INDEX TO INDUSTRIAL LEASE
                        (Single Tenant; Net; Stand-Alone)


         ARTICLE I.        BASIC LEASE PROVISIONS

         ARTICLE II.       PREMISES
           Section 2.1     Leased Premises
           Section 2.2     Acceptance of Premises
           Section 2.3     Building Name and Address
           Section 2.4     Landlord's Responsibilities

         ARTICLE III.      TERM
           Section 3.1     Commencement Date / Option to Extend
           Section 3.2     Delay in Possession

         ARTICLE IV.       RENT AND OPERATING EXPENSES
           Section 4.1     Basic Rent
           Section 4.2     Operating Expenses
           Section 4.3     Security Deposit
           Section 4.4     Additional Security Deposit

         ARTICLE V.        USES
           Section 5.1     Use
           Section 5.2     Signs
           Section 5.3     Hazardous Materials

         ARTICLE VI.       SERVICES
           Section 6.1     Utilities and Services
           Section 6.2     Parking

         ARTICLE VII.      MAINTAINING THE PREMISES
           Section 7.1     Tenant's Maintenance and Repair
           Section 7.2     Landlord's Maintenance and  Repair
           Section 7.3     Alterations
           Section 7.4     Mechanic's Liens
           Section 7.5     Entry and Inspection

         ARTICLE VIII.     TAXES AND ASSESSMENTS ON TENANT'S PROPERTY

         ARTICLE IX.       ASSIGNMENT AND SUBLETTING
           Section 9.1     Rights of Parties
           Section 9.2     Effect of Transfer
           Section 9.3     Sublease Requirements
           Section 9.4     Certain Transfers

         ARTICLE X.        INSURANCE AND INDEMNITY
           Section 10.1    Tenant's Insurance
           Section 10.2    Landlord's Insurance
           Section 10.3    Tenant's Indemnity
           Section 10.4    Landlord's Nonliability
           Section 10.5    Waiver of Subrogation

         ARTICLE XI.       DAMAGE OR DESTRUCTION
           Section 11.1    Restoration
           Section 11.2    Lease Governs

         ARTICLE XII.      EMINENT DOMAIN
           Section 12.1    Total or Partial Taking
           Section 12.2    Temporary Taking
           Section 12.3    Taking of Parking Area

         ARTICLE XIII.     SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIAL
           Section 13.1    Subordination
           Section 13.2    Estoppel Certificate
           Section 13.3    Financials

         ARTICLE XIV.      DEFAULTS AND REMEDIES
           Section 14.1    Tenant's Defaults
           Section 14.2    Landlord's Remedies
           Section 14.3    Late Payments
           Section 14.4    Right of Landlord to Perform
           Section 14.5    Default by Landlord
           Section 14.6    Expenses and Legal Fees
           Section 14.7    Waiver of Jury Trial
           Section 14.8    Satisfaction of Judgment
           Section 14.9    Limitation of Actions Against Landlord

         ARTICLE XV.       END OF TERM
           Section 15.1    Holding Over
           Section 15.2    Merger on Termination
           Section 15.3    Surrender of Premises; Removal of Property

         ARTICLE XVI.      PAYMENTS AND NOTICES

         ARTICLE XVII.     RULES AND REGULATIONS

         ARTICLE XVIII     BROKER'S COMMISSION

         ARTICLE XIX.    TRANSFER OF LANDLORD'S INTEREST

         ARTICLE XX.     INTERPRETATION
           Section 20.1       Gender and Number
           Section 20.2       Headings
           Section 20.3       Joint and Several Liability
           Section 20.4       Successors
           Section 20.5       Time of Essence
           Section 20.6       Controlling Law
           Section 20.7       Severability
           Section 20.8       Waiver and Cumulative Remedies
           Section 20.9        Inability to Perform
           Section 20.10      Entire Agreement
           Section 20.11      Quiet Enjoyment
           Section 20.12      Survival

         ARTICLE XXI.    EXECUTION AND RECORDING
           Section 21.1       Counterparts
           Section 21.2       Corporate and Partnership Authority
           Section 21.3       Execution of Lease; No Option or Offer
           Section 21.4       Recording
           Section 21.5       Amendments
           Section 21.6       Executed Copy
           Section 21.7       Attachments

         ARTICLE XXII.  MISCELLANEOUS
           Section 22.1       Nondisclosure of Lease Terms
           Section 22.2       Guaranty
           Section 22.3       Changes Requested by Lender
           Section 22.4       Mortgagee Protection
           Section 22.5       Covenants and Conditions
           Section 22.6       Security Measures


         EXHIBITS
           Exhibit A       Description of Premises
           Exhibit A-1     Description of the Site
           Exhibit B       Environmental Questionnaire
           Exhibit C       Landlord's Disclosures
           Exhibit D       Insurance Requirements
           Exhibit E       Rules and Regulations
           Exhibit X       Work Letter

<PAGE>

                                INDUSTRIAL LEASE
                        (Single Tenant; Net; Stand-Alone)



     THIS  LEASE  is  made  as of the day of , 19 , by and  between  The  Irvine
Company,  a  Michigan   corporation,   hereafter  called  "Landlord,"  and  ALYN
CORPORATION, a Delaware corporation, hereinafter called "Tenant."


                        ARTICLE I. BASIC LEASE PROVISIONS


     Each reference in this Lease to the "Basic Lease Provisions" shall mean and
refer to the  following  collective  terms,  the  application  of which shall be
governed by the provisions in the remaining Articles of this Lease.

1.   Premises:  The Premises are more particularly described in Section 2.1.


2.   Address of Building: 17021 Von Karman Avenue, Irvine, CA 92614

3.   Use of Premises:  General  administrative office use,  manufacturing and
     distribution,  and any other uses  allowable  under current  zoning
     ordinances, provided that no retail uses shall be permitted.


4.   Commencement Date: February 1, 1998

5.   Lease  Term:  Sixty (60)  months,  plus such  additional  days as may be
     required  to cause  this  Lease to  terminate  on the final day of the
     calendar month.


6.   Basic Rent:  Thirty-Nine  Thousand  Three  Hundred  Ninety-Four  Dollars
     ($39,394.00) per month.

     Basic Rent is subject to adjustment as follows:

     Commencing  on the first day of the  thirteenth  (13th)  month of the Lease
     Term,  the Basic  Rent shall be Forty  Thousand  Five  Hundred  Sixty-Seven
     Dollars ($40,567.00) per month.

     Commencing on the first day of the  twenty-fifth  (25th) month of the Lease
     Term, the Basic Rent shall be Forty-One Thousand Eight Hundred  Twenty-Five
     Dollars ($41,825.00) per month.

     Commencing on the first day of the thirty-seventh (37th) month of the Lease
     Term,  the Basic  Rent shall be  Forty-Three  Thousand  Eighty-Two  Dollars
     ($43,082.00) per month.

     Commencing  on the first day of the  forty-ninth  (49th) month of the Lease
     Term, the Basic Rent shall be Forty-Four Thousand Three Hundred Thirty-Nine
     Dollars ($44,339.00) per month.


7.   Guarantor(s):  None


8.   Floor Area of Premises:  approximately 83,817 rentable square feet


9.   Security Deposit: $ 48,773.00


10.  Broker(s):  Voit Commercial


11.  Additional Insureds:  Insignia Commercial Group, Inc.


12.  Address for Payments and Notices:

     LANDLORD                                      TENANT

     INSIGNIA COMMERCIAL GROUP, INC.               ALYN CORPORATION
     One Technology Drive, Suite F-207             17021 Von Karman Avenue
     Irvine, CA 92618                              Irvine, CA 92614

     with a copy of notices to:                    with a copy of notices to:

     IRVINE INDUSTRIAL COMPANY                     BERGER, KAHN, SHAFTON, MOSS,
     P.O. Box 6370                                  FIGLER, SIMON & GLADSTONE
     Newport Beach, CA  92658-6370                 2 Park Plaza, Suite 650
     Attn:  Vice President, Industrial Operations  Irvine, CA 92614
                                                   Attn:  Harri J. Keto, Esq.


13.  Tenant's Liability Insurance Requirement:  $ 2,000,000.00



<PAGE>


                              ARTICLE II. PREMISES


     SECTION 2.1. LEASED  PREMISES.  Landlord leases to Tenant and Tenant leases
from Landlord the premises  shown in EXHIBIT A (the  "Premises"),  including the
building identified in Item 2 of the Basic Lease Provisions (which together with
the  underlying  real  property,  is  called  the  "Building"),  and  containing
approximately  the floor area set forth in Item 8 of the Basic Lease Provisions.
The Building is located on the site (the  "Site")  shown on EXHIBIT A-1 attached
hereto.

     SECTION 2.2.  ACCEPTANCE  OF  PREMISES.  Tenant  acknowledges  that neither
Landlord  nor any  representative  of Landlord  has made any  representation  or
warranty  with  respect to the Premises or the  Building or the  suitability  or
fitness  of  either  for  any  purpose,   including   without   limitation   any
representations or warranties regarding zoning or other land use matters. Tenant
further  acknowledges  that neither Landlord nor any  representative of Landlord
has  agreed  to  undertake  any   alterations  or  additions  or  construct  any
improvements  to the Premises  except as expressly  provided in this Lease.  The
taking of possession or use of the Premises by Tenant for any purpose other than
construction  shall  conclusively  establish  that the Premises and the Building
were in  satisfactory  condition and in conformity  with the  provisions of this
Lease in all respects,  except for those matters which Tenant shall have brought
to Landlord's  attention on a written  punch list.  The list shall be limited to
any items required to be accomplished by Landlord under the Work Letter attached
as Exhibit X, and shall be delivered to Landlord  within  thirty (30) days after
the term ("Term") of this Lease  commences as provided in Article III below.  If
no items are required of Landlord under the Work Letter, by taking possession of
the Premises Tenant accepts the  improvements in their existing  condition,  and
waives any right or claim against  Landlord  arising out of the condition of the
Premises.   Nothing   contained   in  this  Section   shall  affect   Landlord's
responsibilities under Section 2.4 below, or the commencement of the Term or the
obligation of Tenant to pay rent.  Landlord shall diligently  complete all punch
list items of which it is notified as provided above.

     SECTION 2.3.  BUILDING NAME AND ADDRESS.  Landlord  shall have the right to
change  the  name,  address,  number  or  designation  of the  Building  without
liability to Tenant.

     SECTION  2.4.   LANDLORD'S   RESPONSIBILITIES.   It  shall  be   Landlord's
responsibility, at its sole cost and expense and not as an Operating Expense, to
repair or replace any structural  elements of the Building,  footings,  walls or
roof systems  which shall fail during the Term.  The  foregoing  responsibility,
however,  shall not apply to any maintenance of, or needed periodic  repairs to,
any of the foregoing structural elements.  Landlord shall make any such required
repairs or replacements promptly following notice from Tenant.


                                ARTICLE III. TERM


     SECTION 3.1.     COMMENCEMENT DATE/OPTION TO EXTEND.

              (a)  Commencement  Date. The Term shall be for the period shown in
Item 5 of the Basic Lease  Provisions.  The Term shall  commence  ("Commencement
Date"),  and possession of the Premises  (subject to Tenant's early entry rights
contained in the Work Letter) shall be tendered to Tenant, on the date set forth
in Item 4 of the Basic Lease  Provisions.  Within ten (10) days after possession
of the Premises is tendered to Tenant,  the parties shall  memorialize on a form
provided  by  Landlord  the actual  Commencement  Date and the  expiration  date
("Expiration  Date") of this Lease.  Tenant's failure to execute that form shall
not affect the validity of Landlord's determination of those dates.

              (b) Option to Extend. Provided that Tenant is not in default under
any  provision  of this Lease,  either at the time of exercise of the  extension
right granted herein or at the time of the  commencement of such extension,  and
provided further that Tenant has not sublet more than fifty percent (50%) of the
floor area of the Premises and/or has not assigned its interest under this Lease
other than to a "Tenant  Affiliate"  (as defined in Section 9.4 of this  Lease),
Tenant  may  extend  the Term of this  Lease for one (1)  period  of sixty  (60)
months.  Tenant  shall  exercise  its  right to  extend  the Term by and only by
delivering  to Landlord,  not more than four  hundred  fifty (450) days nor less
than three  hundred sixty (360) days prior to the  expiration  date of the Term,
Tenant's irrevocable written notice of its commitment to extend (the "Commitment
Notice").  The Basic Rent payable  under the Lease  during any  extension of the
Term shall be at the fair market rental,  including subsequent adjustments,  for
comparable  industrial space in the Irvine Business Complex;  provided that such
rate shall in no event be less than the rate payable by Tenant  during the final
month of the initial  Term.  In the event that the parties are not able to agree
on the fair  market  rental  within one hundred  eighty  (180) days prior to the
expiration  date of the Term,  then either party may elect, by written notice to
the other party, to cause said rental,  including subsequent adjustments,  to be
determined by appraisal as follows.

     Within ten (10) days  following  receipt of such  appraisal  election,  the
parties  shall  attempt to agree on an appraiser  to  determine  the fair market
rental.  If the parties are unable to agree in that time,  then each party shall
designate an appraiser within ten (10) days thereafter. Should either party fail
to so designate an appraiser within that time, then the appraiser  designated by
the other  party  shall  determine  the fair  rental  value.  Should each of the
parties  timely  designate an appraiser,  then the two  appraisers so designated
shall  appoint a third  appraiser who shall,  acting  alone,  determine the fair
rental value of the Premises.  Any appraiser  designated hereunder shall have an
M.A.I.  certification  with  not less  than  five (5)  years  experience  in the
valuation of commercial industrial buildings in Orange County, California.

     Within  thirty (30) days  following the  selection of the  appraiser,  such
appraiser  shall  determine the fair market rental value,  including  subsequent
adjustments of the Premises.  In no event shall the appraiser  attribute factors
for market tenant improvement allowances or brokerage commissions to reduce said
fair market rental. The fees of the appraiser(s) shall be shared equally by both
parties.

     Within twenty (20) days after the  determination of the fair market rental,
Landlord shall prepare a reasonably  appropriate amendment to this Lease for the
extension period and Tenant shall execute and return same to Landlord within ten
(10) days.  Should the fair market rental not be established by the commencement
of the extension  period,  then Tenant shall continue paying rent at the rate in
effect  during the last month of the  initial  Term,  and a lump sum  adjustment
shall be made promptly upon the determination of such new rental.

     If  Tenant  fails  to  timely  comply  with any of the  provisions  of this
paragraph, Tenant's right to extend the Term shall be extinguished and the Lease
shall automatically terminate as of the expiration date of the Term, without any
extension  and  without  any  liability  to  Landlord.  Any attempt to assign or
transfer any right or interest  created by this paragraph shall be void from its
inception. Tenant shall have no other right to extend the Term beyond the single
sixty (60) month  extension  created by this  paragraph.  Unless  agreed to in a
writing  signed by  Landlord  and Tenant,  any  extension  of the Term,  whether
created  by an  amendment  to this  Lease or by a holdover  of the  Premises  by
Tenant,  or  otherwise,  shall be deemed a part of, and not in addition  to, any
duly exercised extension period permitted by this paragraph.

     SECTION 3.2. DELAY IN POSSESSION.  If Landlord,  for any reason whatsoever,
cannot  deliver   possession  of  the  Premises  to  Tenant  on  or  before  the
Commencement  Date,  this Lease shall not be void or voidable nor shall Landlord
be liable to Tenant for any resulting loss or damage.  However, Tenant shall not
be liable for any rent and the Commencement  Date shall not occur until Landlord
delivers  possession of the Premises and the Premises are in fact  available for
Tenant's  occupancy with any Tenant  Improvements that have been approved as per
Section 2.2 above, except that if Landlord's failure to so deliver possession on
the Commencement Date is attributable to any action or inaction by Tenant,  then
the  Commencement  Date shall not be advanced to the date on which possession of
the  Premises  is  tendered to Tenant,  and  Landlord  shall be entitled to full
performance  by Tenant  (including  the payment of rent) from the date  Landlord
would  have  been able to  deliver  the  Premises  to  Tenant  but for  Tenant's
delay(s). In the event of any such delay in possession,  if requested by Tenant,
Landlord  shall  make any  storage  space then  available  for rent to Tenant at
market rates, for the duration of any such delay in possession.  Notwithstanding
anything to the contrary  contained in this  Section  3.2,  however,  if for any
reason  other  than  delays due to the action or  inaction  of Tenant,  Landlord
cannot  deliver  possession  of the Premises to Tenant by that date which is one
hundred  twenty (120) days after the date set forth in Item 4 of the Basic Lease
Provisions  for the  Commencement  Date,  then Tenant may, by written  notice to
Landlord  given  at any  time  thereafter  but  prior to the  actual  tender  of
possession  to Tenant and the  occurrence  of the  Commencement  Date,  elect to
terminate this Lease.


                     ARTICLE IV. RENT AND OPERATING EXPENSES


     SECTION 4.1. BASIC RENT. From and after the Commencement Date, Tenant shall
pay to Landlord without deduction or offset,  Basic Rent for the Premises in the
total amount shown (including subsequent  adjustments,  if any) in Item 6 of the
Basic Lease Provisions. Any rental adjustment shown in Item 6 shall be deemed to
occur on the specified monthly  anniversary of the Commencement Date, whether or
not that date occurs at the end of a calendar  month.  The rent shall be due and
payable in advance  commencing  on the  Commencement  Date (as  prorated for any
partial  month) and  continuing  thereafter on the first day of each  successive
calendar  month of the Term. No demand,  notice or invoice shall be required for
the payment of Basic Rent. An  installment of rent in the amount of one (1) full
month's  Basic Rent at the initial  rate  specified in Item 6 of the Basic Lease
Provisions shall be delivered to Landlord  concurrently with Tenant's  execution
of this Lease and shall be applied against the Basic Rent first due hereunder.

     SECTION 4.2.     OPERATING EXPENSES.

     (a) Tenant shall pay to Landlord,  as additional rent, "Building Costs" and
"Property Taxes," as those terms are defined below,  incurred by Landlord in the
operation of the Building.  For  convenience  of reference,  Property  Taxes and
Building Costs shall be referred to collectively as "Operating Expenses".

