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

                                    [LOGO]


1.   BASIC PROVISIONS ("BASIC PROVISIONS").

     1.1     PARTIES: This Lease ("LEASE"), dated for reference purposes only, 
August 19, 1998, is made by and between Cornucopia, Inc.("LESSOR") and 
Mossimo, Inc.("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 2450 White, located in the 
City of Irvine, County of Orange, State of California, with zip code 92614, 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 16,082 SF second floor office portion, part of a larger 
building.

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 or 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: 53 unreserved vehicle parking spaces ("UNRESERVED PARKING 
SPACES");, and 7 reserved vehicle parking spaces ("RESERVED PARKING SPACES"). 
(Also see Paragraph 2.6.)

     1.3     TERM: 2 years and 0 months ("ORIGINAL TERM") commencing October 1, 
1998 ("COMMENCEMENT DATE") and ending Sept. 30, 2000 ("EXPIRATION DATE"). 
(Also see Paragraph 3.)

     1.4     EARLY POSSESSION: September 15, 1998 ("EARLY POSSESSION DATE"). 
(Also see Paragraphs 3.2 and 3.3.)

     1.5     BASE RENT: $13,669.70 per month ("BASE RENT"), payable on the 
First (1st) day of each month commencing November 1, 1998 (Also see Paragraph 
4.)

/X/  If this box is checked, this Lease provides for the Base Rent to be
     adjusted per Addendum Par 49, attached hereto.

     1.6(a)  BASE RENT PAID UPON EXECUTION: $13,669.70 as Base Rent for the
     period October, 1998.

     1.6(b)  LESSEE'S SHARE OF COMMON AREA OPERATING EXPENSES: fifteen and 
     21/100 percent (15.21%) ("LESSEE'S SHARE") as determined by /X/ prorata 
     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: $15,921.18 ("SECURITY DEPOSIT"). (Also see 
Paragraph 5.)

     1.8     PERMITTED USE: General office and light manufacturing for apparel 
     and other 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/  Voit Commercial Brokerage represents Lessor exclusively ("LESSOR'S 
BROKER");

/X/  CB/Richard 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) (or in the event 
there is no separate written agreement between Lessor and said Broker(s), the 
sum of $as per separate) agreement 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 None ("GUARANTOR"). (Also see Paragraph 37.)

     1.12    ADDENDA AND EXHIBITS. Attached hereto is an Addendum or Addenda
consisting of Paragraphs 49 through 54, and Exhibits A through _, 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 noncompliance.

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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 
investigations 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 warranties 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 
non-compliant of the Premises with said warranties.
   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 invites, 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, contractors, 
customers and invitees, during the term of this Lease, the non-exclusive right 
to use, in common with others entitled to such use, the Common Areas as they 
exist from time to time, subject to any rights, powers, and privileges 
reserved by Lessor under the terms hereof or under the terms of any rules and 
regulations or restrictions governing the use of the 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 Lesser 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. Lessor shall have the right, in Lessor's 
sole discretion, from time to time: so long as Lessee's rights here under are 
not impaired thereby:
             (a) To make reasonable changes to the Common Areas, including, 
without limitation, changes in the location, size, shape end 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, 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; provided 
further, however, that if such written notice of Lessee is not received by 
Lessor within said ten (10) day period, Lessee's right to cancel this Lease 
hereunder shall terminate and be of no further force or effect. 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. See Addendum
     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 
charges 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 stated 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 1.6(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:

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                 (iii)  Trash disposal. (See Adendum)
                 (v)    Any increase above the Base Real Property Taxes (as 
defined in Paragraph 10.2(b)) for the Building and the Common Areas.
                 (vi)   Any "Insurance cost Increase" (as defined in Paragraph 
8.1).

             (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 sixty (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 Lessee's Share as indicated on said statement, Lessee shall be credited 
the amount of such overpayment 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.

