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

1.    BASIC PROVISIONS ("BASIC PROVISIONS"):

      1.1     PARTIES: This Lease ("Lease"), dated for reference purposes only, 
January 27, 1998, is made by and between BRS - Campo Investment Company LP, a 
California limited partnership ("Lessor") and Javelin Systems, Inc., a 
Delaware corporation ("Lessee"), (collectively, the "Parties," or 
individually a "Party").

      1.2(a)  PREMISES: That certain portion of the Building, including all 
improvements therein or to be provided by Lessor under the terms of this 
Lease, commonly known by the street address of 17891 Cartwright Avenue, 
located in the City of Irvine, County of Orange, State of California, with 
zip code 92714, as outlined on Exhibit A attached hereto ("Premises"). The 
"Building" is that certain building containing the Premises and generally 
described as (describe briefly the nature of the Building): An approximate 
29,184 square foot freestanding corporate headquarters building, part of a 
larger complex. In addition to Lessee's rights to use and occupy the Premises 
as hereinafter specified, Lessee shall have non-exclusive rights to the 
Common Areas (as defined in Paragraph 2.7 below) as hereinafter specified, 
but shall not have any rights to the roof, exterior walls or utility raceways 
of the Building of to any other buildings in the Industrial Center. The 
Premises, the Building, the Common Areas, the land upon which they are 
located, along with all other buildings and improvements thereon, are herein 
collectively referred to as the "Industrial Center." (Also see Paragraph 2.)

      1.2(b)  PARKING: 54% of the existing parking as unreserved vehicle 
parking spaces ("Unreserved Parking Spaces"); See also paragraph 58 of the 
Addendum.

      1.3     TERM: 5 years and 0 months ("Original Term") commencing upon 
substantial completion of tenant ("Commencement Date") and ending sixty 
months after ("Expiration Date"). (Also see Paragraph 3.) improvements with a 
target commencement date.

      1.4     EARLY POSSESSION: N/A ("Early Possession Date"). (Also see 
Paragraphs 3.2 and 3.3.) of March 15, 1998.

      1.5     BASE RENT: $23,347.20 per month ("Base Rent"), payable on the 
1st day of each month commencing on the second month*. (Also see Paragraph 4)* 
of occupancy.

/X/   If this box is checked, this Lease provides for the Base Rent to be 
adjusted per Addendum 1, attached hereto.

      1.6(a)  BASE RENT PAID UPON EXECUTION: $23,347.20 as Base Rent for the 
first month of occupancy.

      1.6(b)  LESSEE'S SHARE OF COMMON AREA OPERATING EXPENSES: fifty-four 
percent (54%) ("Lessee's Share") as determined by

/X/   pro rata square footage of the Premises as compared to the total square 
footage of the Building or / / other criteria as described in Addendum____.

      1.7     SECURITY DEPOSIT: $26,277.48 ("SECURITY DEPOSIT"). (Also see 
Paragraph 5.)

      1.8     PERMITTED USE: General office, assembly, light manufacturing, 
warehousing and distribution of touch screen computers, and all related uses.
("Permitted Use"). (Also see Paragraph 6.)

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

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

/X/   John Griffin of Voit Commercial represents Lessor exclusively 
("Lessor/s Broker");

/X/   Bill Rauth of Grubb & Ellis represents Lessee exclusively ("Lessee's 
Broker"); or

/ /   _____________________ represents both Lessor and Lessee ("Dual 
Agency"). (Also see Paragraph 15.)

      1.10(b) PAYMENT TO BROKERS. Upon the execution of this Lease by both 
Parties, Lessor shall pay to said Broker(s) jointly, or in such separate 
shares as they may mutually designate in writing, a fee as set forth in a 
separate written agreement between Lessor and said Broker(s) for brokerage 
services rendered by said Broker(s) in connection with this transaction.

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

      1.12    ADDENDA AND EXHIBITS. Attached hereto is an Addendum or Addenda 
consisting of Paragraphs 50 through 60, and Exhibits A through C, all of 
which constitute a part of this Lease.

2.    PREMISES, PARKING AND COMMON AREAS.

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

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

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

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

      2.5     LESSEE AS PRIOR OWNER/OCCUPANT. The warranties made by Lessor 
in this Paragraph 2 shall be of no force or effect if immediately prior to 
the date set forth in Paragraph 1.1 Lessee was the owner or occupant of the 
Premises. In such event, Lessee shall, at Lessee's sole cost and expense, 
correct any noncompliance of the Premises with said warranties.


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                            MULTI-TENANT -- MODIFIED NET

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

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

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

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

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

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

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

     2.10 COMMON AREAS - CHANGES. So long as Lessee's use and enjoyment of 
the Premises is not unreasonably disturbed, Lessor shall have the right, in 
Lessor's sole discretion, from time to time:

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

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

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

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

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

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

3.   TERM.

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

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

     3.3  DELAY IN POSSESSION. If for any reason Lessor cannot deliver 
possession of the Premises to Lessee by the Early Possession Date, if one is 
specified in Paragraph 1.4, or if no Early Possession Date is specified, by 
the Commencement Date, Lessor shall not be subject to any liability therefor, 
nor shall such failure affect the validity of this Lease, or the obligations 
of Lessee hereunder, or extend the term hereof, but in such case, Lessee 
shall not, except as otherwise provided herein, be obligated to pay rent or 
perform any other obligation of Lessee under the terms of this Lease until 
Lessor delivers possession of the Premises to Lessee. If possession of the 
Premises is not delivered to Lessee within thirty (30) days after the 
Commencement Date, Lessee may, at its option, by notice in writing to Lessor 
within ten (10) days after the end of said thirty (30) day period, cancel 
this Lease, in which event the Parties shall be discharged from all 
obligations hereunder. Except as may be otherwise provided, and regardless of 
when the Original Term actually commences, if possession is not tendered to 
Lessee when required by this Lease and Lessee does not terminate this Lease, 
as aforesaid, the period free of the obligation to pay Base Rent, if any, 
that Lessee would otherwise have enjoyed shall run from the date of delivery 
of possession and continue for a period equal to the period during which the 
Lessee would have otherwise enjoyed under the terms hereof, but minus any 
days of delay caused by the acts, changes or omissions of Lessee.

4.  RENT

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

     4.2  COMMON AREA OPERATING EXPENSES. Lessee shall pay to Lessor during 
the term hereof, in addition to the Base Rent, Lessee's Share (as specified 
in Paragraph 1.5(b)) of all Common Area Operating Expenses, as hereinafter 
defined, during each calendar year of the term of this Lease, in accordance 
with the following provisions:

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

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

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

                      (bb)  Exterior signs and any tenant directories.
 
                      (cc)  Fire detection and sprinkler systems.

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

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

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

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

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

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

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

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

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

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


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Lessee's Share as indicated on said statement, Lessee shall be credited the 
amount of such over-payment against Lessee's Share of Common Area Operating 
Expenses next becoming due. If Lessee's payments under this Paragraph 4.2(d) 
during said preceding year were less than Lessee's Share as indicated on 
said statement, Lessee shall pay to Lessor the amount of the deficiency 
within ten (10) days after delivery by Lessor to Lessee of said statement. 
Lessee shall have the right to review the Common Area Operating Expenses per 
Paragraph 60 of the Addendum.