     (b)  Commencing  prior to the start of the  first  full  "Expense  Recovery
Period" (as defined below) of the Lease,  and prior to the start of each full or
partial Expense Recovery Period thereafter, Landlord shall give Tenant a written
estimate of the amount of Operating  Expenses for the Expense  Recovery  Period.
Tenant shall pay the  estimated  amounts of Building  Costs to Landlord in equal
monthly  installments,  in advance, with Basic Rent, and shall pay the estimated
amounts of Property Taxes to Landlord,  semi-annually, not more than thirty (30)
days prior to the  delinquency  date for payment of Property  Taxes. If Landlord
has not furnished its written  estimate for any Expense  Recovery  Period by the
time set forth above,  Tenant shall continue to pay cost  reimbursements  at the
rates  established for the prior Expense Recovery Period,  if any; provided that
when the new estimate is delivered to Tenant,  Tenant shall, at the next monthly
payment date, pay any accrued cost  reimbursements  based upon the new estimate.
For purposes  hereof,  "Expense  Recovery  Period" shall mean every twelve month
period  during the Term (or portion  thereof for the first and last lease years)
commencing July 1 and ending June 30.

     (c)  Within one  hundred  twenty  (120) days after the end of each  Expense
Recovery  Period,  Landlord  shall  furnish  to Tenant a  statement  showing  in
reasonable detail the actual or prorated Operating Expenses incurred by Landlord
during the period, and the parties shall within thirty (30) days thereafter make
any payment or allowance  necessary to adjust Tenant's  estimated  payments,  if
any, to Tenant's actual owed amounts as shown by the annual statement. Any delay
or  failure  by  Landlord  in  delivering  any  statement  hereunder  shall  not
constitute  a waiver of  Landlord's  right to  require  Tenant to pay  Operating
Expenses  pursuant  hereto.  Any  amount due Tenant  shall be  credited  against
installments next coming due under this Section 4.2, and any deficiency shall be
paid by  Tenant  together  with the next  installment.  If  Tenant  has not made
estimated  payments  during the Expense  Recovery  Period,  any amount  owing by
Tenant  pursuant to subsection (a) above shall be paid to Landlord in accordance
with  Article  XVI.  Should  Tenant  fail to object  in  writing  to  Landlord's
determination  of actual  Operating  Expenses  within sixty (60) days  following
delivery of Landlord's  expense  statement,  Landlord's  determination of actual
Operating   Expenses  for  the  applicable  Expense  Recovery  Period  shall  be
conclusive  and  binding on the parties  and any future  claims to the  contrary
shall be barred.

     (d) Even  though the Lease has  terminated  and the Tenant has  vacated the
Premises,  when the final  determination  is made of Operating  Expenses for the
Expense Recovery Period in which the Lease terminates,  Tenant shall upon notice
pay the entire increase due over the estimated  expenses paid.  Conversely,  any
overpayment made in the event expenses  decrease shall be rebated by Landlord to
Tenant.

     (e) If, at any time during any Expense Recovery Period,  any one or more of
the Operating  Expenses are increased to a rate(s) or amount(s) in excess of the
rate(s) or amount(s)  used in calculating  the estimated  expenses for the year,
then the estimate of  Operating  Expenses  shall be  increased  for the month in
which such rate(s) or amount(s)  becomes effective and for all succeeding months
by an amount equal to the increase. Landlord shall give Tenant written notice of
the amount or estimated amount of the increase,  the month in which the increase
will become  effective,  and the month for which the  payments  are due.  Tenant
shall pay the  increase to Landlord  as a part of Tenant's  monthly  payments of
estimated expenses as provided in paragraph (b) above, commencing with the month
in which effective.

     (f) The term  "Building  Costs" shall  include all  reasonable  expenses of
operation and maintenance of the Building and all landscaping, walkways, parking
areas and lighting of the Site to the extent such expenses are not billed to and
paid  directly  by Tenant,  and shall  include the  following  charges by way of
illustration but not limitation:  water and sewer charges; insurance premiums or
reasonable  premium  equivalents  should  Landlord elect to self-insure any risk
that Landlord is authorized to insure hereunder; license, permit, and inspection
fees; heat; light;  power; air  conditioning;  supplies;  materials;  equipment;
tools;  the  cost  of any  environmental,  insurance,  tax or  other  consultant
utilized  by  Landlord  in  connection  with the  Building;  costs  incurred  in
connection  with  compliance  of any laws or changes in laws  applicable  to the
Building  (provided that, if the foregoing costs are incurred for purposes other
than in connection with Tenant's particular use of the Building and are costs of
capital  investments as determined by generally accepted  accounting  principles
consistently  applied,  then the  foregoing  costs shall be included as Building
Costs only to the extent of the amortized amount thereof over the useful life of
such  capital  investment,  calculated  at a market cost of funds as  reasonably
determined by Landlord,  for each year of useful life during the Term); the cost
of any capital investments (other than tenant improvements for specific tenants)
to the extent of the  amortized  amount  thereof  over the  useful  life of such
capital  investments  calculated at a market cost of funds, all as determined by
Landlord,  for each such year of useful life during the Term; labor;  reasonably
allocated wages and salaries,  fringe benefits,  and payroll taxes for personnel
directly  applicable to the Building,  including both  Landlord's  personnel and
outside personnel;  any expense incurred pursuant to Sections 6.1, 6.2, 7.2, and
10.2; and a reasonable (or reasonably allocated) overhead/management fee for the
professional operation of the Building. It is understood that Building Costs may
include  reasonable  competitive  charges  for  direct  services  provided  by a
subsidiary or division of Landlord, and may include the Building's or the Site's
proportionate  share of the cost of maintenance or repair  contracts which cover
the Building and/or the Site and other  buildings  and/or projects in Landlord's
portfolio, as reasonably allocated by Landlord.

     (g) The term  "Property  Taxes" as used herein shall include the following:
(i) all real estate taxes or personal property taxes, as such property taxes may
be reassessed  from time to time; and (ii) other taxes,  charges and assessments
which are levied with respect to this Lease, to the Building or to the Site, and
any improvements,  fixtures and equipment and other property of Landlord located
in the  Building or on the Site,  except that  general net income and  franchise
taxes imposed against Landlord shall be excluded;  and (iii) all assessments and
fees for public  improvements,  services,  and facilities  and impacts  thereon,
including without limitation arising out of any Community Facilities  Districts,
"Mello Roos" districts,  similar  assessment  districts,  and any traffic impact
mitigation  assessments or fees; and (iv) any tax, surcharge or assessment which
shall be levied in addition  to or in lieu of real  estate or personal  property
taxes,  other than taxes  covered by Article  VIII;  and (v) costs and  expenses
incurred in contesting the amount or validity of any Property Tax by appropriate
proceedings.

     SECTION 4.3. SECURITY DEPOSIT.  Concurrently with Tenant's delivery of this
Lease,  Tenant shall deposit with Landlord the sum, if any,  stated in Item 9 of
the Basic Lease Provisions,  to be held by Landlord as security for the full and
faithful  performance  of Tenant's  obligations  under this Lease (the "Security
Deposit").  Subject to the last sentence of this Section,  the Security  Deposit
shall be understood  and agreed to be the property of Landlord  upon  Landlord's
receipt thereof,  and may be utilized by Landlord in its discretion  towards the
payment of all prepaid  expenses by Landlord  for which Tenant would be required
to reimburse Landlord under this Lease,  including without limitation  brokerage
commissions and Tenant Improvement costs. Upon any default by Tenant,  including
specifically  Tenant's failure to pay rent or to abide by its obligations  under
Sections  7.1 and 15.3  below,  whether or not  Landlord  is  informed of or has
knowledge  of  the  default,   the  Security  Deposit  shall  be  deemed  to  be
automatically and immediately applied, without waiver of any rights Landlord may
have under this  Lease or at law or in equity as a result of the  default,  as a
setoff for full or partial  compensation for that default. If any portion of the
Security Deposit is applied after a default by Tenant,  Tenant shall within five
(5) days after  written  demand by  Landlord  deposit  cash with  Landlord in an
amount  sufficient  to restore  the  Security  Deposit to its  original  amount.
Landlord shall not be required to keep this Security  Deposit  separate from its
general  funds,  and Tenant  shall not be entitled  to interest on the  Security
Deposit. If Tenant fully performs its obligations under this Lease, the Security
Deposit or any balance  thereof  shall be returned to Tenant (or, at  Landlord's
option,  to the last  assignee  of Tenant's  interest  in this Lease)  after the
expiration of the Term,  provided that Landlord may retain the Security  Deposit
to the extent and until such time as all amounts  due from Tenant in  accordance
with this Lease have been determined and paid in full.

     SECTION 4.4.  ADDITIONAL SECURITY DEPOSIT. In addition to the foregoing and
as additional security hereunder, Tenant shall deliver to Landlord, concurrently
with its execution and delivery of this Lease,  either a letter of credit in the
amount of One Hundred  Eighty-Five  Thousand  Five Hundred  Seventy-Two  Dollars
($185,572.00),  or the  irrevocable  pledge of a certificate  of deposit in said
amount.  Said  pledge  or  letter  of  credit  shall  be in form  and  substance
acceptable  to Landlord and issued by a financial  institution  with a branch in
Orange  County,  California.  The letter of credit or pledge  shall  provide for
automatic yearly renewal throughout the Term of this Lease. Should Tenant commit
a default under the Lease or should Tenant fail to cause the letter of credit or
pledge to be  continuously  renewed as required  above,  then Landlord  shall be
entitled to draw upon said letter of credit or  negotiate  said  certificate  of
deposit.  Landlord shall,  upon the written request of Tenant (given at any time
after  one (1)  year  following  the  Commencement  Date),  authorize  the  full
exoneration  and  release  of the letter of credit or pledge of  certificate  of
deposit on the following conditions:  (i) Tenant is not then and has not been in
default  under the Lease,  and (ii) Tenant  provides  with such request its most
recently filed financial statement which is reasonably acceptable to Landlord.


                                 ARTICLE V. USES


     SECTION  5.1.  USE.  Tenant  shall use the  Premises  only for the purposes
stated  in  Item  3 of the  Basic  Lease  Provisions,  all  in  accordance  with
applicable  laws and  restrictions  and  pursuant to approvals to be obtained by
Tenant from all relevant and required governmental agencies and authorities. The
parties  agree  that any  contrary  use shall be deemed  to cause  material  and
irreparable harm to Landlord and shall entitle Landlord to injunctive  relief in
addition to any other available remedy.  Tenant, at its expense,  shall procure,
maintain and make available for Landlord's  inspection  throughout the Term, all
governmental approvals,  licenses and permits required for the proper and lawful
conduct of Tenant's permitted use of the Premises. Tenant shall not use or allow
the Premises to be used for any unlawful  purpose,  nor shall Tenant  permit any
nuisance or commit any waste in the  Premises.  Tenant shall not do or permit to
be done  anything  which will  invalidate  or increase the cost of any insurance
policy(ies)  covering  the Building or its  contents,  and shall comply with all
applicable insurance underwriters rules and the requirements of the Pacific Fire
Rating Bureau or any other  organization  performing a similar function.  Tenant
shall  comply at its  expense  with all  present  and future  laws,  ordinances,
restrictions,  regulations,  orders,  rules and requirements of all governmental
authorities that pertain to Tenant or its use of the Premises, including without
limitation all federal and state  occupational  health and safety  requirements,
whether or not Tenant's  compliance will  necessitate  expenditures or interfere
with its use and  enjoyment of the  Premises,  provided  that,  if the foregoing
compliance  costs are  incurred  for  purposes  other  than in  connection  with
Tenant's  particular  use of the Building and are costs of a capital  nature (as
determined by generally accepted accounting  principles  consistently  applied),
then  Tenant  shall  only be  responsible  for such  costs to the  extent of the
amortized  amount  thereof  over the  useful  life of such  capital  investment,
calculated at a market cost of funds, all as reasonably  determined by Landlord,
for each year of useful life during the Term. Tenant shall comply at its expense
with all present and future covenants, conditions, easements or restrictions now
or hereafter  affecting or  encumbering  the  Building,  and any  amendments  or
modifications thereto, including without limitation the payment by Tenant of any
periodic or special dues or assessments  charged  against the Premises or Tenant
which  may be  allocated  to the  Premises  or  Tenant  in  accordance  with the
provisions thereof. Tenant shall promptly upon demand reimburse Landlord for any
additional  insurance  premium  charged by reason of Tenant's  failure to comply
with the  provisions  of this  Section,  and shall  indemnify  Landlord from any
liability and/or expense resulting from Tenant's noncompliance.

     SECTION 5.2 SIGNS.  Tenant  shall have the right to install  signage on the
exterior of the Building (the  "Exterior  Signage").The  Exterior  Signage shall
consist  only of the name "Alyn  Corporation"  and such other  names of Tenant's
assignees or sublessees  as Landlord  shall  approve in writing  (provided  that
Landlord's  approval  may be withheld if  Landlord  determines,  in its sole and
absolute discretion, that any such other names shall materially impair the value
of the Building and/or Landlord's industrial building portfolio).  The number of
signs, size, design, graphics, material, style, color and other physical aspects
of  the  Exterior  Signage  shall  comply  with  any  covenants,  conditions  or
restrictions  encumbering  the  Premises,  Landlord's  signage  program  for the
Building,  as in  effect  from time to time and  approved  by the City of Irvine
("Signage Criteria"), and any applicable municipal or other governmental permits
and approvals. Landlord shall review and approve that any Exterior Signage is so
in compliance prior to  installation.  Tenant  acknowledges  having received and
reviewed a copy of the current Signage  Criteria for the Building.  Tenant shall
be  solely  responsible  for the cost of the  Exterior  Signage,  including  the
fabrication,  installation,  insurance, and maintenance thereof. If Tenant fails
to maintain its Exterior Signage, Landlord may do so at Tenant's expense. In the
event  Tenant,  exclusive  of any  subtenant(s),  fails  to  occupy  the  entire
Premises,  then Tenant  shall,  within  thirty (30) days  following  notice from
Landlord,  remove the Exterior  Signage at Tenant's  expense.  Tenant shall also
remove  the  Exterior  Signage  promptly  following  the  expiration  or earlier
termination  of this Lease.  Any such removal shall be at Tenant's sole expense,
and Tenant shall bear the cost of any resulting repairs to the Building that are
reasonably necessary due to the removal. Except for the foregoing,  Tenant shall
have no right to maintain  identification  signs in any location in, on or about
the Premises or the Building and shall not place or erect any signs, displays or
other  advertising  materials that are visible from the exterior of the Building
without the prior written approval of Landlord.

     SECTION 5.3      HAZARDOUS MATERIALS.

              (a) For  purposes of this Lease,  the term  "Hazardous  Materials"
includes (i) any  "hazardous  materials"  as defined in Section  25501(n) of the
California  Health and Safety  Code,  (ii) any other  substance  or matter which
results in liability to any person or entity from exposure to such  substance or
matter  under any  statutory  or common law theory,  and (iii) any  substance or
matter  which is in  excess  of  permitted  levels  set  forth  in any  federal,
California  or local law or  regulation  pertaining  to any  hazardous  or toxic
substance, material or waste.

              (b) Tenant shall not cause or permit any Hazardous Materials to be
brought upon, stored, used,  generated,  released or disposed of on, under, from
or about the Premises or the Site  (including  without  limitation  the soil and
groundwater   thereunder)   without  the  prior  written  consent  of  Landlord.
Notwithstanding  the foregoing,  Tenant shall have the right,  without obtaining
prior  written  consent of Landlord,  to utilize  within the  Premises  standard
office products that may contain  Hazardous  Materials (such as photocopy toner,
"White Out",  and the like),  provided  however,  that (i) Tenant shall maintain
such products in their original retail packaging,  shall follow all instructions
on  such  packaging  with  respect  to the  storage,  use and  disposal  of such
products,  and shall  otherwise  comply with all applicable laws with respect to
such  products,  and (ii) all of the other terms and  provisions of this Section
5.3 shall apply with respect to Tenant's  storage,  use and disposal of all such
products.  Landlord may, in its reasonable discretion,  place such conditions as
Landlord deems appropriate with respect to any such Hazardous Materials, and may
further require that Tenant  demonstrate  that any such Hazardous  Materials are
necessary or useful to Tenant's business and will be generated, stored, used and
disposed of in a manner that complies with all applicable  laws and  regulations
pertaining  thereto and with good business  practices.  Tenant  understands that
Landlord  may  utilize  an  environmental  consultant  to assist in  determining
conditions  of approval in  connection  with the storage,  generation,  release,
disposal  or use of  Hazardous  Materials  by Tenant  on or about the  Premises,
and/or to conduct periodic inspections of the storage,  generation, use, release
and/or disposal of such Hazardous  Materials by Tenant on and from the Premises,
and Tenant agrees that any costs  incurred by Landlord in  connection  therewith
shall be  reimbursed  by Tenant to Landlord as additional  rent  hereunder  upon
demand.

              (c) Prior to the execution of this Lease,  Tenant shall  complete,
execute and deliver to Landlord an  Environmental  Questionnaire  and Disclosure
Statement (the "Environmental  Questionnaire") in the form of Exhibit B attached
hereto. The completed  Environmental  Questionnaire shall be deemed incorporated
into this Lease for all purposes,  and Landlord  shall be entitled to rely fully
on the information  contained  therein.  On each anniversary of the Commencement
Date until the  expiration  or sooner  termination  of this Lease,  Tenant shall
disclose to Landlord in writing the names and amounts of all Hazardous Materials
which were stored,  generated,  used,  released  and/or disposed of on, under or
about the Premises for the twelve-month  period prior thereto,  and which Tenant
desires to store,  generate,  use,  release and/or dispose of on, under or about
the Premises for the succeeding  twelve-month period. In addition, to the extent
Tenant is permitted to utilize  Hazardous  Materials  upon the Premises,  Tenant
shall  promptly  provide  Landlord with  complete and legible  copies of all the
following  environmental  documents relating thereto:  reports filed pursuant to
any  self-reporting  requirements;  permit  applications,   permits,  monitoring
reports,  workplace  exposure and community exposure warnings or notices and all
other  reports,  disclosures,  plans  or  documents  (even  those  which  may be
characterized  as  confidential)  relating to water  discharges,  air pollution,
waste  generation  or disposal,  and  underground  storage  tanks for  Hazardous
Materials;  orders,  reports,  notices,  listings and correspondence (even those
which  may  be  considered   confidential)   of  or   concerning   the  release,
investigation of,  compliance,  cleanup,  remedial and corrective  actions,  and
abatement of Hazardous Materials; and all complaints,  pleadings and other legal
documents filed by or against Tenant related to Tenant's use, handling, storage,
release and/or disposal of Hazardous Materials.

