STANDARD OFFICE LEASE

                                 BY AND BETWEEN

                        ARDEN REALTY LIMITED PARTNERSHIP,

                         a Maryland limited partnership

                                  AS LANDLORD,

                                       AND

                         E-PERCEPTION TECHNOLOGIES, INC.
                             a Delaware corporation,

                                    AS TENANT


                                    SUITE 203

                                  TOWER PLAZA 1



<PAGE>


                                      INDEX
                                      -----

                                                                       Page(s)
                                                                       -------

Additional Rent..............................................................3
Alterations.................................................................11
Base Year....................................................................3
Basic Rental.................................................................1
Brokers......................................................................1
Commencement Date............................................................1
Direct Costs.................................................................3
Estimate.....................................................................6
Estimate Statement...........................................................6
Estimated Excess.............................................................6
Event of Default............................................................22
Excess.......................................................................6
Expiration Date..............................................................1
First Month's Rent...........................................................2
Force Majeure...............................................................27
Hazardous Material..........................................................28
Interest Notice.............................................................36
Landlord.....................................................................1
Laws........................................................................29
Lease........................................................................1
Lease Year...................................................................2
Market Rent.................................................................36
Operating Costs..............................................................4
Option......................................................................36
Option Rent.................................................................36
Option Rent Notice..........................................................36
Option Term.................................................................36
Original Tenant.............................................................36
Parking Passes...............................................................2
Partnership Tenant..........................................................34
Permitted Use................................................................2
Premises.....................................................................1
Project......................................................................1
Real Property................................................................4
Representative..............................................................27
Review Period................................................................7
Security Deposit.............................................................2
Square Footage...............................................................1
Statement....................................................................6
Tax Costs....................................................................3
Tenant.......................................................................1
Tenant Improvements.........................................................10
Tenant's Acceptance.........................................................36


<PAGE>

Tenant's Proportionate Share.................................................2
Tenant's Signage............................................................37
Tenant's Work...............................................................10
Term.........................................................................1
Transfer....................................................................18
Transfer Premium............................................................18
Transferee..................................................................18



<PAGE>


                              STANDARD OFFICE LEASE
                              ---------------------


     This  Standard  Office Lease  ("Lease") is made and entered into as of this
18th day of May,  2000,  by and between  ARDEN  REALTY  LIMITED  PARTNERSHIP,  a
Maryland limited partnership ("Landlord"), and E-PERCEPTION TECHNOLOGIES,  INC.,
a Delaware corporation ("Tenant").

     Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the
premises  described as Suite No. 203, as designated on the plan attached  hereto
and incorporated herein as Exhibit "A" ("Premises"),  of the project ("Project")
now  known  as  Tower  Plaza I whose  address  is  27555  Ynez  Road,  Temecula,
California for the Term and upon the terms and conditions hereinafter set forth,
and Landlord and Tenant hereby agree as follows:

                                   ARTICLE I
                                   ---------

                             BASIC LEASE PROVISIONS
                             ----------------------


A.       Term:                              Four (4) years

         Commencement Date:                 June 1, 2000


         Expiration Date:                   May 31, 2004

B.       Square Footage:                    4,011 rentable square feet

C.       Basic Rental:

                            Annual         Monthly        Monthly Basic Rental
            Period       Basic Rental   Basic Rental    Per Rentable Square Foot
            ------       ------------   ------------    ------------------------

          6/1/2000 -      $74,604.60      $6,217.05               $1.55
           5/31/2001

          *6/1/2001 -     $77,011.20      $6,417.60               $1.60
           5/31/2002

         **6/1/2001 -     $79,417.80      $6,618.15               $1.65
           5/31/2003

          6/1/2003 -      $81,824.40      $6,818.70               $1.70
           5/31/2004

*    The Base Rent for the thirteenth  (13th) month of the Lease Term is subject
     to partial abatement pursuant to the terms of Section 3(a) of this Lease.

<PAGE>

**   Subject to the terms and  conditions of Article 4, below,  a portion of the
     Security  Deposit  shall be applied to  Monthly  Basic  Rental for the 25th
     month of the Term.

D.       Base Year:                         2000

E.       Tenant's Proportionate Share:      5.54%

F.       Security Deposit:                  A security  deposit of $13,637.40
                                            shall be due and payable by Tenant
                                            to Landlord upon Tenant's execution
                                            of this Lease.

G.       Permitted Use:                     General office use.

H.       Brokers:                           WestMar Commercial Real Estate

I.       Parking Passes:                    Tenant shall have the use of sixteen
                                            (16)  unreserved parking passes, at
                                            the rate provided in Article 23
                                            hereof.

J.       First Month's Rent:                The first full  month's  rent of
                                            $6,217.05  shall be due and  payable
                                            by Tenant to Landlord  upon Tenant's
                                            execution of this Lease.

                                   ARTICLE II
                                   ----------

                                  TERM/PREMISES
                                  -------------

     The Term of this Lease shall commence on the Commencement Date as set forth
in Article  1.A. of the Basic Lease  Provisions  and shall end on the  Execution
Date set forth in Article  1.A. of the Basic Lease  Provisions.  For purposes of
this Lease, the term "Lease Year" shall mean each consecutive  twelve (12) month
period  during  the Lease  Term,  with the first  Lease Year  commencing  on the
Commencement  Date;  however,  (a) if the Commencement Date falls on a day other
than the first day of a calendar  month,  the first  Lease Year shall end on the
last day of the eleventh (11th) month after the Commencement Date and the second
(2nd) and each succeeding Lease year shall commence on the first day of the next
calendar moth, and (b) the last Lease Year shall end on the Expiration  Date. If
Landlord does not deliver  possession of the Premises to Tenant on or before the
Commencement  Date (as set forth in Article 1.A,  above),  Landlord shall not be
subject to any  liability  for its failure to do so, and such failure  shall not
affect the  validity  of this  Lease nor the  obligations  of Tenant  hereunder,
provided the Tenant shall not be obligated to pay Basic Rental until  possession
of the  Premises  is to be  delivered  to Tenant.  Landlord  and  Tenant  hereby
stipulate  that the  Premises  contains  the number of square feet  specified in
Article  1.B. of the Basic Lease  Provisions.  Landlord  may deliver to Tenant a
Commencement  Letter in a form substantially  similar to that attached hereto as
Exhibit "C",  which Tenant shall execute and return to Landlord  within five (5)
days of receipt  thereof.  Failure of Tenant to timely  execute  and deliver the
Commencement  Letter  shall  constitute   acknowledgement  by  Tenant  that  the
statements included in such notice are true and correct, without exception.


                                       2
<PAGE>

                                  ARTICLE III
                                  -----------

                                     RENTAL
                                     ------

     (a) Basic Rental.  Tenant agrees to pay to Landlord during the Term hereof,
         ------------
at Landlord's  office or to such other person or at such other place as directed
from time to time by written notice to Tenant from Landlord, the initial monthly
and  annual  sums as set forth in  Article  1.C of the Basic  Lease  Provisions,
payable in  advance on the first day of each  calendar  month,  without  demand,
setoff  or  deduction,  and in the event  this  Lease  commences  or the date of
expiration  of this  Lease  occurs  other than on the first day or last day of a
calendar  month,  the rent for such  month  shall be  prorated.  Notwithstanding
anything to the contrary  contained  herein and  provided  that Tenant is not in
default in any of its monetary obligations under this Lease as of the expiration
of the  twelfth  (12th)  month of the  Term,  Landlord  hereby  agrees  to abate
Tenant's  obligation to pay monthly Basic Rental for the thirteenth (13th) month
of the initial Lease Term by fifty percent (50%).  During such abatement period,
Tenant shall still be responsible for the payment of the remaining fifty percent
(50%) of monthly Basic Rental and all of its other  monetary  obligations  under
the  Lease.  In the event of a default  by Tenant  under the terms of this Lease
that results in early termination pursuant to the provisions of Section 20(a) of
this Lease,  then as a part of the recovery of the monthly Basic Rental that was
abated under the  provisions of this Article 3.  Notwithstanding  the foregoing,
the first full month's rent shall be paid to Landlord in accordance with Article
1.J. of the Basic Lease Provisions.

     (b) Increase in Direct Costs.  The term "Base Year" means the calendar year
         ------------------------
set forth in Article  1.D. of the Basic Lease  Provisions.  If, in any  calendar
year during the Term of this Lease, the "Direct Costs" (as hereinafter  defined)
paid or incurred by Landlord  shall be higher than the Direct Costs for the Base
Year,  Tenant shall pay an additional sum for such and each subsequent  calendar
year equal to the  product of the amount set forth in Article  1.E. of the Basic
Lease  Provisions  multiplied by such increased amount of "Direct Costs." In the
event  either the  Premises  and/or the Project is  expanded  or  reduced,  then
Tenant's  Proportionate  Share shall be  appropriately  adjusted,  and as to the
calendar year in which such change occurs, Tenant's Proportionate Share for such
year  shall  be  determined  on the  basis of the  number  of days  during  that
particular  calendar year that such Tenant's  Proportionate Share was in effect.
In the event this Lease shall terminate on any date other than the last day of a
calendar  year,  the  additional  sum  payable  hereunder  by Tenant  during the
calendar year in which this Lease  terminates  shall be prorated on the basis of
the  relationship  which  the  number  of  days  which  have  elapsed  from  the
commencement  of said  calendar  year to and  including  said date on which this
Lease  terminates bears to three hundred  sixty-five  (365). Any and all amounts
due and payable by Tenant  pursuant to Article 3(b), (c) and (d) hereof shall be
deemed  "Additional  Rent" and  Landlord  shall be entitle to exercise  the same
rights and remedies  upon  default in these  payments as Landlord is entitled to
exercise with respect to defaults in monthly Basic Rental payments.

     (c) Definitions.  As used herein the term "Direct Costs" shall mean the sum
         -----------
of the following:


        (i) "Tax  Costs,"  which  shall mean any and all real  estate  taxes and
other similar charges on real property or improvements,  assessments,  water and
sewer  charges,


                                       3
<PAGE>

and all other  charges  assessed,  reassessed  or levied  upon the  Project  and
appurtenances  thereto and the parking or other facilities  thereof, or the real
property thereunder  (collectively the "Real Property") or attributable  thereto
or on the rents,  issues,  profits or income received or derived therefrom which
assessed,  reassessed or levied by the United States, the State of California or
any local government  authority or agency or any political  subdivision thereof,
and shall include  Landlord's  reasonable  legal fees,  costs and  disbursements
incurred in connection  with  proceeding  for reduction of Tax Costs or any part
thereof;  provided,  however,  if at any time  after the date of this  Lease the
methods of taxation now  prevailing  shall be altered so that in lieu of or as a
supplement to or a substitute for the whole or any part of any Tax Costs,  there
shall be assessed,  reassessed  or levied (a) a tax,  assessment,  reassessment,
levy,  imposition  or charge  wholly or  partially  as a net income,  capital or
franchise  levy or otherwise  on the rents,  issues,  profits or income  derived
therefrom,  or (b) a tax,  assessment,  reassessment,  levy  (including  but not
limited to any municipal,  state or federal levy), imposition or charge measured
by or based  in  whole or in part  upon  the  Real  Property  and  imposed  upon
Landlord,  or (c) a license fee measured by the rent  payable  under this Lease,
then all such taxes, assessments, reassessments or levies or the part thereof so
measured or based, shall be deemed to be included in the term "Direct Costs." In
no event shall Tax Costs included in Direct Costs for any year subsequent to the
Base Year be less than the amount of Tax Costs  included in Direct Costs for the
Base Year. In addition,  when  calculating Tax Costs for the Base Year,  special
assessments  shall only be deemed included in Tax Costs for the Base Year to the
extent  that  such  special  assessments  are  included  in Tax  Costs  for  the
applicable subsequent calendar year during the Term. Notwithstanding anything to
the contrary contained in this Section 3(c)(i), there shall be excluded from Tax
Costs (i) all excess profits taxes,  franchise taxes, gift taxes,  capital stock
taxes to the extent  applicable  to Landlord's  general or net income,  (ii) any
items  included as  Operating  Costs,  and (iii) any items paid by Tenant  under
Article 6 of this Lease.

        (ii) "Operating Costs", which shall mean all costs and expenses incurred
by  Landlord  in  connection  with  the  maintenance,   operation,  replacement,
ownership and repair of the Project,  the equipment,  the intrabuilding  network
cable,  adjacent  walks,  malls and  landscaped and common areas and the parking
structure,  areas and facilities of the Project,  including, but not limited to,
salaries,  wages,  medical,  surgical and general  welfare  benefits and pension
payments,   payroll  taxes,   fringe  benefits,   employment   taxes,   workers'
compensation,  uniforms  and dry  cleaning  thereof  for all persons who perform
duties connected with the operation,  maintenance and repair of the Project, its
equipment, the intrabuilding network cable and the adjacent walks and landscaped
areas, including janitorial,  gardening,  security, parking, operating engineer,
elevator, painting, plumbing,  electrical,  carpentry, heating, ventilation, air
conditioning,  window  washing,  hired  services,  a  reasonable  allowance  for
depreciation of the cost of acquiring or the rental expense of personal property
used in the maintenance,  operation and repair of the Project, accountant's fees
incurred in the  preparation of rent  adjustment  statements,  legal fees,  real
estate tax  consulting  fees,  personal  property  taxes on property used in the
maintenance and operation of the Project,  fees, costs, expenses or dues payable
pursuant to the terms of any covenants,  conditions or  restrictions  or owners'
associations pertaining to the Project,  capital expenditures incurred to effect
economies of operation  of, or stability of services to, the Project and capital
expenditures required by government  regulations,  laws, or ordinances in effect
as of the date of this Lease,  including,  but not limited to the Americans with
Disabilities Act; the cost of all charges for electricity,  gas, water and other
utilities furnished to the Project, including any taxes thereon; the cost of all
charges for fire and extended  coverage,  liability and


                                       4
<PAGE>

all  other  insurance  for the  Project  carried  by  Landlord;  the cost of all
building  and  cleaning  supplies  and  materials;  the cast of all  charges for
cleaning,  maintenance and service contracts and other services with independent
contractors and  administrations  fees; a property management fee (which fee may
be imputed if Landlord has internalized  management or otherwise acts as its own
property  manager)  and  license,  permit and  inspection  fees  relating to the
Project.  In the  event,  during any  calendar  year,  the  Project is less than
ninety-five  percent  (95%)  occupied  at all times,  Operating  Costs  shall be
adjusted to reflect  the  Operating  Costs of the Project as though  ninety-five
percent  (95%) were  occupied at all times,  and the increase or decrease in the
sums owed  hereunder  shall be based upon such  Operating  Costs as so adjusted.
Notwithstanding  anything to the contrary set exclude (a) market-wide labor-rate
increases  due to  extraordinary  circumstances  including,  but not limited to,
conservation  surcharges,  boycotts,  embargoes  or  other  shortages,  and  (c)
amortization  of any  capital  items  including,  but not  limited  to,  capital
improvements, capital repairs and capital replacements (including such amortized
costs  where the actual  improvement,  repair or  replacement  was made in prior
years).

     Notwithstanding  anything above to the contrary,  Operating Costs shall not
include (1) the cost of providing  any service  directly to and paid directly by
any tenant (outside of such tenant's Direct Cost payments);  (2) the cost of any
items for which  Landlord is  reimbursed  by  insurance  proceeds,  condemnation
awards, a tenant of the Project,  or otherwise to the extent so reimbursed;  (3)
any real  estate  brokerage  commissions  or other costs  incurred in  procuring
tenants,  or any fee in lieu of commission;  (4)  depreciation,  amortization of
principal and interest on mortgages or ground lease payments (if any); (5) costs
of items considered  capital repairs,  replacements,  improvements and equipment
under generally accepted accounting  principles  consistently  applied except as
expressly  included in Operating  Costs  pursuant to the definition  above;  (6)
costs incurred by Landlord due to the violation by Landlord or any tenant of the
terms and  conditions  of any lease of space in the  Project  or any law,  code,
regulation, ordinance or the like; (7) Landlord's general corporate overhead and
general  and  administrative  expenses;  (8) any  compensation  paid to  clerks,
attendants  or other  persons in  commercial  concessions  operated  by Landlord
(other than in the parking  facility  for the  Project);  (9) costs  incurred in
connection with upgrading the Project to comply with disability,  like, seismic,
fire and safety codes,  ordinances,  statutes,  or other laws in effect prior to
the  Commencement  Date,  including,  without  limitation,  the  ADA,  including
penalties  or  damages  incurred  due to such  non-compliance;  and  (10)  costs
incurred  to (i) comply  with laws  relating  to the  removal of any  "Hazardous
Material,"  as that term is defined in  Article 28 of this  Lease,  which was in
existence  on the  Project  prior to the  Commencement  Date,  and was of such a
nature that a federal, state or municipal governmental authority, if it had then
had  knowledge of the presence of such  Hazardous  Material,  in the state,  and
under the  conditions  that it then  existed  on the  Project,  would  have then
required the removal of such Hazardous material or other remedial or containment
action with respect thereto, and (ii) to remove,  remedy,  contain, or treat any
Hazardous  Material,  which Hazardous Material is brought onto the Project after
the date hereof by Landlord or any other  tenant of the Project and is of such a
nature, at that time, that a federal, state or municipal governmental authority,
if it had then had knowledge of the presence of such Hazardous Material,  in the
state, and under the conditions,  that it then exists on the Project, would have
then  required  the  removal of such  Hazardous  Material  or other  remedial or
containment action with respect thereto.