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

6.    USE.

      6.1     PERMITTED USE.

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

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

      6.2    HAZARDOUS SUBSTANCES.

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

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

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

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

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

      7.1     LESSEE'S OBLIGATIONS.

              (a)  Subject to the provisions of Paragraphs 2.2 (Condition), 
2.3 (Compliance with Covenants, Restrictions and Building Code), 7.2 
(Lessor's Obligations), 9 (Damage or Destruction), and 14 (Condemnation), 
Lessee shall, at Lessee's sole cost and expense and at all times, keep the 
Premises and every party thereof in good order, condition and repair, 
including, without limiting the generality of the foregoing, all equipment or 
facilities specifically serving the Premises, such as plumbing, heating, air 
conditioning, ventilating, electrical, lighting facilities, boilers, fired or 
unfired pressure vessels, fire hose connections if within the Premises, 
fixtures, interior walls, interior surfaces of exterior walls, ceilings, 
floors, windows, doors, plate glass, and skylights, but excluding any items 
which are the responsibility of Lessor pursuant to Paragraph 7.2 below. 
Lessee, in keeping the Premises in good order, condition and repair, shall 
exercise and perform good maintenance practices. Lessee's obligations shall 
include restorations, replacements or renewals when necessary to keep the 
Premises and all improvements thereon or a part thereof in good order, 
condition and state of repair.

              (b)  Lessee shall, at Lessee's sole cost and expense, procure 
and maintain a contract, with copies to Lessor, in customary form and 
substance for and with a contractor specializing and experienced in the 
inspection, maintenance and service of the heating, air conditioning and 
ventilating systems, and if Lessor so elects, Lessee shall reimburse Lessor, 
upon demand, for the cost thereof.

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

      7.2     LESSOR'S OBLIGATIONS. Subject to the provisions of Paragraph 
2.2 (Condition), 2.3 (Compliance with Covenants, Restrictions and Building 
Code). 4.2 (Common Area Operating Expenses), 6 (Use), 7.1 (Lessee's 
Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessor, subject 
to reimbursement pursuant to Paragraph 1.2, shall keep in good order, 
condition and repair the foundations, exterior walls, structural condition of 
interior bearing walls, exterior roof, fire sprinkler and/or standpipe and 
hose (if located in the Common Areas) or other automatic fire extinguishing 
system including fire alarm and/or smoke detection systems and equipment, fire 
hydrants, parking, etc.


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

     7.3  UTILITY INSTALLATIONS, TRADE FIXTURES, ALTERATIONS.

          (A)  DEFINITIONS; CONSENT REQUIRED. The term "Utility 
Installations" is used in this Lease to refer to all air lines, power panels, 
electrical distribution, security, fire protection systems, communications 
systems, lighting fixtures, heating, ventilating and air conditioning 
equipment, plumbing, and fencing in, on or about the Premises. The term 
"Trade Fixtures" shall mean Lessee's machines and equipment which can be 
removed without doing material damage to the Premises. The term "Alterations" 
shall mean any modification of the improvements on the Premises which are 
provided by Lessor under the terms of this Lease, other than Utility 
Installations or Trade Fixtures. "Lessee-Owned Alterations and/or Utility 
Installations" are defined as Alterations and/or Utility Installations made 
by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a). 
Lessee shall not make nor cause to be made any Alterations or Utility 
Installations in, on, under or about the Premises without Lessor's prior 
written consent. Lessee may, however, make non-structural Utility 
Installations to the interior of the Premises (excluding the roof) without 
Lessor's consent but upon notice to Lessor, so long as they are not visible 
from the outside of the Premises, do not involve puncturing, relocating or 
removing the roof or any existing walls, or changing or interfering with the 
fire sprinkler or fire detection systems and the cumulative cost thereof 
during the term of this Lease as extended does not exceed $2,500.00.

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

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

     7.4  OWNERSHIP, REMOVAL, SURRENDER, AND RESTORATION.

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

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

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

8.  INSURANCE, INDEMNITY.

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

     8.2  LIABILITY INSURANCE.

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

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

     8.3  PROPERTY INSURANCE-BUILDING, IMPROVEMENTS AND RENTAL VALUE.

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

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

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

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

     8.4  LESSEE'S PROPERTY INSURANCE. Subject to the requirements of 
Paragraph 8.5, Lessee at its cost shall either by separate policy or, at 
Lessor's option, by endorsement to a policy already carried, maintain 
insurance coverage on all of Lessee's personal property, Trade Fixtures and 
Lessee-Owned Alterations and Utility Installations in, on, or about the 
Premises similar in coverage to that carried by Lessor as the Insuring Party 
under Paragraph 8.3(a). Such insurance shall be full replacement cost 
coverage with a deductible not to exceed $1,000.00 per occurrence. The 
proceeds from any such insurance shall be used by Lessee for the replacement 
of personal property and the restoration of Trade Fixtures and Lessee-Owned 
Alterations and Utility Installations. Upon request from Lessor, Lessee shall 
provide Lessor with written evidence that such insurance is in force.

     8.5  INSURANCE POLICIES. Insurance required hereunder shall be in 
companies duly licensed to transact business in the state where the Premises 
are located, and maintaining during the policy term a "General Policyholders 
Rating" of at least B+, V, or such other rating as may be required by a 
Lender, as set forth in the most current issue of "Best's Insurance Guide." 
Lessee shall not do or permit to be done anything which invalidates the 
insurance policies referred to in this Paragraph 8. Lessee shall cause to


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

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

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

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

9.    DAMAGE OR DESTRUCTION.

      9.1     DEFINITIONS.

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

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

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

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

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

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

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

      9.4     TOTAL DESTRUCTION. Notwithstanding any other provision hereof, 
if Premises Total Destruction occurs (including any destruction required by 
any authorized public authority), this Lease shall terminate sixty (60) days 
following the date of such Premises Total Destruction, whether or not the 
damage or destruction is an Insured Loss or was caused by a negligent or 
willful act of Lessee. In the event, however, that the damage or destruction 
was caused by Lessee, Lessor shall have the right to recover Lessor's damages 
from Lessee except as released and waived in Paragraph 9.7, or as specified 
in Paragraph 8.6

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

      9.6     ABATEMENT OF RENT; LESSEE'S REMEDIES.

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

              (b)  If Lessor shall be obligated to repair or restore the 
Premises under the provisions of this Paragraph 9 and shall not commence, in 
a substantial and meaningful way, the repair or restoration of the Premises 
within ninety (90) days after such obligation shall accrue, Lessee may, at 
any time prior to the commencement of such repair or restoration, give 
written notice to Lessor and to any Lenders of which Lessee has actual notice 
of Lessee's election to terminate this Lease on a date not less than sixty 
(60) days following the giving of such notice. If Lessee gives such notice to 
Lessor and such Lenders and such repair or restoration is not commenced 
within thirty (30) days after receipt of such notice, this Lease shall 
terminate as of the date specified in said notice. If Lessor or a Lender 
commences the repair or restoration of the Premises within thirty (30) days 
after the receipt of such notice, this Lease shall continue in full force and 
effect. "Commence" as used in this Paragraph 9.6 shall mean either the 
unconditional authorization of the preparation of the required plans, or the 
beginning of the actual work on the Premises, whichever occurs first. 
*Notwithstanding any provisions contained above,if Landlord has not restored 
or repaired the Premises within one hundred eighty (180) days from the date 
of receipt of insurance proceeds, Lessee may terminate this lease with thirty 
(30) days written notice to Lessor.

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



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

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

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

10.   REAL PROPERTY TAXES.

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

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

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

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

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

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

12.   ASSIGNMENT AND SUBLETTING.

      12.1    LESSOR'S CONSENT REQUIRED.

              (a)  Lessee shall not voluntarily or by operation of law 
assign, transfer, mortgage or otherwise transfer or encumber (collectively, 
"assign") or sublet all or any part of Lessee's interest in this Lease or in 
the Premises without Lessor's prior written consent given under the subject 
to the terms of Paragraph 36, except to any wholly-owned or controlled 
subsidiary, parent, or affiliated corporation of Lessee who has the same or 
better net worth.

