Exhibit 10.42

                                     [LOGO]

            STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE - NET
                     AIR COMMERCIAL REAL ESTATE ASSOCIATION

1. Basic Provisions ("Basic Provisions").

      1.1 Parties: This Lease ("Lease"), dated for reference purposes only March
17, 2005,  is made by and between Wells Fargo Bank N.A as Trustee for the Hutton
Trust  ("Lessor")  and  PhotoMedex,  Inc.,  a Delaware  Corporation  ("Lessee"),
(collectively the "Parties", or individually a "Party").

      1.2(a)  Premises:  That certain portion of the Project (as defined below),
including all  improvements  therein or to be provided by Lessor under the terms
of this Lease,  commonly  known by the street address of 2375 Camino Vida Roble,
Suite  B,  located  in the  City of  Carlsbad,  County  of San  Diego,  State of
California,  with zip code  92009,  as  outlined  on Exhibit A  attached  hereto
("Premises")  and  generally  described as  (describe  briefly the nature of the
Premises):  A multi Tenant single level tilt up building approximately 8,000 RSF
of an  approximately  15,920 RSF building within Camino  Corporate  Center I. 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
containing the Premises  ("Building")  or to any other buildings in the Project.
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 "Project." (See also Paragraph 2)

      1.2(b)  Parking:  3/1,000 usable square feet  unreserved  vehicle  parking
spaces  ("Unreserved  Parking Spaces");  and N/A reserved vehicle parking spaces
("Reserved Parking Spaces"). (See also Paragraph 2.6)

      1.3 Term: Seven (7) years and zero (0) months ("Original Term") commencing
June 15, 2005 (see addendum) ("Commencement Date") and ending eighty four months
from commencement ("Expiration Date"). (See also Paragraph 3)

      1.4 Early Possession:  N/A ("Early Possession Date"). (See also Paragraphs
3.2 and 3.3)

      1.5 Base Rent:  $6,640.00 per month ("Base Rent"),  payable on the 1st day
of each month commencing June 15, 2005, or upon substancial completion of Tenant
Improvements. (See also Paragraph 4)

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

      1.6 Lessee's  Share of Common Area Operating  Expenses:  Ten percent (10%)
("Lessee's Share").

      1.7 Base Rent and Other Monies Paid Upon Execution:

            (a)   Base Rent:  $6,640.00  for the period June 15, 2005 - July 14,
                  2005.

            (b)   Common Area Operating Expenses:  $2,240.00 for the period June
                  15, 2005-July 14, 2005.

            (c)   Security Deposit:  $7,929.00 ("Security  Deposit").  (See also
                  Paragraph 5)

            (d)   Other: $0.00 for _____________________________________________
                  _____________________________________________________________.

            (e)   Total Due Upon Execution of this Lease: $16,809.00.

      1.8 Agreed Use: General office, warehouse,  manufacturing and laboratories
for bio-medical products. (See also Paragraph 6)

      1.9 Insuring Party. Lessor is the "Insuring Party". (See also Paragraph 8)

      1.10 Real Estate Brokers: (See also Paragraph 15)

            (a)   Representation:   The  following   real  estate  brokers  (the
"Brokers")  and  brokerage   relationships  exist  in  this  transaction  (check
applicable boxes):

|X|  Grubb &  Ellis|BRE  Commercial  represents  Lessor  exclusively  ("Lessor's
Broker");

|X| CB Richard Ellis represents Lessee exclusively ("Lessee's Broker"); or

|_| _______________ represents both Lessor and Lessee ("Dual Agency").

            (b) Payment to Brokers: Upon execution and delivery of this Lease by
both  Parties,  Lessor shall pay to the Brokers the brokerage fee agreed to in a
separate  written  agreement (or if there is no such  agreement,  the sum of see
addendum or % of the total Base Rent for the brokerage  services rendered by the
Brokers).

      1.11  Guarantor.  The obligations of the Lessee under this Lease are to be
guaranteed by N/A ("Guarantor"). (See also Paragraph 37)

      1.12  Addenda  and  Exhibits.  Attached  hereto is an  Addendum or Addenda
consisting  of  Paragraphs  1 through 10 and  Exhibits A through C, all of which
constitute a part of this Lease.

2. Premises.

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

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      2.2 Condition. Lessor shall deliver that portion of the Premises contained
within the  Building  ('Unit")  to Lessee  broom clean and free of debris on the
Commencement  Date or the Early Possession Date,  whichever first occurs ("Start
Date"),  and, so long as the required service  contracts  described in Paragraph
7.1(b) below are obtained by Lessee and in effect within  thirty days  following
the Start Date, warrants that the existing electrical, plumbing, fire sprinkler,
lighting,  heating,  ventilating and air conditioning systems ("HVAC"),  loading
doors,  if any,  and all other  such  elements  in the Unit,  other  than  those
constructed  by Lessee,  shall be in good  operating  condition on said date and
that the  structural  elements of the roof,  bearing walls and foundation of the
Unit shall be free of material defects.  If a non-compliance  with such warranty
exists  as of the Start  Date,  or if one of such  systems  or  elements  should
malfunction or fail within the  appropriate  warranty  period,  Lessor shall, as
Lessor's  sole  obligation  with  respect to such  matter,  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,
malfunction or failure,  rectify same at Lessor's expense.  The warranty periods
shall be as follows: (i) 6 months as to the HVAC systems, and (ii) 30 days as to
the  remaining  systems and other  elements of the Unit. If Lessee does not give
Lessor the required notice within the appropriate warranty period, correction of
any such  non-compliance,  malfunction  or failure  shall be the  obligation  of
Lessee at  Lessee's  sole cost and  expense  (except for the repairs to the fire
sprinkler systems, roof, foundations, and/or bearing walls - see Paragraph 7).

      2.3 Compliance.  Lessor warrants that the improvements on the Premises and
the Common Areas comply with the building  codes that were in effect at the time
that each such improvement,  or portion thereof, was constructed,  and also with
all applicable  laws,  covenants or  restrictions  of record,  regulations,  and
ordinances  in  effect  on the  Start  Date  ("Applicable  Requirements").  Said
warranty  does not apply to the use to which  Lessee will put the Premises or to
any Alterations or Utility  Installations  (as defined in Paragraph 7.3(a)) made
or to be made by Lessee.  NOTE: Lessee is responsible for determining whether or
not the Applicable Requirements,  and especially the zoning, are appropriate for
Lessee's  intended use, and  acknowledges  that past uses of the Premises may no
longer be allowed.  If the  Premises do not comply  with said  warranty,  Lessor
shall,  except as otherwise  provided,  promptly after receipt of written notice
from  Lessee  setting  forth  with  specificity  the  nature  and extent of such
non-compliance,  rectify the same at Lessor's  expense.  If Lessee does not give
Lessor written  notice of a  non-compliance  with this warranty  within 6 months
following  the  Start  Date,  correction  of that  non-compliance  shall  be the
obligation  of  Lessee at  Lessee's  sole cost and  expense.  If the  Applicable
Requirements  are  hereafter  changed so as to  require  during the term of this
Lease the construction of an addition to or an alteration of the Unit,  Premises
and/or   Building,   the  remediation  of  any  Hazardous   Substance,   or  the
reinforcement  or other  physical  modification  of the  Unit,  Premises  and/or
Building ("Capital  Expenditure"),  Lessor and Lessee shall allocate the cost of
such work as follows:

            (a) Subject to Paragraph 2.3(c) below, if such Capital  Expenditures
are  required  as a result of the  specific  and unique use of the  Premises  by
Lessee as  compared  with uses by  tenants  in  general,  Lessee  shall be fully
responsible  for the  cost  thereof,  provided,  however  that  if such  Capital
Expenditure  is  required  during  the last 2 years of this  Lease  and the cost
thereof  exceeds 6 months' Base Rent,  Lessee may instead  terminate  this Lease
unless  Lessor  notifies  Lessee,  in writing,  within 10 days after  receipt of
Lessee's  termination  notice  that  Lessor has  elected  to pay the  difference
between the actual cost thereof and the amount equal to 6 months' Base Rent.  If
Lessee  elects  termination,  Lessee  shall  immediately  cease  the  use of the
Premises which requires such Capital  Expenditure  and deliver to Lessor written
notice  specifying  a  termination  date  at  least  90  days  thereafter.  Such
termination date shall,  however,  in no event be earlier than the last day that
Lessee  could  legally  utilize the  Premises  without  commencing  such Capital
Expenditure.

            (b) If such  Capital  Expenditure  is not the result of the specific
and unique  use of the  Premises  by Lessee  (such as,  governmentally  mandated
seismic modifications),  then Lessor and Lessee shall allocate the obligation to
pay for the  portion  of such  costs  reasonably  attributable  to the  Premises
pursuant to the formula set out in Paragraph 7.1(d); provided,  however, that if
such Capital Expenditure is required during the last 2 years of this Lease or if
Lessor  reasonably  determines that it is not  economically  feasible to pay its
share thereof, Lessor shall have the option to terminate this Lease upon 90 days
prior written notice to Lessee unless Lessee notifies Lessor, in writing, within
10 days after  receipt of Lessor's  termination  notice that Lessee will pay for
such Capital  Expenditure.  If Lessor does not elect to terminate,  and fails to
tender its share of any such Capital Expenditure,  Lessee may advance such funds
and deduct same,  with  Interest,  from Rent until  Lessor's share of such costs
have been fully paid. If Lessee is unable to finance  Lessor's  share, or if the
balance  of the Rent due and  payable  for the  remainder  of this  Lease is not
sufficient to fully reimburse  Lessee on an offset basis,  Lessee shall have the
right to terminate this Lease upon 30 days written notice to Lessor.

            (c)  Notwithstanding  the above, the provisions  concerning  Capital
Expenditures are intended to apply only to  non-voluntary,  unexpected,  and new
Applicable  Requirements.  If the Capital  Expenditures are instead triggered by
Lessee as a result of an actual or proposed  change in use,  change in intensity
of use, or modification to the Premises then, and in that event, Lessee shall be
fully  responsible for the cost thereof,  and Lessee shall not have any right to
terminate this Lease.

      2.4 Acknowledgements. Lessee acknowledges that: (a) it has been advised by
Lessor  and/or  Brokers to satisfy  itself with respect to the  condition of the
Premises  (including but not limited to the electrical,  HVAC and fire sprinkler
systems,  security,   environmental  aspects,  and  compliance  with  Applicable
Requirements and the Americans with Disabilities Act), and their suitability for
Lessee's  intended  use,  (b)  Lessee  has made such  investigation  as it deems
necessary with reference to such matters and assumes all responsibility therefor
as the same relate to its  occupancy of the  Premises,  and (c) neither  Lessor,
Lessor's agents,  nor Brokers have made any oral or written  representations  or
warranties  with respect to said matters  other than as set forth in this Lease.
In addition, Lessor acknowledges that: (i) Brokers have made no representations,
promises  or  warranties  concerning  Lessee's  ability  to honor  the  Lease or
suitability to occupy the Premises,  and (ii) it is Lessor's sole responsibility
to  investigate  the financial  capability  and/or  suitability  of all proposed
tenants.

      2.5  Lessee  as Prior  Owner/Occupant.  The  warranties  made by Lessor in
Paragraph  2 shall be of no force or  effect if  immediately  prior to the Start
Date  Lessee was the owner or occupant of the  Premises.  In such event,  Lessee
shall be responsible for any necessary corrective work.

      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." Lessor may regulate the loading and unloading of vehicles by adopting
Rules and  Regulations  as provided  in  Paragraph  2.9. No vehicles  other than
Permitted  Size  Vehicles  may be parked in the Common  Area  without  the prior
written permission of Lessor.

            (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) Lessee  shall not  service or store any  vehicles  in the Common
Areas.

            (c) 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.

      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 Project and interior utility raceways and  installations  within the Unit
that are provided and designated by the Lessor from time to time for the general
non-exclusive  use of Lessor,  Lessee and other tenants of the Project and their
respective employees, suppliers, shippers, customers,  contractors and invitees,
including  parking areas,  loading and unloading areas,  trash areas,  roadways,
walkways, driveways and


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landscaped areas.

      2.8  Common  Areas - Lessee's  Rights.  Lessor  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 Project. 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 ("Rules and Regulations") 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 Project and
their  invitees.  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 tenants of the Project.

      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 Project 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 Project, 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  Project 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.

      3.2 Early Possession. If Lessee totally or partially occupies the Premises
prior to the Commencement  Date, the obligation to pay Base Rent shall be abated
for the  period  of  such  early  possession.  All  other  terms  of this  Lease
(including  but not limited to the  obligations  to pay Lessee's Share of Common
Area  Operating  Expenses,  Real Property  Taxes and  insurance  premiums and to
maintain the Premises) shall, however, be in effect during such period. Any such
early possession shall not affect the Expiration Date.

      3.3  Delay In  Possession.  Lessor  agrees  to use its  best  commercially
reasonable  efforts  to  deliver  possession  of the  Premises  to Lessee by the
Commencement  Date.  If,  despite  said  efforts,  Lessor is  unable to  deliver
possession as agreed, Lessor shall not be subject to any liability therefor, nor
shall such failure affect the validity of this Lease. Lessee shall not, however,
be  obligated  to pay Rent or perform  its other  obligations  until it receives
possession of the Premises.  If possession is not delivered within 60 days after
the Commencement Date, Lessee may, at its option, by notice in writing within 10
days after the end of such 60 day period,  cancel this Lease, in which event the
Parties  shall be discharged  from all  obligations  hereunder.  If such written
notice is not received by Lessor  within said 10 day period,  Lessee's  right to
cancel shall  terminate.  Except as otherwise  provided,  if  possession  is not
tendered to Lessee by the Start Date and Lessee does not  terminate  this Lease,
as aforesaid,  any period of rent  abatement  that Lessee would  otherwise  have
enjoyed  shall run from the date of delivery of  possession  and  continue for a
period equal to what Lessee would otherwise have enjoyed under the terms hereof,
but  minus any days of delay  caused  by the acts or  omissions  of  Lessee.  If
possession  of  the  Premises  is  not  delivered  within  4  months  after  the
Commencement  Date,  this Lease shall  terminate  unless  other  agreements  are
reached between Lessor and Lessee, in writing.