              (d)  Landlord  and its agents shall have the right (which shall be
exercised in  Landlord's  reasonable  discretion),  but not the  obligation,  to
inspect,  sample  and/or  monitor  the  Premises,  the Site  and/or  the soil or
groundwater thereunder at any time to determine whether Tenant is complying with
the terms of this Section 5.3, and in connection  therewith Tenant shall provide
Landlord  with full access to all  relevant  facilities,  records and  personnel
(subject to Tenant's reasonable  confidentiality and security requirements).  If
Tenant is not in compliance  with any of the  provisions of this Section 5.3, or
in the event of a  release  of any  Hazardous  Material  on,  under or about the
Premises and/or the Site caused or permitted by Tenant,  its agents,  employees,
contractors,  licensees  or  invitees,  Landlord  and its agents  shall have the
right, but not the obligation,  without  limitation upon any of Landlord's other
rights and remedies  under this Lease,  to  immediately  enter upon the Premises
and/or the Site (with  reasonable  notice to Tenant except in cases of emergency
where no notice shall be required),  and to discharge Tenant's obligations under
this Section 5.3 at Tenant's expense, including without limitation the taking of
emergency or long-term  remedial action.  Landlord and its agents shall endeavor
to minimize  interference  with Tenant's business in connection  therewith,  but
shall  not be  liable  for any such  interference.  In  addition,  Landlord,  at
Tenant's  expense,  shall have the right,  but not the  obligation,  to join and
participate in any legal proceedings or actions initiated in connection with any
claims arising out of the storage,  generation,  use, release and/or disposal by
Tenant or its agents, employees, contractors, licensees or invitees of Hazardous
Materials on, under, from or about the Premises and/or the Site.

              (e) If the presence of any Hazardous  Materials on, under, from or
about the Premises  and/or the Site caused or permitted by Tenant or its agents,
employees,  contractors,  licensees  or  invitees  results  in (i) injury to any
person,  (ii) injury to or any contamination of the Premises and/or the Site, or
(iii)  injury to or  contamination  of any real or  personal  property  wherever
situated,  Tenant, at its expense,  shall promptly take all actions necessary to
return the Premises,  the Site and any other affected real or personal  property
owned by Landlord to the condition  existing prior to the  introduction  of such
Hazardous  Materials  and to remedy or repair any such injury or  contamination,
including  without  limitation,  any cleanup,  remediation,  removal,  disposal,
neutralization   or   other   treatment   of  any  such   Hazardous   Materials.
Notwithstanding  the  foregoing,  Tenant  shall not,  without  Landlord's  prior
written  consent,  take any  remedial  action in response to the presence of any
Hazardous  Materials  on,  under or about  the  Premises,  the Site or any other
affected real or personal  property  owned by Landlord or enter into any similar
agreement, consent, decree or other compromise with any governmental agency with
respect to any Hazardous  Materials claims;  provided however,  Landlord's prior
written  consent  shall not be  necessary  in the  event  that the  presence  of
Hazardous  Materials  on,  under or about  the  Premises,  the Site or any other
affected  real or personal  property  owned by Landlord (i) imposes an immediate
threat to the health,  safety or welfare of any  individual or (ii) is of such a
nature that an immediate  remedial  response is necessary and it is not possible
to obtain  Landlord's  consent before taking such action.  To the fullest extent
permitted by law,  Tenant shall  indemnify,  hold  harmless,  protect and defend
(with  attorneys  acceptable to Landlord)  Landlord and any successors to all or
any portion of Landlord's interest in the Premises,  the Site and any other real
or personal property owned by Landlord from and against any and all liabilities,
losses,  damages,  diminution  in  value,  judgments,  fines,  demands,  claims,
recoveries,  deficiencies,  costs and  expenses  (including  without  limitation
attorneys'  fees,  court  costs  and  other  professional   expenses),   whether
foreseeable  or  unforeseeable,  arising  directly or indirectly out of the use,
generation,   storage,   treatment,   release,   on-  or  off-site  disposal  or
transportation  of  Hazardous  Materials  on,  into,  from,  under or about  the
Premises,  the Site and any other real or  personal  property  owned by Landlord
caused or permitted by Tenant, its agents, employees, contractors,  licensees or
invitees,  specifically including without limitation the cost of any required or
necessary repair,  restoration,  cleanup or detoxification of the Premises,  the
Site  and any  other  real or  personal  property  owned  by  Landlord,  and the
preparation of any closure or other required  plans,  whether or not such action
is required or necessary  during the Term or after the expiration of this Lease.
If  Landlord  at any  time  discovers  that  Tenant  or its  agents,  employees,
contractors, licensees or invitees may have caused or permitted the release of a
Hazardous Material on, under, from or about the Premises,  the Site or any other
real or  personal  property  owned by  Landlord,  Tenant  shall,  at  Landlord's
request,  immediately  prepare  and  submit to  Landlord a  comprehensive  plan,
subject to Landlord's approval,  specifying the actions to be taken by Tenant to
return the Premises,  the Site or any other real or personal  property  owned by
Landlord to the condition  existing prior to the  introduction of such Hazardous
Materials.  Upon Landlord's  approval of such cleanup plan, Tenant shall, at its
expense,  and without  limitation  of any rights and remedies of Landlord  under
this Lease or at law or in equity,  immediately  implement such plan and proceed
to cleanup such Hazardous  Materials in accordance  with all applicable laws and
as required by such plan and this Lease.  The provisions of this  subsection (e)
shall expressly survive the expiration or sooner termination of this Lease.

              (f)  Landlord  hereby  discloses  to  Tenant,  and  Tenant  hereby
acknowledges,  certain  facts  relating to  Hazardous  Materials at the Premises
and/or the Site known by Landlord to exist as of the date of this Lease, as more
particularly  described  in  Exhibit C  attached  hereto.  Tenant  shall have no
liability  or  responsibility  with  respect to the  Hazardous  Materials  facts
described in Exhibit C, nor with respect to any Hazardous Materials which Tenant
proves  were  not  caused  or  permitted  by  Tenant,  its  agents,   employees,
contractors, licensees or invitees. Further, the requirement in this Section 5.3
that Tenant not "permit" any Hazardous Materials (or indemnify or be responsible
to the extent  Tenant  "permits"  any  Hazardous  Materials) to be brought upon,
stored,  used,  generated,  released or disposed of on, under, from or about the
Premises,  shall not include or apply to  Hazardous  Materials  whose  existence
predated  the  Commencement  Date  of this  Lease,  nor to  Hazardous  Materials
migrating  on,  under or about the Premises  prior to or after the  Commencement
Date  which are not  caused  by  Tenant,  its  agents,  employees,  contractors,
licensees or invitees.  Notwithstanding  the preceding three  sentences,  Tenant
agrees to notify its agents, employees, contractors,  licensees, and invitees of
any exposure or potential exposure to Hazardous Materials at the Premises and/or
the Site that Landlord brings to Tenant's attention.


                              ARTICLE VI. SERVICES


     SECTION 6.1.  UTILITIES AND SERVICES.  Tenant shall be responsible  for and
shall pay promptly, directly to the appropriate supplier, all charges for water,
gas,  electricity,   sewer,  heat,  light,  power,  telephone,   refuse  pickup,
janitorial  service,  interior  landscape  maintenance and all other  utilities,
materials and services  furnished  directly to Tenant or the Premises or used by
Tenant in, on or about the  Premises  during the Term,  together  with any taxes
thereon.  Landlord  shall not be liable for damages or otherwise for any failure
or interruption of any utility or other service  furnished to the Premises,  and
no such failure or interruption shall be deemed an eviction or entitle Tenant to
terminate this Lease or withhold or abate any rent due hereunder. Landlord shall
at all  reasonable  times  have free  access to all  electrical  and  mechanical
installations of Landlord,  subject to reasonable notice and Tenant's reasonable
security and confidentiality requirements.

     SECTION 6.2.  PARKING.  Tenant shall not permit or allow any vehicles  that
belong  to or  are  controlled  by  Tenant  or  Tenant's  employees,  suppliers,
shippers,  customers or invitees to be loaded, unloaded or parked in areas other
than those  designated  by Landlord for such  activities.  If Tenant  permits or
allows any of the prohibited  activities  described  above,  then Landlord shall
have the right,  without  notice,  in addition to such other rights and remedies
that  Landlord may have,  to remove or tow away the vehicle  involved and charge
the costs to Tenant.  Parking shall be limited to striped parking stalls, and no
parking shall be permitted in any driveways, access ways or in any similar area.
Nothing  contained  in this  Lease  shall be  deemed to  create  liability  upon
Landlord for any damage to motor vehicles of visitors or employees, for any loss
of property from within those motor vehicles,  or for any injury to Tenant,  its
visitors or  employees,  unless  ultimately  determined to be caused by the sole
active negligence or willful  misconduct of Landlord,  its agents,  servants and
employees.  Landlord  shall have the right to  establish,  and from time to time
amend,  and to enforce  against all users all reasonable  rules and  regulations
(including the designation of areas for employee parking) that Landlord may deem
necessary and advisable for the proper and efficient  operation and  maintenance
of parking.  Landlord  shall have the right to  construct,  maintain and operate
lighting  facilities  within  the  parking  areas;  to change  the area,  level,
location and arrangement of the parking areas and improvements  therein;  and to
do and  perform  such other acts in and to the  parking  areas and  improvements
therein as, in the use of good business judgment, Landlord shall determine to be
advisable.  Parking  areas shall be used only for parking  vehicles.  Except for
Tenant-owned vehicles, the washing,  waxing,  cleaning or servicing of vehicles,
or the storage of vehicles for 24-hour periods,  is prohibited  unless otherwise
authorized  by  Landlord.  Tenant  shall be liable for any damage to the parking
areas caused by Tenant or Tenant's employees,  suppliers, shippers, customers or
invitees,  including without  limitation damage from excess oil leakage.  Tenant
shall have no right to install any fixtures,  equipment or personal  property in
the parking areas, without first obtaining Landlord's consent.


                      ARTICLE VII. MAINTAINING THE PREMISES


     SECTION 7.1. TENANT'S MAINTENANCE AND REPAIR.  Subject to the limitation on
"capital"  expenditures  contained in Section  4.2(f) and to the  provisions for
Landlord's  responsibilities contained in Section 2.4 hereof, Tenant at its sole
expense  shall make all repairs  necessary to keep the Premises in the condition
as existed on the Commencement  Date (or on any later date that the improvements
may have been installed),  excepting  ordinary wear and tear,  including without
limitation  the  electrical  and  mechanical  systems,   any  air  conditioning,
ventilating or heating  equipment which serves the Premises,  all walls,  glass,
windows, doors, door closures,  hardware, fixtures,  electrical,  plumbing, fire
extinguisher  equipment and other equipment.  Any damage or deterioration of the
Premises shall not be deemed  ordinary wear and tear if the same could have been
prevented by good  maintenance  practices by Tenant.  As part of its maintenance
obligations  hereunder,  Tenant shall, at Landlord's  request,  provide Landlord
with copies of all maintenance  schedules,  reports and notices prepared by, for
or on behalf of Tenant.  Tenant shall obtain  preventive  maintenance  contracts
from a licensed heating and air  conditioning  contractor to provide for regular
inspection and  maintenance  of the heating,  ventilating  and air  conditioning
systems servicing the Premises,  all subject to Landlord's approval. All repairs
shall be at least equal in quality to the original work, shall be made only by a
licensed contractor approved in writing in advance by Landlord and shall be made
only at the time or times  approved  by  Landlord.  Any  contractor  utilized by
Tenant shall be subject to Landlord's standard requirements for contractors,  as
modified  from  time to  time.  Subject  to  Tenant's  reasonable  security  and
confidentiality  requirements,  Landlord  shall  have the  right at all times to
inspect Tenant's  maintenance of all equipment (including without limitation air
conditioning,  ventilating  and heating  equipment),  and may impose  reasonable
restrictions  and requirements  with respect to repairs,  as provided in Section
7.3,   and  the   provisions   of  Section  7.4  shall  apply  to  all  repairs.
Alternatively,  Landlord  may elect to make any repair or  maintenance  required
hereunder  on  behalf of Tenant  and at  Tenant's  expense,  and  Tenant  shall,
following reasonable notice,  promptly reimburse Landlord for all costs incurred
upon submission of an invoice.

     SECTION 7.2. LANDLORD'S  MAINTENANCE AND REPAIR. Subject to Section 7.1 and
Article XI, Landlord shall provide service,  maintenance and repair with respect
to the  roof,  foundations,  and  footings  of the  Building,  all  landscaping,
walkways,  parking  areas,  exterior  lighting  of the  Site,  and the  exterior
surfaces  of the  exterior  walls of the  Building,  except  that  Tenant at its
expense shall make all repairs which  Landlord deems  reasonably  necessary as a
result of the act or  negligence  of Tenant,  its agents,  employees,  invitees,
subtenants or contractors.  Landlord shall have the right to employ or designate
any reputable person or firm, including any employee or agent of Landlord or any
of  Landlord's  affiliates  or  divisions,  to perform  any  service,  repair or
maintenance  function.  Landlord need not make any other improvements or repairs
except as specifically  required under this Lease, and nothing contained in this
Section  shall  limit  Landlord's   right  to  reimbursement   from  Tenant  for
maintenance,  repair costs and replacement  costs as provided  elsewhere in this
Lease.  Tenant  understands that it shall not make repairs at Landlord's expense
or by rental  offset.  Tenant  further  understands  that Landlord  shall not be
required to make any  repairs to the roof,  foundations  or footings  unless and
until  Tenant has  notified  Landlord in writing of the need for such repair and
Landlord  shall have a  reasonable  period of time  thereafter  to commence  and
complete said repair,  if  warranted.  Subject to the  liabilities  on "capital"
expenditures  contained in Section  4.2(f) and to the  provisions for Landlord's
responsibilities  contained in Section 2.4 hereof,  all costs of any maintenance
and repairs on the part of Landlord provided  hereunder shall be considered part
of Building Costs.

     SECTION 7.3.  ALTERATIONS.  Tenant shall make no alterations,  additions or
improvements  to the  Premises  without the prior  written  consent of Landlord,
which  consent  may  be  given  or  withheld  in  Landlord's  sole   discretion.
Notwithstanding  the foregoing,  Tenant may make any  alterations,  additions or
improvements  to the Premises which cost less than One Dollar ($1.00) per square
foot of the  improved  portions  of the  Premises  (excluding  warehouse  square
footage)  so  long as such  improvements  or  additions  do not (i)  affect  the
exterior of the Building or outside areas (or be visible from adjoining  sites),
or (ii) affect or  penetrate  any of the  structural  portions of the  Building,
including  but not limited to the roof, or (iii) require any change to the basic
floor plan of the Premises,  any change to any structural or mechanical  systems
of  the  Premises,   or  any  governmental  permit  as  a  prerequisite  to  the
construction   thereof,  or  (iv)  interfere  in  any  manner  with  the  proper
functioning of or Landlord's access to any mechanical,  electrical,  plumbing or
HVAC systems, facilities or equipment located in or serving the Building, or (v)
diminish the value of the Premises.  Landlord may impose,  as a condition to its
consent, any requirements that Landlord in its discretion may deem reasonable or
desirable,  including but not limited to a requirement  that all work be covered
by a lien and completion bond  satisfactory  to Landlord and  requirements as to
the manner,  time,  and contractor  for  performance  of the work.  Tenant shall
obtain  all  required  permits  for the  work  and  shall  perform  the  work in
compliance with all applicable laws, regulations and ordinances,  all covenants,
conditions  and  restrictions   affecting  the  Premises,   and  the  Rules  and
Regulations  (hereafter  defined).  Tenant  understands and agrees that Landlord
shall be entitled to a supervision fee in the amount of five percent (5%) of the
cost of any alterations work which exceeds One Dollar ($1.00) per square foot of
the  improved  portions of the  Premises,  provided  that such fee shall only be
imposed in the event that the  alteration  work  changes the basic floor plan of
the  Premises,  and shall  not be  imposed  for the  initial  improvement  work,
approved  by  Landlord,  to be  installed  by  Tenant  in the  Premises.  If any
governmental  entity  requires,  as a  condition  to any  proposed  alterations,
additions or improvements to the Premises by Tenant,  that  improvements be made
to the outside  areas,  and if Landlord  consents  to such  improvements  to the
outside areas,  then Tenant shall, at Tenant's sole expense,  make such required
improvements to the outside areas in such manner,  utilizing such materials, and
with  such   contractors  as  Landlord  shall  reasonably   approve.   Under  no
circumstances shall Tenant make any improvement which incorporates any Hazardous
Materials,   including  without  limitation   asbestos-containing   construction
materials into the Premises. Any request for Landlord's consent shall be made in
writing and shall  contain  architectural  plans  describing  the work in detail
reasonably  satisfactory  to  Landlord.  Unless  Landlord  otherwise  agrees  in
writing,  all  alterations,  additions or  improvements  affixed to the Premises
(excluding  moveable trade fixtures and furniture)  shall become the property of
Landlord  and shall be  surrendered  with the  Premises  at the end of the Term,
except that Landlord may, by notice to Tenant,  require  Tenant to remove by the
Expiration  Date,  or  sooner  termination  date  of  this  Lease,  all  or  any
alterations,   decorations,  fixtures,  additions,  improvements  and  the  like
installed  either by Tenant or by Landlord at Tenant's request and to repair any
damage to the Premises arising from that removal.  Except as otherwise  provided
in this  Lease  or in any  Exhibit  to this  Lease,  should  Landlord  make  any
alteration or improvement to the Premises for Tenant, Landlord shall be entitled
to prompt reimbursement from Tenant for all costs incurred.

     SECTION 7.4. MECHANIC'S LIENS. Tenant shall keep the Premises free from any
liens arising out of any work  performed,  materials  furnished,  or obligations
incurred by or for Tenant. Upon request by Landlord, Tenant shall promptly cause
any such lien to be released  by posting a bond in  accordance  with  California
Civil Code Section 3143 or any successor statute. In the event that Tenant shall
not,  within thirty (30) days  following the  imposition of any lien,  cause the
lien to be released of record by payment or posting of a proper  bond,  Landlord
shall have, in addition to all other available remedies,  the right to cause the
lien to be  released  by any  means it deems  proper,  including  payment  of or
defense  against the claim giving rise to the lien.  All expenses so incurred by
Landlord,  including Landlord's  attorneys' fees, and any consequential or other
damages  incurred by Landlord  arising out of such lien,  shall be reimbursed by
Tenant promptly  following  Landlord's  demand,  together with interest from the
date of payment by  Landlord at the maximum  rate  permitted  by law until paid.
Tenant  shall give  Landlord  no less than  twenty  (20) days'  prior  notice in
writing  before  commencing  construction  of any kind on the  Premises  so that
Landlord may post and maintain notices of nonresponsibility on the Premises.