              (b)  A change in the control or Lessee shall constitute an 
assignment requiring Lessor's consent. The transfer of fifty (50) percent or
more of the voting control of Lessee shall constitute a change in control for 
this purpose.

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

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

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

      12.2    TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.

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

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

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

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

              (e)  Each request for consent to an assignment or subletting 
shall be in writing, accompanied by information relevant to Lessor's 
determination as to the financial and operational responsibility and 
appropriateness of the proposed assignee or sublessee, including but not 
limited to the intended use and/or required modification of the Premises, if 
any, together with a non-refundable deposit of $1,000.00 or ten percent 
(10%) of the monthly Base Rent applicable to the portion of the Premises 
which is the subject of the proposed assignment or sublease, whichever is 
greater, as reasonable consideration for Lessor's considering and processing 
the request for consent. Lessee agrees to provide Lessor with such other or 
additional information and/or documentation as may be reasonably requested by 
Lessor.

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

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          (g)  The occurrence of a transaction described in Paragraph 12.2(c) 
shall give Lessor the right (but not the obligation) to require that the 
Security Deposit be increased by an amount equal to three (3) times the then 
monthly Base Rent, and Lessor may make the actual receipt by Lessor of the 
Security Deposit increase a condition to Lessor's consent to such transaction.

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

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

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

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

          (c)  Any matter or thing requiring the consent of the sublessor 
shall require the consent of Lessor herein.
 
          (d)  No sublessee under a sublease approved by Lessor shall further 
assign or sublet all or any part of the Premises without Lessor's prior 
written consent.

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

13.  DEFAULT; BREACH; REMEDIES.

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

          (a)  (Intentionally omitted.)

          (b)  Except as expressly otherwise provided in this Lease, the 
failure by Lessee to make any payment of Base Rent, Lessee's Share of Common 
Area Operating Expenses, or any other monetary payment required to be made by 
Lessee hereunder as and when due, the failure by Lessee to provide Lessor 
with reasonable evidence of insurance or surety bond required under this 
Lease, or the failure of Lessee to fulfill any obligation under this Lease 
which endangers or threatens life or property, where such failure continues 
for a period of ten (10) days following written notice thereof by or on 
behalf of Lessor to Lessee.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

15.   BROKERS' FEES.

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

      15.2    ADDITIONAL TERMS.  Unless Lessor and Broker(s) have otherwise 
agreed in writing, Lessor agrees that: (a) if Lessee exercises any Option (as 
defined in Paragraph 39.1) granted under this Lease or any Option 
subsequently granted, or (b) if Lessee acquires any rights to the Premises or 
other premises in which Lessor has an interest, or (c) if Lessee remains in 
possession of the Premises with the consent of Lessor after the expiration of 
the term of this Lease after having failed to exercise an Option, or (d) if 
said Brokers are the procuring cause of any other lease or sale entered into 
between the Parties pertaining to the Premises and/or any adjacent property 
in which Lessor has an interest, or (e) if Base Rent is increased, whether by 
agreement or operation of an escalation clause herein, then as to any of said 
transactions, Lessor shall pay said Broker(s) a fee in accordance with the 
schedule of said Broker(s) in effect at the time of the execution of this 
Lease.

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

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


16.   TENANCY AND FINANCIAL STATEMENTS.

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

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

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

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

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

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

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

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

23.   NOTICES.

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

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

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

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

25.   RECORDING.  Either Lessor or Lessee shall, upon request of the other, 
execute, acknowledge and deliver to the other a short form memorandum of this 
Lease for recording purposes. The Party requesting recordation shall be 
responsible for payment of any fees or taxes applicable thereto.

26.   NO RIGHT TO HOLDOVER.  Lessee has no right to retain possession of the 
Premises or any part thereof beyond the expiration or earlier termination of 
this Lease. In the event that Lessee holds over in violation of this 
Paragraph 26 then the Base Rent payable from and after the time of the 
expiration or earlier termination of this Lease shall be increased to one 
hundred fifty percent (150%) of the Base Rent applicable during the month 
immediately preceding such expiration or earlier termination. Nothing 
contained herein shall be construed as a consent by Lessor to any holding 
over by Lessee.

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

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

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

30.   SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.

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

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

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

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

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

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

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

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

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

36.   CONSENTS.

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

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

37.   GUARANTOR.

      37.1   FORM OF GUARANTY.  If there are to be any Guarantors of this 
Lease per Paragraph 1.11, the form of the guaranty to be executed by each 
such Guarantor shall be in the form most recently published by the American 
Industrial Estate Association, and each such Guarantor shall have the same 
obligations as Lessee under this Lease, including but not limited to the 
obligation to provide the Tenancy Statement and information required in 
Paragraph 16.

      37.2    ADDITIONAL OBLIGATIONS OF GUARANTORS.  It shall constitute a 
Default of the Lessee under this Lease if any such Guarantor fails or 
refuses, upon reasonable request by Lessor to give; (a) evidence of the due 
execution of the guaranty called for by this Lease, including the authority 
of the Guarantor (and of the party signing on Guarantor's behalf) to obligate 
such Guarantor on said guaranty, and resolution of its board of directors 
authorizing the making of such guaranty, together with a certificate of 
incumbency showing the signatures of the persons authorized to sign on its 
behalf, (b) current financial statements of Guarantor as may from time to 
time be requested by Lessor, (c) a Tenancy Statement, or (d) written 
confirmation that the guaranty is still in effect.


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

39.  OPTIONS.

    39.1  DEFINITION. As used in this Lease, the word "Option" has the 
following meaning: (a) the right to extend the term of this Lease or to renew 
this Lease or to extend or renew any lease that Lessee has on other property 
of Lessor; (b) the right of first refusal to lease the Premises or the right 
of first offer to lease the Premises or the right of first refusal to lease 
other property of Lessor or the right of first offer to lease other property 
of Lessor; (c) the right to purchase the Premises, or the right of first 
refusal to purchase the Premises, or the right of first offer to purchase the 
Premises, or the right to purchase other property of Lessor, or the right of 
first refusal to purchase other property of Lessor, or the right of first 
offer to purchase other property of Lessor.

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

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

    39.4  EFFECT OF DEFAULT ON OPTIONS.

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

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

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

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

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

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

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

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

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

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

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

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




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

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


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

Executed at:                               Executed at:
            ---------------------------                 -----------------------
on:                                        on: March 4, 1998
   ------------------------------------        --------------------------------

BY LESSOR:                                 BY LESSEE:

 BRS - Campo Investment Company LP,          Javelin Systems, Inc.
---------------------------------------    ------------------------------------
 a California limited partnership             a Delaware corporation
---------------------------------------    ------------------------------------
By: Blackpoint Investment Corp.            By: /s/ Horace Hertz
    -----------------------------------        --------------------------------
Name Printed:                              Named Printed: HORACE HERTZ
    -----------------------------------        --------------------------------
Title: Its General Partner                 Title: CFO
    -----------------------------------        --------------------------------
By: /s/  Marc R. Brutten                   By:
    -----------------------------------        --------------------------------
Name Printed: MARC R. BRUTTEN              Named Printed:
    -----------------------------------        --------------------------------
Title: President                           Title: 
    -----------------------------------        --------------------------------
Address: 4660 La Jolla Village Dr. #800    Address:
    -----------------------------------        --------------------------------
     San Diego, CA 92122
    -----------------------------------        --------------------------------
Telephone: (619) 678-8500                  Telephone:
    -----------------------------------        --------------------------------
Facsimile: (619) 678-8504                  Facsimile:
    -----------------------------------        --------------------------------

