LEASE AGREEMENT
                     VENTURE TECHNOLOGY CENTER VII BUILDING
                          8707 TECHNOLOGY FOREST PLACE
                     THE WOODLANDS, MONTGOMERY COUNTY, TEXAS

     THIS LEASE AGREEMENT ("Lease") is made and entered into on this the 4th day
of April,  1997,  between THE  WOODLANDS  CORPORATION,  a Delaware  corporation,
("Lessor"),   and  ARONEX   PHARMACEUTICALS,   INC.,  a  Delaware   corporation,
("Lessee").

         l.  Premises.  Upon the terms and  conditions  hereinafter  set  forth,
Lessor does hereby lease, demise and let to Lessee and Lessee does hereby lease,
and take from Lessor, the following described premises ("Premises"):

         All that  certain  tract or  parcel  of land  containing  approximately
         3.6147  acres  described  in  Exhibit  "A"  attached  hereto  ("Land"),
         together  with that  certain  structure  to be  constructed  thereon by
         Lessor  having  approximately  30,000  square feet of net rentable area
         ("Building") and a parking area;

known and referred to as Venture  Technology  Center VII Building  ("Building"),
located at 8707  Technology  Forest Place,  The  Woodlands,  Montgomery  County,
Texas.  The Premises is shown on the site  development  plan attached  hereto as
Exhibit "A-1" ("Site Plan").

         2. Parking.  Upon completion of the Building,  a parking area providing
for approximately 81 parking spaces and access drives will be provided by Lessor
on the Land at no charge for the  Initial  Term,  and any  renewal  thereof,  in
accordance with the terms of the Lease.
 "Initial  Term",  as used  herein,  shall  mean the first 120 month term of the
Lease  described  in 3 below Lessee  shall have the  exclusive  right to use the
parking  areas and  access  drives  during the Term for  ingress  and egress and
automobile  parking,  except  that Lessor and any future  owners  shall have the
right to construct  pathways in the forest  preserves  over the Land and utilize
the  parking  areas and access  drives  for  ingress  and egress and  automobile
parking in connection  with its rights and obligations  under the Lease.  During
the Term, Lessor shall keep the parking areas and access drives and the Building
exterior in a neat,  clean and orderly  condition,  lighted and  landscaped  and
shall repair any damage to same. The use of such parking areas and access drives
shall at all times be subject to such reasonable rules and regulations as Lessor
may promulgate.

         3. Term.  The term of this Lease  ("Term")  shall  commence on the date
("Commencement  Date") which is the earlier of (a) 10 days after Lessor  tenders
to Lessee  possession  of the  Premises  with all work to be performed by Lessor
pursuant  to the  tenant  improvement  letter  attached  hereto as  Exhibit  "B"
("Tenant Improvement Letter") substantially  completed or (b) the day upon which
Lessee takes occupancy of the Premises,  and shall expire on the last day of the
120th full calendar month following the  Commencement  Date,  subject to earlier
termination as hereinafter  provided.  Lessor shall not be liable or responsible
for any claims,  damages or liabilities  of any nature  whatsoever in connection
with or by reason of any delayed  occupancy.  Within 15 days following  Lessee's
receipt from Lessor of a memorandum of this Lease  specifying  the  Commencement
Date  and  date  of  expiration  of the  Term,  Lessee  agrees  to  execute  the
memorandum.


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         4. Use. Lessee shall use the entire Premises solely for general office,
research and development laboratory purposes , and for no other use.

         5.  Acceptance  of the Premises.  Upon taking  possession of all or any
portion of the  Premises,  Lessee shall be deemed to have accepted the Premises,
to have acknowledged that the same are in the condition called for hereunder and
to have  agreed  that the  obligations  of the Lessor  imposed  by  Exhibit  "B"
attached  hereto have been fully performed  except for punch list items.  Lessor
will use  reasonable  efforts to  complete  the punch list items  within 30 days
after the Commencement  Date (unless the failure to complete is due to events of
Lessee  Delay as  described  Exhibit  "B").  Lessee  hereby  waives any  implied
warranty of Lessor that the Premises are suitable for their intended  commercial
purpose and acknowledges and agrees that all of Lessee's  obligations  hereunder
(including  without  limitation,  the obligation to pay rent) are independent of
any such  implied  warranty and agrees to perform all such  obligations  and pay
rent  notwithstanding  any breach or  allegation of breach by Lessor of any such
implied  warranty  (which  implied  warranty as  aforesaid  is hereby  waived by
Lessee).


         6.       Security Deposit.  INTENTIONALLY DELETED.  


         7. Base  Rent.  The Base Rent,  which  Lessee  hereby  agrees to pay to
Lessor  monthly,  in advance,  at Lessor's  address  stated above,  shall be the
monthly  sum  calculated  as  described  in Article 7 of the Tenant  Improvement
Letter  attached  as  Exhibit  "B",  due and  payable  on the  first day of each
calendar month during the Term hereof,  without offset or deduction,  with a pro
rata portion being due and payable in advance for any partial month occurring at
the beginning of the Term.

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         8.  Additional  Rent.  Lessee agrees to pay all Operating  Expenses (as
defined  in Section 10 below) for the  Premises.  Within 90 days  following  the
completion  of each  Fiscal  Year,  Lessor  will  provide to Lessee a  statement
showing in  reasonable  detail the Operating  Expenses for the preceding  Fiscal
Year, the  Additional  Rent due, and Lessor's  reasonable  estimate of Operating
Expenses for the then current  Fiscal Year.  Lessee shall,  on or before 30 days
following receipt of said statement, pay to Lessor the amount of Additional Rent
due as provided  herein,  less the amount of Additional Rent paid in advance (if
any) during the  preceding  Fiscal  Year.  Any  overpayment  will be credited by
Lessor to the next rental  payment(s) due on or before 30 days after delivery of
the  statement  to  Lessee.  Lessee  agrees to pay  Additional  Rent each  month
thereafter,  in addition to Base Rent,  in an amount  necessary  to amortize the
estimated  Operating  Expenses  for the then  current  Fiscal Year over a period
equal to the lesser of (i) the number of months  remaining  in the Term on a pro
rata basis or (ii) the number of months  remaining  in the current  Fiscal Year.
Notwithstanding  that the Term has  expired  or been  terminated,  Lessee  shall
remain liable for and agrees to pay to Lessor within 30 days  following  receipt
of an invoice therefor,  Operating Expenses for the Fiscal Year during which the
Term expired or was terminated.  Lessee shall have the right, at its expense and
at a reasonable  time, to audit Lessor's  books relevant to the Additional  Rent
due  under  this  Section.  In the  event  Lessee  determines  that  Lessor  has
overstated  Lessee's Additional Rent in any Fiscal Year by greater than 3%, then
Lessor agrees to promptly  refund any overpayment to Lessee after written notice
from Lessee,  accompanied by evidence  substantiating  the  overpayment,  and to
reimburse  Lessee for  Lessee's  reasonable  costs of the  audit,  not to exceed
$1,000.00.  If Lessor and Lessee  are unable to agree upon the  accuracy  of any
such statement, either party may initiate a civil suit in any court of competent
jurisdiction  and the  amount of said  Additional  Rent  shall be paid to Lessor
pending the  rendering of a decision.  The term "Fiscal  Year",  as used herein,
shall mean Lessor's  fiscal year for accounting  purposes which currently is the
12-month  period  beginning  January 1 and ending December 31. Lessor shall have
the right to change the Fiscal  Year,  from time to time,  and,  in such  event,
Lessor shall notify Lessee in writing of such change.  Lessee also agrees to pay
to Lessor, as Additional Rent, a management fee ("Management  Fee") of 3% of the
annual  Base  Rent.  Lessee  agrees to pay the  Management  Fee each  month,  in
addition to other  Additional Rent and Base Rent,  during each Fiscal Year in an
amount  necessary to amortize the Management Fee and Additional Rent due for the
then current  Fiscal Year over a 12 month  period.  For the Fiscal Year in which
the Term begins or ends,  Lessee  shall only be  responsible  for the  amortized
Management Fee and  Additional  Rent due for the months of each such Fiscal Year
that the Lease is in force. This Section of the Lease is subject to the terms of
Section 6. of Rider 1 to the Lease.