     SECTION 7.5. ENTRY AND INSPECTION.  Subject to Tenant's reasonable security
and confidentiality  requirements,  Landlord shall at all reasonable times, upon
written or oral notice (except in emergencies, when no notice shall be required)
have the right to enter the  Premises  to inspect  them,  to supply  services in
accordance  with this  Lease,  to  protect  the  interests  of  Landlord  in the
Premises,  and to submit the Premises to  prospective  or actual  purchasers  or
encumbrance  holders  (or,  during the last one hundred and eighty (180) days of
the Term or when an uncured Tenant default exists, to prospective tenants),  all
without being deemed to have caused an eviction of Tenant and without  abatement
of rent except as provided  elsewhere  in this  Lease.  Landlord  shall have the
right to use any and all means which  Landlord may deem proper to open the doors
in an emergency in order to obtain entry to the  Premises,  and any entry to the
Premises  obtained by Landlord shall not under any circumstances be deemed to be
a forcible  or unlawful  entry  into,  or a detainer  of, the  Premises,  or any
eviction of Tenant from the Premises.


            ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANT'S PROPERTY


     Tenant  shall be liable  for and shall pay,  at least ten (10) days  before
delinquency,  all taxes and assessments  levied against all personal property of
Tenant located in the Premises,  and against any alterations,  additions or like
improvements  made to the  Premises  by or on behalf of  Tenant.  When  possible
Tenant shall cause its  personal  property  and  alterations  to be assessed and
billed  separately  from the real property of which the Premises form a part. If
any taxes on Tenant's  personal  property and/or  alterations are levied against
Landlord  or  Landlord's  property  and if  Landlord  pays the  same,  or if the
assessed  value of Landlord's  property is increased by the inclusion of a value
placed upon the personal  property and/or  alterations of Tenant and if Landlord
pays the taxes based upon the increased assessment, Tenant shall pay to Landlord
the taxes so levied against  Landlord or the  proportion of the taxes  resulting
from the increase in the assessment. In calculating what portion of any tax bill
which is assessed against Landlord  separately,  or Landlord and Tenant jointly,
is  attributable  to Tenant's  alterations  and  personal  property,  Landlord's
reasonable determination shall be conclusive.

                      ARTICLE IX. ASSIGNMENT AND SUBLETTING


     SECTION 9.1.     RIGHTS OF PARTIES.

              (a)  Notwithstanding  any provision of this Lease to the contrary,
Tenant will not,  either  voluntarily  or by operation of law,  assign,  sublet,
encumber,  or otherwise  transfer  all or any part of Tenant's  interest in this
lease,  or permit the  Premises  to be  occupied  by anyone  other than  Tenant,
without  Landlord's prior written consent,  which consent shall not unreasonably
be withheld in accordance with the provisions of Section 9.1.(b).  No assignment
(whether voluntary,  involuntary or by operation of law) and no subletting shall
be  valid  or  effective  without  Landlord's  prior  written  consent  and,  at
Landlord's  election,  any such assignment or subletting or attempted assignment
or subletting shall constitute a material default of this Lease.  Landlord shall
not be deemed to have given its consent to any  assignment  or subletting by any
other course of action,  including its acceptance of any name for listing in the
Building directory. To the extent not prohibited by provisions of the Bankruptcy
Code, 11 U.S.C.  Section 101 et seq. (the "Bankruptcy Code"),  including Section
365(f)(1),  Tenant on behalf of itself  and its  creditors,  administrators  and
assigns waives the applicability of Section 365(e) of the Bankruptcy Code unless
the  proposed  assignee  of the  Trustee  for the estate of the  bankrupt  meets
Landlord's standard for consent as set forth in Section 9.1(b) of this Lease. If
this Lease is assigned to any person or entity pursuant to the provisions of the
Bankruptcy Code, any and all monies or other  considerations  to be delivered in
connection  with the  assignment  shall be delivered  to Landlord,  shall be and
remain the exclusive  property of Landlord and shall not constitute  property of
Tenant or of the estate of Tenant within the meaning of the Bankruptcy Code. Any
person or entity to which this Lease is assigned  pursuant to the  provisions of
the  Bankruptcy  Code  shall be deemed to have  assumed  all of the  obligations
arising under this Lease on and after the date of the assignment, and shall upon
demand execute and deliver to Landlord an instrument confirming that assumption.

              (b) If Tenant  desires to transfer  an interest in this Lease,  it
shall  first  notify  Landlord  of its  desire  and shall  submit in  writing to
Landlord:  (i) the name and address of the proposed transferee;  (ii) the nature
of any  proposed  subtenant's  or  assignee's  business  to be carried on in the
Premises; (iii) the terms and provisions of any proposed sublease or assignment,
including a copy of the proposed  assignment or sublease form;  (iv) evidence of
insurance of the proposed assignee or subtenant  complying with the requirements
of  Exhibit D  hereto;  (v) a  completed  Environmental  Questionnaire  from the
proposed  assignee or  subtenant;  and (vi) any other  information  requested by
Landlord  and  reasonably  related  to  the  transfer.  Except  as  provided  in
Subsection  (e) of this Section,  Landlord shall not  unreasonably  withhold its
consent,  provided:  (1) the use of the  Premises  will be  consistent  with the
provisions  of this Lease;  (2) the proposed  assignee or subtenant has not been
required  by any  prior  landlord,  lender  or  governmental  authority  to take
remedial action in connection with Hazardous Materials  contaminating a property
arising out of the  proposed  assignee's  or  subtenant's  actions or use of the
property in question and is not subject to any  enforcement  order issued by any
governmental  authority  in  connection  with the use,  disposal or storage of a
Hazardous Material; (3) at Landlord's election,  insurance requirements shall be
brought into conformity with Landlord's then current leasing  practice;  (4) any
proposed subtenant or assignee  demonstrates that it is financially  responsible
by submission to Landlord of all reasonable  information as Landlord may request
concerning the proposed subtenant or assignee,  including, but not limited to, a
balance  sheet of the proposed  subtenant or assignee as of a date within ninety
(90) days of the request for  Landlord's  consent  and  statements  of income or
profit and loss of the proposed  subtenant  or assignee for the two-year  period
preceding the request for Landlord's consent,  and/or a certification  signed by
the  proposed  subtenant  or  assignee  that it has not been  evicted or been in
arrears in rent at any other leased premises for the 3-year period preceding the
request for Landlord's  consent;  and (5) the proposed  transfer will not impose
additional material burdens or adverse tax effects on Landlord.

     If Landlord  consents to the proposed  transfer,  Tenant may within  ninety
(90) days  after the date of the  consent  effect  the  transfer  upon the terms
described in the information  furnished to Landlord;  provided that any material
change in the terms shall be subject to Landlord's  consent as set forth in this
Section.  Landlord  shall approve or disapprove  any requested  transfer  within
fifteen (15) business days following  receipt of Tenant's written  request,  the
information set forth above, and the fee set forth below.

              (c)  Notwithstanding  the provisions of Subsection  (b) above,  in
lieu of  consenting to a proposed  assignment  or a proposed  subletting of more
than fifty percent  (50%) of the floor area of the Premises,  Landlord may elect
to (i) sublease the Premises (or the portion proposed to be subleased),  or take
an assignment of Tenant's interest in this Lease, upon the same terms as offered
to the proposed subtenant or assignee  (excluding terms relating to the purchase
of personal  property,  the use of Tenant's name or the continuation of Tenant's
business),  or (ii) terminate  this Lease in its entirety  effective on the date
that the proposed sublease or assignment would have become  effective,  in which
event Tenant shall be released from further  obligation or liability  under this
Lease, except to the extent of any indemnity and/or hold harmless obligations on
Tenant's part  contained in this Lease  accruing  prior to the effective date of
such termination.  Landlord may thereafter,  at its option, assign or re-let any
space so  recaptured  to any  third  party,  including  without  limitation  the
proposed transferee of Tenant.

              (d) Tenant  agrees that fifty percent (50%) of any amounts paid by
the assignee or subtenant,  however  described,  in excess of the sum of (i) the
Basic  Rent  payable  by Tenant  hereunder,  or in the case of a  sublease  of a
portion of the  Premises,  in excess of the Basic Rent  reasonably  allocable to
such  portion,  plus (ii)  Tenant's  direct  out-of-pocket  costs  which  Tenant
certifies to Landlord have been paid to provide  occupancy  related  services to
such assignee or subtenant of a nature commonly provided by landlords of similar
space,  shall be the  property of  Landlord  and such  amounts  shall be payable
directly to Landlord by the assignee or subtenant or, at Landlord's  option,  by
Tenant. At Landlord's  request, a written agreement shall be entered into by and
among Tenant,  Landlord and the proposed  assignee or subtenant  confirming  the
requirements of this subsection.

              (e) Tenant  shall pay to  Landlord a fee of Five  Hundred  Dollars
($500.00)  if and when any transfer  hereunder is requested by Tenant,  provided
that such fee shall be waived for any  sublease  of which  Tenant  shall  notify
Landlord  prior to the  Commencement  Date of this  Lease.  Such  fee is  hereby
acknowledged  as a  reasonable  amount to  reimburse  Landlord  for its costs of
review and evaluation of a proposed  assignee/sublessee,  and Landlord shall not
be obligated to commence such review and evaluation unless and until such fee is
paid.

     SECTION 9.2. EFFECT OF TRANSFER. No subletting or assignment, even with the
consent of Landlord,  shall relieve  Tenant of its obligation to pay rent and to
perform all its other  obligations  under this  Lease.  Moreover,  Tenant  shall
indemnify and hold Landlord  harmless,  as provided in Section 10.3, for any act
or omission by an assignee or subtenant.  Each  assignee,  other than  Landlord,
shall be deemed to assume all  obligations  of Tenant under this Lease and shall
be liable jointly and severally with Tenant for the payment of all rent, and for
the due  performance  of all of  Tenant's  obligations,  under  this  Lease.  No
transfer  shall be binding on Landlord  unless any  document  memorializing  the
transfer is  delivered to Landlord  and both the  assignee/subtenant  and Tenant
deliver to  Landlord  an executed  consent to  transfer  instrument  prepared by
Landlord and consistent with the requirements of this Article. The acceptance by
Landlord of any payment due under this Lease from any other  person shall not be
deemed to be a waiver by  Landlord  of any  provision  of this  Lease or to be a
consent to any transfer.  Consent by Landlord to one or more transfers shall not
operate as a waiver or  estoppel  to the future  enforcement  by Landlord of its
rights under this Lease.

     SECTION 9.3.  SUBLEASE  REQUIREMENTS.  The following  terms and  conditions
shall apply to any  subletting  by Tenant of all or any part of the Premises and
shall be deemed included in each sublease:

              (a) Each and every  provision  contained in this Lease (other than
with respect to the payment of rent hereunder) is incorporated by reference into
and  made a part  of  such  sublease,  with  "Landlord"  hereunder  meaning  the
sublandlord therein and "Tenant" hereunder meaning the subtenant therein.

              (b) Tenant hereby irrevocably  assigns to Landlord all of Tenant's
interest in all rentals and income  arising from any  sublease of the  Premises,
and  Landlord  may collect  such rent and income and apply same toward  Tenant's
obligations under this Lease; provided,  however, that until a default occurs in
the performance of Tenant's  obligations under this Lease, Tenant shall have the
right to receive and collect the sublease rentals. Landlord shall not, by reason
of this  assignment or the collection of sublease  rentals,  be deemed liable to
the  subtenant  for the  performance  of any of Tenant's  obligations  under the
sublease.  Tenant hereby irrevocably authorizes and directs any subtenant,  upon
receipt of a written notice from Landlord stating that an uncured default exists
in the performance of Tenant's  obligations under this Lease, to pay to Landlord
all sums then and  thereafter  due under the  sublease.  Tenant  agrees that the
subtenant  may rely on that  notice  without  any duty of  further  inquiry  and
notwithstanding any notice or claim by Tenant to the contrary. Tenant shall have
no right or claim  against the  subtenant or Landlord for any rentals so paid to
Landlord.

              (c) In the event of the  termination of this Lease,  Landlord may,
at its sole option, take over Tenant's entire interest in any sublease and, upon
notice from  Landlord,  the  subtenant  shall attorn to  Landlord.  In no event,
however,  shall  Landlord be liable for any  previous  act or omission by Tenant
under the sublease or for the return of any advance rental  payments or deposits
under the sublease that have not been actually delivered to Landlord,  nor shall
Landlord  be bound by any  sublease  modification  executed  without  Landlord's
consent or for any  advance  rental  payment by the  subtenant  in excess of one
month's rent. The general provisions of this Lease, including without limitation
those pertaining to insurance and indemnification,  shall be deemed incorporated
by reference into the sublease despite the termination of this Lease.

     SECTION 9.4. CERTAIN  TRANSFERS.  The sale of all or  substantially  all of
Tenant's assets (other than bulk sales in the ordinary course of business) shall
be deemed an  assignment  within the meaning  and  provisions  of this  Article.
Notwithstanding the foregoing,  Landlord's consent shall not be required for the
assignment of this Lease to an entity  controlling  or under common control with
Tenant,  or as a result of a merger by Tenant with or into  another  entity,  so
long as (i) the net worth of the  successor  entity  after  such  assignment  or
merger ("Tenant  Affiliate" herein) is at least equal to the net worth of Tenant
immediately  prior to the date of such assignment or merger,  evidence of which,
satisfactory  to  Landlord,  shall  be  presented  to  Landlord  prior  to  such
assignment  or merger,  (ii) Tenant  shall  provide to  Landlord,  prior to such
assignment  or  merger,  written  notice of such  assignment  or merger and such
assignment  documentation  and other  information  as  Landlord  may  request in
connection therewith,  and (iii) all of the other terms and requirements of this
Article shall apply with respect to such assignment.


                       ARTICLE X. INSURANCE AND INDEMNITY


     SECTION 10.1.  TENANT'S  INSURANCE.  Tenant,  at its sole cost and expense,
shall  provide and  maintain  in effect the  insurance  described  in Exhibit D.
Evidence  of  that  insurance  must  be  delivered  to  Landlord  prior  to  the
Commencement Date.

     SECTION 10.2. LANDLORD'S INSURANCE.  Landlord may, at its election, provide
any or all of the following types of insurance,  with or without  deductible and
in amounts and  coverages as may be  determined  by Landlord in its  discretion:
"all risk"  property  insurance,  subject to standard  exclusions,  covering the
Building,  and such other risks as Landlord or its  mortgagees  may from time to
time deem appropriate,  including leasehold  improvements made by Landlord,  and
commercial general liability  coverage.  Landlord shall not be required to carry
insurance of any kind on Tenant's property,  including  leasehold  improvements,
trade fixtures,  furnishings,  equipment, plate glass, signs and all other items
of  personal  property,  and shall not be  obligated  to repair or replace  that
property should damage occur.  All proceeds of insurance  maintained by Landlord
upon the Building shall be the property of Landlord,  whether or not Landlord is
obligated to or elects to make any repairs.  At Landlord's option,  Landlord may
self-insure all or any portion of the risks for which Landlord elects to provide
insurance hereunder.

     SECTION 10.3. TENANT'S  INDEMNITY.  To the fullest extent permitted by law,
Tenant shall defend,  indemnify,  protect, save and hold harmless Landlord,  its
agents, and any and all affiliates of Landlord,  including,  without limitation,
any  corporations or other entities  controlling,  controlled by or under common
control with Landlord, from and against any and all claims,  liabilities,  costs
or expenses arising either before or after the  Commencement  Date from Tenant's
use or  occupancy of the  Premises or the  Building,  or from the conduct of its
business,  or from any activity,  work, or thing done,  permitted or suffered by
Tenant or its agents, employees,  invitees or licensees in or about the Premises
or the Building,  or from any default in the  performance  of any  obligation on
Tenant's part to be performed under this Lease, or from any act or negligence of
Tenant  or  its  agents,  employees,  visitors,  patrons,  guests,  invitees  or
licensees.  Landlord  may, at its option,  require  Tenant to assume  Landlord's
defense in any action covered by this Section  through  counsel  satisfactory to
Landlord.  The provisions of this Section shall expressly survive the expiration
or sooner termination of this Lease.

     SECTION  10.4.  LANDLORD'S  NONLIABILITY.  Landlord  shall not be liable to
Tenant, its employees,  agents and invitees, and Tenant hereby waives all claims
against  Landlord  for loss of or damage to any  property,  or any injury to any
person,  or loss or interruption of business or income, or any other loss, cost,
damage,  injury  or  liability  whatsoever  (including  without  limitation  any
consequential  damages and lost profit or opportunity costs) resulting from, but
not limited to, Acts of God, acts of civil  disobedience or insurrection,  fire,
explosion,  falling plaster,  steam, gas,  electricity,  water or rain which may
leak or flow  from or into  any  part  of the  Building  or from  the  breakage,
leakage,  obstruction  or  other  defects  of  the  pipes,  sprinklers,   wires,
appliances,  plumbing,  air conditioning,  electrical works or other fixtures in
the Building. It is understood that any such condition may require the temporary
evacuation or closure of all or a portion of the Building. Except as provided in
Sections  11.1 and  12.1  below,  there  shall  be no  abatement  of rent and no
liability of Landlord by reason of any injury to or  interference  with Tenant's
business (including without limitation  consequential damages and lost profit or
opportunity  costs)  arising  from the  making of any  repairs,  alterations  or
improvements to any portion of the Building,  including repairs to the Premises,
nor shall any related activity by Landlord  constitute an actual or constructive
eviction;   provided,   however,   that  in  making   repairs,   alterations  or
improvements,  Landlord shall interfere as little as reasonably practicable with
the  conduct of Tenant's  business in the  Premises.  Neither  Landlord  nor its
agents shall be liable for interference  with light or other similar  intangible
interests.  Tenant shall immediately notify Landlord in case of fire or accident
in the Premises or the Building and of defects in any improvements or equipment.

     SECTION 10.5. WAIVER OF SUBROGATION. Landlord and Tenant each hereby waives
all rights of recovery  against  the other and the other's  agents on account of
loss and damage  occasioned  to the property of such waiving party to the extent
only that such loss or damage is required to be insured  against  under any "all
risk" property  insurance policies required by this Article X; provided however,
that (i) the  foregoing  waiver  shall  not  apply  to the  extent  of  Tenant's
obligations to pay deductibles  under any such policies and this Lease, and (ii)
if any loss is due to the act,  omission or negligence or willful  misconduct of
Tenant or its  agents,  employees,  contractors,  guests or  invitees,  Tenant's
liability  insurance  shall be primary  and shall  cover all losses and  damages
prior to any other insurance  hereunder.  By this waiver it is the intent of the
parties  that  neither  Landlord  nor  Tenant  shall be liable to any  insurance
company (by way of  subrogation  or otherwise)  insuring the other party for any
loss or damage insured against under any "all-risk"  property insurance policies
required by this Article, even though such loss or damage might be occasioned by
the  negligence of such party,  its agents,  employees,  contractors,  guests or
invitees.  The  provisions of this Section  shall not limit the  indemnification
provisions elsewhere contained in this Lease.