BROKER: VOIT COMMERCIAL BROKERAGE          BROKER: GRUBB & ELLIS

Executed at:                               Executed at:
---------------------------------------    -----------------------------------
on:                                        on:
---------------------------------------    -----------------------------------

---------------------------------------    -----------------------------------

---------------------------------------    -----------------------------------
By:   /s/ John D. Griffin                  By:
    -----------------------------------       --------------------------------
Name Printed: JOHN D. GRIFFIN              Named Printed: Bill Rauth
    -----------------------------------       --------------------------------
Title: Senior Vice President               Title: 
    -----------------------------------       --------------------------------
Address: 18500 Von Karman Avenue           Address: 4000 MacArthur Boulevard
    -----------------------------------       --------------------------------
       Suite 150                               Suite 1500
    -----------------------------------       --------------------------------
       Irvine, CA 92612                        Newport Beach, CA 92660
    -----------------------------------       --------------------------------
Telephone: 714/851-5100                    Telephone: 714/833-2900
    -----------------------------------       --------------------------------
Facsimile: 714/261-9092                    Facsimile: 714/833-8037
    -----------------------------------       --------------------------------


      NOTICE: These forms are often modified to meet changing requirements of 
law and industry needs. Please Write or call us to make sure that you are 
utilizing the most current form. We can be reached at the American Industrial 
Real Estate Association, 700 South Flower, Suite 600, Los Angeles, CA 90017. 
(213) 687-8777 Fax (213) 687-8616


-C- 1993 by American Industrial Real Estate Association. All rights reserved. 
No part of these words may be reproduced in any form without permission in 
writing.


                                     -11-
MULTI-TENANT--MODIFIED NET                     
-C- American Industrial Real Estate Association 1993    


<PAGE>

                      17891 CARTWRIGHT ADDENDUM TO LEASE
      
This Addendum to Lease ("Addendum") is made to the Lease dated as of January 
27, 1998 ("Lease"), by and between BRS-Campo Investment Company LP, a 
California Limited Partnership ("Lessor") and Javelin Systems, Inc., a 
Delaware corporation ("Lessee").

Lessor and Lessee hereby agree that notwithstanding anything contained in the 
Lease to the contrary, the provisions set forth below shall be deemed to be a 
part of the Lease and shall supersede, to the extent appropriate, any 
contrary provision in the Lease. All references in the Lease and in this 
Addendum to "Lease" shall be construed to mean the Lease as amended and 
supplemented by this Addendum. All capitalized terms used in the Addendum 
unless specifically defined in this Addendum shall have the same meaning as 
the terms used in the Lease.

50.  BASE RENT:

     Lessee shall pay to Lessor as Base Rent for the Premises, monthly payments
     as follows:

     Months 1 through 12 of the Initial Term:          $23,347.20 per month, NNN
     Months 13 through 24 of the Initial Term:         $24,047.62 per month, NNN
     Months 25 through 36 of the Initial Term:         $24,769.04 per month, NNN
     Months 37 through 48 of the Initial Term:         $25,512.12 per month, NNN
     Months 49 through 60 of the Initial Term:         $26,277.48 per month, NNN

     (a) Lessor and Lessee acknowledge that the Base Rent set forth in Paragraph
     (1. Base Rent) shall be the monthly fixed Base Rent paid by Lessee to
     Lessor pursuant to the terms of this Lease for the Initial Term hereof. For
     purposes hereof "Base Rent" shall mean the monthly fixed payment of rent.
     The term "rent" shall mean Base Rent plus Lessee's Share of Common Area
     Operating Expenses, taxes, insurance and all other amounts to be paid by
     Lessee pursuant to the terms of this Lease.

51.  CONDITION: The following shall be added to Article 2.2 of the Lease: 
     Post-commencement Date compliance with ADA and other applicable 
     regulatory requirements is the responsibility of Lessee.

52.  HAZARDOUS SUBSTANCES: Article 6.2 of the Lease shall be deemed deleted 
     and the following shall be deemed inserted in place thereof:

     6.2 (a) ENVIRONMENTAL QUESTIONNAIRE: Disclosure. Prior to the execution of
     this Lease, Lessee shall complete, execute and deliver to Lessor an
     Environmental Questionnaire and Disclosure Statement (the "Environmental
     Questionnaire") in the form of Exhibit "C", and Lessee shall certify to
     Lessor all information contained in the Environmental Questionnaire as true
     and correct to the best of Lessee's knowledge and belief. The completed
     Environmental Questionnaire shall be deemed incorporated into this Lease
     for all purposes, and Lessor shall be entitled to rely fully on the
     information contained therein. On each anniversary of the Commencement Date
     (each such date is hereinafter referred to as a "Disclosure Date"), until
     and including the first Disclosure Date occurring after the expiration or
     sooner termination of this Lease, Lessee shall disclose to Lessor upon
     request, in writing the names and amounts of all Hazardous Substances, or
     any combination thereof, which were stored, generated, used or disposed of
     on, under or about the Premises for the 12-month period prior to and after
     each Disclosure Date, or which Lessee intends to store, generate, use or
     dispose of on, under or about the Premises. At Lessor's option, Lessee's
     disclosure obligations under this paragraph 6.2 (a) shall include a
     requirement that Lessee annually update, execute and deliver to Lessor the
     Environmental Questionnaire, as the same may be modified by Lessor from
     time to time.


                                      1
<PAGE>

     6.2 (b) HAZARDOUS SUBSTANCES.

     1.   The term "Hazardous Substance(s)" as used in the Lease, is defined as
          follows: Any element, compound, mixture, solution, particle or
          substance, which presents danger or potential danger for damage or
          injury to health, welfare or to the environment including but not
          limited to:

          (a)  Except normal janitorial and/or cleaning solutions, those
               substances which are inherently or potentially radioactive,
               explosive, ignitable, corrosive, reactive, carcinogenic or toxic;
               and
     
          (b)  Those substances which have been recognized as dangerous or
               potentially dangerous to health, welfare or to the environment by
               an federal, municipal, state, county or other governmental or
               quasi-governmental authority and/or any department or agency
               thereof.
  
     2.   Tenant represents and warrants to Landlord that at all times during
          the term of this Lease and any extensions or renewals thereof, Tenant
          shall:
    
          (a)  Obtain Lessor's prior written consent, which consent shall be
               granted or withheld in Lessor's sole discretion, to the
               manufacturing, processing, distributing, using, producing,
               treating, storing, (above or below ground level), disposing of,
               or allowing to be present (the "Presence") of any Hazardous
               Substance in or about the Premises. In connection with each such
               consent requested by Lessee, Lessee shall submit to Lessor a
               description, including the composition, quantity and all other
               information requested by Lessor concerning the proposed Presence
               of any Hazardous Substance. Lessor's consent to the Presence of
               any Hazardous Substance may be deemed given only by inclusion of
               a description of the composition and quantity of the proposed
               Hazardous Substance which Lessor has agreed to the Presence
               thereof shall be deemed to be an Allowed Substance for purposes
               of this Article. All Hazardous Substances described on the
               Environment Questionnaire and Disclosure Statement attached
               hereto as Exhibit "C" are deemed to be Allowed Substances.
               Lessor's consent to the Presence of any Hazardous Substance at
               any time during the Lease term or any renewal thereof shall not
               waive the requirement of obtaining Lessor's consent to the
               subsequent Presence of any other, or increased quantities of any
               Hazardous Substance, such consent shall be deemed given only by
               amendment of Exhibit "C" to this Lease;
             
          (b)  Refrain from (and prohibit others from) allowing, on and after
               the Commencement Date, the Presence of any Hazardous Substances
               in or about the Premises which is not an Allowed Substance;
             
          (c)  Promptly comply at Lessee's own cost and expense with all laws,
               order, rules, regulations, certificates or occupancy, or other
               requirements, as the same now exist or hereafter may be enacted,
               amended, or promulgated, of any federal, state, county,
               municipal, or other governmental or quasi-governmental
               authorities and/or any department or agency thereof relating to
               the Presence of Hazardous Substances in or about the Premises,
               whether or not such substances are Allowed Substances, which
               Presence of Hazardous Substances arose on or after the
               Commencement Date.
             
