<PAGE>

                                                                 Exhibit 10.19

       STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE--MODIFIED NET
                   AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
                                   [LOGO]


1.     BASIC PROVISIONS ("BASIC PROVISIONS").

       1.1     PARTIES: This Lease ("LEASE"), dated for reference purposes
only, July 1, 1998, is made by and between General Atomics ("LESSOR") and
RAJYABIOTICS CORPORATION ("LESSEE"), (collectively the "PARTIES," or
individually a "PARTY"). Refer to Paragraph 49

       1.2(a)  PREMISES: That certain portion of the Building, including all
improvements therein or to be provided by Lessor under the terms of this
Lease, commonly known by the street address of 3510 Dunhill St.,  located in
the City of San Diego, County of San Diego, State of California, with zip
code 92121, as outlined on Exhibit A&B attached hereto ("PREMISES"). The
"BUILDING" is that certain building containing the Premises and generally
described as (describe briefly the nature of the Building): Building No. 7,
3510 Dunhill Street, Suite A. In addition to Lessee's rights to use and
occupy the Premises as hereinafter specified, Lessee shall have non-exclusive
rights to the Common Areas (as defined in Paragraph 2.7 below) as hereinafter
specified, but shall not have any rights to the roof, exterior walls or
utility raceways of the Building or to any other buildings in the Industrial
Center. The Premises, the Building, the Common Areas, the land upon which
they are located, along with all other buildings and improvements thereon,
are herein collectively referred to as the "INDUSTRIAL CENTER." (Also see
Paragraph 2.)

       1.2(b)  PARKING: Refer Par 50 unreserved vehicle parking spaces
("UNRESERVED PARKING SPACES"); and 0 reserved vehicle parking spaces
("RESERVED PARKING SPACES"). (Also see Paragraph 2.6.)

       1.3     TERM: 5 years and 0 months ("ORIGINAL TERM") commencing
October 1, 1998 ("COMMENCEMENT DATE") and ending September 30, 2003
("EXPIRATION DATE"). (Also see Paragraph 3.)

       1.4     EARLY POSSESSION: __________________ ("EARLY POSSESSION
DATE"). (Also see Paragraphs 3.2 and 3.3.)

       1.5     BASE RENT: $ Refer Ex. C per month ("BASE RENT"), payable on
the First day of each month commencing _____________ (Also see Paragraph 4.)

/X/  If this box is checked, this Lease provides for the Base Rent to be
     adjusted per Ex. C attached hereto.

       1.6(a)  BASE RENT Refer to Exhibit C.

       1.6(b)  LESSEE'S SHARE OF COMMON AREA OPERATING EXPENSES: ___________
percent (   %) ("LESSEE'S SHARE") as determined by / / prorata square footage
of the Premises as compared to the total square footage of the Building or
/X/ other criteria as described in Ex. C.

       1.7     SECURITY DEPOSIT: Refer to Ex. C ("SECURITY DEPOSIT").
(Also see Paragraph 5.)

       1.8     PERMITTED USE: Office, R&D and Manufacturing for Biomedical
products in compliance with MIA zoning under the City of San Diego Municipal
Code, and any incidental use thereto ("PERMITTED USE") (Also see Paragraph 6.)

       1.9     INSURING PARTY. Lessor is the "INSURING PARTY." (Also see
Paragraph 8.)

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

/X/ CB Richard Ellis, Inc. represents Lessor exclusively ("LESSOR'S
BROKER");
/X/ The Irving Hughes Group Inc. represents Lessee exclusively ("LESSEE'S
BROKER"); or
/ /
    ---------------------------------------------------------------------

       1.10(b) PAYMENT TO BROKERS. Upon the execution of this Lease by both
Parties, Lessor shall pay to said Broker(s) jointly, or in such separate
shares as they may mutually designate in writing, a fee as set forth in a
separate written agreement between Lessor and said Broker(s) (or in the event
there is no separate written agreement between Lessor and said Broker(s), the
sum of $ Ex.C) for brokerage services rendered by said Broker(s) in
connection with this transaction.

       1.11    GUARANTOR. The obligations of the Lessee under this Lease are
to be guaranteed by Not Applicable ("GUARANTOR"). (Also see Paragraph 37.)
                    --------------

       1.12    ADDENDA AND EXHIBITS. Attached hereto is an Addendum or
Addenda consisting of Paragraphs 49 through 60, and Exhibits A through G, all
of which constitute a part of this Lease.

2.     PREMISES, PARKING AND COMMON AREAS.

       2.1     LETTING. Lessor hereby leases to Lessee, and Lessee hereby
leases from Lessor, the Premises, for the term, at the rental, and upon all
of the terms, covenants and conditions set forth in this Lease. Unless
otherwise provided herein, any statement of square footage set forth in this
Lease, or that may have been used in calculating rental and/or Common Area
Operating Expenses, is an approximation which Lessor and Lessee agree is
reasonable and the rental and Lessee's Share (as defined in Paragraph 1.6(b))
based thereon is not subject to revision whether or not the actual square
footage is more or less.

       2.2     CONDITION. Lessor shall deliver the Premises to Lessee clean
and free of debris on the Commencement Date and warrants to Lessee that the
existing plumbing, electrical systems, lighting, air conditioning and heating
systems and loading doors, if any, in the Premises, other than those
constructed by Lessee, shall be in good operating condition on the
Commencement Date. If a non-compliance with said warranty exists as of the
Commencement Date, Lessor shall, except as otherwise provided in this Lease,
promptly after receipt of written notice from Lessee setting forth with
specificity the nature and extent of such non-compliance, rectify same at
Lessor's expense. If Lessee does not give Lessor written notice of a
non-compliance with this warranty within thirty (30) days after the
Commencement Date, correction of that non-compliance shall be the obligation
of Lessee at Lessee's sole cost and expense. Refer to Paragraph 51

       2.3     COMPLIANCE WITH COVENANTS, RESTRICTIONS AND BUILDING CODE.
Lessor warrants that any improvements (other than those constructed by Lessee
or at Lessee's direction) on or in the Premises which have been constructed
or installed by Lessor or with Lessor's consent or at Lessor's direction
shall comply with all applicable covenants or restrictions of record and
applicable building codes, regulations and ordinances in effect on the Date
of Installation. Lessor further warrants to Lessee that Lessor has no
knowledge of any claim having been made by any governmental agency that a
violation or violations of applicable building codes, regulations, or
ordinances exist with regard to the Premises as of the Commencement Date.
Said warranties shall not apply to any Alterations or Utility Installations
(defined in Paragraph 7.3(a)) made or to be made by Lessee. If the Premises
do not comply with said warranties, Lessor shall, except as otherwise
provided in this Lease, promptly after receipt of written notice from Lessee
given within six (6) months following the Commencement Date and setting forth
with specificity the nature and extent of such non-compliance, take such
action, at Lessor's expense, as may be reasonable or appropriate to rectify
the non-compliance. Lessor makes no warranty that the Permitted Use in
Paragraph 1.8 is permitted for the Premises under Applicable Laws (as defined
in Paragraph 2.4). Refer to Paragraph 52

       2.4     ACCEPTANCE OF PREMISES. Lessee hereby acknowledges: (a) that
it has been advised by the Broker(s) to satisfy itself with respect to the
condition of the Premises (including but not limited to the electrical and
fire sprinkler systems, security, environmental aspects, seismic and
earthquake requirements, and compliance with the Americans with Disabilities
Act and applicable zoning, municipal, county, state and federal laws,
ordinances and regulations and any covenants or restrictions of record
(collectively, "APPLICABLE LAWS") and the present and future suitability of
the Premises for Lessee's intended use; (b) that Lessee has made such
investigation as it deems necessary with reference to such matters, is
satisfied with reference thereto, and assumes all responsibility therefore as
the same relate to Lessee's occupancy of the Premises and/or the terms of
this Lease; and (c) that neither Lessor, nor any of Lessor's agents, has made
any oral or written representations or warranties with respect to said
matters other than as set forth in this Lease. Refer to Paragraph 53


                                                           INITIALS: HH
                                                                    -----
                                                                     RHD
MULTI-TENANT--MODIFIED NET                                          -----
-C- American Industrial Real Estate Association 1993

<PAGE>

       2.6     VEHICLE PARKING. Lessee shall be entitled to use the number of
Unreserved Parking Spaces and Reserved Parking Spaces specified in Paragraph
1.2(b) on those portions of the Common Areas designated from time to time by
Lessor for parking.  Lessee shall not use more parking spaces than said number.
Said parking spaces shall be used for parking by vehicles no larger than
full-size passenger automobiles or pick-up trucks, herein called "PERMITTED
SIZE VEHICLES." Vehicles other than Permitted Size Vehicles shall be parked
and loaded or unloaded as directed by Lessor in the Rules and Regulations (as
defined in Paragraph 40) issued by Lessor. (Also see Paragraph 2.9.)

               (a)     Lessee shall not permit or allow any vehicles that
belong to or are controlled by Lessee or Lessee's employees, suppliers,
shippers, customers, contractors or invitees to be loaded, unloaded, or parked
in areas other than those designated by Lessor for such activities.

               (b)     If Lessee permits or allows any of the prohibited
activities described in this Paragraph 2.6, then Lessor shall have the right,
without notice, in addition to such other rights and remedies that it may
have, to remove or tow away the vehicle involved and charge the cost to
Lessee, which cost shall be immediately payable upon demand by Lessor.

               (c)     Lessor shall at the Commencement Date of this Lease,
provide the parking facilities required by Applicable Law.

       2.7     COMMON AREAS - DEFINITION. The term "COMMON AREAS" is defined
as all areas and facilities outside the Premises and within the exterior
boundary line of the Industrial Center and interior utility raceways within
the Premises that are provided and designated by the Lessor from time to time
for the general non-exclusive use of Lessor, Lessee and other lessees of the
Industrial Center and their respective employees, suppliers, shippers,
customers, contractors and invitees, including parking areas, loading and
unloading areas, trash areas, roadways, sidewalks, walkways, parkways,
driveways and landscaped areas.

       2.8     COMMON AREAS - LESSEE'S RIGHTS. Lessor hereby grants to
Lessee, for the benefit of Lessee and its employees, suppliers, shippers,
contractors, customers and invitees, during the term of this Lease, the
non-exclusive right to use, in common with others entitled to such use, the
Common Areas as they exist from time to time, subject to any rights, powers,
and privileges reserved by Lessor under the terms hereof or under the terms
of any rules and regulations or restrictions governing the use of the
Industrial Center. Under no circumstances shall the right herein granted to
use the Common Areas be deemed to include the right to store any property,
temporarily or permanently, in the Common Areas. Any such storage shall be
permitted only by the prior written consent of Lessor or Lessor's designated
agent, which consent may be revoked at any time. In the event that any
unauthorized storage shall occur then Lessor shall have the right, without
notice, in addition to such other rights and remedies that it may have, to
remove the property and charge the cost to Lessee, which cost shall be
immediately payable upon demand by Lessor.

       2.9     COMMON AREAS - RULES AND REGULATIONS. Lessor or such other
person(s) as Lessor may appoint shall have the exclusive control and
management of the Common Areas and shall have the right, from time to time,
to establish, modify, amend and enforce reasonable Rules and Regulations with
respect thereto in accordance with Paragraph 40. Lessee agrees to abide by
and conform to all such Rules and Regulations, and to cause its employees,
suppliers, shippers, customers, contractors and invitees to so abide and
conform. Lessor shall not be responsible to Lessee for the non-compliance
with said rules and regulations by other lessees of the Industrial Center.
Refer to Exhibit D

       2.10    COMMON AREAS - CHANGES. Lessor shall have the right, in
Lessor's sole discretion, from time to time:

               (a)     To make changes to the Common Areas, including,
without limitation, changes in the location, size, shape and number of
driveways, entrances, parking spaces, parking areas, loading and unloading
areas, ingress, egress, direction of traffic, landscaped areas, walkways and
utility raceways;

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

               (c)     To designate other land outside the boundaries of the
Industrial Center to be a part of the Common Areas;

               (d)     To add additional buildings and improvements to the
Common Areas;

               (e)     To use the Common Areas while engaged in making
additional improvements, repairs or alterations to the Industrial Center, or
any portion thereof; and

               (f)     To do and perform such other acts and make such other
changes in, to or with respect to the Common Areas and Industrial Center as
Lessor may, in the exercise of sound business judgment, deem to be
appropriate.

3.     TERM.

       3.1     TERM. The Commencement Date, Expiration Date and Original Term
of this Lease are as specified in Paragraph 1.3. Refer to Par. 54

       3.2     EARLY POSSESSION. If an Early Possession Date is specified in
Paragraph 1.4 and if Lessee totally or partially occupies the Premises after
the Early Possession Date but prior to the Commencement Date, the obligation
to pay Base Rent shall be abated for the period of such early occupancy. All
other terms of this Lease, however, (including but not limited to the
obligations to pay Lessee's Share of Common Area Operating Expenses and to
carry the insurance required by Paragraph 8) shall be in effect during such
period. Any such early possession shall not affect nor advance the Expiration
Date of the Original Term.

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

4.     RENT.

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

       4.2     COMMON AREA OPERATING EXPENSES. Lessee shall pay to Lessor
during the term hereof, in addition to the Base Rent, Lessee's Share (as
specified in Paragraph 1.6(b)) of all Common Area Operating Expenses, as
hereinafter defined, during each calendar year of the term of this Lease, in
accordance with the following provisions:

               (a)     "COMMON AREA OPERATING EXPENSES" are defined, for
purposes of this Lease, as all costs incurred by Lessor relating to the
ownership and operation of the Industrial Center, including, but not limited
to, the following:

                       (i)     The operation, repair and maintenance, in
neat, clean, good order and condition, of the following:

                               (aa)    The Common Areas, including parking
areas, loading and unloading areas, trash areas, roadways, sidewalks,
walkways, parkways, driveways, landscaped areas, striping, bumpers,
irrigation systems, Common Area lighting facilities, fences and gates,
elevators and roof.

                               (bb)    Exterior Building Numbers and Addresses.

                               (cc)    Fire detection and sprinkler systems.

                       (ii)    The cost of water, gas, electricity and
telephone to service the Common Areas.

                       (iii)   Trash disposal, property management and
security services and the costs of any environmental inspections.

                       (iv)    Reserves set aside for maintenance and repair
of Common Areas.

                       (v)     Real Property Taxes (as defined in Paragraph
10.2) to be paid by Lessor for the Building and the Common Areas under
Paragraph 10 hereof.

                       (vi)    The cost of the premiums for the insurance
policies maintained by Lessor under Paragraph 8 hereof.

                       (viii)  Any other services to be provided by Lessor
that are stated elsewhere in this Lease to be a Common Area Operating
Expense.

               (b)     Any Common Area Operating Expenses and Real Property
Taxes that are specifically attributable to the Building or to any other
building in the Industrial Center or to the operation, repair and maintenance
thereof, shall be allocated entirely to the Building or to such other
building. However, any Common Area Operating Expenses and Real Property Taxes
that are not specifically attributable to the Building or to any other
building or to the operation, repair and maintenance thereof, shall be
equitably allocated by Lessor to all buildings in the Industrial Center.

               (c)     The inclusion of the improvements, facilities and
services set forth in Subparagraph 4.2(a) shall not be deemed to impose an
obligation upon Lessor to either have said improvements or facilities or to
provide those services unless the Industrial Center already has the same,
Lessor already provides the services, or Lessor has agreed elsewhere in this
Lease to provide the same or some of them.

               (d)     Lessee's Share of Common Area Operating Expenses shall
be payable by Lessee within ten (10) days after a reasonably detailed
statement of actual expenses is presented to Lessee by Lessor. Refer to
Exhibit G


                                                           INITIALS: HH
                                                                    -----
                                                                     RHD
                                       -2-                          -----

<PAGE>

5.     SECURITY DEPOSIT. Lessee shall deposit with Lessor upon Lessee's
execution hereof the Security Deposit set forth in Paragraph 1.7 as security
for Lessee's faithful performance of Lessee's obligations under this Lease.
If Lessee fails to pay Base Rent or other rent or charges due hereunder, or
otherwise Defaults under this Lease (as defined in Paragraph 13.1), Lessor
may use, apply or retain all or any portion of said Security Deposit for the
payment of any amount due Lessor or to reimburse or compensate Lessor for any
liability, cost, expense, loss or damage (including attorneys' fees) which
Lessor may suffer or incur by reason thereof. If Lessor uses or applies all
or any portion of said Security Deposit, Lessee shall within ten (10) days
after written request therefore deposit monies with Lessor sufficient to
restore said Security Deposit to the full amount required by this Lease. Any
time the Base Rent increases during the term of this Lease, Lessee shall,
upon written request from Lessor, deposit additional monies with Lessor as an
addition to the Security Deposit so that the total amount of the Security
Deposit shall at all times bear the same proportion to the then current Base
Rent as the initial Security Deposit bears to the initial Base Rent set forth
in Paragraph 1.5. Lessor shall not be required to keep all or any part of the
Security Deposit separate from its general accounts. Lessor shall, at the
expiration or earlier termination of the term hereof and after Lessee has
vacated the Premises, return to Lessee (or, at Lessor's option, to the last
assignee, if any, of Lessee's interest herein), that portion of the Security
Deposit not used or applied by Lessor. Unless otherwise expressly agreed in
writing by Lessor, no part of the Security Deposit shall be considered to be
held in trust, to bear interest or other increment for its use, or to be
prepayment for any monies to be paid by Lessee under this Lease. Refer to
Ex. C

6.     USE.

       6.1     PERMITTED USE.

               (a)     Lessee shall use and occupy the Premises only for the
Permitted Use set forth in Paragraph 1.8, or any other legal use which is
reasonably comparable thereto, and for no other purpose. Lessee shall not use
or permit the use of the Premises in a manner that is unlawful, creates waste
or a nuisance, or that disturbs owners and/or occupants of, or causes damage
to the Premises or neighboring premises or properties.

               (b)     Lessor hereby agrees to not unreasonably withhold or
delay its consent to any written request by Lessee, Lessee's assignees or
subtenants, and by prospective assignees and subtenants of Lessee, its
assignees and subtenants, for a modification of said Permitted Use, so long
as the same will not impair the structural integrity of the improvements on
the Premises or in the Building or the mechanical or electrical systems
therein, does not conflict with uses by other lessees, is not significantly
more burdensome to the Premises or the Building and the improvements thereon,
and is otherwise permissible pursuant to this Paragraph 6. If Lessor elects
to withhold such consent, Lessor shall within five (5) business days after
such request give a written notification of same, which notice shall include
an explanation of Lessor's reasonable objections to the change in use.

       6.2     HAZARDOUS SUBSTANCES.

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

               (b)     DUTY TO INFORM LESSOR. If Lessee knows, or has
reasonable cause to believe, that a Hazardous Substance has come to be
located in, on, under or about the Premises or the Building, other than as
previously consented to by Lessor, Lessee shall immediately give Lessor
written notice thereof, together with a copy of any statement, report,
notice, registration, application, permit, business plan, license, claim,
action, or proceeding given to, or received from, any governmental authority
or private party concerning the presence, spill, release, discharge of, or
exposure to, such Hazardous Substance including but not limited to all such
documents as may be involved in any Reportable Use involving the Premises.
Lessee shall not cause or permit any Hazardous Substance to be spilled or
released in, on, under or about the Premises (including, without limitation,
through the plumbing or sanitary sewer system).

               (c)     INDEMNIFICATION. Lessee shall indemnify, protect,
defend and hold Lessor, its agents, employees, lenders and ground lessor, if
any, and the Premises, harmless from and against any and all damages,
liabilities, judgments, costs, claims, liens, expenses, penalties, loss of
permits and attorneys' and consultants' fees arising out of or involving any
Hazardous Substance brought onto the Premises by or for Lessee or by anyone
under Lessee's control. Lessee's obligations under this Paragraph 6.2(c)
shall include, but not be limited to, the effects of any contamination or
injury to person, property or the environment created or suffered by Lessee,
and the cost of investigation (including consultants' and attorneys' fees and
testing), removal, remediation, restoration and/or abatement thereof, or of
any contamination therein involved, and shall survive the expiration or
earlier termination of this Lease. No termination, cancellation or release
agreement entered into by Lessor and Lessee shall release Lessee from its
obligations under this Lease with respect to Hazardous Substances, unless
specifically so agreed by Lessor in writing at the time of such agreement.

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

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

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

       7.1     LESSEE'S OBLIGATIONS.

               (a)     Subject to the provisions of Paragraphs 2.2 (Condition),
2.3 (Compliance with Covenants, Restrictions and Building Code), 7.2
(Lessor's Obligations), 9 (Damage or Destruction), and 14 (Condemnation),
Lessee shall, at Lessee's sole cost and expense and at all times, keep the
Premises and every part thereof in good order, condition and repair (whether
or not such portion of the Premises requiring repair, or the means of
repairing the same, are reasonably or readily accessible to Lessee, and
whether or not the need for such repairs occurs as a result of Lessee's use,
any prior use, the elements or the age of such portion of the Premises),
including, without limiting the generality of the foregoing, all equipment or
facilities specifically serving the Premises, such as plumbing, heating, air
conditioning, ventilating, electrical, lighting facilities, boilers, fired or
unfired pressure vessels, fire hose connections if within the Premises,
fixtures, interior walls, interior surfaces of exterior walls, ceilings,
floors, windows, doors, plate glass, and skylights, but excluding any items
which are the responsibility of Lessor pursuant to Paragraph 7.2 below.
Lessee, in keeping the Premises in good order, condition and repair, shall
exercise and perform good maintenance practices. Lessee's obligations shall
include restorations, replacements or renewals when necessary to keep the
Premises and all improvements thereon or a part thereof in good order,
condition and state of repair.

               (b)     Lessee shall, at Lessee's sole cost and expense,
procure and maintain a contract, with copies to Lessor, in customary form and
substance for and with a contractor specializing and experienced in the
inspection, maintenance and service of the heating, air conditioning and
ventilation system for the Premises. However,

               (c)     If Lessee fails to perform Lessee's obligations under
this Paragraph 7.1, Lessor may enter upon the Premises after ten (10) days'
prior written notice to Lessee (except in the case of an emergency, in which
case no notice shall be required), perform such obligations on Lessee's
behalf, and put the Premises in good order, condition and repair, in
accordance with Paragraph 13.2 below.

