<PAGE>

                                                                   EXHIBIT 10.12

                                 LEASE AGREEMENT

PROPERTY ADDRESS: 11011 NORTH TORREY PINES ROAD

TENANT:   STRATAGENE

LANDLORD: SLOUGH TPSP LLC

<PAGE>
                                                                               .
                                                                               .
                                                                               .

                                LEASE AGREEMENT

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                 Page
                                                                                                 ----
<S>                                                                                              <C>
ARTICLE I -- SCHEDULE OF LEASE TERMS.......................................................        1

         Section 1.1 - Schedule............................................................        1

ARTICLE II -- PREMISES.....................................................................        4

         Section 2.1 - Leased Premises.....................................................        4

         Section 2.2 - Common Areas and Use Thereof........................................        4

         Section 2.3 - Reservations........................................................        5

ARTICLE III -- RENT AND TENANT'S CHARGES...................................................        5

         Section 3.1 - Definitions.........................................................        5

         Section 3.2 - Base Rent...........................................................        6

         Section 3.3 - Additional Rent.....................................................        7

ARTICLE IV -- TERM.........................................................................        7

         Section 4.1 - Initial Term........................................................        7

         Section 4.2 - Renewal Term........................................................        7

         Section 4.3 - Termination.........................................................        7

ARTICLE V - POSSESSION; TENANT IMPROVEMENTS................................................        8

         Section 5.1 - Possession..........................................................        8

         Section 5.2 - Tenant Improvements.................................................        8

ARTICLE VI -- USE AND CONDITION OF LEASED PREMISES; QUIET ENJOYMENT........................        8

         Section 6.1 - Use.................................................................        8

         Section 6.2 - Compliance With Law.................................................        8

         Section 6.3 - Condition of Leased Premises........................................        9

         Section 6.4 - Signs: Exterior Windows.............................................        9
</TABLE>

                                       i

<PAGE>

<TABLE>
<CAPTION>
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         Section 6.5 - Quiet Enjoyment.....................................................       10

         Section 6.6 - Encumbrances........................................................       10

ARTICLE VII -- TAXES AND OPERATING COSTS...................................................       10

         Section 7.1 - Taxes...............................................................       10

                  Section 7.1.1 - General Property Taxes...................................       10

                  Section 7.1.2 - Personal Property Taxes..................................       11

         Section 7.2 - Operating Costs.....................................................       12

                  Section 7.2.1 - Defined..................................................       12

                  Section 7.2.2 - Payment..................................................       12

         Section 7.3 - Landlord's Statement: Inspection of Records.........................       13

         Section 7.4 - Limitation on Tenant's Share of Taxes and Operating Costs...........       14

ARTICLE VIII -- INSURANCE..................................................................       14

         Section 8.1 - Liability and Property Insurance....................................       14

         Section 8.2 - Quality Of Policies; Certificates...................................       15

         Section 8.3 - Waiver Of Subrogation; Release......................................       16

         Section 8.4 - Increase In Premiums................................................       16

         Section 8.5 - Indemnification.....................................................       16

         Section 8.6 - Blanket Policy......................................................       17

ARTICLE IX -- ALTERATIONS, MAINTENANCE, REPAIRS AND REPLACEMENTS...........................       17

         Section 9.1 - Alterations.........................................................       17

         Section 9.2- Maintenance, Repairs and Replacements of the Leased Premises.........       18

         Section 9.3 - Mechanics' Liens....................................................       18

         Section 9.4 - Roof: Other Systems.................................................       19

ARTICLE X -- DAMAGE, DESTRUCTION AND EMINENT DOMAIN........................................       19

         Section 10.1 - Fire, Explosion or Other Casualty..................................       19
</TABLE>

                                       ii

<PAGE>

<TABLE>
<CAPTION>
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         Section 10.2 - Eminent Domain.....................................................       20

ARTICLE XI - LIMITATION OF LANDLORD'S LIABILITY............................................       21

         Section 11.1 - Limitation of Landlord's Liability.................................       21

ARTICLE XII -- ASSIGNMENT AND SUBLETTING...................................................       21

         Section 12.1 - By Tenant..........................................................       21

         Section 12.2 - By Landlord........................................................       23

ARTICLE XIII -- DEFAULT AND LANDLORD'S REMEDIES............................................       23

         Section 13.1 - Defaults...........................................................       23

         Section 13.2 - Landlord's Remedies................................................       24

         Section 13.3 - Holdover by Tenant.................................................       26

         Section 13.4 - Storage of Tenant's Property.......................................       26

ARTICLE XIV-- ASBESTOS AND HAZARDOUS SUBSTANCES............................................       26

         Section 14.1 - Hazardous Substance................................................       26

ARTICLE XV -- UTILITIES....................................................................       31

         Section 15.1 - Utilities..........................................................       31

ARTICLE XVI -- RIGHTS RESERVED TO LANDLORD; RULES AND REGULATIONS..........................       32

         Section 16.1 - Rights Reserved to Landlord........................................       32

         Section 16.2 - Rules and Regulations..............................................       33

ARTICLE XVII -- NOTICES....................................................................       35

         Section 17.1 - Notices............................................................       35

ARTICLE XVIII -- PARKING...................................................................       35

         Section 18.1 - Parking............................................................       35

ARTICLE XIX -- MISCELLANEOUS...............................................................       36

         Section 19.1 - Tenant's Statement.................................................       36

         Section 19.2 - Estoppel Certificates..............................................       36
</TABLE>

                                      iii

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<TABLE>
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         Section 19.3 - Relationship of Parties............................................       36

         Section 19.4 - Landlord's Expenses; Attorneys' Fees...............................       36

         Section 19.5 - Interest on Unpaid Amounts.........................................       37

         Section 19.6 - Applicable Law and Construction....................................       37

         Section 19.7 - Delays.............................................................       37

         Section 19.8 - Access by Landlord.................................................       37

         Section 19.9 - Brokerage..........................................................       37

         Section 19.10 - Execution of Lease................................................       38

         Section 19.11 - Security Deposit..................................................       38

         Section 19.12 - Heirs, Successors and Assigns.....................................       38

         Section 19.13 - Subordination.....................................................       38

         Section 19.14 - Payments to Affiliates............................................       39

         Section 19.15 - Meaning of "Re-entry" and "Landlord"..............................       39

         Section 19.16 - Remedies and Rights May Be Exercised by Landlord In its Own
                 Name:  Authority to Execute This Lease....................................       39

         Section 19.17 - Time of Essence...................................................       39

         Section 19.18 - Landlord's Obligation to Act as a Cost-Conscious Businessperson...       39
</TABLE>

                                       iv

<PAGE>

                                 LEASE AGREEMENT

         THIS LEASE AGREEMENT (the "Lease") is made and entered into this
_________ day of October, 2003 by and between the party named below in the
Schedule of Lease Terms (the "Schedule") as the Landlord (the "Landlord") and
the party named below in the Schedule as the Tenant ("Tenant").

         For and in consideration of the rents reserved and the covenants and
agreements herein contained on the part of Tenant to be kept, performed and
observed, Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord the premises defined in the Schedule as the Leased Premises for the
Term specified in the Schedule and upon the terms and conditions hereinafter set
forth.

                                    RECITALS

         1.       Tenant currently occupies the Leased Premises pursuant to a
Lease, as amended (the "Prior Lease"), which was assigned to Landlord in
conjunction with Landlord's acquisition of the Project.

         2.       Tenant and Landlord wish Tenant's use and occupancy of the
Leased Premises to continue in accordance with the terms, provisions and
conditions hereof.

         3.       Tenant's business is operating in the Leased Premises, and
Tenant has familiarity with the Leased Premises to which it wishes to make some
modifications.

                                    ARTICLE I
                             SCHEDULE OF LEASE TERMS

Section 1.1 - Schedule

         The following Schedule of Lease Terms is an integral part of this Lease
and is referred to throughout this Lease. Each reference in this Lease to the
Schedule or any term therein shall be construed to incorporate all of the terms
provided for under such provision of the Schedule.

LANDLORD:         Slough TPSP LLC, a Delaware limited liability company

TENANT:           Stratagene, a California corporation

LEASED PREMISES: That certain premises located in the commonly known as Suite
150 and Suite 200, 11011 North Torrey Pines Road and designated on attached
Exhibit A (the "Base Premises") and the Storage Space.

BUILDING: 11011 North Torrey Pines Road, La Jolla, California, consisting of
85.630 square feet of Building Area.

TERM:

         (a)      Initial Term.

                  Commencement Date:  October 1, 2003.

                                       1

<PAGE>

                  Termination Date: On the last day of the last month of the 5th
                           Lease Year, subject to earlier termination as
                           provided in this Lease or any Rider hereto.

         (b)      Renewal Term. The period of time by which this Lease is
                  extended, as provided in Rider 101 annexed hereto.

RENTABLE AREA: Approximately 46,789 rentable square feet (30,589 square feet of
laboratory space and 16,200 square feet of office space), subject to
modification as provided herein.

TENANT'S PROPORTIONATE SHARE:

         (a)      TENANT'S PROPORTIONATE SHARE: A fraction, the numerator of
                  which is the rentable area (46,789 square feet) and the
                  denominator of which is the Total Rentable Area of the Project
                  (currently 291,817 square feet).

         (b)      TENANT'S SHARE OF TAXES: Tenant's Proportionate Share
                  multiplied by Taxes (as defined in Section 7.1 hereof).

         (c)      TENANT'S SHARE OF OPERATING COSTS: Tenant's Proportionate
                  Share multiplied by Operating Costs (as defined in Section 7.2
                  hereof).

PERMITTED USE: Only for the uses permitted in accordance with the Scientific
Research Zoning Ordinance of the City of San Diego, and for no other purpose
without Landlord's written consent.

STORAGE SPACE: Approximately 2,000 square feet located on the parking level P2
which area will be fenced in by Tenant and is, generally, designated on the
attached Exhibit A.

PROJECT: The approximately 17 acres along the south side of North Torrey Pines
Road in La Jolla, California, improved with four buildings commonly known as
11011, 11025, 11077 and 11085 North Torrey Pines Road. The "Total Rentable Area"
of the Project is approximately 291,817 square feet.

SECURITY DEPOSIT:  $77,201.85

BASE RENT:

<TABLE>
<CAPTION>
                                                             MONTHLY BASE RENT(1,2)
                                                             BASED UPON 46,789
      PORTION OF TERM           MONTHLY BASE RENT PSF(1)     RENTABLE SQUARE FEET
-----------------------------------------------------------------------------------
<S>                             <C>                          <C>
From Commencement Date to
September 30, 2004, inclusive           $  1.65                   $  77,201.85
-----------------------------------------------------------------------------------
From October 1, 2004 to
September 30, 2005, inclusive           $  1.69                   $  79,131.90
-----------------------------------------------------------------------------------
From October 1, 2005 to
September 30, 2006, inclusive           $  1.73                   $  81,110.19
-----------------------------------------------------------------------------------
From October 1, 2006 to
September 30, 2007, inclusive           $  1.78                   $  83,137.95
-----------------------------------------------------------------------------------
</TABLE>

                                       2

<PAGE>

<TABLE>
<S>                                     <C>                       <C>
From November 1, 2007 to
October 31, 2008, inclusive             $  1.82                   $  85,216.39
</TABLE>

         (1)      Monthly Base Rent PSF (except for the Initial Monthly Base
                  Rent) is rounded and is for general illustrative purposes
                  only. The actual Rent is calculated in the Monthly Base Rent
                  column and is an increase of 2.5% over that for the previous
                  year.

         (2)      Monthly Base Rent does not include any Base Rent for the
                  Storage Space and will be adjusted if Tenant's laboratory
                  space is reduced.

GUARANTOR(S):  None

BROKER(S):  None

EXHIBITS:

         Exhibit A - Plan (with location of Leased Premises and Storage Area
                     designated)

         Exhibit B - Work Letter Agreement

RIDERS:

         Rider 101 - Option to Renew

         Rider 102 - Storage Space

         Rider 103 - Termination Option

COMMON AREA:

         As used in this Lease, "Project Common Areas" shall mean all areas
within the Project, not including Building Common Areas (as hereinafter
defined), and "Building Common Areas" shall mean all the areas within the
Building, which are available for the common use of tenants of the Project
and/or the Building and which are not leased or held for the exclusive use of
Tenant or other tenants of the Project and/or the Building, including, but not
limited to, parking areas, driveways, sidewalks, loading areas, retaining walls,
truck service ways, pedestrian malls, stairs, ramps, restrooms, access roads,
corridors, landscaping and planted areas, and elevators. The Project Common
Areas and the Building Common Areas may sometimes collectively be referred to as
the "Common Area." Landlord may from time to time reasonably change the size,
location, nature and use of the Common Area, including converting common areas
into leasable areas, constructing additional parking facilities (including
parking structures) in the common areas, and increasing or decreasing Common
Area land and/or facilities. Tenant acknowledges that such activities may result
in occasional inconvenience to Tenant from time to time. Such activities and
changes shall be expressly permitted only if they do not materially affect
Tenant's use of the Leased Premises, materially increase Tenant's Share of Taxes
or Tenant's Share of Operating Costs, and/or significantly adversely affect
Tenant's access and use of the common areas.

                                       3

<PAGE>

                                   ARTICLE II
                                    PREMISES

Section 2.1 - Leased Premises

         (a)      Landlord is the owner of the real estate consisting of a
building located in the development designated in the Schedule. That portion
of the Building consisting of the Leased Premises set forth in the Schedule and
containing the area designated therein is crosshatched on the plan attached
hereto as Exhibit A.

         (b)      With the consent of Landlord which shall not be unreasonably
withheld, conditioned or delayed, Tenant may reduce the amount of its laboratory
space (in Suite 150) by up to 5,000 square feet. Any such area to be removed
from the Leased Premises (the "Relinquished Space") shall be of such shape,
condition and location, and with ingress and egress from existing corridors so
that it shall present no unique impediment to leasing by Landlord to a third
party ("Space Conditions"). Such area being relinquished by Tenant shall be
returned to Landlord in clean condition, with building standard demising walls
between the Leased Premises and the Relinquished Space in place and with
building systems servicing the Relinquished Space functioning. Upon such return
of relinquished space to Landlord, the size of the Leased Premises shall be
reduced by the size of the Relinquished Space (measured in accordance with the
BOMA Standards, as that term is hereinafter defined) and appropriate adjustments
shall be made in Base Rent, Tenant's Building Proportionate Share and Tenant's
Project Proportionate Share, based on the reduction in the Rentable Square Feet
of the Leased Premises and the Relinquished Space. It shall be unreasonable for
Landlord to withhold its consent to Tenant's relinquishment of the Relinquished
Space for any market reasons or other reasons related to Landlord's perceived
inability to lease the Relinquished Space for a rental that is acceptable to
Landlord, unless such inability results from Space Conditions or Tenant's
failure to satisfy its obligations under this Lease.

Section 2.2 - Common Areas and Use Thereof

         Tenant and Tenant's officers, employees, agents, licensees and invitees
shall have the non-exclusive right, in common with Landlord and all tenants and
occupants of the Project or portions thereof and all others to whom Landlord has
or may hereafter grant such right, to use the Common Areas as designated from
time to time by Landlord subject to such reasonable regulations as Landlord may
from time to time impose including the designation of specific times during
which the Common Areas may be utilized and the designation of specific areas in
which trucks, automobiles and/or other vehicles may be parked and in which
materials, including trash and other debris, may be left or stored. Tenant
hereby authorizes Landlord, upon prior reasonable notice to Tenant, to remove by
whatever means Landlord deems expedient any truck, automobile or other vehicle
parked and/or materials located on the Land outside the areas designated
therefor. Tenant further agrees upon demand to reimburse Landlord for the cost
to Landlord of each such removal attributable to Tenant and agrees to indemnify
and hold Landlord harmless with respect thereto.

         Tenant agrees to abide by all reasonable regulations respecting the use
of the Common Areas adopted from time to time by Landlord during the term of
this Lease and agrees to cause Tenant's officers, employees, agents, licensees
and invitees to conform thereto. Landlord, upon such advance notice, if any, as
is reasonable under the circumstances, may at any time temporarily close the
Common Areas or any portion or portions thereof to make repairs or

                                       4

<PAGE>

changes therein, to prevent the acquisition of public rights therein, or to
discourage use or parking not in conformity with Landlord's regulations and may
do such other acts in and to the Common Areas as in Landlord's judgment may be
desirable to improve the convenience thereof. Such repairs, changes and acts
shall be performed in such reasonable manner as will, to the extent practical,
minimize interference with the conduct of Tenant's operations. Tenant, upon
request shall furnish to Landlord the license number and description of each
automobile and other vehicle operated in and around the Project by Tenant and
Tenant's officers and employees. Tenant shall not at any time interfere with the
rights of Landlord, its beneficiaries and/or other tenants or occupants of the
Project, its and their officers, employees, agents, licensees and invitees to
use any part of the Common Areas.