          (d)  At all times conduct, or caused to be conducted, maintenance on
               the HVAC system equipment at the Premises in accordance with the
               requirements of all applicable federal, state, and local laws and
               regulations. In the event of leak or other contamination of any
               Hazardous Substance from the HVAC system, Lessee shall promptly
               repair such leak or other source of contamination from the HVAC
               system in accordance with the requirements of such federal, state
               and local laws and regulations, and in the time period required
               thereby.
             
                                      2

<PAGE>

          (e)  Indemnify and hold Lessor, its agents and employees, harmless
               from any and all demands, claims, causes of action, penalties,
               liabilities, judgments, damages (including consequential damages)
               and expenses including without limitation, court costs and
               reasonable attorney's fees incurred by Lessor as a result of (a)
               Lessee's failure or delay in complying with the provisions of
               sections 2 (a) and (b), above; (b) Lessee's failure or delay in
               complying properly with such law, order, rule, regulation,
               certificate of occupancy or other requirement referred to in
               subsections 2 (c) and (d), above; or (c) any adverse effect which
               results from the presence of any Hazardous Substance which is an
               Allowed Substance. If any action or proceeding is brought against
               Lessor, Lessor's agents or employees by reason of any such claim,
               Lessee, upon notice from Lessor, will defend such claim at
               Lessee's expense with counsel satisfactory to Lessor. This
               indemnification by Lessee of Lessor shall survive the termination
               of the Lease;
            
          (f)  Promptly disclose to Lessor by delivering, in the manner
               prescribed for delivery of notice in the Lease, a copy of any
               forms, submissions, notices, reports or other written
               documentation (Communications) relating to the presence of any
               Hazardous Substance in or about the Premises, whether such
               Communications are delivered to Lessee or are requested of Lessee
               by any federal municipal, state, county or other government or
               quasi-government authority and/or any department or agency
               thereof;
            
          (g)  Notwithstanding any other provisions of this Lease, (1) allow
               Lessor, and Lessor's Agents, access and the right to enter and
               inspect the Premises for the presence of any Hazardous Substance,
               whether or not such Hazardous Substance is an Allowed Substance,
               at any time deemed reasonable by Lessor, without prior notice to
               Lessee, and (2) in the event a release of Hazardous Substances
               occurs on or affects the Premises, Lessee shall permit Lessor or
               Lessor's Agents to enter the Premises at any time, without prior
               notice, to inspect, monitor, take emergency or long term remedial
               action, discharge Lessee's obligations hereunder if Lessee has
               failed to do so, or take any other action to restore the Premises
               to its original condition.
            
          (h)  Compliance by lessee with any provision of this Article 6.2 shall
               not be deemed a waiver of any other provision hereof. Without
               limiting the foregoing, Lessor's consent to the presence of any
               Hazardous Substance shall not relieve Lessee of its indemnity
               obligations under the terms of this Article 6.2.
            
53.  PROPERTY INSURANCE BUILDING, IMPROVEMENTS AND RENTAL VALUE: Article 8.3 (a)
     -Lessor's policy or policies shall insure against the perils of flood and
     earthquake, at Lessor's option.
    
54.  INDEMNITY. The first sentence of Article 8.7 of the Lease shall be modified
     as follows: insert gross before negligence.

55.  SIGNAGE: Lessor agrees that, for so long as Javelin Systems, Inc. leases
     and occupies more that 25,000 rentable square feet of the Premises, Javelin
     Systems, Inc. may place its name on the monument identified on the attached
     EXHIBIT D. Javelin Systems, Inc. shall be entitle to utilize a specific
     sign panel area (as designated by Lessor) within the monument sign. All
     costs associated with Javelin Systems, Inc.'s contemplated sign panels with
     the proposed monument sign as well as the maintenance of same shall be paid
     for solely by Javelin Systems, Inc. The exact copy, color and size of the
     proposed sign panel within said monument sign shall be previously approved
     by Lessor in writing (and any other applicable authorities).


                                         3
<PAGE>

56.  LIMITATION ON LESSOR'S LIABILITY: Notwithstanding any provisions to the
     contrary set forth in this Lease, Lessor shall not in any event or at any
     time be personally liable for the payment or performance of any obligation
     required or permitted of Lessor pursuant to this Lease or in any document
     executed in connection herewith. In the event of any breach or default by
     Lessor under this Lease or any such document, the sole recourse of lessee
     shall be against Lessor's interest in the Premises, and no attachment,
     execution, writ or other process shall be sought or obtained, and no
     judicial proceeding shall be initiated by or on behalf of Lessee against
     Lessor personally or Lessor's assets except with respect to Lessor's
     interest in the Premises.

57.  OPTION TO EXTEND: Lessee shall have the option to extend the Term of this
     Lease (the "Option") for one (1) period of five (5) years (each such period
     an "extension term") provided Lessee gives Lessor written notice of its
     election to exercise the Option at lease 180 days prior to the expiration
     of the Term of this Lease (or the then applicable extension term, to the
     extent the Term has been previously extended by the terms of this Article).
     The terms and conditions governing each such extension term will be the
     same as those for the Initial lease Term, except and to the extend modified
     by the terms of Paragraph E, below. Time is of the essence.

     A.   The Option is personal to the Lessee originally named in this Lease
          and may not be exercised by or be assigned to, voluntarily or
          involuntarily, any other person or entity. The Option herein granted
          to Lessee may not be assigned with any permitted assignment or this
          Lease or sublease of the Premises (or any portion thereof).
     
     B.   Lessee shall not have the right to exercise the Option,
          notwithstanding anything set forth above to the contrary:
     
          1.   During any period of time commencing from the date Lessor gives
               to Lessee a written notice that Lessee is in default under any
               provision of this Lease, and continuing until the default alleged
               in said notice is cured;
                 
          2.   During the period of time commencing on the day after a monetary
               obligation to Lessor is due from Lessee and unpaid (without any
               necessity for notice thereof to Lessee) and continuing until the
               obligation is paid;
          
          3.   At any time after the occurrence of any default described in
               Paragraph 13 of the Lease other than those described in the
               preceding paragraphs (without any necessity of Lessor to give
               notice of such default to Lessee); or
     
          4.   In the event that Lessor has given to Lessee two or more notices
               of default or a late charge has become payable under the Lease
               during the twelve month period prior to the time that Lessee
               intends to exercise the Option.
          
     C.   The period of time within which the Option may be exercised shall not
          be extended or enlarged by reason of Lessee's inability to exercise
          the Option because of the foregoing provisions of Paragraph B, even if
          the effect thereof is to eliminate Lessee's right to exercise the
          Option.
     