      3.4 Lessee  Compliance.  Lessor shall not be required to tender possession
of the Premises to Lessee until Lessee  complies with its  obligation to provide
evidence of insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee
shall be required to perform  all of its  obligations  under this Lease from and
after the Start Date,  including the payment of Rent,  notwithstanding  Lessor's
election to withhold  possession  pending receipt of such evidence of insurance.
Further,  if Lessee is  required  to perform  any other  conditions  prior to or
concurrent  with the Start Date, the Start Date shall occur but Lessor may elect
to withhold possession until such conditions are satisfied.

4. Rent.

      4.1 Rent Defined.  All monetary  obligations of Lessee to Lessor under the
terms of this Lease  (except  for the  Security  Deposit)  are deemed to be rent
("Rent").

      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) 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 Project, 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 and Common Area improvements,  including
                  parking  areas,  loading and  unloading  areas,  trash  areas,
                  roadways,  parkways,  walkways,  driveways,  landscaped areas,
                  bumpers,  irrigation systems, Common Area lighting facilities,
                  fences and gates, elevators, roofs, and roof drainage systems.

                  (bb) Exterior signs and any tenant directories.

                  (cc) Any fire detection and/or sprinkler systems.

            (ii)  The cost of water,  gas,  electricity and telephone to service
                  the Common Areas and any utilities not separately metered.

            (iii) Trash disposal,  pest control services,  property  management,
                  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).

            (vi)  The  cost of the  premiums  for the  insurance  maintained  by
                  Lessor pursuant to Paragraph 8.

            (vii) Any  deductible  portion of an  insured  loss  concerning  the
                  Building or the Common Areas.


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            (viii) The cost of any Capital  Expenditure  to the  Building or the
                  Project not covered  under the  provisions  of  Paragraph  2.3
                  provided;  however, that Lessor shall allocate the cost of any
                  such  Capital  Expenditure  over a 12 year  period  and Lessee
                  shall  not be  required  to pay more  than  Lessee's  Share of
                  1/144th of the cost of such Capital  Expenditure  in any given
                  month.

            (ix)  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 Unit, the Building or to any other building
in the Project or to the operation,  repair and  maintenance  thereof,  shall be
allocated  entirely to such Unit,  Building,  or 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 Project.

            (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 Project 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 10 days after a reasonably detailed statement of actual
expenses is presented to Lessee. At Lessor's option,  however,  an amount may be
estimated  by Lessor from time to time of Lessee's  Share of annual  Common Area
Operating Expenses and the same shall be payable monthly or quarterly, as Lessor
shall designate,  during each 12 month period of the Lease term, on the same day
as the Base Rent is due hereunder. Lessor shall deliver to Lessee within 60 days
after the  expiration  of each  calendar  year a reasonably  detailed  statement
showing  Lessee's  Share of the actual Common Area Operating  Expenses  incurred
during the preceding  year. If Lessee's  payments  under this  Paragraph  4.2(d)
during the preceding year exceed  Lessee's Share as indicated on such statement,
Lessor shall credit the amount of such  over-payment  against  Lessee's Share of
Common Area  Operating  Expenses next becoming due. If Lessee's  payments  under
this Paragraph 4.2(d) during the preceding year were less than Lessee's Share as
indicated  on such  statement,  Lessee  shall  pay to Lessor  the  amount of the
deficiency within 10 days after delivery by Lessor to Lessee of the statement.

      4.3 Payment.  Lessee shall cause  payment of Rent to be received by Lessor
in lawful money of the United  States,  without  offset or deduction  (except as
specifically  permitted in this Lease), on or before the day on which it is due.
Rent for any  period  during  the term  hereof  which is for less  than one full
calendar  month shall be prorated  based upon the actual  number of days of said
month.  Payment of Rent shall be made to Lessor at its address  stated herein or
to such  other  persons or place as Lessor  may from time to time  designate  in
writing.  Acceptance  of a payment  which is less than the amount then due shall
not be a waiver of Lessor's  rights to the balance of such Rent,  regardless  of
Lessor's  endorsement  of any check so  stating.  In the event  that any  check,
draft,  or other  instrument  of payment given by Lessee to Lessor is dishonored
for any reason, Lessee agrees to pay to Lessor the sum of $25 in addition to any
late charges which may be due.

5. Security Deposit.  Lessee shall deposit with Lessor upon execution hereof the
Security  Deposit  as  security  for  Lessee's   faithful   performance  of  its
obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults
under this  Lease,  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,  expense,  loss or damage which Lessor may
suffer or incur by reason thereof.  If Lessor uses or applies all or any portion
of the  Security  Deposit,  Lessee shall  within 10 days after  written  request
therefor deposit monies with Lessor  sufficient to restore said Security Deposit
to the full amount required by this Lease. If the Base Rent increases during the
term of this Lease,  Lessee  shall,  upon written  request from Lessor,  deposit
additional  monies with Lessor so that the total amount of the Security  Deposit
shall at all times bear the same  proportion to the  increased  Base Rent as the
initial Security Deposit bore to the initial Base Rent. Should the Agreed Use be
amended  to  accommodate  a  material  change  in the  business  of Lessee or to
accommodate a sublessee or assignee, Lessor shall have the right to increase the
Security Deposit to the extent necessary,  in Lessor's reasonable  judgment,  to
account for any increased wear and tear that the Premises may suffer as a result
thereof. If a change in control of Lessee occurs during this Lease and following
such  change  the  financial  condition  of Lessee  is, in  Lessor's  reasonable
judgment,  significantly  reduced,  Lessee shall deposit such additional  monies
with  Lessor as shall be  sufficient  to cause the  Security  Deposit to be at a
commercially  reasonable  level  based on such  change in  financial  condition.
Lessor  shall not be required to keep the  Security  Deposit  separate  from its
general  accounts.  Within 14 days after the  expiration or  termination of this
Lease,  if Lessor elects to apply the Security  Deposit only to unpaid Rent, and
otherwise  within 30 days  after the  Premises  have been  vacated  pursuant  to
Paragraph 7.4(c) below, Lessor shall return that portion of the Security Deposit
not  used or  applied  by  Lessor.  No part of the  Security  Deposit  shall  be
considered to be held in trust,  to bear  interest or to be  prepayment  for any
monies to be paid by Lessee under this Lease.

6. Use.

      6.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use,
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 damage, waste or a nuisance, or that disturbs occupants of
or  causes  damage to  neighboring  premises  or  properties.  Lessor  shall not
unreasonably  withhold  or  delay  its  consent  to any  written  request  for a
modification  of the  Agreed  Use,  so long as the  same  will  not  impair  the
structural  integrity of the  improvements  on the Premises or the mechanical or
electrical  systems therein,  and/or is not significantly more burdensome to the
Premises. If Lessor elects to withhold consent, Lessor shall within 7 days after
such request give written  notification  of same,  which notice shall include an
explanation of Lessor's objections to the change in the Agreed Use.

      6.2 Hazardous Substances.

            (a) Reportable Uses Require Consent. The term "Hazardous  Substance"
as used in this  Lease  shall  mean  any  product,  substance,  or  waste  whose
presence,  use, manufacture,  disposal,  transportation,  or release,  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 Substances shall include, but not be limited to, hydrocarbons,
petroleum,  gasoline, and/or crude oil or any products, by-products or fractions
thereof.  Lessee shall not engage in any  activity in or on the  Premises  which
constitutes a Reportable Use of Hazardous  Substances  without the express prior
written consent of Lessor and timely  compliance (at Lessee's  expense) with all
Applicable Requirements. "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/or
(iii) the  presence at the  Premises of a Hazardous  Substance  with  respect to
which any  Applicable  Requirements  requires  that a notice be given to persons
entering or occupying the Premises or  neighboring  properties.  Notwithstanding
the foregoing,  Lessee may use any ordinary and customary  materials  reasonably
required to be used in the normal  course of the Agreed Use, so long as such use
is in compliance with all Applicable Requirements,  is not a Reportable Use, and
does not expose the Premises or neighboring  property to any meaningful  risk of
contamination or damage or expose Lessor to any liability therefor. In addition,
Lessor may  condition  its consent to any  Reportable  Use upon  receiving  such
additional  assurances as Lessor  reasonably  deems necessary to protect itself,
the public, the Premises and/or the environment  against damage,  contamination,
injury and/or  liability,  including,  but not limited to, the installation (and
removal  on  or  before  Lease   expiration   or   termination)   of  protective
modifications  (such as concrete  encasements)  and/or  increasing  the Security
Deposit.

            (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,  other than as  previously  consented to by Lessor,  Lessee
shall immediately give written notice of such


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fact to Lessor, and provide Lessor with a copy of any report, notice, claim or
other documentation which it has concerning the presence of such Hazardous
Substance.

            (c)  Lessee  Remediation.  Lessee  shall  not  cause or  permit  any
Hazardous  Substance  to be spilled or  released  in,  on,  under,  or about the
Premises  (including  through the plumbing or sanitary  sewer  system) and shall
promptly,  at Lessee's expense,  take all  investigatory  and/or remedial action
reasonably  recommended,  whether or not formally  ordered or required,  for the
cleanup  of any  contamination  of,  and for the  maintenance,  security  and/or
monitoring  of the  Premises  or  neighboring  properties,  that was  caused  or
materially contributed to by Lessee, or pertaining to or involving any Hazardous
Substance  brought  onto the Premises  during the term of this Lease,  by or for
Lessee, or any third party.

            (d) Lessee Indemnification.  Lessee shall indemnify, defend and hold
Lessor, its agents, employees,  lenders and ground lessor, if any, harmless from
and against any and all loss of rents and/or  damages,  liabilities,  judgments,
claims, expenses, penalties, and attorneys' and consultants' fees arising out of
or involving any Hazardous Substance brought onto the Premises by or for Lessee,
or any third party (provided, however, that Lessee shall have no liability under
this Lease with  respect to  underground  migration of any  Hazardous  Substance
under the Premises  from areas  outside of the  Project).  Lessee's  obligations
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,  removal, remediation,  restoration and/or abatement, and
shall  survive the  expiration or  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.

            (e) Lessor  Indemnification.  Lessor and its  successors and assigns
shall indemnify,  defend,  reimburse and hold Lessee, its employees and lenders,
harmless from and against any and all environmental damages,  including the cost
of  remediation,  which  existed  as a result  of  Hazardous  Substances  on the
Premises prior to the Start Date or which are caused by the gross  negligence or
willful misconduct of Lessor, its agents or employees.  Lessor's obligations, as
and when required by the  Applicable  Requirements,  shall  include,  but not be
limited to, the cost of investigation,  removal, remediation, restoration and/or
abatement, and shall survive the expiration or termination of this Lease.

            (f)  Investigations  and  Remediations.   Lessor  shall  retain  the
responsibility and pay for any  investigations or remediation  measures required
by governmental  entities having  jurisdiction  with respect to the existence of
Hazardous  Substances  on the  Premises  prior to the Start  Date,  unless  such
remediation  measure  is  required  as  a  result  of  Lessee's  use  (including
"Alterations",  as defined in paragraph 7.3(a) below) of the Premises,  in which
event Lessee shall be responsible for such payment. Lessee shall cooperate fully
in any such activities at the request of Lessor,  including  allowing Lessor and
Lessor's agents to have reasonable access to the Premises at reasonable times in
order to carry out Lessor's investigative and remedial responsibilities.

            (g) Lessor Termination  Option. If a Hazardous  Substance  Condition
(see Paragraph  9.1(e))  occurs during the term of this Lease,  unless Lessee is
legally responsible  therefor (in which case Lessee shall make the investigation
and remediation  thereof required by the Applicable  Requirements and this Lease
shall  continue in full force and effect,  but subject to Lessor's  rights under
Paragraph 6.2(d) 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 remediate
such  condition  exceeds  12  times  the then  monthly  Base  Rent or  $100,000,
whichever  is  greater,  give  written  notice to  Lessee,  within 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 60 days
following  the  date  of such  notice.  In the  event  Lessor  elects  to give a
termination notice,  Lessee may, within 10 days thereafter,  give written notice
to  Lessor of  Lessee's  commitment  to pay the  amount by which the cost of the
remediation of such Hazardous  Substance Condition exceeds an amount equal to 12
times the then monthly Base Rent or $100,000, whichever is greater. Lessee shall
provide Lessor with said funds or satisfactory  assurance thereof within 30 days
following  such  commitment.  In such event,  this Lease shall  continue in full
force and effect,  and Lessor shall proceed to make such  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 provided,  this Lease shall  terminate as of the date specified in Lessor's
notice of termination.

      6.3 Lessee's Compliance with Applicable Requirements.  Except as otherwise
provided  in  this  Lease,  Lessee  shall,  at  Lessee's  sole  expense,  fully,
diligently  and in a  timely  manner,  materially  comply  with  all  Applicable
Requirements,  the requirements of any applicable fire insurance  underwriter or
rating bureau, and the  recommendations of Lessor's engineers and/or consultants
which  relate in any manner to the  Premises,  without  regard to  whether  said
requirements are now in effect or become effective after the Start Date.  Lessee
shall, within 10 days after receipt of Lessor's written request,  provide Lessor
with copies of all permits and other documents, and other information 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 the failure of Lessee or
the Premises to comply with any Applicable Requirements.

      6.4 Inspection;  Compliance.  Lessor and Lessor's  "Lender" (as defined in
Paragraph 30) and consultants shall have the right to enter into 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.  The cost of any such  inspections  shall be paid by
Lessor,  unless a violation of Applicable  Requirements,  or a contamination  is
found to exist or be imminent,  or the  inspection  is requested or ordered by a
governmental authority. In such case, Lessee shall upon request reimburse Lessor
for the  cost of such  inspection,  so  long as such  inspection  is  reasonably
related to the violation or contamination.