                                       5
<PAGE>

(d)      Determination of Payment.
         ------------------------

        (i) If for any  calendar  year  ending or  commencing  within  the Term,
Tenant's  Proportionate  Share of Direct  Costs for such  calendar  year exceeds
Tenant's  Proportionate  Share of Direct  Costs for the Base Year,  then  Tenant
shall pay to Landlord,  in the manner set forth in Sections  3(d)(ii) and (iii),
below, and as additional rent, an amount equal to the excess (the "Excess").

        (ii) Landlord shall give Tenant a yearly expense estimate statement (the
"Estimate  Statement") which shall set forth Landlord's reasonable estimate (the
"Estimate")  of what the  total  amount of  Direct  Costs  for the  then-current
calendar  year shall be and the  estimated  Excess (the  "Estimated  Excess") as
calculated by comparing  Tenant's  Proportionate  Share of Direct Costs for such
calendar year, which shall be based upon the Estimate, to Tenant's Proportionate
Share of Direct  Costs for the Base  Year.  The  failure of  Landlord  to timely
furnish the Estimate Statement for any calendar year shall not preclude Landlord
from enforcing its rights to collect any Estimated  Excess under this Article 3.
If pursuant to the Estimate  Statement an Estimated Excess is calculated for the
then-current  calendar  year,  Tenant shall pay,  with its next  installment  of
Monthly  Basic  Rental  due,  a  fraction  of  the  Estimated   Excess  for  the
then-current  calendar  year  (reduced by any amounts paid  pursuant to the last
sentence of this Section  3(d)(ii)).  Such fraction  shall have as its numerator
the number of months  which have elapsed in such  current  calendar  year to the
month of such payment, both months inclusive,  and shall have twelve (12) as its
denominator.  Until a new  Estimate  Statement  is  furnished,  Tenant shall pay
monthly,  with  the  Monthly  Basic  Rental  installments,  an  amount  equal to
one-twelfth  (1/12)  of the total  Estimated  Excess  set forth in the  previous
Estimate Statement delivered by Landlord to Tenant.

        (iii) In  addition,  Landlord  shall  endeavor  to give to  Tenant on or
before  the  first  day of April  following  the end of each  calendar  year,  a
statement  (the  "Statement")  which  shall state the Direct  Costs  incurred or
accrued for such  preceding  calendar year, and which shall indicate the amount,
if any, of the Excess.  Upon receipt of the  Statement  for each  calendar  year
during the Term, if amounts paid by Tenant as Estimated Excess are less than the
actual  Excess as specified on the  Statement,  Tenant shall pay,  with its next
installment  of Monthly Basic Rental due, the full amount of the Excess for such
calendar  year,  less the  amounts,  if any,  aid during such  calendar  year as
Estimated  Excess.  If,  however,  the Statement  indicates that amounts paid by
Tenant as Estimated  Excess are greater  than the actual  Excess as specified on
the  Statement,  such  overpayment  shall  be  credited  against  Tenant's  next
installments of Estimated Excess.  The failure of Landlord to timely furnish the
Statement for any calendar year shall not prejudice  Landlord from enforcing its
rights  under this  Article 3. Even  though the Term has  expired and Tenant has
vacated  the  Premises,  when  the  final  determination  is  made  of  Tenant's
Proportionate  Share of the  Direct  Costs for the  calendar  year in which this
Lease terminates,  if (a) an Excess is present,  Tenant shall immediately pay to
Landlord an amount as  calculated  pursuant to the  provisions  of this  Article
3(d), or (b) such final  determination  indicates that amounts paid by Tenant as
Estimated  Excess are greater  than the actual  Excess for such  calendar  year,
Landlord  shall refund such  overpayment  to Tenant within sixty (60) days after
Landlord's delivery of the final  determination.  The provisions of this Section
3(d)(iii) shall survive the expiration or earlier termination of the Term.



                                       6
<PAGE>

        (iv) Within one hundred  twenty (120) days after  receipt of a Statement
by Tenant  ("Review  Period"),  if Tenant  disputes  the amount set forth in the
Statement,  Tenant's  employees or an independent  certified  public  accountant
(which  accountant  is  a  member  of  a  nationally  or  regionally  recognized
accounting  firm and is hired on a  non-contingency  fee basis),  designated  by
Tenant,  may,  after  reasonable  notice to Landlord  and at  reasonable  times,
inspect  Landlord's records at Landlord's  offices,  provided that Tenant is not
then  in  default  after  expiration  of  all  applicable  cure  periods  of any
obligation under this Lease (including,  but not limited to , the payment of the
amount in dispute)  and  provided  further that Tenant and such efforts to cause
their respective agents and employees to, maintain all information  contained in
Landlord's records in strict confidence.  Notwithstanding the foregoing,  Tenant
shall only have the right to review  Landlord's  records one (1) time during any
twelve (12) month period.  Tenant's  failure to dispute the amounts set forth in
any Statement  within the Review Period shall be deemed to be Tenant's  approval
of such Statement and Tenant, thereafter, waives the right or ability to dispute
the amounts set forth in such Statement.  If after such  inspection,  but within
thirty (30) days after the Review Period,  Tenant  notifies  Landlord in writing
that Tenant still disputes such amounts, a certification as to the proper amount
shall be made in accordance with Landlord's  standard accounting  practices,  at
Tenant's  expenses,  by an independent  certified public accountant  selected by
Landlord and who is a member of a nationally or regionally recognized accounting
firm, which  certification  shall be binding upon Landlord and Tenant.  Landlord
shall  cooperate in good faith with Tenant and the accountant to show Tenant and
the  accountant the  information  upon which the  certification  is to be based.
However,  if such  certification by the accountant  proves that the Direct Costs
set forth in the Statement were overstated by more than ten percent (10%),  then
the cost of the accountant and the cost of such certification  shall be paid for
by Landlord.  Promptly following the parties receipt of such certification,  the
parties shall make such appropriate payments or reimbursements,  as the case may
be, to each other, as are determined to be owing pursuant to such certification.
Tenant agrees that this section shall be the sole method to be used by Tenant to
dispute the amount of any Direct Costs  payable by Tenant  pursuant to the terms
of this Lease,  and Tenant  hereby  waives any other  rights at law or in equity
relating thereto.

        (v) If the  Project  is a part of a  multi-building  development,  those
Direct Costs  attributable to such development as a whole ( and not attributable
solely to any individual building therein) shall be allocated by Landlord to the
Project and to the other  buildings  within  such  development  on an  equitable
basis.

                                   ARTICLE IV
                                   ----------

                                SECURITY DEPOSIT
                                ----------------

         Tenant has deposited with Landlord the sum set forth in Article 1.F. of
the Basic Lease Provisions as security for the full and faithful  performance of
every provision of this Lease to be performed by Tenant.  If Tenant breaches any
provision  of this  Lease,  including  but not  limited to the  payment of rent,
Landlord may use all or any part of this security deposit for the payment of any
rent or any other sums in default,  or to compensate Landlord for any other loss
or damage  which  Landlord  may  suffer by reason of  Tenant's  default.  If any
portion of said  deposit is so used or applied,  Tenant  shall,  within ten (10)
days after  written  demand  therefore,  deposit cash with Landlord in an amount
sufficient to restore the security deposit to its original amount.


                                       7
<PAGE>

Tenant agrees that Landlord  shall not be required to keep the security  deposit
in trust,  segregated it or keep it separate from  Landlord's  general funds but
Landlord may  commingle  the security  deposit with its general funds and Tenant
shall not be entitle to interest on such  deposit.  Notwithstanding  anything to
the  contrary  contained  in this  Article 4, in the event that  Tenant,  at the
expiration of the  twenty-fourth  (24th) month of the initial Lease Term, is not
then in default of any of its monetary  obligations  under this Lease,  Landlord
shall  reduce the amount of the  Security  Deposit by the amount of the  Monthly
Basic  Rental due and payable to Landlord for the  twenty-fifth  (25th) month of
the  initial  Lease  Term,  and  provided  there  exists  no  default  by Tenant
hereunder,  the  security  deposit or any balance  thereof  shall be returned to
Tenant  (or,  at  Landlord's  option,  to  Tenant's  assignee),   provided  that
subsequent  to the  expiration  of this  Lease,  Landlord  may retain  from said
security  deposit  (i) an  amount  reasonably  estimated  by  Landlord  to cover
potential Direct Cost  reconciliation  payments due with respect to the calendar
year in which this Lease  terminates or expires  (such amount so retained  shall
not, in any event,  exceed ten percent  (10%) of estimated  Direct Cost payments
due from Tenant for such calendar year through the date of expiration or earlier
termination  of this Lease and any amounts so  retained  and not applied to such
reconciliation  shall be  returned  to Tenant  within  thirty  (30)  days  after
Landlord's  delivery of the Statement for such calendar year),  (ii) any and all
amounts  reasonably  estimated by Landlord to cover the anticipated  costs to be
incurred by Landlord to remove any signage  provided to Tenant  under this Lease
and to repair any damage caused by such removal (in which case any excess amount
so  retained by Landlord  shall be  returned to Tenant  within  thirty (30) days
after such removal and repair) and (iii) any and all amounts permitted by law or
this  Article 4. Tenant  herby waives the  provisions  of Section  1950,7 of the
California  Civil Code and all other  provisions  of law,  now or  hereafter  in
effect, which provide that Landlord may claim from a security deposit only those
sums  reasonably  necessary to remedy defaults in the payment of rent, to repair
damage caused by Tenant or to clean the Premises,  it being agreed that Landlord
may, in  addition,  claim those sums  specified  in this  Article 4 above and/or
those sums  reasonably  necessary to  compensate  Landlord for any other loss or
damage, foreseeable or unforeseeable,  caused by the acts or omissions of Tenant
or any officer, employee, agent, contractor or invitee of Tenant.

                                   ARTICLE V
                                   ---------

                                  HOLDING OVER
                                  ------------

     Should  Tenant,   without  Landlord's  written  consent,  hold  over  after
termination  of this Lease,  Tenant  shall  become a tenant from month to month,
only upon each and all of the terms herein  provided as may be  applicable  to a
month to month  tenancy  and any such  holding  over  shall  not  constitute  an
extension of this Lease.  During such holding over, Tenant shall pay in advance,
monthly,  Basic Rental at two hundred  percent  (200%) of the rate in effect for
the last month of the Term of this Lease,  in  addition  to, and not in lieu of,
all other  payments  required to be made by Tenant  hereunder  including but not
limited to Tenant's Proportionate Share of any increase in Direct Costs. Nothing
contained  in this  Article 5 shall be  construed  as consent by Landlord to any
holding over of the  Premises by Tenant,  and  Landlord  expressly  reserves the
right to require  Tenant to surrender  possession of the Premises to Landlord as
provided in this Lease upon the  expiration or earlier  termination of the Term.
If Tenant fails to surrender the Premises upon the  expiration or termination of
this Lease,  Tenant agrees to indemnify,  defend and hold Landlord harmless from
all costs, loss, expenses or liability, including without

                                       8
<PAGE>

limitation,  claims made by any succeeding tenant and real estate brokers claims
and attorney's fees and costs.

                                   ARTICLE VI
                                   ----------

                             PERSONAL PROPERTY TAXES
                             -----------------------

     Tenant  shall pay,  prior to  delinquency,  all taxes  assessed  against or
levied  upon  trade  fixtures,  furnishings,  equipment  and all other  personal
property of Tenant located in the Premises.  In the event any or all of Tenant's
trade  fixtures,  furnishings,  equipment and other  personal  property shall be
assessed  and taxed with  property of  Landlord,  or if the cost or value of any
leasehold  improvements  in  the  Premises  exceeds  the  cost  or  value  of  a
Project-standard  buildout  as  determined  by Landlord  and, as a result,  real
property  taxes for the Project are  increased,  Tenant  shall pay  Landlord its
share of such taxes within ten (10) days after delivery to Tenant by Landlord of
a statement  in writing  setting  forth the amount of such taxes  applicable  to
Tenant's property or above-standard improvements. Tenant shall assume and pay to
Landlord  at the time of paying  Basic  Rental any  excise,  sales,  use,  rent,
occupancy, garage, parking, gross receipts or other taxes (other than net income
taxes)  which may be imposed on or on account of letting of the  Premises or the
payment of Basic  Rental or any other sums due or payable  hereunder,  and which
Landlord  may be  required  to pay or  collect  under  any law now in  effect or
hereafter  enacted.  Tenant shall pay  directly to the party or entity  entitled
thereto all business  license fees,  gross  receipts taxes and similar taxes and
impositions  which  may from time to time be  assessed  against  or levied  upon
Tenant, as and when the same become due and before delinquency.  Notwithstanding
anything to the contrary contained herein, any sums payable by Tenant under this
Article 6 shall not be included in the computations of "Tax Costs."

                                  ARTICLE VII
                                  -----------

                                       USE
                                       ---

     Tenant  shall use and  occupy  the  Premises  only for the use set forth in
article  1.G.  of the Basic  Lease  Provisions  and shall not use or occupy  the
Premises or permit the same to be used or occupied for any other purpose without
the prior written consent of Landlord, which consent may be given or withheld in
Landlord's sole and absolute discretion,  and Tenant agrees that it will use the
Premises in such a manner so as not to interfere  with or infringe the rights of
other  tenants  in the  Project.  Tenant  shall,  at its sole cost and  expense,
promptly comply with all laws, statutes, ordinances and governmental regulations
or  requirements  now in force or which may hereafter be in force relating to or
affecting  (i) the  condition,  use or  occupancy of the Premises or the Project
excluding  structural changes to the Project not related to Tenant's  particular
use of the  Premises,  and (ii)  improvements  installed or  constructed  in the
Premises  by or for the benefit of Tenant.  Tenant  shall not do or permit to be
done  anything  which  would  invalidate  or  increase  the cost of any fire and
extended  coverage  insurance  policy  covering the Project  and/or the property
located therein and Tenant shall comply with all rules, orders,  regulations and
requirements  of any  organization  which sets out  standards,  requirements  or
recommendations  commonly  referred  to by major  fire  insurance  underwriters.
Tenant shall promptly upon demand reimburse  Landlord for any additional premium
charges  for any such  insurance  policy  assessed  or  increased  by  reason of
Tenant's failure to comply with the provisions of this Article.



                                       9
<PAGE>

                                  ARTICLE VIII
                                  ------------

                              CONDITION OF PREMISES
                              ---------------------

     Subject  to  Landlord's  review  and  approval  of (a) the paint and carpet
selected by Tenant and (b) the  contractors  retained by Tenant to install  such
paint and carpet,  Tenant  shall be entitle to repaint the painted  walls in the
Premises and re-carpet the Premises  (collectively,  "Tenant's Work").  Landlord
shall allow Tenant to access to the  Premises  beginning on May 22, 2000 for the
purpose  of Tenant  performing  such  Tenant's  Work in the  Premises.  Prior to
Tenant's  entry into the  Premises as  permitted by the terms of this Article 8,
Tenant shall  submit a schedule to  Landlord,  for  Landlord's  approval,  which
schedule  shall  detail the timing and purpose of Tenant's  entry.  Tenant shall
hold Landlord  harmless from and indemnify,  protect and defend Landlord against
any loss or damage to the Project or Premises and against  injury to any persons
caused by Tenant's  actions  pursuant  to this  Article 8. In  addition,  Tenant
hereby  acknowledges  that Tenant may perform Tenant's Work during the Term, and
that  Tenant  shall not be deemed  constrictively  evicted  nor shall  Tenant be
entitled to any abatement of rent due to any interference with Tenant's business
and/or  operations  resulting from the  performance  of Tenant's Work.  Landlord
shall reimburse  Tenant for costs incurred in connection with the performance of
Tenant's  Work up to One Thousand  Dollars  ($1,000.00)  within thirty (30) days
after Landlord's receipt of an invoice therefore.  Tenant hereby agrees that the
Premises shall be taken "as is", "with all faults", "without any representations
or warranties",  and Tenant hereby agrees and warrants that it has  investigated
and inspected the  conditions  of the Premises and the  suitability  of same for
Tenant's  purposes,  and Tenant does hereby waive and disclaim any objection to,
cause of action based upon, or claim that its  obligations  hereunder  should be
reduced or limited  because of the  conditions of the Premises or the Project or
the suitability of same for Tenant's purposes.  Tenant acknowledges that neither
Landlord nor any agent nor any employee of Landlord has made any representations
or warranty  with  respect to the Premises or the Project or with respect to the
suitability of either for the conduct of Tenant's  business and Tenant expressly
warrants and represents  that Tenant has relied solely on its own  investigation
and  inspection  of the  Premises  and the Project in its decision to enter into
this Lease and let the Premises in an "As Is" condition.  The existing leasehold
improvements  in the  Premises  as of the  date of  this  Lease,  together  with
Tenant's  Work  pursuant  to the  first  sentence  of  this  Article  8,  may be
collectively  referred  to herein as the  "Tenant  Improvements."  The taking of
possession  of the  Premises by Tenant  shall  conclusively  establish  that the
Premises  and the Project  were at such time in  satisfactory  condition  latent
defects excepted. Tenant hereby waives subsection 1 of Section 1932 and Sections
1941 and 1942 of the Civil Code of California or any successor provision of law.