Section 2.3 - Reservations

         Provided that Landlord shall use commercially reasonable efforts to
minimize any disturbance to the Leased Premises, and shall promptly repair any
resulting damage to the Leased Premises or Tenant's property at Landlord's sole
cost and expense, Landlord, upon such advance notice, if any, as may be
reasonable under the circumstances, reserves the right to construct, operate,
maintain, test, enlarge, change, repair and replace within the Leased Premises
and Project such sewers, pipes, drains, conduits, wires, cables, structural
members and the like as may be deemed necessary by Landlord to provide service
to Landlord, Tenant, other tenants or occupants of the Building or Project or to
fulfill Landlord's duties under this Lease or under any other lease of a portion
of the Building or Project. Landlord shall have access to the Leased Premises at
all times in the case of an emergency and otherwise at such times as do not
materially and adversely disturb the conduct of Tenant's operations for the
exercise of the foregoing reserved rights and no such exercise shall operate as
an eviction thereunder.

         Landlord reserves that right to perform any future development within
the Project. Landlord shall have the right to make any reasonable and
appropriate changes to the Common Areas and Tenant's Proportionate Share to
accommodate any such future development. However, any such changes shall not
materially, adversely affect the quality of, or amenities provided in, the
Project, or Tenant's ability to conduct its business and shall not materially
increase Tenant's share of Taxes or Tenant's Share of Operating Costs.

                                   ARTICLE III
                            RENT AND TENANT'S CHARGES

Section 3.1 - Definitions

         For the purposes of this Lease:

         (a)      "Building Area" means the aggregate rentable square foot area
of the Building within the outside face of exterior walls. At the commencement
of the Term, the Building Area is the square footage set forth in the Schedule;

         (b)      "Rentable Area" means the square foot area of the Leased
Premises (excluding the Storage Space) as determined in accordance with the
standards for measurement promulgated by the Building Office Management
Association ("BOMA"), ANSI/BOMA Z65.1-1996 ("BOMA Standards"). At the
commencement of the Term, the Rentable Area is the square footage set forth in
the Schedule;

                                       5

<PAGE>

         (c)      "Tenant's Building Proportionate Share" means the percentage
equal to the fraction, the numerator of which is the number of square feet of
Rentable Area and the denominator of which is the number of square feet of
Building Area. At the commencement of the Term, Tenant's Building Proportionate
Share is the percentage set forth in the Schedule;

         (d)      "Tenant's Project Proportionate Share" means the percentage
equal to the fraction, the numerator of which is the number of square feet of
Rentable Area and the denominator of which is the number of square feet of
Project Area. At the commencement of the Term, Tenant's Project Proportionate
Share is the percentage set forth in the Schedule;

         (e)      "Project Area" means the aggregate rentable square foot area
of the Project. At the commencement of the Term, the Project Area is the square
footage set forth in the Schedule; and

         (f)      "Lease Year" means the 12-month period commencing on the
Commencement Date set forth in the Schedule if the Commencement Date is the
first day of a month or on the first day of the first full month after the
Commencement Date if the Commencement Date does not occur on the first day of a
month and each 12-month period thereafter during the Term commencing on the
anniversary of the commencement of the first Lease Year.

         Notwithstanding anything to the contrary contained herein, Landlord
shall not be entitled to remeasure the Leased Premises, the Building or the
Project for purposes of recalculating the Rentable Area, the Building Area or
the Project Area under this Lease unless such remeasurement is of each of the
Leased Premises, the Building and the Project and all such remeasurement
activities are conducted in accordance with the BOMA Standards consistently
applied.

Section 3.2 - Base Rent

         (a)      In General. Tenant agrees to pay to Landlord in advance,
without demand or any deduction whatsoever, at the address of Landlord set forth
in the Schedule or to such other person, or at such other place as Landlord may
from time to time in writing direct, monthly installments of basic rent (the
"Base Rent") as set forth in the Schedule on or before the first day of every
calendar month of the Term and pro rata, in advance, for any partial month,
without demand and without any set off or deduction whatsoever. The covenants to
pay rent shall be independent of any other covenant. In the event that Tenant
shall fail to pay Base Rent or Additional Rent due hereunder within five (5)
days after the same becomes due, then in addition to all rights, powers and
remedies provided herein, by law or otherwise in the case of nonpayment of rent,
Landlord shall be entitled to recover from Tenant and Tenant agrees to pay to
Landlord, on demand, a late payment charge for each such payment due equal to
four percent (4%) of the amount due. Notwithstanding the foregoing, Tenant shall
not be obligated to pay the late charge pursuant to this Section 3.2(a) for the
first late payment in any Lease Year, provided such payment is not outstanding
more than five (5) days after notice from Landlord.

         (b)      Abatement of Base Rent.

                  (i)      Base Premises. Base Rent, but not Additional Rent or
         any other amounts due Landlord from Tenant, shall be abated for the
         months of November and December of 2003.

                                       6

<PAGE>

                  (ii)     Storage Space. No rent shall be due for the Storage
         Space during the Initial Term of this Lease or any Renewal Term. It is
         acknowledged that the Table of Base Rent set forth in Article I
         includes only rent on the Base Premises and not on the Storage Space.
         Thus no reduction therefrom is due because of the absence of Base Rent
         on the Storage Space. It is further acknowledged that the Storage Space
         square footage shall not be included in calculating any of Tenant's
         proportionate shares.

Section 3.3 - Additional Rent

         All other rent, sums, liabilities, obligations and other amounts which
Tenant is required to pay or discharge pursuant to this Lease and any Riders
thereto, together with interest for late payment thereon, are sometimes
collectively called "Additional Rent." Additional Rent shall include the
following items:

         (a)      Tenant's Share of Taxes (as defined in Section 7.1), payable
at the times set forth in Section 7.3;

         (b)      Tenant's Share of Operating Costs (as defined in Section 7.2),
payable at the time set forth in Section 7.3;

         (c)      Except to the extent reimbursed by insurance proceeds, the
cost of any maintenance, repairs and replacements performed by Landlord at
Tenant's cost pursuant to the provisions of Sections 6.2 or 9.2 within ten (10)
days after receipt of Landlord's statement therefor;

         (d)      Any rent escalations due pursuant to this Lease and any Rider
hereto; and

         (e)      Any other amounts due Landlord from Tenant pursuant to this
Lease Agreement.

                                   ARTICLE IV
                                      TERM

Section 4.1 - Initial Term

         The Initial Term of this Lease shall commence and terminate as provided
in the Schedule.

Section 4.2 - Renewal Term

         Tenant is hereby granted the option, pursuant to the terms and
conditions set forth in Rider 1.01 attached hereto to renew this lease for a
period of five (5) years. Notwithstanding any provision here and to the contrary
such renewal option shall lapse and become null and void if Tenant does not
deliver to Landlord written notice of such renewal before January 1, 2008.

Section 4.3 - Termination

         Tenant is hereby granted the option, pursuant to the terms and
conditions set forth in Rider 1.03 attached hereto, to terminate this Lease.

                                       7

<PAGE>

                                    ARTICLE V
                         POSSESSION; TENANT IMPROVEMENTS

Section 5.1 - Possession

         Tenant is currently in possession of the Leased Premises pursuant to
the Prior Lease. Tenant accepts the Leased Premises in their "as is" condition
and acknowledges that no improvements, maintenance or repair is required, that
the Leased Premises are complete and in good order and satisfactory condition.

Section 5.2 - Tenant Improvements

         Tenant may improve, recondition and reconfigure the Premises all in
accordance with the Work Letter Agreement annexed hereto as Exhibit B. In
conjunction therewith Landlord will provide an allowance of $10.00 per rentable
square foot (the "Allowance") of the final configuration as specified in the
Work Letter Agreement. To the extent that the Allowance is not fully utilized
for approved improvement, reconditioning and reconfiguration of the Leased
Premises immediately, then any unused portion shall be made available for
additional approved improvements, reconditioning and reconfiguration for a
period of three (3) years after the commencement of this Lease, subject to the
terms of the Work Letter Agreement.

                                   ARTICLE VI
              USE AND CONDITION OF LEASED PREMISES; QUIET ENJOYMENT

Section 6.1 - Use

         Tenant shall use the Leased Premises solely for the uses permitted in
accordance with the Scientific Research Zoning Ordinance of the City of San
Diego, and for no other purpose without Landlord's written consent. Tenant may,
subject to the terms and conditions of this Lease, use the Premises and all
Common Areas 24 hours per day, 7 days per week, every day of the year.

         Tenant shall not injure, overload, deface or otherwise damage the
Leased Premises or Common Areas, nor commit any nuisance, nor unreasonably annoy
other tenants in the Building or in the Project or owners or occupants of
neighboring property, nor install or use any sign or other advertising device on
the exterior of the Leased Premises other than signs complying with the
provisions of Section 6.4, nor use or permit the use of any portion of the
Leased Premises as living quarters, sleeping apartments or lodging rooms.

Section 6.2 - Compliance With Law

         Tenant shall at its sole cost and expense comply or cause compliance
with all present and future laws, ordinances and regulations of duly constituted
public authorities now or hereafter in any manner affecting the Leased Premises,
the Common Areas, the Project, the sidewalks adjacent thereto or any buildings
thereon or the use thereof, whether or not any such laws, ordinances or
regulations which may be hereafter enacted involve a change of policy on the
part of the governmental authority enacting the same and Tenant shall promptly
remove or cure at Tenant's sole cost and expense any violation of any of said
laws, ordinances and regulations. Tenant shall not permit any unlawful
occupation, business or trade to be conducted on the Leased Premises or any use
to be made thereof contrary to any law, ordinance or regulation.

                                       8

<PAGE>

Tenant shall be entitled to such opportunity as is reasonable under all
circumstances to contest the validity of any such law, ordinance or regulation
adversely affecting Tenant's use of the Leased Premises. Tenant, however, shall
hold Landlord financially harmless and indemnify and defend Landlord from and
against the consequences of any violation of any such law, ordinance or
regulation, whether financial or otherwise. If any alterations, repairs or other
work shall be required by Tenant to satisfy its obligations hereunder then same
shall be in compliance with the Article IX of the Lease. If Tenant shall fail to
satisfy its obligations under this Section 6.2, Landlord may take any steps or
action and undertake and perform any work required of the Tenant under this
Section 6.2, but shall not be required to do so and the cost thereof shall be
paid by Tenant as provided in Section 3.3(c). Notwithstanding the foregoing, if
any alterations, repairs or other work (each, a "Modification") shall be
required to cause the Leased Premises, the Common Areas, or any other portion of
the Project to comply with any law, ordinance or regulation, and such
Modifications is not required because of Tenant's specific use of the Leased
Premises (in contrast to any modification that would generally be required by
law without regard to Tenant's particular use of the Leased Premises), then
Tenant shall not be required to perform such Modification; provided, however,
that if Landlord performs any such Modification, the costs thereof may be
included as an Operating Cost to the extent permitted by Section 7.21 hereof.

Section 6.3 - Condition of Leased Premises

         Tenant has examined and knows the condition of the Leased Premises
(excepting any uncompleted work as Landlord may be obligated to construct
hereunder) and acknowledges that no representation as to the condition and
repair thereof has been made by or on behalf of Landlord prior to or at the
execution of this Lease that is not herein expressed. Tenant agrees to take good
care of the Leased Premises, the Common Areas and the Project and, subject to
the provisions of this Lease, at the termination of this Lease, by lapse of time
or otherwise, shall deliver the Leased Premises to Landlord in the same
condition and repair as when delivered to Tenant at the commencement of the
Term, loss by fire or other insured casualty and ordinary wear and tear
excepted.

Section 6.4 - Signs: Exterior Windows

         Tenant shall not install, paint or place nor permit the installation,
painting or placement of any signs or other advertising media, any window
ventilation, any air conditioners, any awnings, any aerials or the like within
the Leased Premises, the Building or the Project, and that will be visible from
outside the Leased Premises, without the prior written consent of Landlord.
Landlord reserves the right to designate the type, composition and color of all
window coverings visible from the outside of the Building and the dimensions and
other requirements of any sign which Landlord may authorize Tenant to install on
the Leased Premises or the Property. The cost of Tenant's signs, the
installation thereof and all governmental permits therefor, including renewals,
shall be paid by Tenant. Landlord shall perform all maintenance of Tenant's
signs during the Term and the entire cost thereof shall be paid by Tenant as
Additional Rent. Notwithstanding the foregoing, Landlord shall provide and
maintain at its expense sufficient directional signage so that visitors to the
Project can find Tenant's building; and Tenant shall be allowed to keep existing
signage without any charge or expense to Tenant.

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Section 6.5 - Quiet Enjoyment

         Provided that no uncured Default exists, Tenant shall have the peaceful
and quiet enjoyment of the Leased Premises without hindrance on the part of
Landlord and Landlord shall warrant and defend Tenant in such peaceful and quiet
enjoyment of the Leased Premises against the lawful claims of all persons
claiming by, through or under Landlord, but Landlord shall not be liable for any
breach of the above covenants occurring subsequent to the transfer of title of
the Project; however, the subsequent Landlord shall be responsible for such
covenants accruing after the date of such transfer.

Section 6.6 - Encumbrances

         Tenant shall not do any act or suffer or permit any action to be taken
which shall in any way encumber the Leased Premises, the Building or the
Project, nor shall the interest or estate of Landlord in the Leased Premises,
the Building or the Project be in any way subject to any claim by way of lien or
encumbrance, whether by operation of law or by virtue of any express or implied
contract by Tenant. Any claim to, or lien upon, the Leased Premises, the
Building or the Project arising from any act or omission of Tenant shall accrue
only against the leasehold estate of Tenant and shall be subject and subordinate
to the paramount title and rights of Landlord in and to the Leased Premises, the
Building and the Project.

                                   ARTICLE VII
                            TAXES AND OPERATING COSTS

Section 7.1 - Taxes

         Section 7.1.1 - General Property Taxes

         (a)      Definition. The term "Taxes" shall mean any taxes or fees
levied, assessed or charged, directly or indirectly, upon the Project and all
portions thereof (including, but not limited to Building), based upon the
ownership, leasing, renting or operating of the Project. Taxes include, without
limitation, real estate taxes, personal property taxes, sewer rents, water
rents, assessments (special or otherwise), transit taxes, any tax or charge for
fire protection, streets, sidewalks, road maintenance, refuse or other service,
any tax imposed upon this transaction, any tax or excise or rent or any other
tax or fee (however described) on account of rental received for use and
occupancy of any or all of the Project, whether any such taxes are imposed by
the United States, the state, any local governmental municipality, county or
authority or agency, or any other political subdivision of any thereof. Taxes
shall also include all reasonable costs and expenses (including, without
limitation, legal fees and court costs) charged for the protest or the reduction
of any of the aforesaid taxes, whether such protest or reduction is ultimately
successful or not. Upon the request of Landlord, Tenant will cooperate with
Landlord and will execute any document which may be reasonably necessary and
proper for any such protest or contest proceeding. Landlord shall have the
right, but not the obligation, to withhold the payment of any Taxes, in
connection with any such protest or contest.

                  If at any time during the Term, a tax or excise on rents or
income or other tax however described (herein called "Rent Tax") is levied or
assessed by the State of California, or any political subdivision thereof or
other governmental authority, on account of the rents hereunder or the interest
of Landlord (or of Landlord's beneficiaries) under this Lease, and if

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<PAGE>

such Rent Tax is in lieu of, in addition to or as a substitute for, in whole or
in part, real estate taxes or other ad valorem taxes, such Rent Tax shall be
included in Taxes.