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 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 therefore 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 or 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 ad 
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

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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 Lessee's use of 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.
     6.4     INSPECTION; COMPLIANCE WITH LAW. Lessor, Lessor's agents, 
employees, contractors and designated representatives, and the holders of any 
mortgages, deeds of trust or ground leases on the Premises ("LENDERS") shall 
have the right to enter the Premises at any time in the case of an emergency, 
and otherwise at reasonable times and with 24 hours prior notice, for the 
purpose of inspecting the condition of the Premises and for verifying 
compliance by Lessee with this Lease and all Applicable Requirements (as 
defined in Paragraph 6.3), and Lessor shall be entitled to employ experts 
and/or consultants in connection therewith to advise Lessor with respect to 
Lessee's activities, including, but not limited to, Lessee's installation, 
operation, use, monitoring, maintenance, or removal of any Hazardous Substance 
on or from the Premises. The costs and expenses of any such inspections shall 
be paid by the party requesting same, unless a Default or Breach of this Lease 
by Lessee or a violation of Applicable Requirements or a contamination, caused 
or materially contributed to by Lessee, is found to exist or to be imminent, 
or unless the inspection is requested or ordered by a governmental authority 
as the result of any such existing or imminent violation or contamination. In 
such case, Lessee shall upon request reimburse Lessor or Lessor's Lender, AS 
the case may be, for the costs and expenses of such inspections.

7.   MAINTENANCE, REPAIRS, UTILITY INSTALLATIONS, TRADE FIXTURES AND 
     ALTERATIONS.
     7.1     LESSEE'S OBLIGATIONS. SEE ADDENDUM
             (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 part thereof in good order, condition and repair (whether or not such 
portion of the Premises requiring repair, or the means of repairing the same, 
are reasonably or readily accessible to Lessee, and whether or not the need 
for such repairs occurs as a result of Lessee's use, any prior use, the 
elements or the age of such portion of the Premises), including, 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 ventilation 
system for the Premises. However, Lessor reserves the right, upon notice to 
Lessee, to procure and maintain the contract for 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 the case of an emergency, in which case no 
notice shall be required), perform such obligations on Lessee's behalf, and 
put the Premises in good order, condition and repair, in accordance with 
Paragraph 13.2 below.
     7.2     LESSOR'S OBLIGATIONS. Subject to the provisions of Paragraphs 2.2 
(Condition), 2.3 (Compliance with Covenants, Restrictions end Building Code), 
4.2 (Common Area Operating Expenses), 6 (Use), 7.1 (Lessee's Obligations), 9 
(Damage or Destruction) and 14 (Condemnation), Lessor,  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 lots, walkways, parkways, driveways, 
landscaping, fences, signs and utility systems serving the Common Areas and 
all parts thereof, as well as providing the services for which there is a 
Common Area Operating Expense pursuant to Paragraph 4.2. Lessor shall not be 
obligated to paint the exterior or interior surfaces of exterior walls nor 
shall Lessor be obligated to maintain, repair or replace windows, doors or 
plate glass of the Premises. Lessee expressly waives the benefit of any 
statute now or hereafter in effect 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 machinery 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 $10,000.00
             (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 then 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 any 
such lien, claim or demand, then Lessee shall, at its sole expense, defend and 
protect itself, Lessor and the Premises against the same and shall pay and 
satisfy any such adverse judgment that may be rendered thereon before the 
enforcement thereof 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 the amount of such contested lien claim or demand, 
indemnifying Lessor against liability for the same, as-or as otherwise 
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 
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

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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 ground water 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 PREMIUM INCREASES.

