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                                                                   EXHIBIT 10.34
                                                                   -------------


                        SINGLE-TENANT INDUSTRIAL LEASE
                        ------------------------------
                                  (TRIPLE NET)



                                   LANDLORD:

                              SUNHALA ENTERPRISES
                        a California general partnership



                                    TENANT:

                                SYNBIOTICS, INC.
                            a California corporation
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               SUMMARY OF BASIC LEASE INFORMATION AND DEFINITIONS

This SUMMARY OF BASIC LEASE INFORMATION AND DEFINITIONS ("Summary") is hereby
incorporated into and made a part of the attached Single-Tenant Industrial Lease
which pertains to the Premises described in Section 1.4 below. All references in
the Lease to the "Lease" shall include this Summary. All references in the Lease
to any term defined in this Summary shall have the meaning set forth in this
Summary for such term. Any initially capitalized terms used in this Summary and
any initially capitalized terms in the Lease which are not otherwise defined in
this Summary shall have the meaning given to such terms in the Lease.

1.1  LANDLORD'S ADDRESS:  Sunhala Enterprises
                          c/o OliverMcMillan Management Services, Inc.
                          4350 Executive Drive, Suite 300
                          San Diego, California  92121
                          Att.:  James L. McMillan
                          Telephone:  457-0911
                          Facsimile:  455-1695

1.2  TENANT'S ADDRESS:    Synbiotics Corporation
                          16420 Via Esprillo
                          San Diego, California  92127-1702
                          Attn:  _________________
                          Telephone:  451-3770
                          Facsimile:  451-3826

1.3  PROJECT:  The industrial development known as 'Sunhala", in the City of San
Diego, County of San Diego, State of California, as shown on the site plan
attached hereto as Exhibit "A". The Project includes all buildings,
                   ------------
improvements and facilities, now or subsequently located within such development
from time to time, including, without limitation, the three (3) buildings
(including the Premises) currently located within the Project, as depicted on
the site plan attached hereto as Exhibit "A". The aggregate rentable square
                                 ------------
feet of all of the buildings (including the Premises) located within the Project
is approximately 72,000 square feet.

1.4  PREMISES:  That certain building (the "Building"), containing approximately
24,000 square feet, the address of which is 16420 Via Esprillo, San Diego,
California.  The Premises are more particularly described in Exhibit "B".
                                                             -----------
attached hereto.

1.5  TENANT'S SHARE OF OPERATING EXPENSES:  33.33%, based upon the square
footage of the Premises compared to the aggregate square footage of all
buildings in the Project.

1.6  MONTHLY OPERATING EXPENSE CHARGE:  Tenant's monthly Share of Operating
Expenses as provided in Section 4.

1.7  COMMENCEMENT DATE:  May 1, 1996.

1.8  ESTIMATED COMMENCEMENT DATE:  Not applicable.

1.9  TERM:  Sixty (60) months.

1.10 RENT:     MONTHS    ANNUAL RENT     MONTHLY RENT
               ------    -----------     ------------

                60         $165,600        $13,800

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1.11 SECURITY DEPOSIT:  Fourteen Thousand Four Hundred Dollars ($14,400).

1.12 PERMITTED USE:  Office, laboratory, clean rooms and light manufacturing of
the type currently performed by Tenant as of the date of this Lease, or any
other use which is reasonably comparable.

1.13 BROKERS:  The Sanders Company representing Landlord and Tenant.

1.14  INTEREST RATE:  The lesser of: (a) the rate announced from time to time by
Bank of America or, if Bank of America ceases to exist or ceases to publish such
rate, then the rate announced from time to time by the largest (as measured by
deposits) chartered operating bank operating in California, as its "prime rate"
or "reference rate", plus five percent 5%); or (b) the maximum rate permitted by
law.

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                         SINGLE-TENANT INDUSTRIAL LEASE

This LEASE ("Lease"), which includes the preceding Summary of Basic Lease
Information and Definitions ("Summary") attached hereto and incorporated herein
by this reference, is made as of the 1st day of May, 1996, by and between
SUNHALA ENTERPRISES, a California general partnership ("Landlord"), and
SYNBIOTICS CORPORATION, a California corporation ("Tenant").

1.   PREMISES.
     ---------

1.1  PREMISES.  Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord the Premises upon and subject to the terms, covenants and conditions
contained in this Lease to be performed by each party.

1.2  LANDLORD'S RESERVATION OF RIGHTS.  Provided Tenant's use of and access to
the Premises is not interfered with in an unreasonable manner, Landlord reserves
the right from time to time to install, use, maintain, repair, replace and
relocate pipes, ducts, conduits, wires and appurtenant meters and equipment
above the ceiling surfaces, below the floor surfaces and within the walls of the
Premises.

2.   TERM.  The Term of this Lease shall be for the period designated in Section
     ----
1.9 of the Summary commencing on the Commencement Date, and ending on the
expiration of such period, unless the Term is sooner terminated or extended as
provided in this Lease.

3.   RENT
     ----

3.1  BASIC RENT.  Tenant agrees to pay Landlord, as basic rent for the Premises,
the Annual Basic Rent designated in Section 1.10 of the Summary.  The Annual
Basic Rent shall be paid by Tenant in twelve (12) equal monthly installments of
Monthly Basic Rent in the amounts designated in Section 1.10 of the Summary in
advance on the first day of each and every calendar month during the Term,
except that the first full month's Monthly Basic Rent shall be paid upon
execution of this Lease by Tenant.  Monthly Basic Rent for any partial month
shall be prorated in the proportion that the number of days this Lease is in
effect during such month bears to the actual number of days in such month.

3.2  INCREASES TO BASIC RENT.  The Annual Basic Rent to be paid by Tenant during
each year of this Lease shall in no event be less than the amount set forth
herein but shall be increased as follows: The level of the United States Bureau
of Labor Statistics Consumer Price Index for All Urban Consumers, All items, for
Los Angeles-Anaheim-Riverside, California (1982-84=100) (the "Index") at the
Commencement Date (the "'base level") shall be the base for the adjustment
upward of the Annual Basic Rent.  At each anniversary of the Commencement Date,
the Annual Basic Rent payable for the year following such anniversary shall be
in an amount equal to the Annual Basic Rent increased by the same percentage as
the percentage change in the base level.  In no event, however, shall the
resulting increase in the Annual Basic Rent payable hereunder be less than four
percent (4%) of the Annual Basic Rent in effect immediately prior to any such
adjustment.  In the event the Bureau should discontinue the publication of the
Index, or alter the same in some other manner, Landlord in its discretion, will
adopt a reasonably comparable, suitable index or procedure which reflects
consumer prices.

3.3  RENT ABATEMENT.  Not applicable.

3.4  ADDITIONAL RENT.  All amounts and charges payable by Tenant under this
Lease in addition to the Annual Basic Rent described in Section 3.1 above shall
be considered additional rent for the purposes of this Lease, and the word
"rent" in this Lease shall include such additional rent unless the context
specifically or clearly implies that only the Annual Basic Rent or percentage
rent, if any, is referenced.  The Annual Basic Rent and additional rent shall

                                      -1-
<PAGE>

be paid to Landlord as provided in Section 7, without any prior demand therefor
and without any deduction or offset, in lawful money of the United States of
America.

3.5  LATE PAYMENTS.  Late payments of Monthly Basic Rent and/or any item of
additional rent will be subject to interest and a late charge as provided in
Section 23.7 below.

4.   COMMON AREA OPERATING EXPENSES.
     -------------------------------

4.1  DEFINITION OF COMMON AREA.  The term "Common Area", as used in this Lease
means all areas and the improvements thereon within the boundaries of the
Project (exclusive of the buildings located within the Project) which area and
improvements are now or later made available for the general use of Landlord,
Tenant and other persons entitled to occupy floor area in the Project and their
customers, including, without limitation, the parking facilities of the Project,
loading and unloading areas, trash areas, roadways, sidewalks, walkways,
parkways, driveways, landscaped areas, and similar areas and facilities situated
within the Project which are not reserved for the exclusive use of any Project
occupants.  Common Area shall not include (i) the entryway to a tenant I s
premises, (ii) any improvements installed by a tenant outside of its premises,
whether with or without Landlord's knowledge or consent, or (iii) any areas or
facilities located within the Project that are included in the description of
premises leased to a tenant.

4.2  MAINTENANCE AND USE OF COMMON AREA.  The manner in which the Common Area
shall be maintained shall be solely determined by Landlord.  If any owner or
tenant of any portion of the Project maintains Common Area located upon its
parcel or demised premises (Landlord shall have the right in its sole discretion
to allow any purchaser or tenant to so maintain Common Area located upon its
parcel or demised premises and to be excluded from participation in the payment
of Common Area Expenses as provided below), Landlord shall not have any
responsibility for the maintenance of that portion of the Common Area and Tenant
shall have no claims against Landlord arising out of any failure of such owner
or tenant to so maintain its portion of the Common Area.  The use and occupancy
by Tenant of the Premises shall include the right to use the Common Area (except
areas used in the maintenance or operation of the Project), in common with
Landlord and other tenants of the Project and their customers and invitees,
subject to (i) any Declaration of Covenants, Conditions and Restrictions of
record, or as Landlord shall cause to be recorded from time to time from and
after the date hereof (collectively the "Declaration"), provided that the
Declaration shall in no event impose on Tenant any obligations which would
prevent or interfere with Tenant's occupancy of the Premises in accordance with
the terms of this Lease, and (ii) such reasonable, non-discriminatory rules and
regulations concerning the Project as may be established by Landlord from time
to time including, without limitation, the Rules and Regulations attached hereto
as Exhibit "F".  Tenant agrees to promptly comply with all such rules and
   -----------
regulations and any reasonable, non-discriminatory amendments thereto upon
receipt of written notice from Landlord.

4.3  CONTROL OF AND CHANGES TO COMMON AREA.  Landlord shall have the sole and
exclusive control of the Common Area, as well as the right to make reasonable
changes to the Common Area.  Provided Landlord does not materially interfere
with Tenant's use of and access to the Premises, Landlord's rights shall
include, but not be limited to, the right to (a) restrain the use of the Common
Area by unauthorized persons; (b) cause Tenant to remove or restrain persons
from any unauthorized use of the Common Area if they are using the Common Area
by reason of Tenant's presence in the Project; (c) utilize from time to time any
portion of the Common Area for promotional, entertainment, and related matters;
(d) temporarily close any portion of the Common Area for repairs, improvements
or alterations, to discourage non-customer use, to prevent public dedication or
an easement by prescription from arising, or for any other reason deemed
appropriate in Landlord's judgment; and (e) reasonably change the shape and size
of the Common Area, add, eliminate or change the location of improvements to the
Common Area, including, without limitation, buildings, lighting, parking areas,
landscaped areas, roadways, walkways, drive aisles and curb cuts.

                                      -2-
<PAGE>

4.4  OPERATING EXPENSES.  Throughout the Term of this Lease, commencing on the
Commencement Date, Tenant agrees to pay Landlord as additional rent in
accordance with the terms of this Section 4, Tenant's Share of Operating
Expenses for the taxes and insurance for the Common Area and for all costs and
expenses for the operation, maintenance, repair, and replacement of the Common
Area including, without limitation: (i) any form of real property tax,
assessment, license fee, license tax, business license fee, commercial rental
tax, levy, charge, improvement bond or similar imposition of any kind or nature
imposed by any authority having the direct power to tax, including any city,
county, state or federal government, or any school, agricultural, lighting,
drainage or other improvement or special assessment district thereof; (ii) any
and all assessments under any covenants, conditions and restrictions affecting
the Project; (iii) water, sewer and other utility charges; (iv) costs of
insurance obtained by Landlord pursuant to Section 21 of this Lease; (v) waste
disposal and janitorial services; (vi) security; (vii) labor; (viii) management
costs including, without limitation: (A) wages and salaries (and payroll taxes
and similar charges) of property management employees, and (B) management office
rental, supplies, equipment and related operating expenses and a commercially
reasonable management fee; (ix) supplies, materials, equipment and tools
including rental of personal property; (x) maintenance, sweeping, repairs,
resurfacing, re-striping and upkeep of any parking and any other paved surfaces
included within the Common Area; (xi) amortization on a straight line basis over
the useful life [together with interest at the Interest Rate on the unamortized
balance] of all capitalized expenditures which are: (A) reasonably intended to
produce a reduction in operating charges or energy consumption; or (B) required
under any governmental law or regulation that was not applicable to the Project
at the time it was originally constructed; or (C) for replacement of any Project
equipment needed to operate the Project.at the same quality levels as prior to
the replacement; (xii) gardening and landscaping; (xiii) maintenance of signs
(other than signs of tenants of the Project); (xiv) personal property taxes
levied on or attributable to personal property used in connection with the
Common Areas; (xv) reasonable accounting, audit, verification, legal and other
consulting fees; and (xvi) any other costs and expenses of repairs, maintenance,
painting, lighting, cleaning, and similar items, including appropriate reserves,
applicable to the Common Area.

4.5  TENANT'S MONTHLY OPERATING EXPENSE CHARGE.  From and after the Commencement
Date, Tenant shall pay to Landlord, on the first day of each calendar month
during the Term of this Lease, Tenant's share of an amount estimated by Landlord
to be the Monthly Operating Expenses for the Common Area for that month and the
estimated monthly charge for Tenant's share of Real Property Taxes as provided
in Section 10 ("Tenant's Monthly Operating Expense Charge").