     D.   All rights with respect to the Option shall terminate and be of no
          further force or effect even after Lessee's due and timely exercise of
          the Option, if, after such exercise, but prior to the commencement of
          the applicable extension term, (1) Lessee fails to pay to Lessor a
          monetary obligation of Lessee for a period of ten days after such
          obligation become due (without any necessity of Lessor to give notice
          thereof to Lessee); (2) Lessee fails to cure a non-monetary default
          within 30 days after the date the Lessor gives notice to Lessee of
          such default; or (3) Lessor gives to Lessee two or more notifies of
          default or a late charge becomes payable for any such default, whether
          or not such defaults are cured.
     

                                         4
                                          
<PAGE>

     E.   The Basic Monthly Rent shall be increased on the first day of each
          extension term (the "Rental Adjustment Date") to the "fair rental
          value" prevailing for comparable space in the Irvine Business Complex,
          determined in the following manner:

          1.   Not later than 120 days prior to the applicable Rental Adjustment
               Date, Lessor and Lessee shall meet in an effort to negotiate, in
               good faith, the fair rental value of the Premises as of such
               applicable Rental Adjustment Date. If Lessor and lessee have not
               agreed upon the fair rental value of the Premises at least 90
               days prior to the applicable Rental Adjustment Date, the fair
               rental value shall be determined by appraisal as described below.
     
          2.   If Lessor and Lessee are not able to agree upon the fair rental
               value of the Premises within the time period prescribed in
               Paragraph 1, then Lessor and Lessee shall attempt to agree in
               good faith upon a single appraiser not later than 75 days prior
               to the applicable Rental Adjustment Date. If Lessor and Lessee
               are unable to agree upon a single appraiser not later than 65
               days prior to the applicable Rental Adjustment Date. Within five
               days thereafter, the two appointed appraisers shall appoint a
               third appraiser. If Lessor and Lessee agree upon an appraiser, or
               if either Lessor or Lessee fail to appoint its appraiser within
               the prescribed time period, the single appraiser appointed shall
               determine the fair rental value of the Premises. If both parties
               fail to appoint appraisers within the prescribed time periods,
               then the first appraiser thereafter selected by a party shall
               determine the fair rental value of the Premises. Each party shall
               bear the cost of its own appraiser and the parties shall share
               equally the cost of the single or third appraiser if applicable.
               Each such appraiser must have a least five years experience in
               the appraisal of commercial/industrial real property in the area
               in which the Project is located and shall be members of a
               professional organization such as MAI or equivalent.
     
          3.   For the purposes of such appraisal, the term "fair rental value"
               shall mean the price that a ready and willing Lessee would pay,
               as of the applicable Rental Adjustment Date, as monthly rent to a
               ready and willing Lessor of property comparable to the Premises
               if such property were exposed for lease on the open market for a
               reasonable period of time and taking into account all of the
               purposes for which such property may be used. If a single
               appraiser is chosen, then such appraiser shall determine the fair
               rental value of the Premises. Otherwise, the fair rental value of
               the Premises shall be the arithmetic average of the two of the
               three appraisals which are closest in amount, and the third
               appraisal shall be disregarded. In no event, however, shall the
               Basic Monthly Rent be reduced by reason of such computation or
               the operation of this Article.
     
               Lessor and Lessee shall instruct the appraiser(s) to complete
               their determination of the fair rental value no later than 30
               days prior to the applicable Rental Adjustment Date. If,
               notwithstanding such instruction, the fair rental value is not
               determined before the first day of an extension term, then Lessee
               shall continue to pay to Lessor the Basic Monthly Rent applicable
               to the Premises immediately prior to such extension term, until
               the fair rental value of the Premises is determined. When the
               fair rental value of the Premises is determined, Lessor shall
               deliver notice thereof to Lessee, and Lessee shall pay to Lessor,
               within ten days after receipt of such notice, the difference
               between the Basic Monthly Rent actually paid by Lessee to Lessor
               and the new Basic Monthly Rent determined hereunder.
     
                                         5

<PAGE>

               Notwithstanding the foregoing, in no event shall the monthly Base
               Rent payable during an Option Term be less than the monthly Base
               Rent payable during the last month of the Initial Term or the
               proceeding Option Term, as applicable.
          
58.  PARKING: Lessor shall grant to Lessee its pro rata share of existing
     parking at the Project. Lessor will stripe twenty (20) of those parking
     spaces as reserved for Lessee and three (3) spaces as "visitor" parking as
     depicted on Exhibit A. Lessor shall not be responsible for enforcing
     Lessee's Reserved Parking Spaces or Visitor Parking Spaces.

59.  RIGHT OF FIRST REFUSAL: Provided (i) there is no continuing and uncured
     default by Lessee under this Lease and (ii) Lessee has not assigned this
     Lease or sublet all or any portion of the Premises in a transfer which
     requires Lessor's consent, Lessor hereby grants to Lessee, during the
     Original Term only, a right of first refusal to lease the second floor of
     the building known as 17881 Cartwright Road, consisting of approximately
     12,400 square feet. Such right of first refusal may be exercised only
     following the failure by General Power Systems, Inc. ("GPSI") to exercise
     its first right of refusal to lease the second floor of the 17881 building
     so long as such right is still in effect. In the event that Lessor receives
     an offer to lease all or a part of the 17881 Building, subject to the right
     of GPSI and only following GPSI's failure to exercise its option, if any,
     to lease the second floor if the offer to lease relates to the second
     floor, Lessor shall notify Lessee of the rental rate, the length of the
     lease term, and the other material terms of the offer. If Lessee has not
     elected in writing to accept all such terms within five (5) business days
     of receipt of such notice, Lessee shall be deemed to have waived all of its
     rights under this paragraph as to the portion of the 17881 Building covered
     by such offer. If Lessee elects in writing to accept such terms, Lessor
     shall prepare and deliver to Lessee, and Lessee shall execute and deliver
     to lessor within five (5) business days of delivery, a lease in
     substantially the form of this Lease, modified as necessary due to the
     prior occupancy of Lessee in the Premises. Failure by lessee to so execute
     such Lease shall be deemed as a noncurable default under this Lease and a
     waiver by Lessee of any further rights as to the 17881 building.

60.  AUDIT RIGHTS;

     a.   AUDIT THRESHOLD. In the event Lessee's Share of Common Area Operating
          Expenses increases by more than five percent (5%) in any Lease Year,
          Lessee may audit Lessor's common area operating costs in order to
          verify the accuracy of Common Area Operating Expenses provided that:
             
          (i)   Lessee specifically designates the fiscal year(s) that Lessee
                intends to audit, which shall be a year within three (3) years
                of the date of the audit but must be within the Term of this
                Lease; and
          (iii) Such audit will be conducted only during normal business hours
                at the office where Lessor maintains Common Area Operating
                Expense records and only after Lessee gives Lessor fourteen
                (14) days' notice.
            
     b.   COPY OF AUDIT. Lessee shall deliver to Lessor a copy of the results of
          such audit within fifteen (15) days of its receipt by Lessee. No such
          audit shall be conducted if any other Lessee has conducted an audit
          for the time period Lessee intends to audit and Lessor furnishes to
          Lessee a copy of the results of such audit.
             
     c.   TENANT NOT IN DEFAULT. No audit shall be conducted at any time that
          Lessee is in default of any of the terms of the Lease.
             
     d.   LIMITS FOR SUBTENANTS AND ASSIGNEES. No subtenant shall have any right
          to conduct an audit and no assignee shall conduct an audit for any
          period during which such assignee was not in possession of the
          Premises.
             
                                          6

<PAGE>

     e.   CONFIDENTIALITY. Lessee and its agents or representatives agree not to
          disclose any information obtained from any such audit to any other
          Lessee in the Project.