         9.  Payment of Rentals.  Lessee  covenants  to promptly pay all rentals
when due and payable.  A late charge of 7% shall be added to any payment of Base
Rent or  Additional  Rent  which  is more  than 10 days  past  due in  order  to
compensate  Lessor for the extra  administrative  expenses  incurred.  If Lessor
shall pay any monies or incur any expenses in  correction  of  violations of the
covenants  herein set forth, the amounts so paid or incurred shall, on notice to
Lessee,  be  considered  additional  rent  payable  by  Lessee  with  the  first
installment  of Base Rent  thereafter  to  become  due and  payable,  and may be
collected or enforced as by law provided in respect of rentals.

         10.  Operating  Expenses.  The term  "Operating  Expenses" means all of
Lessor's  costs,  expenses and  disbursements  (but not  acquisition  of capital
investment items, except as hereinafter

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expressly  provided or specific costs billed to specific lessees) to operate and
maintain the Land, the Building,  and all  improvements on the Land from time to
time (to the extent and only to the extent same are Lessor's  obligation  to pay
or furnish under the other provisions of this Lease), including, but not limited
to,  Lessor's  costs of  providing  utilities,  including,  but not  limited  to
lighting;  porter  services and  supplies;  refuse  removal (if Lessor elects to
furnish  this  service);   courtesy  guard  services;   landscaping,   including
irrigation; and general maintenance and repairs,  including, but not limited to,
repairs to roof surface and  preventive  maintenance,  parking area  restriping,
exterior painting and other activities.  Operating Expenses shall also include a
reasonable amortization charge on account of any capital expenditure incurred to
effect  a  reduction  of  Operating   Expenses  and  a  reasonable   charge  for
amortization  of all  capital  items  Lessor  installs  (a) to reduce  Operating
Expenses,  so long as the  amortization  charge never exceeds the savings in any
future year, or (b) which Lessor is required to install on or for the benefit of
the Building by any governmental law, code or regulation passed or enacted on or
after the  Commencement  Date,  or (c) which is a  replacement  (as  opposed  to
additions or new  improvements) of items located in the common areas adjacent to
the Building,  the parking area and other facilities used in connection with the
Building, or involving the exterior of the Building,  including, but not limited
to, the roof and structural  elements.  Additionally,  Operating  Expenses shall
include  all ad valorem  taxes or  assessments,  and Annual  Assessments  of The
Woodlands Commercial Owners Association which accrue against the Building or the
Land during the Term,  together  with all  insurance  premiums  which  Lessor is
required to pay or deems  necessary  to pay with  respect to the Building or the
Land, including, but not limited to, casualty insurance and liability insurance.

         11.  Utilities.  Lessor  shall  make  available  to the  Building  gas,
electricity,  water and sewer facilities.  Lessee agrees to assume all costs and
expenses  for water and  sewer,  except as herein  provided,  gas,  electricity,
telephone,  and any other service needed for its use at the Premises,  including
any license or deposit required to establish or maintain such services,  and the
costs of  hook-up.  Lessor  agrees to pay all costs and  expenses  for water and
sewer  service.  The cost of these  services  shall be included  with  Operating
Expenses  as defined in Section 10 hereof.  Lessee  shall  promptly  pay for all
utility services furnished to the Premises during the term of this Lease. Lessor
shall under no  circumstances be liable to Lessee in damage or otherwise for any
interruption  in service of water,  electricity,  heating,  air  conditioning or
other  utilities or services  caused by govern mental  regulation,  emergencies,
Acts of God, by the making of any necessary  repairs or improve ments, or by any
cause beyond Lessor's reasonable control. Lessor shall endeavor in good faith to
give at least 24 hours  notice  to Lessee  when any  necessary  interruption  in
service will be made by Lessor. Notwithstanding the preceding sentence, if there
shall occur an  interruption  or  discontinuance  of utilities or services to be
provided  or made  available  by Lessor of such nature that (i) Lessee is unable
to, or does not,  make normal use of the  Premises,  (ii) such  interruption  or
discontinuance  has not been caused in whole or  substantial  part,  directly or
indirectly, by the gross negligence or willful misconduct of Lessee, or Lessee's
agents, employees, contractors,  subcontractors,  subtenants or assignees, (iii)
the interruption or continuance is within the control of Lessor, and (iv) Lessee
shall  have given  written  notice to Lessor  respecting  such  interruption  or
discontinuance  and  Lessor  shall  have  failed  to cure such  interruption  or
discontinuance  for 5  consecutive  business  days after  Lessor  receives  said
notice, then all Base Rent and Additional Rent

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payable  herein  shall  automatically  abate  from the  expiration  of the 5 day
period,  until such time as the  services or  utilities  are  restored or Lessee
begins normal use of the Premises  again,  whichever  occurs  first,  and Lessee
shall  have  the  right  to  terminate   the  Lease  if  the   interruption   or
discontinuance,  which meets the  requirements of (i) - (iv) above continues for
more than 30 days. For purposes of determining  whether there is an interruption
or  discontinuance  of  utilities  or  services,  an outage or series of outages
totalling 6 hours or more  between  7:00 a.m.  and 6:00 p.m. on any day,  Monday
through  Friday,   excluding  Holidays,  shall  constitute  an  interruption  or
discontinuance  of services or  utilities  for such day, but outages that are of
shorter duration shall not be considered. In the event of any such interruption,
however,  Lessor shall use  reasonable  diligence to restore such  service.  For
purposes of this Section,  all existing  improvements  in the Premises  shall be
deemed to be "building standard".