             (a) As used herein, the TERM "INSURANCE COST INCREASE" is defined 
as any increase in the actual cost of the insurance applicable to the Building 
and required to be carried by Lessor pursuant to Paragraphs 8.2(b), 8.3(a) and 
8.3(b), ("REQUIRED INSURANCE"); over and above the Base Premium, as 
hereinafter defined, calculated on an annual basis, "INSURANCE COST INCREASE" 
shall include, but not be limited to, requirements of the holder of a mortgage 
or deed of trust covering the Premises, increased valuation of the Premises, 
and/or a general premium rate increase. The term "INSURANCE COST INCREASE" 
shall not, however, include any premium increases resulting from the nature of 
the occupancy of any other lessee of the Building. If the Parties insert a 
dollar amount in Paragraph 1.9, such amount shall be considered the "BASE 
PREMIUM." If a dollar amount has not been inserted in Paragraph 1.9 and if the 
Building has been previously occupied during the twelve (12) month period 
immediately preceding the Commencement Date, the "BASE PREMIUM" shall be the 
annual premium applicable to such twelve (12) month period. If the Building 
was not fully occupied during such twelve (12} month period, the "BASE 
PREMIUM" shall be the lowest annual premium reasonably obtainable for the 
Required Insurance as of the Commencement Date, assuming the most nominal use 
possible of the Building. In no event, however, shall Lessee be responsible 
for any portion of the premium cost attributable to liability insurance 
coverage in excess of $1,000,000 procured under Paragraph 8.2(b).
             (b) Lessee shall pay any Insurance Cost increase to Lessor 
pursuant to Paragraph 4.2. 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, at Lessor's costs, 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 and 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 end/or earthquake unless required by a 
Lender or included in the Base Premium), 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 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 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 shall invalidate the 
insurance policies referred to in this Paragraph 8. Lessee shall cause to 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 
Paragraphs 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 the 
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 of insurance 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 subrogation that such companies may have against Lessor or Lessee, as 
the case may be, so long as the insurance is not invalidated thereby.
     8.7     INDEMNITY. Except for Lessor's negligence, intentional harm, 
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, 
attorneys' and consultants' fees, expenses and/or liabilities arising out of, 
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with, 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. Lessor need not have first paid any such claim in order to be 
so indemnified.
     8.8     EXEMPTION OF LESSOR FROM LIABILITY. Lessor shall not be liable for
injury or damage to the person or goods, wares, merchandise or other property 
of Lessee, Lessee's employees, contractors, invites, customers, or any other 
person in or about the Premises, whether such damage or injury is caused by 
or results from fire, steam, electricity, gas, water or rain, or from the 
breakage, leakage, obstruction or other defects of pipes, fire sprinklers, 
wires, appliances, plumbing, 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 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) day 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 Lessee elects to do such 
work at its sole expense. 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 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 thirty 
(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.
     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 sixty (60) 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 
fifteen (15) 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 fifteen (15) days after the 
receipt of such notice, this Lease shall continue in full

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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.
     9.7     HAZARDOUS SUBSTANCE CONDITIONS. If a Hazardous Substance 
Condition occurs, unless Lessee is legally responsible therefor (in which 
case Lessee shall make the 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 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 or $100,000, 
whichever is greater, 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(a), applicable to the Industrial Center, and except 
as otherwise provided in Paragraph 10.3, any increases in such amounts over 
the base Real Property Taxes shall be included in the calculation of Common 
Area Operating Expenses in accordance with the provisions of Paragraph 4.2.

     10.2    REAL PROPERTY TAX DEFINITIONS.
             (a) 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 improvements thereon, the execution of this 
Lease, or any modification, amendment or transfer thereof, and whether or not 
contemplated by the Parties.
             (b) As used herein, the term "BASE REAL PROPERTY TAXES" shall be 
the amount of Real Property Taxes which are assessed against the Premises, 
Building or Common Areas in the calendar year during which the Lease is 
executed. 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 its Lessee-Owned 
Alterations and Utility Installations, Trade Fixtures, furnishings, equipment 
and all other personal property to be assessed and billed separately from the 
real property of Lessor. If any of Lessee's said property shall be assessed 
with Lessor's real property, Lessee shall pay Lessor the taxes attributable 
to Lessee's property within 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 and subject to 
the terms of Paragraph 36.
             (b) A change in the control of Lessee shall constitute an 
assignment requiring Lessor's consent. The transfer, on a cumulative basis, 
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 fifty (50) percent 
of such Net Worth of Lessee as it was represented to Lessor of 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 
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 credited 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 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.

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             (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) alter 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 subletting 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 sublessee, 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 $500.00, 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.
     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 the time of the exercise of said option to the expiration of 
such sublease; provided, however, Lessor shall not be liable for any prepaid 
rents or security deposit paid by such sublessee to such sublessor or for any 
other prior defaults or breaches of such sublessor under such sublease.
             (c) Any matter or thing requiring the consent of the sublessor 
under a sublease shall also 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 Paragraphs 13.2 and/or 13.3:
             (a) The vacating of the Premises without the intention to 
reoccupy same, or the abandonment of the Premises.
             (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, (iii) 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 at 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

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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 assurances 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 to 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 unpaid rent which would have been earned after termination until 
the time of award exceeds the amount of such rental loss that the Lessee 
proves could have been reasonably avoided; (iii) the worth at the time of 
award of the amount by which the unpaid rent for the balance of the term 
after the time of award exceeds the amount of such rental loss that the 
Lessee proves could be reasonably avoided; and (iv) any other amount 
necessary to compensate Lessor for all the detriment proximately caused by 
the Lessee's failure to perform its obligations under this Lease or which in 
the ordinary course of things would be likely to result therefrom, including, 
but not limited to, the cost of recovering 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 by 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 statute.
             (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 or termination of this Lease and/or the 
termination of Lessee's right to possession shall not relieve Lessee from 
liability under any indemnity provisions of this Lease as to matters 
occurring or accruing during the term hereof or by reason of Lessee's 
occupancy of the Premises.
     13.3    INDUCEMENT RECAPTURE 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 an 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 which 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 percent (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