         (b)      Payment. Tenant's Share of Taxes during the Term hereof shall
be paid in monthly installments on or before the first day of each calendar
month during the Term, in advance, in an amount estimated in writing by Landlord
from time to time. Upon receipt of all tax bills and assessment bills
attributable to any calendar year during the Term, Landlord shall furnish Tenant
with a written statement of the actual amount of Tenant's Share of Taxes for
such year. If the total amount paid by Tenant under this Section for any
calendar year during the Term of this Lease shall be less than the actual amount
due from Tenant for such year as shown on such statement, Tenant shall pay to
Landlord the difference between the amount paid by Tenant and the actual amount
due; such deficiency to be paid within thirty (30) days after demand therefor by
Landlord; and if the total amount paid by Tenant hereunder for any such calendar
year shall exceed such actual amount due from Tenant for such calendar year,
such excess shall be credited against payments hereunder next due, or, if no
payments are next due, refunded by Landlord. All amounts due hereunder shall be
payable in the manner and at such place as the rent payments provided for
herein. Landlord's and Tenant's obligations under this Article shall survive the
expiration of the Term.

                  Taxes shall not include (a) any net income, capital, stock,
succession, transfer, franchise, gift, estate, sales or inheritance taxes or (b)
any fine, penalty or interest that results from Landlord's failure to pay any
Tax in a timely fashion.

         Section 7.1.2 - Personal Property Taxes

                  (a)     Tenant shall pay prior to delinquency, all taxes
charged against trade fixtures, furnishings, equipment and all other personal
property belonging to Tenant. Tenant shall attempt to have such personal
property taxed separately from the Premises.

                  (b)      If any such taxes on Tenant's personal property are
levied against Landlord or the Project, or if the assessed value of the Project
is increased by the inclusion therein of a value placed upon such personal
property or trade fixtures of Tenant, then Landlord after written notice to
Tenant, shall have the right to pay the taxes based on such increased
assessments, regardless of the validity thereof, but only under proper protest
if requested by Tenant in writing. If Landlord shall do so, then Tenant shall,
upon demand, repay to Landlord the taxes levied against Landlord, where the
proportion of such taxes resulting from such increase in the assessment. In any
such event, however, Tenant, at Tenant's sole cost and expense, shall have the
right, in the name of Landlord and with Landlord's cooperation, to bring suit in
any court of competent jurisdiction to recover the amount of any such taxes so
paid under protest; any amount so recovered shall belong to Tenant.

                  (c)      If any of Tenant's personal property is taxed with
the Project, Tenant shall pay Landlord the taxes for the personal property
within fifteen (15) days after Tenant receives a written statement from Landlord
for such personal property taxes.

                                       11

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Section 7.2 - Operating Costs

         Section 7.2.1 - Defined

                  As used in this Lease the term "Operating Costs" shall mean
and refer to all reasonable costs and expenses paid or incurred by Landlord
during the Term in operating, insuring, managing, equipping, policing,
protecting, heating, cooling, lighting, repairing, replacing and maintaining the
Leased Premises, the Building and the Project [including, but not limited to,
periodic maintenance and repair of the exterior, roof, structural elements and
mechanical systems of the Leased Premises, the Building and the Project, the
cost of any maintenance contracts for HVAC units and for other mechanical
systems, the replacement of HVAC units and components and of the mechanical
systems thereof, the cost of insurance in such amounts and against such risks as
Landlord shall require (including, without limitation, casualty, comprehensive,
general liability, excess single limit liability and rent insurance); fees for
management and supervision (not to exceed four percent (4%) of the annual rent
for the Project), landscaping, accounting, lighting, refuse removal, maintenance
of signs, and compliance with government laws, ordinance, rules, regulations and
the like applicable to the Project, repair and maintenance of parking areas and
Common Areas]; provided, however, that Operating Costs shall not include the
following: (a) costs of alterations of any tenant's premises, except for repairs
to the Project or capital improvements otherwise includable in Operating Costs;
(b) legal costs, advertising expenses, brokerage fees and other costs and
expenses related to the leasing of any premises in the Project; (c) the cost of
relocating any tenant; (d) Landlord's general corporate overhead not directly
related to the Project; (e) the cost of any political or charitable
contribution; (f) Taxes or any other taxes; (g) costs in connection with any
sale or other disposition of the Project; (h) principal and interest payments on
loans secured by mortgages or trust deeds encumbering the Project or the
leasehold, ground lease rent, and any costs, fees or payments in connection
therewith; (i) management fees not expressly permitted in this Section 7.2.1;
(j) costs of capital improvements, except that Operating Costs shall include the
cost during the Term, as reasonably amortized according to GAAP with interest at
then current rates for construction financing on the unamortized amount, of all
capital improvements made during the Term (i) to comply with applicable laws
that are enacted after the date hereof, or (ii) that are reasonably expected to
result in a net reduction in Operating Costs; (k) costs for which Landlord
receives direct reimbursement from tenants of the Project other than by reason
of operating cost clauses; (l) brokerage and leasing commissions, advertising
and marketing costs and other expenses incurred; (m) depreciation charges; (n)
rental payments due under any ground lease; (o) wages and salaries of executive
personnel above the level of "building manager"; (p) costs of financing or
refinancing; (q) any sums paid to a person, corporation, partnership or other
legal entity related to Landlord or its beneficiaries (including partners of
such beneficiaries) which exceed normal and competitive rates otherwise
available for the services or goods in question; (r) costs and expenses for
which Landlord is solely responsible in Section 9.2; (s) reserves; (t)
accounting, audits, or professional fees associated with the preparation and
payment of net income, capital, stock, succession, transfer, franchise, gift,
estate, sales, or inheritance taxes; or (u) legal fees and expenses, except to
the extent specifically provided elsewhere in this Lease.

         Section 7.2.2 - Payment

                  (a)      Tenant shall pay Tenant's Share of Operating Costs,
in advance, in monthly installments on the first day of each month during the
Term hereof (prorated for any fractional month), based upon Landlord's
reasonable estimate of Operating Costs for the then current year. Landlord may
reasonably adjust such estimates at any time and from time to time based on
Landlord's experience and reasonable anticipation of such Operating Costs. Such
adjustment shall be effective as of the first day of the month following the
month during which

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<PAGE>

such modified estimate is provided to Tenant in writing; Tenant's monthly
payment shall be adjusted so that the entirety of Landlord's revised estimate
shall have been fully paid by the end of the then current calendar year.

                  (b)      One Hundred Eighty (180) days following the end of
each calendar year, Landlord shall notify Tenant in writing ("Landlord's
Statement") of such Operating Costs for such calendar year. If the Tenant's
Share of Operating Costs due for such calendar year exceeds the payments on
account thereof made during such calendar year, then Tenant, within thirty (30)
days after the date of Landlord's Statement, shall pay to the Landlord the
amount by which Tenant's Share of Operating Costs exceeds the payments on
account thereof made during such calendar year. If the payments on account of
Tenant's Share of Operating Costs made during such calendar year exceed the
amount thereof owed for such calendar year, then Landlord shall credit such
excess to any rentals then due and owing from Tenant, until such excess has been
exhausted. If this Lease shall expire prior to full application of such excess,
or if there is any excess for the calendar year during which this Lease
terminates, then Landlord shall pay to Tenant the balance thereof not previously
applied against the rental and not reasonably required for payment of Additional
Rent for the calendar year in which the Lease expires.

                  No interest or penalties shall accrue on any amounts which
Landlord or Tenant is obligated to credit or pay to the other by reason of this
Section 7.3(b) if paid on time.

                  (c)      With respect to any calendar year which does not fall
entirely within the Term, Tenant shall be obligated to pay as Additional Rent
for such calendar year only a pro rata share of Additional Rent as hereinabove
determined, based upon the number of days of the term of this Lease falling
within the calendar year. Following expiration or termination of this Lease,
Tenant shall pay any Additional Rent due to the Landlord within fifteen (15)
days after the date of Tenant's receipt of Landlord's Statement. Without
limitation on other obligations of Tenant or Landlord which shall survive the
expiration of the term of this Lease, the obligations of Tenant or Landlord to
pay or rebate Additional Rent provided for in this Section 7.2 shall survive the
expiration or termination of this Lease.

Section 7.3 - Landlord's Statement: Inspection of Records

         Landlord shall cause to be kept books and records showing Operating
Costs during each calendar year during the Term in accordance with an
appropriate system of accounts and accounting practices consistently maintained
from year to year. Landlord shall deliver the Landlord's Statement to Tenant as
promptly as practical following the close of each calendar year. The Landlord's
Statement shall certify the amount of Operating Costs for such calendar year and
that the Landlord's Statement has been prepared in accordance with the
applicable provisions of this Lease and in accordance with generally accepted
property management accounting principles. Tenant shall have the right, on five
(5) days notice to Landlord, to examine the Landlord's books and records showing
the Operating Costs at any time during normal business hours within one (1) year
following the receipt of each Landlord's Statement. Unless Tenant shall notify
Landlord of its exception to any items in such Landlord's Statement within such
period, such Landlord's Statement shall be deemed accepted by Tenant. Tenant
shall not be entitled to defer or withhold any payment of Rent or Additional
Rent due pending the examination of Landlord's books and records or the
resolution of any dispute with respect thereto.

                                       13

<PAGE>

Section 7.4 - Limitation on Tenant's Share of Taxes and Operating Costs

         During the Initial Term, the aggregate amount of Tenant's Share of
Taxes and Tenant's Share of Operating Costs shall not exceed, and Tenant shall
not be required to pay more than, the following: with respect to the first Lease
Year, $0.70 per rentable square foot per month (being $8.40 per square foot per
year); with respect to the second Lease Year, $0.721 per rentable square foot
per month (being $8.652 per square foot per year); with respect to the third
Lease Year, $0.74263 per rentable square foot per month (being $8.91156 per
square foot per year); with respect to the fourth Lease Year, $0.765 per
rentable square foot per month (being $9.18 per square foot per year); and with
respect to the fifth Lease Year, $0.7879 per rentable square foot per month
(being $9.4548 per square foot per year).

                                  ARTICLE VIII
                                    INSURANCE

Section 8.1 - Liability and Property Insurance.

                  (a)      Landlord shall procure and maintain in full force and
effect at all times during the Term of this Lease, at Landlord's cost and
expense (but reimbursable as part of the Operating Costs under Section 7.2
hereof), with such deductibles as Landlord elects, commercial general liability
insurance to protect against liability arising out of or related to the use of
or resulting from any accident occurring in, upon or about the Property, with
combined single limit of liability of not less than Ten Million Dollars
($10,000,000) per occurrence for bodily injury and property damage.

                  (b)      Landlord shall procure and maintain in full force and
effect at all times during the Term of this Lease, at Landlord's cost and
expense (but reimbursable as part of the Operating Costs under Section 7.2
hereof), fire and extended coverage insurance for the Building and the Project
on a full replacement cost basis or any other basis Landlord may elect.
Landlord's insurance may include, earthquake, flood, environmental, excess
umbrella liability, brush fire and land slide coverage to the extent Landlord in
its discretion elects to carry such coverage, and shall have such deductibles
and other terms as Landlord in its discretion determines to be appropriate.
Except as expressly set forth in this paragraph (b), Landlord shall have no
obligation to insure the Tenant Improvements and shall, in all events, have no
obligation to insure any other alterations, additions or improvements installed
by Tenant on or about the Property. In addition to the foregoing, and not by way
of limitation, Landlord shall have the right in its sole discretion to procure
and maintain any additional insurance coverage Landlord deems appropriate at any
time during the Term of the Lease (including, but not limited to, rent loss,
earthquake, flood, environmental, brush fire and landslide), at Landlord's cost
and expense (but reimbursable as part of the Operating Costs under Section 7.2
hereof).

                  (c)      Tenant, at Tenant's sole cost and expense, shall
obtain and keep in force during the Term:

                           (i)      commercial general liability insurance,
including contractual liability and products/completed operations liability,
covering the legal liability of Tenant against claims for bodily injury, death
or property damage, occurring on, in or about the Property and the adjoining
land, in the minimum combined single limit amount of $1,000,000 with respect to
any one occurrence.

                           (ii)     worker's compensation insurance and
employer's liability insurance (with a minimum limit of $500,000) covering all
liability imposed under the provisions

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<PAGE>

of any worker's compensation law, employer's liability act or similar laws of
the State of California that may at any time or from time to time be enacted;

                           (iii)    insurance covering Tenant Improvements, all
contents, and Tenant's trade fixtures, machinery, equipment, furniture and
furnishing in the Property for their full replacement cost under Special Form
standard fire and extended coverage insurance, including, without limitation,
vandalism and malicious mischief and sprinkler leakage endorsements, and shall
provide for a deductible not to exceed $25,000.00;

                           (iv)     special form, business interruption or extra
expense insurance; and

                           (v)      umbrella liability insurance in the amount
of $10,000,000 with respect to the risks referred to in Section 8.1(c)(i).

                  Tenant's insurance shall name Landlord, its beneficiaries,
agents and employees as additional insureds. Tenant's insurance shall be primary
and shall be exhausted before Landlord's insurance is invoked. All proceeds from
insurance claims shall name Landlord as Loss Payee.

                  (d)      All policies of property insurance carried under
paragraphs (b) and (c) of this Section 8.1 shall provide protection against "all
perils of direct physical damage" (as defined by the Insurance Services Office)
on all insured property. Tenant shall cause Landlord to be named as an
additional insured on such policy. Replacement cost for purposes hereof shall be
determined according to insurance industry standards. Such insurance policies:
(i) shall be written by companies rated A or better, with a financial rating of
not less than Class VII, in Best's Insurance Guide, and authorized to do
business in California; (ii) shall be written to apply to covered property
damage and other covered loss occurring during the policy term, or the onset of
which occurred or arose during such policy term; (iii) shall be endorsed, in the
case of the insurance covering Tenant's Improvements, to name Landlord's lender
("Lender"), if any, holding the lien of a mortgage or deed of trust on the
Building from time to time as a loss payee; and (iv) shall provide that the
respective coverages shall be primary and not contributing with or in excess of
any coverage that the other party may carry; (v) shall be endorsed to Landlord
with not less than thirty (30) days' notice of cancellation (ten (10) days in
the case of cancellation for nonpayment); and (vi) in the case of policies
carried or required to be carried by Tenant, shall provide for a deductible of
not to exceed $25,000 (except in the case of earthquake coverage). Each party
shall deliver to the other party, on or before the Commencement Date, and
thereafter at least ten (10) days before the expiration dates of expiring
policies, certificates of insurance or other satisfactory evidence of the
continuation of such property insurance coverage for the period indicated
therein. If either party fails to procure property insurance or to deliver
certificates or other evidence thereof as required hereunder, the other party
may, at its option and in addition to the other party's other remedies in the
event of a default hereunder, procure the same for the benefit of such party.
If, pursuant to the foregoing sentence, Tenant secures such insurance on
Landlord's behalf, Tenant shall be entitled to reimbursement of the cost
thereof; if Landlord secures such insurance on Tenant's behalf, Tenant shall
reimburse Landlord for the cost thereof within ten (10) business days after
receipt of Landlord's invoice therefor.

Section 8.2 - Quality Of Policies; Certificates.

                  All policies of insurance required hereunder shall meet the
requirements set forth in Section 8.1(d) above, and shall otherwise be issued by
responsible insurers and, in the case of

                                       15

<PAGE>

policies carried or required to be carried by Tenant, shall be written as
primary policies not contributing with and not in excess of any coverage that
Landlord may carry. Each party shall deliver to the other party certificates of
insurance showing that the insuring party's required policies are in effect. If
either party fails to acquire, maintain or renew any insurance required to be
maintained by it under this Section 8 or to pay the premium therefor, then the
other party, at its option and in addition to its other remedies, but without
obligation so to do, may procure such insurance, and any sums expended to
procure any such insurance on behalf of or in place of the other shall be repaid
upon demand, with interest as provided in Section 19.5 hereof. Tenant shall
obtain written undertakings from each insurer under policies required to be
maintained by it to notify all insureds thereunder at least thirty (30) days
prior to cancellation.

Section 8.3 -Waiver Of Subrogation; Release.

                  Notwithstanding any provisions hereto to the contrary, to the
extent permitted by law and without affecting the coverage provided by insurance
required to be maintained hereunder, Landlord and Tenant each waive any right to
recover against, and release the other for (i) damage to property, (ii) damage
to the Property or any part thereof, or (iii) claims arising by reason of any of
the foregoing, but only to the extent that any of the foregoing damages and
claims under subparts (i)-(iii) hereof are covered, and only to the extent of
such coverage, by insurance actually carried or required to be carried hereunder
by either Landlord or Tenant. This provision is intended to waive fully, and for
the benefit of each party, any rights and claims which might give rise to a
right of subrogation in any insurance carrier. Each party shall procure a clause
or endorsement on any property insurance policy denying to the insurer rights of
subrogation against the other party to the extent rights have been waived by the
insured prior to the occurrence of injury or loss. Coverage provided by
insurance maintained by Tenant and Landlord shall not be limited, reduced or
diminished by virtue of the subrogation waiver herein contained.