       7.2     LESSOR'S OBLIGATIONS. Subject to the provisions of Paragraphs
2.2 (Condition), 2.3 (Compliance with Covenants, Restrictions and Building
Code), 4.2 (Common Area Operating Expenses), 6 (Use), 7.1 (Lessee's
Obligations), 9 (Damage or Destruction) and 14 (Condemnation), Lessor,
subject to reimbursement pursuant to Paragraph 4.2, shall keep in good order,
condition and repair the foundations, exterior walls, structural condition of
interior bearing walls, exterior roof, fire sprinkler and/or standpipe and
hose (if located in the Common Areas) or other automatic fire extinguishing
system including fire alarm and/or smoke

                                                           INITIALS: HH
                                                                    ----
                                       -3-                           RHD
                                                                    ----

<PAGE>

detection systems and equipment, fire hydrants, parking lots, walkways,
parkways, driveways, landscaping, fences, signs and utility systems serving
the Common Areas and all parts thereof, as well as providing the services for
which there is a Common Area Operating Expense pursuant to Paragraph 4.2.
Lessor shall not be obligated to paint the exterior or interior surfaces of
exterior walls nor shall Lessor be obligated to maintain, repair or replace
windows, doors or plate glass of the Premises. Lessee expressly waives the
benefit of any statute now or hereafter in effect which would otherwise
afford Lessee the right to make repairs at Lessor's expense or to terminate
this Lease because of Lessor's failure to keep the Building, Industrial
Center or Common Areas in good order, condition and repair.

       7.3     UTILITY INSTALLATIONS, TRADE FIXTURES, ALTERATIONS.

               (a)     DEFINITIONS; CONSENT REQUIRED. The term "UTILITY
INSTALLATIONS" is used in this Lease to refer to all air lines, power panels,
electrical distribution, security, fire protection systems, communications
systems, lighting fixtures, heating, ventilating and air conditioning
equipment, plumbing, and fencing in, on or about the Premises. The term
"TRADE FIXTURES" shall mean Lessee's machinery and equipment which can be
removed without doing material damage to the Premises. The term "ALTERATIONS"
shall mean any modification of the improvements on the Premises which are
financed by the Lessor and installed by the Lessee under the terms of this
Lease, other than Utility Installations or Trade Fixtures. "LESSEE-OWNED
ALTERATIONS AND/OR UTILITY INSTALLATIONS" are defined as Alterations and/or
Utility Installations made by Lessee that are not financed by the Lessor and
not yet owned by Lessor pursuant to Paragraph 7.4(a). Lessee shall not make
nor cause to be made any Alterations or Utility Installations in, on, under or
about the Premises without Lessor's prior written consent.  Lessee may,
however, make non-structural Utility Installations to the interior of the
Premises (excluding the roof) without Lessor's consent but upon notice to
Lessor, so long as they are not visible from the outside of the Premises, do
not involve puncturing, relocating or removing the roof or any existing
walls, or changing or interfering with the fire sprinkler or fire detection
systems and the cumulative cost thereof during the term of this Lease as
extended does not exceed $5,000.

               (b)     CONSENT. Any Alterations or Utility Installations that
Lessee shall desire to make and which require the consent of the Lessor shall
be presented to Lessor in written form with detailed plans. All consents
given by Lessor, whether by virtue of Paragraph 7.3(a) or by subsequent
specific consent, shall be deemed conditioned upon: (i) Lessee's acquiring
all applicable permits required by governmental authorities; (ii) the
furnishing of copies of such permits together with a copy of the plans and
specifications for the Alteration or Utility Installation to Lessor prior to
commencement of the work thereon; and (iii) the compliance by Lessee with all
conditions of said permits in a prompt and expeditious manner. Any
Alterations or Utility Installations by Lessee during the term of this Lease
shall be done in a good and workmanlike manner, with good and sufficient
materials, and be in compliance with all Applicable Requirements. Lessee
shall promptly upon completion thereof furnish Lessor with as-built plans and
specifications therefor. Lessor may, (but without obligation to do so)
condition its consent to any requested Alteration or Utility Installation
that costs $2,500.00 or more upon Lessee's providing Lessor with a lien and
completion bond in an amount equal to one and one-half times the estimated cost
of such Alteration or Utility Installation.

               (c)     LIEN PROTECTION. Lessee shall pay when due all claims
for labor or materials furnished or alleged to have been furnished to or for
Lessee at or for use on the Premises, which claims are or may be secured by
any mechanic's or materialmen's lien against the Premises or any interest
therein. Lessee shall give Lessor not less than ten (10) days' notice prior
to the commencement of any work in, on, or about the Premises, and Lessor
shall have the right to post notices of non-responsibility in or on the
Premises as provided by law. If Lessee shall, in good faith, contest the
validity of any such lien, claim or demand, then Lessee shall, at its sole
expense, defend and protect itself, Lessor and the Premises against the same
and shall pay and satisfy any such adverse judgment that may be rendered
thereon before the enforcement thereof against the Lessor or the Premises. If
Lessor shall require, Lessee shall furnish to Lessor a surety bond
satisfactory to Lessor in an amount equal to one and one-half times the
amount of such contested lien, claim or demand, indemnifying Lessor against
liability for the same, as required by law for the holding of the Premises
free from the effect of such lien or claim. In addition, Lessor may require
Lessee to pay Lessor's attorneys' fees and costs in participating in such
action if Lessor shall decide it is to its best interest to do so. Refer to
Paragraph 55

       7.4     OWNERSHIP, REMOVAL, SURRENDER, AND RESTORATION.

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

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

               (c)     SURRENDER/RESTORATION. Lessee shall surrender the
Premises by the end of the last day of the Lease term or any earlier
termination date, clean and free of debris and in good operating order,
condition and state of repair, ordinary wear and tear excepted. Ordinary wear
and tear shall not include any damage or deterioration that would have been
prevented by good maintenance practice or by Lessee performing all of its
obligations under this Lease. Except as otherwise agreed or specified herein,
the Premises, as surrendered, shall include the Alterations and Utility
Installations. The obligation of Lessee shall include the repair of any
damage occasioned by the installation, maintenance or removal of Lessee's
Trade Fixtures, furnishings, equipment, and Lessee-Owned Alterations and
Utility Installations, as well as the removal of any storage tank installed
by or for Lessee, and the removal, replacement, or remediation of any soil,
material or ground water contaminated by Lessee, all as may then be required
by Applicable Requirements and/or good practice. Lessee's Trade Fixtures
shall remain the property of Lessee and shall be removed by Lessee subject to
its obligation to repair and restore the Premises per this Lease. Refer to
Paragraph 56

8.     INSURANCE; INDEMNITY.

       8.1     PAYMENT OF PREMIUMS. The cost of the premiums for the insurance
policies maintained by Lessor under this Paragraph 8 shall be a Common Area
Operating Expense pursuant to Paragraph 4.2 hereof. Premiums for policy
periods commencing prior to, or extending beyond, the term of this Lease
shall be prorated to coincide with the corresponding Commencement Date or
Expiration Date.

       8.2     LIABILITY INSURANCE.

               (a)     CARRIED BY LESSEE. Lessee shall obtain and keep in force
during the term of this Lease a Commercial General Liability policy of
insurance protecting Lessee, Lessor and any Lender(s) whose names have been
provided to Lessee in writing (as additional insureds) against claims for
bodily injury, personal injury and property damage based upon, involving or
arising out of the ownership, use, occupancy or maintenance of the Premises
and all areas appurtenant thereto. Such insurance shall be on an occurrence
basis providing single limit coverage in an amount not less than $1,000,000
per occurrence with an "Additional Insured-Managers or Lessors of Premises"
endorsement and contain the "Amendment to the Pollution Exclusion"
endorsement for damage caused by heat, smoke or fumes from a hostile fire.
The policy shall not contain any intra-insured exclusions as between insured
person or organizations, but shall include coverage for liability assumed
under this Lease as an "INSURED CONTRACT" for the performance of Lessee's
indemnity obligations under this Lease. The limits of said insurance required
by this Lease or as carried by Lessee shall not, however, limit the liability
of Lessee nor relieve Lessee of any obligation hereunder. All insurance to be
carried by Lessee shall be primary to and not contributory with any similar
insurance carried by Lessor, whose insurance shall be considered excess
insurance only.

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

       8.3     PROPERTY INSURANCE-BUILDING, IMPROVEMENTS AND RENTAL VALUE.

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

               (b)     RENTAL VALUE. Lessor shall also obtain and keep in force
during the term of this Lease a policy or policies in the name of Lessor,
with loss payable to Lessor and any Lender(s), insuring the loss of the full
rental and other charges payable by all lessees of the Building to Lessor for
one year (including all Real Property Taxes, insurance costs, all Common Area
Operating Expenses and any scheduled rental increases). Said insurance may
provide that in the event the Lease is terminated by reason of an insured
loss, the period of indemnity for such coverage shall be extended beyond the
date of the completion of repairs or replacement of the Premises, to provide
for one full year's loss of rental revenues from the date of any such loss.
Said insurance shall contain an agreed valuation provision in lieu of any
co-insurance clause, and the amount of coverage shall be adjusted annually to
reflect the projected rental income, Real Property Taxes, insurance premium
costs and other expenses, if any, otherwise payable, for the next 12-month
period. Common Area Operating Expenses shall include any deductible amount in
the event of such loss.

               (c)     ADJACENT PREMISES. Lessee shall pay for any increase in
the premiums for the property insurance of the Building and for the Common
Areas or other buildings in the Industrial Center if said increase is caused
by Lessee's acts, omissions, use or occupancy of the Premises.

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

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

       8.5     INSURANCE POLICIES. Insurance required hereunder shall be in
companies duly licensed to transact business in the state where the Premises
are located, and maintaining during the policy term a "General Policyholders
Rating" of at least B+, V, or such other rating as may be required by a
Lender, as set forth in the most current issue of "Best's Insurance Guide."
Lessee shall not do or permit to be done anything which shall invalidate the
insurance policies referred to in


                                                           INITIALS: HH
                                                                    ----
                                       -4-                           RHD
                                                                    ----
<PAGE>

this Paragraph 8. Lessee shall cause to be delivered to Lessor, within seven
(7) days after the earlier of the Early Possession Date or the Commencement
Date, certified copies of, or certificates evidencing the existence and amounts
of, the insurance required under Paragraph 8.2(a) and 8.4.  No such policy shall
be cancelable or subject to modification except after thirty (30) days' prior
written notice to Lessor. Lessee shall at least thirty (30) days prior to
the expiration of such policies, furnish Lessor with evidence of renewals or
"insurance binders" evidencing renewal thereof, or Lessor may order such
insurance and charge the cost thereof to Lessee, which amount shall be payable
by Lessee to Lessor upon demand. Lessees Insurance Policies shall name Lessor
as Additional Insured

       8.6     WAIVER OF SUBROGATION. Without affecting any other rights or
remedies, Lessee and Lessor each hereby release and relieve the other, and waive
their entire right to recover damages (whether in contract or in tort) against
the other, for loss or damage to their property arising out of or incident to
the perils required to be insured against under Paragraph 8.  The effect of such
releases and waivers of the right to recover damages shall not be limited by the
amount of insurance carried or required, or by any deductibles applicable
thereto.  Lessor and Lessee agree to have their respective insurance companies
issuing property damage insurance waive any right to subrogation that such
companies may have against Lessor or Lessee, as the case may be, so long as the
insurance is not invalidated thereby.

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

       8.8     EXEMPTION OF LESSOR FROM LIABILITY. Lessor shall not be liable
for injury or damage to the person or goods, wares, merchandise or other
property of Lessee, Lessee's employees, contractors, invitees, customers, or any
other person in or about the Premises, whether such damage or injury is caused
by or results from fire, steam, electricity, gas, water or rain, or from the
breakage, obstruction or other defects of pipes, fire sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures, or from any other
cause, whether said injury or damage results from conditions arising upon the
Premises or upon other portions of the Building of which the Premises are a
part, from other sources or places, and regardless of whether the cause of such
damage or injury or the means of repairing the same is accessible or not.
Lessor shall not be liable for any damages arising from any act or neglect of
any other lessee of Lessor nor from the failure by Lessor to enforce the
provisions of any other lease in the Industrial Center.  Notwithstanding
Lessor's negligence or breach of this Lease, Lessor shall under no circumstances
be liable for injury to Lessee's business or for any loss of income or profit
therefrom.

9.     DAMAGE OR DESTRUCTION.

       9.1     DEFINITIONS.

               (a)     "PREMISES PARTIAL DAMAGE" shall mean damage or
destruction to the Premises, other than Lessee-Owned Alterations and Utility
Installations, the repair cost of which damage or destruction is less than fifty
percent (50%) of the then Replacement Cost (as defined in Paragraph 9.1(d)) of
the Premises (excluding Lessee-Owned Alterations and Utility Installations and
Trade Fixtures) immediately prior to such damage or destruction.

               (b)     "PREMISES TOTAL DESTRUCTION" shall mean damage or
destruction to the Premises, other than Lessee-Owned Alterations and Utility
Installations, the repair cost of which damage or destruction is fifty
percent (50%) or more of the then Replacement Cost of the Premises (excluding
Lessee-Owned Alterations and Utility Installations and Trade Fixtures)
immediately prior to such damage or destruction.  In addition, damage or
destruction to the Building, other than Lessee-Owned Alterations and Utility
Installations and Trade Fixtures of any lessees of the Building, the cost of
which damage or destruction is fifty percent (50%) or more of the then
Replacement Cost (excluding Lessee-Owned Alterations and Utility Installations
and Trade Fixtures of any lessees of the Building) of the Building shall, at the
option of Lessor, be deemed to be Premises Total Destruction.

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

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

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

       9.2     PREMISES PARTIAL DAMAGE - INSURED LOSS. If Premises Partial
Damage that is an Insured Loss occurs, then Lessor shall, at Lessor's
expense, repair such damage (but not Lessee's Trade Fixtures or Lessee-Owned
Alterations and Utility Installations) as soon as reasonably possible and
this Lease shall continue in full force and effect.  In the event, however,
that there is a shortage of insurance proceeds and such shortage is due to
the fact that, by reason of the unique nature of the improvements in the
Premises, full replacement cost insurance coverage was not commercially
reasonable and available, Lessor shall have no obligation to pay for the
shortage in insurance proceeds or to fully restore the unique aspects of the
Premises unless Lessee provides Lessor with the funds to cover same, or
adequate assurance thereof, within ten (10) days following receipt of written
notice of such shortage and request therefor.  If Lessor receives said funds
or adequate assurance thereof within said ten (10) day period, Lessor shall
complete them as soon as reasonably possible and this Lease shall remain in
full force and effect.  If Lessor does not receive such funds or assurance
within said period, Lessor may nevertheless elect by written notice to Lessee
within ten (10) days thereafter to make such restoration and repair as is
commercially reasonable with Lessor paying any shortage in proceeds, in which
case this Lease shall remain in full force and effect.  If Lessor does not
receive such funds or assurance within such ten (10) day period, and if
Lessor does not so elect to restore and repair, then this Lease shall
terminate sixty (60) days following the occurrence of the damage or
destruction.  Unless otherwise agreed, Lessee shall in no event have any
right to reimbursement from Lessor for any funds contributed by Lessee to
repair any such damage or destruction.  Premises Partial Damage due to flood
or earthquake shall be subject to Paragraph 9.3 rather than Paragraph 9.2,
notwithstanding that there may be some insurance coverage, but the net
proceeds of any such insurance shall be made available for the repairs if
made by either Party.

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

       9.4     TOTAL DESTRUCTION. Notwithstanding any other provision hereof,
if Premises Total Destruction occurs (including any destruction required by any
authorized public authority), this Lease shall terminate sixty (60) days
following the date of such Premises Total Destruction, whether or not the damage
or destruction is an Insured Loss or was caused by a negligent or willful act of
Lessee.  In the event, however, that the damage or destruction was caused by
Lessee, Lessor shall have the right to recover Lessor's damages from Lessee
except as released and waived in Paragraph 9.7.

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

       9.6     ABATEMENT OF RENT; LESSEE'S REMEDIES.

               (a)     In the event of (i) Premises Partial Damage or (ii)
Hazardous Substance Condition for which Lessee is not legally responsible,
the Base Rent, Common Area Operating Expenses and other charges, if any,
payable by Lessee hereunder for the period during which such damage or
condition, its repair, remediation or restoration continues, shall be abated
in proportion to the degree to which Lessee's use of the Premises is
impaired, but not in excess of proceeds from insurance required to be carried
under Paragraph 8.3(b). Except for abatement of Base Rent, Common Area
Operation Expenses and other charges, if any, as aforesaid, all other
obligations of Lessee hereunder shall be performed by Lessee, and Lessee
shall have no claim against Lessor for any damage suffered by reason of any
such damage, destruction, repair, remediation or restoration.

               (b)     If Lessor shall be obligated to repair or restore the
Premises under the provisions of this Paragraph 9 and shall not commence, in
a substantial and meaningful way, the repair of restoration of the Premises
within ninety (90) days after such obligation shall accrue, Lessee may, at
any time prior to the commencement of such repair or restoration, give
written notice to Lessor and to any Lenders of which Lessee has actual notice
of Lessee's election to terminate this Lease on a date not less than sixty
(60) days following the giving of such notice.  If Lessee gives such notice
to Lessor and such Lenders and such repair or restoration is not commenced
within thirty (30) days after receipt of such notice, this Lease shall
terminate as of the date specified in said notice.  If Lessor or a Lender
commences the repair or restoration of the Premises within thirty (30) days
after the receipt of such notice, this Lease shall continue in full force and
effect.  "COMMENCE" as used in this Paragraph 9.6 shall mean either the
unconditional authorization of the preparation of the required plans, or the
beginning of the actual work on the Premises, whichever occurs first.

       9.7     HAZARDOUS SUBSTANCE CONDITIONS. If a Hazardous Substance
Condition occurs, unless Lessee is legally responsible therefor (in which case
Lessee shall make the investigation and remediation thereof required by
Applicable Requirements and this Lease shall continue in full force and effect,
but subject


                                                           INITIALS: HH
                                                                    -----
                                       -5-                           RHD
                                                                    -----
<PAGE>

to Lessor's rights under Paragraph 6.2(c) and Paragraph 13), Lessor may at
Lessor's option either (i) investigate and remediate such Hazardous Substance
Condition, if required, as soon as reasonably possible at Lessor's expense, in
which event this Lease shall continue in full force and effect, or (ii) if the
estimated cost to investigate and remediate such condition exceeds twelve (12)
times the then monthly Base Rent or $100,000 whichever is greater, give
written notice to Lessee within thirty (30) days after receipt by Lessor of
knowledge of the occurrence of such Hazardous Substance Condition of Lessor's
desire to terminate this Lease as of the date sixty (60) days following the date
of such notice.  In the event Lessor elects to give such notice of Lessor's
intention to terminate this Lease, Lessee shall have the right within ten (10)
days after the receipt of such notice to give written notice to Lessor of
Lessee's commitment to pay for the excess costs of (a) investigation and
remediation of such Hazardous Substance Condition to the extent required by
Applicable Requirements, over (b) an amount equal to twelve (12) times the then
monthly Base Rent or $100,000, whichever is greater.  Lessee shall provide
Lessor with the funds required of Lessee or satisfactory assurance thereof
within thirty (30) days following said commitment by Lessee.  In such event this
Lease shall continue in full force and effect, and Lessor shall proceed to make
such investigation and remediation as soon as reasonably possible after the
required funds are available.  If Lessee does not give such notice and provide
the required funds or assurance thereof within the time period specified above,
this Lease shall terminate as of the date specified in Lessor's notice of
termination.

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

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

10.    REAL PROPERTY TAXES.

       10.1    PAYMENT OF TAXES. Lessor shall pay the Real Property Taxes, as
defined in Paragraph 10.2, applicable to the Industrial Center, and except as
otherwise provided in Paragraph 10.3, any such amounts shall be included in the
calculation of Common Area Operating Expenses in accordance with the provisions
of Paragraph 4.2.

       10.2  REAL PROPERTY TAX DEFINITION. As used herein, the term "REAL
PROPERTY TAXES" shall include any form of real estate tax or assessment,
general, special, ordinary or extraordinary, and any license fee, commercial
rental tax, improvement bond or bonds, levy or tax (other than inheritance,
personal income or estate taxes) imposed upon the Industrial Center by any
authority having the direct or indirect power to tax, including any city, state
or federal government, or any school, agricultural, sanitary, fire, street,
drainage, or other improvement district thereof, levied against any legal or
equitable interest of Lessor in the Industrial Center or any portion thereof,
Lessor's right to rent or other income therefrom, and/or Lessor's business of
leasing the Premises.  The term "REAL PROPERTY TAXES" shall also include any
tax, fee, levy, assessment or charge, or any increase therein, imposed by reason
of events occurring, or changes in Applicable Law taking effect, during the term
of this Lease, including but not limited to a change in the ownership of the
Industrial Center or in the improvements thereon, the execution of this Lease,
or any modification, amendment or transfer thereof, and whether or not
contemplated by the Parties.  In calculating Real Property Taxes for any
calendar year, the Real Property Taxes for any real estate tax year shall be
included in the calculation of Real Property Taxes for such calendar year based
upon the number of days which such calendar year and tax year have in common.

       10.3    ADDITIONAL IMPROVEMENTS. Common Area Operating Expenses shall
not include Real Property Taxes specified in the tax assessor's records and work
sheets as being caused by additional improvements placed upon the Industrial
Center by other lessees or by Lessor for the exclusive enjoyment of such other
lessees.  Notwithstanding Paragraph 10.1 hereof, Lessee shall, however, pay to
Lessor at the time Common Area Operating Expenses are payable under Paragraph
4.2, the entirety of any increase in Real Property Taxes if assessed solely by
reason of Alterations, Trade Fixtures or Utility Installations placed upon the
Premises by Lessee or at Lessee's request.