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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 or contemporaneous agreement or understanding shall be 
effective. Lessor and Lessee each represents and warrants to the Brokers that 
it has made, and is relying solely upon, its own investigation as to the 
nature, quality, character and financial responsibility of the other Party to 
this Lease and as to the 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 herein and mailed with postage 
prepaid. Notices delivered by United States Express Mail or overnight courier 
that guarantees next day delivery shall be deemed given 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 two 
hundred percent (200%) 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.

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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 (1) 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 hereafter defined) in any such proceeding, action, or appeal thereon, 
shall be entitled to reasonable attorneys' fees. Such fees may be awarded in 
the same suit or recovered in a separate suit, whether or not such action or 
proceeding is pursued to decision or judgment. The term "PREVAILING PARTY" 
shall include, without limitation, a Party or Broker who substantially 
obtains or defeats the relief sought, as the case may be, whether by 
compromise, settlement, judgment, or the abandonment by the other Party or 
Broker of its claim or defense. The attorneys' 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 with 24 hours prior notice, 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 
the 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). Unless otherwise expressly agreed herein, Lessor reserves 
all rights to the use of the roof of the Building, and the right to install 
advertising signs on the Building, including the roof, which do not 
unreasonably interfere with the conduct of Lessee's business; Lessor shall be 
entitled to all revenues from such advertising signs.

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 or cancellation, have the option to continue any one 
or all of any existing subtenancies. 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 Lessee's request. 
Any unused portion of said deposit shall be refunded to Lessee without 
interest. Lessor's consent to any act, assignment of this 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 Real 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 GUARANTOR. 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 Option 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 or Lessee'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 or refinancing 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.

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 
     ATTORNEY'S 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.

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-C-1993 - AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION  REVISED  FORM MTG-1-6/93E

                                PAGE 12 OF 13

<PAGE>


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


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


By LESSOR:                             By LESSEE:

Cornucopia, Inc.                       Mossimo, Inc.
------------------------------------   ---------------------------------------

By: /s/ Al F. Mayo, CFO                By: /s/ John P. Brincko
    --------------------------------       ------------------------------------

Name Printed: Al F. Mayo               Name Printed:  JOHN P. BRINCKO
              ----------------------                 --------------------------

Title:  CFO                            Title:  PRESIDENT & CEO
        ----------------------------           --------------------------------

By:                                    By: /s/ Thora Thoroddsen
    --------------------------------       ------------------------------------

Name Printed:                          Name Printed: THORA THORODDSEN
              ----------------------                 --------------------------

Title:                                 Title: SECRETARY & TREASURER
       -----------------------------          ---------------------------------

Address: 2450 White Road               Address:
         ---------------------------            -------------------------------
         Irvine, CA 92614
         ---------------------------            -------------------------------
Telephone: (949) 250-4080              Telephone: (  )
           -------------------------              -----------------------------
Facsimile: (949) 724-1338              Facsimile: (  )
           -------------------------              -----------------------------

BROKER:                                BROKER:

VOIT COMMERCIAL BROKERAGE              CB/RICHARD ELLIS

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

By:                                    By:
    --------------------------------       ------------------------------------

Name Printed: John D. Griffin          Name Printed:
              ----------------------                 --------------------------

Title:   Senior Vice President         Title:
       -----------------------------          ---------------------------------
Address: 18500 Von Karman Avenue,      Address: 
         Suite 150 
         Irvine, CA 92612
         ---------------------------            -------------------------------
Telephone: (949) 851-5100              Telephone: (   )
           -------------------------              -----------------------------
Facsimile: (949) 261-9092              Facsimile: (   )
           -------------------------              -----------------------------
 
NOTE: These forms are often modified to meet changing requirements of law and
      needs of the industry. Always write or call to make sure you are utilizing
      the most current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 700
      South Flower Street, Suite 600, Los Angeles, California 90017 
      (213) 687-8777.

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                                    PAGE 13 OF 13


<PAGE>



                                 ADDENDUM TO LEASE
                               DATED AUGUST 19, 1998
       BY AND BETWEEN CORNUCOPIA, INC ("LESSOR") AND MOSSIMO, INC ("LESSEE")
                            FOR THE PREMISES LOCATED AT
                        2450 WHITE ROAD, IRVINE, CALIFORNIA
                                          
49. RENT INCREASE:
    -------------

     In the thirteenth (13th) month of the Lease Term, the rent shall be
     increased to $14,473.80 per month.
     