Section 8.4 - Increase In Premiums.

                  Tenant shall do all acts and pay all expenses necessary to
insure that the Property is not used for purposes prohibited by any applicable
fire insurance, and that Tenant's use of the Property complies with all
requirements necessary to obtain any such insurance. If Tenant uses or permits
the Property to be used in a manner which increases the existing rate of any
insurance on the Property carried by Landlord, Tenant shall pay the amount of
the increase in premium caused thereby, and Landlord's costs of obtaining other
replacement insurance policies, including any increase in premium, within ten
(10) days after demand therefor by Landlord.

Section 8.5 - Indemnification.

                  (a)      Subject at all times to the waiver of subrogation
provided in Section 8.3 hereof, Tenant shall indemnify, defend by counsel
reasonably acceptable to Landlord and hold Landlord, its members, partners,
shareholders, officers, directors, agents and employees (the "Landlord Group")
harmless from and against any and all liability, loss, suits, penalties, fees,
actions, injuries, claims, demands, costs (including, but not limited to,
reasonable attorneys' fees), damages, expenses or the like of any and every
kind, nature and description whatsoever, in any way involving, arising from,
related to or in connection with any act or omission of, or the use, occupancy
and enjoyment of the Property by, Tenant or any invitees, sublessees, officers,
directors, shareholders, agents or employees of Tenant (when acting within the
scope of their relationship with Tenant) or holding under Tenant from any cause
whatsoever (including, but not

                                       16

<PAGE>

limited to, bodily injury to, or death of, any person, or loss of or damage to
the property of persons, any failure on the part of Tenant to perform or comply
with any of the terms of this Lease, the condition of the Leased Premises, or
the performance of any labor or services or the furnishing of any materials or
other property in respect of the Leased Premises or any part thereof), other
than gross negligence or willful misconduct by Landlord, its agents or
employees. Except to the extent caused by the gross negligence or willful
misconduct of Landlord, its agents or employees, but subject at all times to the
waiver of subrogation provided in Section 8.3 hereof, Landlord, its partners,
shareholders, officers, directors, agents and employees shall not be liable for,
and Tenant hereby waives all claims against such persons for damages to goods,
wares and merchandise in or upon the Property, or for injuries to Tenant, its
agents or third persons in or upon the Property, from any cause whatsoever;
provided that Tenant agrees to insure against all such risks. Tenant shall give
prompt notice to Landlord of any casualty or accident in, on or about the
Property.

                  (b)      Landlord shall indemnify, defend and hold Tenant, its
shareholders, officers directors, agents and employees harmless from liability
for bodily injury to or death of any person, or loss of or damage to the
property of persons, and all actions, claims, demands, costs (including, but not
limited to, reasonable attorneys' fees), damages or expenses arising therefrom
which may be brought or made against Tenant or which Tenant may pay or incur, to
the extent such liabilities or other matters arise by reason of any gross
negligence or willful misconduct or omission by Tenant, its agents or employees.

Section 8.6 - Blanket Policy.

         Any policy required to be maintained hereunder by Landlord or Tenant
may be maintained under a so-called "blanket policy" insuring other parties and
other locations so long as the amount of insurance required to be provided
hereunder is not thereby diminished.

                                   ARTICLE IX
               ALTERATIONS, MAINTENANCE, REPAIRS AND REPLACEMENTS

Section 9.1 - Alterations

         Tenant shall make no alteration in or addition to the Leased Premises
in excess of $10,000 nor permit the making of any hole or in the walls,
partitions, ceilings or floors thereof without on each occasion obtaining the
prior written consent of Landlord (which approval shall not be unreasonably
withheld, unless the same affects the structure or utility or other systems of
the Building, in which event Landlord may withhold its approval in its sole and
absolute discretion), except as allowed by the Work Letter. The construction and
installation of any permitted alteration or addition shall be performed in a
good and workmanlike manner and pursuant to plans and specifications and
utilizing contractors approved by Landlord, which approval shall not be
unreasonably withheld. Promptly after completion of any such alterations or
additions, Tenant shall provide Landlord with such documents and/or "as built"
working drawings as Landlord may reasonably request. Any alteration and/or
addition made by Tenant in or to the Leased Premises, whether or not made with
the consent of Landlord, shall remain on the Leased Premises and without
compensation to Tenant shall become the property of Landlord upon the
termination of this Lease by lapse of time or otherwise; provided, however, that
if Landlord so elects by written notice to Tenant delivered at least thirty (30)
days prior to the end of the Term, Tenant shall remove all such alterations
and/or additions and restore the Leased Premises to a condition comparable to
that existing at the time such alterations and/or additions

                                       17
<PAGE>
were made. Nothing herein contained shall prevent the installation of Tenant's
trade fixtures in the Leased Premises, provided that such trade fixtures can be
installed and removed upon termination of this Lease without structural damage
to the Leased Premises and provided that Tenant shall remove all such trade
fixtures and restore the Leased Premises to a condition comparable to that
existing at the time such installation was made. Tenant shall make all
alterations and additions to the Leased Premises as are required by governmental
authority and which arise by reason of Tenant's specific use of the Leased
Premises and all alterations and additions which are made necessary by the act
or neglect of Tenant, its agents, employees and invitees.

Section 9.2- Maintenance, Repairs and Replacements of the Leased Premises

         Subject to the provisions of Section 10.1, and except as are
obligations of Tenant, Landlord shall perform or cause to be performed all
maintenance, repairs and replacements of the Common Areas and of the exterior,
roof and structural elements of the Building and of the following ten (10)
roof-mounted heating, air conditioning and ventilating systems therein keeping
the same in good repair: two (2) 40-ton units; one (1) 20-ton unit; one (1)
15-ton unit; two (2) 10-ton units; and four (4) 4-ton units. Except as set forth
below, the cost of all such maintenance, repairs and replacements (other than to
the structural elements, exterior or roof of the Building) shall be a part of
the Operating Costs to the extent otherwise permitted pursuant to Section 7.2.1
hereof; provided, however, that any maintenance, repairs or replacements
(including maintenance, repairs and replacements to the exterior, roof,
structural elements and mechanical systems of the Building), the need for which
arises by reason of any act, negligence or omission of Tenant or any officer,
employee, agent, licensee, or invitee of Tenant, shall be performed by Landlord,
but the entire cost thereof (as reduced by any applicable insurance proceeds)
shall be paid by Tenant as Additional Rent. Landlord shall maintain all Common
Areas in an attractive and first class manner.

         Tenant shall be responsible for, and shall perform or cause to be
performed at Tenant's sole cost and expense in a first class manner and to the
reasonable satisfaction of Landlord, all repairs and maintenance of the Leased
Premises, including plumbing fixtures, the seven (7) 5-ton and three (3) split
unit HVAC units serving the Leased Premises, electrical fixtures, bulbs and
tubes, interior windows, all cranes, truck doors, "man doors", utility doors,
elevators and hydraulic lifts located within the Leased Premises or exclusively
serving the Leased Premises and all other fixtures and equipment of Landlord
located therein or exclusively serving the Leased Premises, keeping the same in
good order, condition and repair and in a clean and tenantable condition and in
compliance with all laws, ordinances and regulations applicable to the repair
and maintenance thereof. If Tenant shall fail so to maintain and repair the
Leased Premises, Landlord may perform such maintenance, but shall not be
required to do so, and the cost thereof shall be paid by Tenant as provided in
Section 3.3(c).

Section 9.3 - Mechanics' Liens

         Within ten (10) days after Tenant receives notice thereof, Tenant shall
cause to be discharged any mechanic's, laborer's, materialman's or other lien to
stand against the Leased Premises for any labor or material furnished to Tenant
or claimed to have been furnished to Tenant in connection with work of any
character performed or claimed to have been performed on or about the Leased
Premises by or at the direction or sufferance of Tenant, whether or not such
work was performed or materials furnished with the consent of Landlord. Tenant,
however, may contest the validity of any such lien or claim provided that Tenant
shall deposit with

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<PAGE>

Landlord a cash deposit of at least 150% of such lien or claim (or such other
security as Landlord shall reasonably require) and shall take all steps which
may be reasonably required to prevent any sale, foreclosure or forfeiture of the
Leased Premises, the Building or the Project by reason of nonpayment, and shall
diligently prosecute the defense thereof. Upon a final determination of the
validity of any such lien or claim, Tenant shall immediately pay any judgment or
decree rendered, with all proper costs and charges, and shall cause any such
lien to be released of record without cost to Landlord. If Tenant, in Landlord's
opinion, shall fail or cease to diligently prosecute such action or if Tenant
shall fail to pay any judgment or decree rendered (including all interest,
penalties, costs, charges and Landlord's expenses, including court costs and
attorneys' fees), and Tenant shall fail to cure such failure within ten (10)
days after written notice from Landlord, Landlord may pay the entire amount of
such claim or lien, or such judgment or decree rendered and other amounts set
forth above, out of such deposit and shall return the remainder of such amount,
if any, to Tenant.

Section 9.4 - Roof: Other Systems

         Tenant shall not permit, nor take any action which will cause, the
termination or reduction in scope of any guaranty or warranty of any portion of
the Project (including, but not limited to the Leased Premises, the Building,
the roof of the Building or any system). In this regard, but without limitation,
Tenant shall perform no acts on, place any equipment on nor cause any
penetrations of the roof of the Building; nor shall Tenant place any excessive
use on any Building System.

                                    ARTICLE X
                     DAMAGE, DESTRUCTION AND EMINENT DOMAIN

Section 10.1 - Fire, Explosion or Other Casualty

         In the event the Leased Premises are damaged by fire, explosion or any
other casualty and this Lease is not terminated as hereafter provided, then,
subject to the other provisions of this Lease, the damage shall be diligently
repaired by Landlord; provided, however, that in no event shall Landlord be
required to repair or replace Tenant's stock, fixtures, furniture, furnishings,
floor coverings, equipment or the like, or alterations or additions to the
Leased Premises made by Tenant. In the event of any such damage and (a) if the
Leased Premises shall be damaged to the extent of fifty percent (50%) or more of
the cost of replacement, or (b) if the Building is damaged to the extent of
twenty-five percent (25%) or more of the cost of replacement, then Landlord may
terminate this Lease by written notice to Tenant. The cost of replacement for
purposes hereof shall be determined by a licensed architect selected by Landlord
and reasonably acceptable to Tenant. In the event of any damage to the Leased
Premises by fire, explosion or any other casualty, Landlord shall deliver its
reasonable estimate of the time required to restore the Leased Premises to a
tenantable condition (i.e., such that Tenant can reasonably carry on its normal
business operations in the Leased Premises) within sixty (60) days after the
occurrence thereof. If such estimate exceeds one hundred twenty (120) days,
either party may terminate this Lease by written notice to the other given if at
all within ten (10) days after Tenant's receipt of Landlord's estimate.
Notwithstanding anything to the contrary contained herein, if the repair of the
Leased Premises is not substantially completed within a period of one hundred
twenty (120) days after the date of the occurrence of such damage, then Tenant
may terminate this Lease by written notice to the other party given within five
(5) days after the expiration of such one hundred twenty (120) day period. In
the event of any termination pursuant to this Section 10.1,

                                       19
<PAGE>

all obligations of the parties accruing after such termination, including the
obligation to pay rent and other charges, shall cease upon delivery of such
notice.

         If such casualty shall render the Leased Premises or any portion
thereof unsuitable for Tenant's use there as conducted immediately prior to such
casualty, then the Base Rent and Additional Rent shall be abated as hereinafter
set forth. Any abatement or rent hereunder shall be on a per diem basis in an
amount bearing the same ratio to such rent for the period of unsuitability as
the unsuitable portion of the Leased Premises bears to the entire Leased
Premises.

Section 10.2 - Eminent Domain

         If the whole of the Leased Premises shall be taken by any public
authority under the power of eminent domain, this Lease shall cease as of the
day possession shall be taken by such public authority and Tenant shall pay rent
up to that date with an appropriate refund by Landlord of any rent which has
been paid in advance for a period of subsequent to the date possession is so
taken. If ten percent (10%) or less of the area of the Leased Premises shall be
so taken and if the remainder thereof and of the Common Areas is safely and
quietly tenantable by Tenant without unreasonable noise, odors, or distractions
for the purposes for which the Leased Premises were used immediately prior
thereto, then this Lease shall cease only as to the parts so taken as of the day
possession shall be so taken by such public authority and Tenant shall pay rent
for such parts up to that day with an appropriate refund by Landlord of any rent
which has been paid in advance for a period subsequent to the date possession is
so taken, and thereafter the Base Rent and Additional Rent shall be equitably
adjusted. Landlord, at Landlord's expense, shall make all necessary repairs or
alterations to the Leased Premises and Common Areas so as to constitute the
remaining premises a complete architectural unit; provided, that if the
reasonable cost of such repairs or alterations (as determined by a licensed
architect selected by Landlord) will exceed the amount of the award or if such
repairs or alterations cannot in Landlord's reasonable judgment be completed
within sixty (60) days, then Landlord may terminate this Lease as of the day of
possession by written notice to Tenant and Tenant shall pay rent and other
charges to such termination. If more than ten percent (10%) of the area of the
Leased Premises shall be so taken or if such portion of the Common Areas is so
taken that the remainder is not reasonably suitable for the purposes for which
the Leased Premises were used immediately prior to such taking, then either
party shall have the right to terminate this Lease upon notice in writing to the
other delivered on or before the day of surrendering possession to the public
authority. If neither party so terminates, all of the provisions of this Lease
shall continue to effect, except that the rent and other charges payable by
Tenant shall be equitably adjusted, and Landlord shall make all necessary
repairs or alterations to the Leased Premises and Common Areas so as to
constitute the remaining premises a complete architectural unit. If more than
ten percent (10%) of the aggregate floor area of the Building or more than ten
percent (10%) of the area of the Land shall be taken under the power of eminent
domain then Landlord, by notice in writing to Tenant delivered on or before the
day of surrendering possession to public authority, may terminate this Lease and
rent shall be paid or refunded as of the date of possession. All compensation
awarded for any taking under the power of eminent domain, whether for the whole
or a part of the Leased Premises, the Building or any part of the Project shall
be the property of Landlord, whether awarded as compensation for diminution in
the value of the leasehold or to the fee of the Leased Premises or otherwise,
and Tenant hereby assigns to Landlord all of the Tenant's right, title and
interest in and to any and all such compensation; provided, however, that
Landlord shall not be

                                       20
<PAGE>

entitled to any award made expressly to Tenant for the taking of Tenant's trade
fixtures or furniture or for Tenant's moving costs.

                                   ARTICLE XI
                       LIMITATION OF LANDLORD'S LIABILITY

Section 11.1 - Limitation of Landlord's Liability

         Tenant, as a material part of the consideration to be rendered to
Landlord under this Lease, to the extent permitted by law, hereby waives all
claims caused by or resulting in any way, directly or indirectly, from any
action or failure to act (excluding those which may be willful misconduct or
grossly negligent) of Landlord, its agents, servants or employees, which Tenant
or Tenant's successor or assigns may have against Landlord, its agents, servants
and employees, for loss, theft or damage to property and for injuries to persons
in, upon or about the Leased Premises, the Building or the Project from any
cause whatsoever. Tenant will hold Landlord, its agents, servants and employees
harmless from and on account of any damage or injury to any person, or to the
goods, wares and merchandise of any person, arising from the use of the Leased
Premises by Tenant, or arising from the failure of Tenant to keep the Leased
Premises in good condition as herein provided. Neither Landlord nor its agents,
servants or employees shall be liable to Tenant for any damage by or from any
act or failure to act of any tenant or other occupant of the Project or the
Building, or by any owner or occupant of adjoining or contiguous property.
Tenant agrees to pay for all damage to the Project, the Building and the Leased
Premises, as well as all damage to tenants or occupants thereof caused by Tenant
(including, but not limited to, Tenant's misuse or neglect of the Leased
Premises, its apparatus or appurtenances), or caused by any licensee,
contractor, agent or employee of Tenant.