         12. Peaceful Enjoyment.  Lessee shall and may peacefully have, hold and
enjoy the Premises  for the Term,  subject to the terms and  conditions  of this
Lease,  provided that Lessee pays the rentals and other sums herein  recited and
performs all of its covenants and agreements herein contained.  It is understood
and  agreed  that  this  covenant  and any and all  other  covenants  of  Lessor
contained  in this Lease  shall be binding  upon Lessor and its  successors  and
assigns,  but only with  respect  to  breaches  occurring  during  its and their
respective ownership of Lessor's interest hereunder.

         13. Alterations,  Additions and Improvements.  Lessee shall not make or
allow to be made any  alterations  or physical  additions  in or to the Premises
without first obtaining the written  consent of Lessor,  which consent shall not
be unreasonably withheld or delayed, except that Lessee shall not be required to
obtain Lessor's consent for alterations or additions to the Premises the cost of
which do not exceed  $10,000.00 in the aggregate,  provided such  alterations or
additions  do  not  affect  the  structural  integrity  of the  Building  or the
mechanical  systems thereof.  Lessor shall not be liable as a result of any such
consent  for  completeness,  design  sufficiency,  or  compliance  with any law,
ordinance,  order,  rule, or regulation and Lessee shall  indemnify,  defend and
hold Lessor  harmless  from all claims,  demands,  damages,  causes of action or
litigation,  arising out of or resulting from such consent.  Prior to performing
any alterations or additions with the request for consent, Lessee must submit to
Lessor  detailed  plans  and  specifications  for the  proposed  alterations  or
physical additions.  Any and all alterations,  additions or improvements,  other
than that portion of the initial tenant improvements which are to be provided by
Lessor  pursuant to the terms of Exhibit  "B" hereto,  shall be made at Lessee's
sole  expense.  All such  alterations,  additions or  improvements  shall,  upon
completion,  become the  property of Lessor and shall be  surrendered  to Lessor
upon the  termination  of this  Lease by lapse of time or  otherwise;  provided,
however this clause shall not apply to removable equipment,  trade fixtures,  or
furniture  owned by  Lessee  and  which  can be  removed  without  damage to the
Building or the Premises,  or if there will be damage, said damages are repaired
by Lessee at Lessee's expense and Lessor approves the repairs, provided there is
no default by Lessee in any of the terms and conditions of the Lease.

         14.  Exterior  Repairs.  Lessor will keep the exterior of the Building,
including any doors,  windows,  or glass, in repair,  provided Lessee shall give
Lessor written  notice of the necessity for such repairs,  and provided that the
damage thereto shall not have been caused by the negligence of

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Lessee,  its agents,  employees,  licensees or  invitees,  in which event Lessee
shall be responsible therefor for the cost, except as may be provided for in the
Lease. Lessor shall be under no liability for repair, maintenance, alteration or
any other action with reference to any plumbing,  electrical or other mechanical
installation within or serving the Premises or any part thereof,  except for the
service lines  leading to the  Premises.  Lessor agrees that Lessee will receive
the  benefit  of all  warranties  received  by  Lessor on the  improvements  and
mechanical systems.

         15.  Operation by Lessee.  Lessee  agrees to (a) keep the inside of all
glass in the doors and  windows of the  Premises  clean;  (b) keep all  interior
surfaces of the  Premises  clean;  (c) replace  promptly,  at its  expense,  any
cracked or broken  window glass inside the Premises  with glass of like kind and
quality;  (d) maintain the Premises in a clean,  orderly and sanitary  condition
and free of insects,  rodents,  vermin and other  pests;  (e) keep any  garbage,
trash,  rubbish or refuse in  rat-proof  containers  within the  interior of the
Premises until removed from the area; (f) have such garbage,  trash, rubbish and
refuse  removed at its expense on a regular  basis from  location  points and at
such times as designated  by Lessor,  if said service is not provided by Lessor;
(g) keep all mechanical  apparatus free of vibration,  noise or pollution  which
may be transmitted  beyond the Premises;  (h) comply with all laws,  ordinances,
rules and regulations of the Fire Underwriters Rating Bureau now or hereafter in
affect;  (i) conduct its business in all respects in a manner in accordance with
normal customary industry practices and (j) the terms of this Section 15. Lessor
understands that Lessee intends to work with hazardous materials,  but that such
use will comply with all present and future federal,  state and local government
laws, ordinances, orders, rules and regulations.

         In addition,  Lessee shall not (a) place or maintain any merchandise or
other  articles in any  vestibule  or entry of the  Premises,  on the  footwalks
adjacent  thereto or  elsewhere  on the  exterior  of the  Premises  or Building
without the written  reasonable consent of Lessor; (b) permit undue accumulation
of garbage,  trash, rubbish or other refuse within or without the Premises;  (c)
cause  or  permit  objectionable  odors  to  emanate  or be  dispelled  from the
Premises;  (d) occupy,  use or permit the use or occupancy of any portion of the
Premises  for any  business  or purpose  which is  immoral,  disreputable  or in
violation of any legal  direction of any public officer;  or (e) occupy,  use or
permit the use or  occupancy  of any portion of the Premises for any business or
purpose which, in the opinion of Lessor, reasonably formed, constitutes a public
or private nuisance.

         Lessor  shall have the  right,  upon  written  approval  by Lessee,  to
provide for rubbish and refuse removal services as required of Lessee above, and
Lessee  agrees to  reimburse  Lessor for the cost  incurred  in  providing  such
service,  provided the cost of the service  provided by Lessor is  competitively
priced,  within 30 days after  receipt of a statement  setting forth the cost of
such service.

         Lessee  agrees to discharge  all waste  materials  from the Premises in
compliance  with the rules and  regulations as set forth in The Woodlands  Metro
Center Municipal  Utility District Policy Manual - Industrial Waste Discharges -
Permits and Charges - No. R&S-50,  issued July 12, 1979,  with an effective date
of July 12, 1979, as it may be amended from time to time. Lessee shall haul away
for disposal at its own expense,  any waste  material not meeting the  standards
for discharge set forth in the above-referenced manual.

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         Lessee shall  comply,  at Lessee's  cost and expense,  with all private
restrictions  encumbering the Land and all present and future laws,  ordinances,
orders, rules, regulations and requirements of all federal, state, and municipal
governments,  including all  municipal and road utility  districts and municipal
utility  districts,  and  all  departments,  commissions,  boards  and  officers
thereof, and any other body exercising similar functions, which now or hereafter
may be applicable to the Premises,  the improvements in the Premises,  or to the
use or manner of use of the  Premises  or the  improvements,  including  but not
limited to, all  environmental  laws and the Americans With Disabilities Act. In
the event of a  violation  of any  environmental  law by Lessee  and  cleanup of
contamination  is  required,  in addition to all other  remedies of Lessor under
this Lease or at law or in equity,  Lessee shall conduct a Standard 1 cleanup so
that  there  is a total  and  complete  removal  of all  contaminates  from  the
Premises.  Lessee  agrees  that no  such  cleanup  shall  be  subject  to a risk
reduction  standard and no deed recordation notice shall be recorded against the
Premises.