     Landlord  reserves  the right from time to time,  but subject to payment by
and/or  reimbursement  from Tenant as otherwise  provided herein: (i) to install
use, maintain,  repair,  replace and relocate for service to the Premises and/or
other parts of the Projects pipes, ducts, conduits, wires, appurtenant fixtures,
and mechanical systems, wherever located in the Premises or the Project, (ii) to
alter,  close or relocate  any  facility in the  Premises or the Common Areas or
otherwise  conduct any of the above activities for the purpose of complying with
a general plan for  fire/life  safety for the Project or otherwise  and (iii) to
comply with any federal,  state or local law, rule or order with respect thereto
or the  regulation  thereof not currently in effect.  Landlord  shall attempt to
perform any such work with the least inconvenience to Tenant as possible, but in



                                       10
<PAGE>

not event shall  Tenant be permitted to withhold or reduce Basic Rental or other
charges  due  hereunder  as a result of same,  make any  claim for  constructive
eviction  or  otherwise  make  claim  against   Landlord  for   interruption  or
interference with Tenant's business and/or operations.

                                   ARTICLE IX
                                   ----------

                             REPAIRS AND ALTERATIONS
                             -----------------------

     Landlord shall maintain the  structural  portions of the Project  including
the  foundation,  floor/ceiling  slabs,  roof,  curtain  wall,  exterior  glass,
columns, beams, shafts, stairs,  stairwells,  elevator cabs and common areas and
shall also maintain and repair the basic  mechanical,  electrical,  life safety,
plumbing,  sprinkler  systems  and  heating,  ventilating  and air  conditioning
systems.  Except as expressly provided as Landlord's  obligation in this Article
9, Tenant shall keep the Premises in good  condition  and repair.  All damage or
injury to the Premises or the Project  resulting  from the act or  negligence of
Tenant,  its employees,  agents or visitors,  guests invitees or licensees or by
the use of the Premises shall be promptly  repaired by Tenant,  at its sole cost
and expense, to the satisfaction of Landlord; provided, however, that for damage
to the Project as a result of  casualty  or for any repairs  that may impact the
mechanical,  electrical,  plumbing,  heating,  ventilation  or  air-conditioning
systems of the Project,  Landlord shall have the right (but not the  obligation)
to select the  contractor  and oversee all such  repairs.  Landlord may make any
repairs which are not promptly made by Tenant after Tenant's  receipt of written
notice and the reasonable  opportunity of Tenant to make said repair within five
(5) business days from receipt of said written notice, and charge Tenant for the
cost  thereof,  which  cost  shall be paid by Tenant  within  five (5) days from
invoice from Landlord.  Tenant shall be responsible  for the design and function
of all  non-standard  improvements of the Premises,  whether or not installed by
Landlord at Tenant's  request.  Tenant  waives all rights to make repairs at the
expense of Landlord,  or to deduct the cost thereof from the rent.  Tenant shall
make no  alterations,  changes or additions in or to the Premises  (collectively
"Alterations")  without  Landlord's  prior  written  consent,  and then  only by
contractors  or mechanics  approved by Landlord in writing and upon the approval
by  Landlord  in  writing  of  fully   detailed   and   dimensioned   plans  and
specifications  pertaining to the  Alterations  in question,  to be prepared and
submitted by Tenant at its sole cost and expense.  Tenant shall at its sole cost
and  expense  obtain all  necessary  approvals  and  permits  pertaining  to any
Alterations  approved by Landlord.  Tenant shall construct such Alterations in a
good and workmanlike manner, in conformance with all applicable federal,  state,
county and municipal laws, rules, and regulations,  pursuant to a valid building
permit,  and in conformance with Landlord's  construction rules and regulations.
If Landlord,  in approving any  Alterations,  Tenant shall provide Landlord with
evidence  that  Tenant  carries  "Builder's  All  Risk"  insurance  in an amount
approved by Landlord  covering the  construction of such  Alterations,  and such
other insurance as Landlord may reasonably require, it being understood that all
such  Alterations,  shall be  insured by Tenant  pursuant  to Article 14 of this
Lease  immediately  upon completion  thereof.  In addition,  Landlord may in its
discretion,  require  Tenant  to  obtain  a lien  and  completion  bond  or some
alternate form of security  satisfactory to Landlord in an amount  sufficient to
ensure the lien free  completion of such  Alterations  and naming  Landlord as a
co-obligee.  If permitted  Alterations  are made, they shall be made at Tenant's
sole cost and expense and shall be and become the property of  Landlord,  except
that Landlord  may, by written  notice to Tenant given at least thirty (30) days
prior to the end of the Term,  require Tenant as Tenant's  expense to remove all
partitions, counters, railings and other Alterations installed by Tenant, and to
repair any



                                       11
<PAGE>

damages to the Premises caused by such removal.  Any and all costs  attributable
to or related to having  jurisdiction  over the Project)  arising from  Tenant's
plans, specifications,  improvements,  alterations or otherwise shall be paid by
Tenant at its sole cost and expense. With regard to repairs,  Alterations or any
other work arising from or related to this Article 9, Landlord shall be entitled
to receive  an  administrative/supervision  fee (which fee shall vary  depending
upon whether or not Tenant  orders the work  directly from Landlord but shall in
no event  exceed  three  percent  (3%) of the cost of such work)  sufficient  to
compensate Landlord for all overhead,  general conditions,  fees and other costs
and expenses arising from Landlord's involvement with such work.

                                    ARTICLE X
                                    ---------

                                      LIENS
                                      -----

     Tenant shall keep the  Premises  and the Project  free from any  mechanics'
liens,  vendors  liens or any other  liens  arising  out of any work  performed,
materials  furnished or  obligations  incurred by Tenant,  and agrees to defend,
indemnify and hold harmless  Landlord from and against any such lien or claim or
action  thereon,  together  with costs of suit and  reasonable  attorney's  fees
incurred  by  Landlord  in  connection  with any such  claim or  action.  Before
commencing  any work of  alteration,  addition or  improvement  to the Premises,
Tenant shall give  Landlord at least ten (10) business  days' written  notice of
the Proposed  commencement  of such work (to afford  Landlord an  opportunity to
post appropriate notices of  non-responsibility).  In the event that there shall
be  recorded  against the  Premises or the Project or the  property of which the
Premises  is a part any claim or lien  arising  out of any such work  performed,
materials  furnished  or  obligations  incurred by Tenant and such claim or lien
shall not be removed  or  discharged  within  ten (10) days of filing,  Landlord
shall  have the  right but not the  obligation  to pay and  discharge  said lien
without  regard to  whether  such lien  shall be lawful or correct or to require
that Tenant deposit with Landlord in cash, lawful money of the United States, on
hundred  fifty  percent  (150%) of the  amount of such  claim,  which sum may be
retained by Landlord until such claim shall have been removed of record or until
judgment  shall have been  rendered on such claim and such  judgment  shall have
become final,  at which time Landlord shall have the right to apply such deposit
in discharge of the judgment on said claim and any costs,  including  attorney's
fees and costs  incurred by  Landlord,  and shall  remit the balance  thereof to
Tenant.

                                   ARTICLE XI
                                   ----------

                                PROJECT SERVICES
                                ----------------

     (a) Landlord agrees to furnish to the Premises, at a cost to be included in
Operating  Costs,  from 8:00 a.m. to 6:00 p.m.  Mondays through Fridays and 9:00
a.m. to 1:00 p.m. on  Saturdays,  excepting  local and  national  holidays,  air
conditioning  and heat all in such  reasonable  quantities as in the judgment of
Landlord is reasonably necessary for the comfortable  occupancy of the Premises.
In addition,  Landlord shall provide  electric  current for normal  lighting and
normal  office  machines,  elevator  service  and water on the same floor as the
Premises for lavatory and drinking purposes in such reasonable  quantities as in
the reasonable  judgment of Landlord is reasonably  necessary for general office
use.  Janitorial and  maintenance  services shall be furnished five (5) days per
week, excepting local and national holidays.  Tenant



                                       12
<PAGE>

shall  comply  with all rules and  regulations  which  Landlord  may  reasonably
establish  for the proper  functioning  and  protection  of the common  area air
conditioning,  heating,  elevator,  electrical  intrabuilding  network cable and
plumbing  systems.  Landlord shall not be liable for, and there shall be no rent
abatement as a result of, any stoppage,  reduction or  interruption  of any such
services caused by governmental rules, regulations or ordinances,  riot, strike,
labor disputes, breakdowns,  accidents, necessary repairs or other cause. Except
as  specifically  provided  in this  Article  11,  Tenant  agrees to pay for all
utilities and other services utilized by Tenant and additional building services
furnished to Tenant not uniformly furnished to all tenants of the Project at the
rate generally charged by Landlord to tenants of the Project.

     (b) Tenant will not,  without  prior written  consent of Landlord,  use any
apparatus or device in the Premises which will in any way increase the amount of
electricity  of water  usually  furnished or supplied for use of the Premises as
general office space;  nor connect any  apparatus,  machine or device with water
pipes or electric  current (except through  existing  electrical  outlets in the
Premises), for the purpose of using electric current or water.

     (c) If Tenant  shall  require  electric  current  in  excess of that  which
Landlord is obligated to furnish under  Article 11(a) above,  Tenant shall first
obtain the written  consent of Landlord,  which  Landlord may refuse in its sole
and absolute  discretion,  to the use thereof and Landlord may cause an electric
current  meter or submeter to be installed in the Premises to measure the amount
of such excess electric current consumed by Tenant in the Premises.  The cost of
any such meter and of installation, maintenance and repair thereof shall be paid
for by  Tenant  and  Tenant  agrees to pay to  Landlord,  promptly  upon  demand
therefore by Landlord, for all such excess electric current consumed by any such
use as shown by said meter at the rates  charged for such service by the city in
which the Project is located or the local  public  utility,  as the case may be,
furnishing the same, plus any additional expense incurred by Landlord in keeping
account of the electric current so consumed.

     (d) If any lights,  machines  or  equipment  (including  but not limited to
computers)  are used by Tenant  in the  Premises  which  materially  affect  the
temperature  otherwise  maintained by the air conditioning  system,  or generate
substantially  more heat in the Premises that would be generated by the building
standard  lights and usual office  equipment,  Landlord  shall have the right to
install any machinery and equipment which Landlord reasonably deems necessary to
restore temperature  balance,  including but not limited to modifications to the
standard air conditioning equipment, and the cost thereof, including the cost of
installation  and any additional  cost of operation and  maintenance  occasioned
thereby,  shall be paid by Tenant to Landlord upon demand by Landlord.  Landlord
shall not be liable under any circumstances for loss of or injury to property or
injury to, or interference with, Tenant's business  (including,  but not limited
to,  loss of  profits),  however  occurring,  through or in  connection  with or
incidental  to failure to furnish any of the services or utilities  specified in
this Article 11.

     (e) If Tenant requires heating,  ventilation and/or air conditioning during
times other than the times  provide in Article 11 (a) above,  Tenant  shall give
Landlord such advance notice as Landlord shall reasonably  require and shall pay
Landlord's standard charge for such after-hours use.


                                       13
<PAGE>

     (f) Landlord may impose a reasonable  charge for any  utilities or services
(other than electric  current and heating,  ventilation  and/or air conditioning
which shall be governed by Articles  11(c) and (e) above)  utilized by Tenant in
excess of the amount or type that Landlord reasonably  determines is typical for
general office use.

                                  ARTICLE XII
                                  -----------

                               RIGHTS OF LANDLORD
                               ------------------

     Landlord  and its agents  shall have the right to enter the Premises at all
reasonable  times  for the  purpose  of  cleaning  the  Premises,  examining  or
inspecting the same,  serving or posting and keeping  posted thereon  notices as
provided  by law,  or which  Landlord  deems  necessary  for the  protection  of
Landlord or the Property,  showing the same to prospective  tenants,  lenders or
purchasers  of the  Project,  in the case of an  emergency,  and for making such
alterations,  repairs,  improvements  or  additions  to the  Premises  or to the
Project as Landlord  may deem  necessary  or  desirable.  If Tenant shall not be
personally  present to open and permit an entry  into the  Premises  at any time
when such an entry by landlord is necessary or permitted hereunder, Landlord may
enter by means of a master  key or may  enter  forcibly,  only in the case of an
emergency, without liability to Tenant and without affecting this Lease.

                                  ARTICLE XIII
                                  ------------

                 INDEMNITY; EXEMPTION OF LANDLORD FROM LIABILITY
                 -----------------------------------------------

     (a) Indemnity.  Tenant shall indemnify,  defend and hold Landlord  harmless
         ---------
from any and all claims arising from Tenant's use of the Premises or the Project
or from the conduct of its  business or from any  activity,  work or thing which
may be  permitted  or suffered by Tenant in or about the Premises or the Project
and shall further indemnify,  defend and hold Landlord harmless from and against
any and all claims arising from any breach or default in the  performance of any
obligation on Tenant's part to be performed under this Lease or arising from any
negligence or willful  misconduct  of Tenant or any of its agents,  contractors,
employees or invitees, patrons, customers or members in or about the Project and
from any and all costs,  attorney's  fees and costs,  expenses  and  liabilities
incurred  in the  defense  of any  claim or any  action  or  proceeding  brought
thereon,  including negotiations in connection therewith.  Tenant hereby assumes
all risk of damage to  property  or injury to persons  in or about the  Premises
form any cause,  and Tenant hereby waives all claims in respect  thereof against
Landlord, excepting where the damages is caused solely by the gross negligence r
willful misconduct of Landlord or its agent.

     (b) Exemption of Landlord from Liability.  Landlord shall not be liable for
         ------------------------------------
injury  to  Tenant's  business,  or loss of  income  therefrom,  or,  except  in
connection with damage or injury  resulting from the gross negligence or willful
misconduct  of  Landlord,  or its  authorized  agents  for  damage  that  may be
sustained by the person,  goods,  wares,  merchandise or property of Tenant, its
employees,  invitees, customers, agents, or contractors, or any other person, on
or about the Premises  directly or indirectly  caused by or resulting from fire,
steam, electricity,  gas, water, or rain which may leak or flow from or into any
part of the  Premises,  or from  the  breakage,  leakage,  obstruction  or other
defects of the pipes, sprinklers, wires, appliances,


                                       14
<PAGE>

plumbing,  air conditioning,  light fixtures or mechanical or electrical systems
or from intrabuilding  network cable, whether such damage or injury results from
conditions  arising upon the  Premises or upon other  portions of the Project or
from other sources or places and  regardless of whether the cause of such damage
or injury or the means of repairing the same is inaccessible to Tenant. Landlord
shall not be liable to Tenant for any damages arising from any act or neglect of
any other tenant of the building.

     Tenant  acknowledges  that  Landlord  `s  election  to  provide  mechanical
surveillance  or to post  security  personnel  in the  Project is solely  within
Landlord `s discretion;  Landlord shall have no liability in connection with the
decision  whether or not to provide such  services and Tenant  hereby waives all
claims  based  thereon.  Landlord  shall not be liable  for losses due to theft,
vandalism, or like causes.

                                   ARTICLE XIV
                                   -----------

                                    INSURANCE
                                    ---------

     (a) Tenant's Insurance.  Tenant, shall at all times during the Term of this
         ------------------
Lease,  and at its own cost and  expense,  procure  and  continue  in force  the
following insurance coverage:  (i) Commercial General Liability Insurance with a
combined  single limit for bodily  injury and property  damages of not less than
Two Million  Dollars  ($2,000,000)  per  occurrence  and Three  Million  Dollars
($3,000,000) in the annual aggregate,  including  products liability coverage if
applicable,  covering the insuring  provisions of this Lease and the performance
of Tenant of the indemnity and exemption of Landlord from  liability  agreements
set forth in  Article  13  hereof;  (ii) a policy  of  standard  fire,  extended
coverage  and special  extended  coverage  insurance  (all  risks),  including a
vandalism and malicious  mischief  endorsement  and sprinkler  leakage  coverage
where sprinklers are provided in an amount equal to the full  replacement  value
new  without  deduction  for  depreciation  of  all  (A)  Tenant   Improvements,
Alterations,  fixtures  and other  improvements  in the  Premises  and (B) trade
fixtures,  furniture,  equipment and other personal property  installed by or at
the expense of Tenant; (iii) Worker `s Compensation coverage as required by law;
and (iv)  business  interruption,  loss of income  and extra  expense  insurance
covering failure of Tenants telecommunications  equipment and covering all other
perils,  failures or  interruptions.  Tenant shall carry and maintain during the
entire Lease Term  (including any option periods,  if applicable),  at Tenant `s
sole cost and expense, increased amounts of the insurance required to be carried
by  Tenant  pursuant  to this  Article  14 and such  other  reasonable  types of
insurance  coverage  and in such  reasonable  amounts  covering the Premises and
Tenant `s operations therein, as may be reasonably required by Landlord, so long
as  such  increased  amounts  and  other  types  of  insurance  are  then  being
customarily  required by  landlords  of  comparable  buildings.  Notwithstanding
anything to the contrary  contained  herein,  the  Original  Tenant (and not any
assignee,  subtenant or other transferee) may, subject to the provisions of this
Section 14(a),  fulfill its insurance  obligations under Section 14(a)(iv) above
by self-insurance. Any self-insurance so maintained by Tenant shall be deemed to
contain all of the terms and conditions applicable to such insurance as required
in  this  Article  14,  including,   without  limitation,  a  deemed  waiver  of
subrogation;  consequently,  Landlord shall be treated, for all purposes,  as if
Tenant had actually  purchased  such  insurance  from a third  party.  If Tenant
elects to so self-insure,  then with respect to any claims which may result from
incidents occurring during the Lease Term, such self-insurance  obligation shall
survive the  expiration or


                                       15
<PAGE>

earlier  termination of this Lease to the same extent as the insurance  required
hereunder would survive.