                        ARTICLE XI. DAMAGE OR DESTRUCTION


     SECTION 11.1.    RESTORATION.

              (a) If the Building is damaged,  Landlord shall repair that damage
as soon as reasonably possible, at its expense,  unless: (i) Landlord reasonably
determines  that  the cost of  repair  is not  covered  by  Landlord's  fire and
extended coverage  insurance plus such additional  amounts Tenant elects, at its
option, to contribute,  excluding however the deductible (for which Tenant shall
be  responsible  for Tenant's  proportionate  share);  (ii) Landlord  reasonably
determines  that  the  Premises  cannot,  with  reasonable  diligence,  be fully
repaired by Landlord  (or cannot be safely  repaired  because of the presence of
hazardous factors, including without limitation Hazardous Materials,  earthquake
faults,  and other similar  dangers) within two hundred seventy (270) days after
the date of the damage;  (iii) a material  default by Tenant has occurred and is
continuing  at the time of such  damage;  or (iv) the damage  occurs  during the
final twelve (12) months of the Term.  Should  Landlord  elect not to repair the
damage for one of the  preceding  reasons,  Landlord  shall so notify  Tenant in
writing  within  sixty (60) days after the  damage  occurs and this Lease  shall
terminate as of the date of that notice.

              (b) Unless  Landlord  elects to terminate this Lease in accordance
with subsection (a) above, this Lease shall continue in effect for the remainder
of the Term; provided that so long as Tenant is not in default under this Lease,
if the damage is so  extensive  that  Landlord  reasonably  determines  that the
Premises cannot, with reasonable  diligence,  be repaired by Landlord (or cannot
be safely  repaired  because of the  presence of hazardous  factors,  earthquake
faults,  and other similar dangers) so as to allow Tenant's  substantial use and
enjoyment of the Premises  within two hundred  seventy (270) days after the date
of damage,  then Tenant may elect to terminate  this Lease by written  notice to
Landlord within the sixty (60) day period stated in subsection (a).

              (c)  Commencing  on the date of any  damage to the  Building,  and
ending on the sooner of the date the damage is  repaired  or the date this Lease
is  terminated,  the rental to be paid  under this Lease  shall be abated in the
same proportion that the floor area of the Building that is rendered unusable by
the damage from time to time bears to the total floor area of the Building,  but
only to the  extent  that  any  business  interruption  insurance  proceeds  are
received by Landlord therefor from Tenant's insurance described in Exhibit D.

              (d) Notwithstanding the provisions of subsections (a), (b) and (c)
of this Section,  and subject to the provisions of Section 10.5 above,  the cost
of any  repairs  shall be borne by Tenant,  and Tenant  shall not be entitled to
rental  abatement or  termination  rights,  if the damage is due to the fault or
neglect of Tenant or its employees, subtenants, invitees or representatives.  In
addition,  the  provisions of this Section shall not affect the  provisions  for
Landlord's responsibilities pursuant to Section 2.4 of this Lease, nor be deemed
to require  Landlord  to repair any  improvements  or  fixtures  that  Tenant is
obligated to repair or insure pursuant to any other provision of this Lease.

              (e)  Tenant  shall  fully  cooperate  with  Landlord  in  removing
Tenant's  personal  property and any debris from the Premises to facilitate  all
inspections  of the  Premises  and the  making of any  repairs.  Notwithstanding
anything to the  contrary  contained  in this  Lease,  if Landlord in good faith
believes  there is a risk of injury to persons or damage to property  from entry
into the  Building  or Premises  following  any damage or  destruction  thereto,
Landlord  may restrict  entry into the  Building or the Premises by Tenant,  its
employees,  agents and contractors in a non-discriminatory manner, without being
deemed  to have  violated  Tenant's  rights  of quiet  enjoyment  to, or made an
unlawful  detainer  of, or evicted  Tenant from,  the  Premises.  Upon  request,
Landlord  shall  consult  with Tenant to  determine if there are safe methods of
entry  into the  Building  or the  Premises  solely in order to allow  Tenant to
retrieve files, data in computers,  and necessary inventory,  subject however to
all  indemnities  and waivers of liability from Tenant to Landlord  contained in
this  Lease and any  additional  indemnities  and  waivers  of  liability  which
Landlord may require.

     SECTION 11.2.  LEASE  GOVERNS.  Tenant  agrees that the  provisions of this
Lease,  including  without  limitation  Section 11.1, shall govern any damage or
destruction and shall accordingly supersede any contrary statute or rule of law.


                           ARTICLE XII. EMINENT DOMAIN

     SECTION 12.1. TOTAL OR PARTIAL TAKING.  If all or a material portion of the
Premises  is taken by any lawful  authority  by exercise of the right of eminent
domain,  or sold to prevent a taking,  either  Tenant or Landlord may  terminate
this Lease  effective as of the date possession is required to be surrendered to
the authority.  In the event title to a portion of the Premises is taken or sold
in lieu of taking,  and if Landlord elects to restore the Premises in such a way
as to alter the Premises  materially,  either party may terminate this Lease, by
written notice to the other party, effective on the date of vesting of title. In
the event neither party has elected to terminate  this Lease as provided  above,
then Landlord shall promptly,  after receipt of a sufficient condemnation award,
proceed to restore the Premises to  substantially  their  condition prior to the
taking,  and a  proportionate  allowance  shall be made to  Tenant  for the rent
corresponding  to the time  during  which,  and to the part of the  Premises  of
which, Tenant is deprived on account of the taking and restoration. In the event
of a taking, Landlord shall be entitled to the entire amount of the condemnation
award  without  deduction  for any estate or interest of Tenant;  provided  that
nothing in this  Section  shall be deemed to give  Landlord  any interest in, or
prevent  Tenant from  seeking any award  against the taking  authority  for, the
taking of personal  property and fixtures  belonging to Tenant or for relocation
or business interruption expenses recoverable from the taking authority.

     SECTION 12.2.  TEMPORARY  TAKING. No temporary taking of the Premises shall
terminate  this Lease or give  Tenant any right to  abatement  of rent,  and any
award  specifically  attributable  to a temporary  taking of the Premises  shall
belong entirely to Tenant.  A temporary taking shall be deemed to be a taking of
the use or  occupancy  of the Premises for a period of not to exceed one hundred
eighty (180) days.

     SECTION 12.3.  TAKING OF PARKING AREA. In the event there shall be a taking
of the parking area such that Landlord can no longer provide  sufficient parking
to comply with this Lease, Landlord may substitute reasonably equivalent parking
in a location reasonably close to the Building;  provided that if Landlord fails
to make that  substitution  within ninety (90) days  following the taking and if
the taking materially impairs Tenant's use and enjoyment of the Premises, Tenant
may, at its option,  terminate this Lease by written notice to Landlord. If this
Lease is not so  terminated  by Tenant,  there shall be no abatement of rent and
this Lease shall continue in effect.

          ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS

     SECTION 13.1. SUBORDINATION. At the option of Landlord, this Lease shall be
either superior or subordinate to all ground or underlying leases, mortgages and
deeds of trust,  if any,  which may hereafter  affect the  Premises,  and to all
renewals,  modifications,  consolidations,  replacements and extensions thereof;
provided,  that so long as Tenant is not in default under this Lease, this Lease
shall not be terminated or Tenant's quiet enjoyment of the Premises disturbed in
the  event of  termination  of any  such  ground  or  underlying  lease,  or the
foreclosure  of any  such  mortgage  or deed  of  trust,  to  which  Tenant  has
subordinated this Lease pursuant to this Section.  In the event of a termination
or   foreclosure,   Tenant   shall   become  a  tenant  of  and  attorn  to  the
successor-in-interest  to  Landlord  upon the same terms and  conditions  as are
contained in this Lease, and shall execute any instrument reasonably required by
Landlord's  successor for that purpose.  Tenant shall also, upon written request
of Landlord, execute and deliver all instruments as may be required from time to
time to  subordinate  the  rights of Tenant  under  this  Lease to any ground or
underlying  lease or to the lien of any mortgage or deed of trust (provided that
such instruments include the nondisturbance and attornment  provisions set forth
above), or, if requested by Landlord,  to subordinate,  in whole or in part, any
ground or underlying  lease or the lien of any mortgage or deed of trust to this
Lease.

     SECTION 13.2.    ESTOPPEL CERTIFICATE.

              (a)  Tenant  shall,  at any time  upon not less than ten (10) days
prior  written  notice  from  Landlord,  execute,  acknowledge  and  deliver  to
Landlord,  in any form that  Landlord  may  reasonably  require,  a statement in
writing  (i)  certifying  that this  Lease is  unmodified  and in full force and
effect (or, if modified,  stating the nature of the  modification and certifying
that this  Lease,  as  modified,  is in full force and  effect) and the dates to
which the rental,  additional  rent and other charges have been paid in advance,
if any, and (ii) acknowledging that, to Tenant's knowledge, there are no uncured
defaults on the part of Landlord, or specifying each default if any are claimed,
and (iii) setting  forth all further  information  that Landlord may  reasonably
require.  Tenant's statement may be relied upon by any prospective  purchaser or
encumbrancer of the Premises.

              (b)  Notwithstanding  any other  rights and  remedies of Landlord,
Tenant's  failure to deliver any estoppel  statement  within the  provided  time
shall be conclusive upon Tenant that (i) this Lease is in full force and effect,
without modification except as may be represented by Landlord, (ii) there are no
uncured defaults in Landlord's performance,  and (iii) not more than one month's
rental has been paid in advance.

     SECTION 13.3     FINANCIALS.

              (a) Tenant shall  deliver to Landlord,  prior to the  execution of
this Lease and thereafter at any time upon Landlord's request,  Tenant's current
tax  returns and most  recently  filed  financial  statements,  certified  true,
accurate  and  complete by the chief  financial  officer of Tenant,  including a
balance  sheet and  profit and loss  statement  for the most  recent  prior year
(collectively,   the  "Statements"),   which  Statements  shall  accurately  and
completely  reflect the financial  condition of Tenant.  Landlord agrees that it
will keep the Statements confidential, except that Landlord shall have the right
to deliver the same to any proposed purchaser or encumbrancer of the Premises.

              (b) Tenant acknowledges that Landlord is relying on the Statements
in its  determination  to enter  into  this  Lease,  and  Tenant  represents  to
Landlord,  which  representation  shall be deemed made on the date of this Lease
and again on the  Commencement  Date,  that no material  change in the financial
condition of Tenant, as reflected in the Statements, has occurred since the date
Tenant delivered the Statements to Landlord.  The Statements are represented and
warranted by Tenant to be correct and to accurately  and fully reflect  Tenant's
true  financial  condition as of the date of  submission  by any  Statements  to
Landlord.


                       ARTICLE XIV. DEFAULTS AND REMEDIES


     SECTION 14.1. TENANT'S DEFAULTS.  In addition to any other event of default
set forth in this  Lease,  the  occurrence  of any one or more of the  following
events shall constitute a default by Tenant:

              (a)  The  failure  by  Tenant  to  make  any  payment  of  rent or
additional  rent  required  to be made by  Tenant,  as and when  due,  where the
failure  continues  for a period of three (3) days  after  written  notice  from
Landlord to Tenant; provided, however, that any such notice shall be in lieu of,
and not in  addition  to, any notice  required  under  California  Code of Civil
Procedure Section 1161 and 1161(a) as amended. For purposes of these default and
remedies  provisions,  the term "additional rent" shall be deemed to include all
amounts  of any type  whatsoever  other  than  Basic  Rent to be paid by  Tenant
pursuant to the terms of this Lease.

              (b)  Assignment,  sublease,  encumbrance  or other transfer of the
Lease by Tenant, either voluntarily or by operation of law, whether by judgment,
execution,  transfer by intestacy or testacy, or other means,  without the prior
written consent of Landlord.

              (c)  The  discovery  by  Landlord  that  any  financial  statement
provided by Tenant, or by any affiliate,  successor or guarantor of Tenant,  was
materially false.
              (d) The  failure  of  Tenant  to  timely  and  fully  provide  any
subordination  agreement,   estoppel  certificate  or  financial  statements  in
accordance with the requirements of Article XIII.

              (e) The failure or  inability  by Tenant to observe or perform any
of the express or implied  covenants or  provisions of this Lease to be observed
or performed by Tenant,  other than as specified in any other subsection of this
Section,  where the  failure  continues  for a period of thirty  (30) days after
written notice from Landlord to Tenant or such shorter period as is specified in
any other provision of this Lease; provided, however, that any such notice shall
be in lieu of, and not in addition to, any notice required under California Code
of Civil Procedure Section 1161 and 1161(a) as amended.  However,  if the nature
of the failure is such that more than thirty (30) days are  reasonably  required
for its  cure,  then  Tenant  shall not be  deemed  to be in  default  if Tenant
commences the cure within thirty (30) days,  and thereafter  diligently  pursues
the cure to completion.

              (f) (i) The  making by Tenant of any  general  assignment  for the
benefit of creditors; (ii) the filing by or against Tenant of a petition to have
Tenant  adjudged a Chapter 7 debtor under the  Bankruptcy  Code or to have debts
discharged  or a  petition  for  reorganization  or  arrangement  under  any law
relating to bankruptcy  (unless, in the case of a petition filed against Tenant,
the same is  dismissed  within  thirty (30) days);  (iii) the  appointment  of a
trustee or receiver to take possession of  substantially  all of Tenant's assets
located at the Premises or of Tenant's  interest in this Lease, if possession is
not restored to Tenant within thirty (30) days; (iv) the  attachment,  execution
or other judicial seizure of substantially all of Tenant's assets located at the
Premises  or of  Tenant's  interest  in this  Lease,  where the  seizure  is not
discharged  within thirty (30) days;  or (v) Tenant's  convening of a meeting of
its creditors for the purpose of effecting a moratorium  upon or  composition of
its debts. Landlord shall not be deemed to have knowledge of any event described
in this subsection unless  notification in writing is received by Landlord,  nor
shall there be any presumption  attributable to Landlord of Tenant's insolvency.
In the event that any  provision of this  subsection  is contrary to  applicable
law, the provision shall be of no force or effect.

     SECTION 14.2.    LANDLORD'S REMEDIES.

     (a)  In the  event  of any  default  by  Tenant,  or in  the  event  of the
abandonment  of the Premises by Tenant,  then in addition to any other  remedies
available to Landlord, Landlord may exercise the following remedies:

     (i) Landlord may terminate  Tenant's right to possession of the Premises by
any lawful  means,  in which case this Lease shall  terminate  and Tenant  shall
immediately  surrender possession of the Premises to Landlord.  Such termination
shall not affect any  accrued  obligations  of Tenant  under  this  Lease.  Upon
termination,  Landlord  shall have the right to reenter the  Premises and remove
all  persons and  property.  Landlord  shall also be  entitled  to recover  from
Tenant:

     (1) The worth at the time of award of the unpaid rent and  additional  rent
which had been earned at the time of termination;

     (2) The worth at the time of award of the amount by which the  unpaid  rent
and  additional  rent which would have been earned after  termination  until the
time of award exceeds the amount of such loss that Tenant proves could have been
reasonably avoided;

     (3) The worth at the time of award of the amount by which the  unpaid  rent
and additional  rent for the balance of the Term after the time of award exceeds
the amount of such loss that Tenant proves could be reasonably avoided;

     (4) Any other amount necessary to compensate Landlord for all the detriment
proximately  caused by Tenant's  failure to perform its  obligations  under this
Lease or which in the  ordinary  course of things would be likely to result from
Tenant's  default,  including,  but not  limited  to,  the  cost  of  recovering
possession of the Premises,  refurbishment  of the  Premises,  marketing  costs,
commissions and other expenses of reletting,  including  necessary  repair,  the
unamortized portion of any tenant improvements and brokerage  commissions funded
by Landlord in connection with this Lease,  reasonable  attorneys' fees, and any
other reasonable costs; and

     (5) At Landlord's election,  all other amounts in addition to or in lieu of
the  foregoing as may be permitted by law. The term "rent" as used in this Lease
shall be deemed to mean the Basic Rent and all other sums required to be paid by
Tenant to  Landlord  pursuant to the terms of this  Lease.  Any sum,  other than
Basic  Rent,  shall be  computed  on the  basis of the  average  monthly  amount
accruing during the twenty-four (24) month period  immediately prior to default,
except  that  if  it  becomes  necessary  to  compute  such  rental  before  the
twenty-four (24) month period has occurred, then the computation shall be on the
basis of the  average  monthly  amount  during the  shorter  period.  As used in
subparagraphs  (1) and (2)  above,  the  "worth at the time of  award"  shall be
computed by allowing  interest  at the rate of ten percent  (10%) per annum.  As
used in  subparagraph  (3)  above,  the  "worth at the time of  award"  shall be
computed by discounting  the amount at the discount rate of the Federal  Reserve
Bank of San Francisco at the time of award plus one percent (1%).

     (ii)  Landlord may elect not to terminate  Tenant's  right to possession of
the Premises,  in which event Landlord may continue to enforce all of its rights
and  remedies  under this Lease,  including  the right to collect all rent as it
becomes  due.  Efforts  by the  Landlord  to  maintain,  preserve  or relet  the
Premises,  or the appointment of a receiver to protect the Landlord's  interests
under this Lease,  shall not  constitute a termination  of the Tenant's right to
possession of the Premises. In the event that Landlord elects to avail itself of
the remedy provided by this  subsection  (ii),  Landlord shall not  unreasonably
withhold its consent to an assignment  or subletting of the Premises  subject to
the reasonable standards for Landlord's consent as are contained in this Lease.

              (b) Landlord  shall be under no  obligation  to observe or perform
any covenant of this Lease on its part to be observed or performed which accrues
after the date of any default by Tenant unless and until the default is cured by
Tenant,  it being  understood and agreed that the performance by Landlord of its
obligations  under this Lease are expressly  conditioned  upon Tenant's full and
timely  performance of its obligations  under this Lease. The various rights and
remedies  reserved to Landlord in this Lease or  otherwise  shall be  cumulative
and, except as otherwise  provided by California law, Landlord may pursue any or
all of its rights and remedies at the same time.