7. Maintenance; Repairs, Utility Installations; Trade Fixtures and Alterations.

      7.1 Lessee's Obligations.

            (a)  In  General.   Subject  to  the  provisions  of  Paragraph  2.2
(Condition),   2.3  (Compliance),   6.3  (Lessee's  Compliance  with  Applicable
Requirements),  7.2 (Lessor's  Obligations),  9 (Damage or Destruction),  and 14
(Condemnation),  Lessee  shall,  at Lessee's  sole  expense,  keep the Premises,
Utility  Installations  (intended  for Lessee's  exclusive  use, no matter where
located),  and  Alterations in good order,  condition and repair (whether or not
the portion of the Premises  requiring  repairs,  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, but not limited
to, all equipment or facilities,  such as plumbing, HVAC equipment,  electrical,
lighting  facilities,  boilers,  pressure  vessels,  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. Lessee, in keeping the Premises in good order,
condition and repair,  shall  exercise and perform good  maintenance  practices,
specifically  including the procurement and maintenance of the service contracts
required  by  Paragraph  7.1(b)  below.   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) Service  Contracts.  Lessee  shall,  at Lessee's  sole  expense,
procure and maintain  contracts,  with copies to Lessor,  in customary  form and
substance  for,  and  with  contractors  specializing  and  experienced  in  the
maintenance  of the following  equipment and  improvements,  if any, if and when
installed on the Premises: (i) HVAC equipment, (ii) boiler and pressure vessels,
(iii)  clarifiers,  and (iv) any other  equipment,  if  reasonably  required  by
Lessor.  However,  Lessor reserves the right,  upon notice to Lessee, to procure
and  maintain  any or all of such  service  contracts,  and if Lessor so elects,
Lessee shall reimburse Lessor, upon demand, for the cost thereof.

            (c)  Failure  to  Perform.  If  Lessee  fails  to  perform  Lessee's
obligations under this Paragraph 7.1, Lessor may enter upon


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the Premises  after 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, and Lessee shall promptly reimburse Lessor for the cost thereof.

            (d) Replacement.  Subject to Lessee's  indemnification  of Lessor as
set forth in  Paragraph  8.7 below,  and without  relieving  Lessee of liability
resulting  from  Lessee's  failure to  exercise  and  perform  good  maintenance
practices,  if an item  described in Paragraph  7.1(b) cannot be repaired  other
than at a cost  which is in excess of 50% of the cost of  replacing  such  item,
then such item  shall be  replaced  by  Lessor,  and the cost  thereof  shall be
prorated  between the Parties and Lessee shall only be  obligated  to pay,  each
month during the remainder of the term of this Lease,  on the date on which Base
Rent is due,  an amount  equal to the  product of  multiplying  the cost of such
replacement by a fraction, the numerator of which is one, and the denominator of
which is 144 (ie.  1/144th of the cost per month).  Lessee shall pay interest on
the  unamortized  balance  at a rate  that  is  commercially  reasonable  in the
judgment of Lessor's accountants.  Lessee may, however, prepay its obligation at
any time.

      7.2 Lessor's  Obligations.  Subject to the  provisions of  Paragraphs  2.2
(Condition),  2.3 (Compliance),  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  system,
Common Area fire alarm and/or smoke detection  systems,  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 to the  extent it is
inconsistent with the terms of this Lease.

      7.3 Utility Installations; Trade Fixtures; Alterations.

            (a)  Definitions.  The term  "Utility  Installations"  refers to all
floor and window coverings,  air lines, power panels,  electrical  distribution,
security and fire protection systems,  communication systems, lighting fixtures,
HVAC  equipment,  plumbing,  and fencing in or on the Premises.  The term "Trade
Fixtures"  shall  mean  Lessee's  machinery  and  equipment  that can be removed
without doing material damage to the Premises. The term "Alterations" shall mean
any modification of the improvements,  other than Utility Installations or Trade
Fixtures,  whether by addition or deletion.  "Lessee  Owned  Alterations  and/or
Utility  Installations" are defined as Alterations and/or Utility  Installations
made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a).

            (b)  Consent.  Lessee  shall  not make any  Alterations  or  Utility
Installations to 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 such consent but upon notice to Lessor, as
long as they  are not  visible  from the  outside,  do not  involve  puncturing,
relocating or removing the roof or any existing  walls,  and the cumulative cost
thereof  during this Lease as extended  does not exceed a sum equal to 3 month's
Base Rent in the  aggregate  or a sum equal to one month's  Base Rent in any one
year.  Notwithstanding  the foregoing,  Lessee shall not make or permit any roof
penetrations  and/or  install  anything on the roof  without  the prior  written
approval of Lessor.  Lessor may, as a  precondition  to granting such  approval,
require  Lessee to utilize a contractor  chosen and/or  approved by Lessor.  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.  Consent shall be deemed  conditioned  upon Lessee's:  (i)
acquiring all  applicable  governmental  permits,  (ii)  furnishing  Lessor with
copies  of  both  the  permits  and  the  plans  and  specifications   prior  to
commencement  of the work,  and (iii)  compliance  with all  conditions  of said
permits and other  Applicable  Requirements in a prompt and expeditious  manner.
Any  Alterations  or Utility  Installations  shall be performed in a workmanlike
manner with good and sufficient materials. Lessee shall promptly upon completion
furnish Lessor with as-built plans and  specifications.  For work which costs an
amount in excess of one month's Base Rent, Lessor may condition its consent upon
Lessee  providing a lien and  completion  bond in an amount equal to 150% of the
estimated cost of such Alteration or Utility  Installation  and/or upon Lessee's
posting an additional Security Deposit with Lessor.

            (c)  Indemnification.  Lessee  shall pay,  when due,  all claims for
labor or materials  furnished or alleged to have been furnished to or for Lessee
at or  for  use on the  Premises,  which  claims  are or may be  secured  by any
mechanic's or materialman's  lien against the Premises or any interest  therein.
Lessee shall give Lessor not less than 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.  If Lessee shall 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. If Lessor shall require, Lessee shall furnish a surety bond
in an  amount  equal to 150% of the  amount  of such  contested  lien,  claim or
demand,  indemnifying Lessor against liability for the same. If Lessor elects to
participate in any such action,  Lessee shall pay Lessor's  attorneys'  fees and
costs.

      7.4 Ownership; Removal; Surrender; and Restoration.

            (a) Ownership. Subject to Lessor's right to require removal or elect
ownership as hereinafter  provided,  all Alterations  and Utility  Installations
made by Lessee  shall be the  property of Lessee,  but  considered a part of the
Premises.  Lessor may,  at any time,  elect in writing to be the owner of all or
any specified part of the Lessee Owned  Alterations  and Utility  Installations.
Unless  otherwise  instructed  per  paragraph  7.4(b)  hereof,  all Lessee Owned
Alterations and Utility Installations shall, at the expiration or termination of
this Lease,  become the property of Lessor and be surrendered by Lessee with the
Premises.

            (b) Removal. By delivery to Lessee of written notice from Lessor not
earlier  than 90 and not later than 30 days prior to the end of the term of this
Lease,  Lessor may require that any or all Lessee Owned  Alterations  or Utility
Installations be removed by the expiration or termination of this Lease.  Lessor
may  require  the  removal  at any time of all or any part of any  Lessee  Owned
Alterations or Utility Installations made without the required consent.

            (c) Surrender;  Restoration.  Lessee shall surrender the Premises by
the  Expiration  Date  or  any  earlier   termination  date,  with  all  of  the
improvements,  parts and surfaces thereof broom 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. Notwithstanding the
foregoing,  if this Lease is for 12 months or less,  then Lessee shall surrender
the Premises in the same condition as delivered to Lessee on the Start Date with
NO  allowance  for  ordinary  wear and tear.  Lessee  shall  repair  any  damage
occasioned by the installation, maintenance or removal of Trade Fixtures, Lessee
owned Alterations and/or Utility  Installations,  furnishings,  and equipment as
well as the removal of any storage tank installed by or for Lessee. Lessee shall
also  completely  remove  from the  Premises  any and all  Hazardous  Substances
brought onto the Premises by or for Lessee, or any third party (except Hazardous
Substances which were deposited via underground  migration from areas outside of
the Project)  even if such removal  would  require  Lessee to perform or pay for
work that  exceeds  statutory  requirements.  Trade  Fixtures  shall  remain the
property  of Lessee and shall be removed  by  Lessee.  The  failure by Lessee to
timely vacate the Premises pursuant to this Paragraph 7.4(c) without the express
written  consent of Lessor shall  constitute a holdover  under the provisions of
Paragraph 26 below.

8. Insurance; Indemnity.

      8.1  Payment  of  Premiums.  The cost of the  premiums  for the  insurance
policies required to be carried by Lessor, pursuant to Paragraphs 8.2(b), 8.3(a)
and  8.3(b),  shall be a Common  Area  Operating  Expense.  Premiums  for policy
periods  commencing prior to, or extending beyond,  the term of this Lease shall
be prorated to coincide with the corresponding Start Date or Expiration Date.

      8.2 Liability Insurance.


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            (a)  Carried  by  Lessee.  Lessee  shall  obtain and keep in force a
Commercial General Liability policy of insurance protecting Lessee and Lessor as
an additional  insured  against  claims for bodily injury,  personal  injury and
property  damage based upon 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 annual  aggregate of not less than
$2,000,000, an "Additional  Insured-Managers or Lessors of Premises Endorsement"
and contain the "Amendment of 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 persons or  organizations,  but
shall  include  coverage for  liability  assumed under this Lease as an "insured
contract"  for the  performance  of Lessee's  indemnity  obligations  under this
Lease. The limits of said insurance shall not,  however,  limit the liability of
Lessee nor relieve Lessee of any obligation hereunder.  All insurance 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 maintain liability insurance as
described in Paragraph 8.2(a), 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
a policy or policies of  insurance  in the name of Lessor,  with loss payable to
Lessor,  any  ground-lessor,  and to any Lender  insuring  loss or damage to the
Premises.  The amount of such insurance  shall be equal to the full  replacement
cost of the  Premises,  as the same shall exist from time to time, or the amount
required by any Lender,  but in no event more than the  commercially  reasonable
and available  insurable  value thereof.  Lessee Owned  Alterations  and Utility
Installations,  Trade Fixtures,  and Lessee's personal property shall be insured
by Lessee under  Paragraph  8.4. If the coverage is available  and  commercially
appropriate,  such policy or policies  shall insure  against all risks of direct
physical  loss or damage  (except the perils of flood and/or  earthquake  unless
required by a Lender), including coverage for debris removal and the enforcement
of  any   Applicable   Requirements   requiring   the   upgrading,   demolition,
reconstruction  or replacement of any portion of the Premises as the result of a
covered  loss.  Said policy or policies  shall also contain an agreed  valuation
provision  in  lieu  of any  coinsurance  clause,  waiver  of  subrogation,  and
inflation guard protection  causing an increase in the annual property insurance
coverage  amount by a factor of not less than the adjusted  U.S.  Department  of
Labor Consumer Price Index for All Urban Consumers for the city nearest to where
the Premises are located.  If such insurance  coverage has a deductible  clause,
the deductible amount shall not exceed $1,000 per occurrence.

            (b)  Rental  Value.  Lessor  shall  also  obtain and keep in force a
policy or  policies  in the name of Lessor  with loss  payable to Lessor and any
Lender,  insuring the loss of the full Rent for one year with an extended period
of  indemnity  for an  additional  180 days  ("Rental  Value  insurance").  Said
insurance shall contain an agreed valuation provision in lieu of any coinsurance
clause,  and the amount of coverage  shall be  adjusted  annually to reflect the
projected Rent otherwise payable by Lessee, for the next 12 month period.

            (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 Project 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; Business Interruption Insurance.

            (a) Property  Damage.  Lessee  shall  obtain and maintain  insurance
coverage on all of Lessee's personal property,  Trade Fixtures, and Lessee Owned
Alterations and Utility Installations.  Such insurance shall be full replacement
cost  coverage with a deductible  of not to exceed  $1,000 per  occurrence.  The
proceeds from any such insurance  shall be used by Lessee for the replacement of
personal  property,  Trade  Fixtures  and Lessee Owned  Alterations  and Utility
Installations.  Lessee  shall  provide  Lessor with written  evidence  that such
insurance is in force.

            (b) Business Interruption.  Lessee shall obtain and maintain loss of
income and extra  expense  insurance  in amounts  as will  reimburse  Lessee for
direct or indirect loss of earnings  attributable to all perils commonly insured
against  by  prudent  lessees  in the  business  of  Lessee or  attributable  to
prevention of access to the Premises as a result of such perils.

            (c)  No  Representation  of  Adequate  Coverage.   Lessor  makes  no
representation  that the  limits or forms of  coverage  of  insurance  specified
herein  are  adequate  to  cover  Lessee's  property,   business  operations  or
obligations under this Lease.

      8.5 Insurance  Policies.  Insurance  required herein shall be by companies
duly  licensed or admitted 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, as set forth in the most  current  issue of  "Best's
Insurance  Guide",  or such other rating as may be required by a Lender.  Lessee
shall  not do or permit  to be done  anything  which  invalidates  the  required
insurance  policies.  Lessee shall,  prior to the Start Date,  deliver to Lessor
certified  copies of policies of such insurance or  certificates  evidencing the
existence  and  amounts  of the  required  insurance.  No such  policy  shall be
cancelable or subject to modification  except after 30 days prior written notice
to  Lessor.  Lessee  shall,  at least 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. Such policies shall be for a term of at least one year, or the length of
the remaining term of this Lease,  whichever is less. If either Party shall fail
to procure and  maintain the  insurance  required to be carried by it, the other
Party may, but shall not be required to, procure and maintain the same.

      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 against the other,  for loss of or damage to its
property arising out of or incident to the perils required to be insured against
herein.  The effect of such releases and waivers is not limited by the amount of
insurance  carried or required,  or by any deductibles  applicable  hereto.  The
Parties agree to have their respective  property damage insurance carriers 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 gross negligence or willful misconduct,
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,  liens,  judgments,
penalties, attorneys' and consultants' fees, expenses and/or liabilities arising
out of,  involving,  or in  connection  with,  the use and/or  occupancy  of the
Premises by Lessee.  If any action or  proceeding is brought  against  Lessor by
reason of any of the foregoing matters, Lessee shall upon notice 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 defended or indemnified.