         Particularly, but not in limitation of the foregoing paragraph, all
property belonging to Tenant or any occupant of the Leased Premises that is on
the Project, in the Building or the Leased Premises shall be there at the risk
of Tenant or such other person only, and Landlord and its agents or employees
shall not be liable, unless the same results from the gross negligence or
willful misconduct of Landlord, its agents, servants or employees, for any
damage to or theft of or misappropriation of such property; nor for any damage
to property entrusted to Landlord, its agents or employees, if any; nor for the
loss of or damage to any property by theft or otherwise, by any means
whatsoever; nor for any injury or damage to person or property resulting from
fire, explosion, falling plaster, steam, gas, electricity, snow, water or rain
which may leak from any part of the Building or from the pipes, appliances or
plumbing works therein or from the roof, street or subsurface or from any other
place or resulting from dampness or from any other cause whatsoever; nor for
interference with light or any other incorporeal hereditaments, nor for any
latent defect in the Leased Premises or in the Building or the Land. It is
intended, and is a requirement of this Lease, that Tenant insure all of such
items and against all of such risks. Tenant shall give prompt notice to Landlord
in case of fire, casualty or accidents in the Leased Premises or in the Building
or in case of defects therein or in the fixtures or equipment therein.

                                   ARTICLE XII
                            ASSIGNMENT AND SUBLETTING

Section 12.1 - By Tenant

         Tenant shall not assign this Lease or any interest herein and shall not
sublet the Leased Premises or any part thereof or any right or privilege
appurtenant thereto, or suffer any other

                                       21
<PAGE>

person to occupy or use the Leased Premises or any portion thereof, without
first obtaining the written consent of Landlord, which consent shall not be
unreasonably withheld except as hereinafter expressly otherwise provided.
Landlord agrees not to withhold consent to any such assignment of this Lease or
subletting of the entire Leased Premises provided that Tenant requests the same
in writing and provided that (i) at the time thereof, Tenant is not in Default
under this Lease, (ii) Landlord, in its sole discretion reasonably exercised,
determines that the reputation, business, proposed use of the Leased Premises
and financial responsibility of the proposed assignee or sublessee, are
satisfactory to Landlord, (iii) any assignee or sublessee shall expressly assume
all the obligations of this Lease on Tenant's part to be performed, or in the
case of a sublease of less than all of the Leased Premises, assume such
obligations with respect to the relevant portion of the Leased Premises, (iv)
such consent, if given, shall not release Tenant or any guarantor of Tenant's
obligation hereunder of any of its obligations under this Lease, including
without limitation, its obligation to pay rent, (v) Tenant agrees specifically
to pay over to Landlord, as Additional Rent, one-half (1/2) of all sums provided
to be paid under the terms and conditions of such assignment or sublease which
are in excess of the sum of the amounts otherwise required to be paid pursuant
to this Lease and any leasing commission and tenant improvement costs reasonably
paid by Tenant in connection with the sublease or assignment, (vi) a consent to
one assignment or subletting shall not be deemed to be a consent to any
subsequent assignment or subletting, (vii) Tenant shall indemnify and hold
Landlord harmless from any brokerage commissions due in connection with such
assignment or subletting, (viii) Tenant shall remain responsible for the
performance of all covenants and provisions of this Lease, and (ix) Tenant
reimburses Landlord for all of Landlord's actual out-of-pocket expenses incurred
in connection with such assignment or subletting which shall be no more than
$5,000.00. Whether or not such conditions to assignment or subletting are met,
Landlord, at its sole option, may elect to (x) terminate this Lease in the case
of an assignment, or, (y) in the event of a sublease, the term of which ends
during the last year of the Term, terminate this Lease with respect to the
portion of the Leased Premises subject to the proposed sublease, on the first
day of the second calendar month next succeeding receipt of Tenant's written
request for consent to assignment or subletting, to be effective unless Tenant
elects to withdraw its request to sublease or assign, which election, if
exercised by Landlord, shall be by written notice to Tenant given within twenty
(20) days of receipt by Landlord of Tenant's request for such consent to assign
or sublet. If Landlord elects to terminate this Lease in accordance with the
foregoing sentence, then Landlord may lease the relevant portion of the Leased
Premises to the sublessee or assignee proposed by Tenant or any other person or
entity. Any assignment or subletting or occupancy without Landlord's prior
written consent shall be void and, at the option of Landlord, shall constitute a
Default under this Lease. Neither this Lease nor any interest herein shall be
assignable as to the interest of Tenant by operation of law without consent of
Landlord, which consent shall be subject to each of the standards set forth in
this Section 12.1.

         Tenant agrees that in the event Landlord withholds its consent to any
assignment, subletting or occupancy contrary to the provisions of this Section
12.1, then Tenant's sole remedy shall be to seek an injunction in equity to
compel Landlord to give its consent and Tenant expressly waives any right to
damages in the event of such withholding by Landlord of its consent.

         If Tenant is a corporation, limited liability company or partnership
and if the ownership or control thereof shall materially change at any time or
from time to time from the present composition of same as it may exist at any
time, or if a substantial portion of the assets of Tenant shall be sold,
assigned or transferred with or without a specific assignment of this Lease, or,
if

                                       22
<PAGE>

Tenant shall merge or consolidate with any firm or corporation, Landlord at its
option may, if the same results in a material adverse affect on the net worth of
Tenant, by giving sixty (60) days' prior written notice to Tenant, declare such
change a breach of this Lease subject to the remedies provided for breach in
Article XIII hereof. Tenant shall immediately give written notice to Landlord of
any change in ownership contemplated by this Section 12.1.

         Notwithstanding the foregoing, Tenant may, without Landlord's consent,
sublet all or any portion of the Leased Premises or assign the Lease to: (a) a
parent, subsidiary, affiliate, division or corporation controlling, controlled
by or under common control with Tenant; (b) a successor corporation related to
Tenant by merger (including without limitation the proposed merger of Tenant
with Hycor Biomedical, Inc), consolidation, reorganization or governmental
action; or (c) a purchaser of Tenant's leasehold interest in the Leased
Premises; provided that (i) the transferee or assignee or transferor, shall
remain liable for performance of all obligations under this Lease, (ii) Tenant,
as assignor or transferor, shall remain liable for performance of all
obligations under the Lease, (iii) as of the date of such transfer, the
purchaser, assignee, sublessee or transferee shall have the financial ability to
perform (in Landlord's reasonable business judgment) its obligations with
respect to this Lease and/or Leased Premises and (iv) at the time of the
transfer, sublease or assignment, Tenant shall not be in default of any of its
obligations under the Lease (each of the foregoing is a "Permitted Transfer").
For the purpose of this Lease, any (w) sale or transfer of Tenant's capital
stock through any nationally recognized public exchange, (x) redemption or
issuance of additional stock of any class, (y) transaction which causes Tenant,
or its successor in interest, to be traded on a nationally recognized public
exchange, or (z) transaction that occurs when Tenant, or its successor in
interest, is traded on a nationally recognized public exchange, shall not be
deemed an assignment, subletting or any other transfer of the Lease of the
Leased Premises.

         If the original Tenant under this Lease assigns this Lease in
accordance with the terms of this Lease, then Landlord shall provide written
notice to the original Tenant whenever Landlord is required to provide, or does
provide, notice to any successor Tenant under this Lease, and the original
Tenant shall have the right to cure any default by the successor Tenant, and
Landlord shall accept such cure, during the period provided for such cure
pursuant to this Lease.

Section 12.2 - By Landlord

         In the event of sale or conveyance or transfer by Landlord of its
interest in the Building, in the Project or in this Lease, the same shall
operate to release Landlord from any future liability under all of the covenants
and conditions, express or implied, contained in this Lease in favor of Tenant,
and in such event Tenant agrees to look solely to the responsibility of the
successor in interest of Landlord in and to this Lease. This Lease shall not be
affected by any such sale, conveyance or transfer.

                                  ARTICLE XIII
                         DEFAULT AND LANDLORD'S REMEDIES

Section 13.1 - Defaults

         The occurrence of any of the following shall constitute a default
("Default") hereunder:

         (a)      if Tenant defaults in the payment of rent (whether Base Rent
or Additional Rent) or any other sum required to be paid pursuant to this Lease
and if the default is not remedied

                                       23
<PAGE>

within five (5) days after written notice thereof by Landlord to Tenant which
notice shall satisfy, and not be in addition to, the notice requirement in
Section 791 of the California Civil Code; or

         (b)      if Tenant defaults in the prompt and full performance of any
term, covenant or provisions of this Lease (except the other subparagraphs of
this Section 13.1) and if such default is not remedied within twenty (20) days
after notice thereof by the Landlord; provided, however, that if such default is
susceptible of being cured but cannot by its nature be cured within twenty (20)
days, then Tenant shall have such longer period as is reasonably necessary to
cure such default provided Tenant has promptly commenced and is diligently
pursuing such cure; or

         (c)      if the leasehold interest of Tenant is levied upon under
execution or is attached under process of law, which levy or attachment
continues for a period of thirty (30) days; or

         (d)      if Tenant shall generally not pay its debts as they become due
or shall admit in writing its inability to pay its debts or shall make a general
assignment for the benefit of creditors; or

         (e)      if Tenant shall commence any case, proceeding or other action
seeking reorganization, arrangement, adjustment, liquidation, dissolution or
composition of Tenant or its debts under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors, or seeking appointment of a
receiver, trustee, custodian or other similar official for Tenant or for all or
any substantial part of its property; or

         (f)      if any case, proceeding or other action against Tenant shall
be commenced seeking to have an order for relief entered against Tenant as
debtor or seeking reorganization, arrangement, adjustment, liquidation,
dissolution or composition of Tenant or its debts under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors, or seeking
appointment of a receiver, trustee, custodian or other similar official for
Tenant or for all or any substantial part of its property, and such case,
proceeding or other action (i) results in the entry of an order for relief
against Tenant which is not fully stayed within seven (7) days after the entry
thereof or (ii) remains undismissed for a period of sixty (60) days; or

         (g)      Tenant fails to comply with the provisions of Section 9.3 of
this Lease.

Section 13.2 - Landlord's Remedies

         (a)      Upon the occurrence of any one or more Defaults by Tenant,
Landlord may elect to terminate this Lease and Tenant's right to possession of
the Leased Premises or, without terminating this Lease, may forthwith terminate
Tenant's right to possession of the Leased Premises. Upon any termination of
this Lease, whether by lapse of time or otherwise, or upon any termination of
Tenant's right to possession without termination of the Lease, Tenant shall
surrender possession and vacate the Leased Premises and deliver possession
thereof to Landlord, and Tenant hereby grants to Landlord full and free license
to enter into and upon the Leased Premises with or without process of law in the
event of any such termination of this Lease or right to possession, and to
repossess Landlord of the Leased Premises and of Landlord's former estate and to
expel or remove Tenant and any others who may be occupying or be within the
Leased Premises and to remove any and all property therefrom without being
deemed in any manner guilty of trespass, eviction or forcible entry or detainer,
and without relinquishing Landlord's rights to rent or any other right given to
Landlord hereunder or by operation of law.

                                       24
<PAGE>

         (b)      If Landlord elects to terminate Tenant's right to possession
only without terminating this Lease, then Landlord may at Landlord's option
enter into the Leased Premises, remove Tenant's signs and other evidences of
tenancy, and take and hold possession thereof as provided in Section 13.2(a),
without such entry or possession terminating this Lease or releasing Tenant, in
whole or in part, from Tenant's obligation to pay the rent hereunder for the
full Term. Upon and after entry into possession without termination of this
Lease, subject to Landlord's right to first rent other vacant areas in the
Building, Landlord may relet the Leased Premises or any part thereof to any
person, firm, or corporation other than Tenant for such rent, for such time and
upon such terms as Landlord in Landlord's sole discretion shall determine. Any
proceeds from the reletting of the Leased Premises by Landlord shall first be
applied against the cost and expenses of reletting the Leased Premises
including, but not limited to, all reasonable brokerage, advertising, legal,
alteration and other reasonably necessary expenses incurred to secure a new
tenant for the Leased Premises. If the consideration collected by Landlord upon
any such reletting after payment of the expenses of reletting the Leased
Premises is not sufficient to pay monthly the full amount of the rent reserved
in this Lease, then Tenant shall pay to Landlord upon demand the amount of each
monthly deficiency as it becomes due. If the consideration collected by Landlord
upon any such reletting after payment of the expense of reletting the Leased
Premises is greater than the amount necessary to pay the full amount of the rent
reserved in this Lease, the full amount of such excess shall be retained by
Landlord and shall in no event be payable to Tenant.

         (c)      If Landlord shall decide to terminate this Lease, Landlord, at
its option, shall be entitled to recover from Tenant, in lieu of any amounts due
under Section 13.2(b), and Tenant shall pay to Landlord, on demand, as and for
liquidated and agreed final damages, a sum equal to the present value of the
aggregate amount of Base Rent, Additional Rent and the unamortized allowances
and improvements for the period from the date of such termination through the
stated termination of the Term, less the present value of the amount of rental
loss Tenant proves could have been reasonably avoided, using a discount rate of
five percent (5%) per annum.

         (d)      Landlord may, but shall not be obligated to, cure, at any time
and without notice, any Default by Tenant under this Lease, and the cost and
amount thereof shall be Rent and shall be immediately due and payable.

         (e)      With respect to enforcement of any provision of this Lease,
Landlord or Tenant may collect from the other, provided it has been ordered by a
court of law, all costs and expenses thereby incurred including, without
limitation, court costs and reasonable attorneys' fees, together with interest
thereon from the date incurred to the date paid at the rate set forth in Section
19.5 shall be paid on demand.

         (f)      Notwithstanding anything in this Lease to the contrary, any
and all remedies set forth in this Lease (i) shall be in addition to any and all
other remedies Landlord or Tenant may have at law or in equity, (ii) shall be
cumulative and (iii) may be pursued successively or concurrently as the Landlord
or Tenant may elect. The waiver by Landlord or Tenant of any breach of any term,
covenant or condition herein contained shall not be deemed to be a waiver of
such term, covenant or condition or any subsequent breach of the same, or any
other term, covenant or condition herein contained. The acceptance of rent
hereunder shall not be construed to be a waiver of any breach by Tenant of any
term, covenant or condition of this Lease.

         (g)      Notwithstanding any provision in this Lease permitting Tenant
to cure any default within a specified period of time, if Tenant shall default
(i) in the timely payment of rent

                                       25
<PAGE>

(whether any or all of Base Rent or Additional Rent) three (3) or more times in
any period of twelve (12) consecutive months, or (ii) in the performance of any
particular term, condition or covenant of this Lease three (3) or more times in
any period of six (6) consecutive months, then, notwithstanding that such
defaults shall have each been cured within any applicable cure period after
notice, as provided in this Lease, any further similar default (including,
without limitation, with respect to non-payment of rent, the further non-payment
of any kind of rent payable under this Lease) shall not be curable by Tenant and
Landlord shall have all of the remedies provided in this Lease (including,
without limitation, any and all remedies at law and in equity) for a Default
hereunder.

Section 13.3 - Holdover by Tenant

         If the Tenant retains possession of the Leased Premises or any part
thereof after the termination of the Term or any extension thereof, by lapse of
time or otherwise, Tenant shall become a tenant from month-to-month only upon
all of the terms and conditions herein provided as may be applicable to a
month-to-month tenancy and any such holdover shall not constitute an extension
of this Lease; provided, however that during such holding over Tenant shall pay
the Base Rent and any Additional Rent, at 125% of the rate payable for the month
immediately preceding said holding over (including increases for Operating Costs
and Taxes which Landlord may reasonably estimate), computed on a per-month basis
for each month or part thereof (without reduction for any partial month) that
the Tenant thus remains in possession, and in addition thereto, Tenant shall pay
to Landlord all damages, consequential as well as direct, sustained by reason of
the Tenant's retention of possession. Notwithstanding the foregoing, Landlord
shall not be entitled to be compensated for any damages incurred by Landlord due
to any loss of a prospective third-party tenant or delay in delivering the
Leased Premises or any portion thereof to a prospective third-party tenant where
Tenant's holdover does not last in excess of thirty (30) days.

Section 13.4 - Storage of Tenant's Property

         If, upon termination of this Lease by lapse of time or otherwise or up
on abandonment of the Leased Premises, Tenant shall fail to remove any of
Tenant's property from the Leased Premises, Tenant hereby authorizes Landlord,
at Landlord's option, to cause such property to be removed and placed in storage
for the account of and at the expense of Tenant, or on such termination, to sell
such property at public or private sale, with ten (10) days' prior notice to
Tenant, and to apply the proceeds thereof, after payment of all expenses of
removal, storage and sale, to the satisfaction of any obligation of Tenant to
Landlord, the excess, if any, to be paid to Tenant upon demand.