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

       10.5    LESSEE'S PROPERTY TAXES. Lessee shall pay prior to delinquency
all taxes assessed against and levied upon Lessee-Owned Alterations and Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Lessee contained in the Premises or stored within the Industrial Center.
When possible, Lessee shall cause its Lessee-Owned Alterations and Utility
Installations, Trade Fixtures, furnishings, equipment and all other personal
property to be assessed and billed separately from the real property of Lessor.
If any of Lessee's said property shall be assessed with Lessor's real property,
Lessee shall pay Lessor the taxes attributable to Lessee's property within ten
(10) days after receipt of a written statement setting forth the taxes
applicable to Lessee's property.

11.    UTILITIES. Lessee shall pay directly for all utilities and services
supplied to the Premises, including but not limited to electricity, telephone,
security, gas and cleaning of the Premises, together with any taxes thereon.  If
any such utilities or services are not separately metered to the Premises or
separately billed to the Premises, Lessee shall pay to Lessor a reasonable
proportion to be determined by Lessor of all such charges jointly metered or
billed with other premises in the Building, in the manner and within the time
periods set forth in Paragraph 4.2(d). Refer to Paragraph 57 and Exhibit C

12.    ASSIGNMENT AND SUBLETTING.

       12.1    LESSOR'S CONSENT REQUIRED.

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

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

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

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

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

       12.2    TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.

               (a)     Regardless of Lessor's consent, any assignment or
subletting shall not (i) be effective without the express written assumption by
such assignee or sublessee of the obligations of Lessee under this Lease, (ii)
release Lessee of any obligations hereunder, nor (iii) alter the primary
liability of Lessee for the payment of Base Rent and other sums due Lessor
hereunder or for the performance of any other obligations to be performed by
Lessee under this Lease.

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

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

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

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

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


                                                           INITIALS: HH
                                                                    -----
                                       -6-                           RHD
                                                                    -----
<PAGE>

               (g)     The occurrence of a transaction described in
Paragraph 12.2(c) shall give Lessor the right (but not the obligation) to
require that the Security Deposit be increased by an amount equal to six (6)
times the then monthly Base Rent, and Lessor may make the actual receipt by
Lessor of the Security Deposit increase a condition to Lessor's consent to
such transaction.

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

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

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

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

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

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

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

13.    DEFAULT; BREACH; REMEDIES.

       13.1    DEFAULT; BREACH. Lessor and Lessee agree that if an attorney
is consulted by Lessor in connection with a Lessee Default or Breach (as
hereinafter defined), $350.00 is a reasonable minimum sum per such occurrence
for legal services and costs in the preparation and service of a notice of
Default, and that Lessor may include the cost of such services and costs in
said notice as rent due and payable to cure said default. A "DEFAULT" by
Lessee is defined as a failure by Lessee to observe, comply with or perform
any of the terms, covenants, conditions or rules applicable to Lessee under
this Lease. A "BREACH" by Lessee is defined as the occurrence of any one or
more of the following Defaults, and, where a grace period for cure after
notice is specified herein, the failure by Lessee to cure such Default prior
to the expiration of the applicable grace period, and shall entitle Lessor to
pursue the remedies set forth in Paragraphs 13.2 and/or 13.3:

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

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

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

               (d)     A Default by Lessee as to the terms, covenants,
conditions or provisions of this Lease, or of the rules adopted under
Paragraph 40 hereof that are to be observed, complied with or performed by
Lessee, other than those described in Subparagraphs 13.1(a), (b) or (c),
above, where such Default continues for a period of thirty (30) days after
written notice thereof by or on behalf of Lessor to Lessee, provided,
however, that if the nature of Lessee's Default is such that more than thirty
(30) days are reasonably required for its cure, then it shall not be deemed
to be a Breach of this Lease by Lessee if Lessee commences such cure within
said thirty (30) day period and thereafter diligently prosecutes such cure to
completion.

               (e)     The occurrence of any of the following events: (i) the
making by Lessee of any general arrangement or assignment for the benefit of
creditors; (ii) Lessee's becoming a "debtor" as defined in 11 U.S. Code
Section 101 or any successor statute thereto (unless, in the case of a
petition filed against Lessee, the same is dismissed within sixty (60) days);
(iii) the appointment of a trustee or receiver to take possession of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where possession is not restored to Lessee within
thirty (30) days; or (iv) the attachment, execution or other judicial seizure
of substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where such seizure is not discharged within thirty
(30) days; provided, however, in the event that any provision of this
Subparagraph 13.1(e) is contrary to any applicable law, such provision shall
be of no force or effect, and shall not affect the validity of the remaining
provisions.

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

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

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

               (a)     Terminate Lessee's right to possession of the Premises
by any lawful means, in which case this Lease and the term hereof shall
terminate and Lessee shall immediately surrender possession of the Premises
to Lessor. In such event Lessor shall be entitled to recover from Lessee: (i)
the worth at the time of the award of the unpaid rent which had been earned
at the time of termination; (ii) the worth at the time of award of the amount
by which the unpaid rent which would have been earned after termination until
the time of award exceeds the amount of such rental loss that the Lessee
proves could have been reasonably avoided; (iii) the worth at the time of
award of the amount by which the unpaid rent for the balance of the term
after the time of award exceeds the amount of such rental loss that the
Lessee proves could be reasonably avoided; and (iv) any other amount
necessary to compensate Lessor for all the detriment proximately caused by
the Lessee's failure to perform its obligations under this Lease or which in
the ordinary course of things would be likely to result therefrom, including
but not limited to the cost of recovering possession of the Premises,
expenses of reletting, including necessary renovation and alteration of the
Premises, reasonable attorneys' fees and that portion of any leasing
commission paid by Lessor in connection with this Lease applicable to the
unexpired term of this Lease. The worth at the time of award of the amount
referred to in provision (iii) of the immediately preceding sentence shall be
computed by discounting such amount at the discount rate of the Federal
Reserve Bank of San Francisco or the Federal Reserve Bank District in which
the Premises are located at the time of award plus one percent (1%). Efforts
by Lessor to mitigate damages caused by Lessee's Default or Breach of this
Lease shall not waive Lessor's right to recover damages under this Paragraph
13.2. If termination of this Lease is obtained through the provisional remedy
of unlawful detainer, Lessor shall have the right to recover in such
proceeding the unpaid rent and damages as are recoverable therein, or Lessor
may reserve the right to recover all or any part thereof in a separate suit
for such rent and/or damages. If a notice and grace period required under
Subparagraph 13.1(b), (c) or (d) was not previously given, a notice to pay
rent or quit, or to perform or quit, as the case may be, given to Lessee
under any statute authorizing the forfeiture of leases for unlawful detainer
shall also constitute the applicable notice for grace period purposes
required by Subparagraph 13.1(b), (c) or (d). In such case, the applicable
grace period under the unlawful detainer statute shall run concurrently after
the one such statutory notice, and the failure of Lessee to cure the Default
within the greater of the two (2) such grace periods shall constitute both an
unlawful detainer and a Breach of this Lease entitling Lessor to the remedies
provided for in this Lease and/or by said statute.

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

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


                                                           INITIALS: HH
                                                                    -----
                                       -7-                           RHD
                                                                    -----
<PAGE>

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

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

       13.4    LATE CHARGES. Lessee hereby acknowledges that late payment by
Lessee to Lessor of rent and other sums due hereunder will cause Lessor to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed upon
Lessor by the terms of any ground lease, mortgage or deed of trust covering
the Premises. Accordingly, if any installment of rent or other sum due from
Lessee shall not be received by Lessor or Lessor's designee within ten (10)
days after such amount shall be due, then, without any requirement for notice
to Lessee, Lessee shall pay to Lessor a late charge equal to six percent (6%)
of such overdue amount. The parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs Lessor will incur by
reason of late payment by Lessee. Acceptance of such late charge by Lessor
shall in no event constitute a waiver of Lessee's Default or Breach with
respect to such overdue amount, nor prevent Lessor from exercising any of the
other rights and remedies granted hereunder. In the event that a late charge
is payable hereunder, whether or not collected, for three (3) consecutive
installments of Base Rent, then notwithstanding Paragraph 4.1 or any other
provision of this Lease to the contrary, Base Rent shall, at Lessor's option,
become due and payable quarterly in advance.

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

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

15.    BROKERS' FEES.

       15.1    PROCURING CAUSE. The Broker(s) named in Paragraph 1.10 is/are
the procuring cause of this Lease. Refer to Exhibit C

       15.3    ASSUMPTION OF OBLIGATIONS. Any buyer or transferee of Lessor's
interest in this Lease, whether such transfer is by agreement or by operation
of law, shall be deemed to have assumed Lessor's obligation under this
Paragraph 15. Each Broker shall be an intended third party beneficiary of the
provisions of Paragraph 1.10 and of this Paragraph 15 to the extent of its
interest in any commission arising from this Lease and may enforce that right
directly against Lessor and its successors.

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

16.    TENANCY AND FINANCIAL STATEMENTS.

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

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

17.    LESSOR'S LIABILITY. The term "LESSOR" as used herein shall mean the
owner or owners at the time in question of the fee title to the Premises. In
the event of a transfer of Lessor's title or interest in the Premises or in
this Lease, Lessor shall deliver to the transferee or assignee (in cash or by
credit) any unused Security Deposit held by Lessor at the time of such
transfer or assignment. Except as provided in Paragraph 15.3, upon such
transfer or assignment and delivery of the Security Deposit, as aforesaid,
the prior Lessor shall be relieved of all liability with respect to the
obligations and/or covenants under this Lease thereafter to be performed by
the Lessor. Subject to the foregoing, the obligations and/or covenants in
this Lease to be performed by the Lessor shall be binding only upon the
Lessor as hereinabove defined.

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

19.    INTEREST ON PAST-DUE OBLIGATIONS. Any monetary payment due Lessor
hereunder, other than late charges, not received by Lessor within ten (10)
days following the date on which it was due, shall bear interest from the
date due at the prime rate charged by the largest state chartered bank in the
state in which the Premises are located plus four percent (4%) per annum, but
not exceeding the maximum rate allowed by law, in addition to the potential
late charge provided for in Paragraph 13.4.

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

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

22.    NO PRIOR OR OTHER AGREEMENTS; BROKER DISCLAIMER. This Lease contains
all agreements between the Parties with respect to any matter mentioned
herein, and no other prior or contemporaneous agreement or understanding
shall be effective. Lessor and Lessee each represents and warrants to the
Brokers that it has made, and is relying solely upon, its own investigation
as to the nature, quality, character and financial responsibility of the
other Party to this Lease and as to the nature, quality and character of the
Premises. Brokers have no responsibility with respect thereto or with respect
to any default or breach hereof by either Party. Each Broker shall be an
intended third party beneficiary of the provisions of this Paragraph 22.
Refer to Paragraph 58

23.    NOTICES.

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

       23.2    DATE OF NOTICE. Any notice sent by registered or certified
mail, return receipt requested, shall be deemed given on the date of delivery
shown on the receipt card, or if no delivery date is shown, the postmark
thereon. If sent by regular mail, the notice shall be deemed given
forty-eight (48) hours after the same is addressed as required herein and
mailed with postage prepaid. Notices delivered by United States Express Mail
or overnight courier that guarantees next day


                                                           INITIALS: HH
                                                                    -----
                                       -8-                           RHD
                                                                    -----
<PAGE>

delivery shall be deemed given twenty-four (24) hours after delivery of the
same to the United States Postal Service or courier. If any notice is
transmitted by facsimile transmission or similar means, the same shall be
deemed served or delivered upon telephone or facsimile confirmation of
receipt of the transmission thereof, provided a copy is also delivered via
delivery or mail. If notice is received on a Saturday or a Sunday or a legal
holiday, it shall be deemed received on the next business day.

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

26.    NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or earlier termination of
this Lease. In the event that Lessee holds over in violation of this
Paragraph 26 then the Base Rent payable from and after the time of the
expiration or earlier termination of this Lease shall be increased to two
hundred percent (200%) of the Base Rent applicable during the month
immediately preceding such expiration or earlier termination.  Nothing
contained herein shall be construed as a consent by Lessor to any holding
over by Lessee.

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

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

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

30.    SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.

       30.1    SUBORDINATION. This Lease and any Option granted hereby shall
be subject and subordinate to any ground lease, mortgage, deed of trust, or
other hypothecation or security device (collectively, "SECURITY DEVICE"), now
or hereafter placed by Lessor upon the real property of which the Premises
are a part, to any and all advances made on the security thereof, and to all
renewals, modifications, consolidations, replacements and extensions thereof.
Lessee agrees that the Lenders holding any such Security Device shall have no
duty, liability or obligation to perform any of the obligations of Lessor
under this Lease, but that in the event of Lessor's default with respect to
any such obligation, Lessee will give any Lender whose name and address have
been furnished Lessee in writing for such purpose notice of Lessor's default
pursuant to Paragraph 13.5. If any Lender shall elect to have this Lease
and/or any Option granted hereby superior to the lien of its Security Device
and shall give written notice thereof to Lessee, this Lease and such Options
shall be deemed prior to such Security Device, notwithstanding the relative
dates of the documentation or recordation thereof.

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

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

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

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

32.    LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Lessor's
agents shall have the right to enter the Premises at any time, in the case of
an emergency, and otherwise at reasonable times for the purpose of showing
the same to prospective purchasers, lenders, or lessees, and making such
alterations, repairs, improvements or additions to the Premises or to the
Building, as Lessor may reasonably deem necessary. Lessor may at any time
place on or about the Premises or Building any ordinary "For Sale" signs and
Lessor may at any time during the last one hundred eighty (180) days of the
term hereof place on or about the Premises any ordinary "For Lease" signs.
All such activities of Lessor shall be without abatement of rent or liability
to Lessee.

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

34.    SIGNS. Lessee shall not place any sign upon the exterior of the
Premises or the Building, except that Lessee may, with Lessor's prior written
consent, install (but not on the roof) such signs as are reasonably required
to advertise Lessee's own business so long as such signs are in a location
designated by Lessor and comply with Applicable Requirements and the signage
criteria established for the Industrial Center by Lessor. The installation of
any sign on the Premises by or for Lessee shall be subject to the provisions of
Paragraph 7 (Maintenance, Repairs, Utility Installation, Trade Fixtures and
Alterations). Refer to Par. 59

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

36.    CONSENTS.

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

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

37.    GUARANTOR.

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


                                                           INITIALS: HH
                                                                    -----
                                       -9-                           RHD
                                                                    -----
<PAGE>

39.    OPTIONS.

       39.1    DEFINITION. As used in this Lease, the word "OPTION" has the
following meaning: (a) the right to renew this Lease.(b) the right of first
offer to lease other property of Lessor;  Refer to Par. 60

       39.2    OPTIONS PERSONAL TO ORIGINAL LESSEE. Each Option granted to
Lessee in this Lease is personal to the original Lessee named in Paragraph
1.1 hereof, and cannot be voluntarily or involuntarily assigned or exercised
by any person or entity other than said original Lessee while the original
Lessee is in full and actual possession of the Premises and without the
intention of thereafter assigning or subletting. The Options, if any, herein
granted to Lessee are not assignable, either as a part of an assignment of
this Lease or separately or apart therefrom, and no Option may be separated
from this Lease in any manner, by reservation or otherwise.

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

       39.4    EFFECT OF DEFAULT ON OPTIONS.

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

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

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

40.    RULES AND REGULATIONS. Lessee agrees that it will abide by, and keep
and observe all reasonable rules and regulations ("Rules and Regulations")
which Lessor may make from time to time for the management, safety, care, and
cleanliness of the grounds, the parking and unloading of vehicles and the
preservation of good order, as well as for the convenience of other
occupants or tenants of the Building and the Industrial Center and their
invitees.

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

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

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

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

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

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

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

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

    Exhibit A - Site Plan
    Exhibit B - Floor Plan
    Exhibit C - Premises, Rent, Leasehold Improvement Recovery, Security
                Deposit and Operating Expenses
    Exhibit D - Rules and Regulations
    Exhibit E - Owner/Landlord Attornment Agreement; Agreement of
                Subordination, Non-disturbance and Attornment
    Exhibit F - Work Letter Agreement
    Exhibit G - Riders to RAJYABIOTICS Sublease with General Atomics


                                                           INITIALS: HH
                                                                    -----
                                       -10                           RHD
                                                                    -----
<PAGE>

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

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

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

<TABLE>
<S>                                                    <C>
Executed at: San Diego, California                     Executed at:  San Diego, California
           --------------------------------------                  -------------------------------------
on: July 28, 1998                                      on:
   ----------------------------------------------         ----------------------------------------------


By LESSOR:                                             By LESSEE:
           GENERAL ATOMICS                                    RAJYABIOTICS CORPORATION
-------------------------------------------------      -------------------------------------------------

-------------------------------------------------      -------------------------------------------------
By:                                                    By:
   ----------------------------------------------         ----------------------------------------------
Name Printed:                                          Name Printed:
            -------------------------------------                  -------------------------------------
Title:                                                 Title:
      -------------------------------------------            -------------------------------------------
By: /s/ Robert H. Dalry                                By: /s/ Harry Hixson
   ----------------------------------------------         ----------------------------------------------
Name Printed:  Robert H. Dalry                         Name Printed: Harry Hixson
            -------------------------------------                  -------------------------------------
Title: Director Facilities                             Title: Chief Executive Officer and Co-Founder
      -------------------------------------------            -------------------------------------------
Address: 3550 General Atomics Ct.                      Address:
        -----------------------------------------              -----------------------------------------
         San Diego, CA 92121-1194
-------------------------------------------------      -------------------------------------------------
Telephone: (619)  455-2310                             Telephone: (619)  456-5262
                  -------------------------------                        -------------------------------
Facsimile: (619)  455-4375                             Facsimile: (619)  456-5983
                  -------------------------------                        -------------------------------


BROKER:                                                BROKER:

Executed at:                                           Executed at:
           --------------------------------------                  -------------------------------------
on:                                                    on:
   ----------------------------------------------         ----------------------------------------------
By:                                                    By:
   ----------------------------------------------         ----------------------------------------------
Name Printed:                                          Name Printed:
            -------------------------------------                  -------------------------------------
Title:                                                 Title:
      -------------------------------------------            -------------------------------------------
Address:                                               Address:
        -----------------------------------------              -----------------------------------------

-------------------------------------------------      -------------------------------------------------
Telephone: (    )                                      Telephone: (    )
                  -------------------------------                        -------------------------------
Facsimile: (    )                                      Facsimile: (    )
                  -------------------------------                        -------------------------------
</TABLE>

NOTE: These forms are often modified to meet changing requirements of law and
needs of the industry. Always write or call to make sure you are utilizing
the most current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 700 So.
Figueroa St., M-1, Los Angeles, CA 90017. (213) 687-8777.


                                                           INITIALS: HH
                                                                    -----
                                       -11-
                                                                    -----

<PAGE>
                                 ADDENDUM TO SUBLEASE
                                    BY AND BETWEEN
                     GENERAL ATOMICS AND RAJYABIOTICS CORPORATION
                                  DATED JULY 1, 1998

49.  ADD TO PARAGRAPH 1.1: PARTIES:

Lessor is the tenant of the ("Industrial Center") under a certain lease (the
"Master Lease") with Sorrento West Properties Inc. ("Owner"). Lessor covenants,
represents, and warrants that Lessor is not in default under the Master Lease,
has not received any notice of termination by Master Lessor, of the Master
Lease, that the execution and performance by Lessor of the terms and conditions
of this Sublease will not violate any of the terms of the Master Lease, and that
Lessor will not willfully commit any act or omission which would violate any
term or condition of the Master Lease or cause the termination of the Master
Lease during the term of this Sublease. Lessor shall indemnify, defend and hold
harmless Lessee from all liability, costs, damages, claims, demands and expenses
of every kind, including but not limited to attorneys' fees arising from or
relating to or resulting from Lessor's failure to comply with the terms of the
Master Lease or any termination thereof or of this Lease due to the default of
Lessor under the Master Lease. To the extent that the Master Lease grants Lessor
any discretionary right to terminate the Master Lease, whether due to casualty,
condemnation, or otherwise, Lessor shall not exercise such right without
Lessee's prior approval. The ATTORNMENT AGREEMENT, executed by the Owner, Lessor
and Lessee, Exhibit E, is attached and made a part of this Sublease Agreement.

Lessee acknowledges that Lessor has disclosed that Allstate Life Insurance
Company of New York holds a financial interest in the Industrial Center secured
by a Deed of Trust on the property which requires an assignment of Borrower's
interest in the Master Lease, and all Subleases, in the unlikely event that the
Lender obtains rights of possession through, foreclosure, deed in lieu of
foreclosure, or otherwise. By execution of this Sublease Agreement, Lessee
acknowledges the Lender's position and Lessee's obligation as described in the
"AGREEMENT OF SUBORDINATION, NONDISTURBANCE AND ATTORNMENT", Exhibit E, attached
to and made a part of this Sublease Agreement.

As used herein, "Lease" means "Sublease", "Lessor" means "Sublessor", "Lessee"
means "Sublessee", and "Sublease Agreement" means "Agreement".

50.  ADD TO PARAGRAPH 1.2b: PARKING:

Lessee shall have rights for three (3) unreserved parking spaces per 1,000
square feet of subleased space.

51.  ADD TO PARAGRAPH 2.2: CONDITION:

Subject to the foregoing warranties, the Lessee shall accept the Premises in
"as-is" condition, unfurnished, as offered by the Lessor. The Lessor shall
warrant, for a period not to exceed one year, heating, ventilation and
air-conditioning (HVAC), electrical, and plumbing pre-existing the installation
of the Lessee's improvements. The Lessee shall be responsible to obtain and
administer one-year warranties for all new building structures and systems
installed on behalf of the Lessee including the HVAC, electrical and plumbing
and other Utility Installations. Except for the roof, windows and structural
elements of the building, for which the Lessor shall warrant through the
sublease term, and the one-year warranty for pre-existing installations
enumerated above, the Lessee shall be responsible for all post warranty
maintenance and repair of all Alterations, Utility Installations and Trade
Fixtures. The Lessee shall also be responsible for roof leaks caused by
penetrations installed as part of the Leasehold Improvements.

