------------











               * (ii) Tender Date - Completion Notice Delivered.
                      -----------------------------------------














                                   9
<PAGE>








               * (iii) Tender Date - Completion Notice Not Delivered.
                       ---------------------------------------------
















         * (c)   Start of Construction.
                 ---------------------















               * (i)


               * (ii)



               * (iii)










                    *CONFIDENTIAL INFORMATION IS OMITTED*

     2.5   Acknowledgment Of Lease Commencement.  Upon commencement of the
           ------------------------------------
term of this Lease, Landlord and Tenant shall execute a written acknowledgment
of the Commencement Date, date of the termination and related matters,
substantially in the form attached hereto as Exhibit E (with appropriate
insertions), which acknowledgment shall be deemed to be incorporated herein
by this reference.  Notwithstanding the foregoing requirement, the failure of
either party to execute such a written acknowledgment shall not affect the
determination of the Commencement Date, date of termination and related
matters in accordance with the provisions of this Lease.

     2.6   Holding Over.  If Tenant holds possession of the Property or any
           ------------
portion thereof after the term of this Lease with Landlord's written consent,
then except as otherwise specified in such consent, Tenant shall become a
tenant from month to month at one hundred ten percent (110%) of the Basic
Annual Rent and otherwise upon the terms herein specified for the period
immediately prior to such holding over and shall continue in such status
until the tenancy is terminated by either party upon not less than thirty
(30) days prior written notice.  If Tenant holds possession of the Property
or any portion thereof after the term of this Lease without Landlord's
written consent, then Landlord in its sole discretion may elect (by written
notice to

                                  10
<PAGE>


Tenant) to have Tenant become a tenant either from month to month or at will,
at two hundred percent (200%) of the Basic Annual Rent (prorated on a daily
basis for an at-will tenancy, if applicable) and otherwise upon the terms
herein specified for the period immediately prior to such holding over, or
may elect to pursue any and all legal remedies available to Landlord under
applicable law with respect to such unconsented holding over by Tenant and
may recover all damages resulting therefrom, including, but not limited to,
loss (including, but not limited to, loss of rent, contribution to taxes and
operating expenses), cost, liability, damages and attorneys' fees resulting
from Landlord's becoming in breach of, or failing to fulfill a prerequisite
to effectiveness or commencement of, a lease of the Property, or from the
termination of such a lease by the lessee because of Landlord's inability to
deliver possession of the premises at the required time and in the condition
required hereunder).  Landlord shall advise Tenant in writing of the latest
date upon which the Property must be made available to Landlord in order to
place the Property in the condition required by any new tenant and of the
dates upon which any new tenant may terminate any new lease for failure to
achieve any target dates.  Landlord shall use its reasonable best effort to
mitigate any damages including, but not limited to, attempting to secure a
tenant for the property as promptly as is reasonably possible.  Tenant shall
indemnify and hold Landlord harmless from any loss, damage, claim, liability,
cost or expense (including reasonable attorneys' fees) resulting from any
delay by Tenant in surrendering the Property (except with Landlord's prior
written consent), including but not limited to any claims made by a
succeeding tenant by reason of such delay.  Acceptance of rent by Landlord
following expiration or termination of this Lease shall not constitute a
renewal of this Lease.

     2.7   Option To Extend Term.  Tenant shall have the option to extend the
           ---------------------
term of this Lease, at the Basic Annual Rent set forth in Paragraph 3.5 and
otherwise upon all the terms and provisions set forth herein with respect to
the initial term of this Lease, for up to two (2) additional periods of five
(5) years each, the first extension commencing upon the expiration of the
initial term hereof and the second extension commencing upon the expiration
of the first extended term, if any.  Exercise of such option with respect to
the first such extended term shall be by written notice to Landlord at least
nine (9) months prior to the expiration of the initial term hereof; exercise
of such option with respect to the second extended term, if the first
extension option has been duly exercised, shall be by like written notice to
Landlord at least nine (9) months prior to the expiration of the first
extended term hereof.  If Tenant is in default beyond the expiration of any
applicable notice and cure period hereunder on the date of such notice
or on the date any extended term is to commence, or if this Lease has earlier
terminated for any reason, then the extension option, at Landlord's election,
shall be of no force or effect, the extended term shall not commence and this
Lease shall expire at the end of the then current term hereof (or at such
earlier time as Landlord may elect pursuant to the default provisions of this
Lease).  Except as expressly set forth in this Paragraph 2.7, Tenant shall
have no right to extend the term of this Lease beyond its prescribed term.

                             3.  RENTAL
                                 ------

     3.1   Basic Annual Rent.
           -----------------

           (a)   "Basic Annual Rent:"  Calculation; Initial Estimate.  Tenant
                 ---------------------------------------------------
agrees to pay Landlord as "Basic Annual Rent" for the Property, on a triple
net basis, a sum equal to twelve and one-half percent (12.5%) of the Total
Project Cost, all as described and determined in accordance with the Work
Letter.  The initial Project Budget (a copy of which is annexed to the Work
Letter), is subject to modification pursuant to the Work Letter; such
modifications of the Project Budget shall result in modification of the Basic
Annual Rent.  Determination of the final Total Project Cost upon which
calculation of initial Basic Annual Rent will be based, and any disputes and
disagreements concerning same, shall be resolved by Arbitration (as described
in Paragraph 4 hereof); provided, however, amounts shall not be included in
the calculation of Rent until and unless actually expended.  If there is not
agreement on the initial Basic Annual Rent by the Commencement Date, then
Tenant shall pay  Basic Annual Rent in the amount of Projected Monthly Basic
Annual Rent per month; when agreement as to initial Basic Annual Rent has been
achieved or determined by Arbitration, then Tenant shall make payment of any
shortage within ten (10) days or Landlord shall pay within ten (10) days the
amount of any overpayment.

                                   11
<PAGE>


           (b)   Payment in Monthly Installments.  The Basic Annual Rent shall
                 -------------------------------
be paid in equal monthly installments in advance on the first day of each and
every calendar month during the term of the Lease; in the event the Commence-
ment Date is not the first day of a calendar month, then Tenant shall make a
pro rata payment for the remainder of the month during which the Commencement
Date occurs.  Basic Annual Rent is also subject to adjustment as set forth in
Paragraph 3.4 hereof.

     3.2   Other Obligations.  In addition to Basic Annual Rent, Tenant agrees
           -----------------
to pay to the Operating Expenses as provided in Paragraph 9 hereof and taxes
("Taxes") as provided in Paragraph 8 hereof.

     3.3   Payments.  Basic Annual Rent, Operating Expenses and Taxes shall be
           --------
paid to Landlord, without abatement, deduction, or offset of any kind except
as otherwise provided herein, in lawful money of the United States of America,
at such place as Landlord may from time to time designate in writing;
initially such payments shall be sent to the place designated herein for the
delivery of notices to Landlord.  In the event the term of this Lease
commences or ends on a day other than the first day of a calendar month, then
the Basic Annual Rent, Operating Expenses and Taxes for such fraction of a
month shall be prorated for such period and shall be paid at the then current
rate for such fractional month.  If an increase in Basic Annual Rent becomes
effective on a day other than the first day of a calendar month, the Basic
Annual Rent for that month shall be the sum of the two applicable rates, each
prorated for the portion of the month during which such rate is in effect.

     3.4   Rent  Increases.
           ---------------

           (a)   Annual Percentage Increase.  The Basic Annual Rent shall be
                 --------------------------
subject to a compounded annual increase as follows: (i) four percent (4%) for
each of the second, third, fourth and fifth years of the initial term of the
Lease, (ii) three percent (3%) for each of the sixth, seventh, eighth, ninth
and tenth years of the initial term of the Lease, and (iii) two and one-half
percent (2.5%) for each of the eleventh, twelfth, thirteenth, fourteenth and
fifteenth years of the initial term of the Lease.  The first such adjustment
shall become effective commencing with that monthly installment of Rent which
is due on or after the first anniversary of the Commencement Date and
subsequent adjustments shall become effective on the same day of each calendar
year thereafter for so long as this Lease continues in effect.

           (b)   Subsequent Expenditures of Project Budget.  It is
                 -----------------------------------------
acknowledged that amounts properly includable in Total Project Cost may not
have been expended (e.g., costs relating to permanent financing) at the time
that Basic Annual Rent is determined, by agreement or by arbitration.  In
such event, the Basic Annual Rent shall be adjusted effective as of the date
of any such expenditures on a prospective basis.  Landlord shall provide
Tenant with a written statement of any such expenditures along with a
calculation of the adjustment of Basic Annual Rent, the amount due and
documentation of the expenditure.  Tenant shall have the same examinations
and audit rights as afforded with respect to Total Project Cost, and any
disagreement shall be treated in the same manner as a disagreement concerning
Total Project Cost.

     3.5   Extension  Terms.
           ----------------

           (a)   First Extension.  The Basic Annual Rent during the first
                 ---------------
extended term shall be equal to the greater of (i) the Basic Annual Rent
payable for the last month of the initial term of this Lease or (ii) the fair
market rental value of the Property (as defined below), determined as of the
commencement of such extended term in accordance with this paragraph.  Such
Basic Annual Rent as determined under this Paragraph 3.5(a) shall be subject
to a compounded annual increase of three percent (3%) for each year of the
extended term after the first year, effective in the same manner as increases
during the initial term of this Lease.

           (b)   Second Extension.   The Basic Annual Rent during the second
                 ----------------
extended term shall be equal to the greater of (i) the Basic Annual Rent
payable for the last month of the first extended term of this Lease, or (ii)
the fair market rental value of the Property (as defined below), determined as
of the commencement of such extended term in accordance with this paragraph.
Such Basic Annual Rent as determined under this Paragraph 3.5(b) shall be
subject to

                                   12
<PAGE>


a compounded annual increase of three percent (3%) for each year of the second
extended term after the first year thereof, effective in the same manner as
increases during the first extended term of this Lease.

           (c)   Fair Market Rental Value.  With respect to the determination
                 ------------------------
of the fair market rental value of the Property, the parties shall have sixty
(60) days in which to agree on the fair market rental for the Property at the
commencement of the first extended term for the uses permitted hereunder.  If
the parties agree on such fair market rental they shall execute an amendment
to this Lease stating the amount of the applicable Basic Annual Rental.  If
the parties are unable to agree on such rental within such sixty (60) day
period, then within fifteen (15) days after the expiration of such period each
party, at its cost and by giving notice to the other party, shall appoint a
real estate appraiser who is a member in good standing of the Appraisal
Institute holding an "M.A.I." designation with at least five (5) years
experience appraising similar commercial properties in northern San Diego
County to appraise and set the fair market rental for the Property at the
commencement of the applicable extended term.  If either party fails to
appoint an appraiser within the allotted time, the single appraiser appointed
by the other party shall be the sole appraiser.  If an appraiser is appointed
by each party and the two appraisers so appointed are unable to agree upon a
fair market rental within thirty (30) days after the appointment of the
second, they shall appoint a third qualified appraiser within ten (10) days
after expiration of such 30-day period; if they are unable to agree upon a
third appraiser, either party may, upon not less than five (5) days notice to
the other party, apply to the Presiding Judge of the San Diego County Superior
Court for the appointment of a third qualified appraiser.  Each party shall
bear its own legal fees in connection with appointment of the third appraiser
and shall bear one-half of any other costs of appointment of the third
appraiser and of such third appraiser's fee.  The third appraiser, however
selected, shall be a person who has not previously acted for either party in
any capacity.  Within thirty (30) days after the appointment of the third
appraiser, a majority of the three appraisers shall set the fair market rental
for the applicable extended term and shall so notify the parties.  If a
majority are unable to agree within the allotted time, the three appraised
fair market rentals shall be added together and divided by three and the
resulting quotient shall be the fair market rental for the first extended
term, which determination shall be binding on the parties and shall be
enforceable in any further proceedings relating to this Lease.  For purposes
of this Paragraph 3.5, the "fair market rental" of the Property shall be
determined with reference to the then prevailing market rental rates for
properties in northern San Diego County, for a renewing tenant, with shell and
standard office, research and development improvements and site (common area)
improvements comparable in age and character to those then existing in the
Initial Building and on the Property, taking into account the fact that Tenant
is taking the Property in "as is" condition (but that Tenant has the
maintenance and repair obligations set forth herein), that this Lease is a
triple net lease and such other matters as the appraisers deem appropriate.
The appraisers shall have no right to award a Tenant improvement allowance or
other monetary concessions, but shall take into account any such concessions
granted in connection with similar leases used for comparison in the
determination of Rent.

     3.6   Late Charge.  If Tenant fails to pay when due Rent or other amounts
           -----------
due Landlord hereunder, such unpaid amounts shall bear interest for the
benefit of Landlord from the due date until paid at a rate equal to the
lesser of fifteen percent (15%) per annum or the maximum rate permitted by
law, from the thirtieth (30th) day after the date due to the date of payment.
In addition to such interest, Tenant shall pay to Landlord a late charge in
an amount equal to five percent (5%) of any installment of Rent and any other
amounts due Landlord if not paid in full on or before the fifth (5th) day
after Landlord notifies Tenant in writing that such Rent or other amount is
due.  Tenant acknowledges that late payment by Tenant to Landlord of
rental or other amounts due hereunder will cause Landlord to incur costs not
contemplated by this Lease, including, without limitation, processing and
accounting charges and late charges which may be imposed on Landlord by the
terms of any loan relating to the Property.  Tenant further acknowledges that
it is extremely difficult and impractical to fix the exact amount of such
costs and that the late charge set forth in this Paragraph 3.6 represents a
fair and reasonable estimate thereof.  Acceptance of any late charge by
Landlord shall not constitute a waiver of Tenant's default with respect to
overdue rental or other amounts, nor shall such acceptance prevent Landlord
from exercising any other rights and remedies available to it.  Acceptance of
rent or other payments by Landlord shall not constitute a waiver of late
charges or interest accrued with respect to such rent or other payments or any
prior installments thereof, nor of any other defaults

                                   13
<PAGE>


by Tenant, whether monetary or non-monetary in nature, remaining uncured at
the time of such acceptance of rent or other payments.

                   4.  DETERMINATION OF TOTAL PROJECT COST;
                       ------------------------------------
                             ARBITRATION AND AUDIT
                             ---------------------

     4.1   Landlord's Statement of Total Project Cost; Tenant Review.
           ---------------------------------------------------------
As promptly as possible after Substantial Completion of the Project, Landlord
shall present to Tenant a written statement ("Total Project Cost Statement")
setting forth the Total Project Cost in a format which is consistent with the
Project Budget (as defined and referred to in the Work Letter).  Landlord
shall also make available to Tenant supporting data and all documentation of
the Landlord's statement of Total Project Cost, and Tenant shall have a
period of sixty (60) days (or 90 days if Tenant performs an audit) to review
and audit the Total Project Cost Statement and all data and documentation
relating to Landlord's calculation of Total Project Cost.  If Tenant, in its
reasonable discretion, disagrees with Landlord's determination of the amount
of any portion of the Total Project Cost which is part of the sum on which
the Rent will be calculated ("Disputed  Items"), then Tenant shall give
written notice thereof to Landlord during such sixty (60) day (or 90 days if
Tenant performs an audit) period, stating the basis for such objection,
specifically identifying the line items, and the specific components,
elements and invoices thereof, and stating the amount which Tenant reasonably
believes to be the correct amount ("Tenant's Proposal"); Tenant shall permit
Landlord to review and copy all of its work papers, documentation and
calculations.  If Landlord does not receive such written notice within such
sixty (60) day (or 90 days if Tenant performs an audit) period, then, for all
purposes, Tenant shall be deemed to have accepted Landlord's statement of
Total Project Cost and Landlord's calculation of initial Basic Rent; any line
item, or any component, element or invoice thereof, which is not objected to
in Tenant's Proposal shall be deemed to be accepted.

     4.2   Arbitration of Dispute.  If, after working in good faith to
           ----------------------
resolve the dispute, Landlord and Tenant have not agreed upon a resolution
within fifteen (15) days after Tenant's original notice, then with respect to
any unresolved matter identified in Tenant's Proposal either party may
commence arbitration proceedings with the American Arbitration Association
regional office in San Diego, California, or such other place as the parties
shall mutually agree in writing by filing a demand for arbitration in writing
with the American Arbitration Association office having jurisdiction thereof,
and by contemporaneously sending a copy of said demand to the other party, by
Certified Mail, Postage Prepaid, Return Receipt Requested.  The arbitration
proceedings shall be governed by and decided in accordance with the
Construction Industry Arbitration Rules of the American Arbitration
Association, then in effect, unless the parties shall mutually agree
otherwise, in writing and as modified by this Paragraph  4.

           (a)   Panel Selection.  Any claim shall be submitted to a balanced
                 ---------------
panel, consisting of one attorney, who shall be the Chair of the Panel, one
contractor and one certified public accountant.  The attorney panel member
shall be currently licensed to practice law  and shall have actively engaged
in the practice of law for at least 10 years, and in the immediately preceding
five years, shall have devoted a substantial amount of his/her time to the
practice of construction law and shall have demonstrated an expertise in the
process of arbitration as an alternate dispute resolution method.  The
contractor selected for the panel shall not have less than 10 years of
experience in the field, shall have experience in the type of construction
which is the subject of this Lease and shall be in a supervisory or management
role in their field.  The accountant shall be a partner in a Big 6 accounting
firm with not less than ten (10) years' experience in the construction field,
in general, and shall have experience within the last three (3) years in the
review and calculation of project costs.

           The panel shall commit to be available to allow the arbitration
sessions to proceed on a continuous basis and the parties recognize that such
a panel may require fees in excess of those suggested by the American
Arbitration Association.

           (b)   Scope of Award; No Authority to Award Punitive Damages.  The
                 ------------------------------------------------------
arbitrator(s) shall follow the substantive and evidentiary laws of the State
of California.  Landlord and Tenant, during the arbitration, shall each
present a final proposal with respect to each line item, or component, element
or invoice thereof, reflected in Tenant's Proposal which remains unresolved;
the sole authority of the arbitrators shall be to select either the Landlord's
or

                                  14
<PAGE>


the Tenant's final proposal which most closely approximates the amount
properly includable as part of Total Project Costs under the terms of this
Lease.  The arbitrators shall have no authority to make an independent
determination of such matters; the arbitrator(s) shall have no authority to
award punitive damages nor make any ruling, finding or award that does not
conform to the terms and conditions of this Lease.