      8.8  Exemption  of Lessor from  Liability.  Lessor shall not be liable for
injury or damage to the person or goods, wares, merchandise or other property of
Lessee,  Lessee's  employees,  contractors,  invitees,  customers,  or any other
person in or about the  Premises,  whether such damage or injury is caused by or
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage,  obstruction  or  other  defects  of  pipes,  fire  sprinklers,  wires,
appliances,  plumbing,  HVAC or  lighting  fixtures,  or from any  other  cause,
whether the said  injury or damage  results  from  conditions  arising  upon the
Premises  or upon other  portions  of the  Building,  or from  other  sources or
places.  Lessor  shall not be liable  for any  damages  arising  from any act or
neglect of any other  tenant of Lessor nor from the failure of Lessor to enforce
the  provisions  of any other  lease in the  Project.  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.


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            (a) "Premises  Partial  Damage" shall mean damage or  destruction to
the  improvements  on the  Premises,  other than Lessee  Owned  Alterations  and
Utility Installations, which can reasonably be repaired in 3 months or less from
the date of the damage or  destruction,  and the cost  thereof does not exceed a
sum equal to 6 month's Base Rent.  Lessor shall notify Lessee in writing  within
30 days from the date of the  damage or  destruction  as to  whether  or not the
damage is Partial or Total.

            (b) "Premises Total Destruction" shall mean damage or destruction to
the  improvements  on the  Premises,  other than Lessee  Owned  Alterations  and
Utility Installations and Trade Fixtures, which cannot reasonably be repaired in
3 months or less  from the date of the  damage or  destruction  and/or  the cost
thereof  exceeds a sum equal to 6 month's Base Rent.  Lessor shall notify Lessee
in  writing  within 30 days from the date of the  damage  or  destruction  as to
whether or not the damage is Partial or Total.

            (c) "Insured Loss" shall mean damage or destruction to  improvements
on 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  Requirements,  and without
deduction for depreciation.

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

      9.2 Partial Damage - Insured Loss. If a Premises Partial Damage that is an
Insured Loss occurs, then Lessor shall, at Lessor's expense,  repair such damage
(but not  Lessee's  Trade  Fixtures  or Lessee  Owned  Alterations  and  Utility
Installations)  as soon as reasonably  possible and this Lease shall continue in
full force and  effect;  provided,  however,  that  Lessee  shall,  at  Lessor's
election,  make the repair of any damage or destruction the total cost to repair
of which is $5,000 or less, and, in such event, Lessor shall make any applicable
insurance  proceeds  available to Lessee on a reasonable basis for that purpose.
Notwithstanding the foregoing, if the required insurance was not in force or the
insurance  proceeds are not sufficient to effect such repair, the Insuring Party
shall  promptly  contribute  the  shortage in  proceeds as and when  required to
complete said repairs. In the event,  however, such shortage was due to the fact
that, by reason of the unique nature of the improvements,  full replacement cost
insurance coverage was not commercially  reasonable and available,  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 10 days following
receipt of written  notice of such  shortage  and  request  therefor.  If Lessor
receives said funds or adequate assurance thereof within said 10 day period, the
party  responsible  for  making  the  repairs  shall  complete  them  as soon as
reasonably  possible  and this Lease shall  remain in full force and effect.  If
such funds or  assurance  are not  received,  Lessor may  nevertheless  elect by
written notice to Lessee within 10 days thereafter to: (i) 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,  or
(ii) have this Lease terminate 30 days thereafter.  Lessee shall not be entitled
to reimbursement of 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, notwithstanding that there may be some insurance coverage, but
the net proceeds of any such  insurance  shall be made available for the repairs
if made by either Party.

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

      9.4 Total  Destruction.  Notwithstanding  any other provision hereof, if a
Premises Total Destruction  occurs, this Lease shall terminate 60 days following
such  Destruction.  If the  damage  or  destruction  was  caused  by  the  gross
negligence  or  willful  misconduct  of Lessee,  Lessor  shall have the right to
recover Lessor's damages from Lessee, except as provided in Paragraph 8.6.

      9.5 Damage  Near End of Term.  If at any time  during the last 6 months 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 terminate this Lease effective
60 days  following  the date of  occurrence  of such  damage by giving a written
termination notice to Lessee within 30 days after the date of occurrence of such
damage. Notwithstanding the foregoing, 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 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 commercially  reasonable 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 on the date specified in the
termination notice and Lessee's option shall be extinguished.

      9.6 Abatement of Rent; Lessee's Remedies.

            (a) Abatement.  In the event of Premises  Partial Damage or Premises
Total  Destruction  or a Hazardous  Substance  Condition for which Lessee is not
responsible under this Lease, the Rent payable by Lessee for the period required
for the repair,  remediation  or  restoration  of such damage shall be abated in
proportion to the degree to which Lessee's use of the Premises is impaired,  but
not to exceed the proceeds  received from the Rental Value insurance.  All other
obligations of Lessee  hereunder shall be performed by Lessee,  and Lessor shall
have no  liability  for any such  damage,  destruction,  remediation,  repair or
restoration except as provided herein.

            (b) Remedies.  If Lessor shall be obligated to repair or restore the
Premises and does not commence, in a substantial and meaningful way, such repair
or restoration within 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 60 days
following the giving of such notice. If Lessee gives such notice and such repair
or  restoration  is not commenced  within 30 days  thereafter,  this Lease shall
terminate as of the date specified in said notice.  If the repair or restoration
is commenced  within such 30 days,  this Lease shall  continue in full force and
effect.  "Commence"  shall mean either the  unconditional  authorization  of the
preparation  of the required  plans,  or the beginning of the actual work on the
Premises, whichever first occurs.

      9.7 Termination; Advance Payments. Upon termination of this Lease pursuant
to  Paragraph  6.2(g) or  Paragraph  9, an  equitable  adjustment  shall be made
concerning  advance Base Rent and any other  advance  payments made by Lessee to
Lessor. Lessor shall, in addition, return to Lessee so much of Lessee's Security
Deposit as has not been, or is not then required to be, used by Lessor.

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


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10. Real Property Taxes.

      10.1  Definition.  As used herein,  the term "Real  Property  Taxes" shall
include any form of  assessment;  real  estate,  general,  special,  ordinary or
extraordinary, or rental levy or tax (other than inheritance, personal income or
estate  taxes);  improvement  bond;  and/or  license fee imposed  upon or levied
against any legal or equitable interest of Lessor in the Project, Lessor's right
to other income therefrom, and/or Lessor's business of leasing, by any authority
having the  direct or  indirect  power to tax and where the funds are  generated
with reference to the Project address and where the proceeds so generated are to
be applied by the city, county or other local taxing authority of a jurisdiction
within which the Project is located.  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  during the term of this Lease,  including
but not  limited  to, a change in the  ownership  of the  Project or any portion
thereof or a change in the  improvements  thereon.  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.

      10.2 Payment of Taxes. Lessor shall pay the Real Property Taxes applicable
to the Project,  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.

      10.3  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 Project by
other  lessees or by Lessor for the exclusive  enjoyment of such other  lessees.
Notwithstanding  Paragraph 10.2 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 Personal  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.  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 10 days after  receipt of a written
statement setting forth the taxes applicable to Lessee's property.

11.  Utilities.  Lessee  shall  pay for all  water,  gas,  heat,  light,  power,
telephone,  trash  disposal and other  utilities  and  services  supplied to the
Premises,  together with any taxes  thereon.  Notwithstanding  the provisions of
Paragraph 4.2, if at any time in Lessor's sole judgment,  Lessor determines that
Lessee  is  using a  disproportionate  amount  of  water,  electricity  or other
commonly metered utilities,  or that Lessee is generating such a large volume of
trash as to require an increase in the size of the  dumpster  and/or an increase
in the number of times per month that the  dumpster is emptied,  then Lessor may
increase Lessee's Base Rent by an amount equal to such increased costs.

12. Assignment and Subletting.

      12.1 Lessor's Consent Required.

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

            (b) A change in the control of Lessee shall constitute an assignment
requiring  consent.  The transfer,  on a cumulative basis, of 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,
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 by an amount  greater than 25%
of such Net Worth as it was  represented  at the time of the  execution  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, whichever was or is greater, shall be considered an
assignment of this Lease to which Lessor may withhold its consent. "Net Worth of
Lessee"  shall  mean  the  net  worth  of  Lessee   (excluding  any  guarantors)
established under generally accepted accounting principles.

            (d) An assignment or subletting  without  consent shall, at Lessor's
option, be a Default curable after notice per Paragraph 13.1(c), or a noncurable
Breach without the necessity of any notice and grace period. If Lessor elects to
treat such unapproved  assignment or subletting as a noncurable  Breach,  Lessor
may either:  (i)  terminate  this Lease,  or (ii) upon 30 days  written  notice,
increase the monthly Base Rent to 110% of the Base Rent then in effect. 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 110% of the price  previously  in effect,  and (ii) all fixed and
non-fixed  rental  adjustments  scheduled during the remainder of the Lease term
shall be increased to 110% of the scheduled adjusted rent.

            (e) Lessee's remedy for any breach of 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,  no  assignment or subletting
shall: (i) be effective without the express written  assumption by such assignee
or sublessee of the obligations of Lessee under this Lease,  (ii) release Lessee
of any obligations hereunder, or (iii) alter the primary liability of Lessee for
the  payment  of Rent or for the  performance  of any  other  obligations  to be
performed by Lessee.

            (b) Lessor may accept 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 Rent or performance  shall constitute a waiver or estoppel
of Lessor's right to exercise its remedies for Lessee's Default or Breach.

            (c)  Lessor's  consent to any  assignment  or  subletting  shall not
constitute a consent to any subsequent assignment or subletting.

            (d) In the event of any  Default  or Breach by  Lessee,  Lessor  may
proceed directly  against Lessee,  any Guarantors or anyone else responsible for
the performance of Lessee's obligations under this Lease, including any assignee
or  sublessee,  without first  exhausting  Lessor's  remedies  against any other
person or entity  responsible  therefore  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 fee of $1,000 or
10% of the current  monthly Base Rent  applicable to the portion of the Premises
which is the  subject of the  proposed  assignment  or  sublease,  whichever  is
greater, as consideration for Lessor's  considering and processing said request.
Lessee agrees to provide Lessor with such other or additional information and/or
documentation as may be reasonably requested.


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            (f) Any assignee of, or sublessee under, this Lease shall, by reason
of accepting such  assignment or entering into such sublease,  be deemed 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 to in writing.

            (g)  Lessor's  consent to any  assignment  or  subletting  shall not
transfer to the assignee or sublessee any Option granted to the original  Lessee
by this Lease  unless such  transfer is  specifically  consented to by Lessor in
writing. (See Paragraph 39.2)

      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 Rent payable on any  sublease,  and Lessor may collect such Rent
and apply same toward Lessee's obligations under this Lease; provided,  however,
that until a Breach  shall occur in the  performance  of  Lessee's  obligations,
Lessee may collect said Rent.  Lessor  shall not, by reason of the  foregoing or
any  assignment of such  sublease,  nor by reason of the  collection of Rent, be
deemed  liable to the  sublessee for any failure of Lessee to perform and comply
with any of Lessee's  obligations to such sublessee.  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  all Rent due and to become  due under the
sublease.  Sublessee  shall rely upon any such  notice from Lessor and shall pay
all Rents to Lessor  without  any  obligation  or right to inquire as to whether
such Breach exists, notwithstanding any claim from Lessee to the contrary.

            (b) In the event of a Breach by Lessee,  Lessor  may, at its option,
require 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 prior  Defaults  or  Breaches  of such
sublessor.

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

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

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

13. Default; Breach; Remedies.

      13.1 Default; Breach. A "Default" is defined as a failure by the Lessee to
comply  with or perform  any of the terms,  covenants,  conditions  or Rules and
Regulations  under this Lease. A "Breach" is defined as the occurrence of one or
more of the following  Defaults,  and the failure of Lessee to cure such Default
within any applicable grace period: (a) The abandonment of the Premises;  or the
vacating of the Premises  without  providing a commercially  reasonable level of
security, or where the coverage of the property insurance described in Paragraph
8.3  is  jeopardized  as a  result  thereof,  or  without  providing  reasonable
assurances to minimize potential vandalism.

            (b) The  failure  of  Lessee  to  make  any  payment  of Rent or any
Security Deposit required to be made by Lessee  hereunder,  whether to Lessor or
to a third  party,  when due, to provide  reasonable  evidence of  insurance  or
surety bond, or to fulfill any  obligation  under this Lease which  endangers or
threatens  life or  property,  where such  failure  continues  for a period of 3
business days following written notice to Lessee.

            (c) The failure by Lessee to provide (i) reasonable written evidence
of compliance with Applicable  Requirements,  (ii) the service contracts,  (iii)
the rescission of an  unauthorized  assignment or  subletting,  (iv) an Estoppel
Certificate,  (v)  a  requested  subordination,  (vi)  evidence  concerning  any
guaranty  and/or  Guarantor,  (vii) any document  requested  under  Paragraph 41
(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 10 days following written notice 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 2.9 hereof,
other than those described in subparagraphs  13.1(a),  (b) or (c), above,  where
such Default  continues for a period of 30 days after written notice;  provided,
however,  that if the nature of Lessee's  Default is such that more than 30 days
are reasonably required for its cure, then it shall not be deemed to be a Breach
if  Lessee  commences  such  cure  within  said  30 day  period  and  thereafter
diligently prosecutes such cure to completion.

            (e) The occurrence of any of the following events: (i) the making of
any  general  arrangement  or  assignment  for the  benefit of  creditors;  (ii)
becoming a "debtor"  as defined in 11 U.S.C.  ss. 101 or any  successor  statute
thereto  (unless,  in the case of a petition filed against  Lessee,  the same is
dismissed  within 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 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 30
days;  provided,  however,  in the event that any provision of this subparagraph
(e) is contrary to any applicable  law, such  provision  shall be of no force or
effect, and not affect the validity of the remaining provisions.