52.  ADD TO PARAGRAPH 2.3: COMPLIANCE WITH COVENANTS, RESTRICTIONS AND BUILDING
     CODE:

Lessee shall be responsible for, and shall bear all costs and expenses
associated with any and all Alterations to its Premises which may be required
for obtaining building permits to alter the Premises for the Lessee's use. This
shall include those provisions in compliance with California Title 24 and the
ADA codes as it applies to access and use by the disabled.

53.  ADD TO PARAGRAPH 2.4: ACCEPTANCE OF PREMISES:

The Lessor represent and warrants that it has no knowledge of any Reportable Use
of Hazardous Materials on the Premises and will indemnify and hold harmless the
Lessee against damages, liabilities, claims, judgments, liens, expenses, or
penalties arising out of or involving the use of Hazardous Materials prior to
the Lessee's Date of Possession.

                                                           INITIALS: HH
                                                                    -----
                                       -12-                          RHD
                                                                    -----
<PAGE>

The Lessee shall satisfy itself with respect to the condition of the Premises
related to any conditions or damages that may have been caused by prior
unauthorized use of Hazardous Materials. All costs and expenses to perform an
inspection and prepare reports shall be born by the Lessee and any
contingency related to this issue shall be discharged prior to execution of
this Agreement.

54.  ADD TO PARAGRAPH 3.1: TERM:

The Lessor shall deliver FIRST-IN Premises to the Lessee upon payment of the
full Security Deposit and the execution of this Agreement. Early Possession,
or Delay of Possession shall not apply to FIRST-IN Space in that start of
Rent and Operating Expenses is established to occur October 1, 1998. Further,
the Lessor is not responsible for the design and construction of its
Leasehold Improvements.

The Lessor shall deliver to the Lessee, the ADDED Space Block no later than
July 1, 1999. In the event the ADDED Space Block becomes available prior to
the July 1, 1999 date, then the Parties agrees to include the ADDED Space
Block as part of the Lessee's Premises under the terms and conditions of this
Agreement. Early Possession shall apply to the ADDED Space Block and Rent and
Operating Expenses shall start the first day of the month following delivery
of the ADDED Space Block to the Lessee. Base Rent shall be at the same rate
as then in effect for the Lessee's current Premises, and Operating Expenses
shall be prorated in direct relation to the size of the Premises.

55.  ADD TO PARAGRAPH 7.3: UTILITY INSTALLATIONS, TRADE FIXTURES, ALTERATIONS:

55.1 The Lessor grants to the Lessee permission to install Leasehold
Improvements for converting the Premises from the current Office R&D use to
Biomedical Office and Laboratory use. The Lessor agrees to finance the costs
of these Leasehold Improvements over the Original Term of this Agreement.

55.2 Lessee acknowledges that the Building is shared with other tenants and
Alterations and Utility Installations may affect services and common spaces
serving these adjoining tenants. Accordingly, Alterations, and Utility
Installations made by the Lessee shall be designed by licensed
Architect/Engineers and installed by licensed and insured construction or
service companies all having qualified Personnel possessing the proper
qualifications, training and insurance coverage needed for performing the
work.

55.3 The Lessor and the current tenant occupying Suite B have an on-going
need for certain building amenities to serve their Premises. Parties agree to
cooperate in the design of Lessee expansions and that any cost for
Alterations that may be required to maintain the multi-tenant use.

56.  ADD TO PARAGRAPH 7.4: OWNERSHIP, REMOVAL, SURRENDER, AND RESTORATION:

56.1  Installation of Lessee's Trade Fixtures and furnishings, or those items
of property considered removable upon termination of Tenancy, shall be
designed for ease of removal. The Lessor shall not encumber the ownership by
lien or other obligation and agrees to execute any reasonable documents
acknowledging said ownership rights and granting the authorization to remove
the property under certain Lessee defaults of Sublease terms. Upon request of
Lessee, Lessor shall execute and deliver any consent or waiver forms
reasonably requested by any of Lessee's vendors, equipment lessors, chattel
mortgagees, or holders or owners of any trade fixtures, signs, equipment,
furniture, or other personal property of any kind and description kept or
installed on the Premises (singly and/or collectively, "Equipment Lessors")
setting forth that Lessor waives, in favor of said Equipment Lessor any
superior lien, claim, interest or other right therein. Subject to the Terms
of this Agreement Paragraph 7.4(c), Lessor shall further acknowledge that
property covered by the consent or waiver forms is personal property and that
such property may be removed from the Premises by said Equipment Lessor at
any time upon default in the terms of such chattel mortgage or other similar
documents, free and clear of any claim or lien of Lessor. Lessee shall pay
reasonable rent for use of the Premises and upon removal of said equipment
promptly repair any damage caused by the removal of such property.

56.2  The Lessor shall have the option to file a Notice of Non-Responsibility
for protection of the Lessor and Property Owner against mechanics Liens for
non payment of labor, materials and services authorized by the Lessee at the
Premises. The Lessee represents and warrants that no contract services have
been engaged to date that may result in a lien against the property.

56.3  Leasehold Improvements installed by the Lessee, and financed by the
Lessor, shall be the property of the Lessor and any additional Alterations,
removal, or change of use, shall be approved by the Lessor, whose consent
shall not be unreasonably withheld.

57.  ADD TO PARAGRAPH 11: UTILITIES:

Lessee acknowledges that the Building is a multi-tenant building having
certain shared Utility Services including house power, water and sewer and
shall pay its prorata share of these Common Area Utilities.

                                                           INITIALS: HH
                                                                    -----
                                       -13-                          RHD
                                                                    -----
<PAGE>
58.    ADD TO PARAGRAPH 22: NO PRIOR OR OTHER AGREEMENTS; BROKER DISCLAIMER:

The Parties represent and warrant that no agreement exists for the purchase,
lease or rental of said furnishings at the time this Sublease Agreement is
executed, and that any agreement made by the Parties shall be in writing
executed by the parties to this Sublease Agreement.

59.    ADD TO PARAGRAPH 34: SIGNS:

The Lessee agrees that any Lessee corporate signage mounted external to the
Building shall be placed in the Landscaping area near the main entrance to
Suite A, and the design and appearance shall be consistent with signage for
the Lessor's Buildings #3 and #6 on Dunhill Street.

60.    ADD TO PARAGRAPH 39: OPTIONS:

60.1   The Lessor hereby grants to the Lessee the OPTION TO TERMINATE this
Agreement for part or all of the Premises at any time thirty-six (36) months
after the Commencement Date under the following terms and conditions:

       (a)  This Option shall be limited to two separate Space Blocks (Suite
       A and Suite B) returned by the Lessee in a configuration that affords the
       Lessor the opportunity to lease to third parties.

       (b)  The Lessee shall give the Lessor nine months advanced written
       notice.

       (c)  The Lessee shall pay the Lessor a lump sum amount equivalent to
       the unamortized costs of Leasehold Improvements and unamortized Brokerage
       Commissions.

       (d)  The unamortized Leasehold Improvements and Commissions shall be
       calculated based on a blended or square foot prorata basis.

       (e)  Reduction of Rent and Operating Expenses shall be determined on a
       prorata square foot basis.

       (f)  This Option to Terminate shall apply only to the Original Term of
       this Agreement.

       (g)  The terms of Paragraph 7.4 of this Agreement shall apply.

60.2   Subject to Paragraph 39, the Lessor hereby grants to the Lessee the
RIGHT-OF-FIRST-OFFER OPTION to sublease part or all of the ROFO Space
(Exhibit B) under the following terms and conditions:

       (a)  If Lessor desires to offer ROFO space for sublease, Lessor shall
       deliver a written notice to the Lessee of the Lessor's intent to
       sublease.

       (b)  Use of the ROFO Space by a Lessor's Affiliate shall not be
       construed as the Lessor's intent to Sublease ROFO Space.

       (c)  ROFO shall apply to the Original and Option Terms of the Sublease
       and shall be added under the same Terms and Conditions as then in effect
       for the Lessee's current space under sublease.

       (d)  The Lessee shall have ten (10) business days, starting the day of
       written notice from the Lessor, to execute or waive the ROFO.

       (e)  If the Lessee fails to execute or waive its rights for such an
       offer, then Lessor shall be allowed to lease said space to other third
       parties.

       (f)  If the Lessee fails to respond within the given period, Lessor
       shall interpret Lessee's lack of response as the Lessee's waiver of its
       rights to sublease, and the rights shall terminate for the time remaining
       on the Sublease Term.

       (g)  The right to expand shall be granted only after Lessor's review
       of Lessee's financial statement to establish Lessor's satisfaction that
       Lessee has the ability to pay Rent and Operating Expenses for subleasing
       the ROFO Space.

                                                           INITIALS: HH
                                                                    -----
                                       -14-                          RHD
                                                                    -----
<PAGE>

60.3   Subject to Paragraph 39, the Lessor hereby grants to the Lessee the
OPTION TO RENEW this Agreement by two separate renewals under the following
terms and conditions:

       (a)  Renewals shall comprise one three-year term, and one two-year
       term, in the order stated.

       (b)  For the three-year renewal term, Base Rent shall be established
       at one hundred percent (100%) the prevailing market rate for lease of
       comparable buildings.

       (c)  For the three-year renewal term, annual increases shall be
       established at time of renewal to agree with the annual increases then in
       effect for comparable buildings and use.

       (d)  Operating expenses shall be prorated the same as for the Sublease
       Original Term.

       (e)  For the two-year renewal term, Base Rent shall be established by
       using the Base Rent in effect the month prior to start of the second
       Renewal term increased by annual adjustments then in effect for
       comparable buildings of similar use.


                                                           INITIALS: HH
                                                                    -----
                                       -15-                          RHD
                                                                    -----
<PAGE>

THE IDEAL LOCATION

Sorrento West is strategically located just off U.S. Interstate 5 at 805, the
major North/South highways that provide easy access to the West's major
markets. All major delivery firms provide regular service. San Diego's port
facilities and international airport are only 15 minutes away.

                                    [GRAPHIC]

DIRECTIONS

[GRAPHIC]

FROM SAN DIEGO: Take the Sorrento Valley exit off Interstate 5 (north). Turn
left on Roselle Street. Pass under Interstate 5 and follow Roselle to
Sorrento West site.

                                       OR

Take the Sorrento Valley Exit off Interstate 805 (north). Turn left on
Sorrento Valley Road. Follow Sorrento Valley Road to intersection with
Sorrento Valley Blvd, turn left over railroad tracks and bridge spanning
flood control channel. Turn right onto Roselle Street and follow Roselle
north to Sorrento West site. Approximately 1 block.

FROM LOS ANGELES: Take Carmel Valley Road exit off Interstate 5 (south). Turn
right onto Carmel Valley Road and then left onto Sorrento Valley Road. Follow
Sorrento Valley Road to intersection with Sorrento Valley Boulevard, turn
right over railroad tracks and bridge spanning flood control channel, turn
right onto Roselle Street and follow Roselle to Sorrento West site.

RajyaBioLse.                     Exhibit A                 Initials: HH
July 1, 1998                    Page 1 of 1                         -----
                                                                     RHD
                                                                    -----

<PAGE>


                                     [MAP]




RajyaBioLse.                        Exhibit B              Initials: HH
July 1, 1998                       Page 1 of 1                      -----
                                                                     RHD
                                                                    -----


<PAGE>

                  PREMISES, RENT, LEASEHOLD IMPROVEMENT RECOVERY
               SECURITY DEPOSIT, OPERATING EXPENSES AND COMMISSIONS

PREMISES:  The Building comprises three separate space blocks; "FIRST-IN",
"ADDED" AND "ROFO".  The Building is currently demised into two separate
addresses, Suits, A and B.  The Lessee's FIRST-IN Space Block is located in
Suite A.  The Lessor currently occupies a portion of both Suites, that space
block more specifically identified on Exhibit B as ROFO.  A current Tenant
subleases the remaining portion of building Suite B.

<TABLE>
<CAPTION>
                   SPACE BLOCK DESIGNATION           SIZE (SF)
                   -----------------------           ---------
                   <S>                               <C>
                      FIRST-IN                          6,611
                      ADDED                             2,826
                      ROFO                              6,016
                                                       ------
                      BUILDING TOTAL                   15,453
</TABLE>

RENT/LEASEHOLD IMPROVEMENT RECOVERY:

Rent shall be categorized into three separate elements; Base Rent, Operating
Expenses and Leasehold Improvement Recovery. The Rental Rate for FIRST-IN
Space shall start at $0.82 per square foot per month and shall be adjusted
annually by a four percent (4%) increase. Operating Expenses shall be
prorated in accordance with terms of this Agreement; Leasehold Improvement
Recovery shall be paid in sixty (60) equal payments calculated as described
in the following paragraph.

The following table summarizes the total monthly payments, (excluding
Operating Expenses) based on the maximum leasehold financing obligated by the
Lessor. The Lessor agrees to finance FIRST-IN Leasehold Improvements in an
amount not to exceed $65 per improved square foot, with the Principal to be
amortized over five years at an interest rate of 11% per annum. Leasehold
monthly payments shall be set to start October 1998 and continue through
September 2003. In the event that final billing is not available to calculate
the monthly leasehold payment schedule at the start of Term (October 1,
1998), then the Lessor shall have the option to charge daily interest for use
of funds reimbursed to the Lessee by the Lessor.

<TABLE>
<CAPTION>
                          MONTHLY PAYMENT SCHEDULE FOR FIRST-IN SPACE
     ---------------------------------------------------------------------------------
                         BASE RENT     LH RATE
     LEASE     SPACE     RATE PER      $65/SF/MO    TOTAL     BASE    L'HOLD   TOTAL
     YEAR      BLOCK     SF/MO         @11.0%       RATE      RENT    PAYM'T   PAYMENT
     -----     -----     ---------     ---------    -----     ----    ------   -------
     <S>       <C>       <C>           <C>         <C>        <C>     <C>     <C>
     One       6,611     $0.82         $1.4133     $2.233     $5,421  $9,343  $14,764
     Two       6,611     $0.8528       $1.4133     $2.266     $5,638  $9,343  $14,981
     Three     6,611     $0.8869       $1.4133     $2.300     $5,863  $9,343  $15,206
     Four      6,611     $0.9224       $1.4133     $2.336     $6,098  $9,343  $15,441
     Five      6,611     $0.9593       $1.4133     $2.373     $6,342  $9,343  $15,685
</TABLE>

Once the Final Leasehold Improvement Costs are determined, and corroborated
by both parties, Parties agree to execute a Sublease Amendment that
memorializes the Leasehold Improvement Cost Recovery Schedule, adjusts the
security deposit, and establishes the fact that the Lessor has fulfilled its
obligations stipulated in the Workletter Agreement, Exhibit F.

Provided that the Lessee is not in default of this Agreement, the Lessor
agrees to finance Leasehold Improvements for the ADDED Space Block under the
same terms and conditions for the FIRST-IN Leasehold Improvements, except
that the cost for the ADDED Space Block Improvements will be amortized over
the period remaining on the FIRST-IN Leasehold Payment Recovery Schedule. The
Lessor shall have the option to combine the outstanding balance due for
FIRST-IN and ADDED into one payment schedule, or to maintain separate payment
schedules for the two improvement phases.


                                                         Initials: HH
                                                                  -----
RajyaBioLse                        Exhibit C                       RHD
July 1, 1998                      Page 1 of 2                     -----

<PAGE>

SECURITY DEPOSIT:

Upon execution of this Agreement, the Lessee shall pay the Lessor a Security
Deposit in the amount equivalent to one month's Rent and two month's
Operating Expenses determined as follows:

<TABLE>
<CAPTION>
                                  SECURITY DEPOSIT SUMMARY
                    --------------------------------------------------
                    SECURITY      SPACE        RATE             AMOUNT
                    --------      -----        ----             ------
                    <S>           <C>          <C>             <C>
                    Base Rent     6,611        $0.82            $ 5,421
                    NNN           6,611        $0.17 x 2 mo.    $ 2,248
                    Leasehold     6,611        $65/sf,11%,5yr   $ 9,343
                                                                -------
                    TOTAL SECURITY REQUIRED:                    $17,012
                    Prepaid:                                    $12,000
                                                                -------
                    BALANCE:                                    $ 5,012
</TABLE>

On each anniversary of this Sublease, or the first of the month following
an expansion of the Premises, (or increase in leasehold financing), the
Lessee shall pay an added Security Deposit in an amount as determined to
service payment of Monthly Rent, Operating Expenses and Leasehold Improvement
Payment.

OPERATING EXPENSES:

The Lessee shall pay its prorata share of Operating Expenses through the
entire Sublease Term, including renewals, in direct relation to the size of
the Premises. The following table shows the Lessee's prorata share based on
the FIRST-IN Space Block size of 6,611sf.

<TABLE>
<CAPTION>
                 BUILDING            SIZE           LESSEE PRORATA SHARE
                 NUMBER             SQ. FT.         FIRST-IN SPACE BLOCK
                 --------           -------         --------------------
                 <S>               <C>              <C>
                 3                  20,817            N/A
                 4                  28,354            N/A
                 5                  29,895            N/A
                 6                  24,113            N/A
                 7                  15,453            42.78%(Building)
                                   -------
                 TOTAL             118,632            5.7%(PARK)
</TABLE>

COMMISSIONS:

Upon execution of this Agreement and within thirty days after receipt of a
commission statement, the Lessor shall pay the Lessor's Broker (CBRE)
identified in Paragraph 1.10(a) a commission of $21,140.64. The Lessor shall
not be responsible for payment of commissions based on the Leasehold
Improvement Payment nor for any term renewal or extension. For ADDED and ROFO
expansions, the Lessor agrees to pay Lessee's Broker (IHGp) an amount
determined by using a three percent 3% commission, the size of the expansion,
and the period remaining on the Sublease Original Term.

<TABLE>
<CAPTION>
                                    COMMISSION SCHEDULE
          ----------------------------------------------------------------------
                                             RENT                 BROKERAGE
          SPACE     APPROX.     LEASE   ---------------   COMM.  ---------------
          BLOCK      SIZE       YEAR    MONTHLY ANNUAL    RATE   FEE        OWED
          -----     -------     -----   ---------------   ----   ----       ----
          <S>       <C>         <C>     <C>    <C>        <C>    <C>        <C>
          FIRST-IN  6,611       One     $5,421 $ 65,052   6%     $ 3,903.12 CBRE
          FIRST-IN  6,611       Two     $5,638 $ 67,656   6%     $ 4,059.36 CBRE
          FIRST-IN  6,611       Three   $5,863 $ 70,356   6%     $ 4,221.36 CBRE
          FIRST-IN  6,611       Four    $6,098 $ 73,176   6%     $ 4,390.56 CBRE
          FIRST-IN  6,611       Five    $6,342 $ 76,104   6%     $ 4,566.24 CBRE
          Total                                $352,344   6%     $21,140.64 CBRE

          ----------------------------------------------------------------------
          ADDED     2,826       TBD     TBD    TBD        3%     TBD        IHGp
          ROFO      TBD         TBD     TBD    TBD        3%     TBD        IHGp
          OPTIONS   TBD         TBD     TBD    TBD        0%     Zero       None
</TABLE>



                                                         Initials: HH
                                                                  -----
                                                                   RHD
                                  Page 2 of 2                     -----

<PAGE>

                      GENERAL ATOMICS RULES & REGULATIONS
                    ATTACHED AND MADE A PART OF THIS LEASE

1.   Lessor agrees that Lessee is entitled to, and shall have the quiet
     enjoyment of the Premises described in the Sublease.

2.   During the term of the Sublease, Lessee shall provide Lessor the names
     and home telephone numbers of two Lessee employees that can be contacted
     by the Lessor for emergencies during Lessee's non-business hours.

3.   Lessor shall provide Lessee a minimum 24-hour advanced notice of any
     inspection by the Lessor, Owner, Lender, insurance carriers and
     respective agents.

4.   During the warranty period, Lessee shall give Lessor prompt notice of
     any accidents to or defects in the water pipes, gas pipes, electric
     system, lights and fixtures, heating and cooling apparatus or any other
     service equipment.

5.   Any service piping, ducts, electric conduits, telephone wiring and
     antennas exterior to the Building, or boring, cutting of exterior walls,
     floor or roof shall not be permitted, except with the written consent of
     Lessor.

6.   Lessee's identification sign(s) shall be subject to prior approval by
     Lessor. Guidelines for Building exterior signage is available from the
     Lessor upon request.

7.   Lessee shall not install blinds, shades, awnings or other form of
     inside or outside window covering, or window ventilators, or similar
     devices without the prior written consent of Lessor.

8.   Lessee shall maintain Premises in a clean and safe condition. Trash
     shall be placed in appropriate disposal containers at locations
     designated by Lessor for pick-up and disposal by a serve contractor of
     the Lessor.

9.   Lessee and Lessee's employees shall not obstruct the sidewalks,
     driveways, or other common areas and shall use the same only as a means
     of passage, access and parking; all materials, fixtures, furnishings and
     equipment shall be stored inside the Building. Outside storage at the
     Premises is prohibited.

10.  The water closets, urinals and other plumbing shall be used for the
     purpose for which they were constructed and no rubbish, newspapers or
     other substances of any kind shall be thrown into them. Lessee shall not
     mark, install screws or drill into, or in any way deface the exterior
     walls, stone, metal work, doors and windows of the Building.

11.  Lessee and Lessee's agent and employees shall not play any musical
     instrument, including radio and television, in a loud or objectionable
     manner, or make or permit any improper noises in the Building, or
     interfere in any way with other Industrial Center Tenants or those
     having business with them.

12.  Lessee shall not conduct any auction, or sell goods, wares or
     merchandise on the Premises.

13.  Lessor will not be responsible for loss of or damage to any fixtures,
     furnishings or personal property from any cause.