           (c)   Non-Disclosure.  Neither party nor the arbitrator(s) may
                 --------------
disclose the results of any arbitration hereunder, without the prior written
consent of the parties; provided, however, that either Landlord or Tenant may
effect disclosure of such information to its existing and prospective lenders,
financial partners, consultants, advisors, attorneys, accountants,
underwriters and similar parties, to an entity involved in discussions
involving a merger, consolidation, acquisition or similar transaction
involving Tenant or Landlord, or as is required by law (including applicable
securities laws) or order of court of competent jurisdiction.

           (d)   Pre-Hearing Conference.  The arbitrator shall order a pre-
                 ----------------------
hearing exchange of information by the parties, including production of
requested documents reasonably required by the parties, exchange of summaries
of testimony of proposed witnesses, and the deposition of any experts.  All
issues regarding discovery and compliance therewith shall be decided by the
arbitrator(s).

           The panel shall require a pre-hearing meeting between the parties
at which each party shall present a memorandum disclosing the factual basis
of its claim and defenses and disclosing legal issues raised; Tenant's
memorandum shall contain and disclose the results, and all detail, of its
investigation, and any audit, conducted with respect to the Total Project
Cost Statement; Landlord's memorandum shall state in detail its response to
Tenant's Proposal.  Each party's memorandum shall also disclose the names of
any expert a party may present as a witness in the proceedings.  Failure to
disclose such experts on a timely basis shall bar their testimony at the
hearings.

           (e)   Discovery  Rules.  No discovery except depositions of experts
                 ----------------
and reasonable document production.  This provision does not affect Tenant's
audit rights.

           (f)   Award of Fees and Costs to Prevailing Party.  The arbitrator(s)
                 -------------------------------------------
shall award to the prevailing party as determined by the arbitrator(s), all its
costs and fees.  "Costs and fees" shall include the arbitrators' fees,
administrative expenses, witness fees and reasonable attorneys fees.  Such
recovery shall be made part of any arbitration award.

           (g)   Finality of Award.  The Award rendered by the arbitrator(s)
                 -----------------
shall be final and binding upon the parties absent manifest legal error and
judgment may be entered by any competent court having jurisdiction thereof.

           (h)   Written Opinion.  The Award of the panel shall be accompanied
                 ---------------
by a written, reasoned opinion.  If the arbitrators do not agree, the decision
of two of the three arbitrators shall be determinative.

                       5.  DESIGN AND CONSTRUCTION
                           -----------------------

     5.1   Construction of Improvements.  Landlord shall, at Landlord's cost
           ----------------------------
and expense (except as otherwise provided herein and in the Work Letter),
construct Landlord's Work as defined in and in accordance with the terms and
conditions of the Work Letter.  Landlord shall use its best efforts to
complete such design and construction in accordance with the estimated
project schedule attached hereto as Exhibit D as the same may be modified or
revised from time to time in accordance with the Work Letter.

     5.2   Condition of Property.  On the Actual Tender Date, Landlord shall
           ---------------------
deliver the Building Shell and Core (as defined in the Work Letter), Interior
Improvements and other Improvements constructed by Landlord to Tenant in
reasonable condition for Tenant to install FF&E/Trade Fixtures, promptly upon
completion of construction thereof, and Landlord warrants to Tenant that the
Building Shell and Core, Interior Improvements and other Improvements
constructed by Landlord (i) shall be free from defects in design and defects
in construction and (ii) shall be constructed in compliance in all material
respects with any and all applicable plans

                                  15
<PAGE>


and specifications mutually approved by Landlord and Tenant, subject to
any changes implemented in such specifications in accordance with the
procedures set forth in the Work Letter.  Notwithstanding any provision hereof
to the contrary, Landlord shall not be liable for, or with respect to, any
defect in design to the extent the same responds to and satisfies any
performance criteria provided by Tenant and otherwise is not defective.
Further, Landlord has no responsibility for the propriety, suitability,
sufficiency or the like of the Improvements, or any element thereof, for
Tenant's use.  If it is determined that this warranty has been violated in any
respect, then it shall be the obligation of Landlord, after receipt of written
notice from Tenant setting forth nature of the violation, to promptly, at
Landlord's sole cost, correct the condition(s) constituting such violation.
Tenant's failure to give such written notice to Landlord within one hundred
twenty (120) days after the Commencement Date shall be deemed a waiver by
Tenant of any right of Tenant to assert that Landlord has not complied with
all Landlord's obligations hereunder, except with respect to latent defects.
TENANT ACKNOWLEDGES THAT THE WARRANTY CONTAINED IN THIS PARAGRAPH IS IN LIEU
OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE PHYSICAL
CONDITION OF THE IMPROVEMENTS TO BE CONSTRUCTED BY LANDLORD AND THAT LANDLORD
MAKES NO OTHER WARRANTIES EXCEPT AS EXPRESSLY SET FORTH IN THIS LEASE.

     5.3   Compliance with Law.  Landlord warrants to Tenant that the
           -------------------
Building Shell, Core, Interior Improvements and other Improvements constructed
by Landlord (when constructed), as they exist on the Commencement Date, shall
not violate any covenants or restrictions of record or any applicable
building code, regulation or ordinance in effect on the Commencement Date,
and Landlord agrees to indemnify, defend and hold Tenant harmless from and
against any and all claims, losses, costs and damages arising as a result of
Landlord's breach of this warranty.  Tenant warrants to Landlord that any
improvements constructed by Tenant from time to time shall not violate any
applicable building code, regulation or ordinance in effect on the
Commencement Date or at the time such improvements are placed in service, and
Tenant agrees to indemnify, defend and hold Landlord harmless from and
against any and all claims, losses, costs or damages arising as a result of
Tenant's breach of this warranty.  If it is determined that this warranty has
been violated, then it shall be the obligation of the warranting party, after
written notice from the other party, to correct the condition(s) constituting
such violation promptly, at the warranting party's sole cost and expense.
Tenant acknowledges that neither Landlord nor any agent of Landlord has made
any representation or warranty as to the present or future suitability of the
Property for the conduct of Tenant's business or proposed business thereon.

     5.4   Union Labor.  See Paragraph 11.1 and Exhibit K.
           -----------

     5.5   City Business Cooperation Program.  Landlord agrees to participate
           ---------------------------------
in, and to comply with any reasonable requirements imposed by the City of San
Diego, to the extent not inconsistent with Paragraph 5.4 above, in order to
qualify the Property under the City's Business Cooperation Program, including
requiring all contractors and subcontractors to prepare documentation
required by the City.  Landlord shall, at the appropriate time after the
Commencement Date, apply for certain tax credits from the City of San Diego
with respect to construction of the Project.  The benefit of any such credit
shall accrue to Tenant.  Landlord shall take whatever reasonable efforts as
are necessary to obtain such tax credit.

                    6.  EXPANSION OPTION - LOT 27
                        -------------------------

     6.1   Option Grant.  Landlord hereby grants to Tenant the option to cause
           ------------
Landlord to develop Lot 27 and to lease same ("Lot 27 Expansion Option") upon
the terms and conditions of this Paragraph 6.  The Lot 27 Expansion Option
must be exercised on or before the end of the eighteenth (18th) month after
the Commencement Date of this Lease ("Lot 27 Exercise Period"); provided,
however, that Landlord may elect to have an affiliate effect the development
of Lot 27, in which case, such affiliate shall be bound and obligated by all
the terms and conditions hereof relating to the development and leasing of
Lot 27.

           (a)   Exercise.
                 --------

                                  16
<PAGE>

                 (i)    Method of Exercise.  Tenant shall exercise the Lot 27
                        ------------------
Expansion Option by delivery of written notice to Landlord during the Lot 27
Exercise Period ("Lot 27 Exercise Notice"); provided, however, that if Tenant
is in default under this Lease beyond any applicable notice and cure period at
the time of exercise of the Lot 27 Expansion Option or at the commencement of
the Lot 27 Lease, then Landlord may, at its sole option, terminate the Lot 27
Expansion Option, Tenant's rights under Paragraph 7 hereof or both which shall
then, along with any exercise of either, be null and void.  Such Exercise
Notice shall include a statement of the gross square footage which Tenant
seeks to have developed on Lot 27 (the "Lot 27 Expansion Building"), the
proposed configuration of buildings and other improvements to be constructed
on Lot 27 and Tenant's proposed Lot 27 Expansion Building Delivery Date;
subject to Landlord's approval of the configuration of the buildings (which
will not unreasonably be withheld), the development of Lot 27 may include more
than a single building.  No building on Lot 27 shall be less than 45,000
square feet, and the aggregate size of all buildings shall not be less than
102,000 square feet nor more than 124,400 square feet unless Landlord and
Tenant consent.  The term of the Lot 27 Lease shall not be less than fifteen
(15) years.

                 (ii)   Effect of Exercise.  In the event Tenant effectively
                        ------------------
exercises the Lot 27 Expansion Option, Landlord and Tenant shall enter into,
within sixty (60) days thereafter:

                      (A)  a work letter regarding construction of the Lot 27
     Expansion Building(s), with such terms and conditions as are mutually
     agreed to between Landlord and Tenant substantially in the form of the
     Work Letter, provided, however, that: (1) Tenant shall pay for twenty-
     five percent (25%) of any Interior Improvements in excess of Ten Dollars
     ($10.00) per square foot in lieu of the Tenant Contribution provided for
     in the Work Letter, but Landlord's obligation to pay for Interior
     Improvements shall not exceed One Hundred Dollars ($100) per square foot;
     and (2) the Expansion Building Delivery Date shall be mutually agreed
     upon but shall be no earlier than nine (9) months and no later than
     twenty one (21) months after execution of a lease for Lot 27, all
     subject to Force Majeure and Tenant Delay; and (3) Tenant shall have the
     right at any time prior to the Commencement Date of the Lot 27 Lease to
     reimburse Landlord in cash for a portion of the Total Project Cost of
     Lot 27, up to a maximum of fifteen percent (15%) of the Total Project
     Costs for Lot 27, and if Tenant elects to do so, for purposes of
     determining rent for Lot 27, the Total Project Costs for Lot 27 shall
     be reduced by the amount so paid by Tenant.

                      (B)  a lease (the "Lot 27 Lease") substantially in the
     same form as this Lease other than with respect to Rent, obligations
     relating to the Matrix Lease or any other lease of Tenant and such other
     modifications as are necessary; provided, however, that Tenant shall
     have the right at any time prior to the Commencement Date of the Lot 27
     Lease to reimburse Landlord in cash for a portion of the Total Project
     Cost of Lot 27, up to a maximum of fifteen percent (15%) of the Total
     Project Costs for Lot 27, and if Tenant elects to do so, for purposes of
     determining rent for Lot 27, the Total Project Costs for Lot 27 shall be
     reduced by the amount so paid by Tenant.

                      (C)  an amendment to this Lease making the term of this
     Lease coterminous with the Lot 27 Lease; provided, however, that in no
     event shall the term of this Lease be shortened without Landlord's
     consent which may be withheld for any reason; and

                      (D)  any other documentation reasonably required by
     Tenant, Landlord or Landlord's prospective lender.

Rent shall be calculated on the same basis as Rent is calculated pursuant to
this Lease; the Total Project Cost for such purpose shall also include the
actual cost of Lot 27, which is $3,450,000, plus an amount equal to the
following: (A) the Carrying Costs of Lot 27; plus (B) $230,000 (being $2.00
for each of the 115,000 square feet of building area allocated to Lot 27); and
(C) minus any portion of Carrying Costs paid by Tenant to Landlord pursuant to
Paragraph 6.1(b) hereof.  Landlord and Tenant shall enter into a lease and
work letter within such sixty (60) day period.  If either party fails or
refuses to enter into such agreements in bad faith, the other party
may terminate negotiations and, in the event Landlord terminates negotiations,
Tenant's right to utilize or lease Lot 27 shall terminate and all rights under
Paragraph 7 hereof shall also terminate.

                                  17
<PAGE>

           (b)   Carrying-Costs.  As consideration for Landlord's grant of
                 --------------
the Lot 27 Expansion Option, Tenant shall pay or reimburse to Landlord
one-half (1/2) of all Carrying Costs for Lot 27 incurred by Landlord during or
with respect to the period from the Commencement Date of this Lease until the
expiration of the Lot 27 Expansion Option; provided, however, that such
payments shall continue during the period of any extension of the Lot 27
Expansion Option and, if the Lot 27 Expansion Option is exercised, until a
lease for Lot 27 is executed, and, provided further, that Tenant may at any
time waive the Lot 27 Expansion Option by written notice to Landlord, in which
case Tenant's obligation to pay such share of Carrying Costs shall terminate
thirty (30) days after the date of the notice.  Tenant shall pay one-half
(1/2) of Landlord's estimate of the Carrying Costs to Landlord on a monthly
basis, in advance, on the due date for the monthly installments of Rent; such
payment shall be based upon Landlord's estimate which shall show the separate
components on a line item basis and shall show the calculations of any
calculated amount.  Any failure to pay its portion of Carrying Costs for a
period of ten (10) days after written notice of such failure from Landlord
shall be deemed to be a waiver by Tenant of its rights under Paragraphs 6 and
7 hereof.  Within ten (10) days after the end of the period for which Tenant
is to pay a portion of Carrying Costs for Lot 27, Landlord shall notify Tenant
in writing of Landlord's actual Carrying Costs for Lot 27 for the period with
respect to which Tenant is to pay a portion of Carrying Costs and within ten
(10) days after such notice either (I) Tenant shall pay Landlord the amount by
which such actual Carrying Costs exceeded the estimated Carrying Costs paid by
Tenant for such period, or (II) Landlord shall pay Tenant the amount by which
the estimated Carrying Costs paid by Tenant exceeded the actual Carrying Costs
for such period.  If taxes or other Carrying Costs allocable to Lot 27 for
such period are increased or decreased (for example, by a tax reduction or an
additional tax assessment) following completion of the reconciliation process
described in the preceding sentence, Landlord shall promptly notify Tenant in
writing of such further increase or decrease and the parties shall make any
further adjustment payments in cash in the same manner contemplated in the
preceding sentence.  Not more frequently than every six (6) months, and if
Tenant is current in its payment of Carrying Costs with respect to Lot 27,
Tenant shall have the right to review and audit all data and documentation
underlying the calculation of Carrying Costs; in the event that such audit
discloses that Tenant has underpaid, Tenant shall pay any amount due within
ten (10) days, likewise, Landlord shall remit any overpayment within ten (10)
days; provided, however, that if Landlord disagrees with the results of
Tenant's audit, the matter shall be submitted to a Qualified CPA for binding
determination.  If the parties cannot agree upon a Qualified CPA within ten
(10) days, then each party shall identify a Qualified CPA and the two
Qualified CPAs shall select a third Qualified CPA who shall make the
determination.

     6.2   First Refusal Right.
           -------------------

           (a)   Grant of Refusal Right; Sale/Development Restriction.
                 ----------------------------------------------------
Commencing upon the expiration, termination or waiver of the Lot 27 Expansion
Option, Tenant shall have a First Refusal Right (the "Lot 27 Refusal Right") on
Lot 27 as set forth in this Paragraph 6.2, which Lot 27 Refusal Right expires
on the tenth (10th) anniversary of the Commencement Date of this Lease (the
term of the Lot 27 Refusal Right being the "Lot 27 Refusal Term").  Landlord
shall not sell or enter into any development or leasing agreement with respect
to Lot 27 for a period beginning on the date of this Lease and ending ten (10)
years after the Commencement Date, except in compliance with this Paragraph 6;
provided, however, that the foregoing restrictions shall not apply and Tenant
shall not have any rights with respect to Lots 27 or 26:  (a) during any
period in which Tenant is in default under this Lease beyond any applicable
notice and cure period; (b) when this Lease is not in full force and effect;
or (c) after negotiations for a lease of Lot 27 shall have been terminated by
Landlord because of Tenant's bad faith in relation to such negotiations.

           (b)   First Refusal Right.  If, during the Lot 27 Refusal Term (but
                 -------------------
while this Lease is in full force and effect), Landlord receives or delivers a
bona fide written offer which Landlord wishes to accept ("Offer") from or to
an unaffiliated person or entity other than Tenant (the "Offeror") to
purchase/sell or otherwise develop or lease Lot 27, and if Tenant is not then
in default under this Lease beyond any applicable notice and cure period,
Landlord shall give written notice of such Offer to Tenant, providing a copy
of such Offer specifying the material terms on which the Offeror proposes to
purchase or develop/lease Lot 27, and shall offer to Tenant the opportunity
to lease Lot 27 on the terms as described below (a "Lot 27 Offer

                                  18
<PAGE>


Notice").  For purposes of this Paragraph 6.2(b), an offer shall be sufficient
if it is contained in a letter or other writing signed by the Offeror and
Landlord and specifies the material terms of such proposed purchase,
development or lease.

     Tenant shall have thirty (30) days after the giving of a Lot 27 Offer
Notice by Landlord in which to accept such Offer by written notice to
Landlord.

                 (i)    If Tenant does not accept Landlord's Offer within the
     allotted time, Landlord shall thereafter have the right to sell, develop
     or lease Lot 27 to or for the Offeror, as evidenced by a signed lease,
     signed development or construction agreement or signed sales contract,
     at any time within three hundred (300) days after Landlord's delivery of
     the Lot 27 Offer Notice, at a price and on other terms and conditions
     not more favorable to the Offeror than the price and other terms of the
     original Offer specified in Landlord's Lot 27 Offer Notice.  If Landlord
     effects such a transaction, then Tenant shall have no further refusal
     rights or other rights with respect to Lot 27; if Landlord does not
     effect such transaction within such time, then Tenant's refusal right
     and Landlord's obligation with respect thereto shall continue.

                 (ii)   If Tenant accepts the Offer, then Lot 27 shall be
     leased to Tenant as follows: (i) if the Offer is for a lease of Lot 27,
     on the terms set forth in Landlord's notice, and the parties shall
     promptly execute an agreement containing the terms of Landlord's said
     notice and such other reasonable and customary terms as the parties
     shall agree; or (ii) if the Offer is other than for a lease of Lot 27,
     the Offer shall be appropriately adjusted to reflect a lease transaction
     with the property valued as set forth in the Offer and with the lease
     terms as otherwise specified in Paragraph 6.1(a)(ii) hereof.