            (f) The discovery  that any financial  statement of Lessee or of any
Guarantor given to Lessor 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  basis,  and
Lessee's failure,  within 60 days following written notice of any such event, to
provide written alternative assurance or security,  which, when coupled with the
then  existing  resources of Lessee,  equals or exceeds the  combined  financial
resources of Lessee and the Guarantors  that existed at the time of execution of
this Lease.

      13.2 Remedies. If Lessee fails to perform any of its affirmative duties or
obligations,  within 10 days after  written  notice (or in case of an emergency,
without notice),  Lessor may, at its option,  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 upon  receipt of invoice  therefor.  If any check given to
Lessor  by  Lessee  shall not be  honored  by the bank  upon  which it is drawn,
Lessor,  at its option,  may require all future payments to be made by Lessee to
be by cashier's  check.  In the event of a Breach,  Lessor may,  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:

            (a)  Terminate  Lessee's  right to possession of the Premises by any
lawful  means,  in which  case this  Lease  shall  terminate  and  Lessee  shall
immediately  surrender  possession  to  Lessor.  In such event  Lessor  shall be
entitled to recover  from  Lessee:  (i) 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


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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 the District  within which the Premises are located
at the time of award plus one  percent.  Efforts by Lessor to  mitigate  damages
caused by  Lessee's  Breach of this  Lease  shall  not waive  Lessor's  right to
recover  damages under  Paragraph 12. If  termination  of this Lease is obtained
through the provisional remedy of unlawful detainer, Lessor shall have the right
to recover in such  proceeding  any 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. If a notice and grace period  required  under  Paragraph 13.1 was
not previously  given, a notice to pay rent or quit, or to perform or quit given
to Lessee under the unlawful  detainer  statute shall also constitute the notice
required by Paragraph  13.1. In such case, the applicable  grace period required
by Paragraph 13.1 and the unlawful detainer statute shall run concurrently,  and
the  failure of Lessee to cure the  Default  within the  greater of the two such
grace periods shall  constitute  both an unlawful  detainer and a Breach of this
Lease entitling Lessor to the remedies provided for in this Lease and/or by said
statute.

            (b) Continue the Lease and Lessee's  right to possession and recover
the Rent as it becomes due, in which event Lessee may sublet or assign,  subject
only to reasonable  limitations.  Acts of maintenance,  efforts to relet, and/or
the  appointment  of a receiver to protect  the  Lessor's  interests,  shall not
constitute a termination of the Lessee's right to possession.

            (c) Pursue any other  remedy now or  hereafter  available  under the
laws or judicial  decisions of the state  wherein the Premises are located.  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.  Any agreement for free or abated rent or other
charges,  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. Upon Breach 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,  notwithstanding any subsequent cure of said Breach by Lessee.
The  acceptance by Lessor of rent or the cure of the Breach which  initiated the
operation  of this  paragraph  shall  not be  deemed a waiver  by  Lessor of the
provisions of this paragraph unless  specifically so stated in writing by Lessor
at the time of such acceptance.

      13.4 Late Charges.  Lessee hereby acknowledges that late payment by Lessee
of Rent 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 any Lender. Accordingly, if any Rent
shall not be  received by Lessor  within 5 days after such amount  shall be due,
then, without any requirement for notice to Lessee, Lessee shall pay to Lessor a
one-time late charge equal to 10% of each such overdue amount or $100, whichever
is greater. The parties hereby agree that such late charge represents a fair and
reasonable  estimate  of the  costs  Lessor  will  incur by  reason of such late
payment. 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 the exercise of any of the other rights and remedies granted  hereunder.
In the event that a late charge is payable hereunder,  whether or not collected,
for 3 consecutive  installments of Base Rent, then notwithstanding any provision
of this Lease to the contrary,  Base Rent shall, at Lessor's option,  become due
and payable quarterly in advance.

      13.5 Interest. Any monetary payment due Lessor hereunder,  other than late
charges, not received by Lessor, when due as to scheduled payments (such as Base
Rent) or within 30 days following the date on which it was due for non-scheduled
payment,  shall bear interest from the date when due, as to scheduled  payments,
or the 31st day  after it was due as to  non-scheduled  payments.  The  interest
("Interest")  charged  shall be equal to the  prime  rate  reported  in the Wall
Street  Journal  as  published  closest  prior to the date when due plus 4%, but
shall not  exceed  the  maximum  rate  allowed  by law.  Interest  is payable in
addition to the potential late charge provided for in Paragraph 13.4.

      13.6 Breach by Lessor.

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

            (b)  Performance  by Lessee on Behalf of  Lessor.  In the event that
neither Lessor nor Lender cures said breach within 30 days after receipt of said
notice,  or if having  commenced said cure they do not  diligently  pursue it to
completion,  then Lessee may elect to cure said  breach at Lessee's  expense and
offset from Rent an amount  equal to the greater of one month's Base Rent or the
Security Deposit, and to pay an excess of such expense under protest,  reserving
Lessee's right to reimbursement  from Lessor.  Lessee shall document the cost of
said cure and supply said documentation to Lessor.

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
(collectively  "Condemnation"),  this Lease shall terminate as to the part taken
as of the date the condemning  authority  takes title or  possession,  whichever
first  occurs.  If more than 10% of the floor area of the Unit, or more than 25%
of Lessee's  Reserved Parking Spaces,  is taken by Condemnation,  Lessee may, at
Lessee's  option,  to be exercised in writing  within 10 days after Lessor shall
have given  Lessee  written  notice of such  taking  (or in the  absence of such
notice,  within  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 proportion
to the  reduction  in  utility  of the  Premises  caused  by such  Condemnation.
Condemnation  awards and/or  payments  shall be the property of Lessor,  whether
such  award  shall  be made as  compensation  for  diminution  in  value  of the
leasehold,  the value of the part taken,  or for  severance  damages;  provided,
however,  that  Lessee  shall  be  entitled  to any  compensation  for  Lessee's
relocation  expenses,  loss of business goodwill and/or Trade Fixtures,  without
regard to whether or not this Lease is terminated  pursuant to the provisions of
this Paragraph.  All Alterations and Utility  Installations made to the Premises
by Lessee,  for purposes of Condemnation  only, shall be considered the property
of the Lessee and Lessee shall be entitled to any and all compensation  which is
payable  therefor.  In the event that this Lease is not  terminated by reason of
the Condemnation,  Lessor shall repair any damage to the Premises caused by such
Condemnation.

15. Brokerage Fees.

      15.1 Additional  Commission.  In addition to the payments owed pursuant to
Paragraph  1.10  above,  and unless  Lessor and the Brokers  otherwise  agree in
writing,  Lessor agrees that: (a) if Lessee exercises any Option,  (b) if Lessee
acquires  from  Lessor any rights to the  Premises  or other  premises  owned by
Lessor and located  within the Project,  (c) if Lessee  remains in possession of
the Premises, with the consent of Lessor, after the expiration of this Lease, or
(d) if  Base  Rent  is  increased,  whether  by  agreement  or  operation  of an
escalation  clause  herein,  then,  Lessor shall pay Brokers a fee in accordance
with the schedule of the Brokers in effect at the time of the  execution of this
Lease.


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      15.2  Assumption  of  Obligations.  Any buyer or  transferee  of  Lessor's
interest  in this  Lease  shall be deemed to have  assumed  Lessor's  obligation
hereunder.  Brokers  shall be third party  beneficiaries  of the  provisions  of
Paragraphs  1.10,  15, 22 and 31. If Lessor  fails to pay to Brokers any amounts
due as and for  brokerage  fees  pertaining  to this Lease  when due,  then such
amounts shall accrue Interest.  In addition,  if Lessor fails to pay any amounts
to Lessee's  Broker when due,  Lessee's Broker may send written notice to Lessor
and Lessee of such  failure and if Lessor  fails to pay such  amounts  within 10
days after said  notice,  Lessee  shall pay said monies to its Broker and offset
such amounts against Rent. In addition,  Lessee's Broker shall be deemed to be a
third party  beneficiary  of any  commission  agreement  entered  into by and/or
between  Lessor and Lessor's  Broker for the limited  purpose of collecting  any
brokerage fee owed.

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

16. Estoppel Certificates.

            (a) Each Party (as  "Responding  Party")  shall within 10 days after
written  notice  from  the  other  Party  (the   "Requesting   Party")  execute,
acknowledge  and deliver to the Requesting  Party a statement in writing in form
similar to the then most current  "Estoppel  Certificate"  form published by the
AIR  Commercial  Real  Estate  Association,  plus such  additional  information,
confirmation and/or statements as may be reasonably  requested by the Requesting
Party.

            (b) If the  Responding  Party  shall fail to execute or deliver  the
Estoppel Certificate within such 10 day period, the Requesting Party may execute
an Estoppel  Certificate stating that: (i) the Lease is in full force and effect
without  modification except as may be represented by the Requesting Party, (ii)
there are no uncured defaults in the Requesting Party's  performance,  and (iii)
if Lessor is the Requesting  Party, not more than one month's rent has been paid
in advance. Prospective purchasers and encumbrances may rely upon the Requesting
Party's  Estoppel  Certificate,  and the Responding Party shall be estopped from
denying the truth of the facts contained in said Certificate.

            (c) If Lessor desires to finance,  refinance,  or sell the Premises,
or any part thereof,  Lessee and all  Guarantors  shall deliver to any potential
lender or purchaser  designated  by Lessor such  financial  statements as may be
reasonably  required by such lender or  purchaser,  including but not limited to
Lessee's  financial  statements  for  the  past  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. Definition of Lessor.  The term "Lessor" as used herein shall mean the owner
or owners at the time in question of the fee title to the Premises,  or, if this
is a sublease,  of the Lessee's  interest in the prior lease.  In the event of a
transfer of Lessor's  title or  interest in the  Premises or this Lease,  Lessor
shall  deliver to the  transferee  or assignee (in cash or by credit) any unused
Security  Deposit held by Lessor.  Except as provided in Paragraph 15, upon such
transfer or assignment and delivery of the Security Deposit,  as aforesaid,  the
prior Lessor shall be relieved of all liability with respect to the  obligations
and/or  covenants  under this Lease  thereafter  to be  performed by the Lessor.
Subject to the foregoing,  the obligations  and/or covenants in this Lease to be
performed  by the Lessor  shall be binding  only upon the Lessor as  hereinabove
defined.  Notwithstanding  the above, and subject to the provisions of Paragraph
20 below,  the original Lessor under this Lease,  and all subsequent  holders of
the Lessor's  interest in this Lease shall remain  liable and  responsible  with
regard to the potential duties and liabilities of Lessor pertaining to Hazardous
Substances as outlined in Paragraph 6.2 above.

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. Days.  Unless  otherwise  specifically  indicated to the contrary,  the word
"days"  as used in this  Lease  shall  mean and  refer  to  calendar  days.

20.  Limitation on Liability.  Subject to the  provisions of Paragraph 17 above,
the  obligations  of Lessor  under  this  Lease  shall not  constitute  personal
obligations  of  Lessor,  the  individual  partners  of  Lessor  or its or their
individual partners, directors, officers or shareholders,  and Lessee shall look
to the Premises,  and to no other assets of Lessor,  for the satisfaction of any
liability  of Lessor  with  respect to this Lease,  and shall not seek  recourse
against the individual partners of Lessor, or its or their individual  partners,
directors,  officers or  shareholders,  or any of their personal assets for such
satisfaction.

21. 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.

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 use,  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.  The  liability  (including  court costs and  attorneys'
fees),  of any  Broker  with  respect to  negotiation,  execution,  delivery  or
performance  by either  Lessor or Lessee  under this Lease or any  amendment  or
modification hereto shall be limited to an amount up to the fee received by such
Broker pursuant to this Lease; provided,  however, that the foregoing limitation
on each Broker's  liability  shall not be applicable to any gross  negligence or
willful misconduct of such Broker.

23. Notices.

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

      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 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  guarantee  next day
delivery shall be deemed given 24 hours after delivery of the same to the Postal
Service or courier.  Notices  transmitted by facsimile  transmission  or similar
means  shall  be  deemed  delivered  upon  telephone   confirmation  of  receipt
(confirmation  report from fax machine is  sufficient),  provided a copy is also
delivered via delivery or mail.  If notice is received on a Saturday,  Sunday or
legal holiday, it shall be deemed received on the next business day.

24. Waivers.  No waiver by Lessor of the Default or Breach of any term, covenant
or  condition  hereof by  Lessee,  shall be  deemed a waiver of any other  term,
covenant or condition hereof,  or of any subsequent  Default or Breach by Lessee
of the same or of any other term, covenant or condition hereof. Lessor's consent
to, or  approval  of,  any act shall  not be  deemed to render  unnecessary  the
obtaining of Lessor's  consent to, or approval of, any subsequent or similar act
by Lessee,  or be construed as the basis of an estoppel to enforce the provision
or provisions of this Lease requiring such


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consent.  The  acceptance of Rent by Lessor shall not be a waiver of any Default
or Breach by Lessee.  Any payment by Lessee may be accepted by Lessor on account
of moneys or damages due Lessor,  notwithstanding  any qualifying  statements or
conditions made by Lessee in connection therewith,  which such statements and/or
conditions shall be of no force or effect whatsoever unless  specifically agreed
to in writing by Lessor at or before the time of deposit of such payment.

25. Disclosures Regarding The Nature of a Real Estate Agency Relationship.

            (a)  When  entering  into a  discussion  with a  real  estate  agent
regarding a real estate  transaction,  a Lessor or Lessee should from the outset
understand what type of agency  relationship or  representation  it has with the
agent or agents in the transaction.  Lessor and Lessee acknowledge being advised
by the Brokers in this transaction,  as follows:

                  (i) Lessor's Agent. A Lessor's agent under a listing agreement
with the Lessor  acts as the agent for the  Lessor  only.  A  Lessor's  agent or
subagent has the following affirmative  obligations:  To the Lessor: A fiduciary
duty of utmost  care,  integrity,  honesty,  and  loyalty in  dealings  with the
Lessor. To the Lessee and the Lessor: (a) Diligent exercise of reasonable skills
and care in  performance  of the agent's  duties.  (b) A duty of honest and fair
dealing  and good  faith.  (c) A duty to  disclose  all facts known to the agent
materially  affecting  the value or  desirability  of the property  that are not
known to, or within the diligent  attention and observation of, the Parties.  An
agent is not  obligated to reveal to either Party any  confidential  information
obtained from the other Party which does not involve the affirmative  duties set
forth above.