4.6  ESTIMATE STATEMENT.  Prior to the Commencement Date and on or about March
1st of each subsequent calendar year during the Term of this Lease, Landlord
will endeavor to deliver to Tenant a statement ("Estimate Statement") wherein
Landlord will estimate both the Operating Expenses and Tenant's Monthly
Operating Expense Charge for the then current calendar year.  Tenant agrees to
pay Landlord, as additional rent, Tenant's estimated Monthly Operating Expense
Charge each month thereafter, beginning with the next installment of rent due,
until such time as Landlord issues a revised Estimate Statement or the Estimate
Statement for the succeeding calendar year, except that, concurrently with the
regular monthly rent payment next due following the receipt of each such
Estimate Statement, Tenant agrees to pay Landlord an amount equal to one monthly
installment of Tenant's estimated Monthly Operating Expense Charge (less any
applicable Operating Expenses already paid) multiplied by the number of months
from January, in the current calendar year, to the month of such rent payment
next due, all months inclusive.  If at any time during the Term of this Lease,
but not more often than quarterly, Landlord reasonably determines that Tenant's
Share of Operating Expenses for the current calendar year will be greater than
the amount set forth in the then current Estimate Statement, Landlord may issue
a revised Estimate Statement and Tenant agrees to pay Landlord, within ten (10)
days of receipt of the revised Estimate Statement, the difference between the
amount owed by Tenant under such revised Estimate Statement and the amount owed
by Tenant under the original Estimate Statement for the portion of the then
current calendar year which has expired.  Thereafter Tenant agrees to pay
Tenant's Monthly Operating Expense Charge based on such revised Estimate
Statement until Tenant receives the next calendar years Estimate Statement or a
new revised Estimate Statement for the current calendar year.

                                      -3-
<PAGE>

4.7  ACTUAL STATEMENT.  By March 1st of each calendar year during the Term of
this Lease, Landlord will also endeavor to deliver to Tenant a statement
("Actual Statement") which states Tenant's Share of the actual Operating
Expenses for the preceding calendar year.  If the Actual Statement reveals that
Tenant's Share of the actual Operating Expenses is more than the total
Additional Rent paid by Tenant for Operating Expenses on account of the
preceding calendar year, Tenant agrees to pay Landlord the difference in a lump
sum within ten (10) days of receipt of the Actual Statement.  If the Actual
Statement reveals that Tenant's Share of the actual Operating Expenses is less
than the Additional Rent paid by Tenant for Operating Expenses on account of the
preceding calendar year, Landlord will credit any overpayment toward the next
monthly installment(s) of Tenant's Share of the Operating Expenses due under
this Lease.

4.8  MISCELLANEOUS.  Any delay or failure by Landlord in delivering any Estimate
Statement or Actual Statement pursuant to this Section 4 will not constitute a
waiver of its right to require an increase in additional rent for Operating
Expenses nor will it relieve Tenant of its obligations pursuant to this Section
4, except that Tenant will not be obligated to make any payments based on such
Estimate Statement or Actual Statement until ten (10) days after receipt of such
Estimate Statement or Actual Statement.  If Tenant does not object to any
Estimate Statement or Actual Statement within thirty (30) days after Tenant
receives any such statement, such statement will be deemed final and binding on
Tenant.  Even though the Term has expired and Tenant has vacated the Premises,
when the final determination is made of Tenant's Share of the actual Operating
Expenses for the year in which this Lease terminates, Tenant agrees to pay,
within thirty (30) days after receipt of notice of such final determination, any
increase due over the estimated expenses paid and, conversely, any overpayment
made in the event said expenses decrease shall be rebated by Landlord to Tenant
within thirty (30) days after such final determination is made by Landlord.
Such obligation will be a continuing one which will survive the expiration or
termination of this Lease.  Prior to the expiration or sooner termination of the
Lease Term and Landlord's acceptance of Tenant's surrender of the Premises,
Landlord will have the fight to estimate the actual Operating Expenses for the
then current Lease Year and to collect from Tenant prior to Tenant's surrender
of the Premises, Tenant's Share of any excess of such actual Operating Expenses
over the estimated Operating Expenses paid by Tenant in such Lease Year.

5.   SECURITY DEPOSIT.  Tenant has previously deposited with Landlord the
     ----------------
Security Deposit designated in Section 1.12 of the Summary. The Security Deposit
shall be held by Landlord as security for the full and faithful performance by
Tenant of all of the terms, covenants and conditions of this Lease to be
performed by Tenant during the Term. The Security Deposit is not, and may not be
construed by Tenant to constitute, rent for the last month or any portion
thereof. If Tenant defaults with respect to any of its obligations under this
Lease, Landlord may (but shall not be required to) use, apply or retain all or
any part of the Security Deposit for the payment of any rent or any other sum in
default, or for the payment of any other amount, loss or damage which Landlord
may spend, incur or suffer by reason of Tenant's default. If any portion of the
Security Deposit is so used or applied, Tenant shall, within ten (10) days after
demand therefor, deposit cash with Landlord in an amount sufficient to restore
the Security Deposit to its original amount. Landlord shall not be required to
keep the Security Deposit separate from its general funds, and Tenant shall not
be entitled to interest on the Security Deposit. If Tenant shall fully and
faithfully perform every provision of this Lease to be performed by it, the
Security Deposit or any balance thereof shall be returned to Tenant within two
(2) weeks following the expiration of the Lease term, provided that Landlord may
retain the Security Deposit until such time as any amount due from Tenant in
accordance with Section 4 hereof has been determined and paid in full. If
Landlord sells its interest in the Premises during the Term and if Landlord
deposits with the purchaser the Security Deposit (or balance thereof), and such
purchaser acknowledges receipt thereof, then, upon such sale, Landlord shall be
discharged from any further liability with respect to the Security Deposit.

6.   USE.
     ----

6.1  GENERAL.  Tenant shall use the Premises solely for the Permitted Use
specified in Section 1.12 of the Summary, and shall not use or permit the
Premises to be used for any other use or purpose whatsoever. Tenant shall
observe and comply with the "Rules and Regulations" attached hereto as, and all
reasonable nondiscriminatory

                                      -4-
<PAGE>

modifications thereof and additions thereto from time to time put into effect
and furnished to Tenant by Landlord. Landlord shall endeavor to enforce the
Rules and Regulations, but shall have no liability to Tenant for the violation
or non-performance by any other tenant or occupant of the Project of any such
Rules and Regulations. Tenant shall, at its sole cost and expense, observe and
comply with all requirements of any board of fire underwriters or similar body
relating to the Premises, and all laws, statutes, codes, rules and regulations
now or hereafter in force relating to or affecting the use, occupancy,
alteration or improvement of the Premises, including, without limitation, the
provisions of Title III of the Americans with Disabilities Act of 1990 (the
"Act") as it pertains to Tenant's use, occupancy, improvement and alteration of
the Premises; provided, however, Landlord shall be responsible for compliance
with the Act during the Term with regard to all Common Areas. Tenant shall not
use or allow the Premises to be used (a) in violation of the Declaration or any
other recorded covenants, conditions and restrictions affecting the Project or
of any law or governmental rule or regulation, or of any certificate of
occupancy issued for the Premises, or (b) for any improper, immoral, unlawful or
reasonably objectionable purpose. Tenant shall not do or permit to be done
anything which will obstruct or interfere with the rights of other tenants or
occupants of the Project, or injure or annoy them. Tenant shall not cause,
maintain or permit any nuisance in, on or about the Premises or the Project, nor
commit or suffer to be committed any waste in, on or about the Premises. Tenant
and Tenant's employees and agents shall not solicit business in the Common Area,
nor shall Tenant distribute any handbills or other advertising matter in the
Common Area.

6.2  PARKING.  Tenant and its employees shall park their vehicles only in those
portions of the Common Area from time to time designated for such purpose by
Landlord.  The use of the parking area shall be nonexclusive and shall be
subject to the Parking Rules and Regulations attached hereto as Exhibit "F" and
                                                                -----------
any other reasonable, non-discriminatory rules and regulations adopted by
Landlord from time to time.  Tenant shall be responsible for ensuring that its
employees comply with all the provisions of this Section and such other parking
rules and regulations as may be adopted and implemented by Landlord from time to
time.  Parking in the Common Area shall be available on the basis of ___ spaces
per one thousand (1,000) square feet located within the Premises.

6.3  SIGNS, AWNINGS AND CANOPIES.  Tenant will not place or suffer to be placed
or maintained on the roof or on any exterior door, wall or window (or within 48
inches of any window) of the Premises any sign, awning or canopy, or advertising
matter on the glass of any window or door of the Premises without Landlord's
prior written consent.  In addition, any signs shall be erected signs in
accordance with the provisions of the sign criteria promulgated by the Landlord,
as the same may be revised by Landlord from time to time, and all such signs
must be approved by the Bernardo Industrial Park Architectural Committee.
Tenant agrees to maintain any such sign, awning, canopy, decoration, lettering
or advertising matter as may be approved by Landlord in good condition and
repair at all times.  At the expiration or earlier termination of this Lease, at
Landlord's election, Tenant shall remove all signs, awnings, canopies,
decorations, lettering and advertising and shall repair any damage to the
Premises resulting therefrom all at Tenant's sole cost and expense.  If Tenant
fails to maintain any such approved sign, awning, decoration, lettering, or
advertising, Landlord may do so and Tenant shall reimburse Landlord for such
cost plus a twenty percent (20%) overhead fee.  If, without Landlord's prior
written consent, Tenant installs any sign, awning, decoration, lettering or
advertising, or fails to remove any such item(s) at the expiration or earlier
termination of this Lease, Landlord may have such item(s) removed and stored and
may repair any damage to the Premises at Tenant's expense.  The removal, repair
and/or storage costs shall bear interest until paid at the Interest Rate
specified in Section 1.14.

6.4  HAZARDOUS MATERIALS.  Except for ordinary and general office supplies, such
as copier toner, liquid paper, glue, ink and common household cleaning materials
(some or all of which may constitute "Hazardous Materials" as defined in this
Lease), Tenant agrees not to cause or permit any Hazardous Materials to be
brought upon, stored, used, handled, generated, released or disposed of on, in,
under or about the Premises, the Common Areas or any other portion of the
Project by Tenant, its agents, employees, subtenants, assignees, licensees,
contractors or invitees (collectively, "Tenant's Parties"), without the prior
written consent of Landlord, which consent Landlord shall not unreasonably
withhold provided Tenant provides Landlord with adequate assurances that such
Hazardous Materials are necessary for Tenant's business operations and will be
handled and disposed of in compliance with all applicable

                                      -5-
<PAGE>

laws.  Concurrently with the execution of this Lease, Tenant agrees to complete
and deliver to Landlord an Environmental Questionnaire in the form of Exhibit
                                                                      -------
"J" attached hereto.  Upon the expiration or earlier termination of this Lease,
---
Tenant agrees to promptly remove from the Premises and the Project, at its sole
cost and expense, any and all Hazardous Materials, including any equipment or
systems containing Hazardous Materials which are installed, brought upon,
stored, used, generated or released upon, in, under or about the Premises and/or
the Project or any portion thereof by Tenant or any of Tenant's Parties.  To the
fullest extent permitted by law, Tenant agrees to promptly indemnify, protect,
defend and hold harmless Landlord and Landlord's partners, officers, directors,
employees, agents, successors and assigns (collectively, "Landlord Indemnified
Parties") from and against any and all claims, damages, judgments, suits, causes
of action, losses, liabilities, penalties, fines, expenses and costs (including,
without limitation, clean-up, removal, remediation and restoration costs, sums
paid in settlement of claims, attorneys' fees, consultant fees and expert fees
and court costs) which arise or result from the presence of Hazardous Materials
on, in, under or about the Premises or any other portion of the Project and
which are caused or permitted by Tenant or any of Tenant's Parties.  Tenant
agrees to promptly notify Landlord of any release of Hazardous Materials in the
Premises or any other portion of the Project which Tenant becomes aware of
during the Term of this Lease, whether caused by Tenant or any other persons or
entities.  In the event of any release of Hazardous Materials caused or
permitted by Tenant or any of Tenant's Parties, Landlord shall have the right,
but not the obligation, to cause Tenant to immediately take all steps Landlord
deems necessary or appropriate to remediate such release and prevent any similar
future release to the satisfaction of Landlord and Landlord's mortgagee(s).  At
all times during the Term of this Lease, Landlord will have the right, but not
the obligation, to enter upon the Promises to inspect, investigate, sample
and/or monitor the Premises to determine if Tenant is in compliance with the
terms of this Lease regarding Hazardous Materials.  As used in this Lease, the
term "Hazardous Materials" shall mean and include any hazardous or toxic
materials, substances or wastes as now or hereafter designated under any law,
statute, ordinance, rule, regulation, order or ruling of any agency of the
State, the United States Government or any local governmental authority,
including, without limitation, asbestos, petroleum, petroleum hydrocarbons and
petroleum based products, urea formaldehyde foam insulation, polychlorinated
biphenyls ("PCBs"), and freon and other chlorofluorocarbons.  The provisions of
this Section 6.4 will survive the expiration or earlier termination of this
Lease.

6.5  REFUSE AND SEWAGE.  Tenant agrees not to keep any trash, garbage, waste or
other refuse on the Premises except in sanitary containers and agrees to
regularly and frequently remove same from the Premises.  Tenant shall keep all
containers or other equipment used for storage of such materials in a clean and
sanitary condition.  Tenant shall properly dispose of all sanitary sewage and
shall not use the sewage disposal system for the disposal of anything except
sanitary sewage.  Tenant shall keep the sewage disposal system free of all
obstructions and in good operating condition.  If the volume of Tenant's trash
becomes excessive in Landlord's judgment, Landlord shall have the right to
charge Tenant for additional trash disposal services and/or to require that
Tenant contract directly for additional trash disposal services at Tenant's sole
cost and expense.