AGREED AND ACCEPTED:

LESSOR: BRS-CAMPO INVESTMENT COMPANY LP, a California limited partnership

            By: Blackpoint Investment Corp., Its General Partner
            
By:   /s/ Marc R. Brutten           Date:
    ----------------------------          -------------------------
     Marc R. Brutten, President
     
LESSEE: JAVELIN SYTEMS, INC., a Delaware corporation

By:                                Date: March 4, 1998
    ----------------------------          -------------------------


                                   7

<PAGE>

                                    Exhibit "A"
                                          
                                 TENANT WORK LETTER
                                          
Lessor and Lessee are executing simultaneously with this Tenant Improvement
Agreement ("Agreement"), a written lease ("Lease") covering those certain
premises more particularly described in Exhibit A to the Lease ("Premises"), in
the Building more particularly described in the Lease. Lessor and Lessee agree
that Lessor shall improve and prepare the Premises on Lessee's behalf and for
Lessee's occupancy, on the terms and conditions set forth in this Agreement. To
induce Lessor and Lessee to enter into the Lease (which is hereby incorporated
by reference to the extent that the provisions of this Agreement may apply
thereto) and in consideration of the mutual covenants hereinafter contained,
Lessor and Lessee mutually agree as follows:

     1.   DEFINITIONS AND REPRESENTATIVES: All terms used herein which are 
          not defined shall have the meanings ascribed to them in the Lease. 
          Lessor appoints Lessor's Representative to act for Lessor and 
          Lessee appoints Lessee's Representative to act for Lessee in all 
          matters covered by this Agreement. All inquiries, requests, 
          instructions, authorizations and other communications with respect 
          to matters covered by this Agreement will be made to Lessor's 
          Representative or Lessee's Representative, as the case may be. 
          Lessee will not make any inquiries of or requests to, and will not 
          give any instructions or authorizations to, any other employee or 
          agent of Lessor, including Lessor's architect, engineers and 
          contractors or any of their agents or employees, with regard to 
          matters covered by this Agreement. Either party may change its 
          Representative under this Agreement at any time with three business 
          (3) days' prior written notice to the other party.

          Lessee's Representative:               Horace Hertz
                                           -------------------------------
          Lessor's Representative:              Jim Ingebritsen
                                           -------------------------------
          Lessor's Space Planner
          ("Space Planner"):                      John Farndale
                                            -------------------------------
          Lessor's Contractor ("Contractor"):          DBAC
                                            -------------------------------

     2.   PLANS AND SPECIFICATIONS/LESSEE IMPROVEMENTS: The Premises shall be
          improved by Lessor with certain Lessee improvements ("Lessee
          Improvements") in accordance with plans and specifications prepared by
          Lessor's Space Planner and Lessor's standard Lessee finishes, which
          have not been finalized as of the Date of Lease, but which shall be
          incorporated into this Lease when approved by Lessor and lessee
          ("Plans and Specifications"). Lessor and Lessee shall use best good
          faith efforts to agree upon Plans and Specifications. Lessor's
          approval of the Plans and Specifications for the Lessee Improvements
          shall create no responsibility or liability on the part of lessor for
          their completeness, design sufficiency, or compliance with all laws,
          rules, and regulations of governmental agencies or authorities. The
          cost of the Lessee Improvements shall be allocated between Lessor and
          lessee as provided in Section 8 of this Agreement.
     
     3.   CHANGE ORDERS: Lessee may authorize changes in the work during
          construction, only by written instructions from Lessee's
          Representative to lessor's Representative on a form approved by
          Lessor. All such changes shall be subject to Lessor's prior written
          approval in accordance with Section 4 of this Agreement. Prior to
          commencing any change, Lessor shall prepare and deliver to lessee, for
          Lessee's approval, a change order (the "Change Order") setting forth
          the additional time required to perform the change and the total cost
          of such change, which will include associated architectural,
          engineering and constructions contractor's fees, delay costs,
          additional coordination costs, and the costs of Lessor's overhead at
          the rate of fifteen percent (15%) of the amount of the Change Order.
          If Lessee fails to approve such Change Order within two (2) business
          days after delivery by Lessor, Lessee shall be deemed to have
          withdrawn the proposed Change Order and Lessor shall not proceed to
          perform the change and Lessee
          
                               

<PAGE>

          shall pay for such Change Order at the time Contractor starts work on
          such Change Order.
     
     4.   LESSOR'S APPROVAL: Lessor may withhold its approval of any revisions
          to the Plans and Specifications requested by Lessee, or any Lessee
          Change orders which require work which: (i) exceeds or affects the
          structural integrity of the Building, or any part of the Utility
          Installations or HVAC System; (ii) is not approved by the holder of
          any Mortgage encumbering the Building at the time the work is
          proposed; (iii) violates any agreement which affects the Building or
          which binds the Lessor; (iv) Lessor reasonably believes will increase
          the cost of operation or maintenance of any of the systems of the
          Building; (v) Lessor reasonably believes will reduce the market value
          of the Building at the end of the Term; (vi) does not conform to
          applicable building codes or is not approved by any governmental
          authority with jurisdiction over the Premises and/or Building; (vii)
          does not conform to Lessor's "Building Standard" Lessee improvement
          specifications unless otherwise approved by Lessor; or (viii) Lessor
          reasonably believes will result in a delay in the completion of the
          Lessee Improvements, or result in an increase in the cost of the
          Lessee Improvements (unless Lessee pays such excess in advance).

     5.   LESSOR'S FEE: Lessor shall be paid a fee in connection with Lessor's
          obligations set forth in Section 2 with respect to reviewing and
          approving the design and construction of the Lessee Improvements for
          the Premises in the amount of five percent (5%) of the total cost to
          design, permit and construct the Lessee Improvements which amount
          shall be deducted from the Tenant Improvement Allowance.

     6.   SUBSTANTIAL COMPLETION AND COMMENCEMENT DATE: The Commencement Date
          under the Lease shall not occur until the earlier to occur of (i)
          Substantial Completion of the Lessee Improvements and tender of
          possession of the Premises to lessee; or (ii) the date Lessee opens
          for business in the Premises; or (iii) the date that Substantial
          Completion of the Lessee Improvements would have occurred but for
          Lessee Delays. If Substantial Completion of the Lessee Improvements
          shall be delayed as a result of a Lessee Delay, the Commencement Date
          shall be accelerated by the number of days of such Lessee Delay. Each
          of the following events shall be deemed a "Lessee Delay"; (a) delays
          resulting from any direction by Lessee that Lessor suspend work or
          otherwise hold up construction of any portion of the Lessee
          Improvements because portions of Lessee Improvements cannot be
          performed until work to be performed by or on behalf of Lessee is
          performed; (c) delays due to the failure of Lessee to pay when due any
          amount payable pursuant to this Agreement; (d) delays which result
          directly or indirectly from Lessee's changes in the Plans and
          Specifications; or (e) any other action or inaction of Lessee that
          directly or indirectly delays Lessor in completing the Lessee
          Improvements. Lessee shall pay any actual and documented costs or
          expenses incurred by Lessor as a result of any lessee Delays,
          including without limitation, any increases in costs or expenses for
          labor or materials.

          As used in this Lease and this Agreement, the term "Substantial
          Completion of the Lessee Improvements" shall mean that (i) all of the
          Base Building Systems are operational to the extent necessary to
          service the Premises, (ii) Lessor has procured an Authorized to
          Occupy/Certificate of Occupancy (or an equivalent from the City for
          such work), either temporary or final, and (iii) Lessor has completed
          the Lessee Improvements substantially in accordance with this
          Agreement except for finishing details of construction, decoration,
          mechanical, and other adjustments and other items of the type commonly
          found on an architectural "punch list", none of which materially
          interfere with Lessee's use or occupancy of the Premises for normal
          business operations.
     