     (b) Form of Policies.  The  aforementioned  minimum  limits of policies and
         ----------------
Tenant`s  procurement  and  maintenance  thereof  shall  in no event  limit  the
liability of Tenant  hereunder;  provided that  notwithstanding  the  foregoing,
nothing contained herein shall be construed to nullify the provisions of Section
14(d) hereof.  The  Commercial  General  Liability  Insurance  policy shall name
Landlord,  Landlord `s property  manager,  Landlord `s lender(s)  and such other
persons or firms as Landlord specifies from time to time, as additional insureds
with an appropriate  endorsement to the policy(s).  All such insurance  policies
carried  by  Tenant  shall be with  companies  having a rating  of not less than
A-VIII in Best `s Insurance  Guide.  Tenant shall furnish to Landlord,  from the
insurance companies,  or cause the insurance companies to furnish,  certificates
of  coverage.  No such policy  shall be  cancelable  or subject to  reduction of
coverage or other  modification  or  cancellation  except after thirty (30) days
prior  written  notice to Landlord by the insurer.  All such  policies  shall be
endorsed  to agree  that  Tenant  `s policy is  primary  and that any  insurance
carried by Landlord  is excess and not  contributing  with any Tenant  insurance
requirement  hereunder.  Tenant  shall,  at least  twenty (20) days prior to the
expiration of such policies,  furnish Landlord with renewals or binders.  Tenant
agrees that if Tenant does not take out and maintain  such  insurance or furnish
Landlord with  renewals or binders,  Landlord may (but shall not be required to)
procure said  insurance on Tenant `s behalf and charge  Tenant the cost thereof,
which amount  shall be payable by Tenant upon demand with  interest (at the rate
set forth in Section 20(e) below) from the date such sums are  extended.  Tenant
shall have the right to provide  such  insurance  coverage  pursuant  to blanket
policies  obtained by Tenant,  provided such blanket  policies  expressly afford
coverage to the Premises and to Tenant as required by this Lease.

     (c)  Landlord's  Insurance.  Landlord  shall,  as a cost to be  included in
          ---------------------
Operating  Costs,  procure  and  maintain  at all times  during the Term of this
Lease, a policy or policies of insurance  covering loss or damage to the Project
in the amount of the full replacement  costs without deduction for depreciations
thereof (exclusive of Tenant's trade fixtures,  inventory, personal property and
equipment),   providing  protection  against  all  perils  included  within  the
classification of fire and extended  coverage,  vandalism coverage and malicious
mischief,  sprinkler  leakage,  water damage,  and special extended  coverage on
building.  Additionally,  Landlord may (but shall not be required to) carry: (i)
Bodily Injury and Property Damage  Liability  Insurance  and/or Excess Liability
Coverage Insurance; and (ii) Earthquake and/or Flood Damage Insurance; and (iii)
Rental  Income  Insurance at its election or if required by its lender from time
to time  during  the Term  hereof,  in such  accounts  and with  such  limits as
Landlord or its lender may deem  appropriate.  The costs of such insurance shall
be included in Operating Costs.

     (d) Waiver of  Subrogation.  Landlord  and Tenant  each agree to have their
         ----------------------
respective  insurers  issuing the  insurance  described  in Sections  14(a)(ii),
14(a)(iv)  and  the  first  sentence  of  Section  14(c)  waive  any  rights  of
subrogation that such companies may have against the other party.  Tenant hereby
waives any right that  Tenant may have  against  Landlord  and  Landlord  hereby
waives any right that  Landlord may have against  Tenant as a result of any loss
or damage to the extent such loss or damage is insurable under such policies.


                                       16
<PAGE>

     (e)  Compliance  with Law.  Tenant  agrees  that it will not,  at any time,
          --------------------
during the Term of this  Lease,  carry any stock of goods or do  anything  in or
about the  Premises  that will in any way tend to increase the  insurance  rates
upon the Project. Tenant agrees to pay Landlord forthwith upon demand the amount
of any  increase  in premiums  for  insurance  against  loss by fire that may be
charged  during the Term of this Lease on the amount of  insurance to be carried
by Landlord on the Project  resulting from the  foregoing,  or from Tenant doing
any act in or about said  Premises  that does so increase the  insurance  rates,
whether or not Landlord  shall have consented to such act on the part of Tenant.
If Tenant installs upon the Premises any electrical  equipment which constitutes
an overload of electrical  lines of the  Premises,  Tenant shall at its own cost
and expense in accordance  with all other Lease  provisions,  and subject to the
provisions of Article 9, 10 and 11, hereof,  make whatever changes are necessary
to comply with  requirements of the insurance  underwriters and any governmental
authority having jurisdiction  thereover,  but nothing herein contained shall be
deemed to constitute  Landlord's  consent to such overloading.  Tenant shall, at
its own expense,  comply with all requirements of the insurance authority having
jurisdiction  over the Project  necessary for the maintenance of reasonable fire
and extended coverage  insurance for the Premises,  including without limitation
thereto,  the  installation of fire  extinguishers  or an automatic dry chemical
extinguishing system.

                                   ARTICLE XV
                                   ----------

                            ASSIGNMENT AND SUBLETTING
                            -------------------------

     Tenant  shall  have no power  to,  either  voluntarily,  involuntarily,  by
operation of law or otherwise, sell, assign, transfer or hypothecate this Lease,
or sublet the Premises or any part  thereof,  or permit the Premises or any part
thereof to be used or occupied by anyone other than Tenant or Tenant's employees
without the prior written  consent of Landlord  which shall not be  unreasonably
withheld.  Tenant may transfer its interest pursuant to this Lease only upon the
following  conditions,  which  conditions  agreed by  Landlord  and Tenant to be
reasonable:

     (a) That the  proposed  transferee  shall be subject  to the prior  written
consent of  Landlord,  which  consent  will not be  unreasonably  withheld  but,
without  limiting the  generality of the  foregoing,  it shall be reasonable for
Landlord to deny such consent if:

        (i) The use to be made of the Premises by the proposed transferee is (a)
not generally consistent with the character and nature of all other tenancies in
the Project, or (b) a use which conflicts with any so-called "exclusive" then in
favor of, or for any use which is the same as that stated in any percentage rent
lease to, another tenant of the Project or any other  buildings which are in the
same complex as the Project,  or (c) a use which would be prohibited b any other
portion of this Lease  (including  but not limited to any Rules and  Regulations
then in effect);

        (ii) The  financial  responsibility  of the proposed  transferee  is not
reasonably  satisfactory to Landlord or in any event not at least equal to those
which were possessed by Tenant as of the date of execution of this Lease;

        (iii)  The  proposed  transferee  is  either a  governmental  agency  or
instrumentality thereof; or


                                       17
<PAGE>

        (iv)  Either  the  proposed  transferee  or any  person or entity  which
directly or indirectly  controls,  is  controlled by or is under common  control
with the proposed  transferee  (A) occupies  space in the Project at the time of
the request for consent,  or (B) is negotiating  with Landlord or has negotiated
with Landlord during the six (6) month period immediately  preceding the date of
the proposed transfer, to lease space in the Project.

     (b) Whether or not Landlord consents to any such transfer, Tenant shall pay
to Landlord  Landlord's then standard  processing fee and reasonable  attorneys'
fees and costs  incurred  in  connection  with the  proposed  transfer up to the
aggregate sum of $1,500.00;

     (c) That the proposed  transferee  shall  execute an agreement  pursuant to
which it shall  agree to  perform  faithfully  and be bound by all of the terms,
covenants,  conditions,  provisions and  agreements of this Lease  applicable to
that portion of the Premises so transferred; and

That an executed duplicate original of said assignment and assumption  agreement
or other transfer on a form reasonably approved by Landlord,  shall be delivered
to Landlord  within  five (5) days after the  execution  thereof,  and that such
transfer shall not be binding upon Landlord  until delivery  thereof to Landlord
and the  execution  and delivery of Landlord's  consent  thereto.  It shall be a
condition to Landlord's consent to any subleasing,  assignment or other transfer
of part or all of Tenant's interest in the Premises  (hereinafter referred to as
a "Transfer") that (i) upon Landlord's consent to any Transfer, Tenant shall pay
and  continue to pay fifty  percent  (50%) of any  "Transfer  Premium"  (defined
below), received by Tenant from the transferee; (ii) any sublease of part or all
of Tenant's interest in the Premises shall agree that in the event Landlord give
such sublessee notice that Tenant is in default under this Lease, such sublessee
shall thereafter make all sublease or other payments directly to Landlord, which
will be received by Landlord without  liability whether to honor the sublease or
otherwise  (except to credit such  payments  against sums due under this Lease),
and any  sublessee  shall  agree to attorn to  Landlord  or its  successors  and
assigns at their request should this Lease be terminated for any reason,  except
that in no event shall  Landlord or its successors or assigns to be obligated to
accept such attornment; (iii) any such Transfer and consent shall be effected on
forms supplied by Landlord  and/or its legal counsel;  (iv) Landlord may require
that Tenant not then be in default  hereunder in any respect;  and (v) Tenant or
the proposed subtenant or assignee  (collectively,  "Transferee") shall agree to
pay Landlord,  upon demand,  as additional  rent, a sum equal to the  additional
costs,  if any,  incurred by Landlord for  maintenance and repair as a result of
any change in the nature of occupancy  caused by such  subletting or assignment.
"Transfer Premium" shall mean all rent,  additional rent or other  consideration
payable by a Transferee in connection  with a Transfer in excess of the rent and
Additional  Rent  payable  by Tenant  under  this  Lease  during the term of the
Transfer  and if such  Transfer is less than all of the  Premises,  the Transfer
Premium shall be calculated on a rentable square foot basis.  In any event,  the
Transfer  Premium shall be calculated  after  deducting the reasonable  expenses
incurred by Tenant for (1) any  changes,  alterations  and  improvements  to the
Premises  paid for by Tenant in  connections  with the  Transfer,  (2) any other
out-of-pocket monetary concessions provided by Tenant to the Transferee, and (3)
any brokerage  commissions  paid for by Tenant in connection  with the Transfer.
"Transfer  Premium" shall also include,  but not be limited to, key money, bonus
money or other cash  consideration  paid by a transferee to Tenant in connection
with such Transfer,  and any payment in excess of fair market value for services
rendered  by Tenant to the  Transferee  and



                                       18
<PAGE>

any payment in excess of fair  market  value for  assets,  fixtures,  inventory,
equipment,  or furniture  transferred  by Tenant to the Transferee in connection
with such Transfer. Any sale, assignment,  hypothecation, transfer or subletting
of this Lease which is not in compliance  with the provisions of this Article 15
shall be void and shall, at the option of Landlord,  terminate this Lease. In no
event shall the consent by Landlord to an  assignment or subletting be construed
as relieving  Tenant,  any  assignee,  or sublessee  from  obtaining the express
written  consent of Landlord  to any further  assignment  or  subletting,  or as
releasing Tenant from any liability or obligation  hereunder whether or not then
accrued and Tenant shall continue to be fully liable therefor.  No collection or
acceptance of rent by Landlord from any person other than Tenant shall be deemed
a waiver of any  provision of this Article 15 or the  acceptance of any assignee
or subtenant hereunder, or a release of Tenant (or of any successor of Tenant or
any  subtenant).  Notwithstanding  anything to the  contrary  in this Lease,  if
Tenant or any proposed Transferee claims that Landlord has unreasonably withheld
or delayed its consent  under this Article 15 or otherwise has breached or acted
unreasonably  under this Article 15, their sole remedies  shall be a declaratory
judgment,  an  injunction  for the relief sought and/or  monetary  damages,  and
Tenant hereby waives all other  remedies,  including,  without  limitation,  any
right at law or equity to  terminate  this Lease,  on its own behalf and, to the
extent   permitted  under  all  applicable  laws,  on  behalf  of  the  proposed
Transferee.

     Notwithstanding  anything to the  contrary  contained  in this  Article 15,
Landlord shall have the option, by giving written notice to Tenant within thirty
(30) days  after  Landlord's  receipt  of a request  for  consent  to a proposed
Transfer,  to terminate this Lease as to the portion of the Premises that is the
subject of the  Transfer.  If this Lease is so  terminated  with respect to less
than the entire  Premises,  the Basic  Rental and Tenant's  Proportionate  Share
shall be prorated based on the number of rentable square feet retained by Tenant
as  compared  to the total  number of  rentable  square  feet  contained  in the
original  Premises,  and this Lease as so amended shall  continue  thereafter in
full force and effect,  and upon the request of either party,  the parties shall
execute written confirmation of the same.

                                  ARTICLE XVI
                                  -----------

                              DAMAGE OR DESTRUCTION
                              ---------------------

     If the  Project  is  damaged  by tire or  other  insured  casualty  and the
insurance proceeds have been made available therefor by the holder or holders of
any mortgages or deeds of trust covering the Premises or the Project, the damage
shall be  repaired  by  Landlord  to the  extent  such  insurance  proceeds  are
available therefor and provided such repairs can, in Landlord's sole opinion, be
completed  within one hundred  eighty (180) days after the necessity for repairs
as a result of such  damage  becomes  known to  Landlord  without the payment of
overtime or other  premiums,  and until such repairs are completed rent shall be
abated in proportion to the part of the Premises  which is unusable by Tenant in
the conduct of its  business  (but there shall be no abatement of rent by reason
of any portion of the Premises  being unusable for a period equal to one (1) day
or less).  However,  if the damage is due to the fault or neglect of Tenant, its
employees, agents, contractors, guests, invitees and the like, there shall be no
abatement of rent,  unless and to the extent  Landlord  receives  rental  income
insurance  proceeds.  Upon the occurrence of any damage to the Premises,  Tenant
shall assign to Landlord (or to any party  designated by Landlord) all insurance
proceeds payable to Tenant under Section 14(a)(ii)(A)



                                       19
<PAGE>

above; provided,  however, that if the cost of repair of improvements within the
Premises  by  Landlord  exceeds  the amount of  insurance  proceeds  received by
Landlord from Tenant's insurance carrier,  as so assigned by Tenant, such excess
costs shall be paid by Tenant to  Landlord  prior to  Landlord's  repair of such
damage.  If repairs  cannot,  in  Landlord's  opinion,  be completed  within one
hundred  eighty (180) days after the  necessity  for repairs as a result of such
damage  becomes  known to  Landlord  without  the  payment of  overtime or other
premiums, Landlord may, at its option, either (i) make them in a reasonable time
and in such  event  this Lease  shall  continue  in effect and the rent shall be
abated,  if at all, in the manner provided in this Article 16, or (ii) elect not
to effect such repairs and instead  terminate this Lease, by notifying Tenant in
writing of such termination  within sixty (60) days after Landlord learns of the
necessity  for  repairs  as a  result  of  damage,  such  notice  to  include  a
termination  date  giving  Tenant  sixty  (60) days to vacate the  Premises.  In
addition,  Landlord  may elect to terminate  this Lease if the Project  shall be
damaged by fire or other  casualty  or cause,  whether or not the  Premises  are
affected, and the damage is not fully covered, except for deductible amounts, by
Landlord's  insurance  policies.  Finally,  if the  Premises  or the  Project is
damaged to any  substantial  extent  during the last  twelve  (12) months of the
Term,  then  notwithstanding  anything  contained  in  this  Article  16 to  the
contrary,  Landlord  shall  have the  option to  terminate  this Lease by giving
written  notice to Tenant of the exercise of such option  within sixty (60) days
after Landlord learns of the necessity for repairs as the result of such damage.
A total  destruction  of the Project shall  automatically  terminate this Lease.
Except as provided in this  Article 16,  there shall be no abatement of rent and
no liability of Landlord by reason of my injury to or interference with Tenant's
business or property  arising from such damage or  destruction  or the making of
any repairs,  alterations or improvements in or to any portion of the Project or
the Premises or in or to fixtures,  appurtenances and equipment therein.  Tenant
understands  that  Landlord  will not carry  insurance  of any kind on  Tenant's
furniture, furnishings, trade fixtures or equipment, and that Landlord shall not
be  obligated  to repair any damage  thereto  or  replace  the same.  Except for
proceeds  relating  to  Tenant's  furniture,  furnishings,  trade  fixtures  and
equipment,  Tenant  acknowledges that Tenant shall have no right to any proceeds
of  insurance  relating to property  damage.  With  respect to any damage  which
Landlord  is  obligated  to repair or elects to  repair,  Tenant,  as a material
inducement to Landlord entering into this Lease, irrevocably waives and releases
its rights  under the  provisions  of Sections  1932 and 1933 of the  California
Civil Code.