                        7.  EXPANSION RIGHTS -- LOT 26
                            --------------------------

     7.1   First Refusal Right.
           -------------------

           (a)   Grant of Refusal Right; Sale/Development Restriction.  Tenant
                 ----------------------------------------------------
shall have a First Refusal Right on Lot 26 as set forth in this Paragraph 7.1
(the "Lot 26 Refusal Right"), which Lot 26 Refusal Right commences on the date
hereof and expires on the earlier to occur of: (i) the expiration,
termination or waiver of the Lot 27 Expansion Option; (ii) the exercise of the
Lot 27 Expansion Option during the thirty (30) day period after Landlord has
delivered an Offer for Lot 26 pursuant to Paragraph 7.1(b)(i) (in which event
the terms of Paragraph 7.2 shall apply); (iii) the sale, lease or other
disposition of Lot 26 as permitted by this Paragraph 7; or (iv) the tenth
(10th) anniversary of the Commencement Date of this Lease (the term of the Lot
26 Refusal Right being the "Lot 26 Refusal Term").  If the Lot 27 Expansion
Option is exercised during a period of time when there is not a Lot 26 Offer
Notice pending with respect to which Tenant may exercise its Lot 26 Refusal
Right, then the Lot 26 Refusal Right shall continue in full force and effect,
subject to expiration or termination as provided for in this Lease.  Landlord
shall not sell or enter into any development or leasing agreement with respect
to Lot 26 during the Lot 26 Refusal Term, except in compliance with this
Paragraph 7; provided, however, that the foregoing restrictions shall not
apply and Tenant shall not have any rights with respect to Lots 27 or 26:  (a)
during any period in which Tenant is in default under this Lease beyond any
applicable notice and cure period; (b) when this Lease is not in full force
and effect; or (c) after negotiations for a lease of Lot 27 shall have been
terminated by Landlord because of Tenant's bad faith in relation to such
negotiations.

           (b)   First Refusal Right.   If, during the Lot 26 Refusal Term,
                 -------------------
Landlord receives or delivers a bona fide written offer which Landlord wishes
to accept ("Offer") from or to an unaffiliated person or entity other than
Tenant (the "Offeror") to purchase/sell or otherwise develop or lease Lot 26,
and if Tenant is not then in default under this Lease beyond any applicable
notice and cure period, Landlord shall give written notice of such Offer to
Tenant providing a copy of such Offer specifying the material terms on which
the Offeror proposes to purchase or develop/lease Lot 26, and shall offer to
Tenant the opportunity to lease Lot 26 (or exercise the Lot 27 Expansion
Option) on the terms as described below (a "Lot 26 Offer Notice").  For
purposes of this Paragraph 7.1(b), an offer shall be sufficient if it is
contained in a letter or other writing signed by the Offeror and Landlord
and specifies the material terms of such proposed purchase, development or
lease.

                                  19
<PAGE>


                 (i)    During Pendency of Lot 27 Expansion Option.  If the
                        ------------------------------------------
     Lot 26 Offer Notice is delivered while the Lot 27 Expansion Option is in
     effect and unexercised, then Tenant shall have thirty (30) days after
     delivery of the Lot 26 Offer Notice by Landlord during which to either:

                        (A)  Exercise the Lot 27 Expansion Option by delivery
          of a Lot 27 Exercise Notice to Landlord during such thirty (30) day
          period, in which event Paragraphs 6.1 and 7.2 shall control and
          have  effect;  or

                        (B)  Decline, fail or refuse to exercise the Lot 27
          Expansion Option, in which event, Landlord shall thereafter have
          the right to sell, develop or lease Lot 26 to or for the Offeror,
          as evidenced by a signed lease, signed development or construction
          agreement or signed sales contract, at any time within three
          hundred (300) days after Landlord's delivery of the Lot 26 Offer
          Notice, at a price and on other terms and conditions not more
          favorable to the Offeror than the price and other terms of the
          original Lot 26 Offer Notice.  If Landlord effects such a trans-
          action, then Tenant shall have no further refusal rights or other
          rights with respect to Lot 26; if Landlord does not effect such
          transaction within such time, then Tenant's Lot 26 Refusal Right
          and Landlord's obligation with respect thereto shall continue.

                 (ii)   Other than During Pendency of Lot 27 Expansion Option.
                        -----------------------------------------------------
     If the Lot 26 Offer Notice is delivered at any time after the Lot 27
     Expansion Option has been effectively exercised and while the Lot 26
     Refusal Right is in force, then Tenant shall have thirty (30) days after
     the date of giving of such Lot 26 Offer Notice in which to accept such
     Offer by written notice to Landlord.

                      (A)    If Tenant does not accept Landlord's Offer within
          the allotted time, Landlord shall thereafter have the right to sell,
          develop or lease Lot 26 to or for the Offeror, as evidenced by a
          signed lease, signed development or construction agreement or
          signed sales contract, at any time within three hundred (300) days
          after Landlord's delivery of the Lot 26 Offer Notice, at a price
          and on other terms and conditions not more favorable to the Offeror
          than the price and other terms of the original Offer specified in
          Landlord's Lot 26 Offer Notice.  If Landlord effects such a trans-
          action, then Tenant shall have no further refusal rights or other
          rights with respect to Lot 26; if Landlord does not effect such
          transaction within such time, then Tenant's Lot 26 Refusal Right
          and Landlord's obligation with respect thereto shall continue.

                      (B)    If Tenant accepts the Offer, then Lot 26 shall be
          leased to Tenant as follows: (i) if the Offer is for a lease of Lot
          26, on the terms set forth in Landlord's notice, and the parties
          shall promptly execute an agreement containing the terms of
          Landlord's said notice and such other reasonable and customary
          terms as the parties shall agree; or (ii) if the Offer is other
          than for a lease of Lot 26, the Offer shall be appropriately
          adjusted to reflect a lease transaction with the property valued
          as set forth in the Offer and with the lease terms as otherwise
          specified in Paragraph 7.2(b) hereof.

     7.2   Exercise of Lot 27 Expansion Option During Pendency of Lot 27
           -------------------------------------------------------------
Offer; Option on Lot 26.  If Tenant shall exercise the Lot 27 Expansion
-----------------------
Option during the thirty (30) days after Landlord's giving a Lot 26 Offer
Notice, then the Lot 26 Refusal Right shall terminate and be null and
void, and Tenant shall, instead, commencing at that date and continuing until
the first anniversary of the Commencement Date of the Lot 27 Lease (the "Lot
26 Exercise Period"), have the option to cause Landlord to develop Lot 26 and
to lease same ("Lot 26 Expansion Option") upon the terms and conditions of
this Paragraph 7.2.  Landlord may elect to have an affiliate effect the
development of Lot 26, in which case, such affiliate shall be bound and
obligated by all the terms and conditions hereof relating to the development
and leasing of Lot 26.

           (a)   Exercise.  Tenant shall exercise the Lot 26 Expansion Option by
                 --------
delivery of written notice to Landlord and the Lot 26 Owner during the Lot 26
Exercise Period ("Lot 26 Exercise Notice"); provided, however, that if Tenant
is in default under this Lease or the Lot 27

                                  20
<PAGE>


Lease, beyond any applicable notice and cure period at the time of exercise of
the Lot 26 Expansion Option, then Landlord may, at its sole option, terminate
the Lot 26 Expansion Option which shall then, along with any exercise
thereof, be null and void.  Such Lot 26 Exercise Notice shall include a s
tatement of the gross square footage which Tenant seeks to have developed on
Lot 26 (the "Lot 26 Expansion Building") and Tenant's proposed Lot 26
Expansion Building Delivery Date; the development of Lot 26 shall consist of
a single building which shall not be less than 60,000 square feet nor more
than 65,000 square feet unless Landlord and Tenant consent.  The term of the
lease shall not be less than fifteen (15) years.

           (b)   Effect of Exercise.  In the event Tenant effectively exercises
                 ------------------
the Lot 26 Expansion Option, Landlord and Tenant shall enter into, within
sixty (60) days thereafter:

                 (i)    a work letter regarding construction of the Lot 26
     Expansion Building on Lot 26, with such terms and conditions as are
     mutually agreed to between Landlord and Tenant substantially in the
     form of the Work Letter, provided, however, that: (A) Tenant shall pay
     for twenty-five percent (25%) of any Interior Improvements in excess of
     Ten Dollars ($10.00) per square foot in lieu of the Tenant Contribution
     provided for in the Work Letter, but Landlord's obligation to pay for
     Interior Improvements shall not exceed One Hundred Dollars ($100) per
     square foot; and (B) the Lot 26 Expansion Building Delivery Date shall
     be mutually agreed upon but shall be no earlier than nine (9) months and
     no later than twenty one (21) months after execution of the Lot 26 Lease,
     all subject to Force Majeure and Tenant Delay;

                 (ii)   a lease (the "Lot 26 Lease") substantially in the
     same form as this Lease other than with respect to Rent, to obligations
     relating to the Matrix Lease or any other lease of Tenant and to such
     other modifications as are necessary; provided, however, that this Lease
     shall not be modified so as to be co-terminus with such lease.

                 (iii)  any other documentation reasonably required by Tenant,
     Landlord or Landlord's prospective lender.

Rent shall be calculated on the same basis as Rent is calculated pursuant to
this Lease; the Total Project Cost for such purpose shall also include the
actual cost of Lot 26, which is $1,890,000, plus an amount equal to the
following: (A) the Carrying Costs of Lot 26; plus (B) $126,000 (being $2.00
for each of the 63,000 square feet of building area allocated to Lot 26); and
(C) minus any portion of Carrying Costs paid by Tenant to Landlord pursuant to
Paragraph 7.3 hereof.  Landlord and Tenant shall enter into a lease and work
letter within such sixty (60) day period.  If either party fails or refuses to
enter into such agreements in bad faith, the other party may terminate
negotiations and, if negotiations are terminated by Landlord, Tenant's right
to utilize or lease Lot 26 shall terminate.

     7.3   Carrying  Costs.  As consideration for Landlord's grant of the Lot
           ---------------
26 Expansion Option, Tenant shall pay or reimburse to Landlord one-half (1/2)
of all Carrying Costs for Lot 26 incurred by Landlord during or with respect
to the period from the Commencement Date of the Lot 27 Lease until the
expiration of the Lot 26 Expansion Option; provided, however, that such
payments shall continue during the period of any extension of the Lot 26
Expansion Option and, if the Lot 26 Expansion Option is exercised, until a
lease for Lot 26 is executed and provided further that Tenant may at any time
waive the Lot 26 Expansion Option by written notice to Landlord, in which
case Tenant's obligation to pay such share of Carrying Costs shall terminate
thirty (30) days after the date of the notice.  Tenant shall pay one-half
(1/2) of Landlord's estimate of the Carrying Costs to Landlord on a monthly
basis, in advance, on the due date for the monthly installments of Rent; such
payment shall be based upon Landlord's estimate which shall show the separate
components on a line item basis and shall show the calculations of any
calculated amount.  Any failure to pay its portion of Carrying Costs for a
period of ten (10) days after written notice of such failure from Landlord
shall be deemed to be a waiver by Tenant of its rights under this Paragraphs
6 and 7.  Within ten (10) days after the end of the period for which Tenant
is to pay a portion of Carrying Costs for Lot 26, Landlord shall notify Tenant
in writing of Landlord's actual Carrying Costs for Lot 26 for the period with
respect to which Tenant is to pay a portion of Carrying Costs and within ten
(10) days after such notice either (I) Tenant shall pay Landlord the amount
by which such actual Carrying Costs exceeded the estimated Carrying Costs
paid by Tenant for such period, or (II) Landlord shall pay Tenant the amount
by which the

                                  21
<PAGE>


estimated Carrying Costs paid by Tenant exceeded the actual Carrying Costs for
such period.  If taxes or other Carrying Costs allocable to Lot 26 for such
period are increased or decreased (for example, by a tax reduction or a
additional tax assessment) following completion of the reconciliation process
described in the preceding sentence, Landlord shall promptly notify Tenant
in writing of such further increase or decrease and the parties shall make any
further adjustment payments in cash in the same manner contemplated in the
preceding sentence.  Not more frequently than every six (6) months, and if
Tenant is current in its payment of Carrying Costs with respect to Lot 26,
Tenant shall have the right to review and audit all data and documentation
underlying the calculation of Carrying Costs; in the event that such audit
discloses that Tenant has underpaid, Tenant shall pay any amount due within
ten (10) days, likewise, Landlord shall remit any overpayment within ten (10)
days; provided, however, that if Landlord disagrees with the results of
Tenant's audit, the matter shall be submitted to a Qualified CPA for binding
determination.  If the parties cannot agree upon a Qualified CPA within ten
(10) days, then each party shall identify a Qualified CPA and the two
Qualified CPAs shall select a third Qualified CPA who shall make the
determination.

     7.4   Paydown.  Tenant shall have the right at any time prior to the
           -------
Commencement Date of the Lot 26 Lease to reimburse Landlord in cash for a
portion of the Total Project Cost of Lot 26, up to a maximum of fifteen
percent (15%) of the Total Project Costs for Lot 26.  If Tenant elects
to do so, for purposes of determining rent for Lot 26, the Total Project Costs
for Lot 26 shall be reduced by the amount so paid by Tenant.

                               8.  TAXES
                                   -----

     8.1   Personal Property.  Tenant shall be responsible for and shall pay
           -----------------
prior to delinquency all taxes and assessments levied against or by reason
of (a) any and all alterations, additions and items installed or placed on
the Property and taxed as personal property rather than as real property,
and/or (b) all personal property, trade fixtures and other property placed by
Tenant on or about the Property.  Upon request by Landlord, Tenant shall
furnish Landlord with satisfactory evidence of Tenant's payment thereof.  If
at any time during the term of this Lease any of said alterations, additions
or personal property, whether or not belonging to Tenant, shall be taxed or
assessed as part of the Property, then such tax or assessment shall be paid
by Tenant to Landlord immediately upon presentation by Landlord of copies of
the tax bills in which such taxes and assessments are included and shall, for
the purposes of this Lease, be deemed to be personal property taxes or
assessments under this Paragraph 8.1.

     8.2   Real Property.  Taxes shall mean all taxes and assessments levied
           -------------
against the Property, including, but not limited to, real and personal
property taxes and assessments or substitutes therefor levied or assessed
against the Property or any part thereof, including but not limited to any
possessory interest, use, business, license or other taxes or fees, any taxes
imposed directly on rents or services, any assessments or charges for police
or fire protection, housing, transit, open space, street or sidewalk
construction or maintenance or other similar services from time to time by
any governmental or quasi governmental entity, and any other new taxes
on Landlords in addition to taxes now in effect.  Taxes shall not include,
however, any tax on income or the like of Landlord or any use, business,
license or other tax or fee not directly imposed on the ownership of the
Property or on rent.  Tenant shall pay to Landlord on the first day of each
calendar month of the term of this Lease, one-twelfth (1/12) of Landlord's
good faith estimate of all taxes and assessments levied or to be levied on the
Property for such calendar year; unless Landlord is required to deposit real
estate tax estimates with any mortgage lender (and Landlord shall use its good
faith best efforts to persuade any such mortgage lender to waive any real
estate tax escrow requirement), Landlord shall hold Tenant's monthly payment
of Taxes in an interest bearing account with interest for the benefit of
Tenant.  Landlord shall advise Tenant, from time to time, of Landlord's
estimate of taxes to be paid.  During the first five years of the term of this
Lease, Tenant shall not be required to pay any portion of Taxes which are
attributable to a change in ownership of the Property.  At no time shall
Tenant be responsible for any Taxes attributable to the third or subsequent
change of ownership of the Property during the initial term of this Lease nor
during the second or subsequent change of ownership during the extension terms
of this Lease.

                                  22
<PAGE>



                         9.  OPERATING EXPENSES
                             ------------------

     9.1   Liability For Operating Expenses.
           --------------------------------

           (a)   Tenant  shall pay to Landlord, at the time and in the manner
hereinafter set forth, an amount equal to one hundred percent (100%)
("Tenant's Operating Cost Share") of the Operating Expenses defined in
Paragraph 9.2.

           (b)   If Landlord incurs Operating Expenses for the Property and
Parcels other than the Site (consisting only of maintenance of landscaping,
maintenance of the jogging trail and paved areas, insurance expenses, any cost
resulting from the Existing CC&R's, or any other expense imposed by any
governmental body with authority over the Property and the Torrey Pines
Science Center) on a basis which does not separate those attributable to the
Property, Landlord shall make a reasonable determination regarding the
appropriate treatment of such expense items that are allocable both to the
Site and to any such additional buildings or properties.  In determining such
percentage, a building shall be taken into account from and after the earlier
of (a) the date such expenses are first incurred with respect to such other
properties or (b) the date on which a tenant first enters into possession of
the building or a portion thereof, and the square footage of any such building
shall be measured or determined in accordance with the same standard
applicable to the measurement of the Initial Building.  All such expenses
shall be allocated to the Initial Building based on the square footage thereof
relative to the square footage within and planned to be within the Parcels.

           (c)   Tenant shall pay the Management Fee to Landlord as part of
Operating Expenses.  Landlord shall provide, or cause another entity to
provide, periodic reviews of the Property, payment of taxes and other Operating
Expenses, provision of Operating Expense Statements and effectuation of
repairs for which Landlord is responsible pursuant to this Lease.

     9.2   Definition Of Operating Expenses.
           --------------------------------

           (a)   Subject to the exclusions and provisions hereinafter contained,
the term "Operating Expenses" shall mean the total costs and expenses, capital
and ordinary, actually and reasonably incurred by or allocable to Landlord for
operation and maintenance of the Improvements and the Property, including
without limitation, costs and expenses of (i) operation, repair and
maintenance of the roof, exterior walls and other structural portions and
operating systems (including HVAC) of the Initial Building, provided that any
portion of such that is of a "capital" nature pursuant to the terms hereof,
shall be amortized as provided herein; (ii) liability, casualty, rent loss or
other insurance (including, but not limited to, earthquake insurance and
environmental insurance if Landlord elects to carry such insurance, which it
is Landlord's present intention to do) carried by Landlord with respect to the
Property, the Improvements or any portion thereof subject to Paragraph 14.1(b)
below; (iii) supplies, equipment, utilities and tools used in operation,
repair and maintenance of the roof (structural portions only), exterior walls
and other structural portions of the Initial Building; (iv) capital
improvements and repairs to the Property or the Improvements, amortized over
their respective useful lives (including, but not limited to those, (aa) which
reduce or will cause future reduction of other items of Operating Expenses for
which Tenant is otherwise required to contribute (but not in excess of the
cost savings realized) or (bb) which are required by law, ordinance,
regulation or order of any governmental authority enacted after the date of
this Lease); (v) the Management Fee; (vi) maintenance and repair of the
parking areas, driveways and paved areas outside the Initial Building; (vii)
any obligations of Landlord pursuant to Paragraph 12.1 hereof; and (viii) any
other costs (including, but not limited to, any parking or utilities fees or
surcharges) allocable to or paid by Landlord, as owner of the Property or
Improvements, pursuant to the Existing CC&Rs or to any applicable laws,
ordinances, regulations or orders of any governmental or quasi-governmental
authority, including without limitation any fees or assessments imposed by the
Torrey Pines Science Center Association.  The distinction between items of
ordinary operating maintenance and repair and items of a capital nature shall
be made in accordance with generally accepted accounting principles applied on
a consistent basis by Landlord's accountants.  Capital expenses authorized to
be included as part of Operating Expenses shall be amortized over the actual
useful life of such capital items.  Landlord shall seek to have all
contracts in connection with Operating Expenses be at reasonable prices,
seeking competitive bids when Landlord deems same appropriate; all of the
foregoing is subject, however, to Landlord's use of contractors,

                                  23
<PAGE>


subcontractors and labor which meets the requirements of Paragraph 2 of
Exhibit K annexed hereto.