                  (ii)  Lessee's  Agent.  An agent can agree to act as agent for
the Lessee only. In these situations,  the agent is not the Lessor's agent, even
if by agreement the agent may receive compensation for services rendered, either
in full or in part from the  Lessor.  An agent  acting only for a Lessee has the
following  affirmative  obligations.  To the Lessee:  A fiduciary duty of utmost
care, integrity, honesty, and loyalty in dealings with the Lessee. To the Lessee
and  the  Lessor:  (a)  Diligent  exercise  of  reasonable  skills  and  care in
performance  of the agent's  duties.  (b) A duty of honest and fair  dealing and
good  faith.  (c) A duty to  disclose  all facts  known to the agent  materially
affecting  the value or  desirability  of the property that are not known to, or
within the diligent  attention and observation of, the Parties.  An agent is not
obligated to reveal to either Party any confidential  information  obtained from
the other Party which does not involve the affirmative duties set forth above.

                  (iii) Agent Representing Both Lessor and Lessee. A real estate
agent,  either acting  directly or through one or more associate  licenses,  can
legally be the agent of both the Lessor  and the  Lessee in a  transaction,  but
only with the knowledge and consent of both the Lessor and the Lessee. In a dual
agency situation,  the agent has the following  affirmative  obligations to both
the Lessor and the  Lessee:  (a) A  fiduciary  duty of utmost  care,  integrity,
honesty and loyalty in the dealings with either Lessor or the Lessee.  (b) Other
duties to the  Lessor  and the Lessee as stated  above in  subparagraphs  (i) or
(ii).  In  representing  both Lessor and  Lessee,  the agent may not without the
express permission of the respective Party, disclose to the other Party that the
Lessor will accept rent in an amount less than that  indicated in the listing or
that the  Lessee is willing to pay a higher  rent than that  offered.  The above
duties  of the agent in a real  estate  transaction  do not  relieve a Lessor or
Lessee from the responsibility to protect their own interests. Lessor and Lessee
should  carefully  read all  agreements to assure that they  adequately  express
their  understanding  of  the  transaction.  A real  estate  agent  is a  person
qualified  to advise  about  real  estate.  If legal or tax  advice is  desired,
consult a competent professional.

            (b) Brokers  have no  responsibility  with respect to any default or
breach  hereof  by  either  Party.  The  liability  (including  court  costs and
attorneys'  fees),  of any Broker with  respect to any breach of duty,  error or
omission relating to this Lease shall not exceed the fee received by such Broker
pursuant to this Lease; provided, however, that the foregoing limitation on each
Broker's  liability  shall not be applicable to any gross  negligence or willful
misconduct of such Broker.

            (c) Buyer and Seller agree to identify to Brokers as  "Confidential"
any  communication or information given Brokers that is considered by such Party
to be confidential.

26.  No Right To  Holdover.  Lessee  has no right to  retain  possession  of the
Premises or any part thereof beyond the expiration or termination of this Lease.
In the event that Lessee  holds over,  then the Base Rent shall be  increased to
150% of the  Base  Rent  applicable  immediately  preceding  the  expiration  or
termination. Nothing contained herein shall be construed as 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;  Construction of Agreement. All provisions of this
Lease to be observed or performed by Lessee are both  covenants and  conditions.
In construing this Lease, all headings and titles are for the convenience of the
Parties only and shall not be considered a part of this Lease. Whenever required
by the context, the singular shall include the plural and vice versa. This Lease
shall  not be  construed  as if  prepared  by one of  the  Parties,  but  rather
according to its fair meaning as a whole, as if both Parties had prepared it.

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 upon the Premises, to any and all advances made on the security
thereof,  and to all renewals,  modifications,  and extensions  thereof.  Lessee
agrees that the  holders of any such  Security  Devices (in this Lease  together
referred to as "Lender") shall have no liability or obligation to perform any of
the  obligations  of Lessor under this Lease.  Any Lender may elect to have this
Lease  and/or any Option  granted  hereby  superior to the lien of its  Security
Device by giving written notice thereof to Lessee, whereupon 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. In the event that Lessor transfers title to the Premises,
or the Premises are acquired by another upon the foreclosure or termination of a
Security Device to which this Lease is subordinated (i) Lessee shall, subject to
the non-disturbance  provisions of Paragraph 30.3, attorn to such new owner, and
upon request, enter into a new lease, containing all of the terms and provisions
of this Lease, with such new owner for the remainder of the term hereof,  or, at
the  election  of such new owner,  this Lease shall  automatically  become a new
Lease between  Lessee and such new owner,  upon all of the terms and  conditions
hereof,  for the remainder of the term hereof,  and (ii) Lessor shall thereafter
be relieved of any further obligations hereunder and such new owner shall assume
all of Lessor's obligations hereunder, except that such new owner shall not: (a)
be liable for any act or omission of any prior  lessor or with respect to events
occurring  prior to acquisition  of ownership;  (b) be subject to any offsets or
defenses  which  Lessee  might have  against any prior  lessor,  (c) be bound by
prepayment of more than one month's rent, or (d) be liable for the return of any
security deposit paid to any prior lessor.

      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  a  commercially  reasonable   non-disturbance
agreement (a "Non-Disturbance  Agreement") from the Lender which Non-Disturbance
Agreement  provides  that Lessee's  possession of the Premises,  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.  Further,  within 60 days after the  execution  of this Lease,  Lessor
shall  use its  commercially  reasonable  efforts  to  obtain a  Non-Disturbance
Agreement from the holder of any  pre-existing  Security Device which is secured
by  the   Premises.   In  the  event  that  Lessor  is  unable  to  provide  the
Non-Disturbance  Agreement  within  said 60 days,  then  Lessee may, at Lessee's
option,  directly  contact Lender and attempt to negotiate for the execution and
delivery of a Non-Disturbance Agreement.


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

31.  Attorneys'  Fees.  If any  Party or Broker  brings an action or  proceeding
involving  the  Premises  whether  founded in tort,  contract  or equity,  or to
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'  fees 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. In addition,
Lessor shall be entitled to attorneys' fees, costs and expenses  incurred in the
preparation  and service of notices of Default and  consultations  in connection
therewith, whether or not a legal action is subsequently commenced in connection
with  such  Default  or  resulting  Breach  ($200 is a  reasonable  minimum  per
occurrence for such services and consultation).

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  tenants,  and making  such  alterations,
repairs, improvements or additions to the Premises as Lessor may deem necessary.
All such activities  shall be without  abatement of rent or liability to Lessee.
Lessor may at any time place on the Premises  any ordinary  "For Sale" signs and
Lessor may during the last 6 months of the term hereof place on the Premises any
ordinary  "For Lease"  signs.  Lessee may at any time place on the  Premises any
ordinary "For Sublease" sign.

33. Auctions.  Lessee shall not conduct, nor permit to be conducted, any auction
upon the Premises without  Lessor's prior written  consent.  Lessor shall not be
obligated to exercise any standard of reasonableness  in determining  whether to
permit an auction.

34. Signs.  Except for ordinary "For Sublease" signs which may be placed only on
the Premises,  Lessee shall not place any sign upon the Project without Lessor's
prior written consent. All signs must comply with all Applicable Requirements.

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,  that Lessor may elect to continue any one or all
existing subtenancies.  Lessor's failure within 10 days following any such event
to elect 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.  Except 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,  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 upon receipt of an invoice and supporting  documentation
therefor.  Lessor's  consent  to any act,  assignment  or  subletting  shall not
constitute an  acknowledgment  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.  The  failure  to specify  herein  any  particular
condition to Lessor's consent shall not preclude the imposition by Lessor at the
time of consent of such further or other  conditions as are then reasonable with
reference to the  particular  matter for which  consent is being  given.  In the
event that  either  Party  disagrees  with any  determination  made by the other
hereunder  and  reasonably  requests  the  reasons for such  determination,  the
determining  party shall furnish its reasons in writing and in reasonable detail
within 10 business days following such request.

37. Guarantor.

      37.1 Execution.  The Guarantors,  if any, shall each execute a guaranty in
the form most recently published by the AIR Commercial Real Estate  Association,
and each such  Guarantor  shall have the same  obligations  as Lessee under this
Lease.

      37.2 Default. It shall constitute a Default of the Lessee if any Guarantor
fails or refuses,  upon request to provide: (a) evidence of the execution of the
guaranty,  including the authority of the party signing on Guarantor's behalf to
obligate Guarantor,  and in the case of a corporate Guarantor,  a certified copy
of a  resolution  of its  board of  directors  authorizing  the  making  of such
guaranty, (b) current financial statements, (c) an Estoppel Certificate,  or (d)
written confirmation that the guaranty is still in effect.

38. Quiet  Possession.  Subject to payment by Lessee of the Rent and performance
of all of the  covenants,  conditions  and  provisions  on  Lessee's  part to be
observed and performed under this Lease,  Lessee shall have quiet possession and
quiet enjoyment of the Premises during the term hereof.

39.  Options.  If Lessee is  granted  an  option,  as  defined  below,  then the
following provisions shall apply.

      39.1 Definition.  "Option" shall mean: (a) the right to extend the term of
or renew  this  Lease or to extend or renew any lease  that  Lessee has on other
property  of  Lessor;  (b) the right of first  refusal  or first  offer to lease
either the  Premises or other  property of Lessor;  (c) the right to purchase or
the right of first refusal to purchase the Premises or other property of Lessor.

      39.2 Options Personal To Original Lessee.  Any Option granted to Lessee in
this  Lease is  personal  to the  original  Lessee,  and cannot be  assigned  or
exercised by anyone other than said original  Lessee and only while the original
Lessee is in full  possession of the Premises and, if requested by Lessor,  with
Lessee  certifying  that Lessee has no  intention  of  thereafter  assigning  or
subletting.

      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 have been validly exercised.

      39.4 Effect of Default on Options.

            (a) Lessee shall have no right to exercise an Option: (i) during the
period  commencing with the giving of any notice of Default and continuing until
said  Default  is  cured,  (ii)  during  the  period  of time any Rent is unpaid
(without  regard to whether notice  thereof is given  Lessee),  (iii) during the
time  Lessee is in Breach of this  Lease,  or (iv) in the event that  Lessee has
been given 3 or more  notices of separate  Default,  whether or not the Defaults
are cured, during the 12 month period immediately  preceding the exercise of the
Option.

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

            (c) 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 prior to the commencement of the extended term, (i) Lessee fails to
pay Rent for a period  of 30 days  after  such Rent  becomes  due  (without  any
necessity  of Lessor to give notice  thereof),  (ii) Lessor gives to Lessee 3 or
more notices of separate Default during any 12 month period,  whether or not the
Defaults are cured, or (iii) if Lessee commits a Breach of this Lease.

40.  Security  Measures.  Lessee  hereby  acknowledges  that the Rent 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.

41.  Reservations.  Lessor reserves the right: (i) to grant, without the consent
or joinder of Lessee,  such easements,  rights and dedications that Lessor deems
necessary,


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(ii) to cause the  recordation  of parcel  maps and  restrictions,  and (iii) to
create and/or install new utility raceways,  so long as such easements,  rights,
dedications,  maps,  restrictions,  and  utility  raceways  do not  unreasonably
interfere  with the use of the  Premises  by Lessee.  Lessee  agrees to sign any
documents reasonably requested by Lessor to effectuate such rights.

42.  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.

43. Authority. If either Party hereto is a corporation, trust, limited liability
company, partnership, or similar entity, 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.  Each party  shall,  within 30
days after  request,  deliver to the other party  satisfactory  evidence of such
authority.

44. 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.

45.  Offer.  Preparation  of this  Lease by  either  party or  their  agent  and
submission  of same to the other  Party shall not be deemed an offer to lease to
the other  Party.  This Lease is not intended to be binding  until  executed and
delivered by all Parties hereto.

46.  Amendments.  This  Lease may be  modified  only in  writing,  signed by the
Parties  in  interest  at the time of the  modification.  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 a Lender in  connection  with the  obtaining of normal  financing or
refinancing of the Premises.

47.  Multiple  Parties.  If more than one  person  or entity is named  herein as
either  Lessor or Lessee,  such  multiple  Parties  shall have joint and several
responsibility to comply with the terms of this Lease.

48. Waiver of Jury Trial.  The Parties hereby waive their  respective  rights to
trial by jury in any action or proceeding  involving the Property or arising out
of this Agreement.

49. Mediation and Arbitration of Disputes.  An Addendum  requiring the Mediation
and/or the  Arbitration  of all  disputes  between  the Parties  and/or  Brokers
arising out of this Lease |_| is |X| is not attached to this Lease.

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.

ATTENTION:  NO  REPRESENTATION  OR  RECOMMENDATION IS MADE BY THE AIR COMMERCIAL
REAL  ESTATE  ASSOCIATION  OR BY ANY BROKER AS TO THE LEGAL  SUFFICIENCY,  LEGAL
EFFECT,  OR TAX  CONSEQUENCES  OF THIS  LEASE  OR THE  TRANSACTION  TO  WHICH IT
RELATES. THE PARTIES ARE URGED TO:

1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.

2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE
PREMISES.  SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE
PRESENCE OF HAZARDOUS  SUBSTANCES,  THE ZONING OF THE PREMISES,  THE  STRUCTURAL
INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS,  COMPLIANCE WITH THE
AMERICANS WITH DISABILITIES ACT AND THE SUITABILITY OF THE PREMISES FOR LESSEE'S
INTENDED USE.

WARNING:  IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN CALIFORNIA,  CERTAIN
PROVISIONS  OF THE LEASE MAY NEED TO BE REVISED  TO COMPLY  WITH THE LAWS OF THE
STATE IN WHICH THE PREMISES ARE LOCATED.