6.6  LIMITATION ON DAILY FLOW OF SEWAGE.  Tenant acknowledges that Landlord has
entered into an agreement pursuant to which a limitation has been imposed upon
Landlord with respect to maximum average daily flow of sewage from the Premises
into the sanitary sewer system servicing the Project and other real property in
the Bernardo Industrial Park.  Tenant agrees to be bound by and to comply with
all the terms of said agreement, and further agrees that a breach of the terms
of said agreement shall constitute a breach of this Lease.

6.7  TENANT'S OBLIGATIONS FOR EXCESSIVE POLLUTANTS.  Tenant shall pay all costs
caused by Tenant introducing excessive pollutants into the sanitary sewer
system, including permits, fees and charges levied by any governmental
subdivision for any pollutants or solids other than ordinary human waste.
Tenant agrees that the average daily flow of sewage from the Premises into the
sanitary sewer system shall not exceed 5,000 gallons.  For the purpose of this
                                       -----
paragraph, "average daily flow" shall mean the discharge of sewage and waste
water, expressed as a rate of flow in gallons per day (the "GPD") and shall be
computed by dividing the total gallons of sewage and waste water discharged
during any calendar month, by the number of days therein.  Said average daily
flow may be determined by the use of either permanent or temporary measurement
devices installed in the sewer system, or in the event a

                                      -6-
<PAGE>

sewer measurement device is not installed with respect to the Premises, then by
the measurement of water consumption as determined by the recorded water meter
reading.  Tenant shall be responsible for the installation and maintenance of
any dilution tanks, holding tanks, settling tanks, sewer sampling devices, sand
traps or similar devices as may be required by the governmental subdivision for
Tenant's use of the sanitary sewer system.

7.   PAYMENTS AND NOTICES.  All rent and other sums payable by Tenant to
     ---------------------
Landlord hereunder shall be paid to Landlord at the address designated in
Section 1.1 of the Summary, or to such other persons and/or at such other places
as Landlord may hereafter designate in writing.  Any notice required or
permitted to be given hereunder must be in writing and may be given by personal
delivery (including delivery by nationally recognized overnight carrier or
express mailing service), facsimile transmission, or by registered or certified
mail, postage prepaid, return receipt requested, addressed to Tenant at the
addressees) designated in Section 1.2 of the Summary, or to Landlord at the
addressees) designated in Section 1.1 of the Summary.  Either party may, by
written notice to the other, specify a different address for notice purposes.

8.   BROKERS.  The parties recognize that the broker(s) who negotiated this
     --------
Lease are stated in Section 1.13 of the Summary, and agree that Landlord shall
be solely responsible for the payment of brokerage commissions to said
broker(s), and that Tenant shall have no responsibility therefor unless written
provision to the contrary has been made.  Each party represents and warrants to
the other, that, to its knowledge, no other broker, agent or finder (a)
negotiated or was instrumental in negotiating or consummating this Lease on its
behalf, and (b) is or might be entitled to a commission or compensation in
connection with this Lease.  Any broker, agent or finder of Tenant whom Tenant
has failed to disclose herein shall be paid by Tenant.  Tenant shall indemnify,
protect, defend (by counsel reasonably approved in writing by Landlord) and hold
Landlord harmless from and against any and all claims, judgments, suits, causes
of action, damages, losses, liabilities and expenses (including attorneys' fees
and court costs) resulting from any breach by Tenant of the foregoing
representation, including, without limitation, any claims that may be asserted
against Landlord by any broker, agent or finder undisclosed by Tenant herein.
Landlord shall indemnify, protect, defend (by counsel reasonably approved in
writing by Tenant) and hold Tenant harmless from and against any and all claims,
judgments, suits, causes of action, damages, losses, liabilities and expenses
(including attorneys' fees and court costs) resulting from any breach by
Landlord of the foregoing representation, including, without limitation, any
claims that may be asserted against Tenant by any broker, agent or finder
undisclosed by Landlord herein.  The foregoing indemnities shall survive the
expiration or earlier termination of this Lease.

9.   SURRENDER; HOLDING OVER.
     ------------------------

9.1  SURRENDER OF PREMISES.  Upon the expiration or sooner termination of this
Lease, Tenant shall surrender all keys for the Premises to Landlord, and Tenant
shall deliver exclusive possession of the Premises to Landlord broom clean and
in first-class condition and repair, reasonable wear and tear excepted (and
casualty damage excepted if this Lease is terminated as a result thereof
pursuant to Section 18), with all of Tenant's personal property (and those
items, if any, of Tenant Improvements and Tenant Changes below) removed
therefrom and all damage caused by such removal repaired, as required pursuant
to Sections 12.2 and 12.3 below.  If, for any reason, Tenant fails to surrender
the Premises on the expiration or earlier termination of this Lease (including
upon the expiration of any subsequent month-to-month tenancy consented to by
Landlord pursuant to Section 9.2 below), with such removal and repair
obligations completed, then, in addition to the provisions of Section 9.3 below
and Landlord's rights and remedies under Section 12.4 and the other provisions
of this Lease, Tenant shall indemnify, protect, defend (by counsel reasonably
approved in writing by Landlord) and hold Landlord harmless from and against any
and all claims, judgments, suits, causes of action, damages, losses, liabilities
and expenses (including attorneys' fees and court costs) resulting from such
failure to surrender, including, without limitation, any claim made by any
succeeding tenant based thereon.  The foregoing indemnity shall survive the
expiration or earlier termination of this Lease.

9.2  HOLDING OVER.  If Tenant holds over after the expiration or earlier
termination of the Lease Term, Tenant shall become a tenant at sufferance only,
upon the terms and conditions set forth in this Lease so far as applicable

                                      -7-
<PAGE>

(including Tenant's obligation to pay all Common Area Expenses and any other
additional rent under this Lease), but at a Monthly Basic Rent equal to: (a) one
hundred fifty percent (150%) of the Monthly Basic Rent applicable to the
Premises immediately prior to the date of such expiration or earlier
termination; or (b) one hundred fifty percent (150%) of the prevailing market
rate excluding any rental or other concessions (as reasonably determined by
Landlord) for the Premises in effect on the date of such expiration or earlier
termination.  Acceptance by Landlord of rent after such expiration or earlier
termination shall not constitute a consent to a hold over hereunder or result in
an extension of this Lease.  Tenant shall pay an entire month's Monthly Basic
Rent calculated in accordance with this Section 9.2 for any portion of a month
it holds over and remains in possession of the Premises pursuant to this Section
9.2.

9.3  NO EFFECT ON LANDLORD'S RIGHTS.  The foregoing provisions of this Section 9
are in addition to, and do not affect, Landlord's right of re-entry or any other
rights of Landlord hereunder or otherwise provided at law or in equity.

10.  TAXES.
     ------

10.1 REAL PROPERTY TAXES.  Tenant agrees to pay all general and special real
property taxes, assessments (including, without limitation, change in ownership
taxes or assessments), liens, bond obligations, license fees or taxes and any
similar impositions in-lieu of other impositions now or previously within the
definition of real property taxes or assessments (collectively "Real Property
Taxes") which may be levied or assessed by any lawful authority against the
Premises applicable to the period from the Commencement Date until the
expiration or sooner termination of this Lease.  Notwithstanding the foregoing
provisions, if the Real Property Taxes are not levied and assessed against the
Premises as a separate tax parcel, then Tenant shall pay Tenant's pro rate share
of all Real Property Taxes which may be levied or assessed by any lawful
authority against the land and improvements of the separate tax parcel in which
the Premises is located.  Tenant's pro rate share under such circumstances shall
be apportioned according to the floor area of the Premises as it relates to the
total leasable floor area of all of the buildings (including the Premises)
situated in the separate tax parcel in which the Premises is located.

All Real Property Taxes for the tax year in which the Commencement Date occurs
and for the tax year in which this Lease terminates shall be apportioned and
adjusted so that Tenant shall not be responsible for any Real Property Taxes for
a period of time occurring prior to the Rent Commencement Date or subsequent to
the expiration of the Term.

The amount to be paid pursuant to the provisions of this Section 10.1 shall be
paid monthly in advance as part of Tenant's Monthly Operating Expense Charge as
estimated by Landlord based on the most recent tax bills and estimates of
reappraised values (if reappraisal is to occur), commencing with the month (or
partial month on a prorated basis if such be the case) that the Commencement
Date occurs.  The initial estimated monthly charge for Tenant's share of Real
Property Taxes is included in the Monthly Operating Expense Charge as provided
in Section 4.

If at any time during the Term under the laws of the United States, or the
state, county, municipality, or any political subdivision thereof in which the
Project is located, a tax or excise on rent or any other tax however described
is levied or assessed by any such political body against Landlord on account of
rent payable to Landlord hereunder or any tax based on or measured by
expenditures made by Tenant on behalf of Landlord, such tax or excise shall be
considered "Real Property Taxes" for purposes of this Section 10.1, and shall be
payable in full by Tenant.  At Landlord's option, such taxes or excises shall be
payable monthly in advance on an estimated basis as provided in this Section
10.1 or shall be payable within ten (10) days after Tenant's receipt of the tax
bill therefor from Landlord.

10.2 PERSONAL PROPERTY TAXES.  Tenant shall be liable for, and shall pay before
delinquency, all taxes and assessments (real and personal) levied against (a)
any personal property or trade fixtures placed by Tenant in or about the
Premises (including any increase in the assessed value of the Premises based
upon the value of any such personal

                                      -8-
<PAGE>

property or trade fixtures); and (b) any Tenant Improvements or alterations in
the Premises (whether installed and/or paid for by Landlord or Tenant).  If any
such taxes or assessments are levied against Landlord or Landlord's property,
Landlord may, after written notice to Tenant (and under proper protest if
requested by Tenant) pay such taxes and assessments, and Tenant shall reimburse
Landlord therefor within ten (10) business days after demand by Landlord;
provided, however, Tenant, at its sole cost and expense, shall have the right,
with Landlord's cooperation, to bring suit in any court of competent
jurisdiction to recover the amount of any such taxes and assessments so paid
under protest.

11.  POSSESSION; CONDITION OF PREMISES; REPAIRS.
     -------------------------------------------

11.1  DELIVERY OF POSSESSION.  Tenant has been and continues in occupancy of the
Premises since 1988;  accordingly Tenant hereby accepts possession of the
Premises in its current "as-is" condition.

11.2 CONDITION OF PREMISES.  Tenant acknowledges that, except as otherwise
expressly set forth in this Lease, neither Landlord nor any agent of Landlord
has made any representation or warranty with respect to the Premises or the
Project or their condition, or with respect to the suitability thereof for the
conduct of Tenant's business.  The continuance of possession of the Premises by
Tenant shall conclusively establish that the Project, the Premises, the Tenant
Improvements therein, and the Common Areas were at such time complete and in
good, sanitary and satisfactory condition and repair without any obligation on
Landlord's part to make any alterations, upgrades or improvements thereto.

11.3 LANDLORD'S REPAIR OBLIGATIONS.  At Landlord's sole cost, Landlord shall
maintain and repair the roof and structure of the Building in good condition,
ordinary wear and tear and damage by fire or casualty excepted.  To the extent
repairs to the roof or structure are required as a result of Tenant's failure to
perform any of its obligations hereunder, or as a result of the acts of Tenant
or its employees, agents, contractors, invitees or subtenants, such repairs,
plus an administrative fee of ten percent (10%), shall be made by Landlord at
the sole cost and expense of Tenant.  Landlord shall, as part of the Operating
Expenses, repair and maintain the Common Areas of the Project;  provided,
however, to the extent such maintenance or repairs are required as a result of
any act, neglect, fault or omission of Tenant or any of Tenant's agents,
employees, contractors, licensees or invitees, Tenant shall pay to Landlord, as
additional rent, the costs of such maintenance and repairs.  Landlord shall not
be liable to Tenant for failure to perform any such repairs or maintenance,
unless Landlord shall fail to make such repairs and such failure shall continue
for an unreasonable time following written notice from Tenant to Landlord of the
need for such repairs.  Without limiting the foregoing, Tenant waives the right
to make repairs at Landlord's expense under any law, statute or ordinance now or
hereafter in effect (including the provisions of California Civil Code Section
1942 and any successive sections or statutes of a similar nature).

11.4 TENANT'S REPAIR OBLIGATIONS.  Except for Landlord's obligations
specifically set forth in Sections 11.2, 11.3, 18.1 and 19.2 hereof, Tenant
shall at all times and at Tenant's sole cost and expense, keep, maintain, clean,
repair and preserve the Premises and all parts thereof, both structural and non-
structural, in good working order and repair including, without limitation,
utility meters, plumbing, pipes and conduits, all heating, ventilating and air
conditioning systems located within the Premises, all fixtures, furniture and
equipment, Tenant's signs, if any, locks, closing devices, security devices,
windows, window sashes, casements and frames, floors and floor coverings,
shelving, restrooms, ceilings, roof membranes, skylights, interior and demising
walls, doors, electrical and lighting equipment, sprinkler systems, walkways,
loading dock areas and doors, rail spur areas, fences and signs, if any, and any
Tenant Improvements, Tenant Changes or other alterations, additions and other
property and/or fixtures located within the Premises in good condition and
repair, reasonable wear and tear excepted.  Tenant agrees to procure and
maintain maintenance contracts for all heating, ventilating and air conditioning
systems with reputable contractors reasonably approved by Landlord, provided
that Landlord may, at Landlord's option, procure such contract in which event
Tenant shall reimburse Landlord for Landlord's actual costs therefore.  In the
event said system requires repair work to be performed, Landlord shall contract
for the performance of such repair work at Tenant's sole cost and expense, and
Tenant shall promptly reimburse Landlord for the cost of the same upon
Landlord's demand therefor.  Tenant

                                      -9-
<PAGE>

shall replace, at its expense, any and all plate and other glass in and about
the Premises which is damaged or broken from any cause whatsoever except due to
the gross negligence or willful misconduct of Landlord, its agents or employees.
Such maintenance and repairs shall be performed with due diligence, lien-free
and in a good and workmanlike manner, by licensed contractor(s) which are
selected by Tenant and approved by Landlord, which approval Landlord shall not
unreasonably withhold or delay.  Except as otherwise expressly provided in this
Lease, Landlord shall have no obligation to alter, remodel, improve, repair,
renovate, or redecorate all or any part of the Premises.