14.  Although Lessor may have given Lessee approval to use the name of the
     Industrial Center in connection with any business on the property,
     Lessor shall have the right to prohibit any advertising by any agent
     which in Lessor's opinion, tends to impair the reputation of the
     Building or its desirability as a Building for offices and laboratories,
     and upon written notice from Lessor, Lessee shall refrain from or
     discontinue such advertising.

15.  No cooking shall be done or permitted by Lessee on the Premises, except
     in areas specifically designed for the purpose, without the consent of
     Lessor, nor shall the Premises be used for the storage of merchandise,
     for washing clothes, for keeping of pets, for lodging or for any improper,
     objectionable or immoral purposes.

16.  Lessee shall not disturb, solicit or canvass any occupant of the
     Industrial Center and shall cooperate to prevent same.

17.  From time to time it may become advantageous to make amendments to this
     list which are in the best interests of both Lessor and Lessee and which
     are not inconsistent with the Sublease. Lessor reserves the right to
     make such amendments by giving notice to Lessee.


RajyaBioLse.                        Exhibit D             Initials: HH
July 1, 1998                       Page 1 of 1                     -----
                                                                    RHD
                                                                   -----
<PAGE>

                               ATTORNMENT AGREEMENT
                                   LAND CONSENT


     SORRENTO WEST PROPERTIES, INC. ("SWP") is the owner of those premises at
3510 Dunhill Street, San Diego, California ("Premises"), leased by SWP to
GENERAL ATOMICS ("GA") by a written Amended and Restated Net Lease dated
March 1, 1991 ("Master Lease"). The Master Lease is in full force and effect
and GA is not in default. GA, as the tenant under the Master Lease, will
lease the Premises to RAJYABIOTICS, INC. ("RBI") by a written lease dated
July 1, 1998 ("Sublease"). SWP hereby consents to the Sublease dated July 1,
1998.

     RBI agrees that in the event of termination of the Master Lease, RBI
shall attorn to SWP as the Lessor. In the event SWP notifies RBI in writing
that GA is in default of the Master Lease and instructs RBI to make all lease
payments directly to SWP, RBI agrees to follow such instructions. SWP shall
indemnify and hold RBI harmless against any actions by GA in following such
instructions.

     SWP and GA each agree that they will recognize the Sublease provided RBI
is not in default of such Sublease.

     Executed as of July 20, 1998.


GENERAL ATOMICS                         SORRENTO WEST PROPERTIES, INC.


By: /s/ Max D. Kemp                     By: /s/ John E. Jones
    ------------------------------          ---------------------------------
    Max D. Kemp                             John E. Jones
    Sr. Vice President                      Secretary and Treasurer


RAJYABIOTICS, INC.


By:  /s/ Harry Hixson
    ------------------------------
Name:    Harry Hixson
      ----------------------------
Title:   Chairman & CEO
       ---------------------------







                                   Exhibit E
                                  Page 1A of 6
<PAGE>

                            CONSENT OF MASTER LESSOR


     SORRENTO WEST PROPERTIES, INC., "Master Lessor" under the Master Lease
identified in that certain Sublease dated for reference purposes July 1,
1998, to which this Consent is attached, hereby consents to said Sublease.
This Consent shall not be deemed to relieve Sublessor, as Tenant under the
Master Lease, from any obligation or liability thereunder, nor shall this
Consent be deemed Master Lessor's consent to any further subletting or
assignment.


MASTER LESSOR:


SORRENTO WEST PROPERTIES, INC.


By:  /s/ John E. Jones
    ------------------------------
Name:    John E. Jones
      ----------------------------
Title:   Secretary and Treasurer
       ---------------------------
Date:    July 20, 1998
      ----------------------------







                                  Page 1B of 6

<PAGE>

RECORDING REQUESTED BY AND        )

WHEN RECORDED RETURN TO:          )

PILLSBURY MADISON & SUTRO         )
101 WEST BROADWAY, STE. 1800      )
SAN DIEGO, CA 92101               )
ATTN: ANGELA M. YATES, ESQ.       )
--------------------------------------------------------------------------------
                                                (SPACE ABOVE FOR RECORDER'S USE)

                           AGREEMENT OF SUBORDINATION,
                          NONDISTURBANCE AND ATTORNMENT

     NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN THE LEASEHOLD ESTATE IN
THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME
OTHER OR LATER SECURITY INSTRUMENT.

     THIS AGREEMENT OF SUBORDINATION, NON DISTURBANCE AND ATTORNMENT
("AGREEMENT") IS DATED THE _______________ DAY OF DECEMBER, 1991, BETWEEN
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK ("LENDER") AND _______________
______________________________, A ____________________ ("SUBTENANT")

                               RECITALS

     A.  Sorrento West Properties, Inc., a Delaware corporation ("Borrower")
and General Atomics, a California corporation ("GA") are the landlord and
tenant, respectively, under that certain Net Lease dated as of December 17,
1987 by and between Genesee Properties, Inc., a Wyoming corporation and GA
(formerly known as "GA Technologies, Inc."), (the "Master Lease").

     B.  Subtenant has executed that certain lease dated ___________, 19__
(the "Sublease") with GA, as lessor or sublessor ("Landlord"), covering the
premises (the "Premises") in that certain building located at ______________,
San Diego, California (the "Property"); and

     C.  Lender has made or has agreed to make a mortgage loan to Borrower
secured by a deed of trust on the Property which includes an assignment of
Borrower's interest in the Master Lease and all subleases (the "Mortgage");
and

     D.  The parties hereto desire to confirm their understanding with
respect to the Sublease and the Mortgage.

     NOW, THEREFORE, in consideration of the covenants, terms, conditions and
agreements contained herein, the parties hereto agree as follows:

                                                         Initials: HH
                                                                  -----
RajyaBioLse.                       Exhibit E                       RHD
July 1, 1998                      Page 2 of 6                     -----

<PAGE>

     1.  The Sublease and the Master Lease are and shall continue to be
unconditionally subject and subordinate in all respects to the Mortgage and
the lien created thereby, and to any advancements made thereunder, and to any
consolidation, extensions, modifications or renewals thereof.

     2.  Subtenant agrees to give Lender a copy of any notice of default
served on the Landlord by certified mail, return receipt requested, with
postage prepaid, at Allstate Plaza West J2A, 3100 Sanders Road, Northbrook,
Illinois 60062, Attn: Commercial Mortgage Division. If Landlord fails to cure
such default within the time provided in the Sublease, Lender shall have the
right, but not the obligation to cure such default on behalf of Landlord
within thirty (30) calendar days after the time provided for in the Sublease
or within a reasonable period if such default cannot be cured within that
time and Lender is proceeding with due diligence to cure such default. In
such event Subtenant shall not terminate the Sublease while such remedies
are being diligently pursued by Lender. Further, Subtenant shall not, as to
Lender, require cure of any such default which is not susceptible of cure by
Lender.

     3.  So long as Subtenant is not in default under the Sublease,
Subtenant's possession and occupancy of the Premises shall not be disturbed
by Lender during the term of the Sublease or any extension thereof, subject
to the terms of Section 4 below.

     4.  If Lender obtains the right to possession of the Premises or if
the Borrower's interest in the Property is transferred to Lender by
foreclosure, deed in lieu of foreclosure, or otherwise, then the Master Lease
and the Sublease shall be deemed automatically terminated, regardless of any
contrary provisions of the Master Lease or the Sublease. However, Lender and
Subtenant agree that, simultaneously with such termination, this Agreement
will be deemed to constitute a new lease on terms identical to those in the
Sublease, except for the identity of the Landlord. All terms and conditions
of the Sublease are incorporated herein by this reference as is set forth in
full. The provisions of this Paragraph 4 are intended to be self-effectuating.

     5.  If Lender succeeds to Landlord's interest under the Sublease, Lender
shall not be:

         (a)  liable for any act or omission of Landlord, Borrower or any
prior landlord; or

         (b)  subject to any offsets or defenses which Subtenant might have
against Landlord, Borrower or any prior landlord; or

         (c)  required or obligated to credit Subtenant with any rent or
additional rent for any rental period beyond the then current month which
Subtenant might have paid Landlord, Borrower or any prior landlord; or

         (d)  bound by any amendments or modifications of the Sublease made
without Lender's consent, other than exercise of rights, options or elections
contained in the Sublease, including without limitation options to extend the
term of the Sublease; or




                                                         Initials: HH
                                                                  -----
                                                                   RHD
                                 Page 3 of 6                      -----
<PAGE>

         (e)  liable for the return of any security deposit unless such
security deposit shall have been actually received by Lender. In the event of
receipt of any such security deposit, Lender's obligations with respect
thereto shall be limited to the amount of such security deposit actually
received by Lender, and Lender shall be entitled to all rights, privileges
and benefits of Landlord set forth in the Sublease with respect thereto.

     6.  Subtenant declares, agrees and acknowledges that:

         (a)  Lender is not obligated to determine whether its loan proceeds
are used for the purposes provided for in its loan agreement. If the Borrower
uses or applies the loan proceeds for purposes other than those permitted in
its loan agreement, that will not affect the subordination herein; and

         (b)  Subtenant intentionally and unconditionally waives, subjects and
subordinates the Sublease and the leasehold estate created by the Sublease in
favor of the lien of the Mortgage. Subtenant acknowledges that Lender is
relying upon this waiver, subjection and subordination in making a loan to
Borrower and that loan would not be made without this waiver, subjection
and subordination.

     7.  The provisions of this Agreement shall be binding upon and inure to
the benefit of Lender and Subtenant and their respective successors and
assigns. Furthermore, the provisions of this Agreement shall be binding upon
any guarantor of Subtenant's obligations under the Sublease. The words
"Lender," "Landlord" and "Subtenant" shall include their respective heirs,
legatees, executors, administrators, beneficiaries, successors and assigns.
This Agreement shall be governed by the laws of the State of California.

     8.  Any notices to Subtenant hereunder shall be effective upon mailing
notice to Subtenant by certified mail, return receipt requested, with postage
prepaid, at the address set forth in the Sublease or at such other address as
the Subtenant may designate in writing to Lender at the address set forth in
paragraph 2.

                                                         Initials: HH
                                                                  -----
                                                                   RHD
                                  Page 4 of 6                     -----

<PAGE>

     9.  This Agreement contains the entire agreement between the parties and
no modifications shall be binding upon any party hereto unless set forth in a
document duly executed by or on behalf of such party.

    10.  The Agreement may be executed in multiple counterparts, all of which
shall be deemed originals and with the same effect as if all parties had
signed the same document. All of such counterparts shall be construed
together and shall constitute one instrument.

    11.  Subtenant will, within ten days after Lender's request, execute,
acknowledge, deliver and furnish such documents or take such further action
as Lender may deem necessary or desirable to evidence this Agreement as a
direct lease between Lender and Subtenant, upon the occurrence of the events
described in Paragraph 4 above, or to otherwise carry out the terms of this
Agreement.

     NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH MAY
ALLOW THE PARTIES AGAINST WHOM YOU CLAIM AN EQUITABLE INTEREST IN REAL
PROPERTY TO OBTAIN A LOAN A PORTION OF WHICH MAY BE EXPENDED FOR PURPOSES
OTHER THAN IMPROVEMENT OF THE LAND.

     IN WITNESS WHEREOF, THE PARTIES HERETO HAVE EXECUTED THIS AGREEMENT AS
OF THE DAY AND YEAR FIRST ABOVE WRITTEN.

LENDER:                          SUBTENANT:
-------                          ----------

ALLSTATE LIFE INSURANCE          ________________________________
COMPANY OF NEW YORK


                                                         Initials: HH
                                                                  -----
                                                                   RHD
                                  Page 5 of 6                     -----

<PAGE>

     We consent to the terms and conditions of the above Agreement and
acknowledge and agree that, upon the occurrence of any of the events
described in Paragraph 4 of this Agreement, we shall have no right, title or
interest in and to any rents or other payments payable to Lender by
Subtenant, accruing after the date of termination.

LANDLORD:                           BORROWER:
---------                           ---------

GENERAL ATOMICS,                    SORRENTO WEST PROPERTIES, INC.
A CALIFORNIA CORPORATION            A DELAWARE CORPORATION

BY:                                 BY:
   ----------------------------        ----------------------------------

NAME:                               NAME:
     --------------------------          --------------------------------

TITLE:                              TITLE:
      -------------------------           -------------------------------


                                                         Initials: HH
                                                                  -----
                                                                   RHD
                                  Page 6 of 6                     -----
<PAGE>

                             WORK LETTER AGREEMENT

In consideration of the terms and conditions of the Sublease Agreement by and
between General Atomics ("GA"), Lessor, and RajyaBiotics Corporation, Lessee,
dated, July 1, 1998, the parties hereby agree to the terms specified in this
Work Letter Agreement. The Work Letter Agreement is written to complement the
Form Sublease and its Addenda; it expands and elaborates on the Sublease and
its Addenda. While no conflict between this Exhibit and Sublease is intended,
in the event of conflict, the Sublease shall control.

                               I. BASE BUILDING

The Lessor will deliver Building 7 Premises in "as-is" condition,
unfurnished, and generally configured as shown on the Floor Plan, Exhibit B.
The Lessee will make all necessary Alterations for its use of the Premises,
including the upgrade of Toilet Rooms, access corridors and door passage for
ADA accessability. The Parties agree to use existing interior improvements to
the extent practical and economical.

                      II BUILDING COMMON AREA IMPROVEMENTS

ROOF: Concurrent with installation of Leasehold Improvements, the Lessor will
replace the building soft roof and install curbs to support the existing
mechanical equipment. The Lessor will install walking pads to the existing
equipment and will modify the existing equipment ducting, electrical and
piping as necessary to serve curb mounted mechanical equipment. The Lessee
will install roof curbs and access walking pads for all new mechanical
installations as part of its Leasehold Improvements.

                              III BUILDING SYSTEMS

MECHANICAL: The Building space conditioning is provided by roof mounted
packaged units. The boundaries of the space conditioning zones are not exactly
congruent with the boundaries of the proposed Premises. The Parties agree
that the Leasehold Improvements will reconfigure the space conditioning
zones in a manner that will not deprive current ventilation to the ADDED and
ROFO Space Blocks ("Remainder Space") and will connect equipment to the
appropriate metered electrical distribution buss.

ELECTRICAL: The building is powered from one service entrance with
consumption measured by three separate Utility meters, one for the Common
Area house power, and one each for Suite A and Suite B. The Parties agree
that the Leasehold Improvements will make provisions for a fourth meter and
will reconfigure the distribution system in a manner that the Lessor's ROFO
Space usage can be metered either for direct billing the Utility Service
Company, or by a private meter from which consumption can be measured and
provide for monthly reimbursement by the Lessor to the Lessee. Further, if
the Lessee's consumption exceeds the Lessee's prorata share of the available
connected building service, then provisions will be made by the Leasehold
Improvements to supplement the Building electrical service.

FIRE PROTECTION: The building is currently fitted with a smoke detection and
alarm system connected to the Lessor's central alarm station. Parties agree
that the Leasehold Improvements will make provisions for separating the
Lessee's area from the Remainder Space such that the Lessee's Premises are
connected to a private commercial alarm service of the Lessee's choice, and
the Remainder Space continues to be served by the Lessor's system. Parties
agree that if a sprinkler system is required as a condition of obtaining
permits for the Lessee's planned use, then the Leasehold Improvements will
make provisions for installing the sprinkler system.

TELECOMMUNICATIONS: The ROFO Space Block is served by the Lessor's private
telephone system via connection to the Lessor's Building 6, located adjacent
to Building 7. The Lessee's Premises and the Suite B Tenant is served via a
service entrance in the Building electrical utility room. The Parties agree
that Leasehold Improvements will make provisions for the Lessee's connection
and access to service of the Lessee's choice using the service available in
the electrical utility room.

TOILET ROOM ACCESS: Two sets of toilet room facilities currently exist in the
Building, one set each for Suites A and B. The Lessor plans to share east
toilet room facilities with the Suite B Tenant until the time when the Lessee
takes Possession of the ADDED Space Block. If the Lessee's space plan
dictates removing the Suite B toilet room facilities, then the Lessee agrees
that the Leasehold Improvements make provisions for replacement of one toilet
room to serve the ROFO Space Block. Further, this serves notice facilities be
restored upon surrender of the ADDED Space Block.

RayjaBioLes.                     Exhibit F             Initials: HH
July 1, 1998                    Page 1 of 4                     -----
                                                                 RHD
                                                                -----
<PAGE>

                           IV. LEASEHOLD IMPROVEMENTS

The Lessee will be responsible for design and construction of the Leasehold
Improvements to change the Premises for the Lessee's specific use. The Lessor
financing will be provided for those improvements that are of value to the
realty and can be later used by other tenants. Costs for design, purchase,
and installation of the Lesseee's Trade Fixtures is excluded from the
Lessor's financing.  Lessor allowable reimbursable costs and expenses are as
follows:

1.     Costs and expenses required for preparing leasehold improvement working
       drawings and specifications, for reproducing design documents and for
       permit processing.

2.     Assessments for permits and fees needed to construct the leasehold
       improvements.

3.     Installation of structures, walls, insulation, ceilings, doorways, and
       those building features needed to provide working space in the
       laboratory and administrative space.

4.     Installation of mechanical, plumbing and services to support
       laboratory and administrative areas. This includes heating,
       ventilation, air conditioning, exhaust systems; distribution piping
       for compressed air, deionized water, specialty gases, potable water,
       sewer and natural gas. In those cases where services interface with the
       Lessee Trade Fixtures, Leasehold Improvements will provide for
       specified services installed to a convenient point of connection such
       as valves above ceiling or at rough-in locations, as designated on the
       working drawings and specifications.

5.     Installation of electrical equipment and services to distribute
       commercial electrical or standby electric power to laboratory
       equipment, lighting; wiring and connections for standard
       communications, special data communications, standard life safety,
       fire detection and alarm, and process or security alarms. In cases
       where sevices interface directly with the Lessee Trade Fixtures, the
       Leasehold Improvements will provide for specified services installed
       to a convenient point of connection such as wall outlets, above
       ceiling junction box, or at a disconnect device, such as a fused swicth
       as designated on the working drawings and specifications.

6.     Installation of doors, door hardware, suspended ceilings, electrical
       trim, mechanical trim, floor covering and painting.

7.     Installation of parking lot features related to ADA codes.

8.     Special inspections required as a condition of the building permits.

The LESSEE will be responsible for the following:

A.     Selecting design consultants for preparation of construction documents.

B.     Coordinating collection of as-built information, design and
       preparation of construction documents.

C.     Making application to the City for building permits.

D.     Obtaining Lessor's consent of bidders selected and award of contracts.

E.     Soliciting bids and awarding contracts for installation of Leasehold
       Improvements.

F.     Performing or overseeing the Building Improvements.

G.     Payment of design consultants and contractors that provide labor,
       materials and services.

H.     Preparation and maintenance of cost accounting for Project
       expenditures.

I.     Submittals to the Lessor for Leasehold Improvement reimbursement.

J.     Payment of costs and expenses in excess of the $65 per square foot
       Leasehold Improvement commitment.


                                                           INITIALS: HH
                              Page 2 of 4                           -----
                                                                     RHD
                                                                    -----
<PAGE>

The LESSOR will be responsible for the following at no added fee or charge
to the Leasehold Improvement Project:

K.  At its own discretion, Lessor may file a "Notice of Non-Responsibility"
    giving notice to all material suppliers and contractors that the Lessor is
    not responsible for payment of contracted services.

L.  Assist the design team with definition of building interfaces and
    existing site conditions.

M.  Perform a design review of the construction documents to ascertain that
    the design is consistent with this Agreement, and that the improvements meet
    the guidelines for the Leasehold Improvement financing.

N.  Perform routine inspections at the construction site to confirm that the
    installations are in accordance with the plans and adequate construction
    quality standards are being maintained.

O.  Perform routine inspections to ascertain construction progress supports
    the reimbursement payments being requested by the Lessee.

P.  Reimburse the Lessee based on submittals requesting payment for design,
    permits, construction and inspections.

Q.  Maintain an accounting of reimbursements to the Lessee and Prepare a
    Leasehold Improvement Payment Schedule.

R.  Prepare a Sublease Amendment to memorialize the Leasehold Improvement
    Payment Schedule and other minor changes deemed.

The following guidelines will apply Lessor Reimbursement of Lessee's payment
for Leasehold Improvements:

S.  The Lessee will require bidders submit quotes in a CSI format that can be
    used for cost control and reimbursement verification during the Leasehold
    Improvement Project.

T.  The Lessee will provide the Lessor sufficient backup information showing
    verification of payment with supporting information. Supporting information
    will include a summary of the cost to complete, and verification of payment
    by the Lessee accompanied by conditional or unconditional mechanics lien
    releases executed by the performing contractor(s).

U.  Any request for reimbursement for progress payments (payments for less
    than 100% completion) will be supported with a project completion summary
    showing percentage completed for those services for which reimbursements is
    being requested. Cost summaries will be submitted in the form that
    designates the different scopes of work, respective performing contractor(s)
    and services rendered.

V.  Upon Substantial Completion of the Leasehold Improvements, or that date
    on which a walk-through inspection will be conducted, Parties will develop a
    punch-list of items needing correction or additional work. Punch-list
    corrections will be completed within 30 days and prior to final leasehold
    improvement reimbursement payment by the Lessor.

                      V. TENANT FIXTURES, EQUIPMENT AND SERVICES

The Lessor will not finance Tenant fixtures that are subject to removal by
the Lessee at end of lease term, or those improvements considered of no value
to the leasehold. The Lessee will be responsible for the specification,
design, purchase and installation of its fixtures, hardware, and all personal
property needed to complement or complete the Premises for the Lessee
operations. Said equipment will remain under the Lessee ownership, and its
installation will be the responsibility of the Lessee. In this regard, the
Lessee will:

A.  Cause to be prepared the necessary design documents for procurement of
    laboratory fixtures and equipment.

B.  Install and connect to its fixtures and equipment, ducting, piping,
    electrical, and other needed services from a convenient point of connection
    provided by the Lessor as part of the leasehold.

C.  Supply and install specialty systems and equipment such as tissue culture
    hoods, autoclaves, standby power generator, and other specialty equipment
    and systems, all unique to the Lessee's operations.