                                  ARTICLE XVII
                                  ------------

                                  SUBORDINATION
                                  -------------

     This Lease is subject and  subordinate to all ground or underlying  leases,
mortgages and deeds of trust which affect the property or the Project, including
all  renewals,  modifications,   consolidations,   replacements  and  extensions
thereof; provided,  however, if the lessor under any such lease or the holder or
holders of any such  mortgage or deed of trust shall advise  Landlord  that they
desire or require  this Lease to be prior and  superior  thereto,  upon  written
request of Landlord to Tenant,  Tenant agrees to promptly  execute,  acknowledge
and deliver any and all documents or instruments  which Landlord or such lessor,
holder or holders deem  necessary or desirable  for purposes  thereof.  Landlord
shall have the right to cause this Lease to be and become and remain subject and
subordinate  to any and all ground or underlying  leases,  mortgages or deeds of
trust which may hereafter be executed covering the Premises, the Project



                                       20
<PAGE>

or the property or any renewals, modifications,  consolidations, replacements or
extensions  thereof,  for the full  amount  of all  advances  made or to be made
thereunder  and  without  regard  to the  time or  character  of such  advances,
together  with  interest  thereon  and  subject to all the terms and  provisions
thereof; provided, however, that Landlord obtains from the lender or other party
in  question a written  undertaking  in favor of Tenant to the effect  that such
lender or other party will not disturb  Tenant's right of possession  under this
Lease if Tenant is not then or thereafter in breach of any covenant or provision
of this Lease.  Tenant  agrees,  within ten (10) days after  Landlord `s written
request therefor,  to execute,  acknowledge and deliver upon request any and all
documents or instruments  requested by Landlord which are necessary or proper to
assure the subordination of this Lease to any such mortgages,  deed of trust, or
leasehold  estates.  Tenant agrees that in the event any proceedings are brought
for  the  foreclosure  of any  mortgage  or deed of  trust  or any  deed in lieu
thereof,  to attorn to the  purchaser  or any  successors  thereto upon any such
foreclosure  safe  or  deed in lieu  thereof  as so  requested  to do so by such
purchaser and to recognize such purchaser as the lessor under this Lease; Tenant
shall,  within ten (10) days after request  execute such further  instruments or
assurances  as such  purchaser  may  reasonably  deem  necessary  to evidence or
confirm  such  attornment.  Tenant  agrees to provide  copies of any  notices of
Landlord  `s  default  under  this  Lease  to any  mortgagee  or deed  of  trust
beneficiary  whose  address has been provided to Tenant and Tenant shall provide
such mortgagee or deed of trust beneficiary a commercially reasonable time after
receipt of such notice within which to cure any such default.  Tenant waives the
provisions  of any  current  or  future  statute,  rule or law which may give or
purport to give Tenant any right or election to terminate or otherwise adversely
affect this Lease and the  obligations  of the Tenant  hereunder in the event of
any foreclosure proceeding or sale.

                                 ARTICLE XVIII
                                 -------------

                                 EMINENT DOMAIN
                                 --------------

     If the whole of the Premises or the Project or so much thereof as to render
the balance unusable by Tenant shall be taken under power of eminent domain,  or
is sold, transferred or conveyed in lieu thereof, this Lease shall automatically
terminate as of the date of such  condemnation,  or as of the date possession is
taken by the  condemning  authority,  at  Landlord's  option.  No award  for any
partial or entire  taking shall be  apportioned,  and Tenant  hereby  assigns to
Landlord  any award which may be made in such taking or  condemnation,  together
with any and all rights of Tenant now or hereafter  arising in or to the same or
any part thereof;  provided,  however,  that nothing  contained  herein shall be
deemed  to give  Landlord  any  interest  in or to  require  Tenant to assign to
Landlord any award made to Tenant for the taking of personal  property and trade
fixtures  belonging to Tenant and  removable by Tenant at the  expiration of the
Term  hereof as provided  hereunder  or for the  interruption  of, or damage to,
Tenant's  business.  In the event of a partial taking  described in this Article
18, or a sale, transfer or conveyance in lieu thereof,  which does not result in
a  termination  of this Lease,  the rent shall be  apportioned  according to the
ratio that the part of the  Premises  remaining  useable by Tenant  bears to the
total area of the Premises.  Tenant hereby waives of any and all rights it might
otherwise  have  pursuant  to  Section  1265.130  of the  California  Code Civil
Procedure.



                                       21
<PAGE>

                                   ARTICLE XIX
                                   -----------

                                     DEFAULT
                                     -------

     Each of the  following  acts or omissions of Tenant or of any  guarantor of
Tenant's performance  hereunder,  or occurrences,  shall constitute an "Event of
Default":

     (a) Failure or refusal to pay Basic  Rental,  Additional  Rent or any other
amount to be paid by Tenant to Landlord  hereunder within five (5) calendar days
after notice that the same is due or payable hereunder; said five (5) day period
shall be in lieu of, and not in addition to, the notice  requirements of Section
1161 of the California Code of Civil Procedure or any similar or successor law;

     (b) Except as set forth in items (a) above and (c)  through  and  including
(g) below, failure to perform or observe any other covenant or condition of this
Lease to be  performed or observed  within  thirty (30) days  following  written
notice to Tenant of such  failure.  Such thirty (30) day notice shall be in lieu
of, and not in addition to, any required  under  Section 1161 of the  California
Code of Civil Procedure or any similar or successor law;

     (c)  Abandonment  or vacating or failure to accept  tender of possession of
the Premises or any significant portion thereof;

     (d) The taking in  execution  or by similar  process or law (other  than by
eminent domain) of the estate hereby created;

     (e) The filing by Tenant or any guarantor  hereunder in any court  pursuant
to any statute of a petition in bankruptcy  or insolvency or for  reorganization
or arrangement for the appointment of a receiver of all or a portion of Tenant's
property;  the filing  against  Tenant or any  guarantor  hereunder  of any such
petition,  or the commencement of a proceeding for the appointment of a trustee,
receiver or liquidator for Tenant, or for any guarantor hereunder,  or of any of
the property of either,  or a proceeding by any  governmental  authority for the
dissolution  or  liquidation  of  Tenant  or any  guarantor  hereunder,  if such
proceeding shall not be dismissed or trusteeship discontinued within thirty (30)
days after commencement of such proceeding or the appointment of such trustee or
receiver;  or the making by Tenant or any  guarantor  hereunder of an assignment
for the benefit of creditors;

     (f)  Tenant's  failure to cause to be released  any  mechanics  liens filed
against  the  Premises  or the  Project  within  twenty (20) days after the date
Tenant receives or refuses notice that the same have been filed or recorded; or

     (g) Tenant's  failure to observe or perform  according to the provisions of
Articles 7, 17 or 25 within five (5) business days after notice from Landlord.

     All  defaults by Tenant of any covenant or condition of this Lease shall be
deemed by the parties hereto to be material.



                                       22
<PAGE>

                                   ARTICLE XX
                                   ----------

                                    REMEDIES
                                    --------

     (a) Upon the occurrence of an Event of Default under this Lease as provided
in  Article 19 hereof,  Landlord  may  exercise  all of its  remedies  as may be
permitted by law,  including  but not limited to the remedy  provided by Section
1951.4  of  the  California  Civil  Code,  and  including  without   limitation,
terminating  this Lease,  reentering  the  Premises and removing all persons and
property  therefrom,  which property may be stored by Landlord at a warehouse or
elsewhere at the risk, expense and for the account of Tenant. If Landlord elects
to terminate  this Lease,  Landlord shall be entitled to recover from Tenant the
aggregate of all amounts permitted by law,  including but not limited to (i) the
worth at the time of award of the  amount  of any  unpaid  rent  which  had been
earned at the time of such termination; plus (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
Tenant proves could have been  reasonably  avoided;  plus (iii) the worth at the
time of award of the  amount by which the  unpaid  rent for the  balance  of the
Lease Term after the time of award  exceeds  the amount of such rental loss that
Tenant  proves could have been  reasonably  avoided;  plus (iv) any other amount
necessary to  compensate  Landlord for all the detriment  proximately  caused by
Tenant's  failure to perform  its  obligations  under this Lease or which in the
ordinary  course of things  would be  likely to result  therefrom,  specifically
including but not limited to,  brokerage  commissions and  advertising  expenses
incurred,  expenses of remodeling the Premises or any portion  thereof for a new
tenant,  whether for the same or a different  use,  and any special  concessions
made to obtain a new tenant; and (v) at Landlord `s election, such other amounts
in addition to or in lieu of the foregoing as may be permitted from time to time
by applicable law. The term "rent" as used in this Article 20(a) shall be deemed
to be and to mean  all  sums  of  every  nature  required  to be paid by  Tenant
pursuant to the terms of this Lease,  whether to Landlord or to others.  As used
in items (i) and (ii), above, the "worth at the time of award" shall be computed
by allowing  interest at the rate set forth in item (e),  below,  but in no case
greater than the maximum  amount of such  interest  permitted by law. As used in
item  (iii),  above,  the  "worth at the time of  award"  shall be  computed  by
discounting  such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).

     (b) Nothing in this Article 20 shall be deemed to affect  Landlord's  right
to indemnification for liability or liabilities arising prior to the termination
of this Lease for personal injuries or property damage under the indemnification
clause or clauses contained in this Lease.

     (c) Notwithstanding  anything to the contrary set forth herein,  Landlord's
re-entry to perform acts of maintenance or preservation of or in connection with
efforts to relet the Premises or any portion  thereof,  or the  appointment of a
receiver upon Landlord's  initiative to protect  Landlord's  interest under this
Lease shall not  terminate  Tenant's  right to possession of the Premises or any
portion  thereof and, until  Landlord does elect to terminate  this Lease,  this
Lease shall  continue in full force and effect and  Landlord  may enforce all of
Landlord's rights and remedies  hereunder  including,  without  limitation,  the
remedy  described in California  Civil Code Section 195 1.4 (lessor may continue
lease in effect after  lessee's  breach and  abandonment  and recover rent as it
becomes due, if lessee has the right to sublet or assign, subject only to



                                       23
<PAGE>

reasonable  limitations).  Accordingly,  if Landlord does not elect to terminate
this Lease on account of any default by Tenant, Landlord may, from time to time,
without  terminating  this Lease,  enforce all of its rights and remedies  under
this Lease, including the right to recover all rent as it becomes due.

     (d) All rights,  powers and  remedies of Landlord  hereunder  and under any
other  agreement now or hereafter in force between  Landlord and Tenant shall be
cumulative and not  alternative  and shall be in addition to all rights,  powers
and remedies given to Landlord by law, and the exercise of one or more rights or
remedies  shall not impair  Landlord  `s right to  exercise  any other  right or
remedy.

     (e) Any amount due from Tenant to Landlord hereunder which is not paid when
due shall bear interest at the lower of eighteen  percent (18%) per annum or the
maximum lawful rate of interest from the due date until paid,  unless  otherwise
specifically  provided herein, but the payment of such interest shall not excuse
or cure any default by Tenant  under this Lease.  In addition to such  interest:
(i) if Basic  Rental is not paid  within  ten (10) days after the same is due, a
late charge equal to five percent (5%) of the amount overdue or $100,  whichever
is greater,  shall be assessed and shall accrue for each calendar  month or part
thereof  until such rental,  including the late charge,  is paid in full,  which
late  charge  Tenant  hereby  agrees is a  reasonable  estimate  of the  damages
Landlord  shall  suffer  as a  result  of  Tenant's  late  payment  and  (ii) an
additional charge of $25 shall be assessed for any check given to Landlord by or
on behalf of Tenant which is not honored by the drawee  thereof;  which  damages
include  Landlord's  additional  administrative  and other costs associated with
such late payment and unsatisfied checks and the parties agree that, it would be
impracticable  or extremely  difficult to fix  Landlord's  actual damage in such
event.  Such charges for interest and late payments and  unsatisfied  checks are
separate  and  cumulative  and are in  addition  to and  shall not  diminish  or
represent a substitute for any or all of Landlord's rights or remedies under any
other provision of this Lease.

                                  ARTICLE XXI
                                  -----------

                         TRANSFER OF LANDLORD'S INTEREST
                         -------------------------------

     In the event of any transfer or termination  of Landlord's  interest in the
Premises or the Project by sale, assignment, transfer, foreclosure, deed-in-lieu
of foreclosure or otherwise whether voluntary or involuntary,  Landlord shall be
automatically relieved of any and all obligations and liabilities on the part of
Landlord  from and after the date of such  transfer  or  termination,  including
furthermore without  limitation,  the obligation of Landlord under Article 4 and
California Civil Code 1950.7 above to return the security deposit, provided said
security deposit is transferred to said  transferee.  Tenant agrees to attorn to
the transferee  upon any such transfer and to recognize  such  transferee as the
lessor under this Lease and Tenant  shall,  within ten (10) days after  request,
execute such further instruments or assurances as such transferee may reasonably
deem necessary to evidence or confirm such attornment.


                                       24
<PAGE>

                                  ARTICLE XXII
                                  ------------

                                     BROKER
                                     ------

     In connection  with this Lease,  Tenant warrants and represents that it has
had  dealings  only with  firm(s)  set forth in Article  1.H. of the Basic Lease
Provisions  and that it knows of no other  person or  entity  who is or might be
entitled  to a  commission,  finder `s fee or other like  payment in  connection
herewith  and does  hereby  indemnify  and agree to hold  Landlord,  its agents,
members,  partners,   representatives,   officers,   affiliates,   shareholders,
employees,  successors  and assigns  harmless from and against any and all loss,
liability  and  expenses  that  Landlord  may incur  should  such  warranty  and
representation prove incorrect, inaccurate or false.

                                  ARTICLE XXIII
                                  -------------

                                     PARKING
                                     -------

     Tenant shall rent from Landlord,  commencing on the Commencement  Date, the
number of unreserved parking passes set forth in Section l(I) of the Basic Lease
Provisions,  which parking passes shall pertain to the Project parking facility.
Tenant shall not be charged for  automobile  parking  passes  during the initial
Lease Term.  However,  Tenant  shall be  responsible  for the full amount of any
taxes imposed by any  governmental  authority in connection  with the renting of
such  parking  passes by Tenant or the use of the  parking  facility  by Tenant.
Tenant's  continued  right to use the parking passes is conditioned  upon Tenant
abiding by all rules and regulations  which are prescribed from time to time for
the orderly  operation and use of the parking  facility where the parking passes
are located, including any sticker or other identification system established by
Landlord,  Tenant's  cooperation in seeing that Tenant's  employees and visitors
also  comply  with such rules and  regulations,  and Tenant not being in default
under this Lease.  Landlord  specifically reserves the right to change the size,
configuration,  design,  layout  and all other  aspects of the  Project  parking
facility  at any time and Tenant  acknowledges  and agrees  that  Landlord  may,
without  incurring  any  liability  to Tenant and without any  abatement of rent
under this Lease, from time to time, close-off or restrict access to the Project
parking   facility  for  purposes  of  permitting  or   facilitating   any  such
construction,  alteration  or  improvements.  Landlord may relocate any reserved
parking  spaces  rented by Tenant to another  location  in the  Parking  project
facility.  Landlord  may delegate  its  responsibilities  hereunder to a parking
operator or a lessee of the parking facility in which case such parking operator
or  lessee  shall  have all the  rights  of  control  attributed  hereby  to the
Landlord.  The parking  passes rented by Tenant  pursuant to this Article 23 are
provided to Tenant  solely for use by Tenant's own personnel and such passes may
not be transferred, assigned, subleased or otherwise alienated by Tenant without
Landlord's prior approval. Tenant may validate visitor parking by such method or
methods as the Landlord may establish,  at the validation rate from time to time
generally applicable to visitor parking.



                                       25
<PAGE>


                                  ARTICLE XXIV
                                  ------------

                                     WAIVER
                                     ------

     No waiver by Landlord of any  provision of this Lease shall be deemed to be
a waiver of any other provision hereof or of any subsequent  breach by Tenant of
the same or any other  provision.  No  provision  of this lease may be waived by
Landlord,  except by an instrument in writing  executed by Landlord.  Landlord's
consent to or  approval  of any act by Tenant  requiring  Landlord's  consent or
approval shall not be deemed to render  unnecessary  the obtaining of Landlord's
consent to or approval of any subsequent  act of Tenant,  whether or not similar
to the act so  consented  to or  approval.  No act or thing done by  Landlord or
Landlord's agents during the Term of this Lease shall be deemed an acceptance of
a surrender of the Premises,  and no agreement to accept such surrender shall be
valid unless in wiring and signed by Landlord. The subsequent acceptance of rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach
by Tenant of any term,  covenant  or  condition  of this  Lease,  other than the
failure  of  Tenant  to pay the  particular  rent  so  accepted,  regardless  of
Landlord's  knowledge of such preceding breach at the time of acceptance of such
rent.  Any  payment by Tenant or receipt by  Landlord of an amount less than the
total amount then due  hereunder  shall be deemed to be in partial  payment only
thereof  and not a waiver  of the  balance  due or an accord  and  satisfaction,
notwithstanding any statement or endorsement to the contrary on any check or any
other  instrument  delivered  concurrently  therewith or in  reference  thereto.
Accordingly,  Landlord may accept any such amount and  negotiate  any such check
without prejudice to Landlord's right to recover all balances due and owning and
to pursue its other rights against Tenant under this Lease regardless of whether
Landlord makes any notation on such instrument of payment or otherwise  notifies
Tenant that such  acceptance or negotiation  is without  prejudice to Landlord's
rights.

                                  ARTICLE XXV
                                  -----------

                              ESTOPPEL CERTIFICATE
                              --------------------

     Tenant  shall,  at any time and from  time to time,  upon not less than ten
(10) days' prior written notice from Landlord, execute,  acknowledge and deliver
to Landlord a statement in writing  certifying the following  information,  (but
not limited to the following  information  in the event further  information  is
requested by Landlord):  (i) that this Lease is unmodified and in full force and
effect (or, if modified,  stating the nature of such modification and certifying
that this Lease,  as modified,  is in full force and effect);  (ii) the dates to
which the rental and other charges are paid in advance, if any; (iii) the amount
of Tenant's security deposit, if any; and (iv) acknowledging that there are not,
to Tenant's  knowledge,  any uncured defaults o the part of Landlord  hereunder,
and no events or conditions then in existence which, with the passage of time or
notice or both, would constitute a default on the part of Landlord hereunder, or
specifying  such  defaults,  events or  conditions,  if any are  claimed.  It is
expressly  understood  and agreed that any such  statement may be relied upon by
any  prospective  purchaser  or  encumbracer  of all or any  portion of the Real
Property.  Tenant's  failure to deliver  such  statement  within such time shall
constitute an admission by Tenant that all statements contained therein are true
and correct.  Tenant agrees to execute all documents required in accordance with
this Article 25 within ten (10) days after  delivery of said  documents.  Tenant
hereby irrevocably appoints




                                       26
<PAGE>

landlord as Tenant's  attorney-in-fact  and in Tenant's name, place and stead to
execute any and all documents described in this Article 25 if Tenant fails to do
so with the specified time period.