11.5 LANDLORD'S RIGHTS.  If Tenant fails to perform Tenant's obligations under
Section 11.4 hereof, or under any other provision of this Lease, then Landlord
shall have the option to enter upon the Premises after ten (10) days' prior
written notice to Tenant, or in the case of an emergency immediately without
prior notice, to perform such obligations on Tenant's behalf necessary to return
the Premises to good order, condition and repair.  The costs incurred by
Landlord pursuant to this Section 11.4 shall become due and payable to Landlord,
upon demand, together with a fee of ten percent (10%) of the costs of such work
for Landlord's managing agent.

12.  ALTERATIONS.
     ------------

12.1 TENANT CHANGES; CONDITIONS.

(a)  Tenant shall not make any alterations, additions, improvements or
decorations to the Premises (collectively, "Tenant Changes", and individually, a
"Tenant Change") unless Tenant first obtains Landlord's prior written approval
thereof, which approval Landlord shall not unreasonably withhold.
Notwithstanding the foregoing, Landlord's prior approval shall not be required
for any Tenant Change which satisfies all of the following conditions
(hereinafter a "Pre-Approved Change"): (i) the costs of such Tenant Change does
not exceed Five Hundred Dollars ($500.00) individually; (ii) the costs of such
Tenant Change when aggregated with the costs of all other Tenant Changes made by
Tenant during the Term of this Lease do not exceed Fifteen Hundred Dollars
($1,500.00); (iii) Tenant delivers to Landlord final plans, specifications and
working drawings for such Tenant Change at least ten (10) days prior to
commencement of the work thereof; and (iv) Tenant and such Tenant Change
otherwise satisfy all other conditions set forth in this Section 12.1.

(b)  All Tenant Changes shall be performed: (i) in accordance with the approved
plans, specifications and working drawings; (ii) lien-free and in a good and
workmanlike manner; (iii) in compliance with all laws, rules and regulations of
all governmental agencies and authorities including, without limitation, the
provisions of Title III of the Americans with Disabilities Act of 1990; (iv) in
such a manner so as not to unreasonably interfere with the occupancy of any
other building located within the Project, nor impose any additional expense
upon nor delay Landlord in the maintenance and operation of the Building or any
other building located within the Project; and (v) at such times, in such manner
and subject to such rules and regulations as Landlord may from time to time
reasonably designate.

(c)  Throughout the performance of the Tenant Changes, Tenant shall obtain, or
cause its contractors to obtain, workers compensation insurance and commercial
general liability insurance in compliance with the provisions of Section 20 of
this Lease.

12.2 REMOVAL OF TENANT CHANGES AND TENANT IMPROVEMENTS.  All Tenant Changes and
the initial Tenant Improvements in the Premises (whether installed or paid for
by Landlord or Tenant), shall become the property of Landlord and shall remain
upon and be surrendered with the Premises at the end of the Term of this Lease;
provided, however, Landlord may, by written notice delivered to on or before the
expiration of the Lease Term (or upon any sooner termination of this Lease)
identify those items of the initial Tenant Improvements and Tenant Changes, if
any, which Landlord shall require Tenant to remove at the end of the Term of
this Lease.  If Landlord requires Tenant to remove any such items as described
above, Tenant shall, at its sole cost, remove the identified items on or before

                                     -10-
<PAGE>

the expiration or sooner termination of this Lease and repair any damage to the
Premises caused by such removal (or, at Landlord's option, shall pay to Landlord
all of Landlord's costs of such removal and repair).

12.3 REMOVAL OF PERSONAL PROPERTY.  All articles of personal property owned by
Tenant or installed by Tenant at its expense in the Premises (including business
and trade fixtures, furniture and movable partitions) shall be, and remain, the
property of Tenant, and shall be removed by Tenant from the Premises, at
Tenant's sole cost and expense, on or before the expiration or sooner
termination of this Lease.  Tenant shall repair any damage caused by such
removal.

12.4 TENANT'S FAILURE TO REMOVE.  If Tenant fails to remove by the expiration or
sooner termination of this Lease all of its personal property, or any items of
Tenant Improvements or Tenant Changes identified by Landlord for removal
pursuant to Section 12.2 above, Landlord may, (without liability to Tenant for
loss thereto, at Tenant's sole cost and in addition to Landlord's other rights
and remedies under this Lease, at law or in equity: (a) remove and store such
items in accordance with applicable law; and/or (b) upon ten (10) days' prior
notice to Tenant, sell all or any such items at private or public sale for such
price as Landlord may obtain as permitted under applicable law.  Landlord shall
apply the proceeds of any such sale to any amounts due to Landlord under this
Lease from Tenant (including Landlord's attorneys' fees and other costs incurred
in the removal, storage and/or sale of such items), with any remainder to be
paid to Tenant.

13.  LIENS.  Tenant shall not permit any mechanic's, materialmen's or other
liens to be filed against all or any part of the Project or the Premises, nor
against Tenant's leasehold interest in the Premises, by reason of or in
connection with any repairs, alterations, improvements or other work contracted
for or undertaken by Tenant or any other act or omission of Tenant or Tenant's
agents, employees, contractors, licensees or invitees.  Tenant shall, at
Landlord's request, provide Landlord with enforceable, conditional and final
lien releases (and other reasonable evidence reasonably requested by Landlord to
demonstrate protection from liens) from all persons furnishing labor and/or
materials with respect to the Premises.  Landlord shall have the right at all
reasonable times to post on the Premises and record any notices of non-
responsibility which it deems necessary for protection from such liens.  If any
such liens are filed, Tenant shall, at its sole cost, immediately cause such
lien to be released of record or bonded so that it no longer affects title to
the Project or the Premises.  If Tenant fails to cause such lien to be so
released or bonded within twenty (20) days after filing thereof, Landlord may,
without waiving its rights and remedies based on such breach, and without
releasing Tenant from any of its obligations, cause such lien to be released by
any means it shall deem proper, including payment in satisfaction of the claim
giving rise to such lien.  Tenant shall pay to Landlord within five (5) days
after receipt of invoice from Landlord, any sum paid by Landlord to remove such
liens, together with interest at the Interest Rate from the date of such payment
by Landlord.


14.  ASSIGNMENT AND SUBLETTING.
     --------------------------

14.1 RESTRICTION ON TRANSFER.  Tenant will not assign or encumber this Lease in
whole or in part, nor sublet all or any part of the Premises, without the prior
written consent of Landlord, which consent Landlord will not unreasonably
withhold, except as provided in this Section 14.  The consent by Landlord to any
assignment, encumbrance or subletting shall not constitute a waiver of the
necessity for such consent to any subsequent assignment or subletting.  This
prohibition against assigning or subletting shall be construed to include a
prohibition against any assignment or subletting by operation of law.  If this
Lease is assigned by Tenant, or if the Premises or any part thereof are sublet
or occupied by any person or entity other than Tenant, Landlord may collect rent
from the assignee, subtenant or occupant, and apply the net amount collected to
the rent herein reserved, but no such assignment, subletting, occupancy or
collection shall be deemed a waiver on the part of Landlord, or the acceptance
of the assignee, subtenant or occupant as Tenant, or a release of Tenant from
the further performance by Tenant of covenants on the part of Tenant herein
contained unless expressly made in writing by Landlord.  Irrespective of any
assignment or sublease, Tenant shall remain fully liable under this Lease and
shall not be released from performing any of the terms, covenants and conditions
of this Lease.  Without limiting in any way Landlord's right to withhold

                                     -11-
<PAGE>

its consent on any reasonable grounds, it is agreed that Landlord will not be
acting unreasonably in refusing to consent to an assignment or sublease if, in
Landlord's opinion, (i) the net worth or financial capabilities of such assignee
or subtenant is less than that of Tenant at the date hereof, (ii) the proposed
assignee does not have the financial capability to fulfill the obligations
imposed by the assignment, (iii) the proposed assignment or sublease involves a
change of use of the Premises from that specified herein, or (iv) the proposed
assignee is not, in Landlord's reasonable opinion, of reputable or good
character or consistent with Landlord's desired tenant mix for the Project.  Any
proposed assignee or subtenant which Landlord does not disapprove shall be
deemed a "Permitted Business". If Tenant assigns this Lease or sublets the
Premises to a third party who is not in any way affiliated or connected with
Tenant by way of a merger, reorganization, consolidation or otherwise, any rent,
additional rent or other compensation paid to Tenant in addition to the rent
payable to Landlord as set forth in this Lease shall be paid by Tenant to
Landlord as additional rent as set forth in Section 14.4. If Tenant is a
corporation, or is an unincorporated association or partnership, the transfer,
assignment or hypothecation of any stock or interest in such corporation,
association or partnership in the aggregate in excess of forty-nine percent
(49%) shall be deemed an assignment within the meaning and provisions of this
Section 14. 1.

14.2 TRANSFER NOTICE.  If Tenant desires to effect a Transfer, then at least
thirty (30) days prior to the date when Tenant desires the Transfer to be
effective (the "Transfer Date"), Tenant agrees to give Landlord a notice (the
"Transfer Notice"), stating the name, address and business of the proposed
assignee, sublessee or other transferee (sometimes referred to hereinafter as
"Transferee"), reasonable information (including references) concerning the
character, ownership, and financial condition of the proposed Transferee, the
Transfer Date, any ownership or commercial relationship between Tenant and the
proposed Transferee, and the consideration and all other material terms and
conditions of the proposed Transfer, all in such detail as Landlord may
reasonably require.

14.3 LANDLORD'S OPTIONS.  Within fifteen (15) days of Landlord's receipt of any
Transfer Notice, and any additional information requested by Landlord concerning
the proposed Transferee's financial responsibility, Landlord will notify Tenant
of its election to do one of the following: (i) consent to the proposed Transfer
subject to such reasonable conditions as Landlord may impose in providing such
consent; (ii) refuse such consent, which refusal shall be on reasonable grounds;
or (iii) terminate this Lease as to all or such portion of the Premises which is
proposed to be sublet or assigned and recapture all or such portion of the
Premises for reletting by Landlord in which event Tenant shall be released from
all future obligations under this Lease arising after the date of such
termination with respect to the Premises or portion thereof which is recaptured
by Landlord.

14.4 ADDITIONAL CONDITIONS.  A condition to Landlord's consent to any Transfer
of this Lease will be the delivery to Landlord of a true copy of the fully
executed instrument of assignment, sublease, transfer or hypothecation, in form
and substance reasonably satisfactory to Landlord.  Tenant agrees to pay to
Landlord, as additional rent, fifty percent (50%) of all sums and other
consideration payable to and for the benefit of Tenant by the assignee or
sublessee in excess of the rent payable under this Lease for the same period and
portion of the Premises.  In calculating excess rent or other consideration
which may be payable to Landlord under this Section, Tenant will be entitled to
deduct commercially reasonable third party brokerage commissions and attorneys'
fees and other amounts reasonably and actually expended by Tenant in connection
with such assignment or subletting if acceptable written evidence of such
expenditures is provided to Landlord.  No Transfer will release Tenant of
Tenant's obligations under this Lease or alter the primary liability of Tenant
to pay the rent and to perform all other obligations to be performed by Tenant
hereunder.  Landlord may require that any Transferee remit directly to Landlord
on a monthly basis, all monies due Tenant by said Transferee.  Consent by
Landlord to one Transfer will not be deemed consent to any subsequent Transfer.
In the event of default by any Transferee of Tenant or any successor of Tenant
in the performance of any of the terms hereof, Landlord may proceed directly
against Tenant without the necessity of exhausting remedies against such
Transferee or successor.  If Tenant effects a Transfer or requests the consent
of Landlord to any Transfer (whether or not such Transfer is consummated), then,
upon demand, and as a condition precedent to Landlord's consideration of the
proposed assignment or sublease, Tenant agrees to pay Landlord a non-refundable
administrative fee of Five Hundred Dollars ($500.00), plus Landlord's reasonable
attorneys' fees and costs

                                     -12-
<PAGE>

and other costs incurred by Landlord in reviewing such proposed assignment or
sublease not to exceed $1,000.00 for any Transfer.