           (b)   Operating Expenses shall not include: (a) any capital cost,
expense or improvement other than those expressly authorized above; (b) the
cost of any services, utilities or materials not provided to Tenant or not
used with respect to the Property, including, without limitation, the cost of
electricity, heating, ventilation and air conditioning (including all
maintenance, repair and similar costs associated therewith) and janitorial
services provided to the premises of any other tenants; (c) the cost of
investigating, monitoring or remedying any environmental condition or
hazardous substances presently existing or introduced to the Property by
Landlord; (d) any debt service (including principal and interest) or payments
of any judgments against Landlord or mechanics liens unless attributable to
actions or failures to act of Tenant; (e) any costs arising from a breach or
default by Landlord under this Lease or any other lease or agreement; (f) the
cost of curing violations or contesting such laws or violations caused by
Landlord or the costs of any voluntary traffic mitigation actions; (g) costs,
damage or repairs caused by or necessitated by the negligence or willful
misconduct of Landlord or its agents, contractors or employees; (h) any costs
which would have been reimbursed or paid for by warranties or by insurance
proceeds had Landlord maintained the insurance required under this Lease or
for any amounts with respect to judgments or other charges assessed against
Landlord in excess of insurance policy limits (including, without limitation,
any liability policy); (i) any costs reimbursed to Landlord by any other
tenant other than through the payment of Operating Expenses; (j) any costs to
renovate, decorate or paint vacant space or the space of any tenant (except
Tenant or any assignee or sublessee of Tenant or any person or entity
utilizing the Property under Tenant's right); (k) costs incurred in connection
with leases or construction of the Project or any other improvements within
the Parcels (including initial landscaping and paved areas) for any tenant or
occupant of the Parcels including Tenant (including, without limitation,
brokerage commissions and legal fees); (l) costs incurred in connection with a
financing, sale, ground leasing or sale-leaseback of all or any part of the
Parcels; (m) costs incurred in connection with lawsuits or other legal actions
(including, without limitation, arbitrations and mediation) instituted or
defended by Landlord unless Tenant is obligated under Paragraph 14.4(a) to
indemnify Landlord for the same; (n) sums incurred as late payment fees,
penalties or interest; (o) ground rent; or other ground lease payments; (p)
depreciation of any equipment or all or any part of the Initial Building or
any other improvements; (q) Landlord's advertising, entertainment and
promotional costs, including any political or charitable contributions; (r)
costs of acquiring, leasing, restoring, insuring or displaying sculptures,
paintings and other objects of art located within or outside the Parcels,
unless such object is contemplated in the Project Budget or approved by Tenant
in writing; (s) costs and expenses payable to Landlord or to an affiliate of
Landlord to the extent that such costs and expenses exceed competitive costs
and expenses for materials and services by unrelated persons or entities of
similar skill and experience; (t) repairs or replacements resulting from
latent defects in the design or construction of any Improvements unless the
design responds to and satisfies any performance criteria provided by Tenant
and otherwise is not defective; (u) any defect in construction of the Initial
Building (which is the fault of Landlord or its contractors, agents or
employees); and (v) any cost or expense relating to administration and
management, including but not limited to overhead, wages, salaries, other
compensation and benefits, office rental, office supplies, dues and
subscriptions, office utility charges, telephone charges and automobile
expenses other than the Management Fee (collectively, the "Excluded
Expenses").  In calculating Operating Expenses, no item charged to Tenant as
an Operating Expense or Building Expense shall be charged to Tenant as any
other type of expense or cost which, under the terms of this Lease, can be
charged to Tenant.

     9.3   Determination and Payment Of Operating Expenses.  Tenant shall pay
           -----------------------------------------------
to Landlord on the first day of each calendar month of the term of this Lease,
one twelfth (1/12th) of Landlord's good faith estimate of Tenant's Operating
Expenses with respect to the Property for such calendar year.  Landlord shall
advise Tenant, from time to time of Landlord's estimate of Operating Expenses,
either increasing or decreasing same; Landlord shall not modify its estimate
of Operating Expenses unless, in its good faith judgment, due to unanticipated
events, the aggregate of Operating Expenses for the particular year shall
change by twenty percent (20%) or more from the previous estimate.

                                 24
<PAGE>


                 (a)    Within ninety (90) days after the conclusion of each
calendar year, Landlord shall furnish to Tenant a statement (the "Annual
Operating Expense Statement") showing in reasonable detail including a
separate line item breakdown of each component of Operating Expenses, the
actual Operating Expenses for the previous calendar year, which were billed
to Tenant by Landlord.  Any additional sum due from Tenant to Landlord shall be
due and payable within thirty (30) days of Tenant's receipt of such statement.
If the amounts paid by Tenant pursuant to this Paragraph 9.3 exceed Tenant's
Operating Expenses for the previous calendar year, Landlord shall accompany
said statement with payment for the amount of such difference.

                 (b)    Any amount due under this Paragraph 9.3 for any period
which is less than a full month shall be prorated for such fractional month.

                 (c)    Provided that Tenant shall have paid in full any amount
due from it reflected on the Annual Operating Expense Statement, Tenant shall
be entitled within one hundred twenty (120) days after receipt of the Annual
Operating Expense Statement, upon reasonable written notice to Landlord and
during normal business hours at Landlord's office in San Diego County, to copy,
inspect and examine those books and records of Landlord relating to the
determination and payment of Operating Expenses relating to this Lease, the
Property and/or any other properties described in Paragraph 9.1(b).  If, after
inspection and examination of such books and records, Tenant disputes the
amount of any such Operating Expenses charged by Landlord and the parties are
not able to resolve such dispute by good faith negotiations within thirty (30)
days after Tenant notifies Landlord in writing of the disputed items, then
Tenant may, by written notice to Landlord, request an independent audit of
such books and records.  The independent audit of the books and records shall
be conducted by a certified public accountant acceptable to both Landlord and
Tenant or, if the parties are unable to agree, by a "Big Six" accounting firm
designated by Landlord and not then employed by Landlord or Tenant.  The audit
shall be limited to the determination of the amount of Operating Expenses
specified by Tenant in its notice of objection.  If the audit discloses that
the amount of Operating Expenses billed to Tenant was in excess of the actual
amounts incurred by Landlord, Landlord shall promptly pay to Tenant the
overpayment.  All costs and expenses of the audit shall be paid by Tenant
unless the audit shows that Landlord overstated Operating Expenses covered by
the audit by more than five percent (5%), in which case Landlord shall pay all
reasonable costs and expenses of the audit.

     9.4   Proration.  If the Commencement Date falls on a day other than the
           ---------
first day of an insurance coverage period, tax fiscal year or other period to
which an Operating Expense or Building Expense is allocable or attributable,
or if this Lease terminates on a day other than the last day of an insurance
coverage period, tax fiscal year or other period to which an Operating
Expense or Building Expense is allocable or attributable, then the amount of
Operating Expenses payable by Tenant with respect to such first or last
partial insurance coverage period, tax fiscal year or other period shall
be prorated on the basis which the number of days during such insurance
coverage period, tax fiscal year or other period in which this Lease is in
effect bears to the total number of days in such insurance coverage period,
tax fiscal year or other period.  The obligation of Tenant to pay Operating
Expenses that occur during the Lease Term shall survive the termination of
this Lease by lapse of time or otherwise.

                            10.  UTILITIES
                                 ---------

     10.1  Payment.  Commencing with the Commencement Date and thereafter
           -------
throughout the term of this Lease, Tenant shall pay before delinquency, all
charges for water, gas, heat, light, electricity, power, sewer, telephone,
alarm system, janitorial and other services or utilities supplied to or
consumed in or upon the Property, including any taxes on such services and
utilities.

     10.2  Interruption.  In the event of interruption or failure of any
           ------------
service or utility furnished to or used in the Property for any reason
whatsoever, including, but not limited to, accident, making of repairs,
alterations or improvements, severe weather, difficulty or inability in
obtaining services or supplies, labor difficulties or any other cause (an
"Interruption") for more than five (5) consecutive days, the same shall cause
Rent and other charges required to be paid hereunder to abate, effective the
date such Interruption begins, but Landlord shall not be liable in

                                 25
<PAGE>


damages or otherwise.  Notwithstanding the foregoing, Tenant shall not be
entitled to any abatement (a) to the extent any such Interruption is caused by
the negligence or willful misconduct of Tenant or its agents, employees or
contractors or (b) to the extent such Interruption does not interfere with
Tenant's use of the Property.  Tenant acknowledges and agrees that it shall
co-insure or self-insure against any risks it determines are necessary to be
insured against pursuant to this Paragraph 10.2.  Notwithstanding anything to
the contrary contained in this Paragraph 10.2, in the event an Interruption
occurs and continues unabated for (a) ninety (90) consecutive days for an
Interruption that occurs during the last two (2) years of the term of this
Lease or (b) nine (9) consecutive months for an Interruption that occurs any
other time during the term of this Lease, then in either such event, Tenant
shall have the right to terminate this Lease.

                       11.  ALTERATIONS; SIGNS
                            ------------------

     11.1  Right To Make Alterations.  Tenant shall make no alternations,
           -------------------------
additions or improvements, either with respect to initial occupancy or
subsequent thereto, to the Premises (other than interior, non-structural
alterations costing less than Twenty-Five Thousand Dollars ($25,000) in a
given instance) without the prior written consent of Landlord, which consent
shall not be unreasonably withheld or delayed and shall be deemed to be given
unless Landlord shall deliver to Tenant written notice of disapproval within
fifteen (15) days of receipt of Tenant's notice or request.  All such
alterations, additions and improvements shall be completed with due diligence
in a first-class workmanlike manner, and if Landlord's consent is required as
above, in compliance with plans and specifications approved in writing by
Landlord, and in compliance with all applicable laws, ordinances, rules and
regulations and to the extent Landlord's consent is not otherwise required
hereunder for such alterations, additions or improvements, Tenant shall give
prompt written notice thereof to Landlord for purposes of Paragraph 11.2
hereof.  In view of the requirement for first-class workmanship, any such
alterations, additions or improvements which involve the use of a contractor
or subcontractor shall be performed by a contractor or subcontractor that
employs skilled union labor, as further explained in Exhibit "K."

     Tenant shall cause any contractors engaged by Tenant for work on the
Property to maintain public liability and property damage insurance, naming
Landlord and to the extent available its partners, shareholders, agents,
property manager and employees as additional insureds, and shall furnish
Landlord with certificates of insurance or other evidence that such coverage
is in effect.  Notwithstanding any other provisions of this Paragraph 11.1,
under no circumstances shall Tenant make any structural alterations or
improvements, or any substantial changes to the roof or substantial equipment
installations on the roof, or any substantial changes or alterations to
building systems (other than the distribution portion thereof), without
Landlord's prior written consent.

     For any individual project costing more than Twenty-Five Thousand Dollars
($25,000.00), Tenant shall maintain, and shall provide copies to Landlord of,
all plans, specifications, drawings (including, particularly, "as-builts") of
any and all improvements, alterations, additions, renovations, repairs,
installations of fixtures or other equipment and the like; Landlord shall be
permitted to observe any and all such work by Tenant on the Property in
accordance with the requirements of Paragraph 16.1.  For purposes of this
Paragraph 11, the term "building systems" shall refer to the central plant
portions of the mechanical, electrical and heating, ventilation and air
conditioning systems of the Initial Building.  Notwithstanding any provision
herein to the contrary, at the termination or expiration of this Lease, Tenant
shall provide Landlord with final, as-built, plans, specifications and
drawings of all alternations effected by Tenant.

     11.2  Title To Alterations.  All alterations, additions and
           --------------------
improvements installed in, on or about the Property shall be part of the
Improvements and the property of Landlord, unless Landlord elects at the time
Tenant requests consent to require Tenant to remove the same upon the
termination of this Lease; provided, however, that the foregoing shall not
apply (i) to Tenant's equipment, furniture and trade fixtures, or (ii) to
any of the Interior Improvements (as defined in Exhibit C hereto), or any
subsequent improvements installed by Tenant at its own expense, which are
movable without material damage, are not an integral part of the

                                  26
<PAGE>


Initial Building's structure or interior architectural improvements, and are
not an integral part of the Initial Building's HVAC, plumbing or electrical
systems or other standard operating systems.  All of such items described in
clause (i) or (ii) of the preceding sentence (in all events including, but
not limited to, lab benches, fume hoods and cold rooms) may (and, if duly
elected by Landlord hereunder, shall) be removed by Tenant prior to or upon
the termination of this Lease.  Tenant shall promptly repair any damage
caused by its removal of any such improvements.  Notwithstanding anything to
the contrary contained herein, in no event shall Landlord have the right to
require Tenant to remove any of the Interior Improvements.

     11.3  Tenant Fixtures.  Notwithstanding the provisions of Paragraph 11.1
           ---------------
and 11.2, Tenant may install, remove and reinstall equipment, furniture and
trade fixtures without Landlord's prior written consent, except that any
fixtures which are affixed to the Property or which affect the exterior or
structural portions of the Initial Building or the building systems shall
require Landlord's written approval.  The foregoing shall apply to Tenant's
signs, logos and insignia, all of which Tenant shall have the right to place
and remove and replace (a) only with Landlord's prior written consent as to
location, size and composition, which consent shall not be unreasonably
withheld or delayed, and (b) only in compliance with all restrictions and
requirements of applicable law and of any Existing CC&Rs applicable to the
Property.  Notwithstanding the foregoing, Tenant shall have the right, in it
sole discretion, to direct Landlord to remove Tenant's signage at the
expiration or earlier termination of this Lease.  Tenant shall remove all
such trade fixtures, signs, logos and insignia prior to or at the expiration
or earlier termination of the term of this Lease.  Tenant shall immediately
repair any damage caused by installation and removal of fixtures under this
Paragraph 11.3.  Landlord waives any Landlord's lien on any equipment,
furnishings, trade fixtures, inventory or other personal property of Tenant;
provided, however, that Landlord retains its lien and all rights it has
hereunder, at law or in equity with respect to any item in which Landlord
expressly has ownership rights under this Lease.

     11.4  No Liens.  Tenant shall at all times keep the Property free from
           --------
all liens and claims of any contractors, subcontractors, materialmen,
suppliers or any other parties employed either directly or indirectly by
Tenant in construction work on the Property.  Tenant may contest any claim of
lien, but only if, prior to such contest, Tenant either (i) posts security in
the amount of the claim, plus estimated costs and interest, or (ii) records a
bond of a responsible corporate surety in such amount as may be required to
release the lien from the Property.  Tenant shall indemnify, defend and hold
Landlord harmless against any and all liability, loss, damage, cost and other
expenses, including, without limitation, reasonable attorneys' fees, arising
out of claims of any lien for work performed or materials or supplies
furnished at the request of Tenant or persons claiming under Tenant.

     11.5  Signs.  Without limiting the generality of the provisions of
           -----
Paragraph 11.3 hereof, Tenant shall have the exclusive right to display only
its sign on the Site and on the Initial Building, subject to Landlord's prior
approval as to location, size and composition (which approval shall not be
unreasonably withheld or delayed) and subject to all restrictions and
requirements of applicable law and of any Existing CC&Rs applicable to the
Property.  Subject to the conditions concerning the foregoing, Tenant may
also erect a monument sign containing its name at the entry to the Site as
part of Landlord's Work.  Landlord shall use its reasonable best efforts to
obtain the necessary governmental or administrative approvals in order to
allow Tenant to have its name on the Building, subject to Landlord's approval
of signage as provided herein.

                     12.  MAINTENANCE AND REPAIRS
                          -----------------------

     12.1  Landlord's Work.  Landlord shall repair and maintain or cause to be
           ---------------
repaired and maintained the roof, exterior walls and other structural portions
of the Initial Building, the parking areas, driveways and paved areas outside
the Initial Building.  The actual cost of all work performed by Landlord under
this Paragraph 12.1 shall be included in Operating Expenses hereunder, except
to the extent such work (i) is required due to the negligence of Landlord, or
(ii) that portion of any expense that is an Excluded Expense.

     12.2  Tenant's Obligation For Maintenance.
           -----------------------------------

           (a)   Good Order, Condition And Repair.  Except as provided in
                 --------------------------------
Paragraph 12.1

                                  27
<PAGE>
hereof, Tenant at its sole cost and expense shall keep and maintain in good
and sanitary order, condition and repair the Property and every part thereof,
wherever located (normal wear and tear, damage and destruction by casualty
and condemnation excepted) the nonstructural portions of the Initial
Building, including but not limited to signs, interior, ceiling, electrical
system, plumbing system, life safety and telephone and communications systems
of the Initial Building, the HVAC equipment and related mechanical systems
serving the Initial Building (for which equipment and systems Tenant shall
enter into a service contract with a person or entity designated or approved
by Landlord), the items referred to in Paragraph 9.2(b) hereof, all doors,
door checks, windows, plate glass, door fronts, plumbing and sewage and
other utility facilities, fixtures, lighting, wall surfaces, floor surfaces
and ceiling surfaces of the Initial Building under or within the Initial
Building and all other interior repairs, foreseen and unforeseen, with
respect to the Initial Building, as required.

           (b)   Remedy.  If either party, after notice from the other, fails
                 ------
to promptly commence and thereafter proceed with reasonable diligence to
complete any material repairs, maintenance, or replacements which are the
obligation of such party hereunder, such failure shall be deemed a material
default by such party under this Lease and the other party shall have the
right, but shall not be required, to enter the Property and perform such work.
Immediately on demand from performing party, the cost of such repairs shall
be due and payable by the defaulting party.  In the event of the reasonable
possibility of immediate injury to person or substantial harm to property,
either party may proceed to effect necessary repairs on an emergency basis,
providing notice to the other party as promptly as possible; in all other
circumstances, the party with the obligation to effect repair shall be
provided with written notice specifying a reasonable amount of time in which
to commence such repair, and such obligated party shall proceed with the
repairs with due diligence.