              (c) No delay or omission  of  Landlord  to  exercise  any right or
remedy  shall be  construed as a waiver of the right or remedy or of any default
by Tenant.  The  acceptance by Landlord of rent shall not be a (i) waiver of any
preceding breach or default by Tenant of any provision of this Lease, other than
the  failure  of Tenant  to pay the  particular  rent  accepted,  regardless  of
Landlord's  knowledge  of  the  preceding  breach  or  default  at the  time  of
acceptance of rent, or (ii) a waiver of Landlord's  right to exercise any remedy
available to Landlord by virtue of the breach or default.  The acceptance of any
payment from a debtor in possession,  a trustee,  a receiver or any other person
acting on behalf of Tenant or Tenant's  estate shall not waive or cure a default
under  Section  14.1.  No payment by Tenant or receipt by  Landlord  of a lesser
amount  than the rent  required by this Lease shall be deemed to be other than a
partial  payment on account of the earliest due  stipulated  rent, nor shall any
endorsement  or  statement  on any check or  letter  be  deemed  an  accord  and
satisfaction and Landlord shall accept the check or payment without prejudice to
Landlord's  right to recover the balance of the rent or pursue any other  remedy
available to it. No act or thing done by Landlord or  Landlord's  agents  during
the Term shall be deemed an acceptance  of a surrender of the  Premises,  and no
agreement  to accept a surrender  shall be valid unless in writing and signed by
Landlord.  No employee of Landlord or of Landlord's  agents shall have any power
to accept the keys to the Premises prior to the  termination of this Lease,  and
the delivery of the keys to any employee  shall not operate as a termination  of
the Lease or a surrender of the Premises.

     SECTION 14.3.    LATE PAYMENTS.

              (a) Any rent due under this Lease that is not received by Landlord
within ten (10) days of the date when due shall  bear  interest  at the  maximum
rate  permitted  by law from the date due  until  fully  paid.  The  payment  of
interest  shall not cure any default by Tenant  under this Lease.  In  addition,
Tenant  acknowledges  that the late  payment by Tenant to  Landlord of rent will
cause Landlord to incur costs not  contemplated by this Lease,  the exact amount
of which will be extremely difficult and impracticable to ascertain. Those costs
may include, but are not limited to,  administrative,  processing and accounting
charges,  and late charges  which may be imposed on Landlord by the terms of any
ground lease, mortgage or trust deed covering the Premises.  Accordingly, if any
rent due from Tenant  shall not be received by Landlord or  Landlord's  designee
within ten (10) days after the date due,  then Tenant shall pay to Landlord,  in
addition to the  interest  provided  above,  a late charge in a sum equal to the
greater of five percent (5%) of the amount  overdue or Two Hundred Fifty Dollars
($250.00) for each delinquent  payment.  Acceptance of a late charge by Landlord
shall not  constitute  a waiver of Tenant's  default with respect to the overdue
amount,  nor shall it prevent  Landlord from  exercising any of its other rights
and remedies.

              (b) Following each second consecutive  installment of rent that is
not paid within ten (10) days  following  notice of  nonpayment  from  Landlord,
Landlord  shall have the option (i) to  require  that  beginning  with the first
payment of rent next due,  rent shall no longer be paid in monthly  installments
but shall be  payable  quarterly  three (3)  months in  advance  and/or  (ii) to
require that Tenant increase the amount,  if any, of the Security Deposit by one
hundred  percent (100%).  Should Tenant deliver to Landlord,  at any time during
the Term, two (2) or more insufficient checks, the Landlord may require that all
monies then and  thereafter  due from  Tenant be paid to  Landlord by  cashier's
check.

     SECTION 14.4. RIGHT OF LANDLORD TO PERFORM. All covenants and agreements to
be performed by Tenant under this Lease shall be performed at Tenant's sole cost
and expense and without  any  abatement  of rent or right of set-off.  If Tenant
fails to pay any sum of money,  other than rent,  or fails to perform  any other
act on its part to be  performed  under this Lease,  and the  failure  continues
beyond any applicable  grace period set forth in Section 14.1,  then in addition
to any other available remedies,  Landlord may, at its election make the payment
or perform  the other act on  Tenant's  part.  Landlord's  election  to make the
payment  or  perform  the  act on  Tenant's  part  shall  not  give  rise to any
responsibility  of Landlord to continue  making the same or similar  payments or
performing  the same or similar  acts.  Tenant  shall,  promptly  upon demand by
Landlord,  reimburse  Landlord for all sums paid by Landlord  and all  necessary
incidental  costs,  together with interest at the maximum rate  permitted by law
from the date of the payment by  Landlord.  Landlord  shall have the same rights
and remedies if Tenant fails to pay those amounts as Landlord  would have in the
event of a default by Tenant in the payment of rent.

     SECTION 14.5.  DEFAULT BY LANDLORD.  Landlord  shall not be deemed to be in
default in the  performance of any obligation  under this Lease unless and until
it has failed to perform the  obligation  within  thirty (30) days after written
notice by Tenant to  Landlord  specifying  in  reasonable  detail the nature and
extent of the  failure;  provided,  however,  that if the  nature of  Landlord's
obligation  is such  that  more  than  thirty  (30)  days are  required  for its
performance,  then Landlord shall not be deemed to be in default if it commences
performance within the thirty (30) day period and thereafter  diligently pursues
the cure to completion.

     SECTION  14.6.  EXPENSES AND LEGAL FEES.  All sums  reasonably  incurred by
Landlord in  connection  with any event of default by Tenant under this Lease or
holding over of possession by Tenant after the expiration or earlier termination
of this Lease,  including  without  limitation  all costs,  expenses  and actual
accountants,   appraisers,  attorneys  and  other  professional  fees,  and  any
collection  agency or other  collection  charges,  shall be due and  payable  by
Tenant to Landlord on demand, and shall bear interest at the rate of ten percent
(10%) per annum. Should either Landlord or Tenant bring any action in connection
with this Lease,  the prevailing party shall be entitled to recover as a part of
the action its reasonable  attorneys'  fees, and all other costs. The prevailing
party for the purpose of this paragraph  shall be determined by the trier of the
facts.

     SECTION 14.7.  WAIVER OF JURY TRIAL.  LANDLORD AND TENANT EACH ACKNOWLEDGES
THAT IT IS AWARE OF AND HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT
TO ITS  RIGHTS  TO TRIAL BY JURY,  AND EACH  PARTY  DOES  HEREBY  EXPRESSLY  AND
KNOWINGLY  WAIVE AND  RELEASE  ALL SUCH  RIGHTS TO TRIAL BY JURY IN ANY  ACTION,
PROCEEDING  OR  COUNTERCLAIM  BROUGHT BY EITHER PARTY  HERETO  AGAINST THE OTHER
(AND/OR AGAINST ITS OFFICERS,  DIRECTORS,  EMPLOYEES,  AGENTS,  OR SUBSIDIARY OR
AFFILIATED  ENTITIES)  ON ANY  MATTERS  WHATSOEVER  ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS LEASE, TENANT'S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY
CLAIM OF INJURY OR DAMAGE.

     SECTION 14.8.  SATISFACTION OF JUDGMENT. The obligations of Landlord do not
constitute  the  personal  obligations  of the  individual  partners,  trustees,
directors,  officers or shareholders  of Landlord or its  constituent  partners.
Should Tenant recover a money judgment against Landlord,  such judgment shall be
satisfied  only out of the  proceeds of sale  received  upon  execution  of such
judgment and levied thereon against the right, title and interest of Landlord in
the Building and out of the rent or other income from such  property  receivable
by Landlord or out of consideration  received by Landlord from the sale or other
disposition  of all or any part of  Landlord's  right,  title or interest in the
Building, and no action for any deficiency may be sought or obtained by Tenant.

     SECTION 14.9. LIMITATION OF ACTIONS AGAINST LANDLORD.  Any claim, demand or
right of any kind by Tenant  which is based  upon or arises in  connection  with
this Lease shall be barred unless Tenant  commences an action thereon within one
(1) year after the date that the act, omission,  event or default upon which the
claim, demand or right arises, has occurred.


                             ARTICLE XV. END OF TERM


     SECTION 15.1.  HOLDING OVER.  This Lease shall  terminate  without  further
notice upon the expiration of the Term, and any holding over by Tenant after the
expiration  shall not  constitute a renewal or extension of this Lease,  or give
Tenant  any rights  under  this  Lease,  except  when in writing  signed by both
parties.  If Tenant holds over for any period after the  expiration  (or earlier
termination)  of the Term without the prior  written  consent of Landlord,  such
possession shall constitute a tenancy at sufferance only; such holding over with
the prior written consent of Landlord shall constitute a month-to-month  tenancy
commencing on the first (1st) day following the  termination  of this Lease.  In
either of such events,  possession  shall be subject to all of the terms of this
Lease,  except that the monthly  Basic Rent shall be one hundred  fifty  percent
(150%)  of the  Basic  Rent  for the  month  immediately  preceding  the date of
termination  for the initial two (2) months of  holdover,  and for each month of
holdover  thereafter  shall be one hundred  seventy-five  percent  (175%) of the
Basic  Rent for the month  immediately  preceding  the date of  termination.  If
Tenant fails to surrender the Premises upon the expiration of this Lease despite
demand to do so by Landlord,  Tenant shall indemnify and hold Landlord  harmless
from all loss or liability, including without limitation, any claims made by any
succeeding tenant relating to such failure to surrender.  Acceptance by Landlord
of rent after the  termination  shall not  constitute a consent to a holdover or
result in a renewal of this Lease. The foregoing  provisions of this Section are
in  addition  to and do not affect  Landlord's  right of  re-entry  or any other
rights of Landlord under this Lease or at law.

     SECTION 15.2.  MERGER ON  TERMINATION.  The voluntary or other surrender of
this Lease by Tenant, or a mutual termination of this Lease, shall terminate any
or all existing subleases unless Landlord,  at its option,  elects in writing to
treat  the  surrender  or  termination  as an  assignment  to it of  any  or all
subleases affecting the Premises.

     SECTION  15.3.  SURRENDER  OF  PREMISES;  REMOVAL  OF  PROPERTY.  Upon  the
Expiration Date or upon any earlier termination of this Lease, Tenant shall quit
and surrender possession of the Premises to Landlord in as good order, condition
and repair as when  received  or as  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  personal  property and debris,  except for any items that
Landlord may by written  authorization allow to remain.  Tenant shall repair all
damage to the Premises  resulting  from the removal,  which repair shall include
the patching and filling of holes and repair of structural damage, provided that
Landlord may instead elect to repair any structural  damage  resulting from such
removal at Tenant's expense.  If Tenant shall fail to comply with the provisions
of this Section,  Landlord may effect the removal  and/or make any repairs,  and
the cost to Landlord shall be additional rent payable by Tenant upon demand.  If
Tenant fails to remove  Tenant's  personal  property  from the Premises upon the
expiration  of the Term,  Landlord may remove,  store,  dispose of and/or retain
such personal property, at Landlord's option, in accordance with then applicable
laws,  all at the expense of Tenant.  If  requested  by  Landlord,  Tenant shall
execute,  acknowledge and deliver to Landlord an instrument in writing releasing
and  quitclaiming  to Landlord  all right,  title and  interest of Tenant in the
Premises.


                        ARTICLE XVI. PAYMENTS AND NOTICES


     All sums payable by Tenant to Landlord shall be paid,  without deduction or
offset,  in lawful  money of the United  States to  Landlord  at its address set
forth  in Item 12 of the  Basic  Lease  Provisions,  or at any  other  place  as
Landlord  may  designate  in  writing.  Unless  this  Lease  expressly  provides
otherwise,  as for example in the payment of rent  pursuant to Section  4.1, all
payments  shall  be due and  payable  within  five (5) days  after  demand.  All
payments requiring proration shall be prorated on the basis of a thirty (30) day
month and a three hundred sixty (360) day year.  Any notice,  election,  demand,
consent,  approval or other  communication  to be given or other  document to be
delivered  by either party to the other may be delivered in person or by courier
or overnight  delivery  service to the other  party,  or may be deposited in the
United  States mail,  duly  registered  or certified,  postage  prepaid,  return
receipt requested,  and addressed to the other party at the address set forth in
Item 12 of the Basic Lease Provisions, or if to Tenant, at that address or, from
and after the  Commencement  Date,  at the  Premises  (whether or not Tenant has
departed  from,  abandoned  or vacated the  Premises),  or may be  delivered  by
telegram,  telex or telecopy,  provided that receipt  thereof is  telephonically
confirmed.  Either  party  may,  by written  notice to the other,  served in the
manner provided in this Article, designate a different address. If any notice or
other  document  is sent by  mail,  it  shall  be  deemed  served  or  delivered
twenty-four (24) hours after mailing. If more than one person or entity is named
as Tenant under this Lease,  service of any notice upon any one of them shall be
deemed as service upon all of them.


                       ARTICLE XVII. RULES AND REGULATIONS


     Tenant agrees to observe  faithfully and comply strictly with the Rules and
Regulations,  attached as Exhibit E, and any  reasonable  and  nondiscriminatory
amendments,  modifications  and/or  additions as may be adopted and published by
written  notice to tenants by Landlord  for the  safety,  care,  security,  good
order,  or cleanliness  of the Premises.  Landlord shall not be liable to Tenant
for any violation of the Rules and  Regulations or the breach of any covenant or
condition in any lease by any other tenant or such tenant's  agents,  employees,
contractors,  quests or invitees.  One or more waivers by Landlord of any breach
of the Rules and  Regulations by Tenant or by any other tenant(s) shall not be a
waiver of any subsequent  breach of that rule or any other.  Tenant's failure to
keep and observe the Rules and Regulations shall constitute a default under this
Lease.  In the case of any conflict  between the Rules and  Regulations and this
Lease, this Lease shall be controlling.


                       ARTICLE XVIII. BROKER'S COMMISSION


     The  parties  recognize  as the  broker(s)  who  negotiated  this Lease the
firm(s),  if any,  whose  name(s) is (are)  stated in Item 10 of the Basic Lease
Provisions,  and agree that  Landlord  shall be  responsible  for the payment of
brokerage  commissions  to those  broker(s)  unless  otherwise  provided in this
Lease. Landlord and Tenant warrant that they have had no dealings with any other
real estate broker or agent in connection  with the  negotiation  of this Lease,
and each party agrees to indemnify  and hold the other party  harmless  from any
cost,  expense  or  liability  (including  reasonable  attorneys'  fees) for any
compensation,  commissions or charges claimed by any other real estate broker or
agent  employed  or  claiming  to  represent  or to have  been  employed  by the
indemnifying  party  in  connection  with the  negotiation  of this  Lease.  The
foregoing agreement shall survive the termination of this Lease. If Tenant fails
to take possession of the Premises or if this Lease otherwise  terminates  prior
to the  Expiration  Date as the  result of  failure  of  performance  by Tenant,
Landlord shall be entitled to recover from Tenant the unamortized portion of any
brokerage  commission  funded by Landlord  in  addition to any other  damages to
which Landlord may be entitled.


                  ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST


     In the event of any transfer of Landlord's  interest in the  Premises,  the
transferor  shall be  automatically  relieved of all  obligations on the part of
Landlord  accruing  under this  Lease  from and after the date of the  transfer,
provided  that any funds held by the  transferor in which Tenant has an interest
shall be turned over, subject to that interest,  to the transferee and Tenant is
notified of the transfer as required by law. No holder of a mortgage and/or deed
of trust to which this Lease is or may be  subordinate,  and no landlord under a
so-called  sale-leaseback,  shall be responsible in connection with the Security
Deposit,  unless the  mortgagee  or holder of the deed of trust or the  landlord
actually  receives the Security  Deposit.  It is intended that the covenants and
obligations  contained in this Lease on the part of Landlord  shall,  subject to
the foregoing,  be binding on Landlord,  its successors and assigns, only during
and in respect to their respective successive periods of ownership.



                           ARTICLE XX. INTERPRETATION


     SECTION  20.1.  GENDER  AND  NUMBER.  Whenever  the  context  of this Lease
requires,  the words "Landlord" and "Tenant" shall include the plural as well as
the  singular,  and words used in neuter,  masculine or feminine  genders  shall
include the others.

     SECTION  20.2.  HEADINGS.  The  captions  and  headings of the articles and
sections of this Lease are for  convenience  only,  are not a part of this Lease
and shall have no effect upon its construction or interpretation.

     SECTION  20.3.  JOINT AND  SEVERAL  LIABILITY.  If more than one  person or
entity is named as Tenant, the obligations  imposed upon each shall be joint and
several and the act of or notice from,  or notice or refund to, or the signature
of, any one or more of them shall be binding on all of them with  respect to the
tenancy of this Lease,  including,  but not limited to, any renewal,  extension,
termination or modification of this Lease.

     SECTION  20.4.  SUCCESSORS.  Subject to Articles IX and XIX, all rights and
liabilities  given to or imposed  upon  Landlord  and Tenant shall extend to and
bind their respective heirs, executors, administrators,  successors and assigns.
Nothing contained in this Section is intended,  or shall be construed,  to grant
to any person other than  Landlord and Tenant and their  successors  and assigns
any rights or remedies under this Lease.

     SECTION 20.5.  TIME OF ESSENCE.  Time is of the essence with respect to the
performance of every provision of this Lease.

     SECTION  20.6.  CONTROLLING  LAW.  This  Lease  shall  be  governed  by and
interpreted in accordance with the laws of the State of California.

     SECTION  20.7.  SEVERABILITY.  If any term or provision of this Lease,  the
deletion of which would not adversely affect the receipt of any material benefit
by either party or the deletion of which is consented to by the party  adversely
affected, shall be held invalid or unenforceable to any extent, the remainder of
this Lease shall not be affected and each term and provision of this Lease shall
be valid and enforceable to the fullest extent permitted by law.

     SECTION  20.8.  WAIVER  AND  CUMULATIVE  REMEDIES.  One or more  waivers by
Landlord or Tenant of any breach of any term, covenant or condition contained in
this  Lease  shall not be a waiver of any  subsequent  breach of the same or any
other  term,  covenant  or  condition.  Consent to any act by one of the parties
shall not be deemed to render  unnecessary the obtaining of that party's consent
to any subsequent act. No breach by Tenant of this Lease shall be deemed to have
been waived by Landlord  unless the waiver is in a writing  signed by  Landlord.
The rights and remedies of Landlord  under this Lease shall be cumulative and in
addition to any and all other rights and remedies which Landlord may have.