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

<TABLE>
<S>                                            <C>
Execute at: San Diego, CA                      Executed at: Montgomeryville, PA
            ---------------------------------               ---------------------------------
On:         April 12, 2005                     On:          April 4, 2005
            ---------------------------------               ---------------------------------

By LESSOR:                                     By LESSEE:

Wells Fargo Bank N.A as Trustee                PhotoMedex, Inc.
for the Hutton Trust                           a Delaware Corporation
--------------------------------------------   ---------------------------------------------


By:/s/Danny Flowers                            By:/s/Jeff O'Donnell
   -----------------------------------------      ------------------------------------------
Name Printed: Danny Flowers                    Name Printed: Jeff O'Donnell
              ------------------------------                 -------------------------------
Title: Vice President                          Title: CEO
       -------------------------------------          --------------------------------------


By: /s/Delbert McGue III                       By: /s/D.M. McGrath
    ----------------------------------------       -----------------------------------------
Name Printed: Delbert McGue III                Name Printed: Dennis McGrath
              ------------------------------                 -------------------------------
Title: Vice President                          Title: CFO
       -------------------------------------          --------------------------------------
Address: 1350 Fashion Valley Road, 3rd Floor   Address: 147 Keystone Drive
         San Diego, California 92108                    Montgomery, Pennsylvania 18936
         -----------------------------------            Montgomery County
                                                        ------------------------------------
Telephone: (619) 668-2820                      Telephone: (215) 619-3600
           ---------------------------------              ----------------------------------
Facsimile: (619) 668-2828                      Facsimile: (215) 619-3208
           ---------------------------------              ----------------------------------
Federal ID No.                                 Federal ID No. 59-2058100
               -----------------------------                  ------------------------------
</TABLE>

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: AIR Commercial Real Estate  Association,  700 South Flower Street,
Suite 600, Los Angeles, CA 90017. (213) 687-8777.

          (C)Copyright 1999 By AIR Commercial Real Estate Association.
                              All rights reserved.

                 No part of these works may be reproduced in any
                      form without permission in writing.

                Abramson- 2375 Camino Vida Roble-Photomedex-MTLN


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March 17, 2005

ADDENDUM TO LEASE DATED MARCH 17, 2005 BY AND BETWEEN WELLS FARGO BANK, N.A., AS
TRUSTEE  FOR THE  HUTTON  TRUST  AS  LESSOR  AND  PHOTOMEDEX,  INC.  A  DELAWARE
CORPORATION AS LESSEE.

--------------------------------------------------------------------------------
The above-mentioned Lease is modified in the following particulars only:

Should the terms and  conditions  of this  Addendum  conflict with the terms and
conditions  of the  above-mentioned  Lease,  the  terms and  conditions  of this
Addendum shall prevail.

      1.    Base Rent               Months   PSF/Mo.  Monthly Payment
            (Triple Net):           ---------------------------------
                                    1.       $0.83    $6,640.00
                                    2-4.     $0.00    $0.00 (Free Rent)
                                    5.-12.   $0.83    $6,640.00

                                    **  Base  rent   shall   increase   annually
                                    thereafter at a rate of 3% over the previous
                                    year's Base Rent.

      2.    Operating Expense       In addition to the Base Rent,  Tenant  shall
            Payment                 pay its prorated share of project  operating
                                    expenses  (including during their "free rent
                                    period"),   which   are   estimated   to  be
                                    approximately  $0.28  per  square  foot  per
                                    month.

                                    These  expenses   include   property  taxes,
                                    property   insurance,    water,    landscape
                                    maintenance     common    area    utilities,
                                    association  fee,  and  property  management
                                    fees.   Utilities   directly   serving   the
                                    Premises are not included in this amount and
                                    are  separately  metered  and  paid  for  by
                                    Tenant.

      3.    Tenant Improvements:    Landlord  shall  hire  their  contractor  to
                                    complete  all  Tenant   Improvements   on  a
                                    turnkey basis,  utilizing  building standard
                                    materials and finishes subject to a mutually
                                    acceptable  Space Plan  (attached as Exhibit
                                    A) and Final  Construction  Bid (attached as
                                    Exhibit B).

                                    Landlord  will fund an amount up to $195,000
                                    that will be utilized  for the  construction
                                    of  Tenants  improvements  within the suite.
                                    Tenant will be responsible to contribute any
                                    amounts required above said amount needed to
                                    complete  Tenant's suite  according to their
                                    mutually acceptable Space Plan. These Tenant
                                    Improvements  (costing up to $195,000) shall
                                    be  amortized  at a fixed six  percent  (6%)
                                    interest   over  the   initial   Lease  Term
                                    estimated  to  be  approximately  $0.36  psf
                                    based upon 8,000  rentable  square  feet and
                                    considered as  "additional  rents" above the
                                    base rental rate and NNN charges.

                                    Landlord  agrees to  deliver  the roof is in
                                    good  condition and repair as of the date of
                                    this  Proposal.  Landlord  agrees to deliver
                                    all HVAC units in good  operating  condition
                                    at  lease  execution.   Landlord  agrees  to
                                    warrant  the  HVAC  at  his  sole  cost  and
                                    expense  for one  hundred  eighty days (180)
                                    days of the Initial Lease Term.

                                    Costs related to ADA Compliance or any other
                                    fees  associated  with  standard  City  code
                                    compliance  at time of  occupancy  shall  be
                                    paid for by Lessor unless such compliance is
                                    directly  related to Tenants specific use of
                                    said space  whereas  Tenant would pay costs.
                                    This does not include  the costs  associated
                                    with normal building  construction that must
                                    be  done to  complete  the  interior  of the
                                    space.

      4.    Delivery of             Landlord  will  use  its  best  commercially
            Possession:             reasonable  efforts to deliver possession of
                                    the Premises by the Commencement Date.

      5.    Tenant's Option to      Provided  Tenant has abided by the terms and
            Terminate               conditions  of the Lease,  Tenant shall have
                                    the  Option to  Terminate  the  Lease  after
                                    month sixty (60) of the initial  Lease Term.
                                    Should   Tenant   exercise   the  Option  to
                                    Terminate,   Tenant   agrees   to  pay   any
                                    unamortized  Tenant  Improvement  costs  and
                                    Leasing   Commissions   from   the  date  of
                                    termination  through  the end of the initial
                                    Lease Term.  Tenant shall  provide  Landlord
                                    with six (6) month's advanced written notice
                                    in  order  to   exercise   the   Option   to
                                    Terminate.

<PAGE>

      6.    Signage:                Tenant shall be granted standard sign rights
                                    for the subject Premises. Said signage shall
                                    be mutually agreed upon between Landlord and
                                    Tenant in accordance  with the sign criteria
                                    for the  project  and  according  to City of
                                    Carlsbad codes and regulations.

      7.    Option to Extend:       Provided  Tenant is not in uncured  material
                                    default  and has  abided  by the  terms  and
                                    conditions   of  the  Lease,   Tenant  shall
                                    receive  two (2) three (3) year  Options  to
                                    Extend  the lease  under the same  terms and
                                    conditions of the original  lease except for
                                    the  Base   Monthly   Rent  which  shall  be
                                    adjusted  to  95%  of  the  then  prevailing
                                    market  rent for  comparable  space  but not
                                    less than the  previous  months  base rental
                                    rate. Tenant shall provide Landlord with six
                                    (6) months' advanced written notice in order
                                    to exercise the Option to Extend.

      8.    Required Letter of      Prior to receipt of said funds,  Lessee must
            Credit:                 provide the Lessor will a $195,000 Letter of
                                    Credit  (LC) for a major  AAA  credit  rated
                                    banking  institution.  Provided  that Lessee
                                    has been in good standing of their terms and
                                    conditions  set forth in their lease,  their
                                    Letter  of  Credit  will be  reduced  by 20%
                                    annually  after  the  first  year  that  the
                                    Letter of Credit is put into place  provided
                                    that Lessee has not and/or is not in default
                                    of the terms and  conditions of their lease.
                                    Said  LC  shall  remain  in  place  for  the
                                    initial sixty (60) months of the lease term.

      9.    Brokerage Commission:   Landlord  shall pay a Leasing  Commission to
                                    CB Richard Ellis, Inc. in an amount equal to
                                    three percent (3%) on the transaction  value
                                    of the  first  five (5)  years of the  Lease
                                    Term and a one and one-half  percent  (1.5%)
                                    on the remaining term  thereafter.  One-half
                                    of the  commission  will be paid upon  Lease
                                    execution   and  the  final   one-half  upon
                                    Tenant's occupancy of the Building.  Listing
                                    agents  shall be paid  according  to Listing
                                    agreement.

     10.    Agency:                 Tenant and Landlord  acknowledge and approve
                                    that CB Richard Ellis, Inc.,  represents the
                                    Tenant  and  Grubb  &  Ellis|BRE  Commercial
                                    represents the Landlord in this transaction.

ALL OTHER TERMS AND CONDITIONS SET FORTH IN THE ORIGINAL LEASE DATED MARCH 17,
2005 ARE IN FULL FORCE.

AGREED TO AND ACCEPTED BY:

LESSOR:                                    LESSEE:
WELLS FARGO, N.A., AS TRUSTEE              PHOTOMEDEX, INC.
THE HUTTON TRUST                           A DELAWARE CORPORATION


By:/s/Danny Flowers                       By: /s/Jeff O'Donnell
   ------------------------------             ------------------------------
   Danny Flowers                              Jeff O'Donnell
   Its: Vice President                        Its: CEO


By: /s/Del Mcghue III
   ------------------------------
   Del Mcgue III

Its: Vice President

DATED:4/12/05                             DATED: 4/4/05
      ---------------------------                ---------------------------

<PAGE>

                                    Exhibit A
                             Conceptual Floor Plan
                                 (not to scale)

                          [FLOOR PLAN GRAPHIC OMITTED]


Initial________                                                  Initial________

<PAGE>

                                     [LOGO]

                            RULES AND REGULATIONS FOR
                              STANDARD OFFICE LEASE
                                    Exhibit B

Dated: March 17, 2005

By and  Between  Wells  Fargo  Bank N.A.  as Trustee  for the  Hutton  Trust and
PhotoMedex, Inc., a Delaware Corporation

                                 GENERAL RULES

      1. Lessee shall not suffer or permit the  obstruction of any Common Areas,
including driveways, walkways and stairways.

      2. Lessor  reserves  the right to refuse  access to any persons  Lessor in
good faith judges to be a threat to the safety and reputation of the Project and
its occupants.

      3.  Lessee  shall not make or  permit  any  noise or odors  that  annoy or
interfere with other lessees or persons having business within the Project.

      4. Lessee shall not keep  animals or birds  within the Project,  and shall
not bring  bicycles,  motorcycles or other vehicles into areas not designated as
authorized for same.

      5. Lessee shall not make,  suffer or permit litter  except in  appropriate
receptacles for that purpose.

      6. Lessee shall not alter any lock or install new or  additional  locks or
bolts.

      7. Lessee shall be  responsible  for the  inappropriate  use of any toilet
rooms, plumbing or other utilities.  No foreign substances of any kind are to be
inserted therein.

      8. Lessee shall not deface the walls,  partitions or other surfaces of the
Premises or Project.

      9. Lessee shall not suffer or permit anything in or around the Premises or
Building  that causes  excessive  vibration or floor  loading in any part of the
Project.

      10.  Furniture,  significant  freight and equipment shall be moved into or
out of the building only with the Lessor's knowledge and consent, and subject to
such  reasonable  limitations,  techniques  and timing,  as may be designated by
Lessor.

      11.  Lessee  shall be  responsible  for any damage to the Office  Building
Project  arising from any such activity.  Lessee shall not employ any service or
contractor  for  services or work to be  performed  in the  Building,  except as
approved by Lessor.

      12. Lessor reserves the right to close and lock the Building on Saturdays,
Sundays and Building Holidays, and on other days between the hours of _____ P.M.
and _____ A.M. of the  following  day. If Lessee uses the  Premises  during such
periods,  Lessee shall be responsible for securely locking any doors it may have
opened for entry.

      13.  Lessee  shall return all keys at the  termination  of its tenancy and
shall be responsible for the cost of replacing any keys that are lost.

      14. No window  coverings,  shades or awnings shall be installed or used by
Lessee.

      15. No Lessee, employee or invitee shall go upon the roof of the Building.

      16.  Lessee  shall not  suffer or permit  smoking or  carrying  of lighted
cigars or cigarettes in areas  reasonably  designated by Lessor or by applicable
governmental agencies as non-smoking areas.

      17. Lessee shall not use any method of heating or air  conditioning  other
than as provided by Lessor.

      18.  Lessee  shall not install,  maintain or operate any vending  machines
upon the Premises without Lessor's written consent.

      19. The Premises shall not be used for lodging or  manufacturing,  cooking
or food  preparation.

      20. Lessee shall comply with all safety,  fire  protection  and evacuation
regulations established by Lessor or any applicable governmental agency.

      21.  Lessor  reserves  the  right  to  waive  any one of  these  rules  or
regulations,  and/or as to anyparticular  Lessee,  and any such waiver shall not
constitute  a  waiver  of  any  other  rule  or  regulation  or  any  subsequent
application  thereof  to such  Lessee.

      22.  Lessee  assumes all risks from theft or vandalism  and agrees to keep
its Premises  locked as maybe  required.

      23.  Lessor  reserves  the right to make such other  reasonable  rules and
regulations  as it may from  time to time  deem  necessary  for the  appropriate
operation and safety of the Project and its occupants. Lessee agrees to abide by
these and such rules and regulations.

                                  PARKING RULES

      1. Parking areas shall be used only for parking by vehicles no longer than
full size,  passenger  automobiles  herein  called  "Permitted  Size  Vehicles."
Vehicles other than Permitted Size Vehicles are herein referred to as "Oversized
Vehicles."

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

      3. Parking  stickers or  identification  devices  shall be the property of
Lessor and be returned to Lessor by the holder  thereof upon  termination of the
holder's  parking  privileges.  Lessee  will pay such  replacement  charge as is
reasonably established by Lessor for the loss of such devices.

      4. Lessor reserves the right to refuse the sale of monthly  identification
devices  to any  person or entity  that  willfully  refuses  to comply  with the
applicable rules, regulations, laws and/or agreements.