         Lessee  also  agrees to comply  with the Rules and  Regulations  of the
Building,  a copy of which is  attached  as Exhibit  "C".  Lessor may amend said
Rules  and  Regulations,  from time to time,  if  reasonably  necessary  for the
safety,  care, or cleanliness of the Building,  provided that no amendment shall
alter any covenant or provision contained in this Lease. Lessee agrees to comply
with any  amendment  which is made to said rules and  Regulations  in compliance
with the terms of this subsection  after Lessee  receives  written notice of the
amendment.

         16.  Interior  Repairs and  Maintenance.  Except as provided for in the
Lease,  Lessee  will,  at Lessee's  cost and  expense,  keep the interior of the
Premises,   together  with  all  electrical,   plumbing  and  other   mechanical
installations  therein,  all heating  and air  conditioning  equipment,  and all
interior  windows or doors serving the Premises,  in good order and repair,  and
will make all  replacements  thereto as its expense.  Lessee will  surrender the
Premises at the  expiration  or earlier  termination  of this Lease,  in as good
condition as when received,  excepting  depreciation caused by ordinary wear and
tear or casualty  covered by insurance.  Lessee will not overload the electrical
wiring  serving the  Premises or within the  Premises,  and will  install at its
expense,  but only after obtaining  Lessor's  reasonable  written approval,  any
additional  electrical service which may be required in connection with Lessee's
use or occupancy.  Notwithstanding anything herein to the contrary,  Lessor, and
not Lessee,  shall be liable for any and all interior  repairs  which may result
from any  structural  failure of the  Building,  unless  caused by  Lessee,  its
agents, employees or invitees.  Lessee will repair promptly, at its expense, any
damage to the  Premises  caused by bringing  into the  Premises any property for
Lessee's use, or by the installation or removal of such property,  regardless of
fault or by whom such damage was caused,  unless  caused by Lessor,  its agents,
employees or contracts.  Upon execution of this Lease,  Lessee,  at its own cost
and   expense,   shall   enter   into   a   regularly   scheduled   preventative
maintenance/service  contract with Lessor, or a maintenance  contractor approved
by Lessor, for servicing all hot water,  heating, and  air-conditioning  systems
and equipment  within the Premises.  If Lessee fails to make such repairs and/or
to perform  the  maintenance  and  repairs to the  Premises  which are  Lessee's
obligation under this Lease,  Lessor may make same, and Lessee agrees to pay, as
additional  rent, the cost thereof,  plus 10% overhead,  to Lessor promptly upon
Lessor's demand therefor.


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         17. Roof and Walls.  Lessor or its  designee  shall have the  exclusive
right  (a) to  erect  in  connection  with the  construction  thereof  temporary
scaffolds  and other  aids to  construction  on the  exterior  of the  Premises,
provided  that access to the Premises  shall not be denied;  and (b) to install,
maintain,  use, repair and replace within the Premises,  pipes, ducts, conduits,
wires and all other  mechanical  equipment  serving other parts of the Building,
the same to be in locations within the Premises as will not materially interfere
with  Lessee's  use  thereof.  Lessee  shall have no right to penetrate or erect
improvements  on the roof  without the prior  written  consent of Lessor,  which
consent  shall not be  unreasonably  withheld  or delayed,  and any  approval by
Lessor will require Lessee executing Lessor's license agreement. Lessee shall be
liable in damages to Lessor for any breach of this provision,  including damages
for loss of any and all warranties.

         18. Signs and Advertising. Lessee will not place or suffer to be placed
or  maintained  on or  displaced  to the  exterior  of the  Premises,  any sign,
advertising  matter or other  thing of any kind,  and will not place or maintain
any  decoration,  lettering or advertising  matter on the glass of any window or
door of the Premises  without first  obtaining  the written  approval of Lessor,
which  consent  shall not be  unreasonably  withheld  or  delayed.  Lessee  will
maintain any approved sign, decoration,  lettering,  advertising matter or other
thing in good condition and repair at all times.

         19. Entry by Lessor.  Lessee shall  permit  Lessor or Lessor's  agents,
representatives,  or employees to enter upon the Premises at  reasonable  times,
and upon having  given  Lessee  reasonable  advance  notice,  (a) to inspect the
Premises,  to determine  whether Lessee is in compliance  with the terms of this
Lease; (b) to show the Premises to prospective purchasers,  lessees, mortgagees,
bene ficiaries  under trust deeds,  or insurers (but as to  prospective  lessees
only  during  the  last 6  months  of  the  Term),  and  (c)  to  make  repairs,
improvements,  additions and alterations thereto, as Lessor is permitted to make
according to the terms of the Lease. Any inspections of the Premises pursuant to
this subsection shall be at Lessor's cost and expense; provided, however, in the
event it is determined by Lessor that an environmental study should be conducted
on the  Premises and said  environmental  study  determines  that Lessee has not
complied  with all then  existing  environmental  laws,  Lessee shall  reimburse
Lessor  for the cost of the study  within 15 days  after  receipt  of an invoice
setting forth the cost, and Lessee shall promptly take all action necessary,  at
Lessee's sole expense,  to remedy any noncompliance by Lessee discovered by such
study in accordance with Section 15 above.

         20. Liens.  In the event that any mechanic's,  materialmen's,  or other
lien shall at any time be filed against the  Premises,  the Building or the Land
purporting  to be for  work,  labor,  services  or  materials  performed  for or
furnished to Lessee or anyone holding the Premises  through or under Lessee,  or
arising out of any alleged act or  omission of Lessee,  Lessee  shall  forthwith
cause the same to be properly bonded or released.  If Lessee shall fail to cause
such lien to be bonded or released  within 15 days after  being  notified of the
filing thereof, then, in addition to any other right or remedy of Lessor, Lessor
may,  but shall not be  obligated  to,  discharge  the same by posting a bond or
paying the amount  claimed to be due, and the amount so paid by Lessor,  and all
costs and expenses  incurred by Lessor in procuring  the discharge of such lien,
including  reasonable  attorney's  fees,  shall be due and  payable by Lessee to
Lessor as additional rent on the first day of the next succeeding month.

                                                         8

<PAGE>



Lessor shall not be liable for any labor or  materials  furnished to Lessee upon
credit, and that no mechanics',  materialmen's or other liens for any such labor
or  materials  shall attach to or affect the estate or interest of Lessor in and
to the Land or Building.