                                   ARTICLE XIV
                              HAZARDOUS SUBSTANCES

Section 14.1 - Hazardous Substance

         (a)      For purposes of this Section, "hazardous substance" shall mean
the substances included within the definitions of the term "hazardous substance"
under (i) the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, 42 U.S.C. Sections 9601 et seq., and the regulations
promulgated thereunder, as amended, (ii) the California Carpenter-Presley-Tanner
Hazardous Substance Account Act, California Health & Safety Code Sections 25300
et seq., and regulations promulgated thereunder, as amended, (iii) the Hazardous

                                       26
<PAGE>

Materials Release Response Plans and Inventory Act, California Heath & Safety
Code Sections 25500 et seq., and regulations promulgated thereunder, as amended,
and (iv) petroleum; "hazardous waste" shall mean (i) any waste listed as or
meeting the identified characteristics of a "hazardous waste" under the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. Sections 6901 et seq., and
regulations promulgated pursuant thereto, as amended (collectively, "RCRA"),
(ii) any waste meeting the identified characteristics of "hazardous waste;"
"extremely hazardous waste" or "restricted hazardous waste" under the California
Hazardous Waste Control Law, California Health & Safety Code Sections 25100 et
seq., and regulations promulgated pursuant thereto, as amended (collectively,
the "CHWCL"), and/or (iii) any waste meeting the identified characteristics of
"medical waste" under California Health & Safety Code Sections 25015-25027.8,
and regulations promulgated thereunder, as amended; and "hazardous waste
facility" shall mean a hazardous waste facility as defined under the CHWCL.

         (b)      Without limiting the generality of the obligations set forth
in Section 14.4 of this Lease:

                           (i)      Tenant covenants not to cause or permit any
hazardous substance or hazardous waste to be brought upon, kept, stored or used
in or about the Property without the prior written consent of Landlord, which
consent shall not be unreasonably withheld or delayed, except that Tenant, in
connection with its permitted use of the Property as provided in Section 14.1,
may keep, store and use materials that constitute hazardous substances which are
customary for such permitted use; provided, however, that such hazardous
substances must be kept, stored and used in quantities which are customary for
such permitted use, must be kept, stored and used in full compliance with
clauses (ii) and (iii) immediately below, and a list of such substances along
with a statement of the maximum amount which may be on the Property at any time
must be delivered to Landlord.

                           (ii)     Tenant covenants that it will comply with
all applicable laws, rules, regulations, orders, permits, licenses and operating
plans of any governmental authority with respect to the receipt, use, handling,
generation, transportation, storage, treatment and/or disposal of hazardous
substances or wastes by Tenant or its agents or employees, and Tenant will
provide Landlord with copies of all permits, licenses, registrations and other
similar documents that authorize Tenant to conduct any such activities in
connection with its authorized use of the Property from time to time.

                           (iii)    Tenant agrees that it shall not (A) operate
on or about the Property any facility required to be permitted or licensed as a
hazardous waste facility or for which interim status as such is required, nor
(B) store any hazardous wastes on or about the Property, nor (C) conduct any
other activities on or about the Property that could result in the Property
being deemed to be a "hazardous waste facility" (including, but not limited to,
any storage or treatment of hazardous substances or hazardous wastes which could
have such a result).

                           (iv)     Tenant agrees to comply with all applicable
laws, rules, regulations, orders and permits relating to underground storage
tanks installed by Tenant or its agents or employees (including any
installation, monitoring, maintenance, closure and/or removal of such tanks) as
such tanks are defined in California Health & Safety Code Section 25281(x),
including, without limitation, complying with California Health & Safety Code
Sections 25280-25299.7 and the regulations promulgated thereunder, as amended.
Tenant shall furnish to Landlord copies of all registrations and permits issued
to or held by Tenant from time to time for any and all underground storage
tanks.

                                       27
<PAGE>

                           (v)      Tenant shall provide Landlord in writing the
following information and/or documentation at the commencement of this Lease and
within sixty (60) days of any change in or addition to the required information
and/or documentation:

                                    (A)      A list of all hazardous substances
and/or wastes that Tenant receives, uses, handles, generates, transports,
stores, treats or disposes of from time to time in connection with its
operations on the Property.

                                    (B)      All MSDS's, if any, required to be
completed with respect to operations of Tenant at the Property from time to time
in accordance with Title 26, California Code of Regulations Section 8-5194 or 42
U.S.C. Section 11021, or any amendments thereto, and any Hazardous Materials
Inventory Sheets that detail the MSDS's.

                                    (C)      All hazardous waste manifests (as
defined in Title 26, California Code of Regulations Section 22-66481), if any,
that Tenant is required to complete from time to time in connection with its
operations at the Property.

                                    (D)      A copy of any Hazardous Materials
Management Plan required from time to time with respect to Tenant's operations
at the Property, pursuant to California Health & Safety Code Sections 25500 et
seq., and any regulations promulgated thereunder, as amended.

                                    (E)      Copies of any Contingency Plans and
Emergency Procedures required of Tenant from time to time due to its operations
in accordance with Title 26, California Code of Regulations Sections 22-67140 et
seq., and any amendments thereto, and copies of any Training Programs and
Records required under Title 26, California Code of Regulations, Section
22-67105, and any amendments thereto.

                                    (F)      Copies of any biennial reports
required to be furnished to the California Department of Health Services from
time to time relating to hazardous substances or wastes, pursuant to Title 26,
California Code of Regulations, Section 22-66493, and any amendments thereto.

                                    (G)      Copies of all industrial wastewater
discharge permits issued to or held by Tenant from time to time in connection
with its operations on the Property.

                                    (H)      Copies of any other lists or
inventories of hazardous substances and/or wastes on or about the Property that
Tenant is otherwise required to prepare and file from time to time with any
governmental or regulatory authority.

                           (vi)     Tenant, in connection with any receipt,
storage, possession, use, transfer or disposal of radioactive materials or
radiation, shall:

                                    (A)      Comply with all federal, state and
local laws, rules, regulations, orders, licenses and permits;

                                    (B)      Maintain, to such extent and for
such periods as may be required by applicable law, and permit Landlord or its
representatives to inspect during normal business hours at any time and from
time to time upon reasonable notice to Tenant, a list of all radioactive
materials or radiation received, stored, possessed, used, transferred or
disposed of from time to time; and

                                       28
<PAGE>

                                    (C)      Maintain, to such extent and for
such periods as may be required by applicable law, and permit Landlord or its
representatives to inspect during normal business hours at any time and from
time to time upon reasonable notice to Tenant, all licenses, registration
materials, inspection reports, governmental orders and permits in connection
with the receipt, storage, possession, use, transfer or disposal of radioactive
materials or radiation from time to time.

                           (vii)    Tenant agrees to comply with any and all
applicable laws, rules, regulations and orders of any governmental authority
with respect to the release into the environment of any hazardous wastes or
substances or radiation or radioactive materials by Tenant or its agents or
employees. Tenant agrees to give Landlord immediate verbal notice of any
unauthorized release of any such hazardous wastes or substances or radiation or
radioactive materials into the environment, and to follow such verbal notice
with written notice to Landlord of such release within twenty-four (24) hours of
the time at which Tenant became aware of such release.

                           (viii)   Tenant shall indemnify, defend and hold
Landlord harmless from and against any and all claims, losses (including, but
not limited to, loss of rental income and loss due to business interruption),
damages, liabilities, costs, legal fees and expenses of any sort arising out of
or relating to (A) any failure by Tenant to comply with any provisions of
Section 14.6 of this Lease, or (B) any receipt, use handling, generation,
transportation, storage, treatment, release and/or disposal of any hazardous
substance or waste or any radioactive material or radiation on or about the
Property in connection with Tenant's use or occupancy of the Property or as a
result of any acts or omissions of Tenant or of any agent or employee of Tenant
whether discovered prior to or after the expiration or earlier termination of
this Lease.

                           (ix)     Tenant agrees to cooperate with Landlord in
furnishing Landlord with complete information regarding Tenant's receipt,
handling, use, storage, transportation, generation, treatment and/or disposal of
any hazardous substances or wastes or radiation or radioactive materials. Upon
request, Tenant agrees to grant Landlord reasonable access at reasonable times
to the Property to inspect Tenant's receipt, handling, use, storage,
transportation, generation, treatment and/or disposal of hazardous substances or
wastes or radiation or radioactive materials, without being deemed guilty of any
disturbance of Tenant's use or possession and without being liable to Tenant in
any manner.

                           (x)      Notwithstanding Landlord's rights of
inspection and review under this paragraph (b), Landlord shall have no
obligation or duty to so inspect or review, and no third party shall be entitled
to rely on Landlord to conduct any sort of inspection or review by reason of the
provisions of this paragraph (b).

                           (xi)     Within thirty (30) days after termination or
expiration of this Lease, Tenant at its sole cost and expense shall obtain and
deliver to Landlord an environmental study, of the scope and performed by an
expert reasonably satisfactory to Landlord, evaluating the presence or absence
of hazardous substances and wastes, radiation and radioactive materials on and
about the Property. Such study shall be based on a reasonable and prudent level
of tests and investigations of the Property which tests shall be conducted no
earlier than the date of termination or expiration of this Lease. Liability for
any remedial actions required or recommended on the basis of such study shall be
immediately effected by Tenant. In addition to the foregoing, Tenant shall
obtain all certificates, clearances and approvals, if any, required by

                                       29
<PAGE>

any governmental agency verifying compliance by Tenant with any laws, rules or
regulations governing Tenant's use and vacancy of the Property.

         (c)      In the event of any third-party claims, losses, damages,
liabilities, costs, legal fees and expenses of any sort (including, but not
limited to, costs incurred with respect to any government-mandated remediation),
against either Landlord or Tenant or both, arising out of or relating to (i) the
presence on the Property of any hazardous substances or wastes or radiation or
radioactive materials not present on the Property as of the Commencement Date
(except to the extent the presence thereof is already covered by an express
indemnification obligation under Section 14.6(b)(viii)), and/or (ii) any
unauthorized release into the environment by Tenant, its agents, contractors or
employees (including, but not limited to, the Site) of any hazardous substances
or wastes or radiation or radioactive materials (except to the extent such
release is already covered by an express indemnification obligation under
Section 14.6(b)(viii)), then (x) Landlord and Tenant shall cooperate reasonably
and in good faith in the defense of such third-party claims, liabilities and
related matters and, subject to Landlord's reasonable approval, shall use a
single law firm, managed by Tenant, for their joint defense, and (y) Tenant
shall bear one hundred percent (100%) of the total claims, losses, damages,
liabilities, costs, legal fees and expenses incurred by Landlord and/or Tenant
in connection with matters covered by this Section 14.6(c). For purposes of the
sharing of expenses contemplated in clause (y) of the preceding sentence, the
party directly paying or incurring such costs or expenses shall be entitled to
invoice the other party from time to time (on a monthly basis or at other
appropriate intervals) for such other party's respective share thereof, which
invoice shall be accompanied by copies of third-party invoices or other
reasonable documentation supporting the invoiced amounts, and the party
receiving such invoice shall pay its share as reflected in the applicable
invoice within fifteen (15) days after receipt thereof, unless the parties agree
otherwise. Within three (3) months after receipt of any such invoice, the party
receiving the invoice shall be entitled, upon reasonable written notice and
during normal business hours, to inspect and examine the books and records of
the party submitting the invoice with respect to the invoiced amounts. Any
dispute with respect thereto that the parties are unable to resolve by good
faith negotiations shall be resolved by an independent audit using the same
procedure set forth in Section 6.3(c).

         (d)      Tenant shall surrender possession of the Leased Premises in
the same condition as when delivered to Tenant at the commencement of the Prior
Lease and in suitable condition to be re-let to another tenant, ordinary wear
and tear and damage from casualty not caused by Tenant excepted (including,
without limitation, receiving any clearances, approvals and/or certifications,
if any, required by any government agency verifying compliance with all federal,
state and local laws, rules, regulations and orders governing Tenant's use and
vacancy of the Property); without limiting the generality of the foregoing or
any provision of this Lease concerning condition of the Property upon
termination or expiration of this Lease, Tenant shall cause to be removed from
the Property any and all hazardous substances wherever located so that the
Property can be sold, or delivered to a new tenant, in an environmentally clean
condition. In addition to the foregoing and not by way of limitation, Tenant
shall have performed the following: (i) an exit site assessment, by an
environmental consultant selected by Landlord; and (ii) an assessment to verify
the Property is free of residual radioactive contamination, by a nuclear
specialist selected by Landlord. In the event Tenant does not comply with the
provisions of this Section 14.6(d) and deliver any necessary results and/or
certifications to Landlord and to any required governmental body, on the
expiration or earlier termination of this Lease, Tenant shall be held to the
terms of this Lease and required to pay Rent and shall be otherwise subject to
the holdover provisions in Section 13.3 hereof. Further, Tenant shall indemnify,
defend and hold Landlord

                                       30
<PAGE>

harmless from and against any and all claims, losses, damages, liabilities,
costs, legal fees and expenses of any sort arising out of or relating to
Tenant's failure to effect the clean up, and assessments, and to obtain the
clearances and certifications required by this Section. If Tenant shall vacate
the Property without having effected such clean up and obtained such clearances
and certifications, then Landlord may obtain same at Tenant's cost; Landlord's
action in such regard shall not eliminate Tenant's liability to pay for same or
to pay Rent as a holdover hereunder.

                                   ARTICLE XV
                                    UTILITIES

Section 15.1 - Utilities

         (a)      Tenant shall pay for the use of all electrical, gas, water,
sewer and other utility service to the Leased Premises. Tenant shall be billed
directly by each such utility (except water which may at Landlord's election be
separately metered and billed to Tenant) and Tenant agrees to pay each such bill
promptly in accordance with its terms. In the event that for any reason Tenant
cannot be billed directly, Landlord shall forward each bill with respect to the
Leased Premises to Tenant and Tenant shall pay it promptly in accordance with
its terms. Notwithstanding anything contained herein to the contrary, if Tenant
cannot be separately metered for any reason, Tenant shall pay Landlord as
Additional Rent and In monthly installments at the time prescribed for monthly
installments of Base Rent, an annual amount, as estimated by Landlord from time
to time, which Tenant would pay for such utility service if the same were
separately metered to the Leased Premises by the local utility company and
billed to Tenant at such company's current rates (including applicable taxes).
The cost of any utility service supplied to the Project or Common Areas by
Landlord shall be included in Operating Costs.

         (b)      In the event Tenant does not directly pay the bills for water
used in the Leased Premises, Tenant shall not waste or permit the wasting of
water. Tenant shall pay Landlord for domestic water and hot water furnished or
used for any other purpose as Additional Rent, at reasonable rates fixed by
Landlord, and, in connection therewith, Landlord may require tenant at Tenant's
cost to install a submeter to measure Tenant water usage. Tenant shall not
introduce into the sewer system any harmful or dangerous substances and shall
not overload the sewer system by abnormal usage.

         (c)      Tenant agrees that Landlord shall not be liable in damages, by
abatement of rent or otherwise, for failure to furnish or for a delay in
furnishing any service or utility, whether the responsibility of Landlord or
others, if such failure or delay is occasioned, in whole or in part, by repairs,
renewals or improvements authorized by this Lease so long as Landlord exercises
reasonable diligence to avoid unnecessary inference with any service or utility,
by any strike, lockout or other labor trouble, by inability to secure
electricity, gas, water or other fuel at the Building or Project after
reasonable effort so to do, by any accident or casualty whatsoever, by the act
or default of Tenant or other parties, or by any other cause beyond the
reasonable control of Landlord; and such failures or delays shall never be
deemed to constitute an eviction or disturbance of the Tenant's use and
possession of the Leased Premises or relieve the Tenant from paying rent or
performing any of its obligations under this Lease. Notwithstanding the
foregoing, in the event any interruption or delay in service results from
Landlord's gross negligence or willful misconduct, and such interruption renders
the Leased Premises unsuitable for Tenant's use for a period in excess of three
(3) consecutive business days, rent shall abate

                                       31
<PAGE>

from and after said third business day until such time as the Leased Premises
are returned to a tenantable condition.