50. IMPROVEMENTS:
    ------------

     Lessor, at his sole cost and expense, shall complete the following
     improvements:
     
     A. Recarpet the office area. 
     B. Repaint the doors.
     
     Said improvement costs shall not exceed $21,411.11.
     
51. BUILDING ACCESS:
    ---------------

     Lessee shall have access to the premises 24 hours per day, 7 days per week.
     Lessor shall operate the building for use by the public from 7:00 a.m. to
     6:00 p.m., Monday through Friday. Lessor shall provide after hours access
     cards to Lessee's designated employees at a cost of $20.00 per card.
     
52. SIGN:
    ----

     Lessee, at his sole cost and expense, can affix signage to the existing
     monument per a mutually agreed upon plan, which complies with the City of
     Irvine's sign criteria.
     
53. TRASH REMOVAL:
    -------------

     In addition to rent, Lessee shall pay $40.00 per month for trash removal.
     In the event an additional dumpster is needed, due to Lessee's use, Lessee
     shall be responsible for the cost of said dumpster.
     
54. UTILITIES:
    ---------

     Lessee shall be responsible for all of its electrical and telephone costs
     and usage associated with the premises. Lessee is responsible for securing
     telephone and computer hook-up. Lessee shall also be responsible for paying
     electrical costs to Lessor on a monthly basis.


AGREED & ACCEPTED:

LESSOR: CORNUCOPIA, INC.

BY: /s/ Al F. Mayo, CFO                   DATE:  9/3/98
    -----------------------------------         ------------------------------

LESSEE: MOSSIMO, INC.

BY:  /s/ Thora Thoroddsen                 DATE:  9/2/98
     ----------------------------------          ------------------------------





<PAGE>


                                OPTION(S) TO EXTEND
                              STANDARD LEASE ADDENDUM
                                          
               Dated     August 19, 1998
                     --------------------------------------------------
               By and Between (Lessor) Cornucopia, Inc.
                                       --------------------------------

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

                              (Lessee) Mossimo, Inc.
                                       --------------------------------

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

               Address of Premises:    2450 White Road, Irvine, CA
                                       --------------------------------

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


Paragraph  52
          ----

A. OPTION(S) TO EXTEND:

Lessor hereby grants to Lessee the option to extend the term of this Lease 
for 1 additional 36 month period(s) commencing when the prior term expires 
upon each and all of the following terms and conditions:

     (i)   In order to exercise an option to extend, Lessee must give written
notice of such election to Lessor and Lessor must receive the same at least 6
but not more than 7 months prior to the date that the option period would
commence, time being of the essence. If proper notification of the exercise of
an option is not given and/or received, such option shall automatically expire.
Options (if there are more than one) may only be exercised consecutively.

     (ii)  The provisions of paragraph 39, including those relating to Lessee's
Default set forth in paragraph 39.4 of this Lease, are conditions of this
Option.
     
     (iii) Except for the provisions of this Lease granting an option or options
to extend the term, all of the terms and conditions of this Lease except where
specifically modified by this option shall apply.

     (iv)  This Option is personal to the original Lessee, and cannot be 
assigned or exercised by anyone other than said original Lessee and only while 
the original Lessee is in full possession of the Premises and without the 
intention of thereafter assigning or subletting.

     (v) The monthly rent for each month of the option period shall be 
calculated as follows, using the method(s) indicated below:
(Check Method(s) to be Used and Fill in Appropriately)

/ / I. COST OF LIVING ADJUSTMENT(S) (COLA) 
    a. On (Fill in COLA Dates): ________________________________________________
________________________________________________________________________________
the Base Rent shall be adjusted by the change, if any, from the Base Month 
specified below, in the Consumer Price Index of the Bureau of Labor 
Statistics of the U.S. Department of Labor for (select one): / / CPI W (Urban 
Wage Earners and Clerical Workers) or  / / CPI U (All Urban Consumers), for 
(Fill in Urban Area):
________________________________________________________________________________
All items (1982-1984 = 100), herein referred to as "CPI".