15.  ENTRY BY LANDLORD. Landlord and its employees and agents shall at all
     ------------------
reasonable times have the right to enter the Premises to inspect the same, to
supply any service required to be provided by Landlord to Tenant under this
Lease, to exhibit the Premises to prospective lenders or purchasers (or during
the last year of the Term, to prospective tenants), to post notices of non-
responsibility, and/or to alter, improve or repair the Premises, all without
being deemed guilty of or liable for any breach of Landlord's covenant of quiet
enjoyment or any eviction of Tenant, and without abatement of rent. In
exercising such entry rights, Landlord shall endeavor to minimize, as reasonably
practicable, the interference with Tenant's business, and shall provide Tenant
with reasonable advance written notice of such entry (except in emergency
situations). Landlord shall have the means which Landlord may deem proper to
open Tenant's doors in an emergency in order to obtain entry to the Premises.
Any entry to the Premises obtained by Landlord by any of said means or otherwise
shall not under any circumstances be construed or deemed to be a forcible or
unlawful entry into, or a detainer of, the Premises, or an eviction of Tenant
from the Premises or.any portion thereof, or grounds for any abatement or
reduction of rent and Landlord shall not have any liability to Tenant for any
damages or losses on account of any such entry by Landlord except, subject to
the provisions of Section 22.1, to the extent of Landlord's gross negligence or
willful misconduct.

16.  UTILITIES AND SERVICES.  Tenant shall be solely responsible for and shall
     -----------------------
promptly pay all charges for heat, air conditioning, water, gas, electricity or
any other utility used, consumed or provided in, furnished to or attributable to
the Premises at the rates charged by the supplying utility companies and/or
Landlord.  Should Landlord elect to supply any or all of such utilities, Tenant
agrees to purchase and pay for the same as additional rent as apportioned by
Landlord.  The rate to be charged by Landlord to Tenant shall not exceed the
rate charged to Landlord by any supplying utility.  Tenant shall reimburse
Landlord within ten (10) days of billing for fixture charges and/or water
tariffs, if applicable, which are charged to Landlord by local utility
companies.  Landlord will notify Tenant of this charge as soon as it becomes
known.  This charge will increase or decrease with current charges being levied
against Landlord or the Premises by the local utility company, and will be due
as additional rent.  In no event shall Landlord be liable for any interruption
or failure in the supply of any such utility services to Tenant.

17.  INDEMNIFICATION AND EXCULPATION.
     --------------------------------

17.1 TENANT'S ASSUMPTION OF RISK AND WAIVER.  Except to the extent such matter
is not covered by the insurance required to be maintained by Tenant under this
Lease and such matter is attributable to the gross negligence or willful
misconduct of Landlord, Landlord shall not be liable to Tenant, Tenant's
employees, agents or invitees for: (i) any damage to property of Tenant, or of
others, located in, on or about the Premises, (ii) the loss of or damage to any
property of Tenant or of others by theft or otherwise, (iii) any injury or
damage to persons or property resulting from fire, explosion, failing plaster,
steam, gas, electricity, water, rain or leaks from any part of the Premises or
from the pipes, appliance of plumbing works or from the roof, street or
subsurface or from any other places or by dampness or by any other cause of
whatsoever nature, or (iv) any such damage caused by other persons in the
Premises, occupants of adjacent property of the Project, or the public, or
caused by operations in construction of any private, public or quasi-public
work.  Landlord shall in no event be liable for any consequential damages or
loss of business or profits and Tenant hereby waives any and all claims for any
such damages.  All property of Tenant kept or stored on the Premises shall be so
kept or stored at the sole risk of Tenant and Tenant shall hold Landlord
harmless from any claims arising out of damage to the same, including
subrogation claims by Tenant's insurance carriers, unless such damage shall be
caused by the gross negligence or willful misconduct of Landlord.  Landlord or
its agents shall not be liable for interference with the light or other
intangible rights.

17.2 TENANT'S INDEMNIFICATION OF LANDLORD. Tenant shall be liable for, and
shall indemnify, defend, protect and hold Landlord and Landlord's partners,
officers, directors, employees, agents, successors and assigns (collectively,
"Landlord Indemnified Parties") harmless from and against, any and all claims,
damages, judgments, suits, causes of action, losses, liabilities and expenses,
including attorneys' fees and court costs (collectively, "Indemnified

                                     -13-
<PAGE>

Claims"), arising or resulting from (a) any act or omission of Tenant or any of
Tenant's agents, employees, contractors, subtenants, assignees, licensees or
with respect to acts or omissions within the Premises only, Tenant's invitees
(collectively, "Tenant Parties"); (b) the use of the Premises and Common Areas
and conduct of Tenant's business by Tenant or any Tenant Parties, or any other
activity, work or thing done, permitted or suffered by Tenant or any Tenant
Parties, in or about the Premises or elsewhere on the Project; and/or (c) any
default by Tenant of any obligations on Tenant's part to be performed under the
terms of this Lease.  In case any action or proceeding is brought against
Landlord or any Landlord Indemnified Parties by reason of any such Indemnified
Claims, Tenant, upon notice from Landlord, shall defend the same at Tenant's
expense by counsel approved in writing by Landlord, which approval shall not be
unreasonably withheld.

17.3 LANDLORD'S INDEMNIFICATION OF TENANT.  Notwithstanding anything to the
contrary contained in Section 17.2 above, subject to the limitation on
Landlord's liability contained in Section 31 below and the mutual waivers
contained in Section 22 below, Landlord will be liable for, and agrees to
indemnify, protect, defend and hold harmless Tenant and Tenant's agents.
successors and assigns (collectively, "Tenant Indemnified Parties"), from and
against. any Indemnified Claims (as defined in Section 17.1 above) (but not for
injury to, or interference with, Tenant's or any Tenant Indemnified Parties'
business or for consequential damages), to the extent any such Indemnified Claim
arises or results from (a) any negligent or willful act or omission of Landlord
or any Landlord Parties; (b) any default by Landlord of any obligations on
Landlord's part to be performed under the terms of this Lease; and (c) to the
extent covered by the insurance maintained by Landlord under this Lease, any
acts or omissions of any third parties occurring in the Common Areas other than
the negligence or willful misconduct of Tenant or any Tenant Parties; provided,
however, that Landlord's indemnity shall not apply or extend to any such damage
or injury which occurs within the Premises which is covered by any insurance
maintained by Tenant or any Tenant Indemnified Parties (or which would have been
covered had Tenant obtained the insurance required under this Lease).  In case
any action or proceeding is brought against Tenant or any Tenant Indemnified
Parties by reason of any such injury or damage indemnified by Landlord as set
forth hereinabove, Landlord, upon notice from Tenant, agrees to defend the same
at Landlord's expense by counsel approved in writing by Tenant, which approval
Tenant will not unreasonably withhold.

17.4 SURVIVAL; NO RELEASE OF INSURERS.  The indemnification obligations of
Tenant and Landlord under Sections 17.2 and 17.3, shall survive the expiration
or earlier termination of this Lease.  The covenants, agreements and
indemnifications in Sections 17.1, 17.2 and 17.3 above, are not intended to, and
shall not relieve any insurance carrier of its obligations under policies
carried by either party, pursuant to the provisions of this Lease.

18.  DAMAGE OR DESTRUCTION.
     ----------------------

18.1 LANDLORD'S RIGHTS AND OBLIGATIONS.  In the event the Premises are damaged
by fire or other casualty to an extent not exceeding twenty-five percent (25%)
of the full replacement cost thereof, and Landlord's contractor estimates in a
writing delivered to the parties that the damage thereto is such that the
Premises may be repaired, reconstructed or restored to substantially its
condition immediately prior to such damage within one hundred twenty (120) days
from the date of such casualty, and Landlord will receive insurance proceeds
                                ---
sufficient to cover the costs of such repairs, reconstruction and restoration
(including proceeds from Tenant and/or Tenant's insurance which Tenant is
required to deliver to Landlord pursuant to Section 18.2 below), then Landlord
shall commence and proceed diligently with the work of repair, reconstruction
and restoration and this Lease shall continue in full force and effect.  If,
however, the Premises are damaged to an extent exceeding twenty-five percent
(25%) of the full replacement cost thereof, or Landlord's contractor estimates
that such work of repair, reconstruction and restoration will require longer
than one hundred twenty (120) days to complete, or Landlord will not receive
insurance proceeds (and/or proceeds from Tenant, as applicable) sufficient to
cover time costs of such repairs, reconstruction and restoration, then Landlord
may elect to either:

(a)  repair, reconstruct and restore the portion of the Premises damaged by such
     casualty (including the Tenant Improvements and Tenant Changes), in which
     case this Lease shall continue in full force and effect; or

                                     -14-
<PAGE>

(b)  terminate this Lease effective as of the date which is thirty (30) days
     after Tenant's receipt of Landlord's election to so terminate.

Under any of the conditions of this Section 18.1, Landlord shall give written
notice to Tenant of its intention to repair or terminate within the later of
sixty (60) days after the occurrence of such casualty, or fifteen (15) days
after Landlord's receipt of the estimate from Landlord's contractor.

18.2 TENANT'S COSTS AND INSURANCE PROCEEDS.  In the event of any damage or
destruction of all or any part of the Premises, Tenant shall immediately: (a)
notify Landlord thereof; and (b) deliver to Landlord all insurance proceeds
received by Tenant with respect to the Tenant Improvements and Tenant Changes in
the Premises to the extent such items are not covered by Landlord's casualty
insurance obtained by Landlord pursuant to Section 21 below (excluding proceeds
for Tenant's furniture and other personal property), whether or not this Lease
is terminated as permitted in this Section 18, and Tenant hereby assigns to
Landlord all rights to receive such insurance proceeds.  If, for any reason
(including Tenant's failure to obtain insurance for the full replacement cost of
any Tenant Changes which Tenant is required to insure pursuant to Sections 12.1
and/or 20.1 (a) hereof, Tenant fails to receive insurance proceeds covering the
full replacement cost of such Tenant Changes which are damaged, Tenant shall be
deemed to have self-insured the replacement cost of such Tenant Changes, and
upon any damage or destruction thereto, Tenant shall immediately pay to Landlord
the full replacement cost of such items, less any insurance proceeds actually
received by Landlord from Landlord's or Tenant's insurance with respect to such
items.

18.3 ABATEMENT OF RENT.  In the event that as a result of any such damage,
repair, reconstruction and/or restoration of the Premises, Landlord and Tenant
reasonably determine that continuation of Tenant's business from the Premises is
not practical pending reconstruction and therefore that Tenant is prevented from
using, and does not use, the Premises or any portion thereof, then the rent
shall be abated or reduced, as the case may be, during the period that Tenant
continues to be so prevented from using and does not use the Premises or portion
thereof, in the proportion that the rentable square feet of the portion of the
Premises that Tenant is prevented from using, and does not use, bears to the
total rentable square feet of the Premises.  Notwithstanding the foregoing to
the contrary, if the damage is due to the negligence or willful misconduct of
Tenant or any Tenant Parties, there shall be no abatement of rent.  Except for
abatement of rent as provided hereinabove, Tenant shall not be entitled to any
compensation or damages for loss of, or interference with, Tenant's business or
use or access of all or any part of the Premises resulting from any such damage,
repair, reconstruction or restoration.

18.4 INABILITY TO COMPLETE.  Notwithstanding anything to the contrary contained
in this Section 18, (i) if Landlord is obligated or elects to repair,
reconstruct and/or restore the damaged portion of the Building or Premises
pursuant to Section 18.1 above, but is delayed from completing such repair.
reconstruction and/or restoration beyond the date which is one hundred eighty
(180) days after the date estimated by Landlord's contractor for completion
thereof pursuant to Section 18.1, by reason of any causes beyond the reasonable
control of Landlord (including, without limitation, delays due to Force Majeure
events as defined in Section 32.16, and delays caused by Tenant or any Tenant
Parties), then Landlord may elect to terminate this Lease upon twenty (20) days'
prior written notice to Tenant, and (ii) if Landlord estimates in good faith
that the time necessary to restore any damaged portion of the Premises or the
Building pursuant to Section 18.1 above which materially impairs Tenant's access
to or ability to reasonably conduct business from the Premises will exceed one
hundred eighty (180) days after the date of such damage or destruction, or if
Landlord is obligated or elects to repair, reconstruct and/or restore the
damaged portion of the Premises or the Building pursuant to Section 18.1 above
which materially impairs Tenant's access to or ability to reasonably conduct
business from the Premises, but fails to complete such repairs, reconstruction
and/or restoration within one hundred eighty (180) days after the date of such
damage or destruction, by reason of any causes other than delays caused by
Tenant or any Tenant Parties, then Tenant may elect to terminate this Lease upon
written notice delivered to Landlord within twenty (20) days after the date
Landlord so notifies Tenant of such good faith estimate or within twenty (20)
days after the expiration of such one hundred eighty (180) day period, as the
case may be.

                                     -15-
<PAGE>

18.5 DAMAGE NEAR END OF TERM.  In addition to its termination rights in Sections
18.1 and 18.4 above, Landlord and Tenant shall each have the right to terminate
this Lease if any damage to the Building or Premises occurs during the last
twelve (12) months of the Term of this Lease and Landlord's contractor estimates
in a writing delivered to the parties that the repair, reconstruction or
restoration of such damage cannot be completed within the earlier of (a) the
scheduled expiration date of the Lease Term, or (b) sixty (60) days after the
date of such casualty.

18.6 WAIVER OF TERMINATION RIGHT.  This Lease sets forth the terms and
conditions upon which this Lease may terminate in the event of any damage or
destruction.  Accordingly, the parties hereby waive the provisions of California
Civil Code Section 1932, Subsection 2, and Section 1933, Subsection 4 (and any
successor statutes thereof permitting the parties to terminate this Lease as a
result of any damage or destruction).

19.  EMINENT DOMAIN.
     ---------------

19.1 SUBSTANTIAL TAKING.  Subject to the provisions of Section 19.4 below, in
case the whole of the Premises, or such part thereof as shall substantially
interfere with Tenant's use and occupancy of the Premises as reasonably
determined by Landlord, shall be taken for any public or quasi-public purpose by
any lawful power or authority by exercise the right of appropriation,
condemnation or eminent domain, or sold to prevent such taking, either party
shall have the right to terminate this Lease effective as of the date possession
is required to be surrendered to said authority and rent shall be pro rated to
the date of such termination.