     7.   LESSEE'S PUNCH LIST: Prior to Lessor's delivery of the Premises to
          Lessee, Lessor shall give Lessee three (3) business days prior
          notification of a meeting for Lessee to inspect the Lessee
          improvements. Lessee's Representative shall completely examine the
          Premises and prepare with Lessor's Representative and Contractor a

<PAGE>
                               
          list of all visible items to be completed by Contractor to finish the
          Lessee Improvements. The list shall be signed by both Lessor and
          Lessee and all items shall be completed as soon as reasonably
          possible. Any items damaged during Lessee's move in or occupancy shall
          be repaired or replaced by Contractor at Lessee's sole cost and
          expense and not as part of the Tenant Improvement Allowance.
          
     8.   TENANT IMPROVEMENT ALLOWANCE: Lessor agrees to provide Lessee an
          allowance in an amount not to exceed one hundred seventy five thousand
          dollars ($175,000) which shall be completed at Lessor's cost ("Tenant
          Improvement Allowance"). The Tenant Improvement Allowance shall
          include without limitation any and all costs of construction, city
          permits, space planning, engineering and the cost of Lessor's
          overhead. Prior to the commencement of construction of the Lessee
          Improvements, Lessee shall supply Lessor with cash in an amount (the
          "Over-Allowance Amount") by which the costs to construct the Lessee
          Improvements exceeds the Tenant Improvements Allowance. Lessee shall
          be solely responsible for the Over-Allowance Amount. The Tenant
          Improvement Allowance and Over-Allowance Amount shall be used solely
          toward the cost of constructing the Lessee Improvements and for no
          other purpose. The Tenant Improvement Allowance and/or Over-Allowance
          Amount will not be utilized for any modular workstations or lessee-
          specific furniture. The allowance is designed to be utilized to
          construct improvements which will remain with the property. Lessee may
          use up to $1.00 per useable square foot of the Tenant Improvement
          Allowance for cable and network systems.
     

<PAGE>

[LOGO]                           EXHIBIT "C"

          ENVIRONMENTAL QUESTIONNAIRE AND DISCLOSURE STATEMENT
                                          
The purpose of this form is to obtain information regarding the use of 
hazardous substances on the premises. Prospective tenants should answer the 
questions in light of their proposed operations on the premises. Existing 
tenants 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.

Your cooperation in this matter is appreciated. Any questions should be 
directed to, and when completed, the form should be mailed to:


          -----------------------------------------
          -----------------------------------------

1.   GENERAL INFORMATION

Company Name: Javelin Systems, Inc
              -----------------------------------------------
     
<PAGE>

[LOGO]

4.   SPILLS

4.1  During the past year, have any spills occurred on the premises?

     Yes        No    X
        -------    -------
     If so, please describe the spill and attach the results of any testing
     conducted to determine the extent of such spills.
     
4.2  Were any agencies notified in connection with such spills?

     Yes        No   N/A
        -------    -------
     If so, attach copies of any spill reports or other correspondence with
     regulatory agencies. 
    
4.3  Were any clean up actions undertaken in connection with the spill?

     Yes        No   N/A
        -------    -------
     
     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 ground water sampling done upon completion of the clean
     up work.

     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------

5.   WASTE MANAGEMENT

5.1  Has your company been issued an EPA Hazardous Waste Generator I.D. number?

     Yes         No   X
        -------    -------

5.2  Has your company filed a biennial report as hazardous waste generator?

     Yes         No   X
        -------    -------

     If so, attach a copy of the most recent report files.
     
5.3  Attach a list of the hazardous waste, if any, generated or to be generated
     at the premises, its hazardous class and the quantity generated on a
     monthly basis.

                                      -3-

<PAGE>

[LOGO]

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

        N/A
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------

5.5  Indicate the name of the person(s) responsible for maintaining copies of
     hazardous manifests completed for off-site shipments of hazardous waste.

                     N/A
     -------------------------------------------------------------------------

5.6  Is any treatment or processing of hazardous wastes currently conducted or
     proposed to be conducted at the premises?

     Yes          No    N/A
        --------     ---------

     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------

5.7  Attach copies of any hazardous waste permits or licenses issued to your
     company with respect to its operations on the premises.               
               N/A
     
6.   WASTE WATER TREATMENT/DISCHARGE

6.1  Do you discharge waste water to:

          Storm drain?          Sewer?
    -----                 ------
          Surface water?    X   No industrial discharge
    -----                 ------
     
6.2  Is your waste water treated before discharge?

     Yes           No    N/A
        --------      ---------
     If yes, describe the type of treatment conducted.

     -------------------------------------------------------------------------

6.3  Attach copies of any waste water discharge permits issued to your company
     with respect to its N/A operations on the premises.                N/A


                                      -4-

<PAGE>

[LOGO]

7.   AIR DISCHARGES

7.1  Do you have any air filtration systems or stacks that discharge into the
     air?

     Yes           No     X
        --------      ---------
     
7.2. Do you operate any of the following types of equipment, or any other
     equipment requiring an air emissions permit?

                 Spray booth 
     ---------
                 Dip tank
     ---------
                 Drying oven 
     ---------
                 Incinerator
     ---------
                 Other 
     ---------         ---------------
         X       No equipment requiring air permits
     ---------

7.3  Are air emissions from your operation monitored?

     Yes           No     X
        --------      ---------
     
     If so, indicate the frequency of monitoring and a description of the
     monitoring results.

     -------------------------------------------------------------------
7.4  Attach copies of any air emissions permits pertaining to your operations on
     the premises.       N/A
                                          
8.   HAZARDOUS MATERIALS DISCLOSURES

8.1  Does your company handle hazardous materials in a quantity equal to or
     exceeding an aggregate of 500 pounds, 5 gallons, or 200 cubic feet ?

     Yes           No    X
        --------      ---------
     
8.2  Has your company prepared a hazardous materials management plan ("business
     plan") pursuant to Orange County Fire Department requirement?

     Yes           No    X
        --------      ---------
     
8.3  Are any of the chemicals used in your operation regulated under Proposition
     65?

     Yes           No    X
        --------      ---------
     
8.4  Describe the procedure followed to comply with OSHA Hazard Communication
     Standard requirements.

                                        -5-
<PAGE>

[LOGO]

9.   ENFORCEMENT ACTIONS, COMPLAINTS

9.1  Has your company ever been subject to any agency enforcement actions,
     administrative orders, or consent decrees?

     Yes           No    X
        --------      ---------

     If so, describe the actions and any continuing compliance obligations
     imposed as a result of these actions.
     
9.2  Has your company ever received requests for information, notice or demand
     letters, or any other inquiries regarding its operation ?

     Yes           No    X
        --------      ---------

9.3  Have there ever been, or are there now pending, any lawsuits against the
     company regarding any environmental or health and safety concerns ?

     Yes           No    X
        --------      ---------

9.4  Has an environmental audit ever been conducted at your company's current
     facility?


     Yes           No    X
        --------      ---------

9.5  Have there been any problems or complaints from neighbors at the company's
     current facility?

     Yes           No    X
        --------      ---------

    JAVELIN SYSTEMS, INC
    ---------------------------------
     Company
     
     By:
        -----------------------------
     Title: Chief Financial Officer
        -----------------------------
     Date:  March 3, 1998
        ------------------------------


                                   -6-