      5. Lessor  reserves the right to relocate all or a part of parking  spaces
from floor to floor,  within one floor,  and/or to reasonably  adjacent  offsite
location(s),  and to reasonably  allocate them between compact and standard size
spaces,  as long as the same  complies  with  applicable  laws,  ordinances  and
regulations.

      6. Users of the parking  area will obey all posted  signs and park only in
the areas designated for vehicle parking.

      7. Unless  otherwise  instructed,  every  person using the parking area is
required to park and lock his own vehicle.  Lessor will not be  responsible  for
any damage to  vehicles,  injury to persons  or loss of  property,  all of which
risks are assumed by the party using the parking area.

      8. Validation, if established,  will be permissible only by such method or
methods  as  Lessor  and/or  its  licensee  may  establish  at  rates  generally
applicable to visitor parking.

      9. The maintenance, washing, waxing or cleaning of vehicles in the parking
structure or Common Areas is prohibited.

      10.  Lessee  shall be  responsible  for seeing that all of its  employees,
agents and invitees comply with the applicable parking rules, regulations,  laws
and agreements.

      11.  Lessor  reserves  the right to modify  these rules  and/or adopt such
other  reasonable and  non-discriminatory  rules and  regulations as it may deem
necessary for the proper operation of the parking area.

      12. Such parking use as is herein provided is intended merely as a license
only and no bailment isintended or shall be created hereby.

Abramson-2375 Camino Vida Roble-Photomedex-RR


                                   PAGE 1 OF 1
___________                                                          ___________
___________                                                          ___________
INITIALS                                                                INITIALS

(C)1999 - AIR COMMERCIAL REAL ESTATE ASSOCIATION                FORM OFG-1-9/99E

<PAGE>

                                    EXHIBIT C

        ADDENDUM TO AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION STANDARD
             INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE - MODIFIED NET

The American Industrial Real Estate Association  Standard  Industrial/Commercial
Multi-Tenant Lease - Modified Net ("Lease"),  to which this Addendum is attached
and  incorporated  into by this  reference,  is hereby  modified  and amended as
follows, notwithstanding any provision of the Lease to the contrary:

1.  BROKER'S  COMPENSATION:  Notwithstanding  any other  provision of the Lease,
Wells Fargo Bank, N.A., in its fiduciary capacity,  only agrees to pay Broker as
a commission per separate agreement.

The commission shall be earned and payable only upon receipt of a fully executed
Lease  between the Lessor and  Lessee.  Any fee or  commission  due to any other
broker  in  connection  with  the  Lease  shall  be paid by  Broker  prior to or
concurrently with payment by Wells Fargo Bank, N.A., in its fiduciary  capacity,
to Broker.

2.  EXCULPATION OF WELLS FARGO BANK, N.A.: It is understood and agreed by Lessee
that Wells Fargo Bank,  N.A. is executing  this Lease in its fiduciary  capacity
only and Wells Fargo Bank, N.A., in all capacities, and Wells Fargo Bank, N.A.'s
affiliates,  shareholders, officers, directors, employees and agents are not and
shall not be liable  hereunder,  directly  or  indirectly,  except  for  willful
misconduct, under or by execution of this Lease. The rights and claims of Lessee
or Broker as against Wells Fargo Bank,  N.A., in any capacity,  shall be limited
exclusively  to such  rights as Lessee or Broker may have  against  the trust or
other  estate or  entity  represented  herein  by Wells  Fargo  Bank,  N.A.  Any
liability  of  Wells  Fargo  Bank,  N.A.,  in any  capacity  (including  without
limitation  Wells  Fargo  Bank,  N.A.'s   shareholders,   officers,   directors,
affiliates,  agents, and employees) to Lessee,  Broker or any other person shall
be  limited  to the  estate of the trust or other  estate or entity  represented
herein by Wells Fargo Bank, N.A. in the subject property leased.  Lessee, Broker
or any other person  claiming  through Lessee or Broker agrees to look solely to
such interest for the recovery of any judgment  against Wells Fargo Bank,  N.A.,
in any capacity.  It is the intent of the parties that neither (a) such trust or
other estate or entity  represented  herein by Wells Fargo Bank,  N.A.,  (b) its
trustees  or  beneficiaries,  nor (c) any other  assets  of such  trust or other
estate or entity represented herein by Wells Fargo Bank, N.A. or its trustees or
beneficiaries shall be liable for any such judgment.

3.  APPROVALS:  The  obligations  of Wells Fargo Bank,  N.A.,  in its  fiduciary
capacity,  under  this  Lease are  expressly  contingent  upon  obtaining  court
approval,  if  required,  and  approval of the  required  management  persons or
committee  at Wells Fargo Bank,  N.A.,  and all other owners of interests in the
subject property, if any.

4. |_| [CHECK IF  APPLICABLE]  MULTIPLE  OWNERS:  The  undersigned  Other Owners
(multiple owners) each agree to perform in accordance with this Lease as Lessor.
In the event any such party fails to perform his, her or its  obligations  under
this Lease,  such  defaulting  party agrees to hold  harmless and  indemnify the
other co-owners for and against any and all claims,  liabilities, or expenses of
any kind  whatsoever  which such co-owners may incur as a result of such failure
to perform.

5.  CONDITION:  The subject  property  leased,  including any fixtures,  and any
personal  property,  is  being  leased  in its "AS IS"  condition,  without  any
expressed or implied  warranties.  Any and all representations and warranties of
Lessor set forth in the Lease are hereby deleted.  Lessee hereby represents that
Lessee or Lessee's agents have inspected the subject property to the full extent
deemed  appropriate  and that Lessee is  satisfied  with its  condition.  Lessee
acknowledges  that as of the date of this Lease,  the subject  property  and the
Premises and improvements are in good order, repair, and condition. Lessor shall
not be liable to Lessee or any person for any latent or  existing  defect in the
subject property,  or for any injury or damages that may result to any person or
property, including, without limitation, the person or property of Lessee, by or
from any cause whatsoever  arising out of the present actual or latent condition
of the subject property.

6. INDEPENDENT  INVESTIGATION:  Lessee has not relied on any acts, including any
written  or oral  statements,  by  Wells  Fargo  Bank,  N.A.,  in its  fiduciary
capacity,  or any person  acting on behalf of Wells  Fargo  Bank,  N.A.,  in its
fiduciary  capacity,  in entering into this Lease, but rather has relied on his,
her or its own independent investigation of the subject property.

7. MATTERS OF RECORD: Lessee agrees to accept the property leased subject to any
and   all   covenants,   conditions,    restrictions,    reservations,   rights,
rights-of-way, and easements of record, if any.

8.  BROKER'S  INDEMNITY:  Broker  agrees to indemnify and hold Wells Fargo Bank,
N.A.,  in all  capacities,  free and  harmless  of and from any and all  claims,
liability,  demands,  suits,  actions or judgments,  made,  brought or recovered
against Wells Fargo Bank,  N.A., in any capacity,  or Broker,  or both,  and all
damages, costs and expenses,  including attorneys' fees, incurred by Wells Fargo
Bank,  N.A.,  in any  capacity,  in  connection  with or in any way arising from
Broker's  negligence  or  willful  misconduct  in  connection  with this  Lease,
including,  without  limitation,  (a)  Broker's  unauthorized  written  or  oral
representations; (b) Broker's use of unauthorized advertising materials; (c) any
claim or claims for  commissions  made against  Wells Fargo Bank,  N.A.,  in any
capacity,  by any other  broker or  salesman  arising out of or  connected  with
Broker's  acts or omissions  in  connection  with this Lease.  Wells Fargo Bank,
N.A., in its fiduciary  capacity,  agrees to save and hold harmless  Broker only
from such damages, claims, disputes,  litigation,  and/or judgments arising from
any knowingly incorrect  information  supplied by Wells Fargo Bank, N.A., in its
fiduciary  capacity,  or from any material  fact  actually  known by Wells Fargo
Bank,  N.A., in its fiduciary  capacity,  concerning the subject property leased
which Wells Fargo Bank,  N.A., in its fiduciary  capacity,  fails to disclose to
Broker.

9. ADA: Lessee's  obligations to comply with all laws shall include,  but not be
limited to, the Americans with  Disabilities Act and all similar laws enacted in
the future.

10. INTRABUILDING NETWORK CABLES:  Regardless of any provisions of this Lease to
the  contrary,  Lessor and Lessee agree as follows:

(a) Cabling and Equipment.  Unless Lessor  expressly elects to perform the work,
in which case all costs incurred will be deemed an operating  expense and passed
through to the Lessee under Section 4.2, Lessee will be responsible, at Lessee's
sole   cost,   for   the   installation,   maintenance,   and   repair   of  all
telecommunication  cabling,  wiring,  and risers running  throughout the subject
property serving Lessee, together with all of Lessee's telephones,  telecopiers,
computers,  telephone switching, telephone panels, and related equipment. Lessee
agrees to install,  maintain, and repair such telecommunication cabling, wiring,
and risers in a good and proper manner.

(b) Right of Entry.  In addition to  Lessor's  other  rights of entry under this
Lease,  Lessor may enter the leased  Premises to inspect  the  telecommunication
cabling,  wiring, and risers to assure that the installation,  maintenance,  and
repair are being performed in a good and proper manner.

(c) Approval of Provider.  Lessee agrees to have the installation,  maintenance,
and repair of the  telecommunication  cabling,  wiring,  and  risers  done by an
independent contractor approved by Lessor in writing in advance.

(d)  Indemnity.  Lessee agrees to indemnify,  release,  defend,  and hold Lessor
harmless against any damages, claims, or other liability resulting from Lessee's
installation,  repair, or maintenance of the telecommunication  cabling, wiring,
and risers, including, but not limited to, the costs of repair.

(e) Release. Lessee releases Lessor from all losses, claims, injuries,  damages,
or other  liability,  including,  but not  limited  to,  consequential  damages,
whether to persons or property  and no matter how caused,  in any way  connected
with the interruption of  telecommunications  services due to the failure of any
telecommunications cabling, wiring, or risers. Lessee


                                   Page 1 of 2
<PAGE>

expressly  waives the right to claim that any interruption  constitutes  grounds
for a claim of abatement of rent, of constructive  eviction,  or for termination
of the Lease.

(f)  Restrictions on Tenant  Repairs.  Regardless of Lessee's other rights under
the Lease to make  alterations to the Leased  Premises,  Lessee may not alter or
modify the telecommunication  cabling,  wiring, and risers located in the Leased
Premises or otherwise without Lessor's prior written consent.

11. ARBITRATION:

(a) Except with regard to any claim,  counterclaim,  dispute,  and other  matter
relating  to the  payment of rent or any other sum owing  from  Lessee to Lessor
under this Lease,  Lessor and Lessee  agree that,  if and to the extent that any
claim, counterclaim,  dispute, and other matter in question between them arising
out  of  or  relating  to  this  Lease  or  the  breach  thereof  (collectively,
"Non-Monetary  Disputes")  cannot be resolved through direct  discussions,  such
Non-Monetary  Dispute  shall at the  election of either  party be  submitted  to
arbitration in accordance  with this  subsection  (a). In the event either party
elects to submit any  Non-Monetary  Dispute to arbitration,  the judgment or the
award  rendered  in any such  arbitration  may be  entered  in any court  having
jurisdiction  and shall be final and binding upon the parties.  The  arbitration
shall be conducted in accordance with the then prevailing  rules of the American
Arbitration Association or its successor for arbitration of commercial disputes,
and the provisions of California Code of Civil Procedure Section 1283.05, or any
successor or amended statute or law containing similar provisions.

(b) The arbitrator shall award to the prevailing party, if any, as determined by
the  arbitrator,  all of its costs and fees.  "Costs  and fees"  shall  mean all
expenses of the  arbitration,  including the arbitrators'  fees,  administrative
fees, travel expenses,  out-of-pocket  expenses,  such as copying and telephone,
court costs, witness fees and attorneys fees.

(c)  Notwithstanding  the foregoing,  nothing contained in this section shall be
deemed to limit or restrict  Lessor's rights to file an unlawful detainer action
under  California  Code of Civil  Procedure  ss.ss.  1161 et. seq.  and obtain a
judgment hereunder.

12. LESSEE  OBLIGATIONS:  The  obligations  of Lessee other than rent under this
Lease shall not be limited in any manner by the total  amount of rent or term of
Lease, and shall be limited only as may be specifically  and explicitly  limited
by an express provision of this Lease.

13.  LESSOR  INSURANCE:  Notwithstanding  any  provision  of this  Lease  to the
contrary,  Lessor shall have no obligation  of any kind  whatsoever to carry any
insurance policy or coverage of any kind or in any specified amount.

14.  ENVIRONMENTAL:  Lessee shall furnish  Lessor a copy of any hazardous  waste
removal contract in force at any time during Lessee's occupancy of the Premises.
All such contracts shall provide that the  contracting  party shall give written
notice of any termination of the contract to Lessor.

15. INSPECTIONS: Lessee shall reimburse Lessor for all costs incurred by Lessor,
if any,  for  inspections  by  environmental,  health or safety  experts  deemed
necessary or appropriate by Lessor to assure Lessee's compliance with Applicable
Law.

16. Sections 15.1, 15.2 and 15.3 are hereby deleted.

The parties have executed this Addendum as of the date of the Lease.

LESSOR:                                    BROKER:
WELLS FARGO BANK, N.A.,                    NAME: Grubb & Ellis|BRE Commercial
in its fiduciarycapacity,
as Trustee for the Hutton Trust


By:/s/Danny Flowers                        By:/s/Jeff Abramson
   ------------------------------             ------------------------------
   Danny Flowers                              Jeff Abramson
   Title: Vice President                      Title: Agent

                                           Date:5/2/05
                                                -----------------------------


By:/s/Delbert McGhue III                   By:/s/Barry Hendler
   ------------------------------             --------------------------------
   Delbert McGue III                          Barry Hendler
   Title: Vice President                      Title: Agent

Date:4/12/05                               Date:5/2/05
     ----------------------------               ------------------------------

LESSEE:
PHOTOMEDEX, INC. A DELAWARE CORPORATION


By: /s/Jeff O'Donnell
    -----------------------------
    Jeff O'Donnell
    Title: CEO

Date:4/12/05
     --------------------------


                                   Page 2 of 2