                                  ARTICLE XVI
               RIGHTS RESERVED TO LANDLORD; RULES AND REGULATIONS

Section 16.1 - Rights Reserved to Landlord

         Without limiting any other rights reserved or available to Landlord
under this Lease, at law, or in equity, and subject to Tenant's right to quiet
enjoyment of the Premises and Common Areas 7 days per week, 52 weeks per year,
Landlord reserves the following rights to be exercised at Landlord's election
without liability to Tenant and without effecting an eviction or disturbance of
Tenant's use or possession and without giving rise to any claim for setoff or
abatement of rent or affecting any of Tenant's obligations under this Lease:

         (a)      to change the street address and/or name of the Building or of
the Project (but not to that of a competitor of Tenant);

         (b)      upon at least twenty-four (24) hours notice to Tenant, during
hours reasonably specified by Tenant (except in the case of emergency, when no
notice need be given and access may be had at any time), and subject to Tenant's
reasonable security and safety requirements, Landlord, its agents, contractors
and employees may enter the Leased Premises (i) to inspect the Leased Premises,
and (ii) to make repairs, additions or alterations, whether structural or
otherwise, to the Leased Premises, the Building or the Project, or to any parts
thereof including, without limitation, to make repairs, additions or alterations
within the Leased Premises to mechanical, electrical, and other facilities
serving the Leased Premises or the Project, to shore the foundations and walls
thereof, to erect scaffolding and/or protective barricades around and about the
same, to relocate or change corridors or entrances in and to the Building, to
close entrances, stairways and corridors, if any, and to interrupt or
temporarily suspend services or facilities;

         (c)      upon such advance written or verbal notice as is reasonable
under the circumstances, to show the Leased Premises to prospective purchasers,
mortgagees, or other persons having a legitimate interest in viewing the same,
and, at any time within one year prior to the expiration of the Term, to brokers
or persons wishing to rent the Leased Premises; during the last year of the
Term, to place and maintain a "For Rent" sign in or on the Leased Premises,
Building or the Project; and to place or maintain "For Sale" signs on the
Project and the exterior of the Building;

         (d)      if vacant, or vacated during the last one hundred eighty (180)
days of the Term, to decorate, remodel, repair, alter or otherwise prepare the
Leased Premises for new occupancy;

         (e)      to install, affix and maintain signs on the exterior and
interior of the Building (except signs within the Leased Premises, unless
required by any applicable laws, ordinances, rules, or regulations);

         (f)      to grant to anyone the exclusive right and privilege to
conduct any business in the Building or the Project and such exclusive right and
privilege will be binding upon Tenant, provided such exclusive right shall not
operate to exclude Tenant or its affiliates, assignees or sublessees from any
use expressly permitted herein and any services or products which Tenant is

                                       32
<PAGE>

required to pay for as a result of such exclusive right shall be at reasonable
and competitive rates and charges;

         (g)      to reasonably approve the weight, size and location of heavy
equipment and articles in and about the Leased Premises and the Building
including, by way of example but not of limitation, safes, vaults, cages,
printing machinery, computers, filing cabinets or libraries;

         (h)      to establish and require Tenant to comply with reasonable
security controls for the Building and Project and to otherwise take such action
or preventive measures for the safety or security of the Building and the
Project and its occupants; and

         (i)      to promulgate and establish reasonable rules and regulations
of uniform application governing the use and operation of the Project, the
Building and the Leased Premises as are reasonably necessary for the orderly
operation thereof and which do not materially adversely affect Tenant's use of
the Leased Premises, and Tenant agrees, for itself, its employees, agents and
invitees to comply with such rules and regulations.

         Landlord may enter upon the Leased Premises for any and all of said
purposes and may exercise any and all of the foregoing rights hereby reserved,
at any time and from time to time, without being deemed guilty or any eviction
or disturbance of Tenant's use or possession of the Leased Premises, and without
being liable in any manner to Tenant.

Section 16.2 - Rules and Regulations

         The Tenant agrees as follows:

                  (1)      Landlord shall arrange for a trash collection service
which will provide and periodically empty trash containers placed in designated
areas for use by Tenant and other tenants in the Project. Tenant shall be
responsible for placing all of its garbage and trash in such containers.

                  (2)      No aerial shall be erected on the roof or exterior
walls of the Premises, or on the grounds, without in each instance, the written
consent of the Landlord. Any aerial so installed without such written consent
shall be subject to removal without notice at any time.

                  (3)      No loud speakers, televisions, phonographs, radios,
or other devices shall be used in a manner so as to be heard or seen outside of
the Premises without the prior written consent of the Landlord.

                  (4)      The outside areas immediately adjoining the Premises
shall be kept clean and free from dirt and rubbish by the Tenant to the
satisfaction of the Landlord and Tenant shall not place or permit any
obstruction or materials in such areas. No exterior storage shall be allowed
without permission in writing from Landlord.

                  (5)      The plumbing facilities may be used in any manner
consistent with all governmental rules, regulations, ordinances, and statutes,
and shall not be used for any other purpose than that for which they are
constructed, and the expense of any breakage, stoppage, or damage resulting from
a violation of this provision shall be borne by Tenant, who shall, or whose
employees, agents or invitees shall have caused it.

                                       33
<PAGE>

                  (6)      Tenant shall not burn any trash or garbage of any
kind in or about the Premises, or the Project.

                  (7)      The sidewalks, halls, passages, exits, entrances, and
stairways in and about the Project shall not be obstructed by any of the tenants
or used by them for any purpose other than for ingress to and egress from their
respective premises. The halls, passages, exits, entrances, stairways, balconies
and roof are not for the use of the general public and the Landlord shall in all
cases retain the right to control and prevent access thereto by all persons
whose presence in the judgment of the Landlord shall be prejudicial to the
safety, character, reputation and interests of the Project and its tenants,
provided that nothing herein contained shall be constructed to prevent such
access to persons with whom the Tenant normally deals in the ordinary course of
Tenant's business unless such persons are engaged in illegal activities. No
Tenant and no employees or invitees of any Tenant shall go upon the roof of the
Building except in case of an emergency.

                  (8)      No additional locks or bolts of any kind shall be
placed upon any of the doors or windows by Tenant, nor shall any changes be made
in existing locks or the mechanisms thereof, without the prior written consent
of Landlord which shall not be unreasonably withheld or delayed. Tenant must,
upon the termination of Tenant's tenancy, restore to Landlord all keys of
stores, offices and toilet rooms either furnished to or otherwise procured by
Tenant, and in the event of the loss of any keys so furnished Tenant shall pay
to Landlord the cost thereof.

                  (9)      No Tenant shall lay linoleum or other similar floor
covering so that the same shall be affixed to the floor of the Premises in any
manner except by a paste, or other material, which may easily be removed with
water, the use of cement or other similar adhesive materials being expressly
prohibited. The method of affixing any such linoleum or other similar floor
covering to the floor, as well as the method of affixing carpets or rugs to the
Premises, shall be subject to approval by Landlord, which approval shall not be
unreasonably withheld or delayed. The expense of repairing any damage resulting
from a violation of this rule shall be borne by Tenant by whom, or by whose
agents, clerks, employees, or visitors, the damage shall have been caused.

                  (10)     Tenant will not install blinds, shades, awnings, or
other form of inside or outside window covering, or window ventilators or
similar devices without the prior written consent of Landlord.

         Landlord reserves the right from time to time to amend or supplement
the foregoing rules and regulations, and to adopt and promulgate additional
rules and regulations applicable to the Premises, provided that any such change
shall be reasonable and shall not affect Tenant's rights under this Lease.
Notice of such rules and regulations and amendments and supplements thereto, if
any, shall be given to the Tenant and Tenant agrees to comply with all such
rules and regulations upon receipt of notice to Tenant from Landlord. Landlord
shall not be liable in any way to Tenant for any damage or inconvenience caused
by any other tenant's non-compliance with these rules and regulations.

                                       34
<PAGE>

                                  ARTICLE XVII
                                     NOTICES

Section 17.1 - Notices

         All notices, consents, waivers and other communications which this
Lease requires or permits either party to give to the other shall be in writing
and shall be deemed given when: (a) delivered personally (including delivery by
private courier or express delivery service); (b) the next business day after
delivery of a facsimile, return receipt of which is evidenced by the sender's
facsimile machine; or (c) or four (4) days after deposit in the United States
mail, registered or certified mail, postage prepaid, addressed to the parties at
their respective addresses as follows:

         To Tenant:                 Stratagene
                                    11011 No. Torrey Pines road
                                    La Jolla, California
                                    Attn:

                                    _________________________(phone)
                                    _________________________(fax)

To Landlord:                        Slough TPSP LLC
                                    c/o Slough Estates USA Inc.
                                    444 N. Michigan Ave., Suite 3230
                                    Chicago, IL  60611
                                    Attn:  William Rogalla
                                    312/755-0700 (Phone)
                                    312/755-0717 (Fax)

         with copy to:              Bell, Boyd & Lloyd LLC
                                    70 West Madison, Suite 3300
                                    Chicago, IL  60602
                                    Attn:  Lawrence M. Mages, Esq.
                                    312/372-1121 (Phone)
                                    312/372-2098 (Fax)

or to such other address as may be contained in a notice at least fifteen (15)
days prior to the address change from either party to the other given pursuant
to this Section. Rental payments and other sums required by this Lease to be
paid by Tenant shall be delivered to Landlord at Landlord's address provided in
this Section, or to such other address as Landlord may from time to time specify
in writing to Tenant, and shall be deemed to be paid only upon actual receipt.

                                  ARTICLE XVIII
                                     PARKING

Section 18.1 - Parking

         Landlord shall provide unreserved parking spaces at the Project for use
by Tenant, its employees, invitees and guests based on a parking ratio of 4
parking spaces per 1,000 gross square feet of Rentable Area and otherwise
subject to any applicable governmental regulations. All expenses incurred by
Landlord in maintaining or repairing any of such parking spaces shall be
considered an Operating Cost hereunder and reimbursable by Tenant to Landlord.

                                       35
<PAGE>

                                   ARTICLE XIX
                                  MISCELLANEOUS

Section 19.1 - Tenant's Statement

         Tenant shall furnish to Landlord from time to time, within ten (10)
days after request therefor from Landlord, a copy of Tenant's then most recent
audited and certified financial statements. If Tenant does not ordinarily have
audited and certified financial statements prepared, then the foregoing
obligation shall be satisfied by the delivery of Tenant's most recent financial
statements, certified as true and correct by a duly authorized officer, general
partner or owner of Tenant. Landlord shall maintain the confidentiality of all
such statements and shall not permit them to be disclosed to any other person
(other than Landlord's employees, attorneys, lenders and accountants), and
Landlord shall ensure that all such employees, lenders, accountants, and
attorneys agree to maintain the confidentiality of such statements. Tenant
agrees that Landlord may deliver a copy of such statements to any purchaser of
the Building or Project and Landlord shall ensure that any such purchaser agrees
to maintain the confidentiality of such statements.

Section 19.2 - Estoppel Certificates

         Tenant agrees at any time and from time to time, upon not less than ten
(10) days' prior request from Landlord, to execute, acknowledge and deliver to
Landlord and to any other party designated by Landlord, in form reasonably
satisfactory to Landlord, a written statement certifying (if true) that Tenant
has accepted the Leased Premises, that this Lease is unmodified and in full
force and effect (or, if there have been modifications), that, to Tenant's
knowledge, Landlord is not in default hereunder (or stating any defaults claimed
by Tenant), the date to which the rental and other charges due hereunder have
been paid and such other accurate certifications as may reasonably be required
by Landlord. It is intended that any such statement may be relied upon by any
prospective purchaser or mortgagee of the Leased Premises, Building or Project
and their respective successors and assigns.

Section 19.3 - Relationship of Parties

         Nothing contained herein shall be deemed or construed to create the
relationship of principal and agent or of partnership or of joint venture, it
being understood and agreed that no provision in this Lease or any acts of the
parties hereto shall be deemed to create any relationship other than the
relationship of landlord and tenant

Section 19.4 - Landlord's Expenses; Attorneys' Fees

         Tenant and Landlord shall pay on demand the other's expenses, including
attorneys' fees, expenses and administrative hearing and court costs incurred
either directly or indirectly in enforcing any obligation of the other under
this Lease, in curing any default by the other, in connection with appearing,
defending or otherwise participating in any action or proceeding arising from
the filing, imposition, contesting, discharging or satisfaction of any lien or
claim for lien, in defending or otherwise participating in any legal proceedings
initiated by or on behalf of the other wherein the other is not adjudicated to
be in default under this Lease, or in connection with any investigation or
review of any conditions or documents in the event one party requests the
other's approval or consent to any action of the other which may be desired or
required hereunder. Attorneys' fees payable by Landlord or Tenant shall be at
market rates (including

                                       36
<PAGE>

customary discounts) for attorneys providing the required services in the San
Diego area of a competence which would normally be utilized by Landlord and
Tenant; Landlord shall assign to Tenant rights to sue attorneys whose fees are
charged to Tenant for over billing and/or malpractice.

Section 19.5 - Interest on Unpaid Amounts

         All amounts owed by Tenant to Landlord hereunder shall be deemed to be
Additional Rent and, unless otherwise provided herein, shall be paid within ten
(10) days from the date the Landlord renders a statement of account therefore.
Any amounts owed by either party to the other shall bear interest from the date
due until the date paid at the rate equivalent to the greater of (a) three
percent (3%) above the rate then most recently announced by Chase Manhattan
Bank, Citibank N.A., or Bank of America, or their successors, as its corporate
lending base rate, as such corporate lending base rate may change from time to
time during the Term, and (b) ten percent (10%) per annum. The payment of such
interest shall not excuse or cure any default under this Lease. In no event,
however, shall the changes permitted under this Section 19.5 or elsewhere in
this Lease, to the extent they are considered interest under law, exceed the
maximum lawful rate of interest.

Section 19.6 - Applicable Law and Construction

         The laws of the State of California shall govern the validity,
performance and enforcement of this Lease. The invalidity or unenforceability of
any provision of this Lease shall not affect or impair any other provision. The
headings of the several Articles and Sections contained herein are for
convenience only and do not define, limit or construe the contents of such
Articles or Sections.

Section 19.7 - Delays

         Whenever a period of time is provided in this Lease for Landlord or
Tenant to do or perform any act or thing (other than the satisfaction of a
monetary obligation, including without limitation Tenant's payment of Base Rent
and Additional Rent), Landlord or Tenant shall not be liable or responsible for
any delays due to strikes, lockouts, casualties, material shortages, acts of
God, war, governmental regulation or control or any other causes beyond the
reasonable control of Landlord or Tenant and the time for performance specified
herein shall be extended for the amount of time Landlord or Tenant is so
delayed, provided that Landlord or Tenant shall use all reasonable efforts to
remove the cause of such delay and to resume the performance of any such act or
thing.

Section 19.8 - Access by Landlord

         Intentionally omitted.

Section 19.9 - Brokerage

         Tenant warrants that it has had no dealings with any broker or agent in
connection with this Lease. Tenant covenants to pay, hold harmless and indemnify
Landlord from and against any and all cost, expense or Liability for any
compensation, commissions or charges claimed by any agent or broker with which
it has had dealings or otherwise by reason of any breach of said warranty.

                                       37
<PAGE>

Section 19.10 - Execution of Lease

         No employee or agent of Landlord's agent or of Landlord's broker, if
any, has authority to make or agree to make any agreement or undertaking in
connection with this Lease not set forth in this written Lease. The submission
of this document for examination does not constitute an offer to lease, or
reservation for, or option for, the Leased Premises, and this document will
become effective and binding only upon execution and delivery by both the
Landlord and the Tenant. All negotiations, considerations, representations and
understandings between Landlord and Tenant are incorporated herein and may be
modified or altered only by agreement in writing between Landlord and Tenant and
no act or omission of any employee or agent of Landlord or of Landlord's broker,
if any, if any, shall alter, change or modify any of the provisions hereof.