                                  ARTICLE XXVI
                                  ------------

                              LIABILITY OF LANDLORD
                              ---------------------

     Notwithstanding  anything  in this  Lease to the  contrary,  any  remedy of
Tenant for the  collection of a judgment (or other judicial  process)  requiring
the  payment  of money by  Landlord  in the  event of any  default  by  Landlord
hereunder or any claim, cause of action or obligation, contractual, statutory or
otherwise by Tenant against Landlord  concerning,  arising out of or relating to
any matter relating to this Lease and all of the covenants and conditions or any
obligations,  contractual,  statutory,  or otherwise set forth herein,  shall be
limited solely and  exclusively to an amount which is equal to the lesser of (i)
the interest of Landlord in and to the Project,  and (ii) the interest  Landlord
would have in the Project if the Project were  encumbered by third party debt in
an amount equal to ninety percent (90%) of the then current value of the Project
(as such value is  reasonably  determined  by  Landlord).  No other  property or
assets of Landlord,  or any member,  officer,  director,  shareholder,  partner,
trustee,  agent, servant or employee of Landlord (the "Representative") shall be
subject to levy,  execution or other enforcement  procedure for the satisfaction
of Tenant's remedies under or with respect to this Lease, Landlord's obligations
to Tenant,  whether  contractual,  statutory or otherwise,  the  relationship of
Landlord and Tenant  hereunder,  or Tenant's  use or occupancy of the  Premises.
Tenant further understands that any liability, duty or obligation of Landlord to
Tenant,  shall automatically cease and terminate as of the date that Landlord or
any of Landlord's Representatives no longer have any right, title or interest in
or to the  Project.  Notwithstanding  anything  to the  contrary  in this Lease,
Landlord shall not be liable under any circumstances for injury or damage to, or
interference  with,  Tenant `s business,  including  but not limited to, loss of
Profits, loss of rents or other revenues, loss of business opportunity,  loss of
goodwill or loss of use, in each case, however occurring.

                                 ARTICLE XXVII
                                 -------------

                              INABILITY TO PERFORM
                              --------------------


     This Lease and the obligations of Tenant hereunder shall not be affected or
impaired because Landlord is unable to fulfill any of its obligations  hereunder
or is delayed in doing so, if such inability or delay is caused by reason of any
prevention,  delay, stoppage due to strikes, lockouts, acts of God, or any other
cause previously, or at such time, beyond the reasonable control or anticipation
of Landlord  (collectively,  a "Force Majeure") and Landlord's obligations under
this Lease shall be forgiven and suspended by any such Force Majeure.



                                       27
<PAGE>

                                 ARTICLE XXVIII
                                 --------------

                                 HAZARDOUS WASTE
                                 ---------------

     (a) Tenant shall not cause or permit any Hazardous  Material (as defined in
Article  28(d)  below) to be  brought,  kept or used in or about the  Project by
Tenant,  its agents,  employees,  contractors,  or invitees,  except for general
office supplies typically used in the ordinary course of business (e.g.,  copier
toner,  liquid paper,  glue,  ink, and cleaning  solvents).  Tenant  indemnifies
Landlord from and against any breach by Tenant of the obligations  stated in the
preceding  sentence,  and agrees to defend and hold  Landlord  harmless from and
against  any  and all  claims,  judgments,  damages,  penalties,  fines,  costs,
liabilities,  or losses (including,  without limitation,  diminution in value of
the Project,  damages for the loss or  restriction  or use of rentable or usable
space or of any amenity of the Project,  damages arising from any adverse impact
or marketing of space in  the-Project,  and sums paid in  settlement  of claims,
attorneys' fees and costs,  consultant fees, and expert fees) which arise during
or after the Term of this Lease as a result of such breach. This indemnification
of Landlord by Tenant includes, without limitation, costs incurred in connection
with any investigation of site conditions or any cleanup, remedial,  removal, or
restoration work required by any federal, state, or local governmental agency or
political  subdivision  because  of  Hazardous  Material  present in the soil or
ground water on or under the Project.  Without  limiting the  foregoing,  if the
presence of any Hazardous  Material on the Project caused or permitted by Tenant
results in any  contamination  of the Project and subject to the  provisions  of
Articles 9, 10 and 11,  hereof,  Tenant shall  promptly  take all actions at its
sole expense as are  necessary to return the Project to the  condition  existing
prior to the introduction of any such Hazardous  Material and the contractors to
be used by Tenant for such work must be approved  by  Landlord,  which  approval
shall not be unreasonably withheld so long as such actions would not potentially
have any material adverse  long-term or short-term  effect on the Project and so
long as such actions do not  materially  interfere with the use and enjoyment of
the Project by the other tenants thereof.

     (b) It shall not be  unreasonable  for  Landlord to withhold its consent to
any proposed  Transfer if (i) the proposed  transferee's  anticipated use of the
Premises  involves  the  generation,  storage,  use  treatment,  or  disposal of
Hazardous Material;  (ii) the proposed Transferee has been required by any prior
landlord,  lender,  or  governmental  authority  to  take  remedial  action  in,
connection with Hazardous Material contaminating a property if the contamination
resulted from such Transferee's  actions or use of the property in question;  or
(iii) the proposed  Transferee is subject to an enforcement  order issued by any
governmental  authority in connection  with the use,  disposal,  or storage of a
Hazardous Material.

     (c) As used herein,  the term  "Hazardous  Material" means any hazardous or
toxic substance,  material,  or waste which is or becomes regulated by any local
governmental authority, the State of California or the United States Government.
The term "Hazardous  Material"  includes,  without  limitation,  any material or
substance  which is (i)  defined  as  "Hazardous  Waste,"  "Extremely  Hazardous
Waste," or "Restricted  Hazardous Waste" under Sections 25115, 25117 or 25122.7,
or listed pursuant to Section 25140,  of the California  Health and Safety Code,
Division  20,  Chapter 6.5  (Hazardous  Waste  Control  Law),  (ii) defined as a
"Hazardous  Substance"  under Section 25316 of the California  Health and Safety
Code,  Division 20, Chapter 6.8  (Carpenter-Presley-Tanner  Hazardous  Substance
Account Act), (iii) defined as a



                                       28
<PAGE>

"Hazardous Material," "Hazardous  Substance," or "Hazardous Waste" under Section
25501 of the  California  Health and Safety  Code,  Division  20,  Chapter  6.95
(Hazardous  Materials  Release Response Plans and Inventory),  (iv) defined as a
"Hazardous  Substance"  under Section 25281 of the California  Health and Safety
Code,  Division 20, Chapter 6.7 (Underground  Storage of Hazardous  Substances),
(v)  petroleum,  (vi)  asbestos,  (vii)  listed  under  Article 9 or  defined as
Hazardous  or  extremely  hazardous  pursuant  to  Article 11 of Title 22 of the
California  Administrative  Code, Division 4, Chapter 20, (viii) designated as a
"Hazardous  Substance"  pursuant to Section 311 of the Federal  Water  Pollution
Control Act (33 U.S.C. ss. 1317),  (ix) defined as a "Hazardous  Waste" pursuant
to Section 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C.
ss. 6901 et seq. (42 U.S.C. ss. 6903) or (x) defined as a "Hazardous  Substance"
pursuant  to  Section   101  of  the   Comprehensive   Environmental   Response,
Compensation and Liability Act, 42 U.S.C. ss. 9601 et seq. (42 U.S.C. ss. 9601).

     (d) As used herein, the term "Laws" mean any applicable  federal,  state or
local  laws,  ordinances,  or  regulations  relating to any  Hazardous  Material
affecting the Project, including,  without limitation, the laws, ordinances, and
regulations referred to in Article 28(c) above.

                                  ARTICLE XXIX
                                  ------------

                   SURRENDER OF PREMISES: REMOVAL OF PROPERTY
                   ------------------------------------------

     (a) The  voluntary or other  surrender of this Lease by Tenant to Landlord,
or a mutual termination hereof, shall not work a merger, and shall at the option
of  Landlord,  operate  as an  assignment  to it of  any  or  all  subleases  or
subtenancies affecting the Premises.

     (b) Upon the  expiration  of the Term of this  Lease,  or upon any  earlier
termination  of this Lease,  Tenant shall quit and  surrender  possession of the
Premises  to  Landlord  in as good order and  condition  as the same are now and
hereafter  may be improved by Landlord or Tenant,  reasonable  wear and tear and
repairs which are Landlord's obligation excepted,  and shall, without expense to
Landlord,  remove  or cause to be  removed  from the  Premises  all  debris  and
rubbish, all furniture,  equipment,  business and trade fixtures,  free-standing
cabinet  work,  moveable  partitioning,  telephone  and data  cabling  and other
articles of personal  property  owned by Tenant or installed or placed by Tenant
at its own  expense  in the  Premises,  and all  similar  articles  of any other
persons  claiming under Tenant unless Landlord  exercises its option to have any
subleases or subtenancies  assigned to it, and Tenant shall repair all damage to
the Premises  resulting  from the  installation  and removal of such items to be
removed.

     (c) Whenever  Landlord shall reenter the Premises as provided in Article 20
hereof,  or as  otherwise  provided  in this Lease,  any  property of Tenant not
removed  by Tenant  upon the  expiration  of tire Term of this  Lease (or within
forty-eight  (48) hours after a termination by reason of Tenant `s default),  as
provided in this Lease,  shall be  considered  abandoned and Landlord may remove
any or ail of such items and dispose of the same in any manner or store the same
in a public  warehouse or elsewhere  for the account and at the expense and risk
of Tenant, and if Tenant shall fail to pay the cost of storing any such property
after it has been stored for a period of ninety (90) days or more,  Landlord may
sell any or all of such  property at public or private  sale, in such manner and
at such times and places as Landlord, in its sole


                                       29

<PAGE>

discretion,  may deem proper,  without notice to or demand upon Tenant,  for the
payment of all or any part of such charges or the removal of any such  property,
and shall apply the  proceeds of such sale as  follows:  first,  to the cost and
expense  of  such  sale,  including  reasonable  attorneys'  fees  for  services
rendered;  second, to the payment of the cost of or charges for storing any such
property;  third,  to the  payment of any other sums of money  which may then or
thereafter  be due to Landlord  from Tenant under any of the terms  hereof;  and
fourth, the balance, if any, to Tenant.


     (d) All fixtures,  equipment,  leasehold  improvements,  Alterations and/or
appurtenances  attached  to or built  into the  Premises  prior to or during the
Term,  whether by  Landlord  or Tenant and whether at the expense of Landlord or
Tenant,  or of both,  shall be and remain part of the  Premises and shall not be
removed by Tenant at the end of the Term unless otherwise expressly provided for
in this.  Lease or unless such removal is required by Landlord.  Such  fixtures,
equipment, leasehold improvements,  Alterations,  additions, improvements and/or
appurtenances shall include but not be limited to: all floor coverings,  drapes,
paneling,  built-in cabinetry,  molding,  doors, vaults (including vault doors),
plumbing  systems,  security  systems,  electrical  systems,  lighting  systems,
silencing  equipment,  communication  systems,  all fixtures and outlets for the
systems mentioned above and for all telephone,  radio,  telegraph and television
purposes, and any special flooring or ceiling installations.

                                  ARTICLE XXX
                                  -----------

                                  MISCELLANEOUS
                                  -------------

     (a) Severability: Entire Agreement. Any provision of this Lease which shall
         ------------------------------
prove to be  invalid,  void,  or  illegal  shall  in no way  affect,  impair  or
invalidate any other provision  hereof and such other provisions shall remain in
full force and effect.  This Lease and the Exhibits  and any  Addendum  attached
hereto  constitute the entire agreement  between the parties hereto with respect
to the subject matter hereof, and no prior agreement or understanding pertaining
to any  such-matter  shall be effective  for any  purpose.  No provision of this
Lease may be amended or supplemented except by an agreement in writing signed by
the parties hereto or their successor in interest.

     (b) Attorneys' Fees; Waiver of Jury Trial.
         --------------------------------------

            (i) In any action to enforce the terms of this Lease,  including any
suit by Landlord for the recovery of rent or  possession  of the  Premises,  the
losing party shall pay the successful party a reasonable sum for attorneys' fees
and costs in such  suit and such  attorneys'  fees and costs  shall be deemed to
have accrued prior to the  commencement of such action and shall be paid whether
or not such action is prosecuted to judgment.

            (ii) Should  Landlord,  without fault on Landlord's  part, be made a
party to any  litigation  instituted  by Tenant or by any  third  party  against
Tenant,  or by or against  any person  holding  under or using the  Premises  by
license  of Tenant,  or for the  foreclosure  of any lien for labor or  material
furnished to or for Tenant or any such other person or otherwise  arising out of
or resulting  from any act or transaction of Tenant or of any such other person,
Tenant



                                       30
<PAGE>

covenants to save and hold Landlord  harmless from any judgment rendered against
Landlord or the  Premises or any part  thereof and from all costs and  expenses,
including   reasonable  attorneys  `fees  and  costs  incurred  by  Landlord  in
connection with such litigation.

            (iii) When legal  services are rendered by an attorney at law who is
an employee of a party,  attorneys'  fees and costs incurred by that party shall
be deemed to  include an amount  based  upon the  number of hours  spent by such
employee on such matters multiplied by an appropriate billing rate determined by
taking into  consideration  the same factors,  including but not limited by, the
importance  of  the  matter,  time  applied,  difficulty  and  results,  as  are
considered  when an  attorney  not in the employ of a party is engaged to render
such service.

            (iv) EACH  PARTY  HEREBY  WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION SEEKING SPECIFIC  PERFORMANCE OF ANY PROVISION OF THIS LEASE, FOR DAMAGES
FOR ANY BREACH UNDER THIS LEASE,  OR OTHERWISE FOR  ENFORCEMENT  OF ANY RIGHT OR
REMEDY HEREUNDER.

     (c) Time of Essence.  Each of Tenant's  covenants herein is a condition and
         ---------------
time is of the essence with  respect to the  performance  of every  provision of
this Lease.

     (d) Headings:  Joint and Several.  The article  headings  contained in this
         ----------------------------
Lease are for  convenience  only and do not in any way limit or amplify any term
or  provision  hereof.  The terms  "Landlord"  and "Tenant" as used herein shall
include  the  plural as well as the  singular,  the  neuter  shall  include  the
masculine and feminine  genders and the  obligations  herein imposed upon Tenant
shall be joint and several as to each of the persons,  firms or  corporations of
which Tenant may be composed.

     (e) Reserved Area. Tenant hereby  acknowledges and agrees that the exterior
         --------------
walls of the Premises and the area between the finished  ceiling of the Premises
and the slab of the floor of the project thereabove have not been demised hereby
and the use thereof  together with the right to install,  maintain,  use, repair
and replace pipes, ducts, conduits and wires leading through, under or above the
Premises in locations  which will not materially  interfere with Tenant's use of
the  Premises  and serving  other parts of the Project are hereby  excepted  and
reserved unto Landlord.

     (f) NO  OPTION.  THE  SUBMISSION  OF THIS  LEASE BY  LANDLORD,  1% AGENT OR
         ----------
REPRESENTATIVE  FOR  EXAMINATION  OR EXECUTION BY TENANT DOES NOT  CONSTITUTE AN
OPTION OR OFFER TO LEASE THE PREMISES  UPON THE TERMS AND  CONDITIONS  CONTAINED
HEREIN OR A RESERVATION  OF THE PREMISES IN FAVOR OF TENANT,  IT BEING  INTENDED
HEREBY THAT THIS LEASE SHALL ONLY BECOME  EFFECTIVE UPON THE EXECUTION HEREOF BY
LANDLORD AND TENANT AND DELIVERY OF A FULLY EXECUTED LEASE TO TENANT.

     (g) Use of Project Name;  Improvements.  Tenant shall not be allowed to use
         ----------------------------------
the name, picture or representation of the Project,  or words to that effect, in
connection with any business carried on in the Premises or otherwise  (except as
Tenant `s address)  without the prior


                                       31
<PAGE>

written  consent  of  Landlord.  In  the  event  that  Landlord  undertakes  any
additional  improvements  on the Real Property  including but not limited to new
construction or renovation or additions to the existing  improvements,  Landlord
shall not be liable to Tenant for any noise,  dust,  vibration  or  interference
with access to the Premises or disruption in Tenant `s business caused thereby.

     (h) Rules and  Regulations.  Tenant  shall  observe  faithfully  and comply
         ----------------------
strictly  with the Rules and  Regulations  attached to this Lease as Exhibit "B"
and made a part  hereof,  and such other Rules and  Regulations  as Landlord may
from time to time reasonably  adopt for the safety,  care and cleanliness of the
Project,  the facilities  thereof,  or the  preservation  of good order therein.
Landlord  shall  not be liable to Tenant  for  violation  of any such  Rules and
Regulations,  or for the breach of any covenant or condition in any lease by any
other tenant in the Project.  A waiver by Landlord of any Rule or Regulation for
any  other  tenant  shall not  constitute  nor be deemed a waiver of the Rule or
Regulation for this Tenant.

     (i) Quiet Possession.  Upon Tenant's paying the Basic Rent, Additional Rent
         ----------------
and other sums  provided  hereunder  and  observing  and  performing  all of the
covenants,  conditions  and  provisions  on  Tenant's  part to be  observed  and
performed hereunder,  Tenant shall have quiet possession of the Premises for the
entire Term hereof, subject to all of the provisions of this Lease.