D.  Supply and install special monitoring systems as required to satisfy
    local, state, and federal regulations.

                                                           INITIALS: HH
                                Page 3 of 4                         -----
                                                                     RHD
                                                                    -----
<PAGE>

              RIDERS TO RAJYABIOTICS SUBLEASE WITH GENERAL ATOMICS


RIDER A-ADD TO PARAGRAPH 4.2: COMMON AREA OPERATING EXPENSES:

Lessor shall keep complete and accurate records regarding all Common Area
Operating Expenses. Lessee shall have the right to audit such records within
60 days after Lessor has furnished Lessee a statement of such actual
expenses. If an audit (performed by a certified public accountant on behalf
of Lessee) reveals that Lessor has overcharged Lessee for Common Area
Operating Expenses, Lessor shall refund the amount overcharged within ten
days after such determination has been made.

RIDER B-ADD TO PARAGRAPH 12: TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT
AND SUBLETTING:

Notwithstanding anything to the contrary contained in the Lease, but subject
to Paragraph 60.1, Lessor agrees that Lessee may assign this Lease or sublet
the Premises, or any portion thereof, without Lessor's consent, to any entity
which controls, is controlled by, or is under common control with Lessee, to
any entity which results from a reorganization or a merger or consolidation
with Lessee; to any entity engaged in a joint venture with Lessee wherein
Lessee maintains 50% controlling interest; or to any entity which acquires
substantially all of the stock or assets of Lessee, (hereinafter each a
"Permitted Transfer"). In addition, any sale or transfer of the capital stock
of Lessee shall be deemed a Permitted Transfer if (1) such sale or transfer
occurs in connection with any bona fide financing or capitalization for the
benefit of Lessee, or (2) Lessee becomes a publicly traded corporation, or
(3) such sale or transfer is made to any publicly traded corporation. Without
limiting the generality of the foregoing, Lessor shall have no right to
terminate the Lease in connection with, and shall have no right to any sums
or other economic consideration resulting from, any Permitted Transfer.




RAJYABIO.LSE                      Exhibit G             Initials: HH
July 1, 1998                     Page 1 of 1                     -----
                                                                  RHD
                                                                 -----


<PAGE>

                          AMENDMENT #1 TO THE SUBLEASE
                                BY AND BETWEEN
                GENERAL ATOMICS AND RAJYABIOTICS CORPORATION


This Sublease Amendment #1 ("Amendment #1") dated for reference purposes
only, as September 1, 1998, is made by and between General Atomics ("Lessor")
and RAJYABIOTICS Corporation, ("Lessee").

                                   RECITALS

         Parties entered into a Sublease Agreement ("Agreement") dated July
1, 1998, for a portion of Building 7, 3510 Dunhill Street, San Diego,
designated in the Agreement as the ("Premises).

         The Agreement made provisions for the Lessee to construct certain
Leasehold Improvements at the Premises and for the Lessor to finance cost and
expense of said improvements over the Original Term of the Agreement.

         The Lessee requested and the Lessor approved financing not to exceed
sixty-five dollars ($65) per square foot of leased Premises.

         The Lessee has determined that the cost of said improvements will
exceed the approved funding limit and requested Lessor financing be increased
to an amount not to exceed ninety dollars ($90) per square foot of leased
Premises.

         The Lessor has taken the Lessee's request under consideration and
agrees to increase the financing under the same Terms and Conditions stated
in the Agreement.

         NOW THEREFORE, in consideration of the foregoing, and in
consideration of mutual covenants and agreements of the Parties hereto, the
Parties mutually agree as follows:

DELETE EXHIBIT C IN ITS ENTIRETY AND REPLACE WITH EXHIBIT C, AMENDMENT #1,
DATED SEPTEMBER 1, 1998.

EXCEPT AS HEREBY AMENDED, ALL OTHER TERMS AND CONDITIONS OF SAID AGREEMENT
SHALL REMAIN UNCHANGED AND IN FULL FORCE AND EFFECT.



LESSOR:                                LESSEE:
GENERAL ATOMICS                        RAJYABIOTICS CORPORATION

By:  /s/ R.H. Dalry                    By:  /s/ Harry Hixson
   ----------------------------           -----------------------------
         R.H. Dalry                             Harry Hixson
         Director Facilities                    Chief Executive Officer
                                                and Co-Founder

Date:   Sept. 10, 1998                 Date:   9/10/98
     --------------------------             ---------------------------



RAJYABIOLse.Amend#1                                    Initials: HH
September 1, 1998                                               -----
                                                                 RHD
                                                                -----


<PAGE>

                   PREMISES, RENT, LEASEHOLD IMPROVEMENT RECOVERY
                SECURITY DEPOSIT, OPERATING EXPENSES AND COMMISSIONS


PREMISES: The Building comprises three separate space blocks; "FIRST-IN",
"ADDED" and "ROFO". The Building is currently demised into two separate
addresses, Suits, A and B. The Lessee's FIRST-IN Space Block is located in
Suite A. The Lessor currently occupies a portion of both Suites, that space
block more specifically identified on Exhibit B as ROFO. A current Tenant
subleases the remaining portion of building Suite B.

<TABLE>
<CAPTION>
                     Space Block Designation          Size(sf)
                     -----------------------          --------
                     <S>                              <C>
                            FIRST-IN                    6,611
                            ADDED                       2,826
                            ROFO                        6,016
                                                       ------
                            BUILDING TOTAL             15,453
</TABLE>

RENT/LEASEHOLD IMPROVEMENT RECOVERY:

Rent shall be categorized into three separate elements; Base Rent, Operating
Expenses and Leasehold Improvement Recovery. The Rental Rate for FIRST-IN
Space start at $0.82 per square foot per month and shall be adjusted annually
by a four percent (4%) increase. Operating Expenses shall be prorated in
accordance with terms of this Agreement; Leasehold Improvement Recovery shall
be paid in sixty (60) equal payments calculated as described in the following
paragraph.

The following table summarizes the total monthly payments, (excluding
Operating Expenses) based on the maximum leasehold financing obligated by the
Lessor. The Lessor agrees to finance FIRST-IN Leasehold Improvements in an
amount not to exceed $90 per improved square foot, with the Principal to be
amortized over five years at an interest rate of 11% per annum. Leasehold
monthly payments shall be set to start October 1998 and continue through
September 2003. In the event that final billing is not available to calculate
the monthly leasehold payment schedule at the start of Term (October 1,
1998), then the Lessor shall have the option to charge daily interest for use
of funds reimbursed to the Lessee by the Lessor.

<TABLE>
<CAPTION>
                             MONTHLY PAYMENT SCHEDULE FOR FIRST-IN SPACE
         --------------------------------------------------------------------------------------
         LEASE     SPACE     BASE RENT     LH RATE      TOTAL     BASE      L'HOLD      TOTAL
         YEAR      BLOCK     RATE PER      $90/SF/MO    RATE      RENT      PAYM'T      PAYMENT
         ----      -----     SF/MO         @11.0%       ----      ----      ------      -------
                             -----         ------
         <S>       <C>       <C>           <C>          <C>       <C>       <C>         <C>
         One       6,611     $0.82         $1.9568      $2.777    $5,421    $12,937     $18,358
         Two       6,611     $0.8528       $1.9568      $2.810    $5,638    $12,937     $18,575
         Three     6,611     $0.8869       $1.9568      $2.844    $5,863    $12,937     $18,800
         Four      6,611     $0.9224       $1.9568      $2.879    $6,098    $12,937     $19,035
         Five      6,611     $0.9593       $1.9568      $2.916    $6,342    $12,937     $19,279
</TABLE>

Once the Final Leasehold Improvement Costs are determined, and corroborated
by both parties, Parties agree to execute a Sublease Amendment that
memorializes the Leasehold Improvement Cost Recovery Schedule, adjusts the
security deposit, and establishes the fact that the Lessor has fulfilled it
obligations stipulated in the Workletter Agreement, Exhibit F.

Provided that the Lessee is not in default of this Agreement, the Lessor
agrees to finance Leasehold Improvements for the ADDED Space Block under the
same terms and conditions for the FIRST-IN Leasehold Improvements, except
that the cost for the ADDED Space Block improvements will be amortized over
the period remaining on the FIRST-IN Leasehold Payment Recovery Schedule. The
Lessor shall have the option to combine the outstanding balance due for
FIRST-IN and ADDED into one payment schedule, or to maintain separate payment
schedules for the two improvement phases.




RAJYABIOLse.Amend#1                                    Initials: HH
September 1, 1998                                               -----
                                                                 RHD
                                                                -----
<PAGE>


SECURITY DEPOSIT:

Upon execution of this Agreement, the Lessee shall pay the Lessor a Security
Deposit in the amount equivalent to one month's Rent, two month's Operating
Expenses, and one month's Leasehold Payment determined as follows:

<TABLE>
<CAPTION>
                               SECURITY DEPOSIT SUMMARY
             --------------------------------------------------------------
             SECURITY            SPACE         RATE                 AMOUNT
             --------            -----         ----                 ------
             <S>                 <C>           <C>                  <C>
             Base Rent           6,611         $0.82                $ 5,421
             NNN                 6,611         $0.17 x 2 mo.        $ 2,248
             Leasehold           6,611         $90/sf,11%,5 yr      $12,937
                                                                    -------
             TOTAL SECURITY DEPOSIT REQUIRED                        $20,606
             Security Deposit on Record                             $17,012
             BALANCE DUE:                                           $ 3,594
</TABLE>

On each anniversary of this Sublease, or the first of the month following an
expansion of the Premises, (or increase in leasehold financing), the Lessee
shall pay an added Security Deposit in an amount as determined to service
payment of Monthly Rent, Operating Expenses and Leasehold Improvement Payment.

OPERATING EXPENSES:

The Lessee shall pay its prorata share of Operating Expenses through the
entire Sublease Term, including renewals, in direct relation to the size of
the Premises. The following table shows the Lessee's prorata share based on
the FIRST-IN Space Block size of 6,611sf.

<TABLE>
<CAPTION>
             BUILDING          SIZE           LESSEE PRORATA SHARE
             NUMBER           SQ. FT.         FIRST-IN SPACE BLOCK
             ------           -------         --------------------
             <S>              <C>             <C>
             3                 20,817             N/A
             4                 28,354             N/A
             5                 29,895             N/A
             6                 24,113             N/A
             7                 15,453             42.78% (Building)
                              -------
             TOTAL            118,632             5.57%(PARK)
</TABLE>

COMMISSIONS:

Upon execution of this Agreement and within thirty days after receipt of a
commission statement, the Lessor shall pay the Lessor's Broker (CBRE)
identified in Paragraph 1.10(a) a commission of $21,140.64. The Lessor shall
not be responsible for payment of commissions based on the Leasehold
Improvement Payment nor for any term renewal or extension. For ADDED and ROFO
expansions, the Lessor agrees to pay the Lessee's Broker (IHGp) an amount
determined by using a three percent 3% commission, the size of the expansion,
and the period remaining on the Sublease Original Term.

<TABLE>
<CAPTION>
                                       COMMISSION SCHEDULE
      -------------------------------------------------------------------------------------------
      SPACE           APPROX.      LEASE             RENT            COMM.         BROKERAGE
                                               ----------------               -------------------
      BLOCK            SIZE        YEAR        MONTHLY  ANNUAL       RATE     FEE            OWED
      -----           -------      -----       ----------------      -----    ---            ----
      <S>             <C>          <C>         <C>     <C>           <C>      <C>            <C>
      FIRST-IN        6,611        One         $5,421  $ 65,052      6%       $ 3,903.12     CBRE
      FIRST-IN        6,611        Two         $5,638  $ 67,656      6%       $ 4,059.36     CBRE
      FIRST-IN        6,611        Three       $5,863  $ 70,356      6%       $ 4,221.36     CBRE
      FIRST-IN        6,611        Four        $6,098  $ 73,176      6%       $ 4,390.56     CBRE
      FIRST-IN        6,611        Five        $6,342  $ 76,104      6%       $ 4,566.24     CBRE
      Total                                            $352,344      6%       $21,140.64     CBRE

      -------------------------------------------------------------------------------------------
      ADDED           2,826        TBD         TBD     TBD           3%       TBD            IHGp
      ROFO            TBD          TBD         TBD     TBD           3%       TBD            IHGp
      OPTIONS         TBD          TBD         TBD     TBD           0%       Zero           None
</TABLE>


                                                       Initials: HH
                                                                -----
                                                                 RHD
                                                                -----
<PAGE>

                           AMENDMENT #2 TO THE SUBLEASE
                                 BY AND BETWEEN
                GENERAL ATOMICS AND ELITRA PHARMACEUTICALS, INC.
                      (FORMERLY RAJYABIOTICS CORPORATION)

This Sublease Amendment ("Amendment #2") dated for reference purposes only,
as May 1, 1999, is made by and between GENERAL ATOMICS ("Lessor") and ELITRA
PHARMACEUTICALS, (formerly RAJYABIOTICS CORPORATION) ("Lessee").

                                    RECITALS

         Parties entered into a Sublease Agreement ("Agreement") dated July 1,
1998, for a portion of Building 7, 3510 Dunhill Street, San Diego, California
designated in the Agreement as the ("Premises").

         The Parties executed a Sublease Amendment ("Amendment #1"), dated
September 1, 1998, to increase the Leasehold Improvement financing for the
FIRST-IN Space Block from sixty-five dollars ($65) per square foot to ninety
dollars ($90) per square foot.

         The Lessee served notice to the Lessor of the Lessee's corporate
name change from RAJYABIOTICS CORPORATION, to ELITRA PHARMACEUTICALS, INC.,
effective October 27, 1998.

         The Agreement provided that once the FIRST-IN Leasehold Improvement
Costs were determined, and corroborated by the Parties, an Amendment to the
Agreement would be executed to memorialize the Leasehold Improvement Cost,
adjust the Security Deposit, and to adjust the Cost Recovery Payment Schedule.

         The Lessee has completed space planning for its expansion into
Suite B, in space designated in the Agreement as the ADDED Premises, and
included herein for the purpose of establishing the amended terms for this
expansion.

         The Parties desire to incorporate other minor changes, and interim
agreements, as it relates the increase in size of Premises, and planning for
the next Lessee expansion designated herein as the ADDED Premises.

         NOW THEREFORE, in consideration of the foregoing, and in
consideration of mutual covenants and agreements of the Parties hereto, the
Parties mutually agree as follows:


DELETE EXHIBIT B IN ITS ENTIRETY AND REPLACE WITH EXHIBIT B, AMENDMENT #2,
DATED MAY 1, 1999.

DELETE EXHIBIT C IN ITS ENTIRETY AND REPLACE WITH EXHIBIT C, AMENDMENT #2,
DATED MAY 1, 1999.

DELETE EXHIBIT F IN ITS ENTIRETY AND REPLACE WITH EXHIBIT F, AMENDMENT #2,
DATED MAY 1, 1999.

EXCEPT AS HEREBY AMENDED, ALL OTHER TERMS AND CONDITIONS OF SAID AGREEMENT
SHALL REMAIN UNCHANGED AND IN FULL FORCE AND EFFECT.



LESSOR:                                LESSEE:
GENERAL ATOMICS                        ELITRA PHARMACEUTICALS, INC.


By:  /s/ Robert H. Dalry               By:  /s/ Harry Hixson
   -----------------------------          --------------------------------------
   Robert H. Dalry                        Harry Hixson
   Director Facilities                    Chief Executive Officer and Co-Founder


Date:  June 7, 1999                    Date:  6/8/99
     ---------------------------            ------------------------------------


ElitraLse.Amend#2                                         Initials: HH
May 1, 1999                                                        -----
                                                                    RHD
                                                                   -----
<PAGE>

                                  [GRAPHIC]




ElitraLse.Amend#2                 Exhibit B               Initials: HH
May 1, 1999                      Page 1 of 2                       -----
                                                                    RHD
                                                                   -----
<PAGE>

          ELITRA PHARMACEUTICALS, INC.
                SPACE SUMMARY

<TABLE>
<CAPTION>

Current Space                         CUMULATIVE TOTAL SF
-------------
  Bldg.    Room      Use     Area
   No.      No.     Code      SF
  ----     ----     ----     ----
  <S>      <C>    <C>      <C>
  67       100    Office     233
  67       101    Office     152
  67       102    Office     143
  67       103    Office     515
  67       104    Office     248
  67       105    Office     164
  67       106    Office     189
  67       107    Office     185
  67       108    Office     231
  67       109    Office     140
  67       110    Office     179
  67       111    Office     117
  67       112    Office     164
  67       113    Office     159
  67       114    Office     104
  67       115    Office      48
  67       116    Lab        115
  67       117    Lab        113
  67       118    Lab        250
  67       119    Lab      2,246
  67       120    Lab        106
  67       121    Lab        106
  67       122    Office     298
  67       123    Office     101
  67       124    Office     130
  67       125    Office     175
                           -----
TOTAL                      6,611    TOTAL    6,611

<CAPTION>
Added Space (Effective January 1, 1999)
---------------------------------------
  Bldg.    Room      Use     Area
   No.      No.     Code      SF
  ----     ----     ----     ----
  <S>      <C>    <C>      <C>
  67       136    Office     121
  67       137    Office     113
                             ---
TOTAL                        234    TOTAL    6,845

<CAPTION>
Added Space (Effective April 1, 1999)
-------------------------------------
  Bldg.    Room      Use     Area
   No.      No.     Code      SF
  ----     ----     ----     ----
  <S>      <C>    <C>      <C>
  67       132    Office     405
                             ---
TOTAL                        405    TOTAL    7,250

<CAPTION>
Added Space (Effective August 1, 1999)
---------------------------------------
  Bldg.    Room      Use     Area
   No.      No.     Code      SF
  ----     ----     ----     ----
  <S>      <C>    <C>      <C>
  67       103A   Office     404
  67       112    Office      74    (Restroom Expansion)
  67       113    Office      87    (Restroom Expansion)
  67       132    Lab      1,550
  67       133    Office     899
  67       137    Lab        463
  67       141    Office     123
  67       142    Office     150
  67       143    Office     599
  67       144    Office     133
  67       145    Office     132
                           -----
Subtotal                   4,614


Currently Occupied Month to Month Space
  67       136    Office     121
  67       137    Office     113
  67       132    Office     405
                             ---
Subtotal                    -639
TOTAL                      3,975    TOTAL   11,225
</TABLE>
                                       Page 2 of 2         Initials: HH
                                                                    -----
                                                                     RHD
                                                                    -----

<PAGE>

               PREMISES, TERM, RENT, LEASEHOLD IMPROVEMENT RECOVERY
                SECURITY DEPOSIT, OPERATING EXPENSES AND COMMISSIONS

INSERT TO PARAGRAPH 1.2(a), PREMISES:  The Building comprises three separate
space blocks; "FIRST-IN", "ADDED" and "ROFO". The Building is currently
demised into two separate Suites, A and B. The Lessee's FIRST-IN Space Block
is located in Suite A. This Amendment defines in more detail the Space Blocks
more specifically identified on Exhibit B as ADDED and ROFO. Pursuant to the
changes included in this Amendment, the Lessee Premises are redefined to the
approximate size as follows:

<TABLE>
<CAPTION>
                                     POSSESSION (SF)
              SPACE BLOCK         --------------------
              DESIGNATION         LESSEE        LESSOR         TOTAL
              -----------         ------        ------         -----
              <S>                 <C>           <C>            <C>
              FIRST-IN             6,611            --          6,611
              ADDED                4,614            --          4,614
              ROFO                    --         4,228          4,228
                                  ------         -----         ------
              BUILDING TOTAL      11,225         4,228         15,453
</TABLE>

Upon completion of the ADDED Space Block Leasehold Improvements, the ADDED
Space Block size will be confirmed and the approximate size shall be
corrected if different than stated above.

INSERT TO PARAGRAPH 1.3, TERM:  The Commencement Date for the ADDED Space
Block shall be August 1, 1999, or date of Substantial Completion of Leasehold
Improvements, whichever occurs first. The Expiration Date for all Space
included in the Premises shall be coterminous, or September 30, 2003.

<TABLE>
<CAPTION>
     SPACE BLOCK DESIGNATION          COMMENCEMENT DATE      STATUS
     -----------------------          -----------------      ------
     <S>                              <C>                    <C>
     FIRST-IN                         October 1, 1998        Actual
     ADDED                            August  1, 1999        Projected
</TABLE>

INSERT TO PARAGRAPHS 1.5 & 1.6(a), BASE RENT:
Payments shall be categorized into two separate components, Base Rent and
Leasehold Improvement Recovery. Rent for the ADDED Premises shall be the same
as then in effect for the FIRST-IN Premises, and shall be increased on the
same schedule and at the same rate as for the FIRST-IN Premises, each
anniversary date, at four percent (4%) per annum. Leasehold Improvement debt
balance owed by the Lessee for the FIRST-IN Leasehold Improvements is
determined as shown in the following tabulation.