19.2 PARTIAL TAKING; ABATEMENT OF RENT.  In the event of a taking of a portion
of the Premises which does not substantially interfere with the conduct of
Tenant's business, then, except as otherwise provided in the immediately
following sentence, neither party shall have the right to terminate this Lease
and Landlord shall thereafter proceed to make a functional unit of the remaining
portion of the Premises (but only to the extent Landlord receives proceeds
therefor from the condemning authority), and rent shall be abated with respect
to the part of the Premises which Tenant shall be so deprived on account of such
taking.  Notwithstanding the immediately preceding sentence to the contrary, if
any part of the Project shall be taken (whether or not such taking substantially
interferes with Tenant's use of the Premises), Landlord may terminate this Lease
upon thirty (30) days' prior written notice to Tenant.

19.3 CONDEMNATION AWARD.  Subject to the provisions of Section 19.4 below, in
connection with any taking of the Premises, Landlord shall be entitled to
receive the entire amount of any award which may be made or given in such taking
or condemnation, without deduction or apportionment for any estate or interest
of Tenant, it being expressly understood and agreed by Tenant that no portion of
any such award shall be allowed or paid to Tenant for any so-called bonus or
excess value of this Lease, and such bonus or excess value shall be the sole
property of Landlord.  Tenant shall not assert any claim against Landlord or the
taking authority for any compensation because of such taking (including any
claim for bonus or excess value of this Lease); provided, however, if any
portion of the Premises is taken, Tenant shall be granted the right to recover
from the condemning authority (but not from Landlord) any compensation as may be
separately awarded or recoverable by Tenant for the taking of Tenant's
furniture, fixtures, equipment and other personal property within the Premises,
for Tenant's relocation expenses, and for any loss of goodwill or other damage
to Tenant's business by reason of such taking.

19.4 TEMPORARY TAKING.  In the event of a taking of the Premises or any part
thereof for temporary use, (a) this Lease shall be and remain unaffected thereby
and rent shall not abate, and (b) Tenant shall be entitled to receive for itself
such portion or portions of any award made for such use with respect to the
period of the taking which is within the Term, provided that if such taking
shall remain in force at the expiration or earlier termination of this Lease,
Tenant shall perform its obligations under Section 9 with respect to surrender
of the Premises and shall pay to Landlord the portion of any award which is
attributable to any period of time beyond the Term expiration date.  For purpose
of this Section 19.4, a temporary taking shall be defined as a taking for a
period of two hundred seventy (270) days or less.

                                     -16-
<PAGE>

20.  TENANT'S INSURANCE.
     -------------------

20.1 TYPES OF INSURANCE.  On or before the earlier of the Commencement Date or
the date Tenant commences or causes to be commenced any work of any type in or
on the Premises pursuant to this Lease, and continuing during the entire Term,
Tenant shall obtain and keep in full force and effect, the following insurance:

(a)  All Risk insurance, including fire and extended coverage, sprinkler leakage
(including earthquake sprinkler leakage), vandalism, malicious mischief upon
property of every description and kind owned by Tenant and located in the
Premises, or for which Tenant is legally liable or installed by or on behalf of
Tenant including, without limitation, furniture, equipment and any other
personal property, and any Tenant Changes (but excluding the initial Tenant
Improvements previous existing or installed in the Premises), in an amount not
less then the full replacement cost thereof.

(b)  Commercial general liability insurance coverage, including personal injury,
bodily injury (including wrongful death), broad form property damage, operations
hazard, owners protective coverage, contractual liability (including Tenant's
indemnification obligations under this Lease, including Section 17 hereof),
liquor liability (if Tenant serves or stores alcohol on the Premises), products
and completed operations liability, and owned/non-owned auto liability, with a
general aggregate of not less than Two Million Dollars ($2,000,000). The general
aggregate amount of such commercial general liability insurance shall be
increased every five (5) years during the Term of this Lease to an amount
reasonably required by Landlord.

(c)  Workers compensation and employers liability insurance, in statutory
amounts and limits.

(d)  Loss of income, extra expense and business interruption insurance in such
amounts as will reimburse Tenant for direct or indirect loss of earnings
attributable to all perils commonly insured against by prudent tenants or
attributable to prevention of access to the Premises or Tenant's parking areas
as a result of such perils.

(e)  Any other form or forms of insurance as Tenant or Landlord or the
mortgagees of Landlord may reasonably require from time to time, in form,
amounts and,for insurance risks against which a prudent tenant would protect
itself, but only to the extent such risks and amounts are available in the
insurance market at commercially reasonable costs.

20.2 REQUIREMENTS.  Each policy required to be obtained by Tenant hereunder
shall: (a) be issued by insurers authorized to do business in the state in which
the Premises is located and rated not less than financial class X, and not less
than policyholder rating A in the most recent version of Best's Key Rating Guide
(provided that, in any event, the same insurance company shall provide the
coverages described in Sections 20.1(a) and 20.1(d) above); (b) be in form
reasonably satisfactory from time to time to Landlord; (c) name Tenant as named
insured thereunder and shall name Landlord and, at Landlord's request,
Landlord's mortgagees and ground lessors of which Tenant has been informed in
writing, as additional insureds thereunder, all as their respective interests
may appear, (d) shall not have a deductible amount exceeding Five Thousand
Dollars ($5,000.00); (e) specifically provide that the insurance afforded by
such policy for the benefit of Landlord and Landlord's mortgagees and ground
lessors shall be primary, and any insurance carded by Landlord or Landlord's
mortgagees and ground lessors shall be excess and non-contributing; (f) except
for workers compensation insurance, contain an endorsement that the insurer
waives its right to subrogation as described in Section 22 below: and (g)
contain an undertaking by the insurer to notify Landlord (and the mortgagees and
ground lessors of Landlord who are named as additional insureds) in writing not
less than thirty (30) days prior to any material change, reduction in coverage,
cancellation or other termination thereof.  Tenant agrees to deliver to
Landlord, as soon as practicable after the placing of the required insurance,
but in no event later than ten (1 0) days after the date Tenant takes possession
of all or any part of the Premises, certificates from the insurance company
evidencing the existence of such insurance and Tenant's compliance with the
foregoing provisions of this Section 20).  Tenant shall cause replacement
certificates to be delivered to Landlord not less than thirty (30) days prior to
the expiration of any such policy or policies.  If any such initial or
replacement certificates are not

                                     -17-
<PAGE>

furnished within the time(s) specified herein, Tenant shall be deemed to be in
material default under this Lease without the benefit of any additional notice
or cure period provided in Section 23.1 below, and Landlord shall have the
right, but not the obligation, to procure such policies and certificates at
Tenant's expense.

20.3 EFFECT ON INSURANCE.  Tenant shall not do or permit to be done anything
which will (a) violate or invalidate any insurance policy maintained by Landlord
or Tenant hereunder, or lb) increase the costs of any insurance policy
maintained by Landlord pursuant to Section 21 or otherwise with respect to the
Premises or the Project.  If Tenant's occupancy or conduct of its business in or
on the Premises results in any increase in premiums for any insurance carried by
Landlord with respect to the Premises or the Project, Tenant shall pay such
increase as additional rent within ten (10) days after being billed therefor by
Landlord.  If any insurance coverage carried by Landlord pursuant to Section 21
or otherwise with respect to the Premises or the Project shall be canceled or
reduced (or cancellation or reduction thereof shall be threatened) by reason of
the use or occupancy of the Premises by Tenant or by anyone permitted by Tenant
to be upon the Premises, and if Tenant fails to remedy such condition within
five (5) days after notice thereof, Tenant shall be deemed to be in default
under this Lease, without the benefit of any additional notice or cure period
specified in Section 23.1 below, and Landlord shall have all remedies provided
in this Lease, at law or in equity, including, without limitation, the right
(but not the obligation) to enter upon the Premises and attempt to remedy such
condition at Tenant's Cost.

21.  LANDLORD'S INSURANCE.  During the Term, Landlord shall insure the Common
     ---------------------
Area improvements, the Premises (excluding, however, Tenant's furniture,
equipment and other personal property) and Tenant Changes against damage by fire
and standard extended coverage perils and with vandalism and malicious mischief
endorsements, rental loss coverage, at Landlord's option, earthquake damage
coverage, and such additional coverage as Landlord deems appropriate.  Landlord
shall also carry commercial general liability insurance, in such reasonable
amounts and with such reasonable deductibles as would be carried by a prudent
owner of a similar building in the state in which the Building is located.  At
Landlord's option, all such insurance may be carried under any blanket or
umbrella policies which Landlord has in force for other buildings and projects.
In addition, at Landlord's option, Landlord may elect to self-insure all or any
part of such required insurance coverage.  Landlord may, but shall not be
obligated to, carry any other form or forms of insurance as Landlord or the
mortgagees or ground lessors of Landlord may reasonably determine is advisable.
The cost of insurance obtained by Landlord pursuant to this Section 21 shall be
included in Operating Expenses.

22.  WAIVERS OF SUBROGATION.
     -----------------------

22.1 MUTUAL WAIVER OF PARTIES.  Landlord and Tenant hereby waive their rights
against each other with respect to any claims or damages or losses which are
caused by or result from (a) property damage insured against under any property
insurance policy carded by Landlord or Tenant (as the case may be) pursuant to
the provisions of this Lease and enforceable at the time of such damage or loss,
or (b) property damage which would have been covered under any insurance
required to be obtained and maintained by Landlord or Tenant (as the case may
be) under Sections 20 and 21 of this Lease (as applicable) had such insurance
been obtained and maintained as required therein.  The foregoing waivers shall
be in addition to, and not a limitation of, any other waivers or releases
contained in this Lease.

22.2 WAIVER OF INSURERS.  Each party shall cause each property insurance policy
required to be obtained by it pursuant to Sections 20 and 21 to provide that the
insurer waives all rights of recovery by way of subrogation against either
Landlord or Tenant, as the case may be, in connection with any claims, losses
and damages covered by such policy.  If either party fails to maintain property
insurance required hereunder, such insurance shall be deemed to be self-insured
with a deemed full waiver of subrogation as set forth in the immediately
preceding sentence.

                                     -18-
<PAGE>

23.  TENANT'S DEFAULT AND LANDLORD'S REMEDIES.
     -----------------------------------------

23.1 TENANT'S DEFAULT.  The occurrence of any one or more of the following
events shall constitute a default under this Lease by Tenant:

(a)  the vacation or abandonment of the Premises by Tenant. "Abandonment" is
herein defined to include, but is not limited to, any absence by Tenant from the
Premises for five (5) business days or longer while in default of any other
provision of this Lease;

(b)  the failure by Tenant to make any payment of rent or additional rent or any
other payment required to be made by Tenant hereunder, within three (3) days of
when due;

(c)  the failure by Tenant to observe or perform any of the express or implied
covenants or provisions of this Lease to be observed or performed by Tenant,
other than as specified in Sections 23.1(a) or (b) above, where such failure
shall continue for a period of ten (10) days after written notice thereof from
Landlord to Tenant; provided, however, that any such notice shall be in lieu of,
and not in addition to, any notice required under California Code of Civil
Procedure, Section 1161 and provided further that, if the nature of Tenant's
default is such that more than ten (1 0) days are reasonably required for its
cure, then Tenant shall not be deemed to be in default if Tenant shall commence
such cure within said thirty (30) day period and thereafter diligently prosecute
such cure to completion, which completion shall occur not later than sixty (60)
days from the date of such notice from Landlord; and

(d)  (i) the making by Tenant of any general assignment for the benefit of
creditors, (ii) the filing by or against Tenant of a petition to have Tenant
adjudged a bankrupt or a petition for reorganization or arrangement under any
law relating to bankruptcy (unless, in the case of a petition filed against the
Tenant, the same is dismissed within ninety (90) days), (iii) the appointment of
a trustee or receiver to take possession of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease, where possession
is not restored . to Tenant within ninety (90) days, or (iv) the attachment,
execution or other judicial seizure of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease where such seizure
is not discharged within ninety (90) days.

23.2 LANDLORD'S REMEDIES; TERMINATION.  In the event of any such default by
Tenant, in addition to any other remedies available to Landlord under this
Lease, at law or in equity, Landlord shall have the immediate option to
terminate this Lease and all rights of Tenant hereunder.  In the event that
Landlord shall elect to so terminate this Lease, then Landlord may recover from
Tenant:

(a)  the worth at the time of award of any unpaid rent which had been earned at
the time of such termination; plus

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

(c)  the worth at the time of award of the amount by which the unpaid rent for
the balance of the term after the time of award exceeds the amount of such
rental loss that Tenant proves could be reasonably avoided; plus

(d)  any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under this
Lease or which, in the ordinary course of things, would be likely to result
therefrom including, but not limited to: unamortized Tenant Improvement costs;
attorneys' fees; unamortized brokers' commissions; the costs of refurbishment,
alterations, renovation and repair of the Premises; and removal (including the
repair of any damage caused by such removal) and storage (or disposal) of
Tenant's personal property, equipment,

                                     -19-
<PAGE>

fixtures, Tenant Changes, Tenant Improvements and any other items which Tenant
is required under this Lease to remove but does not remove.

As used in Sections 23.2(a) and 23.2(b) above, the "worth at the time of award"
is computed by allowing interest at the Interest Rate set forth in Section 1.14
of the Summary.  As used in Section 23.2(c) above, the "worth at the time of
award" is computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%).