Section 19.11 - Security Deposit

         Tenant has deposited with Landlord the sum set forth in the Schedule as
"Security Deposit" as security for the faithful performance and observance by
Tenant of the provisions of this Lease and at all times during the Term of this
Lease said sum shall equal no less than one month's Base Rent. If Tenant shall
default in respect of any such provision, Landlord may use, apply or retain the
whole or any part of the security deposit to the extent required for the payment
of any rent and/or other charge or any other sum as to which Tenant is in
default or for any sum which Landlord may have expended or may be required to
expend by reason of Tenant's default, including, but not limited to, any damages
or deficiency in the reletting of the Leased Premises. In the case of any such
application by Landlord, Tenant shall deposit with Landlord from time to time
within five (5) days after Landlord's written demand therefor sufficient
additional funds to restore such security deposit to the amount set forth above.
If Tenant shall fully and faithfully comply with all of the conditions of this
Lease, the Security Deposit shall be returned to Tenant after the date fixed as
the end of the Term and after delivery to Landlord of entire possession of the
Leased Premises. In no event shall the security be applied by Tenant to reduce
any rent or other charge payable by Tenant.

Section 19.12 - Heirs, Successors and Assigns

         The covenants, agreements and obligations herein contained, except as
herein otherwise specifically provided, shall extend to, bind and inure to the
benefit of the parties hereto and their respective personal representatives,
heirs, successors and assigns.

Section 19.13 - Subordination

         This Lease is and shall always be subject to the lien of any mortgage,
including a trust deed in the nature of a mortgage, which may now or hereafter
affect the Project, the Building or the Leased Premises, and to all renewals,
consolidations, replacements and extensions thereof; provided however, with
respect to any such mortgage executed after the date hereof, that the holder of
such mortgage agrees, in the event of foreclosure and so long as no default
exists or other event has occurred which would entitle the Landlord to terminate
this Lease or Tenant's right to possession, that such holder shall recognize
this lease and not disturb the possession of the Tenant hereunder. Tenant agrees
to and does hereby attorn to the holder of any such mortgage, or any purchaser
upon foreclosure, or their successors and assigns, which attornment shall be
effective and self-operative without the execution of any further instruments.
Tenant hereby further agrees to execute such instruments and assurances as
Landlord or the holder of any such mortgage may deem reasonably necessary to
evidence the subordination of this Lease

                                       38
<PAGE>

and Tenant's attornment to such holder or purchaser. Landlord represents to
Tenant that, to the best of Landlord's knowledge, none of the Project, the
Building or the Leased Premises are subject to a mortgage or other monetary
lien.

Section 19.14 - Payments to Affiliates

         Nothing in this Lease shall be construed to prevent Landlord from
paying for bona fide services rendered or materials delivered with respect to
the Building, to the Project or to the Leased Premises (including, without
limitation, management services and contracting of capital improvements or other
capital repairs or construction items) by affiliates of Landlord of its
beneficiary or of the Agent provided that the fees or costs of such services and
materials are at the market rates in the San Diego metropolitan area. All such
fees or costs paid by Landlord to such parties shall be deemed to constitute
Operating Costs on the same terms and conditions as if such fees and costs were
paid to parties without any affiliation with Landlord.

Section 19.15 - Meaning of "Re-entry" and "Landlord"

         The words "Re-enter" and "Re-entry", as used in this Lease are
restricted to their technical legal meaning. The term "Landlord", as used in
this Lease, means only the landlord from time to time, and upon conveying or
transferring its interest, such conveying or transferring landlord shall be
relieved from any further obligation or liability pursuant to this Lease.

Section 19.16 - Remedies and Rights May Be Exercised by Landlord In its Own
Name: Authority to Execute This Lease

         All rights and remedies of Landlord under this Lease, or that may be
provided by law, may be exercised by Landlord in is own name individually, or in
its name by Agent or any other agent of the beneficiary thereof, and all legal
proceedings for the enforcement of any such rights or remedies, may be commenced
and prosecuted to final judgment and executed by Landlord in its own name
individually or in its name by Agent or by any other agent of the beneficiary
thereof. Tenant represents to Landlord that it has full power and authority to
execute this Lease and to make and perform the agreements herein contained.
Tenant shall furnish to Landlord promptly upon demand a corporate resolution or
other appropriate documentation reasonably requested by Landlord evidencing the
due authorization of Tenant to enter into this lease.

Section 19.17 - Time of Essence

         Time is of the essence of this Lease and all provisions herein relating
thereto shall be strictly construed.

Section 19.18 - Landlord's Obligation to Act as a Cost-Conscious Businessperson

         If Landlord provides materials or services or engages third parties to
provide materials or services according to this Lease which result in Landlord
directly billing Tenant for such materials and/or services, Landlord shall
negotiate fees, expenses and costs such that Tenant shall not be required to pay
or reimburse Landlord for amounts that exceed the market rate for such materials
and/or services in the San Diego metropolitan area. The requirements of this
Section 19.18 shall not apply to any costs or expenses included within the scope
of Operating Costs.

                                       39
<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Lease on the day and
year first above written.

            "Landlord"                                    "Tenant"

SLOUGH TPSP LLC,                              STRATAGENE,
a Delaware limited liability company          a California corporation

By: Slough Estates USA Inc.
Its:  Manager

By:    /s/ R. W. ROHNER                       By:   /s/ RONNI L. SHERMAN
    --------------------------------              ------------------------------
Its:   V.P./C.F.O.                            Its:  Executive Vice President and
                                                    General Counsel


                                       40
<PAGE>

                                    EXHIBIT A

               PLAN (WITH LOCATION OF LEASED PREMISES DESIGNATED)

<PAGE>

                                    EXHIBIT B

                              WORK LETTER AGREEMENT

<PAGE>

                                    Rider 101
                                 Option To Renew

         Subject to the further provisions of this Rider, Tenant shall have the
option (the "Renewal Option") to renew this Lease for one (1) period of five (5)
years the ("Renewal Term"), commencing on the day immediately following the last
day of the Initial Term , as follows:

         (a)      Exercise. Tenant shall exercise the Renewal Option by giving
written notice thereof to Landlord not more than twenty-four (24) months and not
less than twelve (12) months prior to the last day of the Term. Tenant's notice
of its exercise of the Renewal Option is the "Renewal Notice."

         (b)      Tenant's Share of Taxes and Operating Costs. With respect to
the Tenant's Share of Taxes and Operating Costs payable during the Renewal Term,
the parties shall have ninety (90) days following Landlord's receipt of the
Renewal Notice (the "Negotiation Deadline") in which to agree on the Tenant's
Share of Taxes and Operating Costs, including without limitation whether there
shall be any limit as set forth in Section 7.4 of the Lease. If the parties are
unable to agree on Tenant's Share of Taxes and Operating Costs for the Renewal
Term on or before the Negotiation Deadline, Tenant shall have the right to
withdraw and cancel its Renewal Notice by giving written notice thereof to
Landlord at any time before the Negotiation Deadline (a "Withdrawal Notice"). If
Tenant timely delivers a Withdrawal Notice, the Renewal Notice shall be deemed
null and void and this Lease shall expire at the end of the Initial Term as
though no Renewal Notice was ever delivered. In the event Tenant fails to timely
deliver a Withdrawal Notice, Tenant's right to cancel its Renewal Notice shall
be deemed waived and null and void, Tenant shall be required to pay during the
Renewal Term one hundred percent (100%) of Tenant's Share of Taxes and Operating
Costs, and Section 7.4 of the Lease shall be deemed deleted therefrom as of the
first day of the Renewal Term.

         (c)      Terms.

                  (i) General. All terms and conditions of this Lease shall
apply during the Renewal Term, except that: (A) Landlord shall not provide any
allowances nor be required to effect any improvements to the Leased Premises;
(B) Base Rent for the Renewal Term shall be 95% of the "then prevailing fair
market base monthly rent" (assuming a fully "net" lease, allowing for
escalations and excluding abatement and any allowance) for non-renewal,
non-affiliate leases for properties of equivalent quality (including age and
type of any improvements in the Leased Premises), size, utility and location in
northern San Diego County, with the length of the lease term, and credit
standing of the Tenant taken into account; and (C) Tenant's Share of Taxes and
Operating Costs shall be as determined in accordance with paragraph (b) of this
Rider.

                  (ii) Determination of Rent. With respect to the determination
of the "then prevailing fair market base monthly rent," the parties shall have
thirty (30) days following the Negotiation Deadline in which to agree on the
prevailing fair monthly rent as of the commencement date of the applicable
Renewal Term for the uses permitted hereunder. If the parties agree on such fair
market monthly rental value, they shall execute an amendment to this Lease
stating the amount of the applicable Base Rent. If the parties are unable to
agree on such prevailing fair market monthly rent within such thirty (30) day
period, then within fifteen (15)

<PAGE>

days after the expiration of such period each party, at its cost and by giving
notice to the other party, shall appoint a real estate appraiser who is a member
in good standing of the Appraisal Institute holding an "M.A.I." designation with
at least five years experience appraising similar commercial properties in
northern San Diego County to appraise and set the then prevailing fair market
monthly rent value at the commencement date of the applicable Renewal Term, in
accordance with the standards specified in subparagraph (c)(i)(B). If either
party fails to appoint an appraiser within the allotted time, the single
appraiser appointed by the other party shall be the sole appraiser. If an
appraiser is appointed by each party and the two appraisers so appointed are
unable to agree upon such then prevailing fair market monthly rent within thirty
(30) days after the appointment of the second appraiser, they shall appoint a
third qualified appraiser within ten (10) days after expiration of such thirty
(30) day period; if they are unable to agree upon a third appraiser, either
party may, upon not less than five days notice to the other party, apply to the
Presiding Judge of the San Diego County Superior Court for the appointment of a
third qualified appraiser. Each party shall bear its own legal fees in
connection with appointment of the third appraiser and shall bear one-half of
any other costs of appointment of the third appraiser and of such third
appraiser's fee. The third appraiser, however selected, shall be a person who
has not previously acted for either party in any capacity. Within thirty (30)
days after the appointment of the third appraiser, the three appraisers shall
set the then prevailing fair market monthly rent as of the commencement date of
the Renewal Term and shall so notify the parties. If the three appraisers are
unable to agree within the allotted time, the two appraised then prevailing fair
market monthly rents which are closest together shall be added together and
divided by two and the resulting quotient shall be the initial then prevailing
fair market monthly rent, which determination shall be binding on the parties
and shall be enforceable in any further proceedings relating to this Lease. The
appraisers shall have no right to award a Tenant improvement allowance or other
monetary concessions, but shall take into account any such concessions and other
relevant factors.

         (d)      Tenant Default. If at the time when Landlord received the
Renewal Notice or on the date of the commencement of the Renewal Term, Tenant
shall be in Default under this Lease, Landlord shall have the right, by giving
written notice thereof to Tenant, to cancel the Renewal Option with respect to
such Renewal Term and any exercise of such Renewal Option by Tenant. In the
event of such cancellation, Tenant shall have no right, and Landlord shall have
no obligation, to renew this Lease pursuant to such Renewal Option.

         (e)      Limitations on Renewal Option. If Tenant fails to exercise the
Renewal Option within the time required, such failure shall automatically cancel
such Renewal Option, and Tenant shall have no right, and Landlord shall have no
obligation, to renew this Lease pursuant to such Renewal Option.

<PAGE>

                                    Rider 102
                                  Storage Space

         Subject to the further provisions of this Rider, Landlord hereby grants
to Tenant a license and permission to use as storage space approximately 2,000
square feet on the P2 parking level of the Project as designated on the Exhibit
C attached hereto and incorporate herein (the "Storage Space"), for the storage
of Tenant's Personal Property only. The Storage Space shall not be used or
occupied by Tenant for any other purpose.

         (a).     For the Initial Term of the Lease and any Renewal Term, there
shall be no rental charge for the Storage Space.

         (b).     Tenant shall receive the key to the Storage Space upon
execution of this Lease and shall allow Landlord or Landlord's agents access to
the Storage Space upon reasonable prior notice to Tenant by Landlord to inspect
the Storage Space. Tenant shall not store or place any Hazardous Materials,
volatile, illegal or dangerous items in the Storage Space, including, without
limitation, chemicals, liquids, explosives, firearms, live plant or animal
matter, garbage or trash, and shall maintain the Storage Space in a neat and
orderly fashion, and shall not stack or place any items outside of the Storage
Space. Tenant shall responsible for the utilities serving the Storage Space. The
Tenant shall not use the Storage Space in any manner except for the storage of
Tenant's Personal Property.

         (c).     Tenant acknowledges and agrees that Landlord is not
responsible for the security of Tenant's Personal Property, and that Tenant
assumes all risks, and hereby waives any and all claims against Landlord (and
its members, managers, agents, contractors, subcontractors and employees)
(collectively, "Landlord and its Related Parties"), associated with, arising
from or in any way related to, the use of the Storage Space, including, without
limitation, any loss or damage to personal property in the Storage Space
regardless of whether same shall be caused by Landlord's acts and Tenant hereby
waives any and all claims, whether known or unknown against Landlord and its
Related Parties with respect to same, unless caused by Landlord's gross
negligence or willful misconduct. Tenant shall and does hereby indemnify and
hold Landlord and its Related Parties harmless for any and all claims, damages,
costs, expenses or charges (including attorneys' fees and court costs) arising
from or in any way related to this Amendment, the license, the storage of
property in the Storage Space, and access to and use of the Storage Space,
unless caused by Landlord's gross negligence or willful misconduct. Tenant shall
at all times during the term of this license maintain insurance covering all
loss, damage or casualty to Tenant's Personal Property in the full amount of its
replacement value and, if requested by Landlord, Tenant shall deliver evidence
of said insurance coverage and payment of all premiums therefor to Landlord.

         (d).     Upon the termination of this license, Tenant shall promptly
remove all items from the Storage Space, leaving same in broom clean condition,
and tender all keys to the Storage Space to Landlord and repair any damage to
the Storage Space. In the event Tenant shall fail to so remove all items from
the Storage Space, then Landlord may, in the exercise of its sole and absolute
discretion, and Tenant hereby authorizes Landlord to, remove and dispose of all
personal property left in the Storage Space seven (7) days after the termination
of Tenant's

<PAGE>

license to use the Storage Space and Landlord shall have no liability to Tenant
in connection with the removal and disposal of any such personal property from
the Storage Space.

<PAGE>

                                    Rider 103
                            Early Termination Option

                  Subject to the terms and conditions of and compliance with the
provisions of this Rider, Tenant shall have the option (the "Termination
Option") to terminate this Lease effective, subject to clause (a), at any time
designated by Tenant in the Termination Notice that is after the third (3rd)
anniversary date of the Commencement Date (the "Early Termination Date"), as
follows:

                  (a) Exercise. Tenant shall exercise the Termination Option by
giving written notice thereof to Landlord not more than twenty-four (24) months
and not less than nine (9) months prior to the Early Termination Date (the
"Termination Notice.")

                  (b) Termination Fee. Provided Tenant has delivered the
Termination Notice to Landlord in the manner and within the time periods set
forth in Subsection (a) above, Tenant's right to terminate this Lease pursuant
to the Termination Option shall be further conditioned on Tenant's payment to
Landlord, on or before the date which is nine (9) months prior to the Early
Termination Date, a sum equal to $500,000 (the "Termination Fee").
Notwithstanding the foregoing, if the Early Termination Date is anytime after
the fourth (4th) anniversary of the Commencement Date, the Termination Fee shall
be reduced to $250,000. There shall be no Termination Fee due by Tenant if the
Early Termination Date is any time during the Renewal Term.

                  (c) Tenant Default. If at the time when Landlord receives the
Termination Notice or on the Early Termination Date, Tenant shall be in Default
under this lease, Landlord shall have the right, by giving written notice
thereof to Tenant, to cancel Tenant's exercise of the Termination Option by
Tenant. In such event, (i) Landlord shall (within thirty (30) days after such
cancellation) return to Tenant an amount equal to the Termination Fee paid by
Tenant, less any Rent then due but not paid, and (ii) Tenant shall have no
right, and Landlord shall have no obligation, to terminate this lease pursuant
to such exercise of the Termination Option. If, within the time period set forth
in subparagraph (a) above, Tenant cures the Default(s) giving rise to Landlord's
cancellation, and no further Default exists, then Tenant may again exercise the
Termination Option subject to and in accordance with this Rider.

                  (d) Limitations on the Termination Option. If Tenant fails to
exercise the Termination Option or pay the Termination Fee within the respective
time periods provided for in this Rider, such failure shall automatically cancel
the Termination Option, and Tenant shall have no right, and Landlord shall have
no obligation, to terminate this lease pursuant to the Termination Option.

                  (e) Security Deposit. Within thirty (30) days after the Early
Termination Date, Landlord shall repay to Tenant that portion of the Security
Deposit to which Tenant is entitled pursuant to the terms of the Lease.