         21.  Subordination.  Lessee  agrees  that  this  Lease is and  shall be
subordinate to any mortgage or deed of trust which may now or hereafter encumber
the Building or the Land,  and to all renewals,  modifications,  consolidations,
replacements and extensions thereof,  provided,  however, that the holder of any
such mortgage or deed of trust shall agree that Lessee shall not be disturbed in
its possession of the Premises or its rights hereunder  terminated or amended by
the mortgagee, any purchaser at or in lieu of foreclosure or other party so long
as Lessee is not in default under this Lease.  Lessor  agrees to use  reasonable
efforts to obtain a nondisturbance  agreement in a commercially  reasonable form
from its  lender  at the time a  mortgage  or deed of trust is  placed  upon the
Building  or  Land.  In  confirmation  of such  subordination,  Lessee  shall at
Lessor's request execute promptly any appropriate certificate or instrument that
Lessor may reasonably request. In the event of the enforcement by the trustee or
the beneficiary  under a mortgage or deed of trust of the remedies  provided for
by law or by such  mortgage or deed of trust,  Lessee will,  upon request of any
person  or party  succeeding  to the  interest  of  Lessor  as a result  of such
enforcement,  automatically  become the  lessee of such  successor  in  interest
without  change  in the  terms  or other  provisions  of this  Lease;  provided,
however,  that such  successor in interest shall not be bound by (i) any payment
of Base  Rent or  Additional  Rent for more  than one  month in  advance  except
prepayments  in the  nature of  security  for the  performance  by Lessee of its
obligations  under this Lease;  (ii) any amendment or  modifications  under this
Lease  made  without  the  written  consent  of such  trustee,  beneficiary,  or
successor in  interest;  (iii) any default by the prior owner or landlord in the
observance or performance  of any of its covenants or obligations  hereunder any
right of offset  which  Lessee may have had against the prior owner or landlord.
Upon request by any  successor in interest,  Lessee shall execute and deliver an
instrument or instruments confirming the attornment herein provided for.

         Within 15 days  after  Lessor's  request,  Lessee  agrees to execute an
estoppel  certificate  or  other  agreement  certifying  to  Lessor  and/or  any
mortgagee of the  Building  such facts and  agreeing to such  reasonable  notice
provisions as such mortgagee may request in connection with Lessor's  financing,
subject,  however, to the non-disturbance rights of Lessee  above-described.  If
Lessee fails or refuses to give a certificate  hereunder  within the time period
herein  specified,  then  the  information  contained  in  such  certificate  as
submitted by Lessor  shall be deemed  correct for all  purposes,  and all notice
provisions and other matters in the  certificate  shall be deemed agreed to, but
Lessor  shall  have the right to treat  such  failure  or  refusal as default by
Lessee.

         This Lease and all rights of Lessee  hereunder are further  subject and
subordinate  to the extent that the same relate to the Premises to all ground or
underlying  leases  covering  the  Land/or  any part  thereof  which  may now or
hereinafter  affect the Land or the Building,  and any renewals or modifications
thereof;  provided,  however that the holder of any ground  lease or  underlying
leases  covering the Land or the  Building  shall agree that Lessee shall not be
disturbed in its possession of

                                                         9

<PAGE>



the  Premises or its rights  hereunder  terminated  or amended by such holder as
long as Lessee is not in default under this Lease.

         22.  Condemnation.  If the whole or any part of the  Premises  shall be
taken under the power of eminent  domain,  this Lease shall  terminate as to the
part so taken on the date Lessee is required to yield possession  thereof to the
condemning authority. Lessor shall, with reasonable diligence, make such repairs
and  alterations as may be necessary in order to restore the part not taken to a
useful  condition,  and the Base Rent  shall be reduced  proportionately  to the
portion  of the  Premises  so  taken.  If the  amount of the  Premises  so taken
substantially  impairs the usefulness of the Premises for the purposes set forth
in Section 4 , either party may terminate this Lease within 30 days after Lessee
is  dispossessed,  effective  as of the date when  Lessee is  required  to yield
posses sion. All compensation  awarded for any taking shall belong to and be the
property of Lessor.

         23. Fire and Casualty.  In the event of a fire or other casualty in the
Premises,  Lessee  shall  immediately  give  notice  thereof to  Lessor.  If the
Premises,  through  no  fault or  neglect  of  Lessee,  its  agents,  employees,
invitees, licensees or visitors, shall be destroyed by fire or other casualty so
as to render  the  Premises  untenantable,  the rental  herein  shall be reduced
proportionally to the portion of the Premises rendered  untenantable  until such
time as the Premises are made tenantable by Lessor.  If from such cause the same
shall be so damaged that Lessor  shall decide not to rebuild,  then all rent and
other sums owed  hereunder up to the time of such  destruction or casualty shall
be paid by Lessee,  and  thenceforth  this Lease shall cease and come to an end.
Notwithstanding  anything contained herein to the contrary, if within 60 days of
the fire or  casualty  it is  determined  that the  Premises  cannot be restored
within 150 days from the date of the fire or casualty, Lessor shall give written
notice to Lessee.  Lessee  shall have the right  within 60 days from the date of
Lessor's  notice to  terminate  the  Lease.  Further,  notwithstanding  anything
contained  herein to the contrary,  in the event the Building shall be destroyed
or  damaged  prior to the final 2 years of the then  current  Lease Term to such
extent that  rebuilding or repairing  can be completed  within 150 days from the
date of the  damage,  Lessor  shall,  at its sole cost and  expense,  diligently
proceed  forthwith to rebuild and repair said Premises as closely as possible to
the Building to be  constructed  in  accordance  with  Exhibit "B",  except that
Lessor  shall  not be  obligated  for such  repair in an amount in excess of the
insurance proceeds recovered as a result of such damage or which could have been
recovered had Lessor maintained the insurance Lessor was required to maintain in
this Lease.  If the Premises  should be  substantially  damaged by fire or other
casualty  during  the  final 2 years of the  Lease  Term,  Lessor  shall  not be
required to rebuild or repair such damage and at Lessor or Lessee's  option,  by
written  notice to the other  within 60 days after the date of the damage,  this
Lease shall  terminate and all Base Rent and Additional  Rent shall be abated as
of the  date of the  damage.  However,  if  during  the last 2 years of the then
current Lease Term,  Lessor shall exercise said right of termination and at that
time  Lessee  shall  have the right to renew the Lease  Term,  Lessee may render
Lessor's  notice of termination  nugatory and reinstate  Lessor's  obligation to
rebuild,  provided that Lessee,  within 15 days of receipt of Lessor's notice of
termination, exercises its right to renew the Term of the Lease.


                                                        10

<PAGE>



         24.  Casualty  Insurance.  Lessor shall,  at all times during the Term,
maintain a policy or policies of insurance with the premiums  thereon fully paid
in advance, issued by and binding upon some solvent insurance company,  licensed
to do business in the State of Texas, insuring Lessor's interest in the Building
against loss or damage by fire and other hazards  within the coverage of a Texas
standard form of fire and extended  coverage  policy,  for the full  replacement
value thereof,  with payments for losses thereunder  payable solely to Lessor or
its designee.  Lessee shall  maintain in force a like policy  insuring  Lessee's
interest in any furniture,  equipment, machinery, goods or supplies which Lessee
may bring or obtain upon the Premises.