           (c)   Condition Upon Surrender.  At the expiration or earlier
                 ------------------------
termination of this Lease, in addition to any other obligations of Tenant
with respect to surrender and vacation of the Property in Paragraphs 2.6,
11.2, 13.5, 17.1 and 17.2.  Tenant shall surrender the Property, including
any additions, alterations and improvements thereto, in good and sanitary
order, condition and repair, ordinary wear and tear, damage and destruction
by casualty and condemnation excepted, first, however, removing all goods and
effects of Tenant and all and fixtures and items required to be removed
pursuant to this Lease (including, but not limited to, any such removal
required as a result of an election by Landlord to require such removal as
contemplated in Paragraph 11.2), and repairing any damage caused by such
removal.  At least thirty (30) days before the expiration or sooner
termination of this Lease, Landlord and Tenant shall conduct a walk-through
inspection of the Site and shall effect a preliminary identification of items
which Tenant is required to repair.  Within seven (7) days after the date
that Tenant shall vacate the Premises, Landlord and Tenant shall conduct
another walk-through inspection of the Site and shall update, and
appropriately modify, the list of items requiring repair (including, repairs
on the initial list which were not completed and any repairs newly added).
Upon delivery to Tenant of such list, Tenant shall elect either (i) to effect
such repairs at Tenant's expense, or (ii) to request Landlord to effect such
repairs at Tenant's expense.  Upon completion of all of such repairs to
Landlord's reasonable satisfaction, Tenant shall have no further obligations
to Landlord hereunder, except with respect to environmental matters specified
in Paragraph 13.5 hereof and with respect to conditions that are not
susceptible of discovery by a reasonably diligent and thorough, but non-
invasive, investigation.  Tenant expressly waives any and all interest in any
fixtures and building systems (and their components), and in any personal
property and trade fixtures not removed from the Property by Tenant at the
expiration or termination of this Lease, agrees that any such personal
property and trade fixtures may, at Landlord's election, be deemed to
have been abandoned by Tenant, and authorizes Landlord (at its election and
without prejudice to any other remedies under this Lease or under applicable
law) to remove and either retain, store or dispose of such property at
Tenant's cost and expense, and Tenant waives all claims against Landlord for
any damages resulting from any such removal, storage, retention or disposal.
The provisions of Paragraph 13.5(c) shall also apply.


                         13.  USE OF PROPERTY
                              ---------------

     13.1  Permitted Use.  Subject to Paragraphs 13.3 and 13.4 hereof, Tenant
           -------------
shall use the Property solely as a medical and biological research lab with
light production and manufacturing,

                                  28
<PAGE>


together with administrative, office and storage uses and for any other
purpose in accordance with the Scientific Research Zoning Ordinance of the
City of San Diego and the Torrey Pines Science Center Planned Industrial
Development, and for no other purpose without Landlord's written consent
(not to be unreasonably withheld or delayed).

     13.2  No Nuisance.  Tenant shall not use the Property for or carry on or
           -----------
permit upon the Property or any part thereof any nuisance, nor commit or
allow to be committed any waste in, on or about the Property.  Tenant shall
not do or permit anything to be done in or about the Property, nor bring nor
keep anything therein, which is not appropriate as a permitted use and will
in any way cause the Property to be uninsurable with respect to the insurance
required by this Lease.

     13.3  Compliance With Laws.  Tenant shall not use the Property or permit
           --------------------
the Property to be used in whole or in part for any purpose or use that is in
violation of any applicable laws, ordinances, regulations or rules of any
governmental agency or public authority.  Tenant shall keep the Property
equipped with all safety appliances required by law, ordinance or insurance
on the Property, or any order or regulation of any public authority, because
of Tenant's particular use of the Property.  Tenant shall procure all
licenses and permits required for its particular use of the Property.  Tenant
shall use the Property in accordance with all applicable ordinances, rules,
laws and regulations and shall comply with all requirements of all
governmental authorities now in force or which may hereafter be in force
pertaining to its particular use of the Property, including, without
limitation, regulations applicable to noise, water, soil and air pollution,
and making such nonstructural alterations and additions thereto as may be
required from time to time by such laws, ordinances, rules, regulations and
requirements of governmental authorities or insurers of the Property
(collectively, "Requirements") because of Tenant's construction of
improvements in or its particular use of the Property.  Any structural
alterations or additions required from time to time by applicable Requirements
because of Tenant's construction of improvements in or other particular use of
the Property shall be made by Tenant, at Tenant's sole cost and expense, in
accordance with the procedures and standards set forth in Paragraph 11.1 for
alterations by Tenant and upon prior written notice to Landlord.  The judgment
of any court, or the admission by Landlord or Tenant in any proceeding against
Landlord or Tenant, that Landlord or Tenant has violated any law, statute,
ordinance or governmental rule, regulation or requirement shall be conclusive
of such violation as between Landlord and Tenant.

     13.4  Liquidation Sales.  Tenant shall not conduct or permit to be
           ------------------
conducted any auction, bankruptcy sale, liquidation sale, or going out of
business sale, in, upon or about the Property, whether said auction or sale
be voluntary, involuntary or pursuant to any assignment for the benefit of
creditors, or pursuant to any bankruptcy or other insolvency proceeding.

     13.5  Environmental Matters.
           ---------------------

           (a)   For purposes of this Paragraph, "hazardous substance" shall
mean the substances included within the definitions of the term "hazardous
substance" under (i) the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et seq., and the
regulations promulgated thereunder, as amended, (ii) the California
Carpenter-Presley-Tanner Hazardous Substance Account Act, California Health &
Safety Code Section 25300 et seq., and regulations promulgated thereunder, as
amended, (iii) the Hazardous Materials Release Response Plans and Inventory
Act, California Heath & Safety Code Section 25500 et seq., and regulations
promulgated thereunder, as amended, and (iv) petroleum; "hazardous waste"
shall mean (i) any waste listed as or meeting the identified characteristics
of a "hazardous waste" under the Resource Conservation and Recovery Act of
1976, 42 U.S.C. Section 6901 et seq., and regulations promulgated pursuant
thereto, as amended (collectively, "RCRA"), (ii) any waste meeting the
identified characteristics of "hazardous waste;" "extremely hazardous waste"
or "restricted hazardous waste" under the California Hazardous Waste Control
Law, California Health & Safety Code Section 25100 et seq., and regulations
promulgated pursuant thereto, as amended (collectively, the "CHWCL"), and/or
(iii) any waste meeting the identified characteristics of "medical waste"
under California Health & Safety Code Sections 25015-25027.8, and regulations
promulgated thereunder, as amended; and "hazardous waste facility" shall
mean a hazardous waste facility as defined under the CHWCL.

                                  29
<PAGE<


           (b)   Without limiting the generality of the obligations set forth
in Paragraph 13.3 of this Lease:

                 (i)    Tenant covenants not to cause or permit any hazardous
substance or hazardous waste to be brought upon, kept, stored or used in or
about the Property without the prior written consent of Landlord, which
consent shall not be unreasonably withheld or delayed and shall be deemed to
be given unless Landlord shall deliver to Tenant written notice of disapproval
within ten (10) days of receipt of Tenant's notice or request, which notice
or request shall include written evidence of Tenant's compliance with any
permit process with which Tenant is required to comply, including without
limitation, submission of MSDS's, and except that Tenant, in connection with
its permitted use of the Property as provided in Paragraph 13.1, may keep,
store and use materials that constitute hazardous substances which are
customary for such permitted use, provided such hazardous substances are
kept, stored and used in quantities which are customary for such permitted
use and are kept, stored and used in full compliance with clauses (ii) and
(iii) immediately  below.

                 (ii)   Tenant covenants that it will comply with all
applicable laws, rules, regulations, orders, permits, licenses and operating
plans of any governmental authority with respect to the receipt, use,
handling, generation, transportation, storage, treatment and/or disposal of
hazardous substances or wastes by Tenant or its agents or employees, and
Tenant will provide Landlord with copies of all permits, licenses,
registrations and other similar documents that authorize Tenant to conduct
any such activities in connection with its authorized use of the Property on
the Commencement Date or later initial receipt thereof and annually thereafter.

                 (iii)  Tenant agrees that it shall not (A) operate on or
about the Property any facility required to be permitted or licensed as a
hazardous waste facility or for which interim status as such is required, nor
(B) conduct any other activities on or about the Property that could result
in the Property being deemed to be a "hazardous waste facility" (including,
but not limited to, any storage or treatment of hazardous substances or
hazardous wastes which could have such a result).

                 (iv)   Tenant agrees to comply with all applicable laws,
rules, regulations, orders and permits relating to underground storage tanks
installed by Tenant or its agents or employees (including any installation,
monitoring, maintenance, closure and/or removal of such tanks) as such tanks
are defined in California Health & Safety Code Section 25281(x), including,
without limitation, complying with California Health & Safety Code Section
25280-25299.7 and the regulations promulgated thereunder, as amended.  Tenant
shall furnish to Landlord copies of all registrations and permits issued to
or held by Tenant from time to time for any and all underground storage tanks.

                 (v)    If applicable, Tenant shall provide Landlord in
writing the following information and/or documentation at the commencement of
this Lease and within sixty (60) days of any change in or addition to the
required information and/or documentation (provided, however, that in the
case of the materials described in Paragraphs (A), (B), (C) and (E) below,
Tenant shall not be required to deliver copies of such materials to Landlord
but shall maintain copies of such materials to such extent and for such
periods as may be required by applicable law and shall permit Landlord or its
representatives to inspect such materials during normal business hours at any
time and from time to time upon reasonable notice to Tenant):

                        (A)  A list of all hazardous substances and/or wastes
that Tenant receives, uses, handles, generates, transports, stores, treats or
disposes of from time to time in connection with its operations on the
Property.

                        (B)  All Material Safety Data Sheets ("MSDS's"), if
any, required to be completed with respect to operations of Tenant at the
Property from time to time in accordance with Title 26, California Code of
Regulations Section 8-5194 or 42 U.S.C. Section 11021, or any amendments
thereto, and any Hazardous Materials Inventory Sheets that detail the MSDS's.

                        (C)  All hazardous waste manifests (as defined in
Title 26, California Code of Regulations Section 22-66481), if any, that
Tenant is required to complete from time to time in connection with its
operations at the Property.

                                 30
<PAGE>


                        (D)  A copy of any Hazardous Materials Management Plan
required from time to time with respect to Tenant's operations at the Property,
pursuant to California Health & Safety Code Section 25500 et seq., and any
regulations promulgated thereunder, as amended.

                        (E)  Copies of any Contingency Plans and Emergency
Procedures required of Tenant from time to time due to its operations in
accordance with Title 26, California Code of Regulations Section 22-67140 et
seq., and any amendments thereto, and copies of any Training Programs and
Records required under Title 26, California Code of Regulations, Section
22-67105, and any amendments thereto.

                        (F)  Copies of any biennial reports required to be
furnished to the California Department of Health Services from time to time
relating to hazardous substances or wastes, pursuant to Title 26, California
Code of Regulations, Section 22-66493, and any amendments thereto.

                        (G)  Copies of all industrial wastewater discharge
permits issued to or held by Tenant from time to time in connection with its
operations on the Property.

                        (H)  Copies of any other lists or inventories of
hazardous substances and/or wastes on or about the Property that Tenant is
otherwise required to prepare and file from time to time with any
governmental or regulatory authority.

                 (vi)   Tenant shall secure Landlord's prior written approval
for any proposed receipt, storage, possession, use, transfer or disposal of
"radioactive materials" or "radiation," as such materials are defined in Title
26, California Code of Regulations Section 17-30100, and/or any other
materials possessing the characteristics of the materials so defined, which
approval Landlord may withhold in its sole and absolute discretion; provided,
that such approval shall not be required for any radioactive materials for
which Tenant has secured prior written approval of the Nuclear Regulatory
Commission and delivered to Landlord a copy of such approval, nor for any
materials in such quantities set forth on Exhibit I hereof.  Tenant, in
connection with any such authorized receipt, storage, possession, use,
transfer or disposal of radioactive materials or radiation, shall:

                        (A)  Comply with all federal, state and local laws,
rules, regulations, orders, licenses and permits;

                        (B)  Maintain, to such extent and for such periods as
may be required by applicable law, and permit Landlord or its representatives
to inspect during normal business hours at any time and from time to time upon
reasonable notice to Tenant, a list of all radioactive materials or radiation
received, stored, possessed, used, transferred or disposed of from time to
time, to the extent not already disclosed through delivery of a copy of a
Nuclear Regulatory Commission approval with respect thereto as contemplated
above; and

                        (C)  Maintain, to such extent and for such periods as
may be required by applicable law, and permit Landlord or its representatives
to inspect during normal business hours at any time and from time to time upon
reasonable notice to Tenant, all licenses, registration materials, inspection
reports, governmental orders and permits in connection with the receipt,
storage, possession, use, transfer or disposal of radioactive materials or
radiation from time to time.

                 (vii)  Tenant agrees to comply with any and all applicable
laws, rules, regulations and orders of any governmental authority with
respect to the release into the environment of any hazardous wastes or
substances or radiation or radioactive materials by Tenant or its agents or
employees.  Tenant agrees to give Landlord immediate verbal notice of any
release in violation of applicable laws of any such hazardous wastes or
substances or radiation or radioactive materials into the environment, and to
follow such verbal notice with written notice to Landlord of such release
within twenty-four (24) hours of the time at which Tenant became aware of
such release.

                 (viii) Tenant shall indemnify, defend and hold Landlord
harmless from and against any and all claims, losses (including, but not
limited to, loss of rental income), damages, liabilities, costs, legal fees
and expenses of any sort arising out of or relating to (A) any failure by
Tenant to comply with any provisions of this Paragraph 13.5(b), or (B) any
receipt, use handling, generation, transportation, storage, treatment,
release and/or disposal of any hazardous substance or waste or any radioactive
material or radiation on or about the Property in connection with Tenant's
use or occupancy of the Property or as a result of any intentional or
negligent acts or omissions of Tenant or of any agent or employee of Tenant
whether discovered prior to or after the expiration or earlier termination of
this Lease.  Landlord shall indemnify, defend and hold Tenant harmless from
and against any and all claims, losses, damages, liabilities, costs, legal fees
and expenses of any sort arising out of or relating to (A) the existence of
any "hazardous substance" on the Property at the Actual Tender Date, or (B)
the introduction of any "hazardous substance" by Landlord, its agents or
employees onto the Property after the Actual Tender Date.

                 (ix)   Tenant agrees to cooperate with Landlord in
furnishing Landlord with complete information regarding Tenant's receipt,
handling, use, storage, transportation, generation, treatment and/or disposal
of any hazardous substances or wastes or radiation or radioactive materials.
Upon request, Tenant agrees to grant Landlord, subject to Paragraph 16.1,
reasonable access at reasonable times to the Property to inspect Tenant's
receipt, handling, use, storage, transportation, generation, treatment and/or
disposal of hazardous substances or wastes or radiation or radioactive
materials, without being deemed guilty of any disturbance of Tenant's use or
possession and without being liable to Tenant in any manner.

                 (x)    Notwithstanding Landlord's rights of inspection and
review under this Paragraph 13.5(b), Landlord shall have no obligation or
duty to so inspect or review, and no third party shall be entitled to rely on
Landlord to conduct any sort of inspection or review by reason of the
provisions of this Paragraph (b).

                 (xi)   If Tenant receives, handles, uses, stores, transports,
generates, treats and/or disposes of any hazardous substances or wastes or
radiation or radioactive materials on or about the Property at any time during
the term of this Lease, then within thirty (30) days after termination or
expiration of this Lease, Tenant at its sole cost and expense shall obtain and
deliver to Landlord an environmental study, performed by an expert selected by
Landlord and reasonably satisfactory to Tenant, evaluating the presence or
absence of hazardous substances and wastes, radiation and radioactive
materials on and about the Property.  Such study shall be based on a
reasonable and prudent level of tests and investigations of the Property which
tests shall be conducted no earlier than the date of termination or expiration
of this Lease.  Liability for any remedial actions required or recommended on
the basis of such study shall be that of Tenant unless any hazardous substance
discovered by such study existed on the Property at the Actual Tender Date or
was introduced onto the Property by Landlord, its agents or employees after
the Actual Tender Date.  Upon satisfactory completion by Tenant of (i) any
remedial actions required or recommended by such study and (ii) any remedial
or other action required by any governmental agency (including, without
limitation, any actions required pursuant to Paragraph 13.5(c) below), Tenant
shall be released of all liability to Landlord under this Paragraph 13.

           (c)   With respect to any environmental, hazardous substance or
similar matter for which Tenant is responsible and liable hereunder, Tenant
shall surrender possession of the Property in compliance with all federal,
state and local laws, rules, regulations and orders regarding environmental
condition and cleanup ("Environmental Laws") including, without limitation,
receiving any clearances and/or certifications verifying compliance with all
Environmental Laws.  In the event Tenant does not comply with the provisions
of this Paragraph 13.5(c) and deliver any necessary results and/or
certifications to Landlord and to any required governmental body, on the
expiration or earlier termination of this Lease, Tenant shall be held to the
terms of this Lease and required to pay Rent and shall be otherwise subject to
the holdover provisions in Paragraph 2.6 except Tenant shall only be obligated
to pay Rent at 110% of Basic Annual Rental; provided, however, that Tenant
shall only be obligated to pay any Rent for such period of time that Landlord
is prevented, by reason of Tenant's having not yet fully complied with the
certification requirements hereof, from effecting improvements, modifications
and

                                  32
<PAGE>


repairs required by a written lease of the Premises.  Notwithstanding the
foregoing, from the date, if any, upon which the only outstanding results
and/or certifications remaining to be delivered to Landlord upon expiration
or earlier termination of this Lease are informational and not substantive,
then Tenant shall no longer be subject to the holdover provisions hereof.
Further, Tenant shall indemnify, defend and hold Landlord harmless from and
against any and all claims, losses, damages, liabilities, costs, legal fees
and expenses of any sort arising out of or relating to Tenant's failure to
effect the clean up, and assessments, and to obtain the clearances and
certifications required by this Paragraph.  If Tenant shall vacate the
Property without having effected such clean up and obtained such clearances
and certifications, then Landlord may obtain same at Tenant's cost;
Landlord's action in such regard shall not eliminate Tenant's liability to
pay for same or to pay Rent as a holdover under the conditions specified in
this Paragraph 13.5(c).