                FIRST-IN LEASEHOLD PAYMENTS BY LESSEE

<TABLE>
<CAPTION>
                                                                         PAYMENT
LESSOR      INVOICE   INVOICE     PAYMENT   PERIOD     PERIOD    CUM.    PLUS
INVOICE #   DATE      AMOUNT      DATE      STARTING   ENDING    DAYS    INTEREST
---------   -------   -------     -------   --------   ------    ----    --------
<S>        <C>       <C>         <C>        <C>       <C>        <C>     <C>
5349       09/01/98  $ 9,343.00  10/14/98   10/15/98  04/30/99   198     $ 9,914.89
5408       10/01/98  $16,531.00  11/16/98   11/17/98  04/30/99   165     $17,370.04
5463       11/02/98  $12,937.00  12/07/98   12/08/98  04/30/99   144     $13,508.23
5518       12/01/98  $12,937.00  01/08/99   01/09/99  04/30/99   112     $13,379.18
5571       01/05/99  $12,937.00  02/03/99   02/04/99  04/30/99   86      $13,275.19
5627       02/03/99  $12,937.00  03/03/99   03/04/99  04/30/99   58      $13,164.12
5683       03/03/99  $12,937.00  04/07/99   04/08/99  04/30/99   23      $13,026.67
                     ----------                                          ----------
                     $90,559.00                                          $93,638.32
</TABLE>

              FIRST-IN CONSTRUCTION PAYMENT REIMBURSEMENTS BY LESSOR

<TABLE>
<CAPTION>
                                                                       PAYMENT
LESSOR         PAYMENT     PAYMENT     PERIOD       PERIOD     CUM.    PLUS
PAYMENT #      AMOUNT      DATE        STARTING     ENDING     DAYS    INTEREST
---------      -------     -------     --------     ------     ----    --------
<S>         <C>            <C>         <C>         <C>         <C>     <C>
1           $141,676.58    10/13/98    10/14/98    04/30/99     199    $150,393.71
2           $246,087.00    11/02/98    11/03/98    04/30/99     179    $259,664.09
3           $184,532.00    02/24/99    02/25/99    04/30/99     65     $188,166.58
            -----------                                                -----------
            $572,295.58                                                $598,224.38

BALANCE DUE FOR FIRST-IN IMPROVEMENTS STARTING MAY 1, 1999             $504,586.06
</TABLE>

                                                          Initials: HH
ElitraLse.Amend#2                 Exhibit C                        -----
May 1, 1999                      Page 1 of 4                        RHD
                                                                   -----
<PAGE>

The following table summarizes the total monthly payments, (excluding
Operating Expenses) based on the actual leasehold financing reimbursed by the
Lessor. The debt balance is calculated using the monthly payments made to the
Lessor by the Lessee, and the contractor reimbursement payments made by the
Lessor to the Lessee. The debt balance of $504,586.06 starting May 1, 1999
includes interest earned based on the payment dates for the period ending
April 30, 1999. The new balance of $504,586.06 is used as the Principal to
determine the equal monthly payments required to fully pay the debt over the
remaining period of the five year term, starting May 1, 1999, and ending
September 30, 2003. Refer to Page 4 of this Exhibit for the adjusted Payment
Recovery Schedule.

<TABLE>
<CAPTION>

         RENT AND ADJUSTED LEASEHOLD PAYMENT SCHEDULE FOR FIRST-IN SPACE BLOCK
      -----------------------------------------------------------------------------
      LEASE     SPACE    RENT     *LH RATE(sf)   TOTAL     BASE    L'HOLD     TOTAL
      PERIOD    BLOCK    PER        UNIT COS     PER      RENT    PAYM'T     PAYMENT
      -----     SIZE    sf/mo       @11.0%       sf/mo     ----    ------     -------
                -----   -----     -----------    -----
   <S>          <C>     <C>       <C>            <C>      <C>      <C>        <C>
   10/98-09/99  6,611   $0.82        $1.8246     $2.645   $5,421     See Table Above
   10/99-09/00  6,611   $0.8528      $1.8246     $2.677   $5,638   $12,062    $17,700
   10/00-09/01  6,611   $0.8869      $1.8246     $2.712   $5,863   $12,062    $17,925
   10/01-09/02  6,611   $0.9224      $1.8246     $2.747   $6,098   $12,062    $18,160
   10/02-09/03  6,611   $0.9593      $1.8246     $2.784   $6,342   $12,062    $18,404
</TABLE>

   * Amount shown in this column is calculated by dividing the $12,062.43
     payment by FIRST-IN Space Block size of 6,611sf.
     Real Unit Cost Unit cost of $86.57/sf financed by the Lessor is calculated
     by dividing the Total Reimbursement of $572,295.58 by the FIRST-IN Space
     Block size of 6,611sf.

Provided that the Lessee is not in default of this Agreement, the Lessor
agreed to finance Leasehold Improvements for the ADDED Space Block under the
same terms and conditions for the FIRST-IN Leasehold Improvements, except
that the cost for the ADDED Space Block Leasehold Improvements shall be
amortized over the period remaining on the FIRST-IN Leasehold Payment
Recovery Schedule. The following summarized the payments using a projected
$90 unit price, amortized over the period remaining of the Agreement (50
months), at an interest rate of 11% per annum, starting August 1999, and
continuing through September 2003.

<TABLE>
<CAPTION>

         RENT AND PROJECTED LEASEHOLD PAYMENT SCHEDULE FOR ADDED SPACE BLOCK
      -----------------------------------------------------------------------------
      LEASE     SPACE    RENT     *LH RATE(sf)   TOTAL     BASE    L'HOLD     TOTAL
      PERIOD    BLOCK    PER        UNIT COST     PER      RENT    PAYM'T     PAYMENT
      -----     SIZE    sf/mo       @11.0%       sf/mo     ----    ------     -------
                -----   -----     -----------    -----
   <S>          <C>     <C>       <C>            <C>      <C>      <C>        <C>
   08/99&09/99  4,614   $0.82        $2.2520     $3.072   $3,783   $10,391    $14,174
   10/99-09/00  4,614   $0.8528      $2.2520     $3.105   $3,935   $10,391    $14,326
   10/00-09/01  4,614   $0.8869      $2.2520     $3.140   $4,092   $10,391    $14,483
   10/01-09/02  4,614   $0.9224      $2.2520     $3.174   $4,256   $10,391    $14,647
   10/02-09/03  4,614   $0.9593      $2.2520     $3.211   $4,426   $10,391    $14,817
</TABLE>

Upon final accounting of the ADDED Leasehold Improvement Project Costs, the
Payment Recovery Schedule for this expansion shall be adjusted like the
FIRST-IN Schedule. The Lessor shall retain the option to combine the
outstanding debt balance due for FIRST-IN and ADDED Leasehold Improvements
into one payment schedule, or to maintain separate payment schedules,
whichever the Lessor desires. The Parties agree there is no promised or
inferred obligation for the Lessor to finance Leasehold Improvements in ROFO
Space in the event part or all of the ROFO Space is added to the Lessee's
Premises.

INSERT TO PARAGRAPH 1.7, SECURITY DEPOSIT:
Upon execution of this Amendment, the Lessee shall pay the Lessor a Security
Deposit in the amount equivalent to one month's Rent, two month's Operating
Expenses, and one month's Leasehold Payment for each of the two improvement
projects determined as follows:

<TABLE>
<CAPTION>

                                   SECURITY DEPOSIT SUMMARY
       --------------------------------------------------------------------------------
       DESIGNATION       SPACE      SECURITY                    FACTOR           AMOUNT
       -----------       -----      --------                    ------           ------
       <S>               <C>        <C>                         <C>              <C>
       FIRST-IN          6,611      Base Rent                   $0.82 x 1 mo.    $ 5,421
                         6,611      Operating Expenses          $0.17 x 2 mo.    $ 2,248
                         6,611      Leasehold Improvements      $1.8246/sf/mo.   $12,062
       ADDED             4,614      Base Rent                   $0.82 x 1 mo.    $ 3,783
                         4,614      Operating Expenses          $0.17 x 2 mo.    $ 1,569
                         4,614      Leasehold Improvements      $2.2520/sf/mo.   $10,391
                                                                                 -------
                         TOTAL SECURITY DEPOSIT REQUIRED                         $35,474
                         Security Deposit on Record                              $20,606
                                                                                 -------
                         ADDED SECURITY DEPOSIT DUE:                             $14,868
</TABLE>

                                       Page 2 of 4         Initials: HH
                                                                    -----
                                                                     RHD
                                                                    -----
<PAGE>

On each anniversary date of this Agreement, or the first of the month
following an expansion of the Premises, (or for increase in leasehold
financing), the Lessee shall pay an Added Security Deposit in an amount as
determined to secure payment of Monthly Rent, Operating Expenses and
Leasehold Improvement Payment.

INSERT TO PARAGRAPH 1.6(b). LESSEE'S SHARE OF COMMON AREA EXPENSES:
Operating Expenses shall be prorated in accordance with terms of this
Agreement. The Lessee shall pay its prorata share of Operating Expenses
through the entire Sublease Term, including renewal periods or extension, in
direct relation to the size of the Premises. The following table shows the
Lessee's prorata share based on the FIRST-IN Space Block size of
approximately 6,611sf and ADDED Space Block of approximately 4,614sf, a
combined size of approximately 11,225sf.

<TABLE>
<CAPTION>

                    BUILDING         SIZE            LESSEE       LESSEE PRORATA SHARE
                     NUMBER         SQ. FT.          SQ. FT.       REVISED SPACE BLOCK
                    --------        -------          -------      --------------------
                    <S>             <C>              <C>          <C>
                       3             20,817             0                 N/A
                       4             28,354             0                 N/A
                       5             29,895             0                 N/A
                       6             24,113             0                 N/A
                       7             15,453           11,225              72.64% (Building)
                                    -------          -------
                     TOTAL          118,632           11,225              09.46% (PARK)
</TABLE>

INSERT TO PARAGRAPH 1.10(b). PAYMENT OF BROKER:
This Amendment acknowledges that the Lessor compensated the Broker
representing the Lessor, CB Richard Ellis (CBRE), commission in the amount of
$21,140.64 as the procuring cause of the FIRST-Space Block. The following
table shows the calculation for the paid commission:

<TABLE>
<CAPTION>

                                            COMMISSION SCHEDULE
          -------------------------------------------------------------------------------------------
          SPACE           APPROX.        LEASE             RENT          COMM.         BROKERAGE
                                                      --------------     -----       --------------
          BLOCK            SIZE          PERIOD       MONTHLY ANNUAL     RATE        FEE       PAID
          -----           -------        ------       --------------     -----       ----      ----
          <S>             <C>          <C>           <C>     <C>         <C>        <C>        <C>
          FIRST-IN         6,611       10/98-09/99   $5,421  $ 65,052      6%       $ 3,903.12  CBRE
          FIRST-IN         6,611       10/99-09/00   $5,638  $ 67,656      6%       $ 4,059.36  CBRE
          FIRST-IN         6,611       10/00-09/01   $5,863  $ 70,356      6%       $ 4,221.36  CBRE
          FIRST-IN         6,611       10/01-09/02   $6,098  $ 73,176      6%       $ 4,390.56  CBRE
          FIRST-IN         6,611       10/01-09/03   $6,342  $ 76,104      6%       $ 4,566.24  CBRE
                                                             --------               ----------
          Total                                              $352,344      6%       $21,140.64  CBRE
</TABLE>

For ADDED and ROFO expansions, the Lessor agreed to pay the Lessee's Broker,
the Irving Hughes Group, Inc. (IHGp), an amount determined by using a three
percent 3% commission, the size of the expansion, and the period remaining on
the Original Term of the Agreement. Upon execution of this Amendment, and
within thirty days after receipt of a commission statement from IHGp, the
Lessor shall pay the Lessee's Broker, a commission of $6,242.34, calculated
as shown in the summary below.

<TABLE>
<CAPTION>

                                            COMMISSION SCHEDULE
          -------------------------------------------------------------------------------------------
          SPACE           APPROX.        LEASE             RENT          COMM.         BROKERAGE
                                                      --------------     -----       --------------
          BLOCK            SIZE          PERIOD       MONTHLY ANNUAL     RATE        FEE       OWED
          -----           -------        ------       --------------     -----       ----      ----
          <S>             <C>          <C>           <C>     <C>         <C>       <C>         <C>
          ADDED            4,614       08/99-09/99   $3,783  $  7,566      3%      $  227.10   IGHp
          ADDED            4,614       10/99-09/00   $3,935  $ 47,220      3%      $1,416.60   IGHp
          ADDED            4,614       10/00-09/01   $4,092  $ 49,104      3%      $1,473.12   IGHp
          ADDED            4,614       10/01-09/02   $4,256  $ 51,072      3%      $1,532.16   IGHp
          ADDED            4,614       10/01-09/03   $4,426  $ 53,112      3%      $1,593.36   IGHp
                                                             --------              ---------
          Total                                              $208,074      3%      $6,242.34   IGHp
          -------------------------------------------------------------------------------------------
          ROFO             TBD             TBD         TBD      TBD        3%         TBD      IHGp
          OPTIONS          TBD             TBD         TBD      TBD        0%         Zero     None
</TABLE>

The Lessor shall not be responsible for payment of commissions based on the
Leasehold Improvement Payment, nor for any term renewal, or term extension.


                                       Page 3 of 4         Initials: HH
                                                                    -----
                                                                     RHD
                                                                    -----
<PAGE>

                           MORTAGE AMORTIZATION

<TABLE>
<S>                               <C>               <C>                      <C>
KEY FIGURES                                         INPUTS
Annual Loan Payments              $144,749.16       Loan Principal Amount    $504,586.06
Monthly Payments                   $12,062.43       Annual Interest Rate          11.00%
Interest in First Calendar Year    $35,058.73       Loan Period in Years       4.4166667
Interest Over Term of Loan        $170,910.02       Base Year of Loan               1999
Sum of All Payments               $675,496.08       Base Month of Loan               May
</TABLE>

<TABLE>
<CAPTION>
                Beginning                                             Cumulative     Cumulative      Ending
Year    Mont     Balance       Payments     Principal     Interest     Principal       Interest     Balance
------------------------------------------------------------------------------------------------------------
<S>     <C>     <C>           <C>           <C>           <C>         <C>            <C>            <C>
1999    May     $504,586.06   $12,062.43    $7,437.06     $4,625.37     $7,437.06     $4,625.37     $497,149
        Jun      497,149.00    12,062.43     7,505.23      4,557.20     14,942.29      9,182.57      489,644
        Jul      489,643.77    12,062.43     7,574.03      4,488.40     22,516.32     13,670.97      482,070
        Aug      482,069.74    12,062.43     7,643.46      4,418.97     30,159.78     18,089.94      474,426
        Sep      474,426.28    12,062.43     7,713.52      4,348.91     37,873.30     22,438.85      466,713
        Oct      466,712.76    12,062.43     7,784.23      4,278.20     45,657.53     26,717.05      458,929
        Nov      458,928.53    12,062.43     7,855.59      4,206.84     53,513.12     30,923.89      451,073
        Dec      451,072.94    12,062.43     7,927.59      4,134.84     61,440.71     35,058.73      443,145
2000    Jan      443,145.35    12,062.43     8,000.26      4,062.17     69,440.97     39,120.90      435,145
        Feb      435,145.09    12,062.43     8,073.60      3,988.83     77,514.57     43,109.73      427,071
        Mar      427,071.49    12,062.43     8,147.61      3,914.82     85,662.18     47,024.55      418,924
        Apr      418,923.88    12,062.43     8,222.29      3,840.14     93,884.47     50,864.69      410,702
        May      410,701.59    12,062.43     8,297.67      3,764.76    102,182.14     54,629.45      402,404
        Jun      402,403.92    12,062.43     8,373.73      3,688.70    110,555.87     58,318.15      394,030
        Jul      394,030.19    12,062.43     8,450.49      3,611.94    119,006.36     61,930.09      385,580
        Aug      385,579.70    12,062.43     8,527.95      3,534.48    127,534.31     65,464.57      377,052
        Sep      377,051.75    12,062.43     8,606.12      3,456.31    136,140.43     68,920.88      368,446
        Oct      368,445.63    12,062.43     8,685.01      3,377.42    144,825.44     72,298.30      359,761
        Nov      359,760.62    12,062.43     8,764.62      3,297.81    153,590.06     75,596.11      350,996
        Dec      350,996.00    12,062.43     8,844.97      3,217.46    162,435.03     78,813.57      342,151
2001    Jan      342,151.03    12,062.43     8,926.05      3,136.38    171,361.08     81,949.95      333,225
        Feb      333,224.98    12,062.43     9,007.87      3,054.56    180,368.95     85,004.51      324,217
        Mar      324,217.11    12,062.43     9,090.44      2,971.99    189,459.39     87,976.50      315,127
        Apr      315,126.67    12,062.43     9,173.77      2,888.66    198,633.16     90,865.16      305,953
        May      305,952.90    12,062.43     9,257.86      2,804.57    207,891.02     93,669.73      296,695
        Jun      296,695.04    12,062.43     9,342.73      2,719.70    217.233.75     96,389.43      287,352
        Jul      287,352.31    12,062.43     9,428.37      2,634.06    226,662.12     99,023.49      277,924
        Aug      277,923.94    12,062.43     9,514.79      2,547.64    236,176.91    101,571.13      268,409
        Sep      268,409.15    12,062.43     9,602.01      2,460.42    245,778.92    104,031.55      258,807
        Oct      258,807.14    12,062.43     9,690.03      2,372.40    255,468.95    106,403.95      249,117
        Nov      249,117.11    12,062.43     9,778.86      2,283.57    265,247.81    108,687.52      239,338
        Dec      239,338.25    12,062.43     9,868.50      2,193.93    275,116.31    110,881.45      229,470
2002    Jan      229,469.75    12,062.43     9,958.96      2,103.47    285,075.27    112,984.92      219,511
        Feb      219,510.79    12,062.43    10,050.25      2,012.18    295,125.52    114,997.10      209,461
        Mar      209,460.54    12,062.43    10,142.38      1,920.05    305,267.90    116,917.15      199,318
        Apr      199,318.16    12,062.43    10,235.35      1,827.08    315,503.25    118,744.23      189,083
        May      189,082.81    12,062.43    10,329.17      1,733.26    325,832.42    120,477.49      178,754
        Jun      178,753.64    12,062.43    10,423.85      1,638.58    336,256.27    122,116.07      168,330
        Jul      168,329.79    12,062.43    10,519.41      1,543.02    346,775.68    123,659.09      157,810
        Aug      157,810.38    12,062.43    10,615.83      1,446.60    357,391.51    125,105.69      147,195
        Sep      147,194.55    12,062.43    10,713.15      1,349.28    368,104.66    126,454.97      136,481
        Oct      136,481.40    12,062.43    10,811.35      1,251.08    378,916.01    127,706.05      125,670
        Nov      125,670.05    12,062.43    10,910.45      1,151.98    389,826.46    128,858.03      114,760
        Dec      114,759.60    12,062.43    11,010.47      1,051.96    400,836.93    129,909.99      103,749
2003    Jan      103,749.13    12,062.43    11,111.40        951.03    411,948.33    130,861.02       92,638
        Feb       92,637.73    12,062.43    11,213.25        849.18    423,161.58    131,710.20       81,424
        Mar       81,424.48    12,062.43    11,316.04        746.39    434,477.62    132,456.59       70,108
        Apr       70,108.44    12,062.43    11,419.77        642.66    445,897.39    133,099.25       58,689
        May       58,688.67    12,062.43    11,524.45        537.98    457,421.84    133,637.23       47,164
        Jun       47,164.22    12,062.43    11,630.09        432.34    469,051.93    134,069.57       35,534
        Jul       35,534.13    12,062.43    11,736.70        325.73    480,788.63    134,395.30       23,797
        Aug       23,797.43    12,062.43    11,844.29        218.14    492,632.92    134,613.44       11,953
        Sep       11,953.14    12,062.43    11,952.86        109.57    504,585.78    134,723.01            0
</TABLE>


                                       Page 4 of 4         Initials: HH
                                                                    -----
                                                                     RHD
                                                                    -----
<PAGE>
                                       WORK LETTER AGREEMENT

This Work Letter Agreement is written to complement the Form Sublease and its
Addenda; it expands and summarizes the obligations of the Parties related to
installation of Leasehold Improvements, and surrender of the Premises at end
of Term.

                                        I. INTRODUCTION

This Amendment memorializes completion of the Parties' obligations for
altering the FIRST-IN Premises and summarizes the obligations of the Parties
for altering the ADDED Premises, consistent with the terms and conditions
covered in the Original Agreement and subsequent Amendment #1.

                                        II. BASE BUILDING

The Lessor delivered, or will deliver to Lessee, the Building 7 Premises in
two separate space blocks, FIRST-IN, and ADDED, both in "as-is" condition,
unfurnished, and generally configured as shown on the Floor Plan, Exhibit B,
of the Original Agreement. The Floor Plan Arrangement for the Lessee
completed (FIRST-IN) Premises and the Lessee's ADDED Premises (planned) is
shown in Exhibit B of this Amendment.

FIRST-IN SPACE BLOCK: The Lessee had designed, permitted and installed all
Alterations and Utility Installations needed for its use of the 6,611sf
FIRST-IN Premises, in Building Suite A.

ADDED SPACE BLOCK: The Lessee is preparing space plans and working documents
to permit and install all Alterations and Utility Installations needed to
expand into approximately 4,614sf, the ADDED Premises, in Building Suite B.

ROFO SPACE BLOCK: The Lessor will retain in its possession the Space Block
designated ROFO. As part of the ADDED Space Block Leasehold Improvements, the
Lessee will make certain Alterations and Utility Installations to the
Lessor's ROFO Space Block to provide an efficient work space arrangement for
the Lessee's expanded Premises.

                             III. BUILDING COMMON AREA IMPROVEMENTS

ROOF: Concurrent with the Lessee's installation of Leasehold Improvements in
the FIRST-IN Space Block, the Lessor replaced the building soft roof,
installed mechanical equipment curbs, and rerouted mechanical equipment
services to the roof mounted equipment. The Lessor also installed roof
protection walking pads to access the roof mounted mechanical equipment. The
Parties agree that ADDED Space Block improvements will be of like design and
construction as modified or installed for the FIRST-IN improvements.

EQUIPMENT ENCLOSURE: As part of the FIRST-IN Leasehold Improvements, the
Lessee installed electrical and plumbing services in the existing enclosure
located at Building column lines A-6. Parties agree that any additions or
alterations for the ADDED Space Block will implement the Lessor's guidelines
that all equipment located outside the Building, but not on the roof, is to
be mounted inside the enclosure, screened from the street or driveway by the
enclosure wall, and that all service penetrations into the building from the
enclosure will be installed below the top elevation of the screen wall.

                                    IV. BUILDING SYSTEMS

MECHANICAL: The Building space conditioning is provided by roof mounted
packaged units with zone boundaries not exactly congruent with the boundaries
of the proposed ADDED Premises. The Parties agree that the Leasehold
Improvements installed by the Lessee will reconfigure the space conditioning
zones in a manner that will not reduce conditioned ventilation to the
Lessor's retained ROFO Space Block, and conditioned air will be aligned in
general agreement with the Space Block boundaries.