     SECTION 20.9. INABILITY TO PERFORM. In the event that either party shall be
delayed or  hindered  in or  prevented  from the  performance  of any work or in
performing  any act required  under this Lease by reason of any cause beyond the
reasonable  control of that party, then the performance of the work or the doing
of the act  shall  be  excused  for the  period  of the  delay  and the time for
performance  shall be  extended  for a period  equivalent  to the  period of the
delay.  The  provisions  of this Section shall not operate to excuse Tenant from
the  prompt  payment  of  rent or  from  the  timely  performance  of any  other
obligation under this Lease within Tenant's reasonable control.

     SECTION  20.10.  ENTIRE  AGREEMENT.  This Lease and its  exhibits and other
attachments  cover in full each and every  agreement  of every kind  between the
parties   concerning  the  Premises  and  the  Building,   and  all  preliminary
negotiations,  oral agreements,  understandings  and/or practices,  except those
contained in this Lease, are superseded and of no further effect.  Tenant waives
its rights to rely on any representations or promises made by Landlord or others
which are not contained in this Lease. No verbal  agreement or implied  covenant
shall be held to modify the  provisions  of this  Lease,  any  statute,  law, or
custom to the contrary notwithstanding.

     SECTION 20.11. QUIET ENJOYMENT.  Upon the observance and performance of all
the  covenants,  terms  and  conditions  on  Tenant's  part to be  observed  and
performed,  and  subject to the other  provisions  of this Lease,  Tenant  shall
peaceably and quietly hold and enjoy the Premises for the Term without hindrance
or interruption by Landlord or any other person claiming by or through Landlord.

     SECTION  20.12.  SURVIVAL.  All  covenants  of  Landlord  or  Tenant  which
reasonably would be intended to survive the expiration or sooner  termination of
this Lease,  including without  limitation any warranty or indemnity  hereunder,
shall so survive and continue to be binding upon and inure to the benefit of the
respective parties and their successors and assigns.


                      ARTICLE XXI. EXECUTION AND RECORDING


     SECTION  21.1.  COUNTERPARTS.  This  Lease may be  executed  in one or more
counterparts,  each of which shall constitute an original and all of which shall
be one and the same agreement.


     SECTION  21.2.  CORPORATE  AND  PARTNERSHIP  AUTHORITY.   If  Tenant  is  a
corporation or partnership,  each  individual  executing this Lease on behalf of
the  corporation  or  partnership  represents  and  warrants  that  he  is  duly
authorized  to execute and deliver  this Lease on behalf of the  corporation  or
partnership,  and that this Lease is binding upon the corporation or partnership
in accordance  with its terms.  Tenant shall, at Landlord's  request,  deliver a
certified copy of its board of directors' resolution or partnership agreement or
certificate authorizing or evidencing the execution of this Lease.

     SECTION 21.3.  EXECUTION OF LEASE;  NO OPTION OR OFFER.  The  submission of
this  Lease to Tenant  shall be for  examination  purposes  only,  and shall not
constitute an offer to or option for Tenant to lease the Premises.  Execution of
this  Lease by Tenant  and its  return to  Landlord  shall not be  binding  upon
Landlord, notwithstanding any time interval, until Landlord has in fact executed
and delivered this Lease to Tenant, it being intended that this Lease shall only
become  effective  upon  execution by Landlord and delivery of a fully  executed
counterpart to Tenant.

     SECTION  21.4.  RECORDING.  Tenant shall not record this Lease  without the
prior written consent of Landlord.  Tenant, upon the request of Landlord,  shall
execute and  acknowledge  a "short form"  memorandum of this Lease for recording
purposes.

     SECTION 21.5.  AMENDMENTS.  No amendment or termination of this Lease shall
be effective  unless in writing  signed by authorized  signatories of Tenant and
Landlord, or by their respective  successors in interest. No actions,  policies,
oral or informal  arrangements,  business dealings or other course of conduct by
or between the parties shall be deemed to modify this Lease in any respect.

     SECTION  21.6.  EXECUTED  COPY.  Any fully  executed  photocopy  or similar
reproduction of this Lease shall be deemed an original for all purposes.

     SECTION 21.7.  ATTACHMENTS.  All exhibits,  amendments,  riders and addenda
attached  to this  Lease are  hereby  incorporated  into and made a part of this
Lease.


                           ARTICLE XXII. MISCELLANEOUS


     SECTION 22.1.  NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and agrees
that  the  terms of this  Lease  are  confidential  and  constitute  proprietary
information  of Landlord.  Disclosure  of the terms could  adversely  affect the
ability of Landlord to negotiate other leases and impair Landlord's relationship
with other  tenants.  Accordingly,  Tenant  agrees  that it,  and its  partners,
officers,  directors,  employees  and  attorneys,  shall not  intentionally  and
voluntarily  disclose the terms and conditions of this Lease to any other tenant
or apparent  prospective tenant of the Landlord,  either directly or indirectly,
without the prior written consent of Landlord,  provided,  however,  that Tenant
may disclose the terms to prospective subtenants or assignees under this Lease.

     SECTION  22.2.  GUARANTY.  As a condition to the execution of this Lease by
Landlord,  the  obligations,  covenants and  performance of the Tenant as herein
provided shall be guaranteed in writing by the Guarantor(s)  listed in Item 7 of
the Basic Lease Provisions, if any, on a form of guaranty provided by Landlord.

     SECTION 22.3. CHANGES REQUESTED BY LENDER. If, in connection with obtaining
financing for the Building, the lender shall request reasonable modifications in
this  Lease as a  condition  to the  financing,  Tenant  will  not  unreasonably
withhold or delay its consent, provided that the modifications do not materially
increase  the  obligations  of Tenant or  materially  and  adversely  affect the
leasehold interest created by this Lease.

     SECTION 22.4. MORTGAGEE PROTECTION. No act or failure to act on the part of
Landlord which would otherwise  entitle Tenant to be relieved of its obligations
hereunder  or to  terminate  this  Lease  shall  result  in  such a  release  or
termination  unless (a) Tenant has given notice by registered or certified  mail
to any  beneficiary  of a deed of trust or mortgage  covering the Premises whose
address  has been  furnished  to Tenant and (b) such  beneficiary  is afforded a
reasonable  opportunity to cure the default by Landlord (which in no event shall
be less than sixty (60) days),  including, if necessary to effect the cure, time
to obtain  possession  of the Premises by power of sale or judicial  foreclosure
provided that such foreclosure remedy is diligently pursued.  Tenant agrees that
each  beneficiary  of a deed of trust or mortgage  covering  the  Premises is an
express third party beneficiary hereof,  Tenant shall have no right or claim for
the  collection of any deposit from such  beneficiary or from any purchaser at a
foreclosure  sale unless  such  beneficiary  or  purchaser  shall have  actually
received and not refunded the deposit,  and Tenant shall comply with any written
directions  by any  beneficiary  to pay  rent  due  hereunder  directly  to such
beneficiary  without  determining  whether an event of default exists under such
beneficiary's deed of trust.
     
SECTION 22.5. COVENANTS AND CONDITIONS. All of the provisions of this Lease
shall be  construed  to be  conditions  as well as covenants as though the words
specifically  expressing or imparting covenants and conditions were used in each
separate provision.

     SECTION 22.6.  SECURITY MEASURES.  Tenant hereby acknowledges that Landlord
shall have no obligation  whatsoever to provide guard service or other  security
measures for the benefit of the Premises.  Tenant assumes all responsibility for
the protection of Tenant,  its agents,  invitees and property from acts of third
parties.  Nothing herein contained shall prevent  Landlord,  at its sole option,
from  providing  security  protection  for the Premises or any part thereof,  in
which event the cost thereof shall be included within the definition of Building
Costs.


LANDLORD:                                     TENANT:

THE IRVINE COMPANY,                           ALYN CORPORATION,
a Michigan corporation                        a Delaware corporation



By /s/Clarence W. Barker                      By /s/ Robin A. Carden            
   ---------------------                         -------------------
   Clarence W. Barker,                           Robin A. Carden,
   President, Irvine Industrial Company,         President  
   a division of The Irvine Company


By /s/ John C. Tsu                             By /s/ Walter R. Menetrey
   ---------------------                          ----------------------
   John C. Tsu,                                   Walter R. Menetrey,
   Assistant Secretary                            Executive Vice President


<PAGE>






                                INDUSTRIAL LEASE
                        (Single Tenant; Net; Stand-Alone)


                                     BETWEEN


                               THE IRVINE COMPANY


                                       AND


                                ALYN CORPORATION
<PAGE>
                                    EXHIBIT B

                            IRVINE INDUSTRIAL COMPANY
                         HAZARDOUS MATERIALS SURVEY FORM

     The  purpose  of this form is to obtain  information  regarding  the use of
hazardous substances on Irvine Industrial Company property.  Prospective tenants
and  contractors  should  answer  the  questions  in  light  of  their  proposed
operations on the premises.  Existing tenants and contractors  should answer the
questions as they relate to ongoing operations on the premises and should update
any information previously submitted.

     If  additional  space is needed to answer  the  questions,  you may  attach
separate sheets of paper to this form.  When completed,  the form should be sent
to the following address:

                   _________________________________________
                   _________________________________________
                   _________________________________________
                   _________________________________________
                          (insert address of Property
                               Management Company)

     Your cooperation in this matter is appreciated.  If you have any questions,
please do not  hesitate to call  [insert  name of  Property  Manager] at [insert
phone number] for assistance.

1.   GENERAL INFORMATION

     Name of Responding Company:_______________________________________________
     Check all that apply:  Tenant (  )  Contractor (  )  Prospective (  )
                            Existing (  )

     Mailing Address:__________________________________________________________

     Contact Person & Title:___________________________________________________

     Telephone Number: (   ) _____-__________   

     Address of Leased Premises:_______________________________________________

     Length of Lease or Contract Term:_________________________________________

     Describe the proposed  operations to take place on the property,  including
principal  products  manufactured or services to be conducted.  Existing tenants
and contractors should describe any proposed changes to ongoing operations.


2.   STORAGE OF HAZARDOUS MATERIALS

     2.1  Will any hazardous materials be used or stored on-site?

          Wastes                   Yes  (  ) No  (  )
          Chemical Products        Yes  (  ) No  (  )
          Biological Hazards/      Yes  (  ) No  (  )
          Infectious Wastes        Yes  (  ) No  (  )
     Radioactive Materials         Yes  (  ) No  (  )

     2.2  List any  hazardous  materials to be used or stored,  the quantities
          that will be on-site at any given  time, and the  location and method
          of storage (e.g.,  bottles in storage closet on the premises).

          Location and Method

          Waste/Products      of Storage          Quantity
          _______________     ____________      _____________
          _______________     ____________      _____________
          _______________     ____________      _____________
          _______________     ____________      _____________

     2.3  Is any underground storage of hazardous substances proposed
          or currently conducted on the premises?  Yes  (  )  No (  )

          If yes, describe the materials to be stored,  and the size and
          construction of the tank.  Attach copies of any permits obtained for
          the underground  storage of such substances._________________________
          _____________________________________________________________________

3.   SPILLS

     3.1  During the past year, have any spills occurred on the
          premises?  Yes  (  )  No  (  )
          If so, please describe the spill and attach the results
          of any testing conducted to determine the extent of
          such spills.

     3.2  Were any agencies notified in connection with such spills?
          Yes  (  )  No  (  )
          If so, attach copies of any spill reports or other correspondence with
          regulatory agencies.

     3.3  Were any clean-up  actions  undertaken in connection with
          the spills?  Yes ( ) No ( )
          If so,  briefly  describe the actions  taken.  Attach copies of any
          clearance  letters obtained from any  regulatory  agencies  involved
          and the results of any final soil or  groundwater  sampling  done
          upon completion of the clean-up work.

4.   WASTE MANAGEMENT

     4.1  List the waste,  if any,  generated or to be generated at
          the   premises,   whether  it  is  as  hazardous   waste,
          biological or  radioactive  hazard,  its hazard class and
          the quantity generated on a monthly basis.

               Waste             Hazard         Quantity/Month
          _______________     ____________      _____________
          _______________     ____________      _____________
          _______________     ____________      _____________
          _______________     ____________      _____________

     4.2  Describe the method(s) of disposal for each waste.  Indicate where and
          how often disposal will take place.__________________________________
          _____________________________________________________________________

     4.3  Is any treatment or processing of hazardous, infectious or radioactive
          wastes currently conducted or proposed to be conducted at the
          premises?  Yes  (  )  No  (  )

          If yes, please describe any existing or proposed treatment methods.__
          _____________________________________________________________________

     4.4  Attach copies of any hazardous waste permits or licenses issued to
          your company with respect to its operations on the premises.

5.   WASTEWATER TREATMENT/DISCHARGE

     5.1  Do you discharge industrial wastewater to:
          ___ storm drain?          ___ sewer?
          ___ surface water?        ___ no industrial discharge

     5.2  Is your industrial wastewater treated before discharge?
          Yes  (  )  No  (  )

          If yes, describe the type of treatment conducted.

     5.3  Attach copies of any wastewater discharge permits issued to
          your company with respect to its operations on the premises.

6.   AIR DISCHARGES

     6.1  Do you have any air filtration systems or stacks that
          discharge into the air?  Yes  (  )  No  (  )

     6.2  Do you operate any equipment that require air emissions
          permits?  Yes  (  )  No  (  )

     6.3  Attach copies of any air discharge permits pertaining to
          these operations.


7.   HAZARDOUS MATERIALS DISCLOSURES

     7.1  Does your  company  handle an  aggregate  of at least 500 pounds,
          55  gallons  or  200  cubic  feet  of  hazardous material at any given
          time?  If so,  state law  requires that you prepare a hazardous
          materials  management plan. Yes ( ) No ( )

     7.2  Has your company prepared a hazardous materials management
          plan ('business plan') pursuant to state and Orange
          County Fire Department requirements?   Yes  (  )  No (  )
          If so, attach a copy of the business plan.

     7.3  Are any of the chemicals used in your operations regulated
          under Proposition 65?  Yes  (  )  No  (  )
          If so, describe the actions taken, or proposed actions to
          be taken, to comply with Proposition 65 requirements.

     7.4  Is your company subject to OSHA Hazard Communication Standard
          Requirements? Yes  (  )  No  (  )
          If so,  describe the  procedures  followed to comply with these
          requirements.


8.   ENFORCEMENT ACTIONS, COMPLAINTS

     8.1  Has your company ever been subject to any agency enforcement
          actions, administrative orders, or consent decrees?
          Yes  (  )  No (  )
          If so, describe the actions and any continuing compliance
          obligations imposed as a result of these actions.

     8.2  Has your company ever received requests for information,
          notice or demand letters, or any other inquiries
          regarding its operations?  Yes  (  )  No  (  )

     8.3  Have there ever been, or are there now pending, any lawsuits
          against your company regarding any environmental or
          health and safety concerns?   Yes  (  )  No  (  )

     8.4  Has an environmental audit ever been conducted at your
          company's current facility?
          Yes  (  )  No  (  )
          If so, discuss the results of the audit.

     8.5  Have there been any problems or complaints from neighbors at
          your company's current facility?   Yes  (  )   No  (  )


                                             __________________________________
                                             __________________________________
               
                                             By:_______________________________
                                                Name:__________________________
                                                Title:_________________________

                                                  Date:________________________
<PAGE>
                                    EXHIBIT C

                             LANDLORD'S DISCLOSURES

                                    SPECTRUM

         The  capitalized  terms used and not otherwise  defined in this Exhibit
shall have the same  definitions  as set forth in the Lease.  The  provisions of
this Exhibit shall supersede any  inconsistent or conflicting  provisions of the
Lease.

         1. Landlord has been informed that the El Toro Marine Corps Air Station
(MCAS)  has been  listed as a  Federal  Superfund  site as a result of  chemical
releases occurring over many years of occupancy. Various chemicals including jet
fuel,  motor oil and solvents have been  discharged in several areas  throughout
the MCAS site. A regional  study  conducted by the Orange County Water  District
has estimated that groundwaters beneath more than 2,900 acres have been impacted
by Trichloroethlene (TCE), an industrial solvent. There is a potential that this
substance may have migrated into the ground water  underlying the Premises.  The
U.S.  Environmental  Protection  Agency,  the Santa Ana Region  Quality  Control
Board,   and  the  Orange   County  Health  Care  Agency  are   overseeing   the
investigation/cleanup  of this  contamination.  To the Landlord's current actual
knowledge,  the ground water in this area is used for irrigation  purposes only,
and there is no practical impediment to the use or occupancy of the Premises due
to the El Toro discharges.


<PAGE>

                                    EXHIBIT D

                               TENANT'S INSURANCE

         The following  standards for Tenant's  insurance  shall be in effect at
the Premises. Landlord reserves the right to adopt reasonable  nondiscriminatory
modifications  and  additions to those  standards.  Tenant  agrees to obtain and
present  evidence  to Landlord  that it has fully  complied  with the  insurance
requirements.

         1. Tenant shall,  at its sole cost and expense,  commencing on the date
Tenant is given  access to the  Premises  for any  purpose and during the entire
Term, procure, pay for and keep in full force and effect: (i) commercial general
liability  insurance  with respect to the Premises and the  operations  of or on
behalf of Tenant  in, on or about the  Premises,  including  but not  limited to
personal injury, owned and nonowned automobile, blanket contractual, independent
contractors,  broad form  property  damage (with an  exception to any  pollution
exclusion  with  respect to damage  arising  out of heat,  smoke or fumes from a
hostile fire), fire and water legal liability,  products liability (if a product
is sold from the  Premises),  liquor law liability  (if alcoholic  beverages are
sold,  served or consumed  within the Premises),  and  severability of interest,
which  policy(ies)  shall be written on an  "occurrence"  basis and for not less
than the  amount  set forth in Item 13 of the  Basic  Lease  Provisions,  with a
combined single limit (with a $50,000 minimum limit on fire legal liability) per
occurrence for bodily  injury,  death,  and property  damage  liability,  or the
current limit of liability carried by Tenant,  whichever is greater, and subject
to such increases in amounts as Landlord may determine  from time to time;  (ii)
workers'  compensation  insurance  coverage as required  by law,  together  with
employers' liability insurance; (iii) with respect to improvements, alterations,
and the like  required  or  permitted  to be made by Tenant  under  this  Lease,
builder's all-risk insurance,  in an amount equal to the replacement cost of the
work; (iv) insurance against fire, vandalism,  malicious mischief and such other
additional  perils as may be included  in a standard  "all risk" form in general
use in Orange County,  California,  insuring  Tenant's  leasehold  improvements,
trade fixtures, furnishings,  equipment and items of personal property of Tenant
located in the  Premises,  in an amount  equal to not less than  ninety  percent
(90%) of their actual replacement cost (with replacement cost endorsement);  and
(v) business  interruption  insurance in amounts  satisfactory  to cover one (1)
year of loss.  In no event  shall the  limits of any  policy  be  considered  as
limiting the liability of Tenant under this Lease.