23.3 LANDLORD'S REMEDIES; RE-ENTRY RIGHTS.  In the event of any such default by
Tenant, in addition to any other remedies available to Landlord under this
Lease, at law or in equity, Landlord shall also have the right, with or without
terminating this Lease, to re-enter the Premises and remove all persons and
property from the Premises; such property may be removed, stored and/or disposed
of pursuant to Section 12.4 of this Lease or any other procedures permitted by
applicable law.  No re-entry or taking possession of the Premises by Landlord
pursuant to this Section 23.3, and no acceptance of surrender of the Premises or
other action on Landlord's part, shall be construed as an election to terminate
this Lease unless a written notice of such intention be given to Tenant or
unless the termination thereof be decreed by a court of competent jurisdiction.

23.4 LANDLORD'S REMEDIES; CONTINUATION OF LEASE.  In the event of any such
default by Tenant, in addition to any other remedies available to Landlord under
this Lease, at law or in equity, Landlord shall have the right to continue this
Lease in full force and effect, whether or not Tenant shall have abandoned the
Premises.  The foregoing remedy shall also be available to Landlord pursuant to
California Civil Code Section 1951.4 and any successor statute thereof in the
event Tenant has abandoned the Premises.  In the event Landlord elects to
continue this Lease in full force and effect pursuant to this Section 23.4, then
Landlord shall be entitled to enforce all of its fights and remedies under this
Lease, including the right to recover rent as it becomes due.  Landlord's
election not to terminate this Lease pursuant to this Section 23.4 or pursuant
to any other provision of this Lease, at law or in equity, shall not preclude
Landlord from subsequently electing to terminate this Lease or pursuing any of
its other remedies.

23.5 LANDLORD'S RIGHT TO PERFORM.  Except as specifically provided otherwise in
this Lease, all covenants and agreements by Tenant under this Lease shall be
performed by Tenant at Tenant's sole cost and expense and without any abatement
or offset of rent.  If Tenant shall fail to pay any sum of money (other than
Annual Basic Rent) or perform any other act on its part to be paid or performed
hereunder and such failure shall continue for three (3) days with respect to
monetary obligations (or ten (10) days with respect to nonmonetary obligations)
after Tenant's receipt of written notice thereof from Landlord, Landlord may,
without waiving or releasing Tenant from any of Tenant's obligations, make such
payment or perform such other act on behalf of Tenant.  All sums so paid by
Landlord and all necessary incidental costs incurred by Landlord in performing
such other acts shall be payable by Tenant to Landlord within five (5) days
after demand therefor as additional rent.

23.6 INTEREST.  If any monthly installment of Annual Basic Rent or Common Area
Expenses, or any other amount payable by Tenant hereunder is not received by
Landlord by the date when due, it shall bear interest at the Interest Rate set
forth in Section 1.14 of the Summary from the date due until paid.  All
interest, and any late charges imposed pursuant to Section 23.7 below, shall be
considered additional rent due from Tenant to Landlord under the terms of this
Lease.

23.7 LATE CHARGES.  Tenant acknowledges that, in addition to interest costs, the
late payments by Tenant to Landlord of any Annual Basic Rent or other sums due
under this Lease will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of such costs being extremely difficult and impractical
to fix.  Such other costs include, without limitation, processing,
administrative and accounting charges and late charges that may be imposed on
Landlord by the terms of any mortgage, deed of trust or related loan documents
encumbering the Premises or the Project.  Accordingly, if any monthly
installment of Annual Basic Rent or Operating Expenses or any other amount
payable by Tenant hereunder is not received by Landlord by the due date thereof,
Tenant shall pay to Landlord an additional sum of ten percent (10%) of the
overdue amount as a late charge, but in no event more

                                     -20-
<PAGE>

than the maximum late charge allowed by law.  The parties agree that such late
charge represents a fair and reasonable estimate of the costs that Landlord will
incur by reason of any late payment as hereinabove referred to by Tenant, and
the payment of late charges and interest are distinct and separate in.that the
payment of interest is to compensate Landlord for the use of Landlord's money by
Tenant, while the payment of late charges is to compensate Landlord for
Landlord's processing, administrative and other costs incurred by Landlord as a
result of Tenant's delinquent payments.  Acceptance of a late charge or interest
shall not constitute a waiver of Tenant's default with respect to the overdue
amount or prevent Landlord from exercising any of the other rights and remedies
available to Landlord under this Lease or at law or in equity now or hereafter
in effect.

23.8 SECURITY INTEREST.  Tenant hereby grants to Landlord a lien and security
interest on all property of Tenant now or hereafter placed in or upon the
Premises including, but not limited to, all fixtures, machinery, equipment,
furnishings and other articles of personal property, and all proceeds of the
sale or other disposition of such property (collectively, the "Collateral") to
secure the payment of all rent to be paid by Tenant pursuant to this Lease.
Such lien and security interest shall be in addition to any landlord's lien
provided by law.  This Lease shall constitute a security agreement under the
Commercial Code of the State so that Landlord shall have and may enforce a
security interest in the Collateral.  Tenant agrees to execute as debtor and
deliver such financing statement or statements and any further documents as
Landlord may now or hereafter reasonably request to protect such security
interest pursuant to such code.  Landlord may also at any time file a copy of
this Lease as a financing statement.  Landlord, as secured party, shall be
entitled to all rights and remedies afforded as secured party under such code,
which rights and remedies shall be in addition to Landlord's liens and rights
provided by law or by the other terms and provisions of this Lease.

23.9 RIGHTS AND REMEDIES CUMULATIVE.  All rights, options and remedies of
Landlord contained in this Section 23 and elsewhere in this Lease shall be
construed and held to be cumulative, and no one of them shall be exclusive of
the other, and Landlord shall have the right to pursue any one or all of such
remedies or any other remedy or relief which may be provided by law or in
equity, whether or not stated in this Lease.  Nothing in this Section 23 shall
be deemed to limit or otherwise affect Tenant's indemnification of Landlord
pursuant to any provision of this Lease.

24.  LANDLORD'S DEFAULT.  Landlord shall not be in default in the performance of
any obligation required to be performed by Landlord under this Lease unless
Landlord has failed to perform such obligation within thirty (30) days after the
receipt of written notice from Tenant specifying in detail Landlord's failure to
perform; provided however, that if the nature of Landlord's obligation is such
that more than thirty (30) days are required for its performance, then Landlord
shall not be deemed in default if it commences such performance within such
thirty (30) day period and thereafter diligently pursues the same to completion.
Upon any such uncured default by Landlord, Tenant may exercise any of its rights
provided in law or at equity; provided, however: (a) Tenant shall have no right
to offset or abate rent in the event of any default by Landlord under this
Lease, except to the extent offset rights are specifically provided to Tenant in
this Lease; and (b) Tenant's Rights and remedies hereunder shall be limited to
the extent (1) Tenant has expressly waived-in this Lease any of such rights or
remedies and/or (ii) this Lease otherwise expressly limits Tenant's rights or
remedies, including the limitation on Landlord's liability contained in Section
31 hereof.

25.  SUBORDINATION.  At the request of Landlord, this Lease shall be subject and
subordinate at all times to such ground or master leases (and such extensions
and modifications thereto, and to the lien of such mortgages and deeds of trust
now or hereafter affecting the Premises (as well as to any advances made
thereunder and to all renewals, replacements, modifications and extensions
thereof; provided, however, any subordination of this Lease shall provide that
Tenant shall not be disturbed in its possession of the Premises or in enjoyment
of its rights under this Lease so long as Tenant is not in default with respect
to its obligations hereunder.  Notwithstanding the foregoing, Landlord shall
have the right to subordinate or cause to be subordinated any or all ground or
master leases or the lien of any or all mortgages or deeds of trust to this
Lease.  In the event that any ground or master lease terminates for any reason
or any mortgage or deed of trust is foreclosed or a conveyance in lieu of
foreclosure is made for any reason,

                                     -21-
<PAGE>

at the election of Landlord's successor in interest, Tenant shall attorn to and
become the tenant of such successor.  Tenant hereby waives its rights under any
current or future law which gives or purports to give Tenant any right to
terminate or otherwise adversely affect this Lease and the obligations of Tenant
hereunder in the event of any such foreclosure proceeding or sale.  Tenant
covenants and agrees to execute and deliver to Landlord within ten (10) days
after receipt of written demand by Landlord and in the form reasonably required
by Landlord, any additional documents evidencing the priority or subordination
of this Lease with respect to any such ground or master lease or the lien of any
such mortgage or deed of trust.  Should Tenant fail to sign and return any such
documents within said ten (10) day period, Tenant shall be in default hereunder
without the benefit of any additional notice or cure periods specified in
Section 23.1 above.

26.  ESTOPPEL CERTIFICATE.
     ---------------------

26.1 TENANT'S OBLIGATIONS.  Within ten (10) business days following Landlord's
written request, Tenant shall execute and deliver to Landlord an estoppel
certificate, in a form substantially similar to the form of Exhibit "F" attached
                                                            -----------
hereto, certifying: (a) the Commencement Date of this Lease; (b) that this Lease
is unmodified and in full force and effect (or, if modified, that this Lease is
in full force and effect as modified, and stating the date and nature of such
modifications); (c) the date to which the rent and other sums payable under this
Lease have been paid; (d) that there are not, to the best of Tenant's knowledge,
any defaults under this Lease by either Landlord or Tenant, except as specified
in such certificate; and (a) such other matters as are reasonably requested by
Landlord.  Any such estoppel certificate delivered pursuant to this Section 26.1
may be relied upon by any mortgagee, beneficiary, purchaser or prospective
purchaser of any portion of the Project, as well as their assignees.

26.2 TENANT'S FAILURE TO DELIVER.  Tenant's failure to deliver such estoppel
certificate within such time shall be conclusive upon Tenant that: (a) this
Lease is in full force and effect without modification, except as may be
represented by Landlord; (b) there are no uncured defaults in Landlord's or
Tenant's performance; and (c) not more than one (1) month's rental has been paid
in advance.  Tenant shall indemnify, protect, defend (with counsel reasonably
approved by Landlord in writing) and hold Landlord harmless from,and against any
and all claims, judgments, suits, causes of action, damages, losses, liabilities
and expenses (including attorneys' fees and court costs) attributable to any
failure by Tenant to timely deliver any such estoppel certificate to Landlord
pursuant to Section 26.1 above.

27.  EASEMENTS.  Landlord reserves to itself the right, from time to time, to
grant such easements, rights and dedications that Landlord deems necessary or
desirable, and to cause the recordation of parcel maps and restrictions, so long
as such easements, rights, dedications, maps and restrictions do not
unreasonably interfere with the use of the Premises by Tenant.  Tenant shall
sign any of the aforementioned documents upon request of Landlord and failure to
do so shall constitute a material breach of this Lease.

28.  MODIFICATION AND CURE RIGHTS OF LANDLORD'S MORTGAGEES AND LESSORS.
     ------------------------------------------------------------------

28.1 MODIFICATIONS.  If, in connection with Landlord's obtaining or entering
into any financing or ground lease for any portion of the Premises or the
Project, the lender or ground lessor shall request modifications to this Lease,
Tenant shall, within ten (10) days after request therefor, execute an amendment
to this Lease including such modifications, provided such modifications are
reasonable, do not increase the obligations of Tenant hereunder, or adversely
affect the leasehold estate created hereby or Tenant's rights hereunder.

26.2 CURE RIGHTS.  In the event of any default on the part of Landlord, Tenant
will give notice by registered or certified mail to any beneficiary of a deed of
trust or mortgagee covering the Premises or ground lessor of Landlord whose
address shall have been furnished to Tenant, and shall offer such beneficiary,
mortgagee or ground lessor a reasonable opportunity to cure the default
(including with respect to any such beneficiary or mortgagee, time to obtain
possession of the Premises, subject to this Lease and Tenant's rights hereunder,
by power of sale or judicial foreclosure, if such should prove necessary to
effect a cure).

                                     -22-
<PAGE>

29.  QUIET ENJOYMENT.  Landlord covenants and agrees with Tenant that, upon
     ----------------
Tenant performing all of the covenants and provisions on Tenant's part to be
observed and performed under this Lease (including payment of rent hereunder),
Tenant shall and may peaceably and quietly have, hold and enjoy the Premises in
accordance with and subject to the terms and conditions of this Lease.

30.  TRANSFER OF LANDLORD'S INTEREST.  The term "Landlord" as used in this
     --------------------------------
Lease, so far as covenants or obligations on the part of the Landlord are
concerned, shall be limited to mean and include only the owner or owners, at the
time in question, of the fee title to, or a lessee's interest in a ground lease
of, the Project.

In the event of any transfer or conveyance of any such title or interest (other
than a transfer for security purposes only), the transferor shall be
automatically relieved of all covenants and obligations on the part of Landlord
contained in this Lease accruing after the date of such transfer or conveyance.
Landlord and Landlord's transferees and assignees shall have the absolute right
to transfer all or any portion of their respective title and interest in the
Project, the Premises and/or this Lease without the consent of Tenant, and such
transfer or subsequent transfer shall not be deemed a violation on Landlord's
part of any of the terms and conditions of this Lease.

31.  LIMITATION ON LANDLORD'S LIABILITY.  Notwithstanding anything contained in
     -----------------------------------
this Lease to the contrary, the obligations of Landlord under this Lease
(including any actual or alleged breach or default by Landlord) do not
constitute personal obligations of the individual partners, directors, officers
or shareholders of Landlord or Landlord's partners, and Tenant shall not seek
recourse against the individual partners, directors, officers or shareholders of
Landlord or Landlord's partners, or any of their personal assets for
satisfaction of any liability with respect to this Lease.  In addition, in
consideration of the benefits accruing hereunder to Tenant and notwithstanding
anything contained in this Lease to the contrary, Tenant hereby covenants and
agrees for itself and all of its successors and assigns that the liability of
Landlord for its obligations under this Lease (including any liability as a
result of any actual or alleged failure, breach or default hereunder by
Landlord), shall be limited solely to, and Tenant's and its successors' and
assigns' sole and exclusive remedy shall be against, Landlord's interest in the
Premises and proceeds therefrom, and no other assets of Landlord.