                    14.  INSURANCE AND INDEMNITY
                         -----------------------

     14.1  Liability and Property Insurance.
           --------------------------------

           (a)   Landlord shall procure and maintain in full force and effect at
all times during the term of this Lease, at Landlord's cost and expense (but
reimbursable as an Operating Expense under Paragraph 9.2 hereof), with such
deductibles as Landlord reasonably elects, commercial general liability
insurance to protect against liability arising out of or related to the use of
or resulting from any accident occurring in, upon or about the Property, with
combined single limit of liability of not less than Five Million Dollars
($5,000,000) per occurrence for bodily injury and property  damage.

           (b)   Landlord shall procure and maintain in full force and effect
at all times during the term of this Lease, at Landlord's cost and expense
(but reimbursable as an Operating Expense under Paragraph 9.2 hereof), fire
and extended coverage, boiler and machinery insurance for the Building Shell
(as defined in Exhibit C), Core, Interior Improvements and for the improvements
in the Outside Areas of the Property on a full replacement cost basis, and for
the Tenant Improvements in an amount not less than the total amount
contributed by Landlord toward the payment for the Interior Improvements
pursuant to Exhibit C.  Landlord's insurance may include earthquake, flood,
environmental, excess umbrella liability, brush fire and land slide coverage
to the extent Landlord reasonably elects to carry such coverage, and shall
have such deductibles and other terms as Landlord reasonably determines to be
appropriate.  Except as expressly set forth in this Paragraph (b), Landlord
shall have no obligation to insure the Tenant Improvements and shall, in all
events, have no obligation to insure any other alterations, additions or
improvements installed by Tenant on or about the Property.  In addition to the
foregoing, and not by way of limitation, Landlord shall have the right to
procure and maintain any additional insurance coverage Landlord reasonably
deems appropriate at any time during the term of the Lease, at Landlord's cost
and expense (but reimbursable as an Operating Expense under Paragraph 9.2
hereof).  Landlord shall consult with Tenant on an annual basis regarding the
insurance coverage for the Property to be maintained by Landlord, and Landlord
and Tenant agree to reasonably cooperate to obtain cost-effective coverage;
provided, however, that, in no circumstances shall the coverages be reduced
without Landlord's consent.

           (c)   Tenant, at Tenant's sole cost and expense, shall obtain and
keep in force during the Term:

                 (i)    commercial general liability insurance, including
contractual liability and products/completed operations liability, covering
the legal liability of Tenant against claims for bodily injury, death or
property damage, occurring on, in or about the Property and the adjoining land,
in the minimum combined single limit amount of $1,000,000 with respect to any
one occurrence.

                 (ii)   worker's compensation insurance and employer's
liability insurance (with a minimum limit of $500,000) covering all liability
imposed under the provisions of any worker's compensation law, employer's
liability act or similar laws of the State of California that may at any
time or from time to time be enacted;

                                  33
<PAGE>


                 (iii)  insurance covering all contents, and Tenant's trade
fixtures, machinery, equipment, furniture and furnishing in the Property to the
extent of at least 90% of their replacement cost under Special Form standard
fire and extended coverage insurance, including, without limitation,
vandalism and malicious mischief and sprinkler leakage endorsements, and
shall provide for a deductible not to exceed $10,000.00;

                 (iv)   special form, business interruption or extra expense
insurance; and

                 (v)    catastrophe excess - Umbrella liability insurance in
the amount of $10,000,000 with respect to the risks referred to in Paragraph
14.1(c)(i).

           Tenant's insurance shall be written under policies issued by
insurers reasonably acceptable to Landlord.  Tenant's commercial general
liability policy and its excess policies shall include an endorsement naming
Landlord, its partners, beneficiaries, agents and employees as additional
insureds.  Tenant's insurance shall be primary.

           (d)   All policies of property insurance carried under Paragraphs
(b) and (c) of this Paragraph 14.1 shall provide protection against "all
perils of direct physical damage" (as detailed in the Insurance Services
Office commercial property program "Cause of Loss - Special Form CP1030" or
its equivalent) on all insured property.  Replacement cost for purposes hereof
shall be determined according to insurance industry standards.  Such insurance
policies (i) shall be written by companies rated B+ or better, with a
financial rating of not less than Class VII, in Best's Insurance Guide, and
authorized to do business in California; (ii) shall be written to apply to
covered property damage and other covered loss occurring during the policy
term, or the onset of which occurred or arose during such policy term; (iii)
shall provide that the respective coverages shall be primary and not
contributing with or in excess of any coverage that the other party may carry;
(iv) shall be endorsed to Landlord with not less than thirty (30) days' notice
of cancellation; and (v) in the case of policies carried or required to be
carried by Tenant, shall provide for a deductible of not to exceed $10,000
(except in the case of earthquake coverage).  Each party shall deliver to the
other party, on or before the Commencement Date, and thereafter at least ten
(10) days before the expiration dates of expiring policies, certificates of
insurance or other satisfactory evidence of the continuation of such property
insurance coverage for the period indicated therein.  If either party fails to
procure property insurance or to deliver certificates or other evidence
thereof as required hereunder, the other party may, at its option and in
addition to the other party's other remedies in the event of a default
hereunder, procure the same for the benefit of such party.  If, pursuant to
the foregoing sentence, Tenant secures such insurance on Landlord's behalf,
Tenant shall not be entitled to reimbursement of cost thereof; if Landlord
secures such insurance on Tenant's behalf, Tenant shall reimburse Landlord for
the cost thereof within ten (10) business days after receipt of Landlord's
invoice therefor.

     14.2  Waiver Of Subrogation.  Landlord and Tenant each waive any right to
           ---------------------
recover against the other (i) damage to property, (ii) damage to the Property
or any part thereof, or (iii) claims arising by reason of any of the fore-
going, but only to the extent that any of the foregoing damages and claims
under subparts (i)-(iii) hereof are covered, and only to the extent of such
coverage, by insurance actually carried or required to be carried hereunder
by either Landlord or Tenant.  This provision is intended to waive fully, and
for the benefit of each party, any rights and claims which might give rise to
a right of subrogation in any insurance carrier.  Each party shall procure a
clause or endorsement on any property insurance policy denying to the insurer
rights of subrogation against the other party to the extent rights have been
waived by the insured prior to the occurrence of injury or loss.  Coverage
provided by insurance maintained by Tenant shall not be limited, reduced or
diminished by virtue of the subrogation waiver herein contained.

     14.3  Increase In Premiums.  If Tenant uses or permits the Property to
           --------------------
be used in a manner that is not a permitted use and which increases the
existing rate of any insurance on the Property carried by Landlord, Tenant
shall pay the amount of the increase in premium caused thereby, and
Landlord's costs of obtaining other replacement insurance policies, including
any increase  in premium, within twenty (20) days after demand therefor by
Landlord.

     14.4  Indemnification.
           ---------------

                                 34
<PAGE>


           (a)   Tenant shall indemnify, defend by counsel reasonably
acceptable to Landlord and hold Landlord, its partners, shareholders, officers,
directors, agents and employees harmless from any and all liability for bodily
injury to or death of any person, or loss of or damage to the property of
persons, and  all actions, claims, demands, costs (including, but not limited
to, reasonable attorneys' fees), damages or expenses arising therefrom which
may be brought or made against Landlord or which Landlord may pay or incur to
the extent such liabilities or other matters arise by reason of the use,
occupancy and enjoyment of the Property by Tenant or any invitees, sublessees,
agents or employees of Tenant from any cause whatsoever other than negligence
or willful misconduct or omission by Landlord, its agents or employees,
contractors or Landlord's breach of this Lease.  Landlord, its partners,
shareholders, officers, directors, agents and employees shall not be liable
for, and Tenant hereby waives all claims against such persons for damages to
goods, wares and merchandise in or upon the Property, or for injuries to
Tenant, its agents or third persons in or upon the Property, from any cause
whatsoever other than negligence or willful misconduct or omission by
Landlord, its agents or employees or contractors or Landlord's breach of this
Lease.  Tenant shall give prompt notice to Landlord of any casualty or
accident in, on or about the Property.

           (b)   Landlord shall indemnify, defend by counsel reasonably
acceptable to Tenant and hold Tenant, its shareholders, officers, directors,
agents and employees harmless from liability for bodily injury to or death of
any person, or loss of or damage to the property of persons, and all actions,
claims, demands, costs (including, but not limited to, reasonable attorneys'
fees), damages or expenses arising therefrom which may be brought or made
against Tenant or which Tenant may pay or incur, to the extent such liabilities
or other matters arise by reason of any negligence or willful misconduct or
omission by Landlord, its agents or employees or contractors or Landlord's
breach of this Lease including matters that arise (a) from the use of other
Parcels by Landlord, its agents, employees or contractors and (b) from the
performance by Landlord, its agents, employees or contractors of repair
obligations it is required or elects to perform hereunder.

     14.5  Blanket Policy.  Any policy required to be maintained hereunder by
           --------------
Landlord or Tenant may be maintained under a so-called "blanket policy"
insuring other parties and other locations so long as the amount of insurance
required to be provided hereunder is not thereby diminished.  The cost of
blanket policies maintained by Landlord shall be allocated to all property
covered thereby and Operating Expenses shall only include costs thereof
reasonably allocated to the Property.

                   15.  SUBLEASE AND ASSIGNMENT
                        -----------------------

     15.1  Assignment And Sublease Of Property.  Tenant shall not have the
           -----------------------------------
right or power to assign its interest in this Lease, or make any sublease of
the Property or any portion thereof, nor shall any interest of Tenant under
this Lease be assignable involuntarily or by operation of law, without on
each occasion obtaining the prior written consent of Landlord, which consent
shall not be unreasonably withheld or delayed; provided, however, that
Landlord may condition its consent upon receipt of a reasonably acceptable
agreement from any sublessee or assignee including, but not limited to, the
following provisions: (1) sublessee or assignee is bound by this Lease and
agrees that its sublease or assignment is subordinate hereto; and (2) Tenant
and sublessee or assignee agree that, upon written request of Landlord, after
a default by Tenant under this Lease and expiration of all applicable notice
and cure periods, all amounts payable under the sublease or assignment shall
be paid to Landlord for appropriate distribution and division between
Landlord and Tenant.  Further, Tenant shall provide such information
concerning any proposed subtenant or assignee as Landlord may reasonably
request, including, but not limited to, financial statements, and a list of
officers, directors, shareholders, partners, or members.  Notwithstanding any
subletting or assignment, Tenant shall remain fully and primarily liable for
the payment of all rental and other sums due, or to become due hereunder, and
for the full performance of all other terms, conditions, and covenants to be
kept and performed by Tenant under this Lease.  Any purported sublease or
assignment of Tenant's interest in this Lease requiring but not having
received Landlord's consent thereto shall be void.  Notwithstanding anything
to the contrary contained herein, the following events shall not require
Landlord's consent if the use of the proposed subtenant or assignee is within
the permitted uses specified in Paragraph 13.1: (i) any assignment and/or
sublease to any parent, subsidiary or

                                 35
<PAGE>


affiliated company of Tenant; (ii) any assignment of this Lease to any company
which purchases all or substantially all of the assets of Tenant; (iii) any
assignment of this Lease in conjunction with any merger, consolidation, or
similar transaction involving Tenant or any parent, subsidiary or affiliated
company of Tenant; or (iv) any assignment of this Lease to any partnership,
limited liability company or corporation in which Tenant has at least a fifty
percent (50%) equity interest.  If Landlord does not disapprove any proposed
assignment or sublease within fifteen (15) business days after Tenant's
request for consent, Landlord shall be irrevocably deemed to have approved
such sublease or assignment.

     15.2  Rights Of Landlord.  Consent by Landlord to one or more assignments
           ------------------
of this Lease, or to one or more sublettings of the Property or any portion
thereof, or collection of Rent by Landlord from any assignee or sublessee,
shall not operate to exhaust Landlord's rights under this Paragraph 15, nor
constitute consent to any subsequent assignment or subletting.  No assignment
of Tenant's interest in this Lease and no sublease shall relieve Tenant of
its obligations hereunder, notwithstanding any waiver or extension of time
granted by Landlord to any assignee or sublessee, or the failure of Landlord
to assert its rights against any assignee or sublessee, and regardless of
whether Landlord's consent thereto is given or required to be given hereunder.
In the event of a default by any assignee, sublessee or other successor of
Tenant in the performance of any of the terms or obligations of Tenant under
this Lease, Landlord may proceed directly against Tenant without the necessity
of exhausting remedies against any such assignee, sublessee or other
successor.  In addition, Tenant immediately and irrevocably assigns to Land-
lord, as security for Tenant's obligations under this Lease, all rent from
any subletting of all or a part of the Property as permitted under this Lease,
and Landlord, as Tenant's assignee and as attorney-in-fact for Tenant, or any
receiver for Tenant appointed on Landlord's application, may collect such
rent and apply it toward Tenant's obligations under this Lease; except that,
until the occurrence of a default by Tenant and the expiration of any
applicable notice and cure period, Tenant shall have the right to collect
such rent and to share equally with Landlord any sublease rents.  In the
event of a subletting or an assignment by Tenant to any person or entity
other than an entity as described in the last sentence of Paragraph 15.1
hereof, fifty percent (50%) of any amount of Rent which Tenant receives in
excess of the aggregate of Tenant's out-of-pocket expenses of the subleasing
or assigning and the Rent due hereunder, shall be paid over to Landlord on a
monthly basis.

     15.3  Notice of Proposed Assignment or Sublease.  Tenant shall, by notice
           -----------------------------------------
in writing, advise Landlord of its intention from, on and after a stated date
(which shall not be less than sixty (60) nor more than one hundred eighty
(180) days after the date of the giving of Tenant's notice to Landlord) to
assign this Lease or sublet all or any part of the Property for the balance
or any part of the term of this Lease, and, in such event, Landlord shall
have the right, to be exercised by giving written notice to Tenant within
fifteen (15) business days after its receipt of Tenant's notice, to approve
or reasonably disapprove the proposed sublease or assignment.  Tenant's
notice shall include the name and address of the proposed assignee or
subtenant, a true and complete copy of the proposed assignment or sublease
and sufficient information, as Landlord deems reasonably necessary, to permit
Landlord to determine (i) the financial responsibility and character and the
nature of the business of the proposed assignee or subtenant, and (ii) whether
Landlord has the right under this Lease to withhold consent to the proposed
assignment or sublease.

                 16.  RIGHT OF ENTRY AND QUIET ENJOYMENT
                      ----------------------------------

     16.1  Right Of Entry.  Landlord and its authorized representatives shall
           --------------
have the right to enter the Property at any time during the term of this
Lease during normal business hours and upon not less than two (2) business
days prior notice, except in the case of emergency (in which event no prior
notice shall be required and entry may be made at any time but Landlord shall
give Tenant notice as soon as possible after any such entry), for the purpose
of inspecting and determining the condition of the Property or for any other
proper purpose including, without limitation, to make repairs, replacements
or improvements which Landlord may deem reasonably necessary, to show the
Property to prospective purchasers, to show the Property to prospective tenants
(but only during the final year of the term of this Lease), and to post
notices of nonresponsibility.  Landlord shall not be liable for inconvenience,
annoyance, disturbance, loss of business, quiet enjoyment or other damage or
loss to Tenant by reason of making any repairs

                                 36
<PAGE>


or performing any work upon the Initial Building or the Property or by reason
of erecting or maintaining any protective barricades in connection with any
such work, and the obligations of Tenant under this Lease shall not thereby
be affected in any manner whatsoever, provided, however, Landlord shall use
reasonable efforts to minimize the inconvenience to Tenant's normal business
operations caused thereby.  Notwithstanding the foregoing, Landlord shall be
liable to Tenant for any damages incurred as a result of the negligence,
willful misconduct or breach of this Lease by Landlord or its agents,
employees and contractors in connection with any such entry.  In connection
with any entry by Landlord pursuant to this Paragraph 16.1 or any other
provision of this Lease, (a) Landlord shall use reasonable efforts to
minimize any interference with Tenant's use and enjoyment of the Property,
(b) Landlord shall give notice to Tenant as soon as reasonably possible if
Landlord enters the Property in connection with an emergency, (c) except in
cases of an emergency, Landlord shall not be authorized to enter Tenant's
clean room within the Property, (d) Landlord shall comply with all reasonable
requirements of Tenant in connection with any entry onto the Property,
including having all of Landlord's representatives and other parties wear
gowns and any other necessary safety equipment and complying with other
reasonable safety measures required by Tenant.  In addition, Tenant shall
have the right to require Landlord and any other parties entering the
Property to be escorted and supervised by a representative of Tenant.

     16.2  Quiet Enjoyment.  Landlord covenants that Tenant, upon paying the
           ---------------
Rent and performing its obligations hereunder and subject to all the terms
and conditions of this Lease, shall peacefully and quietly have, hold and
enjoy the Property throughout the term of this Lease, or until this Lease is
terminated as provided by this Lease.