         2. In the event  Landlord  consents  to  Tenant's  use,  generation  or
storage of  Hazardous  Materials  on,  under or about the  Premises  pursuant to
Section 5.3 of this Lease,  Landlord shall have the continuing  right to require
Tenant,  at Tenant's  sole cost and expense  (provided the same is available for
purchase upon commercially  reasonable terms), to purchase  insurance  specified
and approved by  Landlord,  with  coverage  not less than Five  Million  Dollars
($5,000,000.00),  insuring (i) any Hazardous Materials shall be removed from the
Premises,  (ii) the  Premises  shall be restored to a clean,  healthy,  safe and
sanitary condition,  and (iii) any liability of Tenant,  Landlord and Landlord's
officers,  directors,   shareholders,  agents,  employees  and  representatives,
arising from such Hazardous Materials.

         3. All policies of insurance  required to be carried by Tenant pursuant
to this  Exhibit D  containing  a  deductible  exceeding  Ten  Thousand  Dollars
($10,000.00) per occurrence must be approved in writing by Landlord prior to the
issuance of such policy.  Tenant shall be solely  responsible for the payment of
all deductibles.

         4. All policies of insurance  required to be carried by Tenant pursuant
to this Exhibit D shall be written by responsible insurance companies authorized
to do business in the State of  California  and with a Best's rating of not less
than "A" subject to final  acceptance  and approval by Landlord.  Any  insurance
required of Tenant may be furnished by Tenant under any blanket  policy  carried
by it or under a separate  policy,  so long as (i) the Premises are specifically
covered (by rider, endorsement or otherwise),  (ii) the limits of the policy are
applicable on a "per location" basis to the Premises and provide for restoration
of the  aggregate  limits,  and (iii) the  policy  otherwise  complies  with the
provisions  of this  Exhibit  D. A true and  exact  copy of each  paid up policy
evidencing  the  insurance  (appropriately  authenticated  by the  insurer) or a
certificate of insurance,  certifying that the policy has been issued,  provides
the coverage  required by this  Exhibit D and contains the required  provisions,
shall be  delivered  to Landlord  prior to the date Tenant is given the right of
possession  of the  Premises.  Proper  evidence of the renewal of any  insurance
coverage  shall also be  delivered  to  Landlord  not less than thirty (30) days
prior to the expiration of the coverage. Landlord may at any time, and from time
to time,  inspect  and/or copy any and all insurance  policies  required by this
Lease.

         5. Each policy  evidencing  insurance  required to be carried by Tenant
pursuant to this Exhibit D shall contain the following provisions and/or clauses
satisfactory  to  Landlord:  (i) a  provision  that the policy and the  coverage
provided  shall be primary and that any  coverage  carried by Landlord  shall be
noncontributory  with  respect to any  policies  carried by Tenant  except as to
workers'  compensation  insurance;  (ii) a  provision  including  Landlord,  the
Additional Insureds identified in Item 11 of the Basic Lease Provisions, and any
other  parties in interest  designated  by Landlord  as an  additional  insured,
except as to workers' compensation  insurance;  (iii) a waiver by the insurer of
any right to subrogation against Landlord,  its agents,  employees,  contractors
and  representatives  which arises or might arise by reason of any payment under
the  policy  or by  reason  of any act or  omission  of  Landlord,  its  agents,
employees, contractors or representatives; and (iv) a provision that the insurer
will not cancel or change the  coverage  provided  by the policy  without  first
giving Landlord thirty (30) days prior written notice.

         6. In the event that Tenant fails to procure,  maintain and/or pay for,
at the times and for the  durations  specified in this Exhibit D, any  insurance
required  by this  Exhibit  D, or  fails  to  carry  insurance  required  by any
governmental authority,  Landlord may at its election procure that insurance and
pay the  premiums,  in which event Tenant shall repay  Landlord all sums paid by
Landlord,  together with  interest at the maximum rate  permitted by law and any
related costs or expenses  incurred by Landlord,  within ten (10) days following
Landlord's written demand to Tenant.

<PAGE>
                                    EXHIBIT E

                              RULES AND REGULATIONS


                  This  Exhibit sets forth the rules and  regulations  governing
Tenant's use of the Premises leased to Tenant  pursuant to the terms,  covenants
and  conditions  of the Lease to which this Exhibit is attached and therein made
part thereof. In the event of any conflict or inconsistency between this Exhibit
and the Lease, the Lease shall control.

                  1. Tenant  shall not place  anything  or allow  anything to be
placed near the glass of any window,  door,  partition  or wall which may appear
unsightly from outside the Premises.

                  2. The walls, walkways,  sidewalks,  entrance passages, courts
and  vestibules  shall not be  obstructed  or used for any  purpose  other  than
ingress and egress of pedestrian travel to and from the Premises,  and shall not
be  used  for  loitering  or  gathering,  or to  display,  store  or  place  any
merchandise,  equipment  or devices,  or for any other  purpose.  The  walkways,
entrance  passageways,  courts,  vestibules  and roof are not for the use of the
general  public and Landlord  shall in all cases retain the right to control and
prevent  access  thereto by all persons  whose  presence in the  judgment of the
Landlord shall be prejudicial to the safety, character, reputation and interests
of the Building and its tenants, provided that nothing herein contained shall be
construed to prevent such access to persons with whom Tenant  normally  deals in
the  ordinary  course of Tenant's  business  unless such  persons are engaged in
illegal  activities.  No tenant or  employee  or invitee of any tenant  shall be
permitted upon the roof of the Building.

                  3. No awnings or other  projection  shall be  attached  to the
outside walls of the  Building.  No security  bars or gates,  curtains,  blinds,
shades or screens visible from the exterior of the Premises shall be attached to
or hung in, or used in  connection  with,  any  window or door of the  Premises,
without the prior written reasonable  consent of Landlord.  Neither the interior
nor exterior of any windows shall be coated or otherwise sunscreened without the
express written reasonable consent of Landlord.

                  4. The toilet rooms,  urinals,  wash bowls and other  plumbing
apparatus  shall not be used for any purpose other than that for which they were
constructed  and no foreign  substance  of any kind  whatsoever  shall be thrown
therein.  The expense of any  breakage,  stoppage or damage  resulting  from the
violation  of this rule shall be borne by the tenant who, or whose  employees or
invitees, caused it.

                  5. No exterior  storage  shall be allowed at any time  without
the prior  written  approval of  Landlord.  The  Premises  shall not be used for
cooking or washing clothes without the prior written consent of Landlord, or for
lodging or sleeping or for any immoral or illegal purposes.

                  6.  Tenant  shall  not make,  or permit to be made,  any noise
constituting  a nuisance to the  occupants of this or  neighboring  buildings or
premises or those having  business with them,  whether by the use of any musical
instrument,  radio, phonograph,  noise, or otherwise. Tenant shall not use, keep
or permit to be used,  or kept,  any foul or  obnoxious  gas or substance in the
Premises  or permit or suffer the  Premises to be used or occupied in any manner
offensive or objectionable to Landlord or other occupants of this or neighboring
buildings or premises by reason of any odors, fumes or gases.

                  7.       No  animals  shall be  permitted  at any time  within
the Premises.

                  8.  Tenant  shall  not use the  name  of the  Building  or the
Project in  connection  with or in  promoting  or  advertising  the  business of
Tenant,  except as Tenant's  address,  without the written  consent of Landlord.
Landlord  shall have the right to prohibit any  advertising by any Tenant which,
in Landlord's reasonable opinion,  tends to impair the reputation of the Project
or its desirability for its intended uses, and upon written notice from Landlord
any Tenant shall refrain from or discontinue such advertising.

                  9.  Canvassing,  soliciting,  peddling,  parading,  picketing,
demonstrating or otherwise engaging in any conduct that unreasonably impairs the
value or use of the Premises or the Project are prohibited and each Tenant shall
cooperate to prevent the same.

                  10. No  equipment  of any type shall be placed on the Premises
which in Landlord's  reasonable  opinion exceeds the load limits of the floor or
otherwise  threatens  the  soundness  of the  structure or  improvements  of the
Building.

                  11. No air conditioning  unit or other similar apparatus shall
be installed or used by any Tenant without the prior written  reasonable consent
of Landlord.

                  12. No aerial antenna shall be erected on the roof or exterior
walls of the Premises,  or on the grounds,  without in each instance,  the prior
written  reasonable  consent of  Landlord.  Any  aerial or antenna so  installed
without such written consent shall be subject to removal by Landlord at any time
without  prior  notice at the  expense  of the  Tenant,  and  Tenant  shall upon
Landlord's demand pay a removal fee to Landlord of not less than $200.00.

                  13.  The entire  Premises,  including  vestibules,  entrances,
doors, fixtures,  windows and plate glass, shall at all times be maintained in a
safe, neat and clean condition by Tenant. All trash,  refuse and waste materials
shall be  regularly  removed  from the  Premises  by  Tenant  and  placed in the
containers at the locations  designated by Landlord for refuse  collection.  All
cardboard  boxes  must be  "broken  down"  prior to being  placed  in the  trash
container.  All styrofoam  chips must be bagged or otherwise  contained prior to
placement in the trash  container,  so as not to constitute a nuisance.  Pallets
may not be  disposed of in the trash  container  or  enclosures.  The burning of
trash, refuse or waste materials is prohibited.

                  14.      Tenant   shall  use  at   Tenant's   cost  such  pest
extermination  contractor  as  Landlord  may  direct  and at such  intervals  as
Landlord may reasonably require.

                  15.      No person  shall  enter or remain  within the Project
while intoxicated or under the influence of liquor or drugs.

                           Landlord reserves the right to amend or supplement
the  foregoing  Rules and  Regulations  and to adopt and  promulgate  additional
reasonable  rules and  regulations  applicable to the  Premises.  Notice of such
rules and regulations and amendments and supplements  thereto,  if any, shall be
given to the Tenant.

<PAGE>
                                    EXHIBIT X

                                   WORK LETTER


         TENANT IMPROVEMENTS

         The tenant improvement work by Landlord shall consist of repainting the
Premises and installing new carpet in the Premises ("Tenant Improvements").  All
materials and finishes utilized in completing the Tenant  Improvements  shall be
Landlord's  building  standard,  Landlord's  total  contribution  for the Tenant
Improvements,  inclusive of Landlord's  construction  management  fee, shall not
exceed Sixty-Five Thousand Dollars ($65,000.00).  Any excess cost shall be borne
solely by Tenant and shall be paid to  Landlord  within ten (10) days  following
Landlord's billing for such excess cost.

         Landlord  shall  permit  Tenant  and its  agents to enter the  Premises
thirty  (30) days  prior to the  Commencement  Date of the  Lease in order  that
Tenant may perform any work to be performed by Tenant hereunder  through its own
contractors,  subject to Landlord's reasonable prior written approval,  and in a
manner and upon terms and  conditions  and at times  satisfactory  to Landlord's
representative.  The  foregoing  license  to  enter  the  Premises  prior to the
Commencement Date is, however,  conditioned upon Tenant's  contractors and their
subcontractors  and employees  working in harmony and not  interfering  with the
work  being  performed  by  Landlord.  If at any time  that  entry  shall  cause
disharmony or interfere with the work being performed by Landlord,  this license
may be withdrawn  by Landlord  upon  twenty-four  (24) hours  written  notice to
Tenant.  That license is further  conditioned  upon the  compliance  by Tenant's
contractors   with  all   requirements   imposed  by  Landlord  on  third  party
contractors,  including  without  limitation  the  maintenance by Tenant and its
contractors and subcontractors of workers' compensation and public liability and
property   damage   insurance  in  amounts  and  with  companies  and  on  forms
satisfactory to Landlord, with certificates of such insurance being furnished to
Landlord prior to proceeding  with any such entry.  The entry shall be deemed to
be under all of the  provisions  of the Lease except as to the  covenants to pay
Basic Rent and/or  Operating  Expenses.  Landlord shall not be liable in any way
for any injury,  loss or damage which may occur to any such work being performed
by Tenant, the same being solely at Tenant's risk. In no event shall the failure
of  Tenant's  contractors  to  complete  any  work in the  Premises  extend  the
Commencement Date of the Lease.


<PAGE>
                            FIRST AMENDMENT TO LEASE


 I.       PARTIES AND DATE.

                   The First  Amendment to Lease (the "First  Amendment")  dated
         _________________,   1997  is  by  and  between   THE  IRVINE   COMPANY
         ("Landlord"), and ALYN CORPORATION, a Delaware corporation ("Tenant").

 II.      RECITALS.

                   On July 1, 1997,  Landlord  and Tenant  entered  into a lease
         ("Lease") for space in a building  located at 17021 Von Karman  Avenue,
         Irvine, California ("Premises").

                   Landlord and Tenant each desire to modify the Lease to extend
         the Lease  Term and make such other  modifications  as are set forth in
         "III. MODIFICATIONS" next below.

 III.     MODIFICATIONS.

                   Item 5 is hereby  deleted in its entirety  and the  following
                  shall be substituted in lieu thereof:

                            "5.  Lease Term:  The Term of this Lease shall
                  expire at midnight on January 31, 2008.

                   Effective as of February 1, 2003,  Item 6 shall be deleted in
                  its entirety and the following  shall be  substituted  in lieu
                  thereof:

                  "6.  Basic Rent:  Forty-Five Thousand Six Hundred Eighty
                  Dollars ($45,680.00) per month.

                  Basic Rent is subject to adjustment as follows: The Basic Rent
                  shall be  increased,  as of February 1, 2004 and every  twelve
                  (12) months thereafter (the "Rental Adjustment  Date(s)"),  by
                  the  percentage  increase,   if  any,  in  the  United  States
                  Department  of  Labor,  Bureau of Labor  Statistics,  Consumer
                  Price     Index     for    all    Urban     Consumers,     Los
                  Angeles-Anaheim-Riverside     Area    Average,    all    items
                  (1982-84=100)   (the  "Index").   The   adjustment   shall  be
                  calculated  by  comparing  the Index  published  for the third
                  month preceding the applicable Rental Adjustment Date with the
                  Index  published for the third month  preceding the last prior
                  Rental  Adjustment Date (or December,  2002 in the case of the
                  first  rental  adjustment),  and the Basic Rent then in effect
                  shall be increased by the amount of the  percentage  increase,
                  if any,  between those  published  Index amounts.  In no event
                  shall the Basic Rent be reduced by reason of such computation.
                  If at any Rental  Adjustment  Date the Index  shall not exist,
                  Landlord may substitute  another reasonable index published by
                  any governmental  agency.  Landlord shall use diligent efforts
                  to calculate  and give Tenant  notice of any such  increase in
                  the Basic Rent on or near each  Rental  Adjustment  Date,  and
                  Tenant  shall  commence  to  pay  the  increased   Basic  Rent
                  effective on the  applicable  Rental  Adjustment  Date. In the
                  event  Landlord  is unable to  deliver to Tenant the notice of
                  the  increased  Basic Rent at least five (5) days prior to any
                  Rental  Adjustment  Date,  Tenant  shall  commence  to pay the
                  increased  Basic Rent on the first day of the month  following
                  the  delivery of such notice (the  "Payment  Date"),  provided
                  Landlord's  notice  has been  given at least  five (5) days in
                  advance.  Tenant  shall  also  pay,  together  with the  first
                  payment of the increased  Basic Rent, an amount  determined by
                  multiplying the amount of the increase in Basic Rent times the
                  number  of  months  that  have  elapsed   between  the  Rental
                  Adjustment Date and the Payment Date.

                  Notwithstanding  the  foregoing,  the parties agree that as of
                  any Rental  Adjustment Date, the revised Basic Rent due to all
                  cumulative  increases pursuant to this paragraph shall neither
                  (i) exceed the amount obtained by increasing the initial Basic
                  Rent from  February 1, 2003 to said Rental  Adjustment  at the
                  rate of seven percent (7%) per annum, compounded annually, nor
                  (ii) be less  than  the  amount  obtained  by  increasing  the
                  initial  Basic  Rent  from  February  1,  2003 to said  Rental
                  Adjustment  Date at the rate of three  percent (3%) per annum,
                  compounded annually.

 I.       GENERAL.

                   Effect of  Amendments.  The Lease shall  remain in full force
                  and effect  except to the extent  that it is  modified by this
                  Amendment.

                   Entire   Agreement.   This  Amendment   embodies  the  entire
                  understanding  between Landlord and Tenant with respect to the
                  modifications set forth in "III.  MODIFICATIONS" above and can
                  be changed only in writing signed by Landlord and Tenant.

                   Counterparts.  If this Amendment is executed in counterparts,
                  each is hereby declared to be an original; all, however, shall
                  constitute  but one and the same  amendment.  In any action or
                  proceeding,  any photographic,  photostatic,  or other copy of
                  this  Amendment  may  be  introduced  into  evidence   without
                  foundation.

                   Defined  Terms.  All words  commencing  with initial  capital
                  letters in this  Amendment and defined in the lease shall have
                  the same  meaning in this  Amendment  as in the Lease,  unless
                  they are otherwise defined in this Amendment,

                   Corporate  and   Partnership   Authority.   If  Tenant  is  a
                  corporation or partnership,  or is comprised of either or both
                  of them,  each  individual  executing  this  Amendment for the
                  corporation or partnership  represents  that he or she is duly
                  authorized to execute and deliver this  Amendment on behalf of
                  the  corporation or partnership  and this Amendment is binding
                  upon the  corporation or  partnership  in accordance  with its
                  terms.

                   Attorneys'  Fees.  The  provisions  of the  Lease  respecting
                  payment of attorneys' fees shall also apply to this Amendment.

 I.       EXECUTION.

         Landlord and Tenant executed this amendment on the date as set forth in
         "I. PARTIES AND DATE." above.


         LANDLORD:                                TENANT:

         THE IRVINE COMPANY                       ALYN CORPORATION
                                                  a Delaware corporation


        By /s/Clarence W. Barker                   By /s/ Walter R. Menetrey
           ------------------                         ------------------
        Clarence W. Barker,                           Walter R. Menetrey,
        President, Irvine Industrial Company,         Executive Vice President  
        a division of The Irvine Company


        By /s/ John C. Tsu                         By /s/ Richard L. Little
           ------------------                         ----------------------
          John C. Tsu,                                Richard L. Little,
          Assistant Secretary                         Chief Financial Officer