    b. The monthly rent payable in accordance with paragraph A.I.a. of this 
Addendum shall be calculated as follows: the Base Rent set forth in paragraph 
1.5 of the attached Lease, shall be multiplied by a fraction the numerator of 
which shall be the CPI of the calendar month two months prior to the month(s) 
specified in paragraph A.I.a. above during which the adjustment is to take 
effect, and the denominator of which shall be the CPI of the calendar month 
which is two months prior to (select one): / / the first month of the term of 
this Lease as set forth in paragraph 1.3 ("Base Month") or / / (Fill in Other 
"Base Month"): ____________________________________________________________. 
The sum so calculated shall constitute the new monthly rent hereunder, but in 
no event, shall any such new monthly rent be less than the rent payable for 
the month immediately preceding the rent adjustment.

    c. In the event the compilation and/or publication of the CPI shall be
transferred to any other governmental department or bureau or agency or shall be
discontinued, then the index most nearly the same as the CPI shall be used to
make such calculation. In the event that the Parties cannot agree on such
alternative index, then the matter shall be submitted for decision to the
American Arbitration Association in accordance with the then rules of said
Association and the decision of the arbitrators shall be binding upon the
parties. The cost of said Arbitration shall be paid equally by the Parties.

/X/ II. MARKET RENTAL VALUE ADJUSTMENT(S) (MRV)
    a. On (Fill in MRV Adjustment Date(s)) October 1, 2000 the Base Rent 
shall be adjusted to the "Market Rental Value" of the property as follows:

         1) Four months prior to each Market Rental Value Adjustment Date 
described above, the Parties shall attempt to agree upon what the new MRV 
will be on the adjustment date. If agreement cannot be reached, within thirty 
days, then:
     
              (a) Lessor and Lessee shall immediately appoint a mutually 
acceptable appraiser or broker to establish the new MRV within the next 
thirty days. Any associated costs will be split equally between the Parties, 
or

              (b) Both Lessor and Lessee shall each immediately make a 
reasonable determination of the MRV and submit such determination, in 
writing, to arbitration in accordance with the following provisions:

                                                                        
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-C-1997 - AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION           FORM OE-2-3/97E

<PAGE>

                   (i)   Within fifteen days thereafter, Lessor and Lessee 
shall each select an / / appraiser or /X/ broker ("Consultant" - check one) 
of their choice to act as an arbitrator. The two arbitrators so appointed 
shall immediately select a third mutually acceptable Consultant to act as a 
third arbitrator.
 
                   (ii)  The three arbitrators shall within thirty days of the 
appointment of the third arbitrator reach a decision as to what the actual 
MRV for the Premises is, and whether Lessor's or Lessee's submitted MRV is 
the closest thereto. The decision of a majority of the arbitrators shall be 
binding on the Parties. The submitted MRV which is determined to be the 
closest to the actual MRV shall thereafter be used by the Parties.

                   (iii) If either of the Parties fails to appoint an 
arbitrator within the specified fifteen days, the arbitrator timely appointed 
by one of them shall reach a decision on his or her own, and said decision 
shall be binding on the Parties.
 
                   (iv)  The entire cost of such arbitration shall be paid by 
the party whose submitted MRV is not selected, ie. the one that is NOT the 
closest to the actual MRV.

         2) Notwithstanding the foregoing, the new MRV shall not be less than 
the rent payable for the month immediately preceding the rent adjustment.
     
    b. Upon the establishment of each New Market Rental Value:
     
         1) the new MRV will become the new "Base Rent" for the purpose of 
calculating any further Adjustments, and
         2) the first month of each Market Rental Value term shall become the 
new "Base Month" for the purpose of calculating any further Adjustments.
     
/ / III. FIXED RENTAL ADJUSTMENT(S) (FRA)
The Base Rent shall be increased to the following amounts on the dates set forth
below:

     On (Fill in FRA Adjustment Date(s)):    The New Base Rent shall be:
                                             $
     ---------------------------------       ---------------------
                                             $
     ---------------------------------       ---------------------
                                             $
     ---------------------------------       ---------------------
                                             $
     ---------------------------------       ---------------------

B.  NOTICE:
    Unless specified otherwise herein, notice of any rental adjustments, 
other than Fixed Rental Adjustments, shall be made as specified in paragraph 
23 of the Lease.
   
C.  BROKER'S FEE:
    The Brokers specified in paragraph 1.10 shall be paid a Brokerage Fee for 
each adjustment specified above in accordance with paragraph 15 of the Lease.
   

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                                 PAGE 2 OF 2

-C-1997 - AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION           FORM OE-2-3/97E