                      17.  CASUALTY AND TAKING
                           -------------------

     17.1  Damage or Destruction.
           ---------------------

           (a)   If the Initial Building, or the Outside Areas of the Property
necessary for Tenant's use and occupancy of the Initial Building, are damaged
or destroyed in whole or in part under circumstances in which (i) repair and
restoration is permitted under applicable governmental laws, regulations and
building codes then in effect, and under any mortgage or the like encumbering
the Property, (ii) if the Lease has more than two (2) years remaining in the
Term, repair and restoration reasonably can be completed within a period of
nine (9) months following the date of the occurrence, (iii) if the Lease has
two (2) years or less remaining in the term, repair and restoration reasonably
can be completed within ninety (90) days following the date of the occurrence,
and (iv) insurance proceeds sufficient to reimburse Landlord for the cost of
such repair and restoration are available to Landlord, then Landlord, as to
Outside Areas and the Building Shell and Core, and Tenant, as to the Interior
Improvements (in which case Landlord shall make all insurance proceeds
relating thereto available to Tenant), shall commence and complete, with all
due diligence and as promptly as is reasonably practicable under the
conditions then existing, all such repair and restoration as may be required
to return the affected portions of the Property to the condition existing
immediately prior to the occurrence; all repairs, replacements, construction
and the like effected by Tenant shall receive the prior approval of Landlord
(which will not be unreasonably withheld or delayed), as to plans,
specifications, nature, scope, contractors, subcontractors and the like, and
shall be effected in compliance with the provisions of Paragraph 5.4 hereof.
In connection with any such reconstruction of the Interior Improvements,
Landlord shall use its commercially reasonable best efforts (including,
without limitation, any necessary negotiation or intercession with Landlord's
Lender, if any) to promptly make any proceeds of Landlord's property insurance
with respect to the Interior Improvements available to Tenant for such
reconstruction, subject only to such payment controls as Landlord and its
Lender and insurer, or any of them, may reasonably require in order to ensure
the proper application of such proceeds toward the reconstruction of the
Interior Improvements pursuant to this Paragraph 17.1.  In the event of damage
or destruction the repair of which is not permitted under applicable
governmental laws, regulations and building codes then in effect, if such
damage or destruction (despite being corrected to the extent then permitted
under applicable governmental laws, regulations and building codes) would
still materially and adversely affect Tenant's use of the Initial Building or
its ability to conduct its business in the Initial Building, then Tenant may
terminate this Lease as of the date of the occurrence by giving written
notice to the Landlord within thirty (30) days after receipt of written
notice from Landlord of such

                                  37
<PAGE>


restrictions; if Tenant does not timely elect such termination or if such
damage or destruction does not materially impair Tenant's use of the Initial
Building or its ability to conduct its business in the Initial Building, then
this Lease shall continue in full force and effect, except that there shall
be an equitable adjustment in monthly installments of Basic Annual Rent,
based upon the extent to which Tenant's use of the Initial Building or its
ability to conduct its business in the Initial Building is adversely
affected, and Landlord and Tenant respectively shall restore the Building
Shell and the Interior Improvements to a complete architectural whole and to
a functional condition.  In the event of damage or destruction which cannot
reasonably be repaired within nine (9) months following the date of the
occurrence then Tenant, at its election, may terminate this Lease as of the
date of the occurrence by giving written notice to Landlord within thirty
(30) days after receipt of written notice from Landlord of its estimate of
the time to repair (which estimate of time to repair shall be delivered to
Tenant within thirty (30) days after the date of the occurrence); if Tenant
does not timely elect such termination, then this Lease shall continue in
full force and effect and Landlord and Tenant shall each repair and restore
applicable portions of the Property in accordance with the first sentence of
this Paragraph 17.1.  Notwithstanding the foregoing, Landlord shall use its
best efforts to ensure, and if required by California law shall require,
that the repair of any damage or destruction and the use of all insurance
proceeds for such repair shall be permitted under any mortgage or the like
unless and to the extent the mortgagee's security is impaired.


           In the event of damage or destruction in the last two (2) years of
the term of the Lease which cannot reasonably be repaired within ninety (90)
days following the date of the occurrence and Tenant has not exercised its
option to extend the term of this Lease:

           (A)   Tenant may, by giving written notice to Landlord within
thirty (30) days after receipt of written notice from Landlord of its
estimate of the time to repair (which estimate shall be delivered to Tenant
within thirty (30) days after the date of the occurrence): (a) terminate this
Lease as of the date of the occurrence; or (b) exercise its option to extend
so long as Tenant can timely exercise within the time frame set out in
Paragraph 2.7 hereof.

           (B)   In the event Tenant elects to exercise its option to extend,
if available, then this Lease shall continue in full force and effect and
Landlord and Tenant shall each repair and restore applicable portions of the
Property in accordance with the first sentence of this Paragraph 17.1.

           (C)   In the event Tenant does not timely elect to terminate this
Lease or timely exercise its option to extend provided herein, Landlord shall
have the right to either: (a) terminate this Lease as of the date of the
occurrence or (b) elect to repair, in which event this Lease shall continue
in full force and effect and Landlord and Tenant shall each repair and
restore applicable portions of the Property in accordance with the first
sentence of this Paragraph 17.1.

           (b)   The respective obligations of Landlord and Tenant pursuant to
Paragraph 17.1(a) are subject to the following limitations:

                 (i)    If the occurrence results from a peril which is
required to be insured pursuant to Paragraph 14.1(b) and (c) above, the
obligations of either party shall not exceed the amount of insurance proceeds
received from insurers by reason of such occurrence, plus the amount of the
party's permitted deductible (provided that each party shall be obligated to
use its best efforts to recover any available proceeds from the insurance
which it is required to maintain pursuant to the provisions of Paragraph
14.1(b) or (c), as applicable), and, if such proceeds are insufficient,
either party may terminate the Lease unless the other party promptly elects
and agrees, in writing, to contribute the amount of the shortfall; and

                 (ii)   If the occurrence results from a peril which is not
required to be insured pursuant to Paragraph 14.1(b) and (c) above, Landlord
shall be required to repair and restore the Building Shell and Common Areas
to the extent necessary for Tenant's continued use and occupancy of the
Initial Building, and Tenant shall be required to repair and restore the
Interior Improvements to the extent necessary for Tenant's continued use and
occupancy of the Initial Building, provided that each party's obligation to
repair and restore shall not exceed an amount equal to five percent (5%) of
the replacement cost of the Building Shell and Common Area improvements, as
to Landlord, or five percent (5%) of the replacement cost of the Interior

                                 38
<PAGE>


Improvements, as to Tenant; if the replacement cost as to either party
exceeds such amount, then the party whose limit has been exceeded may
terminate this Lease unless the other party promptly elects and agrees, in
writing, to contribute the amount of the shortfall.

           (c)   If this Lease is terminated pursuant to the foregoing
provisions of this Paragraph 17.1 following an occurrence which is a peril
required to be insured against pursuant to Paragraph 14.1(c) and (d),
Landlord and Tenant agree (and any Lender shall be asked to agree) that there
shall be paid from such insurance proceeds (i) to Landlord, the proceeds of
Landlord's property insurance on the Building Shell, (ii) to Landlord, a
portion of the aggregate proceeds of Landlord's and Tenant's property
insurance on the Interior Improvements equal to a fraction, the numerator of
which is the insurable value, immediately prior to the occurrence, of the
Interior Improvements that would have belonged to Landlord upon termination
of this Lease in accordance with the provisions of Paragraph 11.2 and the
denominator of which is the total insurable value, immediately prior to the
occurrence, of all of the Interior Improvements, and (iii) to Tenant, a
portion of the aggregate proceeds of Landlord's and Tenant's property
insurance on the Interior Improvements equal to a fraction, the numerator of
which is the insurable value, immediately prior to the occurrence, of the
Interior Improvements that would have belonged to Tenant upon termination of
this Lease in accordance with the provisions of Paragraph 11.2 and the
denominator of which is the total insurable value, immediately prior to the
occurrence, of all of the Interior Improvements.

           (d)   From and after the date of an occurrence resulting in damage
to or destruction of the Initial Building or of the Common Areas necessary for
Tenant's use and occupancy of the Initial Building, and continuing until
repair and restoration thereof are completed, there shall be an equitable
abatement of Basic Annual Rent and of Tenant's Operating Cost Share of
Operating Expenses based upon the degree to which Tenant's ability to conduct
its business in the Initial Building is impaired and Tenant's use is otherwise
materially and adversely affected.

           (e)   In the event Landlord is required or elects to repair the
Property pursuant to Paragraph 17.1, and such repair is not completed within
the estimated time frame (which estimated time frame shall be within the time
period required for such repair hereunder or, if longer, only upon the prior
written consent of Tenant) ("Repair Completion Date"), subject to Force
Majeure delays and Tenant Delays, then Tenant shall have the right to
terminate this Lease as of the Repair Completion Date by delivering written
notice to Landlord of such election within thirty (30) days after the Repair
Completion Date; however in the event Tenant does not timely elect to
terminate or if Landlord completes the required repair prior to Landlord's
receipt of Tenant's election to terminate, then Tenant's election to terminate
shall be void and of no force or effect and this Lease shall continue in full
force and effect and Landlord and Tenant shall each repair and restore
applicable portions of the Property in accordance with the first sentence of
Paragraph 17.1.

     17.2  Condemnation.
           ------------

           (a)   If during the term of this Lease the Property or Improvements,
is taken by eminent domain or by reason of any public improvement or
condemnation proceeding, or in any manner by exercise of the right of eminent
domain (including any transfer in avoidance of an exercise of the power of
eminent domain), or receives irreparable damage by reason of anything lawfully
done under color of public or other authority, then at Landlord's election by
written notice given to Tenant within thirty (30) days after the nature, scope
and date of the taking is finally determined, (i) this Lease shall terminate
as to the entire Property as of the date of the taking or (ii) if less than
all of the Property is taken, this Lease shall terminate as to the portion
taken and rent shall abate proportionately.  At Tenant's election, by written
notice given to Landlord within thirty (30) days after the nature and extent
of the taking have been finally determined, this Lease shall terminate as to
the entire Property, if the portion of the Property taken is of such extent
and nature as substantially to handicap, impede or permanently impair Tenant's
use of the balance of the Property.  If Tenant elects to terminate this Lease,
Tenant shall also notify Landlord of the date of termination, which date shall
not be earlier than thirty (30) days nor later than ninety (90) days after
Tenant has notified Landlord of Tenant's election to terminate, except that
this Lease shall terminate on the date of taking if such date falls on any

                                39
<PAGE>


date before the date of termination designated by Tenant.  If neither party
elects to terminate this Lease as hereinabove provided, this Lease shall
continue in full force and effect (except that there shall be an equitable
abatement of Basic Annual Rent and of Tenant's Operating Cost Share of
Operating Expenses based upon the degree to which Tenant's ability to conduct
its business in the Initial Building) and/or its use is adversely affected),
Landlord shall restore the Building Shell and Common Area improvements to a
complete architectural whole and a functional condition and as nearly as
reasonably possible to the condition existing before the taking, and Tenant
shall restore the Interior Improvements and Tenant's other alterations,
additions and improvements to a complete architectural whole and a functional
condition and as nearly as reasonably possible to the condition existing
before the taking.  In connection with any such restoration, each party shall
use its respective best efforts (including, without limitation, any necessary
negotiation or intercession with its respective lender, if any) to ensure
that any severance damages or other condemnation awards intended to provide
compensation for rebuilding or restoration costs are promptly collected and
made available to Landlord and Tenant in portions reasonably corresponding to
the cost and scope of their respective restoration obligations, subject only
to such payment controls as either party or its lender may reasonably require
in order to ensure the proper application of such proceeds toward the
restoration of the Improvements.  Each party waives the provisions of Code of
Civil Procedure Section 1265.130, allowing either party to petition the
Superior Court to terminate this Lease in the event of a partial condemnation
of the Property.

           (b)   The respective obligations of Landlord and Tenant pursuant to
Paragraph 17.2(a) are subject to the following limitations:

                 (i)    Each party's obligation to repair and restore shall
not exceed, net of any condemnation awards or other proceeds available for
and allocable to such restoration as contemplated in Paragraph 17.2(a), an
amount equal to five percent (5%) of the replacement cost of the Building
Shell and Common Area improvements, as to Landlord, or five percent (5%) of
the replacement cost of the Interior Improvements, as to Tenant; if the
replacement cost as to either party exceeds such amount, then the party whose
limit has been exceeded may terminate this Lease unless the other party
promptly elects and agrees, in writing, to contribute the amount of the
shortfall; and

                 (ii)   If this Lease is terminated pursuant to the foregoing
provisions of this Paragraph 17.2, or if this Lease remains in effect but any
condemnation awards or other proceeds become available as compensation for the
loss or destruction of any of the Improvements, then Landlord and Tenant agree
(and any Lender shall agree) that there shall be paid from such award or
proceeds (i) to Landlord, the award or proceeds attributable or allocable to
the Building Shell and/or Common Area improvements, and (ii) to Landlord and
Tenant, respectively, portions of the award or proceeds attributable or
allocable to the Interior Improvements, in the respective proportions in which
Landlord and Tenant would have shared, under Paragraph 17.1(c), the proceeds
of any insurance proceeds following loss or destruction of such Interior
Improvements by an insured casualty.

     17.3  Reservation Of Compensation.  Landlord reserves, and Tenant waives
           ---------------------------
and assigns to Landlord, all rights to any award or compensation for damage
to the Improvements, the Property and the leasehold estate created hereby,
accruing by reason of any taking in any public improvement, condemnation or
eminent domain proceeding or in any other manner by exercise of the right of
eminent domain or of anything lawfully done by public authority, except that
(a) Tenant shall be entitled to any and all compensation or damages paid for
or on account of Tenant's moving expenses, trade fixtures and equipment, and
(b) any condemnation awards or proceeds described in Paragraph 17.2(b)(ii)
shall be allocated and disbursed in accordance with the provisions of
Paragraph 17.2(b)(ii), notwithstanding any contrary provisions of this
Paragraph 17.3.

     17.4  Restoration Of Improvements.  In connection with any repair or
           ---------------------------
restoration of Improvements by either party following a casualty or taking as
hereinabove set forth, the party responsible for such repair or restoration
shall, to the extent possible, return such Improvements to a condition
substantially equal to that which existed immediately prior to the casualty
or taking.  To the extent such party wishes to make material modifications to
such Improvements,

                                  40
<PAGE>


such modifications shall be subject to the prior written approval of the
other party (not to be unreasonably withheld or delayed), except that no
such approval shall be required for modifications that are required by
applicable governmental authorities as a condition of the repair or
restoration, unless such required modifications would impair or impede
Tenant's conduct of its business in the Initial Building (in which case any
such modifications in Landlord's work shall require Tenant's consent, not
unreasonably withheld or delayed) or would materially and adversely affect
the exterior appearance, the structural integrity or the mechanical or other
operating systems of the Initial Building (in which case any such
modifications in Tenant's work shall require Landlord's consent, not
unreasonably withheld or delayed).

                              18.  DEFAULT
                                   -------

     18.1  Events Of Default.  The occurrence of any of the following shall
           -----------------
constitute an event of default on the part of Tenant:

           (a)   Nonpayment.  Failure to pay, when due, any amount payable to
                 ----------
Landlord hereunder, such failure continuing for a period of ten (10) days
after notice from Landlord that such payment is past due; provided, however,
that it shall be an Event of Default if Tenant shall fail to pay when due any
amount payable to Landlord hereunder if Tenant has received three notices from
Landlord as contemplated by the preceding clause hereof within twelve (12)
months of such failure to pay;

           (b)    Other Obligations.  Failure to perform any obligation,
                  -----------------
agreement or covenant under this Lease other than those matters specified in
Paragraph (a) hereof, such failure continuing for thirty (30) days after
written notice of such failure; provided, however, that if such failure is
curable in nature but cannot reasonably be cured within such 30-day period,
then Tenant shall not be in default if, and so long as, Tenant promptly (and
in all events within such 30-day period) commences such cure and thereafter
diligently pursues such cure to completion;

           (c)   General Assignment.  A general assignment by Tenant for the
                 ------------------
benefit of creditors;

           (d)   Bankruptcy.  The filing of any voluntary petition in
                 ----------
bankruptcy by Tenant, or the filing of an involuntary petition by Tenant's
creditors, which involuntary petition remains undischarged for a period of
ninety (90) days.  In the event that under applicable law the trustee in
bankruptcy or Tenant has the right to affirm this Lease and continue to
perform the obligations of Tenant hereunder, such trustee or Tenant shall, in
such time period as may be permitted by the bankruptcy court having
jurisdiction, cure all defaults of Tenant hereunder outstanding as of the
date of the affirmance of this Lease and provide to Landlord such adequate
assurances as may be necessary to ensure Landlord of the continued
performance of Tenant's obligations under this Lease.  Specifically, but
without limiting the generality of the foregoing, such adequate assurances
must include assurances that the Property continues to be operated only for
the use permitted hereunder.  The provisions hereof are to assure that the
basic understandings between Landlord and Tenant with respect to Tenant's use
of the Property and the benefits to Landlord therefrom are preserved,
consistent with the purpose and intent of applicable bankruptcy laws:

           (e)   Receivership.  The employment of a receiver appointed by court
                 ------------
order to take possession of substantially all of Tenant's assets or the
Property, if such receivership remains undissolved for a period of ninety
(90) days;

           (f)   Attachment.  The attachment, execution or other judicial
                 ----------
seizure of all or substantially all of Tenant's assets or the Property, if
such attachment or other seizure remains undismissed or undischarged for a
period of ninety (90) days after the levy thereof;

           (g)   Insolvency.  The admission by Tenant in writing of its
                 ----------
inability to pay its debts as they become due, the filing by Tenant of a
petition seeking any reorganization or arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future
statute, law or regulation, the filing by Tenant of an answer admitting or
failing timely to contest a material allegation of a petition filed against
Tenant in any such proceeding or, if within ninety (90) days after the
commencement of any proceeding against Tenant seeking any reorganization or
arrangement, composition, readjustment, liquidation, dissolution or similar

                                  41
<PAGE>


relief under any present or future statute, law or regulation, such
proceeding shall not have been dismissed; or

           (h)   Default under other Leases.  The default by Tenant, or any
                 --------------------------
successor in interest to Tenant through merger or acquisition or subtenant of
Tenant, after applicable notice and cure periods, under any other lease with
Landlord), or with an affiliate of Landlord, including without limitation any
lease or other agreement between Landlord, or with an affiliate of Landlord,
and Tenant pursuant to Paragraphs 6 and 7 hereof.

     18.2  Remedies Upon Tenant's Default.
           ------------------------------

           (a)   Upon the occurrence of any event of default described in
Paragraph 18.1 hereof, Landlord, in addition to and without prejudice to any
other rights or remedies it may have, shall have the immediate right to
re-enter the Property or any part thereof and repossess the same, expelling
and removing therefrom all persons and property (which property may be stored
in a public warehouse or elsewhere at the cost and risk of and for the account
of Tenant), using such force as may be necessary to do so (as to which Tenant
hereby waives any claim for loss or damage that may thereby occur).  In
addition to or in lieu of such re-entry, and without prejudice to any other
rights or remedies it may have, Landlord shall have the right either (i) to
terminate this Lease and recover from Tenant all damages incurred by Landlord
as a result of Tenant's default, as hereinafter provided, or (ii) to continue
this Lease in effect and recover rent and other charges and amounts as they
become due.

           (b)   Even if Tenant has breached this Lease or abandoned the
Property, this Lease shall continue in effect for so long as Landlord does
not terminate Tenant's right to possession under Paragraph (a) hereof and
Landlord may enforce all of its rights and remedies under this Lease,
including the right to recover rent as it becomes due, and Landlord, without
terminating this Lease, may exercise all of the rights and remedies of a
lessor under California Civil Code Section 1951.4 (lessor may continue lease
in effect after lessee's breach and abandonment and recover rent as it
becomes due, if lessee has right to sublet or assign, subject only to
reasonable limitations), or any successor Code section.  Acts of maintenance,
preservation or efforts to relet the Property or the appointment of a
receiver upon application of Landlord to protect Landlord's interests under
this Lease shall not constitute a termination of Tenant's right to possession.