         25. Liability Insurance.  Lessee shall maintain, at its expense, at all
times  during the Term,  a policy or policies of  commercial  general  liability
insurance,  with the premiums  thereon  fully paid in advance,  issued by (i) an
insurance  company  or  companies  rated "A-" or higher  under the most  current
edition of A.M. Best's Key Rating Guide, (ii) a Lloyds of London underwriter, or
(iii) an insurance company agreed to by Lessor. All insurers must be licensed to
do business in the State of Texas. The insurance shall afford  protection of not
less than $1,000,000 combined single limit bodily injury and property damage per
occurrence.  The policy or policies shall name Lessor as an additional  insured.
As to any injury or damage occurring in or on the Premises,  Lessee's  insurance
shall be primary. Lessee's policy shall contain an agreement by the insurer that
such policy, or policies may not be cancelled or materially  modified without 30
days' prior notice to Lessor. Lessee shall provide Lessor a copy of the required
policy or policies,  or a certificate  evidencing the required coverage,  before
beginning  any work in the Premises or taking  occupancy of same.  Additionally,
Lessee shall provide  Lessor  evidence of the renewal of each policy at least 30
days before the expiration of the policy.

         26. Release of Claims; Waiver of Subrogation. Anything in this Lease to
the contrary notwithstanding,  Lessor and Lessee each waive any and all right of
recovery,  claim,  action or cause of action  against the other and its partners
(if any),  and the agents,  officers,  and  employees  of the other party or its
partners, for any loss or damage:

                  (i)      to the Premises,  the Building,  or any  improvements
                           thereto,  or any  personal  property  of  such  party
                           therein, by reason of fire, the elements or any other
                           cause which could have been insured  against  under a
                           Texas  standard  form of fire and  extended  coverage
                           insurance policy, or

                  (ii)     arising out of any business  interruption,  including
                           but not  limited  to loss of  profits,  by  reason of
                           fire, the elements or any other cause,

regardless of cause or origin,  including  the sole or concurrent  negligence of
the other party or its partners,  or the agents,  officers,  or employees of the
other party or its  partners.  Lessor and Lessee  covenant that no insurer shall
hold any right of  subrogation  against the other party for losses which must be
insured  against by the terms of this  Lease.  This  Section  shall  survive the
termination of this Lease.


                                                        11

<PAGE>



         27. Release and Indemnification by Lessee. Subject to Section 26 above,
Lessee  releases  and  agrees  to  defend,  indemnify  and hold  Lessor  and its
partners,  and the agents,  officers and  employees  of Lessor or its  partners,
harmless from and against all claims or causes of action for damage or injury or
death to persons or property occurring on or in the Premises, including, but not
limited to, any claims or causes of action  caused by or resulting  from (i) the
negligence,  but not the gross negligence or willful misconduct of Lessor or its
partners,  or the agents,  officers,  or employees of Lessor or its partners, or
(ii) strict liability or product liability.  Subject to Section 26 above, Lessor
releases and agrees to defend,  indemnify and hold Lessee and its partners,  and
the agents, officers and employees of Lessee or its partners,  harmless from and
against  all claims or causes of action for damage or injury or death to persons
or property occurring on or in the Premises,  including, but not limited to, any
claims or causes of action caused by or resulting from (i) the  negligence,  but
not the gross negligence or willful misconduct of Lessee or its partners, or the
agents,  officers,  or  employees  of Lessee  or its  partners,  or (ii)  strict
liability or product  liability.  This Section shall survive the  termination of
this Lease.

         28.  Holding  Over.  In the event of holding  over by Lessee  after the
expiration or termination of the Term and without the written consent of Lessor,
Lessee shall be a tenant at will and shall pay monthly rent equal to 150% of the
amount of all Base Rent, and  Additional  Rent pay able during the last month of
the Term.  Further,  Lessee shall indemnify Lessor against all actual damages by
any other lessee to whom Lessor may have leased all or any part of the Premises.
Lessor may terminate the tenancy by giving written notice to Lessee.  No holding
over by Lessee,  either with or without the consent and  acquiescence of Lessor,
shall operate to extend the Lease for a longer period than l month.  Any holding
over with the  consent of Lessor in writing  shall  thereafter  constitute  this
Lease a lease from month to month.

         29. Default by Lessee.  If (a) Lessee fails to timely pay any sum to be
paid by Lessee under this Lease and such default  continues  for 5 business days
after  Lessor  delivers  written  notice  of such  failure  to pay to  Lessee or
deposits  written  notice in the U. S. Mail  addressed  to Lessee's  address set
forth in  Section  35; (b) Lessee  fails to perform  any of its other  duties or
obligations under this Lease and such default continues for 20 days after Lessor
delivers  written notice to Lessee or deposits  written notice in the U. S. Mail
addressed to Lessee's address set forth in Section 35, provided such notice sets
forth the nature and extent of such  default.  The period of time to cure such a
default  described in this  subparagraph (b) shall be extended,  provided Lessee
commences to cure such default  within said 20 days and  continues to completion
with due diligence, speed and continuity, said period of extension, however, not
to exceed 40 days from the  expiration of the 20 days;  (c) any of the following
actions  occur and  Lessee  fails to  vigorously  contest  and cause  same to be
removed,  dismissed, or vacated within 30 days from the date of entry or filing:
(i)  Lessee's  interest  under this Lease is levied on under  execution or other
legal  process,  or (ii) any  petition is filed by or against  Lessee to declare
Lessee a bankrupt or to delay,  reduce or modify  Lessee's debts or obligations,
or (iii) any petition under the  Bankruptcy  Code is filed or other action taken
to reorganize or modify Lessee's capital  structure,  or (iv) Lessee is declared
insolvent  according to law, or (v) any general  assignment of Lessee's property
is made for the benefit of creditors, or (vi) a

                                                        12

<PAGE>



receiver or trustee is appointed for Lessee or its property;  (d) Lessee vacates
or abandons  the  Premises  and does not pay rent  provided  for herein;  (e) if
Lessee  is a  corporation,  Lessee  ceases  to  exist as a  corporation  in good
standing  in the State of Texas;  or (f) if  Lessee  is a  partnership  or other
entity, Lessee is dissolved or otherwise  liquidated,  then Lessor may treat the
occurrence of any one or more of the foregoing events as a breach of this Lease.
Upon the occurrence of any of the foregoing events,  at Lessor's option,  Lessor
shall have any one or more of the following described  remedies,  in addition to
all other rights and remedies provided at law or in equity:

                  A. Lessor may terminate this Lease and forthwith repossess the
Premises  and  recover  damages in a sum of money  equal to the total of (i) the
cost of recovering  the Premises,  including the cost of the removal and storage
of any of Lessee's  possessions  left within the Premises,  (ii) the unpaid Base
Rent and  Additional  Rent  earned  at the time of  termination,  plus  interest
thereon at the lesser of 18% or the then maximum  interest rate  permitted to be
charged by applicable law  ("Interest")  from the due date until paid, (iii) the
balance  of the Base Rent and  Additional  Rent for the  remainder  of the Term,
discounted  to its  present  value  at the rate of 6% per  annum,  less the fair
market rental value (allowing a reasonable period for reletting) of the Premises
for said period  (provided  said sum shall not be less than zero),  and (iv) any
other sum of money and damages owed by Lessee to Lessor.