     (j) Rent.  All payments  required to be made hereunder to Landlord shall be
         ----
deemed to be rent, whether or not described as such.

     (k) Successors and Assigns. Subject to the provisions of Article 15 hereof,
         ----------------------
all of the  covenants,  conditions and provisions of this Lease shall be binding
upon and shall inure to the benefit of the parties  hereto and their  respective
heirs, persona! representatives, successors and assigns.

     (l) Notices. Any notice required or Notices permitted to be given hereunder
         -------
shall be in writing and may be given by personal  service  evidenced by a signed
receipt or sent by registered or certified mail,  return receipt  requested,  or
via overnight courier, and shall be effective upon proof of delivery,  addressed
to Tenant at the  Premises  or to  Landlord  at the  management  office  for the
Project,  with a copy to  Landlord,  c/o  Arden  Realty,  Inc.,  11601  Wilshire
Boulevard,  Fourth Floor, Los Angeles, California 90025, Attn: Legal Department.
Either party may by notice to the other  specify a different  address for notice
purposes  except that,  upon Tenant's  taking  possession  of the Premises,  the
Premises shall constitute  Tenant's  address for notice purposes.  A copy of all
notices to be given to Landlord  hereunder shall be concurrently  transmitted by
Tenant to such party hereafter designated by notice from Landlord to Tenant. Any
notices sent by Landlord regarding or relating to eviction procedures, including
without limitation three day notices, may be sent by regular mail.

     (m) Persistent Delinquencies.  In the event that Tenant shall be delinquent
         ------------------------
by more than  fifteen  (15) days in the  payment  of rent on three (3)  separate
occasions  in any twelve  (12) month  period,  Landlord  shall have the right to
terminate  this Lease by thirty (30) days  written  notice  given by Landlord to
Tenant within thirty (30) days of the last such delinquency.



<PAGE>

     (n) Right of  Landlord to  Perform.  All  covenants  and  agreements  to be
         ------------------------------
performed  by Tenant  under any of the terms of this Lease shall be performed by
Tenant at Tenant's  sole cost and expense and without any  abatement of rent. If
Tenant shall fail to pay any sum of money,  other than rent  required to be paid
by it  hereunder  or  shall  fail to  perform  any  other  act on its part to be
performed hereunder,  and such failure shall continue beyond any applicable cure
period set forth in this Lease,  Landlord  may, but shall not be  obligated  to,
without  waiving or releasing  Tenant from any  obligations of Tenant,  make any
such  payment  or  perform  any such  other act on  Tenant's  part to be made or
performed  as is in this Lease  provided.  All sums so paid by Landlord  and all
reasonable  incidental costs,  together with interest thereon at the rate of ten
percent  (10%) per annum  from the date of such  payment by  Landlord,  shall be
payable to Landlord  on demand and Tenant  covenants  to pay any such sums,  and
Landlord  shall have (in addition to any other right or remedy of Landlord)  the
same rights and remedies in the event of the nonpayment  thereof by Tenant as in
the case of default by Tenant in the payment of the rent.

     (o) Access. Changes in Project, Facilities, Name.
         ---------------------------------------------

          (i) Every part of the Project except the inside surfaces of all walls,
windows and doors bounding the Premises (including exterior building walls, core
corridor  walls and doors and any core corridor  entrance),  and any space in or
adjacent to the Premises used for shafts,  stacks, pipes,  conduits,  fan rooms,
ducts, electric or other utilities,  sinks or other building facilities, and the
use thereof,  as well as access thereto through the Premises for the purposes of
operation, maintenance, decoration and repair, are reserved to Landlord.

          (ii) Tenant shall permit Landlord to install,  use and maintain pipes,
ducts and conduits within the walls, columns and ceilings of the Premises.

          (iii) Landlord reserves the right,  without incurring any liability to
Tenant therefor,  to make such changes in or to the Project and the fixtures and
equipment thereof,  as well as in or to the street entrances,  halls,  passages,
elevators, stairways and other improvements thereof, as it may deem necessary or
desirable.

          (iv) Landlord may adopt any name for the Project and Landlord reserves
the right to change the name or address of the Project at any time.

     (p) Signing Authority.  If Tenant is a corporation,  partnership or limited
         -----------------
liability company, each individual executing this Lease on behalf of said entity
represents and warrants that he or she is duly authorized to execute and deliver
this  Lease on behalf  of said  entity in  accordance  with:  (i) if Tenant is a
corporation,  a duly  adopted  resolution  of the  Board  of  Directors  of said
corporation  or in  accordance  with the  By-laws of said  corporation,  (ii) if
Tenant is a partnership,  the terms of the partnership  agreement,  and (iii) if
Tenant is a limited liability company, the terms of its operating agreement, and
that this  Lease is  binding  upon said  entity in  accordance  with its  terms.
Concurrently  with  Tenant's  execution of this Lease,  Tenant shall  provide to
Landlord a copy of: (i) if Tenant is a corporation, such resolution of Directors
authorizing the execution of this Lease on behalf such  corporation,  resolution
shall  be  duly  certified  by  the  secretary  or  assistant  secretary  of the
corporation a true copy of a resolution  duly adopted by t he Board of Directors
of  said  corporation  and shall be in the form of " Exhibit E"


                                       33
<PAGE>

or in some other form  reasonably  acceptable  to Landlord,  (ii) if Tenant is a
partnership,  a copy of the provisions of the partnership agreement granting the
requisite  authority to each  individual  executing this Lease on behalf of said
partnership,  and (iii) if Tenant is a limited liability  company, a copy of the
provisions of its operating  agreement granting the requisite  authority to each
individual  executing this Lease on behalf of said limited liability company. In
the  event  Tenant  fails to  comply  with the  requirements  set  forth in this
subparagraph (p), then each individual  executing this Lease shall be personally
liable for all of Tenant's obligations in this Lease.

     (q) Identification of Tenant.
         ------------------------

          (i) If Tenant  constitutes more than of one person of or entity,  (A )
each of them  shall  be  jointly  and  severally  liable  for the  keeping  all,
observing and performing  covenants,  conditions and provisions of this Lease to
be kept, observed and performed by Tenant, (B) the term "Tenant" as used in this
L ease shall mean and include  each of them jointly and  severally,  and (C) the
act of or notice from,  or notice or refund to, or the  signature of, any one or
more of them,  with  respect to the tenancy of this  Lease,  including , but not
limited to, any renewal, extension,  expiration , termination or modification of
this  Lease,  shall be  binding  upon each and all of the  persons  or  entities
executing  this Lease as Tenant  with the same effect as if each and all of them
had so acted or so given or received such notice or refund or signed .

          (ii)  If  Tenant  is a  partnership  (or is  comprised  of two or more
persons,  individually  and as  co-partners  of a  partnership)  or if  Tenant's
interest in this Lease  assigned to a  partnership  (or to two or more  persons,
individually  and as co-part  partnership)  pursuant  to Article 15 here of (any
such  partnership  and such  persons  hereinafter  referred  to in this  Article
30(q)(ii) as "Partnership Tenant"), the following provisions of this Lease shall
apply to such Partnership Tenant:

              (A) The  liability of each of the parties  comprising  Partnership
Tenant shall be joint and several.

              (B)  Each of the  parties  comprising  Partnership  Tenant  hereby
consents in advance to, and agrees to be bound by, any written  instrument which
may hereafter be executed,  changing,  modifying or discharging  this Lease,  in
whole or in part, or  surrendering  or any part of the Premises to the Landlord,
and by notices,  demands, requests or other communication which may hereafter be
given,  by the to individual or individuals  authorized to execute this Lease on
behalf of Partnership Tenant under Subparagraph (p) above.

              (C) Any bills,  statements,  notices,  demands,  requests or other
communications  given or rendered to Partnership Tenant or to any of the parties
compromising Partnership Tenant shall be deemed given or rendered to Partnership
Tenant and to all such parties and shall be binding upon Partnership  Tenant and
all such parties.

              (D) If  Partnership  Tenant admits new  partners,  all of such new
partners  shall,  by their  admission to Partnership  Tenant,  be deemed to have
assumed  performance  of the terms,  covenants  and  conditions of this Lease on
Tenant's part to be observed and performed.


                                       34
<PAGE>

              (E) Partnership Tenant shall give prompt notice to Landlord of the
admission of any such new partners,  and,  upon demand of Landlord,  shall cause
each such new partner to execute and  deliver to Landlord an  agreement  in form
satisfactory  to  Landlord,   where  in  each  such  new  partner  shall  assume
performance  of all of the  terms,  covenants  and  conditions  of this Lease on
Partnership  Tenant's part to be observed and performed (but neither  Landlord's
failure to request any such agreement nor the failure of any such new partner to
execute or deliver any such agreement to Landlord shall terminate the provisions
of clause (D) of this  Article  30(q)(ii) or relieve any such new partner of its
obligations thereunder).

     (r) Substitute  Premises.  Landlord shall have the at right any time during
         --------------------
the Term hereof,  upon giving Tenant not less than sixty (60) days prior notice,
to  provide  and  furnish  Tenant  with  space   elsewhere  in  the  Project  of
approximately  the same size as the Premises and remove and place Tenant in such
space,  with  Landlord to pay all verified  and  previously  approved  costs and
expenses incurred as a result of such movement to such new space. Landlord moves
Tenant to such new space,  this  Lease and each and all of its terms,  covenants
and  conditions  shall  remain  in full  force  and  effect  and shall be deemed
applicable to such new space and such new space shall thereafter be deemed to be
the "Premises" as though Landlord and Tenant had entered into an express written
amendment of this Lease with respect thereto.

     (s) Survival of Obligations.  Any obligations of Tenant  occurring prior to
         -----------------------
the  expiration  or  earlier  termination  of  this  Lease  shall  survive  such
expiration or earlier termination.

     (t) Intentionally Deleted.
         ---------------------

     (u)  Governing  Law.  This Lease  shall be  governed  by and  construed  in
          --------------
accordance  with the laws of the State of California.  No conflicts of law rules
of any state or country (including, without limitation,  California conflicts of
la w rules) shall be applied to result in the  application of any substantive or
procedural   laws  of  any  state  or  country   other  than   California.   All
controversies,  claims,  actions or causes of action arising between the parties
hereto and/or their respective successors and assigns,  shall be brought,  heard
and  adjudicated  by the  courts of the State of  California,  with venue in the
County of  Riverside.  Each of the parties  hereto  hereby  consents to personal
jurisdiction  by the courts of the State of California  in  connection  with any
such  controversy,  claim,  action or cause of action,  and each of the  parties
hereto consents to service of process by any means  authorized by California law
and consent to the  enforcement of any judgment so obtained in the courts of the
State of  California on the same terms and  conditions  as if such  controversy,
claim , action or cause of action had been originally heard and adjudicated to a
final judgment in such courts.  Each of the parties hereto further  acknowledges
that the laws and courts of  California  were freely and  voluntarily  chosen to
govern this Lease and to adjudicate any claims or disputes hereunder.

     (v)  Exhibits and  Addendum.  The Exhibits  and  Addendum,  if  applicable,
          ----------------------
attached hereto are incorporated  herein by this reference as if fully set forth
herein.


                                       35
<PAGE>

                                  ARTICLE XXXI
                                  ------------

                                OPTION TO EXTEND
                                ----------------

     (a) Option  Right.  Landlord  hereby  grants the Tenant named in this Lease
         ------------
(the "Original  Tenant") one (1) option  ("Option") to extend the Lease Term for
the entire  Premises for a period of three (3) years (an "Option  Term"),  which
option  shall be  exercisable  only by  written  notice  delivered  by Tenant to
Landlord  set forth  below.  The rights  contained  in this  Article 31 shall be
personal to the Original Tenant and may only be exercised by the Original Tenant
(and not any assignee,  sublessee or other  transferee of the Original Tenant `s
interest in this Lease) if the Original  Tenant  occupies the entire Premises as
of the date of Tenant's Acceptance (as defined in Section 31(c) below).

     (b) Option Rent. The rent payable by Tenant during the Option Term ("Option
         -----------
Rent") shall be equal to the "Market  Rent"  (defined  below ), but in now event
shall the Option Rent be less than Tenant is paying under the Lease on the month
immediately  preceding the Option Term for Monthly  Basic Rental,  including all
escalations,  Direct Costs,  additional  rent and other  charges.  "Market Rent"
shall mean the  applicable  Monthly  Basic Rental,  including  all  escalations,
Direct Costs, additional rent and other charges at which tenants, as of the time
of Landlord's  "Option Rent Notice" (as defined below), are entering into leases
for non-sublease, non-encumbered, space comparable in size, location and quality
to the Premises in renewal transactions for a term comparable to the Option Term
which comparable space is located in office buildings  comparable to the Project
in Temecula,  California  taking,  into  consideration the value of the existing
improvements in the Premises to Tenant, as compared to the value of the existing
improvements  in such  comparable  space, w it h such value to be based upon the
age,  quality  and layout of the  improvements  and the extent to which the same
could be  utilized  by  Tenant  with  consideration  given to the fact  that the
improvements existing in the Premises are specifically suitable to Tenant.

     (c) Exercise of Option. The Option shall be exercised by Tenant only in the
         ------------------
following manner: (i) Tenant shall not be in default, and shall not have been in
default  under this Lease more than once,  on the delivery  date of the Interest
Notice and  Tenant's  Acceptance;  (ii)  Tenant  shall  deliver  written  notice
("Interest  Notice") to Landlord not more than ten (10) months nor less than six
(6) months  prior to the  expiration  of the Lease Term,  stating that Tenant is
interested in exercising the Option,  (iii) within fifteen (15) business days of
Landlord's  receipt of Tenant's  written  notice,  Landlord shall deliver notice
("Option  Rent  Notice") to Tenant  setting  forth the Option Rent;  and (iv) if
Tenant desires to exercise such Option,  Tenant shall provide  Landlord  written
notice  within five (5)  business  days after  receipt of the Option Rent Notice
("Tenant's  Acceptance").  Tenant's  failure to deliver the  Interest  Notice or
Tenant's  Acceptance on or before the dates  specified  above shall be deemed to
constitute  Tenant's  election not to exercise the Option.  If Tenant timely and
properly  exercises its Option,  the Lease Term shall be extended for the Option
Term upon all of the terms and conditions  set forth in this Lease,  except that
the rent for the Option Term shall be as indicated in the Option Rent Notice.



                                       36
<PAGE>

                                 ARTICLE XXXII
                                 -------------

                                SIGNAGE/DIRECTORY
                                -----------------

     Provided Tenant is not in default hereunder,  Tenant, at Tenant's cost sole
and expense,  shall have the right to one (1) line in the lobby directory during
the Lease Term. If other tenants occupy space on the floor on which the Premises
is located,  Tenant's  identifying  signage  shall be provided by  Landlord,  at
Landlord's  cost,  and such signage shall be comparable to that used by Landlord
for other similar floors in the Project and shall comply with Landlord's Project
standard signage program.  Provided Tenant is not in default  hereunder,  Tenant
shall have the right, at Tenant `s sole cost and expense,  to install signage in
the  elevator  lobby of the floor on which the  Premises  is located  ("Tenant's
Signage").  Tenant's Signage shall be subject to Landlord's approval as to size,
design,  location,  graphics,  materials,  colors and similar specifications and
shall be consistent  with the exterior  design,  materials and appearance of the
Project and the Project's signage program. Tenant's Signage shall be personal to
the Original Tenant and may not be assigned to any assignee or sublessee, or any
other  person or entity.  Landlord  has the right,  but not the  obligation,  to
oversee the  installation  of Tenant's  Signage.  The cost to maintain  Tenant's
Signage shall be paid for by Tenant.  Upon the  expiration of the Lease Term, or
other earlier termination of this Lease, Tenant shall be responsible for any and
all costs associated with the removal of Tenant `s Signage,  including,  but not
limited  to,  the  cost to  repair  and  restore  the  Project  to its  original
condition, normal wear and tear excepted,




                                       37
<PAGE>


     IN WITNESS WHEREOF, the parties have executed this Lease, consisting of the
foregoing provisions and Articles,  including all exhibits and other attachments
referenced therein, as of the date first above written.


"LANDLORD"                      ARDEN REALTY LIMITED PARTNERSHLP,
                                a Maryland limited partnership

                                By: ARDEN REALTY, INC.,
                                    a Maryland corporation
                                    Its: Sole General Partner

                                By:
                                    --------------------------------------------
                                VICTOR J. COLEMAN
                                Its: President and COO

"TENANT"                        E-PERCEPTION TECHNOLOGIES.,
                                a Delaware corporation

                                By:
                                     -------------------------------------------
                                     Print Name:
                                                 -------------------------------
                                     Title:
                                            ------------------------------------

                                By:
                                    --------------------------------------------
                                     Print Name:
                                                 -------------------------------
                                     Title:
                                            ------------------------------------



                                       38
<PAGE>

                                   EXHIBIT "A"
                                   -----------

                                    PREMISES
                                    --------


<PAGE>


                                   EXHIBIT "B"
                                   -----------

                        [FIRST PAGE OF EXHIBIT B MISSING]
                        ---------------------------------

         7.  Tenant  shall  not use or  keep  in the  Premises  or  Project  any
kerosene,  gasoline or inflammable,  explosive or combustible fluid or material,
or use any method of heating or air  conditioning  other than that  supplied  by
Landlord.

         8. Tenant shall not lay linoleum,  tile,  carpet or other similar floor
covering  so that the same shall be affixed to the floor of the  Premises in any
manner except as approved by Landlord.