ELECTRICAL: The building is powered from one service entrance with
consumption measured by four separate utility meters, one for the common area
house power, one each for Suite A and Suite B, and one for the Lessor's ROFO
Space Block. The Parties agree that the ADDED Space Block Leasehold
Improvements will make provisions to retain the current metering and that the
Building services to the various spaces will be connected to the appropriate
utility metered service.

ElitraLse.Amend#2                      Exhibit F           Initials: HH
May 1, 1999                           Page 1 of 7                   -----
                                                                     RHD
                                                                    -----
<PAGE>

FIRE PROTECTION: The FIRST-IN Space Block Leasehold Improvements reconfigured
the Fire Detection and Alarm System into two separate systems, one serving
the Lessee's Premises, and the other serving Suite A and ROFO Space. Parties
agree that the ADDED Space Block Leasehold Improvements will make provisions
to extend the Lessee's system to protect the ADDED Space Block, and that the
Lessor's system will be reconfigured for protection of the ROFO Space Block.
In the event that building design and permits require installation of a
sprinkler system for the Lessee's use of the ADDED Space Block, then the
Leasehold Improvements will make provisions for installing the sprinkler
system.

TELECOMMUNICATIONS: As part of the FIRST-IN Space Block Leasehold
Improvements, the Lessee rewired the Premises and connected telephone service
from the Building Electric Room to a new telecommunications room (Room 111)
dedicated to the Lessee's Premises. The ROFO Space Block retained by the
Lessor is served by the Lessor's private telephone system terminations, in
Room 127, via private cable to the Lessor's Building 6, located adjacent to
Building 7. The Parties agree that ADDED Space Block Leasehold Improvements
will make provisions for Lessee's communications system cabling to distribute
service from the Electrical Utility Room in a manner that Suite B can be
restored to stand alone use at the end of the Lessee's term without
installing new cabling. No changes will be made to the communications system
serving the Lessee's ROFO Space Block.

TOILET ROOM ACCESS: Two sets of toilet room facilities currently exist in the
Building, one set each for Suites A and B. Prior to the Lessee's installation
of the ADDED Space Block Leasehold Improvements, the Lessor shared the Suite
B toilet rooms with the Suite B tenant. If the Lessee's space plan requires
the removal of the Suite B toilet room facilities, then the Lessee agrees
that the ADDED Space Block Leasehold Improvements will make provisions for a
replacement toilet room (one toilet room) to serve the ROFO Space Block.
Further, this serves notice that unless the Parties agree to expand the
Lessee's Premises to include part or all of the ROFO Space Block, and the
expansion does not provide for two toilet rooms to serve Suite B, then the
Lessor will require that Suite B toilet facilities be restored upon surrender
of the space now designated Suite B, so the Lessor may lease the Building to
two separate tenant similar to the condition pre-existing the Lessee's
Leasehold Improvements.

                                  V. LEASEHOLD IMPROVEMENTS

The Lessee will be responsible for design and construction of the Leasehold
Improvements to alter the Premises for the Lessee's specific use. Lessor
financing will be provided for those improvements that are of value to the
realty and can be later used by other tenants. Lessor allowable reimbursable
costs and expenses are as follows:

1.  Costs and expenses required for preparing leasehold improvement working
    drawings and specifications, for reproducing design documents, and for
    permit processing.

2.  Assessments for permits and fees needed to construct the Leasehold
    Improvements.

3.  Installation of structures, walls, insulation, ceilings, doorways, and
    those building features needed to provide working space in the laboratory
    and administrative space.

4.  Alterations and Utility Installations required to change the physical
    arrangement of the Lessor's ROFO Space to accommodate the Lessee's space
    use plan.

5.  Installation of certain Tenant Fixtures and Equipment expressly approved
    for financing by the Lessor.

6.  Installation of mechanical, plumbing and services to support laboratory
    and administrative areas. This includes heating, ventilation, air
    conditioning, exhaust systems; distribution piping for compressed air,
    deionized water, specialty gases, potable water, sewer and natural gas.
    In those cases where services interface with the Lessee Trade Fixtures,
    Leasehold Improvements will provide for specified services installed to a
    convenient point of connection such as valves above ceiling or at
    rough-in locations, as designated on the working drawings and
    specifications.

7.  Installation of electrical equipment and services to distribute
    commercial electrical or standby electric power to laboratory equipment,
    lighting; wiring and connections for standard communications, special
    data communications, standard life safety, fire detection and alarm, and
    process or security alarms. In cases where services interface directly
    with the Lessee Trade Fixtures, the Leasehold Improvements will provide for
    specified services installed to a convenient point of connection such as
    wall outlets, above ceiling junction box, or at a disconnect device,
    such as a fused switch, as designated on the working drawings and
    specifications.

8.  Installation of doors, door hardware, suspended ceilings, electrical
    trim, mechanical trim, floor covering and painting.


                                                           Initials: HH
                                     Page 2 of 7                    -----
                                                                     RHD
                                                                    -----
<PAGE>
9.  Installation of parking lot features related to ADA codes.

10. Special inspections required as a condition of the building permits.

The LESSEE will be responsible for the following:

A.  Select design consultants for preparation of construction documents.

B.  Coordinate collection of as-built information, design and preparation of
    construction documents.

C.  Make application to the City for building permits.

D.  Solicit or negotiate bids and award contracts for installation of
    Leasehold Improvements.

E.  Obtain Lessor's consent of selected contractor bidders and award of
    contracts.

F.  Install and oversee the Building Improvements.

G.  Pay design consultants and contractors that provide labor, materials and
    services.

H.  Prepare and maintain cost accounting for Project expenditures.

I.  Make submittal to the Lessor for Leasehold Improvement payment
    reimbursement.

J.  Pay the costs and expenses in excess of the Lessor's $90 per square foot
    Leasehold Improvement commitment.

The LESSOR will be responsible for the following at no added fee or charge to
the Leasehold Improvement Project.

K.  At its own discretion, Lessor may file a "Notice of Non-Responsibility"
    giving notice to all material suppliers and contractors that the
    Lessor is not responsible for payment of contracted services.

L.  Assist the design team with definition of building interfaces and
    existing site conditions.

M.  Perform a design review of the construction documents to ascertain that
    the design is consistent with this Agreement, and that the improvements
    meet the guidelines for the Leasehold Improvement financing.

N.  Perform routine inspections  at the construction site to confirm that the
    installations are in accordance with the plans, and adequate construction
    quality standards are being maintained.

O.  Perform routine inspections to ascertain construction progress supports
    the reimbursement payments being requested by the Lessee.

P.  Reimburse the Lessee based on submittals requesting payment for design,
    permits, construction and inspections.

Q.  Maintain an accounting of reimbursements to the Lessee and prepare a
    Leasehold Improvement Payment Schedule.

R.  Prepare a Sublease Amendment to memorialize the Leasehold Improvement
    Payment Schedule and other minor changes deemed appropriate at time of
    revision.

The following guidelines will apply to the Lessor's Reimbursement of Lessee's
payment for Leasehold Improvements:


S.  The Lessee will require contractors submit quotes or estimates in a CSI
    format that can be used for cost control and reimbursement verification
    during the Leasehold Improvement Project.

T.  The Lessee will provide the Lessor sufficient backup information showing
    verification of payment with supporting information. Supporting information
    will include a summary of the cost to complete, and verification of payment
    by Lessee accompanied by conditional or unconditional mechanics lien
    releases executed by the performing contractor(s).

U.  Any request for reimbursement of progress payments (payments for less
    than 100% completion) will be supported with a project completion summary
    showing percentage completed for those materials and services for which
    reimbursements is being requested. Cost summaries will be submitted in the
    form that designates the different scopes of work, respective performing
    contractor(s), and services rendered.

                                                           Initials: HH
                                     Page 3 of 7                    -----
                                                                     RHD
                                                                    -----
<PAGE>

V.  Upon Substantial Completion of the Leasehold Improvements, or that date
    on which a walk-through Inspection will be conducted, Parties will
    develop a punch-list of items needing correction or additional work.
    Punch-list corrections will be completed within 30 days and prior to
    final Leasehold Improvement cost reimbursement by the Lessor.

                   VI. TENANT FIXTURES, EQUIPMENT AND SERVICES

Unless consent is expressly granted, Lessor will not finance Tenant fixtures
that are subject to removal by the Lessee at the end of lease term, or
those improvements considered of no value to the leasehold. The Lessee
will be responsible for the specification, design, purchase and
installation of its fixtures, hardware, and all personal property needed
to complement or furnish the Premises for the Lessee operations. Except
for the fixtures the Lessor agrees to finance, said equipment will remain
under the Lessee's ownership. Installation of all fixtures and equipment
will be the responsibility of the Lessee. In this regard, the Lessee
will:

A.  Have prepared the necessary design documents for procurement of
    laboratory fixtures and equipment.

B.  Install and connect to the fixtures and equipment, ducting, piping,
    electrical, and other needed services from a convenient point of
    connection provided by building standard leasehold improvements.

C.  Supply and install speciality systems and equipment such as tissue
    culture hoods, autoclaves, and other speciality equipment and systems,
    all unique to the Lessee's operations.

D.  Supply and install special monitoring systems as required to satisfy
    local, state, and federal regulations.

E.  Request and authorize installation of data and telecommunications system
    terminal equipment, special life safety systems, special fire
    suppression, security features (alarms, door locks, access controls,
    remote monitoring), and signage, all unique to the Lessee's operation and
    administrative use.

F.  Open or transfer accounts for electrical power, natural gas,
    telecommunications and other connected utilities.

G.  Prepare an inventory of Lessor financed fixtures and equipment by
    location and description, and submit the inventory list to the Lessor for
    inclusion in the next Amendment to this Agreement.

                VII. DISCHARGE OF OBLIGATIONS.

FIRST-IN SPACE BLOCK: This Amendment acknowledges that the Parties fulfilled
the obligations outlined in this Work Letter Agreement for the FIRST-IN
Space Block, and memorializes cost and expense related to Lessor
financing of the Leasehold Improvements. Pages 6 and 7 of this Exhibit
represents the Final Cost Accounting of the FIRST-IN Leasehold
Improvement Project compiled by the Lessee's Contractor. This Cost
Report served as the basis for calculating  the Lessor's reimbursement
payments to the Lessee in the amount of $572,295.58. Refer to Exhibit C
of this Amendment for the revised Leasehold Payment Schedule.

ADDED SPACE BLOCK: The Parties agree to execute and fulfill their respective
obligations for ADDED Space Block Leasehold Improvement Project, in a timely
and efficient manner using the same guidelines as for FIRST-IN Project,
except that more diligence will be exercised in preparing accurate work scope
and cost accounting reports for contractor payment reimbursement. The Lessee
agrees to include in the contract an improved procedure for the timely and
reasonable payment of contract services. This procedure should not include
reimbursement to the Lessee by the Lessor as a precondition for payment of
contractor services.

The Lessor acknowlages that the Lessee is not in default of terms and
conditions of the Agreement and grants the Lessee the option to finance
the ADDED Space Block Leasehold Improvements under the same terms and
conditions as FIRST-IN Improvements, except that the debt incurred by
the Lessee will be amortized over the period remaining on the Term of the
Agreement.


                                                           Initials: HH
                                     Page 4 of 7                    -----
                                                                     RHD
                                                                    -----
<PAGE>

                            VIII.  SURRENDER OF PREMISES

At end of Term, the Lessee is expected to prepare the Premises in a condition
acceptable to the Lessor, in general compliance with the terms of Paragraph
7.4 of the Original Agreement. Prior to the Lessor's acceptance of part or
all of the Premises, the Parties shall conduct inspections to ascertain the
said Premises are in a condition acceptable to the Lessor, a condition
existing at the time the Lessee took Possession, normal wear excepted.

<TABLE>
<CAPTION>
LABORATORIES                       GENERAL ATOMICS          ELITRA PHARMACEUTICALS     DATE
----------------------------------------------------------------------------------------------
<S>                                <C>                      <C>                       <C>
Hazardous materials removed            ________________         ___________________     __________
Fixture inventory prepared             ________________         ___________________     __________
Trash removed                          ________________         ___________________     __________
Telephones disconnected                ________________         ___________________     __________
Services stripped/safe off             ________________         ___________________     __________
Floors repaired                        ________________         ___________________     __________
Walls/minor repairs completed          ________________         ___________________     __________
Floors stripped and waxed              ________________         ___________________     __________
HVAC equipment inspect./repair         ________________         ___________________     __________
Ventilation balanced                   ________________         ___________________     __________
Lab signage left in place              ________________         ___________________     __________
Release from State rad license         ________________         ___________________     __________
Key locks changed                      ________________         ___________________     __________

SERVICE AREAS
--------------
Equipment secured                      ________________         ___________________     __________
Toilet room restoration complete       ________________         ___________________     __________
Gas bottles removed                    ________________         ___________________     __________
Fixtures removed                       ________________         ___________________     __________
Trash removed                          ________________         ___________________     __________
Spills cleaned                         ________________         ___________________     __________
Plumbing drains restored               ________________         ___________________     __________
Plumbing disconnected/capped           ________________         ___________________     __________
Standby generator inspect./repair      ________________         ___________________     __________
Electrical safe off                    ________________         ___________________     __________
Special signage removed                ________________         ___________________     __________
Cleaned and free of stains             ________________         ___________________     __________
Roof clean                             ________________         ___________________     __________

OFFICES
-------
Furnishings removed                    ________________         ___________________     __________
Telephones disconnected                ________________         ___________________     __________
Trash removed                          ________________         ___________________     __________
Special telecom. removed               ________________         ___________________     __________
HVAC equipment inspect./repair         ________________         ___________________     __________
Wall repairs completed                 ________________         ___________________     __________
Minor repairs completed                ________________         ___________________     __________
Carpet extraction cleaned              ________________         ___________________     __________
Office signage left in place           ________________         ___________________     __________
Key locks changed                      ________________         ___________________     __________

SUCCESSOR TENANT CONSENT (IF APPLICABLE)
----------------------------------------
Fixture inventory complete             ________________         ___________________     __________
First inspection                       ________________         ___________________     __________
Ownership transfer completed           ________________         ___________________     __________
Final inspection                       ________________         ___________________     __________

DATE: TURNOVER AND ACCEPTANCE          ________________         ___________________     __________
-----------------------------
</TABLE>

                                                           Initials: HH
                                     Page 5 of 7                    -----
                                                                     RHD
                                                                    -----
<PAGE>

                                                          ESTIMATE (R6)

<TABLE>
<CAPTION>

RUDOLPH AND SLETTEN, INC                                                                                        September 23, 1998
Project:  Rajyabiotic Tenant Improvement
R&S Job No. 2399-0
                                                           SUMMARY SHEET
====================================================================================================================================
Line #     CSI#           TRADE                           7/29/98 GMP         8/17/98 GMP          9/23/98 GMP     Variance Between
                                                                                                                   9/23 & 8/17 GMP
===================================================================================================================================
<S>      <C>              <C>                             <C>                 <C>                  <C>             <C>
11        1 01100         GENERAL CONDITIONS/SUPERVISION  $   23,100          $    23,100           $    25,020        $    1,920
12        2 01111         MISCELLANEOUS ITEMS             $        -          $         -           $         -        $        -
13        3 01200         SURVEYING                       $        -          $         -           $         -        $        -
14        4 01700         FINAL CLEANING                  $      635          $       635           $     1,170        $      535
15        5 02060         DEMOLITION & REMOVAL            $    5,955          $     6,780           $     7,455        $      675
16        6 02444         CHAIN LINK FENCE                $        -          $         -           $         -        $        -
17        7 02520         SITE CONCRETE                   $        -          $     1,200           $     1,950        $      750
18        8 02580         PAVEMENT MARKINGS               $        -          $         -           $         -        $        -
19        9 02850         SITE FURNISHINGS                $        -          $         -           $       100        $      100
20       10 02900         LANDSCAPE & IRRIGATION          $        -          $         -           $         -        $        -
21       11 03200         REINFORCING STEEL               $    1,425          $     1,686           $     1,688        $        -
22       12 03310         BUILDING CONCRETE               $    1,710          $     2,210           $     2,210        $        -
23       13 04200         MASONRY                         $        -          $         -           $         -        $        -
24       14 05500         MISCELLANEOUS IRON              $    1,000          $     1,000           $         -        $    (1,000)
25       15 06100         ROUGH CARPENTRY                 $    1,550          $     1,500           $     4,400        $     2,900
26       16 06200         FINISH CARPENTRY                $   56,763          $    60,630           $    61,390        $       760
27       17 07200         BUILDING INSULATION             $      366          $       366           $       621        $       255
28       18 07500         MEMBRANE ROOFING                $        -          $         -           $         -        $        -
29       19 07600         FLASHING & SHEET METAL          $        -          $     1,500           $       802        $      (698)
30       20 07920         JOINT SEALERS                   $      500          $       500           $       500        $        -
31       21 08000         INSTALL DOORS & HARDWARE        $        -          $         -           $       320        $       320
32       22 08100         METAL DOOR FRAMES               $    3,500          $     8,925           $    18,863        $     9,938
33       23 08200         WOOD DOORS                      $        -          $         -           $         -        $         -
34       24 08305         ACCESS PANELS                   $        -          $         -           $         -        $         -
35       25 08700         FINISH HARDWARE                 $        -          $         -           $         -        $         -
36       26 08800         GLASS & GLAZING (NEW ENTRANCE
                          TO EQUIP. ROOM)                 $    4,400          $     4,400           $       575        $    (3,825)
37       27 09200         PLASTER, STUDS & DRYWALL        $   16,474          $    23,315           $    29,296        $     5,981
38       28 09300         CERAMIC TILE                    $        -          $         -           $         -        $         -
39       29 09500         ACOUSTICAL CEILING              $    8,533          $     8,688           $    10,140        $     1,452
40       30 09650         FLOOR COVERING                  $   16,175          $    19,876           $    23,980        $     4,104
41       31 09900         PAINTING                        $    7,507          $     7,787           $     6,960        $      (827)
42       32 09950         FRP PANELS                      $      912          $       912           $     2,285        $     1,373


                                                           Initials: HH
                                     Page 6 of 7                    -----
                                                                     RHD
                                                                    -----
<PAGE>

43       33 10160         TOILET PARTITIONS               $    1,750          $     1,750           $     3,203        $     1,453
44       34 10400         SIGNAGE                         $        -          $         -           $         -        $         -
45       35 10522         FIRE EXTINGUISHERS              $        -          $         -           $       200        $       200
46       36 10800         TOILET ACCESSORIES              $    1,350          $     1,555           $     4,652        $     2,997
47       37 12200         SPECIAL EQUIPMENT               $   31,995          $    16,388           $    20,603        $     4,215
48       38 15400         PROCESS PLUMBING                $   58,355          $    93,700           $    95,474        $     1,774
49       39 15450         DOMESTIC PLUMBING               SEE PROCESS PLUMBING
50       40 15500         FIRE PROTECTION                 $        -          $         -           $         -        $         -
51       41 15800         HVAC - DRYSIDE                  $   68,446          $    89,117           $    75,132        $   (13,985)
52       42 15801         HVAC - WETSIDE                  SEE HVAC DRY
53       43 16000         ELECTRICAL                      $   39,795          $    91,150           $    96,384        $     5,234
----------------------------------------------------------------------------------------------------------------------------------
54 SUBTOTAL                                               $  352,195          $   468,771           $   495,373        $    26,601
55
56       44               SUBCONTRACTOR BONDS    0.00%    $        0          $         0           $         0        $         0
57       45               LIABILITY INSURANCE    0.70%    $    2,465          $     3,281           $     3,468        $       186
58       46               ESTIMATING/CONTRACTOR
                          CONTINGENCY*          10.00%    $   35,466          $    23,603           $    12,471        $   (11,132)
59       47               FEE                    5.00%    $   19,506          $    24,783           $    25,566        $       783
60       48               BOND PREMIUM           0.00%    $        0          $         0           $         0        $         0
----------------------------------------------------------------------------------------------------------------------------------
61 SUBTOTAL R&S COSTS                                     $  409,633          $   520,438           $   536,877        $    16,439
62
63       49               ARCHITECTURAL FEES              $        0          $    28,415           $    28,715        $       300
64       50               PERMIT/PLANCHECK                $        0          $     8,000           $     2,358        $    (5,642)
65       51               ENVIRONMENTAL STUDY             $        0          $     3,000           $     3,000        $         0
66       52               FUME HOOD & BASE CABINETS       $        0          $         0           $     7,974        $     7,974
67       53               LAMINAR FLOW HOODS              $        0          $         0           $     7,543        $     7,543
68       54               VOICE/DATA CABLING              $        0          $     9,404           $     9,404        $         0
69       55               SECURITY SYSTEM
                          (RE-INSTALLATION)               $        0          $       890           $       890        $         0
70       56               FIRE ALARM SYSTEM               $        0          $         0           $     9,850        $     9,850
71       57               PHONE SYSTEM                    $        0          $    16,246           $    16,246        $         0
            ----------------------------------------------------------------------------------------------------------------------
72 SUBTOTAL SOFT COSTS                                    $        0          $    65,955           $    85,980        $    20,025

              -------------------------------------------------------------------------------------------------
              ESTIMATE(R6) DATED SEPTEMBER 23, 1998                                                    $622,857         $28,715.00
              -------------------------------------------------------------------------------------------------           2,424.58
* Reduced contingency to 2.5% for 9/23/98 GMP                                                                           ----------
                                                                                                                        $31,139.58
                           ELITRA - FIRST-IN LEASEHOLD IMPROVEMENT PAYMENT RECONCILIATION

                           RUDOLPH AND SLETTEN, INC. Contract                  $536,877.00
                           ARCHITECTURALL FEES - PACIFIC CORNERSTONE ACH, INC    31,139.58
                           Invoiced but not included on this report               4,279.00
                                                                               -----------
                           TOTAL REIMBURSED TO ELITRA BY GENERAL ATOMICS       $572,295.58
</TABLE>


                                                           Initials: HH
                                     Page 7 of 7                    -----
                                                                     RHD
                                                                    -----