           (c)   If Landlord terminates this Lease pursuant to this Paragraph
18.2, Landlord shall have all of the rights and remedies of a Landlord provided
by Section 1951.2 of the Civil Code of the State of California, or any
successor Code section, which remedies include Landlord's right to recover
from Tenant (i) the worth at the time of award of the unpaid rent, unpaid
Operating Expenses, unpaid Taxes and any other amounts due Landlord hereunder
which had been earned at the time of termination; (ii) the worth at the time
of award of the amount by which the unpaid rent, unpaid Operating Expenses,
unpaid Taxes and any other amounts due Landlord hereunder which would have
been earned after termination until the time of award exceeds the amount of
such rental loss that Tenant proves could have been reasonably avoided, (iii)
the worth at the time of award of the amount by which the unpaid rent unpaid
Operating Expenses, unpaid Taxes and any other amounts due Landlord hereunder
for the balance of the term after the time of award exceeds the amount of such
rental loss that Tenant proves could be reasonably avoided, and (iv) any other
amount necessary to compensate Landlord for all the detriment proximately
caused by Tenant's failure to perform its obligations under this Lease or
which in the ordinary course of things would be likely to result therefrom,
including, but not limited to, the cost of recovering possession of the
Property, expenses of reletting, including necessary repair, renovation and
alteration of the Property, reasonable attorneys' fees, and other reasonable
costs provided that if the term of any releasing extends beyond the term of
this Lease, Tenant shall only be responsible for the amortized portion
thereof based on the then remaining term of this Lease and the term of the
releasing.  The "worth at the time of award" of the amounts referred to in
clauses (i) and (ii) above shall be computed by allowing interest at ten
percent (10%) per annum from the date such amounts accrued to Landlord.  The
"worth at the time of award" of the amounts referred to in clause (iii) above
shall be computed by discounting such amount at one percentage point above
the discount rate of the Federal Reserve Bank of San Francisco at the time
of award.

                                   42
<PAGE>


     18.3  Remedies Cumulative.  All rights, privileges and elections or
           -------------------
remedies of Landlord contained in this Lease are cumulative and not
alternative to the extent permitted by law and except as otherwise provided
herein.

     18.4  Landlord Default.  The default by Landlord or an afiliate of
           ----------------
Landlord, after applicable notice and cure periods, under any other lease
with Tenant or any successor in interest to Tenant through merger or
acquisition, including without limitation, any lease or other agreement
between Landlord or affiliate of Landlord and Tenant pursuant to Paragraphs
6 and 7, hereof shall be a default by Landlord hereunder.

                19.  SUBORDINATION, ATTORNMENT AND SALE
                     ----------------------------------

     19.1  Subordination To Mortgage.  As of the date herof, Landlord
           -------------------------
represents and warrants that the only mortgage or deed of trust on the
Property is the one shown on the Policy of Title Insurance dated May 7, 1997
and delivered to Tenant.  This Lease, and any sublease entered into by Tenant
under the provisions of this Lease, shall be subject and subordinate to any
mortgage or deed of trust, now or hereafter placed upon the Initial Building,
the Property, or both, and the rights of any mortgagee, trustee, beneficiary
and to any and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof.  If any
mortgagee, trustee, beneficiary elects to have this Lease be an encumbrance
upon the Property prior to the lien of its mortgage, deed of trust, and gives
notice thereof to Tenant, this Lease shall be deemed prior thereto, whether
this Lease is dated prior or subsequent to the date thereof or the date of
recording thereof.  Tenant, and any sublessee, shall execute such documents
as may reasonably be requested by any mortgagee, trustee to evidence the
subordination herein set forth, subject to the conditions set forth above,
or to make this Lease prior to the lien of any mortgage, deed of trust, as
the case may be.  Upon any default by Landlord in the performance of its
obligations under any mortgage, deed of trust, Tenant (and any sublessee)
shall, notwithstanding any subordination hereunder, attorn to the mortgagee,
trustee, beneficiary, thereunder upon demand and become the tenant of the
successor in interest to Landlord, at the option of such successor in
interest, and shall execute and deliver any instrument or instruments
confirming the attornment herein provided for.  Notwithstanding anything to
the contrary contained herein, the subordination of this Lease, Tenant's
attornment obligation and any other obligations of Tenant under this
Paragraph shall be subject to and expressly conditioned upon Tenant's receipt
from each such existing and future holder of any such mortgage, deed of trust
or other right executing and delivering to Tenant a commercially reasonable
non-disturbance agreement.  As a condition to Tenant's obligations hereunder,
Landlord shall deliver to Tenant within thirty (30) days after the date hereof
a non-disturbance agreement acceptable to Tenant executed by any lenders
currently holding a lien on the Parcels and/or the Property.

     19.2  Sale Of Landlord's Interest.  Upon sale, transfer or assignment of
           ---------------------------
Landlord's entire interest in the Improvements and Property after Substantial
Completion of the Initial Building, other than for security purposes,
Landlord shall be relieved of its obligations hereunder with respect to
liabilities accruing from and after the date of such sale, transfer or
assignment, except as otherwise expressly provided in Paragraph 21.2 hereof;
provided, however, as a condition to any such release, the purchaser shall
assume in a written agreement in favor of and reasonably acceptable to Tenant
the obligations of Landlord under this Lease (including Landlord's obligation
hereunder to repair defects in design and construction).

     19.3  Estoppel Certificates.
           ---------------------

           (a)   Tenant shall provide Landlord, within five (5) business days
after written request, with an Estoppel Certificate in a form as attached
hereto as Exhibit F, which is intended for use in connection with a building
under construction.

           (b)   In addition to the Estoppel Certificate to be provided
pursuant to subparagraph (a) above, either Tenant or Landlord (the
"certifying party") shall at any time and from time to time, within ten (10)
business days after written request by the other party (the "requesting
party"), execute, acknowledge and deliver to the requesting party a
certificate in writing stating substantially the matters provided in Exhibit
F, modified to reflect the state of construction or completion and
occupancy and other

                                 43
<PAGE>


matters at that time, along with such other matters as may reasonably be
requested by the requesting party or by any institutional lender, mortgagee,
trustee, beneficiary, or prospective purchaser of the Property or of Tenant's
leasehold interest therein.

           (c)   Any such certificate provided under this Paragraph 19.3 may
be relied upon by any lender, mortgagee, trustee, beneficiary assignee or
successor in interest to the requesting party, by any prospective purchaser,
by any purchaser on foreclosure or sale, by any grantee under a deed in lieu
of foreclosure of any mortgage or deed of trust on the Property, or by any
other third party.  Failure to execute and return within the required time
any estoppel certificate requested hereunder shall be deemed to be an
admission of the truth of the matters set forth in the form of certificate
submitted to the certifying party for execution.

     19.4  Subordination to CC&R's.  This Lease, and any permitted sublease
           -----------------------
entered into by Tenant under the provisions of this Lease, shall be subject
and subordinate to the Existing CC&Rs; provided, however, that following the
execution of this Lease, Landlord shall not record or agree to any new
covenants, conditions or restrictions or any changes to the Existing CC&Rs
affecting the Property and which adversely affect Tenant's right under this
Lease in any material respect without the prior written consent of Tenant,
which consent shall not be unreasonably withheld or delayed.  Tenant agrees
to execute, upon request by Landlord, any documents reasonably required from
time to time to evidence such subordination.  With respect to any such CC&Rs
and any associations or the like with any control over the Site, Landlord
shall represent the Site on any committees or boards established in
connection therewith.

     19.5  Mortgagee Protection.
           --------------------

           (a)   Tenant's obligations to attorn and subordinate under this
Lease shall be conditioned on Tenant's concurrent receipt, from the ground
lessor, mortgagee, trustee, beneficiary or leaseback lessor, of a Non-
Disturbance Agreement in a form as attached hereto as Exhibit F confirming,
among other things, that so long as Tenant is not in default hereunder,
Tenant's rights hereunder shall not be disturbed by such person or entity.

           (b)   In addition to the Non-Disturbance Agreement to be provided
pursuant to subparagraph (a) above, within ten (10) business days after
written request by Landlord, in the event of a sale or further financing of
the Project by Landlord, Tenant shall execute and deliver concurrently with
Landlord and any institutional lender, mortgagee, trustee or beneficiary a
Non-Disturbance Agreement in form substantially similar to that attached as
Exhibit F, along with such other matters as may reasonably be requested by
Landlord or by any institutional lender, mortgagee, trustee, beneficiary,
assignee or successor in interest to Landlord.

                     20.  INTENTIONALLY DELETED
                          ---------------------

                           21.  MISCELLANEOUS
                                -------------

     21.1  Notices.  All notices, consents, waivers and other communications
           -------
which this Lease requires or permits either party to give to the other shall
be in writing and shall be deemed given when delivered personally or when
personal delivery is refused (including delivery by private courier or
express delivery service), or the next business day after facsimile
transmission with indication of receipt to the sending party through the
facsimile system or two (2) business days after deposit in the United States
mail, registered or certified mail, postage prepaid, addressed to the parties
at their respective addresses as follows:

     To Tenant:         (until Commencement Date)
                        Advanced Tissue Sciences, Inc.
                        10933 North Torrey Pines Road
                        La Jolla, CA 92037
                        Attn: Director of Facilities
                        cc: Legal Department
                        (after Commencement Date)
                        [AT THE INITIAL BUILDING --
                        ADDRESS TO BE SUPPLIED]

                                  44
<PAGE>


                        Attn: Director of Facilities
                        cc: Legal Department

     with copy to:      Luce, Forward, Hamilton & Scripps LLP
                        600 W. Broadway, Suite 2600
                        San Diego, CA 92101
                        Attn: David M. Hymer, Esq.

     To Landlord:       TPSC II Limited Partnership
                        c/o Slough Parks Incorporated
                        33 West Monroe, Suite 2000
                        Chicago, IL 60603
                        Attn: William Rogalla

     with copy to:      Bell, Boyd & Lloyd
                        70 West Madison, Suite 3100
                        Chicago, IL 60602
                        Attn: Lawrence M. Mages

or to such other address as may be contained in a notice at least fifteen (15)
days prior to the address change from either party to the other given pursuant
to this Paragraph.  Rental payments and other sums required by this Lease to
be paid by Tenant shall be delivered to Landlord at Landlord's address
provided in this Paragraph, or to such other address as Landlord may from time
to time specify in writing to Tenant, and shall be deemed to be paid only upon
actual receipt.

     21.2  Successors And Assigns.  The obligations of this Lease shall run
           ----------------------
with the land, and this Lease shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns, except
that the original Landlord named herein and each successive Landlord under
this Lease shall be liable only for obligations accruing during the period of
its ownership of the Property, said liability terminating upon termination of
such ownership and passing to the successor.

     21.3  No Waiver.  The failure of Landlord or Tenant to seek redress for
           ---------
violation, or to insist upon the strict performance, of any covenant or
condition of this Lease shall not be deemed a waiver of such violation, or
prevent a subsequent act which would originally have constituted a violation
from having all the force and effect of an original violation.

     21.4  Severability.  If any provision of this Lease or the application
           ------------
thereof is held to be invalid or unenforceable, the remainder of this Lease
or the application of such provision to persons or circumstances other than
those as to which it is invalid or unenforceable shall not be affected
thereby, and each of the provisions of this Lease shall be valid and
enforceable, unless enforcement of this Lease as so invalidated would be
unreasonable or grossly inequitable under all the circumstances or
would materially frustrate the purposes of this Lease.

     21.5  Litigation Between Parties.  In the event of any litigation or
           --------------------------
other dispute resolution proceedings between the parties hereto arising out
of or in connection with this Lease, the prevailing party shall be reimbursed
for all reasonable costs, including, but not limited to, reasonable
accountants' fees and attorneys' fees, incurred in connection with such
proceedings (including, but not limited to, any appellate proceedings
relating thereto) or in connection with the enforcement of any judgment or
award rendered in such proceedings.

     21.6  Surrender.  A voluntary or other surrender of this Lease by Tenant,
           ---------
or a mutual termination thereof between Landlord and Tenant, shall not result
in a merger but shall, at the option of Landlord, operate either as an
assignment to Landlord of any and all existing subleases and subtenancies,
or a termination of all or any existing subleases and subtenancies.  This
provision shall be contained in any and all assignments or subleases made
pursuant to this Lease.

     21.7  Interpretation.  The provisions of this Lease shall be construed
           --------------
as a whole, according to their common meaning, and not strictly for or
against Landlord or Tenant.  The

                                  45
<PAGE>


captions preceding the text of each Paragraph and subparagraph hereof are
included only for convenience of reference and shall be disregarded in the
construction or interpretation of this Lease.

     21.8  Entire Agreement.  This written Lease, together with the
           ----------------
exhibits hereto, contains all the representations and the entire understanding
between the parties hereto with respect to the subject matter hereof.  Any
prior correspondence, memoranda or agreements are replaced in total by this
Lease and the exhibits hereto.  This Lease may be modified only by an
agreement in writing signed by each of the parties.

     21.9  Governing Law.  This Lease and all exhibits hereto shall be
           -------------
construed and interpreted in accordance with and be governed by all the
provisions of the laws of the State of California.

     21.10 No Partnership.  The relationship between Landlord and Tenant is
           --------------
solely that of a lessor and lessee.  Nothing contained in this Lease shall
be construed as creating any type or manner of partnership, joint venture or
joint enterprise with or between Landlord and Tenant.

     21.11 Financial Information.  From time to time Tenant shall promptly
           ---------------------
provide directly to prospective lenders and purchasers of the Property
designated by Landlord financial information as filed with the Securities
and Exchange Commission.

     21.12 Costs.  If Tenant requests the consent of Landlord, to any
           -----
assignment or subletting of the Property, Tenant shall, as a condition
to doing any such act and the receipt of such consent, reimburse Landlord
promptly for any and all reasonable costs and expenses incurred by Landlord in
connection therewith, including, without limitation, reasonable attorneys'
fees not to exceed $1,500.

     21.13 Time.  Time is of the essence of this Lease, and of every term and
           ----
condition hereof.

     21.14 Brokers.  Landlord agrees to pay a brokerage commission to John
           -------
Burnham & Company in connection with the consummation of this Lease in
accordance with a separate agreement.  Each party represents and warrants
that no other broker participated in the consummation of this Lease and
agrees to indemnify, defend and hold the other party harmless against any
liability, cost or expense, including, without limitation, reasonable
attorneys' fees, arising out of any claims for brokerage commissions or other
similar compensation in connection with any conversations, prior negotiations
or other dealings by the indemnifying party with any other broker.

     21.15 Memorandum Of Lease.  At any time during the term of this Lease,
           -------------------
either party, at its sole expense, shall be entitled to record a memorandum
of this Lease and, if either party so elects, both parties agree to cooperate
in the preparation, execution, acknowledgment and recordation of such
document in reasonable form.  Any such memorandum of this Lease shall include
Tenant's Expansion Option and First Refusal Right and in connection therewith
Tenant shall provide Landlord with quit claim deeds to be deposited with
Landlord upon execution of this Lease, to be recorded upon the expiration of
Tenant's Expansion Option and First Refusal Right, respectively.

     21.16 Corporate Authority.  The person signing this Lease on behalf of
           -------------------
Tenant warrants that he or she is fully authorized to do so and, by so doing,
to bind Tenant.

     21.17 Execution and Delivery.  This Lease may be executed in one or more
           ----------------------
counterparts and by separate parties on separate counterparts, but each such
counterpart shall constitute an original and all such counterparts together
shall constitute one and the same instrument.

     21.18 Survival.  Without limiting survival provisions which would
           --------
otherwise be implied or construed under applicable law, the provisions of
Paragraphs 2.6, 9.4, 11.2, 11.3, 11.4, 13.5, 14.4 and 21.14 hereof shall
survive the termination of this Lease with respect to matters occurring prior
to the expiration of this Lease.

     21.19 Confidentiality.
           ---------------

                                  46
<PAGE>


           (a)   Landlord's Obligations.  Landlord shall, and Landlord shall
                 ----------------------
cause its officers, directors, employees, agents, consultants, advisors and
representatives to, maintain in strict confidence, not disclosing any such
information, or providing copies thereof, any of the following: (i) financial
information concerning Tenant which is not publicly available or has not been
disclosed by other sources; and (ii) any matters of building design which are
unique to Tenant, the manner in which it conducts its business or which would
provide third parties with information as to any proprietary system, method,
process or the like of Tenant; provided, however, that Landlord may make
disclosure of such information to its existing and prospective lenders,
financial partners, consultants, advisors, attorneys, accounts, underwriters
and similar parties, to an entity involved in discussions concerning a merger,
consolidation, acquisition or similar transaction with Landlord (in which case
Landlord shall secure from such party a confidentiality undertaking, similar
to Landlord's obligation hereunder) or as is required by law (including
applicable securities laws) or order of court of competent jurisdiction.

           (b)   Tenant's Obligations.  Tenant shall, and shall cause its
                 --------------------
officers, directors, employees, agents, consultants, advisors and
representatives to, maintain the financial and significant business terms of
this Lease, and all exhibits hereto, in strict confidence, not disclosing
any of such information, or providing copies of this Lease or any exhibits
hereto, to any person or entity without the written permission of Landlord;
provided, however, that Tenant may make disclosure of such information to
its existing and prospective lenders, financial partners, consultants,
advisors, attorneys, accounts, underwriters and similar parties, to an
entity involved in discussions concerning a merger, consolidation,
acquisition or similar transaction with Tenant (in which case Tenant shall
secure from such party a confidentiality undertaking, similar to Tenant's
obligation hereunder) or as is required by law (including applicable
securities laws) or order of court of competent jurisdiction.

           IN WITNESS WHEREOF, the parties hereto have executed this Lease as
of the day and year first set forth above.

            "Landlord"                              "Tenant"

TPSC II LIMITED PARTNERSHIP, a              ADVANCED TISSUE SCIENCES, INC., a
 Delaware limited partnership                Delaware corporation


By:__________________________               By:______________________________

Its:_________________________               Its:_____________________________



                                  47
<PAGE>


                                   EXHIBITS
                                   --------

                 EXHIBIT A          Real Property Description (Site)
                 EXHIBIT B          Site Plan
                 EXHIBIT C          Work Letter
                 EXHIBIT D          Estimated Construction Schedule
                 EXHIBIT E          Acknowledgment of Lease Commencement
                 EXHIBIT F          Form of Subordination, Attornment and
                                     Nondisturbance Agreement and Estoppel
                                     Certificate
                 EXHIBIT G          Lot 27: Legal Description and Site Plan
                 EXHIBIT H          Lot 26: Legal Description and Site Plan
                 EXHIBIT I          Radioactive Materials
                 EXHIBIT J          Synopsis of Relevant Provisions
                 EXHIBIT K          Contractor/Subcontractor Requirements