         9.  Tenant  shall not  install or use any  blinds,  shades,  awnings or
screens in, connection with any window or door of the Premises and shall not use
any drape or window  covering  facing any exterior  glass surface other than the
standard drapes, blinds or other window covering established by Landlord.

         10.  Tenant  shall   cooperate  with  Landlord  in  obtaining   maximum
effectiveness  of the cooling system by closing window  coverings when the sun's
rays fall directly on windows of the Premises. Tenant shall not obstruct, alter,
or in any way impair the efficient operation of Landlord's heating,  ventilating
and air-conditioning  system. Tenant shall not tamper with or change the setting
of any thermostats or control valves.

         11. The Premises shall not be used for manufacturing or for the storage
of merchandise  except as such storage may be incidental to the permitted use of
the  Premises.  Tenant shall not,  without  Landlord `s prior  written  consent,
occupy or permit any  portion of the  Premises  to be  occupied  or used for the
manufacture  or sale of liquor or tobacco in any form,  or a barber or  manicure
shop, or as an employment  bureau. The Premises shall not be used for lodging or
sleeping or for any improper, objectionable or immoral purpose. No auction shall
be conducted on the Premises.

         12.  Tenant  shall not make,  or permit  to be made,  any  unseemly  or
disturbing  noises,  or  disturb  or  interfere  with  occupants  of  Project or
neighboring buildings or premises or those having business with it by the use of
any musical  instrument,  radio,  phonographs or unusual noise,  or in any other
way.

         13. No bicycles,  vehicles or animals of any kind shall be brought into
or kept in or about the  Premises,  and no cooking shall be done or permitted by
any tenant in the  Premises,  except that the  preparation  of coffee,  tea, hot
chocolate and similar items for tenants,  their  employees and visitors shall be
permitted. No tenant shall cause or permit any unusual or objectionable odors to
be  produced in or permeate  from or  throughout  the  Premises.  The  foregoing
notwithstanding,  Tenant  shall  have the right to use a  microwave  and to heat
microwavable  items  typically  heated in an office.  No hot  plates,  toasters,
toaster ovens or similar open element  cooking  apparatus  shall be permitted in
the Premises.

         14. The sashes, sash doors,  skylights,  windows and doors that reflect
or admit light and air into the halls, passageways or other public places in the
Project shall not be covered or obstructed by any tenant, nor shall any bottles,
parcels or other articles be placed on the window sills.



<PAGE>

         15. No  additional  locks or bolts of any kind shall be placed upon any
of the doors or windows by any tenant, nor shall any changes be made in existing
locks or the mechanisms thereof unless Landlord is first notified thereof, gives
written  approval,  and is furnished a key therefor.  Each tenant must, upon the
termination  of his tenancy,  give to Landlord all keys and key cards of stores,
offices,  or toilets or toilet rooms, either furnished to, or otherwise procured
by, such  tenant,  and in the event of the loss of any keys so  furnished,  such
tenant shall pay Landlord the cost of replacing the same or of changing the lock
or locks  opened by such lost key if Landlord  shall deem it  necessary  to make
such  change.  If more  than two keys for one lock are  desired,  Landlord  will
provide them upon payment therefor by Tenant. Tenant shall not key or re-key any
locks. All locks shall be keyed by Landlord `s locksmith only.

         16.  Landlord  shall have the right to prohibit any  advertising by any
tenant  which,  in Landlord `s opinion,  tends to impair the  reputation  of the
Project or its  desirability  as an office building and upon written notice from
Landlord any tenant shall refrain from and discontinue such advertising.

         17. Landlord reserves the right to control access to the Project by all
persons after reasonable hours of generally  recognized business days and at all
hours on Sundays and legal  holidays.  Each tenant shall be responsible  for all
persons for whom it requests  after hours access and shall be liable to Landlord
for all acts of such persons. Landlord shall have the right from time to time to
establish  reasonable rules pertaining to freight elevator usage,  including the
allocation and  reservation of such usage for tenants  `initial their move-in to
premises, and final departure therefrom.

         18. Any person  employed  by any tenant to do  janitorial  work  shall,
while in the Project and  outside of the  Premises,  be subject to and under the
control  and  direction  of  the  Office  of  the  Project  or  its   designated
representative  such as  security  personnel  (but not as an agent or servant of
Landlord, and the Tenant shall be responsible for al! acts of such persons).

         19.  All doors  opening  on to public  corridors  shall be kept  closed
except when being used for ingress and egress. Tenant shall cooperate and comply
with any reasonable safety or security  programs,  including fire drills and air
raid drills, and the appointment of "fire wardens" developed by Landlord for the
Project,  or required by law.  Before  leaving the Premises  unattended,  Tenant
shall close and securely  lock all doors or other means of entry to the Premises
and shut off all lights and water faucets in the Premises.

         20.  The  requirements  of  tenants  will  be  attended  to  only  upon
application
to the Office of the Project.

         21.  Canvassing,  soliciting and peddling in the Project are prohibited
and each tenant shall cooperate to prevent the same.

         22. All office  equipment of any electrical or mechanical  nature shall
be placed by tenants in the Premises in settings approved by Landlord, to absorb
or prevent any vibration, noise or annoyance.


<PAGE>

         23.  No  air-conditioning  unit or  other  similar  apparatus  shall be
installed or used by any tenant  without the prior written  consent of Landlord.
Tenant shall pay the cost of all electricity  used for  air-conditioning  in the
Premises if such  electrical  consumption  exceeds  normal office  requirements,
regardless  of  whether  additional  apparatus  is  installed  pursuant  to  the
preceding sentence.

         24. There shall not be used in any space, or in the public halls of the
Project,  either by any tenant or others,  any hand trucks except those equipped
with rubber tires and side guards.

         25. All electrical ceiling fixtures hung in offices or spaces along the
perimeter of the Project must be fluorescent  and/or of a quality,  type, design
and bulb color approved by Landlord.  Tenant shall not permit the consumption in
the Premises of more than 2 1/2 watts per net usable square foot in the Premises
in respect of office  lighting nor shall Tenant  permit the  consumption  in the
Premises  of more than 1 1/2 watts per net  usable  square  foot of space in the
Premises in respect of the power outlets therein,  at any one time. In the event
that such limits are exceeded,  Landlord  shall have the right to require Tenant
to remove lighting  fixtures and equipment  and/or to charge Tenant for the cost
of the additional electricity consumed.

          26. Parking.

              (a)  Project  parking  facility  hours  shall be 7:00 a.m. to 7:00
p.m., Monday through Friday, and closed on weekends,  state and federal holidays
excepted, as such hours may be revised from time to time by Landlord.

              (b) Automobiles  must be parked entirely within the stall lines on
the floor.

              (c) All directional signs and arrows must be observed.

              (d) The speed limit shall be 5 miles per hour.

              (e) Parking is prohibited in areas not striped for parking.

              (f) Parking  cards or any other  device or form of  identification
supplied by Landlord (or its operator) shall remain the property of Landlord (or
its operator). Such parking identification device must be displayed as requested
and may not be  mutilated  in any  manner.  The  serial  number  of the  parking
identification  device may not be obliterated.  Devices are not  transferable or
assignable  and any device in the possession of an  unauthorized  holder will be
void. There will be a replacement  charge to the Tenant or person  designated by
Tenant of $25.00 for loss of any parking card. There shall be a security deposit
of $25.00 due at issuance for each card key issued to Tenant.

              (g) The  monthly  rate for  parking  is  payable  one (1) month in
advance and must be paid by the third business day of each month.  Failure to do
so will  automatically  cancel parking privileges and a charge at the prevailing
daily rate will be due. No deductions  or allowances  from the monthly rate will
be made for days parker does not use the parking facilities.


<PAGE>

              (h) Tenant may validate  visitor parking by such method or methods
as the Landlord may approve,  at the validation rate from time to time generally
applicable to visitor parking.

              (i) Landlord  (and its  operator)  may refuse to permit any person
who violates the within rules to park in the Project parking  facility,  and any
violation of the rules shall subject the  automobile to removal from the Project
parking facility at the parker's expense. In either of said events, Landlord (or
its operator) shall refund a prorata portion of the current monthly parking rate
and the sticker or any other form of identification supplied by Landlord (or its
operator) will be returned to Landlord (or its operator).

              (j)  Project  parking  facility  managers  or  attendants  are not
authorized to make or allow any exceptions to these Rules and Regulations.

              (k) All  responsibility  for any loss or damage to  automobiles or
any personal property therein is assumed by the parker.

              (l)  Loss  or  theft  of  parking   identification   devices  from
automobiles   must  be  reported  to  the  Project  parking   facility   manager
immediately,  and a lost or stolen  report  must be filed by the  parker at that
time.

              (m) The Parking facilities are for the sole purpose of parking one
automobile per space. Washing,  waxing, cleaning or servicing of any vehicles by
the parker or his agents is prohibited.

              (n) Landlord (and its  operator)  reserves the right to refuse the
issuance of monthly  stickers  or other  parking  identification  devices to any
Tenant  and/or  its  employees  who  refuse to comply  with the above  Rules and
Regulations and al! City, State or Federal ordinances, laws or agreements.

              (o) Tenant agrees to acquaint all  employees  with these Rules and
Regulations.

              (p) No vehicle shall be stored in the Project parking facility for
a period of more than one (1) week.

         27. The Project is a non-smoking  Project.  Smoking or carrying lighted
cigars or cigarettes in the Premises or the Project,  including the elevators in
the Project, is prohibited.




<PAGE>

                                   EXHIBIT "C"
                                   -----------

                           NOTICE OF LEASE TERM DATES
                        AND TENANT'S PROPORTIONATE SHARE
                        --------------------------------

TO:                                               DATE:
    ------------------------------                    --------------------------


RE:  Lease dated ___________, 2000, between _____________________  ("Landlord"),
     and  __________________  ("Tenant"),  concerning  Suite ______,  located at
     ____________.

Ladies and Gentlemen:

         In accordance with the Lease,  Landlord wishes to advise and/or confirm
the following:

     1. That the  Premises  have been  accepted  herewith by the Tenant as being
substantially  complete  in  accordance  with the  Lease  and  that  there is no
deficiency in construction.

     2. That the Tenant has taken  possession  of the Premises and  acknowledges
that under the  provisions of the Lease the Term of said Lease shall commence as
of   ______________   for  a   term   of   _______________________   ending   on
_______________________.

     3. That in accordance with the Lease,  Basic Rental  commenced to accrue on
______________________.

     4. If the Commencement Date of the Lease is other than the first day of the
month,  the  first  billing  will  contain a prorata  adjustment.  Each  billing
thereafter  shall be for the full amount of the monthly  installment as provided
for in said Lease.

     5. Rent is due and  payable  in  advance on the first day of each and every
month during the Term of said Lease.  Your rent checks should be made payable to
________________ at _____________________________________.

     6. The exact  number  of  rentable  square  feet  within  the  Premises  is
____________ square feet.



<PAGE>


     7. Tenant's Proportionate Share, as adjusted based upon the exact number of
rentable square feet within the Premises is _________%.

AGREED AND ACCEPTED:

TENANT:

--------------------------------------------,

a
  ------------------------------------------

By:
    ----------------------------------------
      Its:
           ---------------------------------



















                                  EXHIBIT ONLY
                         ***DO NOT SIGN -INITIAL ONLY***







<PAGE>

                                   EXHIBIT "D"
                                   -----------

                              INTENTIONALLY DELETED
                              ---------------------














<PAGE>

                                   EXHIBIT "E"
                                   -----------

                                CERTIFIED COPY OF
                         BOARD OF DIRE'CTORS RESOLUTIONS
                                       OF
                         E-PERCEPTION TECHNOLOGIES, INC.

         The  undersigned,   being  the  duly  elected  Corporate  Secretary  of
E-PERCEPTION TECHNOLOGIES, INC., a Delaware corporation ("Corporation"),  hereby
certifies  that  the `  following  is a true,  full  and  correct  copy o f `the
resolutions adopted by the Corporation by unanimous written consent in lieu of a
special meeting,  of its Board of Directors,  and that said resolutions have not
been amended or revoked as of the date hereof.

         RESOLVED,  that the  Corporation,  is  hereby  authorized  to  execute,
deliver and fully perform that certain document  entitled  Standard Office Lease
("Lease") by and between the Corporation and Arden Realty Limited Partnership, a
Maryland limited partnership, for the lease of space at Tower Plaza I.

         RESOLVED  FURTHER,  that  the  Corporation  is  hereby  authorized  and
directed  to make,  execute and  deliver  any and all,  consents,  certificates,
documents,  instruments,  amendments,   confirmations,   guarantees,  papers  or
writings as may be required in connection  with or in  furtherance  of the Lease
(collectively  with the Lease, the  "Documents") or any  transactions  described
therein,  and to do any and all other acts  necessary or desirable to effectuate
the foregoing resolution.

         RESOLVED  FURTHER,   that  the  following   officers  acting  together:
_____________  as   _____________;   and   _____________  as  _____________  are
authorized  to execute and deliver the  Documents on behalf of the  Corporation,
together with any other documents and/or instruments  evidencing or ancillary to
the  Documents,  and in such  forms and on such terms as such  officer(s)  shall
approve, the execution thereof to be conclusive evidence of such approval and to
execute and deliver on behalf of the Corporation  all other documents  necessary
to effectuate said transaction in conformance with these resolutions.

Date___________, 2000
                                         -------------------------------------,
                                         Corporate Secretary









                                  EXHIBIT ONLY
                         ***DO NOT SIGN -INITIAL ONLY***


<PAGE>


                                TABLE OF CONTENTS

                                                                            Page



ARTICLE I  BASIC LEASE PROVISIONS.............................................1

ARTICLE II  TERM/PREMISES.....................................................2

ARTICLE III  RENTAL...........................................................3
                  (a)      Basic Rental.......................................3
                  (b)      Increase in Direct Costs...........................3
                  (c)      Definitions........................................3
                  (d)      Determination of Payment...........................6

ARTICLE IV  SECURITY DEPOSIT..................................................7

ARTICLE V  HOLDING OVER.......................................................8

ARTICLE VI  PERSONAL PROPERTY TAXES...........................................9

ARTICLE VII  USE..............................................................9

ARTICLE VIII  CONDITION OF PREMISES..........................................10

ARTICLE IX  REPAIRS AND ALTERATIONS..........................................11

ARTICLE X  LIENS.............................................................12

ARTICLE XI  PROJECT SERVICES.................................................12

ARTICLE XII  RIGHTS OF LANDLORD..............................................14

ARTICLE XIII  INDEMNITY; EXEMPTION OF LANDLORD FROM LIABILITY................14
                  (a)      Indemnity.........................................14
                  (b)      Exemption of Landlord from Liability..............14

ARTICLE XIV  INSURANCE.......................................................15
                  (a)      Tenant's Insurance................................15
                  (b)      Form of Policies..................................16
                  (c)      Landlord's Insurance..............................16
                  (d)      Waiver of Subrogation.............................16
                  (e)      Compliance with Law...............................17

ARTICLE XV  ASSIGNMENT AND SUBLETTING........................................17

ARTICLE XVI  DAMAGE OR DESTRUCTION...........................................19

ARTICLE XVII  SUBORDINATION..................................................20

ARTICLE XVIII  EMINENT DOMAIN................................................21



<PAGE>

                                TABLE OF CONTENTS
                                  (continued)
                                                                            Page


ARTICLE XIX  DEFAULT.........................................................22

ARTICLE XX  REMEDIES.........................................................23

ARTICLE XXI  TRANSFER OF LANDLORD'S INTEREST.................................24

ARTICLE XXII  BROKER.........................................................25

ARTICLE XXIII  PARKING.......................................................25

ARTICLE XXIV  WAIVER.........................................................26

ARTICLE XXV  ESTOPPEL CERTIFICATE............................................26

ARTICLE XXVI  LIABILITY OF LANDLORD..........................................27

ARTICLE XXVII  INABILITY TO PERFORM..........................................27

ARTICLE XXVIII  HAZARDOUS WASTE..............................................28

ARTICLE XXIX  SURRENDER OF PREMISES: REMOVAL OF PROPERTY.....................29

ARTICLE XXX  MISCELLANEOUS...................................................30
                  (a)      Severabilitv: Entire Agreement....................30
                  (b)      Attorneys' Fees; Waiver of Jury Trial.............30
                  (c)      Time of Essence...................................31
                  (d)      Headings: Joint and Several.......................31
                  (e)      Reserved Area.....................................31
                  (f)      NO OPTION.........................................31
                  (g)      Use of Project Name; Improvements.................31
                  (h)      Rules and Regulations.............................32
                  (i)      Quiet Possession..................................32
                  (j)      Rent..............................................32
                  (k)      Successors and Assigns............................32
                  (l)      Notices...........................................32
                  (m)      Persistent Delinquencies..........................32
                  (n)      Right of Landlord to Perform......................33
                  (o)      Access.  Changes in Project, Facilities, Name.....33
                  (p)      Signing Authority.................................33
                  (q)      Identification of Tenant..........................34
                  (r)      Substitute Premises...............................35
                  (s)      Survival of Obligations...........................35
                  (t)      Intentionally Deleted.............................35
                  (u)      Governing Law.....................................35
                  (v)      Exhibits and Addendum.............................35

ARTICLE XXXI  OPTION TO EXTEND...............................................36


<PAGE>


                                TABLE OF CONTENTS
                                  (continued)
                                                                            Page


                  (a)      Option Right......................................36
                  (b)      Option Rent.......................................36
                  (c)      Exercise of Option................................36

ARTICLE XXXII  SIGNAGE/DIRECTORY.............................................37