                  B.  Without  terminating  this  Lease,  Lessor  may  terminate
Lessee's  right of possession  and  repossess the Premises by forcible  detainer
suit or  otherwise,  without  demand or notice of any kind to Lessee.  If Lessor
pursues  this  remedy,  Lessor may,  but shall not be  obligated  to,  relet the
Premises for Lessee's account,  for such rent and upon such terms and conditions
as Lessor  deems  satisfactory.  For the  purpose of such  reletting,  Lessor is
authorized  to  decorate  or  to  make  any  repairs,  changes,  alterations  or
modifications  in or to the  Premises  as it  deems  necessary  to  prepare  the
Premises to relet at Lessee's  expense.  If Lessor fails to relet the  Premises,
then Lessee shall pay to Lessor as damages a sum equal to the amount of the Base
Rent and Additional  Rent provided for in this Lease for such period or periods.
If Lessor  relets the Premises  and fails to realize a sufficient  sum from such
reletting after deducting (a) the due and unpaid Base Rent and Additional  Rent,
(b) the accrued Interest thereon, (c) the cost of recovering possession, (d) the
costs  and  expenses  of  all  decorations,  repairs,  changes,  alteration  and
modifications,  and (e) the expense of such  reletting and the collection of the
rent  accruing  therefrom,  then Lessee shall pay to Lessor any such  deficiency
upon demand from time to time.  Lessor may file one or more suits to recover any
sums falling due under this Section from time to time.  Any reletting  shall not
be an election by Lessor to terminate  this Lease unless  Lessor gives a written
notice of such intention to Lessee.  Notwithstanding  any such reletting without
termination, Lessor may at any time thereafter elect to terminate this Lease for
such previous default.

                  C.  Lessor may change  the locks on the  Premises.  The Lessor
will  not  have to give  the  Lessee  a new key  unless  the  Lessee  cures  the
default(s);  the new key will be provided only during Lessor's  regular business
hours.


                                                        13

<PAGE>



         30. Waiver.  Failure of Lessor to declare any default  immediately upon
occurrence thereof, or delay in taking any action in connection therewith, shall
not waive  such  default,  but Lessor  shall have the right to declare  any such
default  at any time and take  such  action  as might be  lawful  or  authorized
hereunder,  either in law or at equity.  Likewise,  failure of Lessee to declare
any default  immediately upon occurrence  thereof, or delay in taking any action
in connection therewith, shall not waive such default, but Lessee shall have the
right to declare  any such  default at any time and take such action as might be
lawful or authorized hereunder, either in law or at equity.

         31.  Lien  for  Rent.  Lessee  hereby  grants  to  Lessor a lien on all
property of Lessee now or hereafter  placed in or upon the Premises,  including,
but  not  limited  to,  all  goods,  wares,  fixtures,   machinery,   equipment,
furnishings, and other articles of personal property , and all proceeds from the
sale or lease  thereof  (except such part of any  property as may be  exchanged,
replaced or sold from time to time in the ordinary course of business, operation
or trade),  and such property shall be and remain subject to such lien of Lessor
for payment of all rent and other sums agreed to be paid by Lessee herein.  This
Lease shall constitute a security  agreement under the Texas Uniform  Commercial
Code  ("TUCC") so that Lessor shall have and may enforce a security  interest in
all property of Lessee now or hereafter placed in or on the Premises,  including
but not limited to all goods, wares, fixtures, machinery, equipment, furnishings
and other articles of personal  property now or hereafter  placed in or upon the
Premises by Lessee,  and all  proceeds  from the sale or lease  thereof.  Lessee
agrees to execute as debtor such financing statement or statements as Lessor may
now or  hereafter  reasonably  request in order that such  security  interest or
interests may be perfected  pursuant to said TUCC. Lessor may at its election at
any time file a copy of this Lease as a financing statement.  Lessor, as secured
party,  shall be entitled to all of the rights and  remedies  afforded a secured
party under said TUCC,  which  rights and  remedies  shall be in addition to and
cumulative of the  landlord's  liens and rights  provided by law or by the other
terms and provisions of this Lease.

         Notwithstanding  anything  contained  herein  to the  contrary,  Lessor
agrees  to  subordinate  its liens to bona  fide  liens to secure  loans for the
purchase  of  furniture,   equipment,  and  inventory  using  the  subordination
agreement substantially in the form attached hereto as Exhibit "D".

         32. Assignment by Lessor. Lessor shall have the right to sell, transfer
or assign, in whole or in part, all of its rights and obligations  hereunder and
in the  Building  and the Land.  In such event and upon the  assumption  by such
transferee of Lessor's obligations hereunder, no further liability or obligation
shall thereafter accrue against Lessor hereunder.

         33.  Assignment  by Lessee.  Lessee  shall not assign this Lease or any
interest  therein,  nor sublet the  Premises or any part thereof or any right or
privilege  appurtenant  thereto,  nor permit any other person, firm or entity to
occupy or use the Premises or any portion  thereof  without first  obtaining the
written consent of Lessor,  which consent shall not be unreasonably  withheld or
delayed.  Lessor shall have the right, at its option, to terminate this Lease as
to any portion of the Premises covered by a proposed assignment or sublease,  or
to approve any such  assignment or sublease only upon the condition that (a) 50%
of all rentals,  after all reasonable expenses associated with the assignment or
sublease are deducted, paid by the assignee or sublessee in excess of the

                                                        14

<PAGE>



rentals  due from  Lessee  hereunder,  shall be paid  directly  to  Lessor,  the
proposed  assignee or  sublessee  is  financially  capable of assuming  Lessee's
obligations  hereunder,  in the sole  judgment of Lessor,  and (b) the  proposed
assignee or sublessee  agrees to use the Premises only for the uses permitted by
Lessee  under  this  Lease,  and to  comply  with  all of the  other  terms  and
conditions  of this  Lease.  Notwithstanding  anything  contained  herein to the
contrary,  if Lessor elects to terminate the Lease  pursuant to this Section 33,
Lessee,  no more than once during the initial  Term,  may rescind its request to
assign the Lease or sublet the Premises  within 10 business days after  Lessor's
notice  of  termination.  Consent  by  Lessor  to  one  assignment,  subletting,
occupation  or use by another  person shall not be deemed to be a consent to any
subsequent  assignment,  subletting,  occupation  or use by the same or  another
person.  Consent to an  assignment  or sublease  shall not  release  Lessee from
liability for the continued  performance  of the terms and provisions to be kept
and performed by Lessee  hereunder,  unless Lessor  specifically  and in writing
releases Lessee from said liability. In addition, an amendment, modification, or
extension of the Lease after the assignment or sublease shall not release Lessee
from  liability for the continued  performance of the terms and provisions to be
performed by Lessee hereunder.  Any assignment or subletting by operation of law
or otherwise,  (including without limitation, a transfer of controlling interest
in  Lessee  to any other  person,  firm or  entity)  without  the prior  written
reasonable consent of Lessor,  shall be void and shall, at the option of Lessor,
terminate  this Lease.  Lessee  covenants and agrees that when the prior written
consent of Lessor is obtained,  and in the event the subletting or assignment is
to be arranged through public  advertisement or listing of any kind, Lessee will
treat all  applications  for sublease or assignment in a uniform manner and will
award leases  according to objective  standards.  No decision on any application
shall be made on the grounds of the  applicant's  race,  color,  religion,  sex,
handicap, familial status, or national origin.

         Notwithstanding  anything contained to the contrary,  it is agreed that
the  requirement  for prior written consent in this Section 33, an assignment or
subletting  by operation of the transfer of the  controlling  interest in Lessee
relates to the protection of Lessor's  economic  rights and interests under this
Lease. The requirement for receiving Lessor's prior written consent shall not be
necessary  if any such  transfer  does not have an  adverse  impact on  Lessor's
economic  rights and  interests.  "Transfer of the  controlling  interest",  for
purposes of this Section 33 is defined to mean the transfer or accumulation,  by
or in any one entity or person, of twenty percent (20%) or more of the corporate
shares or the voting rights that accompany ownership of corporate shares.

         34.  Notices.  Any notice required or permitted to be given pursuant to
the terms of this Lease shall be sent by certified or  registered  U.S.  mail to
Lessor at 2201 Timberloch  Place,  The Woodlands,  Texas 77380,  Attn:  Property
Management,  and to Lessee at 8707 Technology Forest Place, The Woodlands, Texas
77380.  The place to which such  notices  shall be sent may be changed by either
party giving notice of such change to the other party in the manner  hereinabove
provided.  A notice  shall be deemed  given and received on the 3rd business day
following deposit in the U. S.
Mail as provided above.

         35.  Severability.  If  any of  the  provisions  of  this  Lease  shall
contravene  or be invalid under the laws of the  particular  state,  county,  or
jurisdiction where applied, such contravention or

                                                        15

<PAGE>



invalidity  shall not invalidate the Lease or any other portions thereof and the
remainder  of  this  Lease  or the  application  thereof  to  other  persons  or
circumstances shall not be affected thereby.

         36. Corporate Authority. If Lessee signs as a corporation,  each of the
persons  executing  this Lease on behalf of Lessee  represents and warrants that
Lessee is a duly  organized  and  existing  corporation,  that Lessee has and is
qualified  to do  business  in Texas,  that the  corporation  has full right and
authority  to enter into this Lease,  and that all persons  signing on behalf of
the corporation were authorized to do so by appropriate corporate actions.

         37.  Title.  This Lease is subject to all matters of record in the Real
Property Records of Montgomery County, Texas. By execution of this Lease, Lessee
consents to all plats and replats of the Land,  if any, in  compliance  with all
applicable laws.

         38. Not an Offer.  The  submission of this Lease to Lessee shall not be
construed as an offer,  nor shall  Lessee have any rights with  respect  thereto
unless Lessor executes a copy of this Lease and delivers the same to Lessee.

         39.  Exhibits,  Riders  and  Addenda.  This  Lease  also  includes  and
incorporates herein for all purposes all attached Exhibits, Riders, and Addenda,
if any.

         40. Joint and Several  Tenancy.  If more than one person  executes this
Lease as Lessee, their obligations  hereunder are joint and several, and any act
or notice of or to, or refund to, or the  signature of, any one or more of them,
in  relation  to the  renewal or  termination  of this  Lease,  or under or with
respect to any of the terms hereof shall be fully binding on each and all of the
persons executing this Lease as a Lessee.

         41. Binding  Effect.  This Lease shall be binding upon and inure to the
benefit of the heirs, successors or assigns of Lessor and Lessee, subject to the
limitation on subleasing and assignment herein contained.

         42. Entire  Agreement.  This Lease shall  constitute  the sole and only
agreement  of Lessor and Lessee  with regard to the Lease of the  Premises,  and
shall supercede any prior or contemporaneous  oral or written  agreements.  This
Lease  may not be  altered,  changed  or  amended,  except by an  instrument  in
writing, signed by both parties hereto.

         43. Pronouns.  Pronouns which refer to either Lessor or Lessee shall be
construed to mean the appropriate number and gender intended.

         44. Force  Majeure.  If either party shall be delayed or prevented from
the performance of any act required hereunder by reason of acts of God, strikes,
lockouts,   labor  troubles,   inability  to  procure   materials,   restrictive
governmental  laws or  regulations  or other cause  without fault and beyond the
control of the party obligated (Lessee's financial inability,  such as inability
to obtain financing or lack of capital, excepted), performance of such act shall
be excused for the period of

                                                        16

<PAGE>


the delay,  and the period for the performance of any such act shall be extended
by a period  equal to the period of such delay;  provided,  however,  nothing in
this Section shall excuse Lessee from the prompt  payment of any rental or other
charge  required  of  Lessee  hereunder,  except  as may be  expressly  provided
elsewhere in this Lease.

         45.  General.  Time is of the  essence  of this  Lease.  All rights and
remedies  of Lessor and Lessee  under this Lease  shall be  cumulative  and none
shall  exclude any other rights or remedies  allowed by law. This Lease shall be
declared to be a Texas  lease,  and all of the terms  hereof  shall be construed
according  to the laws of the State of Texas.  Said Lease  shall be  performable
only in Montgomery  County,  Texas, and venue for any action hereunder shall lie
exclusively in Montgomery  County,  Texas or in the Southern  District of Texas,
Houston Division, as appropriate.

         IN TESTIMONY  WHEREOF,  the parties  hereto have executed this Lease in
multiple   counterparts,   each  of  which  shall  constitute  an  original  but
collectively shall constitute only one document,  such execution to be effective
on the date first above written.

                                     LESSOR

Date: April 4, 1997                  THE WOODLANDS CORPORATION



                                        By:         s/s: Michael H. Richmond
                                                         -------------------
                                      Name:         Michael H. Richmond
                                     Title:         Executive Vice President


Originator
Legal
Financial
------------ ---------



                                     LESSEE

Date:  April 4, 1997                 ARONEX PHARMACEUTICALS, INC.


                                        By:        s/s: James M. Chubb
                                                        --------------
                                      Name:        James M. Chubb
                                     Title:        President

                                                        17