32.  MISCELLANEOUS.
     --------------

32.1 GOVERNING LAW.  This Lease shall be governed by, and construed pursuant to,
the laws of the state in which the Premises is located.

32.2 SUCCESSORS AND ASSIGNS.  Subject to the provisions of Section 30 above, and
except as otherwise provided in this Lease, all of the covenants, conditions and
provisions of this Lease shall be binding upon, and shall inure to the benefit
of, the parties hereto and their respective heirs, personal representatives and
permitted successors and assigns; provided, however, no rights shall inure to
the benefit of any Transferee of Tenant unless the Transfer to such Transferee
is made in compliance with the provisions of Section 14, and no options or other
rights which are expressly made personal to the original Tenant hereunder or in
any rider attached hereto shall be assignable to or exercisable by anyone other
than the original Tenant under this Lease.

32.3 NO MERGER.  The voluntary or other surrender of this Lease by Tenant or a
mutual termination thereof shall not work as a merger and shall, at the option
of Landlord, either (a) terminate all or any existing subleases, or (b) operate
as an assignment to Landlord of Tenant's interest under any or all such
subleases.

32.4 PROFESSIONAL FEES.  If either Landlord or Tenant should bring suit against
the other with respect to this Lease, including for unlawful detainer or any
other relief against the other hereunder, then all costs and expenses
incurred,by the prevailing party therein (including, without limitation, its
actual appraisers', accountants', attorneys' and other professional fees,
expenses and court costs), shall be paid by the other party.

                                     -23-
<PAGE>

32.5 WAIVER.  The waiver by either party of any breach by the other party of any
term, covenant or condition herein contained shall not be deemed to be a waiver
of any subsequent breach of the same or any other term, covenant and condition
herein contained, nor shall any custom or practice which may become established
between the parties in the administration of the terms hereof be deemed a waiver
of, or in any way affect, the right of any party to insist upon the performance
by the other in strict accordance with said terms.  No waiver of any default of
either party hereunder shall be implied from any acceptance by Landlord or
delivery by Tenant (as the case may be) of any rent or other payments due
hereunder or any omission by the non-defaulting party to take any action on
account of such default if such default persists or is repeated, and no express
waiver shall affect defaults other than as specified in said waiver.  The
subsequent acceptance of rent hereunder by Landlord shall not be deemed to be a
waiver of any preceding breach by Tenant of any term, covenant or condition of
this Lease other than the failure of Tenant to pay the particular rent so
accepted, regardless of Landlord's knowledge of such preceding breach at the
time of acceptance of such rent.

32.6 TERMS AND HEADINGS.  The words "Landlord" and "Tenant" as used herein shall
include the plural as well as the singular.  Words used in any gender include
other genders.  The Section headings of this Lease are not a part of this Lease
and shall have no effect upon the construction or interpretation of any part
hereof.

32.7 TIME.  Time is of the essence with respect to performance of every
provision of this Lease in which time or performance is a factor.  All
references in this Lease to "days" shall mean calendar days unless specifically
modified herein to be "business" days.

32.8 PRIOR AGREEMENTS; AMENDMENTS.  This Lease, including the Summary and all
Exhibits and Riders attached hereto contains all of the covenants, provisions,
agreements, conditions and understandings between Landlord and Tenant concerning
the Premises and any other matter covered or mentioned in this Lease, and no
prior agreement or understanding, oral or written, express or implied,
pertaining to the Premises or any such other matter shall be effective for any
purpose.  No provision of this Lease may be amended or added to except by an
agreement in writing signed by the parties hereto or their respective successors
in interest.  The parties acknowledge that all prior agreements, representations
and negotiations are deemed superseded by the execution of this Lease to the
extent they are not expressly incorporated herein.

32.9 SEPARABILITY.  The invalidity or unenforceability of any provision of this
Lease (except for Tenant's obligation to pay Annual Basic Rent and Operating
Expenses under Sections 3 and 4 hereof) shall in no way affect, impair or
invalidate any other provision hereof, and such other provisions shall remain
valid and in full force and effect to the fullest extent permitted by law.

32.10  RECORDING.  Neither Landlord nor Tenant shall record this Lease.  In
addition, neither party shall record a short form memorandum of this Lease
without the prior written consent (and signature on the memorandum) of the
other, and provided that prior to recordation Tenant executes and delivers to
Landlord, in recordable form, a property acknowledged quitclaim deed or other
instrument extinguishing all of the Tenant's rights and interest in and to the
Project and the Premises, and designating Landlord as the transferee, which deed
or other instrument shall be held by Landlord and may be recorded by Landlord
once this Lease terminates or expires (but not prior thereto).  If such short
form memorandum is recorded in accordance with the foregoing, the party
requesting the recording shall pay for all costs of or related to such
recording, including, but not limited to, recording charges and documentary
transfer taxes.

32.11  EXHIBITS AND RIDERS.  All Exhibits and Riders attached to this Lease are
hereby incorporated in this Lease for all purposes as though set forth at length
herein.

32.12  AUCTIONS.  Tenant shall have no right to conduct any auction in, on or
about the Premises or the Project.

                                     -24-
<PAGE>

32.13  ACCORD AND SATISFACTION.  No payment by Tenant or receipt by Landlord of
a lesser amount than the rent payment herein stipulated shall be deemed to be
other than on account of the rent, nor shall any endorsement or statement on any
check or any letter accompanying any check or payment as rent be deemed an
accord and satisfaction, and Landlord may accept such check or payment without
prejudice to Landlord's right to recover the balance of such rent or pursue any
other remedy provided in this Lease.  Tenant agrees that each of the foregoing
covenants and agreements shall be applicable to any covenant or agreement either
expressly contained in this Lease or imposed by any statute or at common law.

32.14  FINANCIAL STATEMENTS.  Upon ten (10) days prior written request from
Landlord (which Landlord may make at any time during the Term but no more often
than once in any calendar year), Tenant shall deliver to Landlord a current
financial statement of Tenant and any guarantor of this Lease.  Such statements
shall be prepared in accordance with generally acceptable accounting principles
and certified as true in all material respects by Tenant (if Tenant is an
individual) or by an authorized officer or general partner of Tenant (if Tenant
is a corporation or partnership, respectively).

32.15  NO PARTNERSHIP.  Landlord does not, in any way or for any purpose, become
a partner of Tenant in the conduct of its business, or otherwise, or joint
venturer or a member of a joint enterprise with Tenant by reason of this Lease.
The provisions of this Lease relating to Percentage Rent payable hereunder, if
any, are included solely for the purpose of providing a method whereby rent is
to be measured and ascertained.

32.16  FORCE MAJEURE.  In the event that either party hereto shall be delayed or
hindered in or prevented from the performance of any act required hereunder by
reason of strikes, lock-outs, labor troubles, inability to procure materials,
failure of power, governmental moratorium or other governmental action or
inaction (including failure, refusal or delay in issuing permits, approvals
and/or authorizations), injunction or court order, riots, insurrection, war,
fire, earthquake, flood or other natural disaster or other reason of a like
nature not the fault of the party delaying in performing work or doing acts
required under the terms of this Lease (but excluding delays due to financial
inability) (herein collectively, "Force Majeure Delays"), then performance of
such act shall be excused for the period of the delay and the period for the
performance of any such act shall be extended for a period equivalent to the
period of such delay.  The provisions of this Section 32.16 shall not apply to
nor operate to excuse Tenant from the payment of Monthly Basic Rent, Operating
Expenses, percentage rent, if any, additional rent or any other payments
strictly in accordance with the terms of this Lease.

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

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

32.19  NON-DISCRIMINATION.  Tenant acknowledges and agrees that there shall be
no discrimination against, or segregation of, any person, group of persons, or
entity on the basis of race, color, creed, religion, age, sex, marital status,
national origin, or ancestry in the leasing, subleasing, transferring,
assignment, occupancy, tenure, use, or enjoyment of the Premises, or any portion
thereof.

33.  LEASE EXECUTION.
     ----------------

                                     -25-
<PAGE>

33.1 TENANT'S AUTHORITY.  If Tenant executes this Lease as a partnership or
corporation, then Tenant and the persons and/or entities executing this Lease on
behalf of Tenant represent and warrant that: (a) Tenant is a duly authorized and
existing partnership or corporation, as the case may be, and is qualified to do
business in the state in which the Premises is located; (b) such persons and/or
entities executing this Lease are duly authorized to execute and deliver this
Lease on Tenant's behalf in accordance with the Tenant's partnership agreement
(if Tenant is a partnership), or a duly adopted resolution of Tenant's board of
directors and the Tenant's by-laws (if Tenant is a corporation); and (c) this
Lease is binding upon Tenant in accordance with its terms.

33.2 JOINT AND SEVERAL LIABILITY.  If more than one person or entity executes
this Lease as Tenant: (a) each of them is and shall be jointly and severally
liable for the covenants, conditions, provisions and agreements of this Lease to
be kept, observed and performed by Tenant; and lb) the act or signature of, or
notice from or to, any one or more of them with respect to this Lease shall be
binding upon each and all of the persons and entities executing this Lease as
Tenant with the same force and effect as if each and all of them had so acted or
signed, or given or received such notice.

33.3 GUARANTY. Not Applicable.

33.4 NO OPTION.  The submission of this Lease for examination or execution by
Tenant does not constitute a reservation of or option for the Premises and this
Lease shall not become effective as a Lease until it has been executed by
Landlord and delivered to Tenant.

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

LANDLORD:                                  TENANT:

SUNHALA ENTERPRISES, a California general  SYNBIOTICS CORPORATION, a California
partnership                                corporation


By: /s/ James L. McMillan                  By:  /s/ Michael K. Green
    ---------------------                       --------------------
James L. McMillan, Co-Trustee of the       Michael K. Green
James L. McMillan and Hollis L. McMillan   Vice President - Finance
Trust
General Partner

                                     -26-
<PAGE>

Exhibit "A" is a graphical image of a site plan.  The site plan depicts the
location of the property located at 16420 Via Esprillo, San Diego, CA  92127 in
relation to the buildings adjacent to the property which is the subject of the
lease.

                                  EXHIBIT "A"
<PAGE>

                   SAMPLE FORM OF NOTICE OF LEASE TERM DATES
                   -----------------------------------------

To:                           Date:

Re:    Project Lease dated __________, 19_____ between __________, Landlord, and
__________, Tenant, concerning Suite __________ ("Premises") located at
__________.

Gentlemen:

In accordance with the above-referenced Lease, we wish to advise and/or confirm
as follows:

1.   That the Premises have been accepted by Tenant as being substantially
complete in accordance with the Lease, and that there is no deficiency in
construction.

2.   That Tenant has accepted and is in possession of the Premises, and
acknowledges that under the provisions of the Lease, the Term of the Lease is
for __________ years, with _____ options to renew for _____ years each, and
commenced upon the Commencement Date of __________, 19_____ and is currently
scheduled to expire on __________, subject to earlier termination as provided in
the Lease.

3.   That in accordance with the Lease, rental payment has commenced (or shall
commence) on __________.

4.   If the Commencement Date of the Lease is other than the first day of the
month, the first billing will contain a pro rate adjustment.  Each billing
thereafter, with the exception of the final billing, shall be for the full
amount of the monthly installment as provided for in the Lease.

5.   Rent is due and payable in advance on the first day of each and every month
during the Term of the Lease.  Your rent checks should be made payable to
__________, at __________.

6.   The exact number of rentable square feet within the Premises is __________
square feet. The exact number of usable square feet within the Premises is
__________ square feet.

7.   Tenant's Monthly Operating Expense Charge is __________.

AGREED AND ACCEPTED

                                   EXHIBIT "D"
<PAGE>

                             RULES AND REGULATIONS
                             ---------------------


1.   No sign, advertisement, name or notice shall be installed or displayed on
any part of the outside or inside of the Building or in any other part of the
Premises or the Common Area without the prior written consent of Landlord.
Landlord shall have the right to remove, at Tenant's expense and without notice,
any sign installed or displayed in violation of this rule.  All approved signs
or lettering on doors and wall shall be printed, painted, affixed or inscribed
at the expense of Tenant by a person approved by Landlord using materials and in
a style and format approved by Landlord.

2.   No awnings or other projection shall be attached to the outside walls of
the Building without the prior written consent of Landlord, which consent
Landlord will not unreasonably withhold.

3.   Tenant shall not obstruct any sidewalks, halls, passages, exits, entrances,
or loading docks of the Building.  Neither Tenant nor any employee, invitee,
agent, licensee or contractor of Tenant shall go upon or be entitled to use any
portion of the roof of the Building.

4.   Unless expressly set forth to the contrary in Tenant's Lease, Tenant shall
have no right or entitlement to the display of Tenant's name or logo on any
Project sign, monument sign or pylon sign.

5.   All cleaning and janitorial services for the Premises shall be provided at
Tenant's sole cost and expense, exclusively by or through Tenant or Tenant's
janitorial contractors in accordance with the provisions of Tenant's Lease.

6.   Landlord will furnish Tenant, free of charge, with two keys to each door
lock in the Premises.  Landlord may impose a reasonable charge for any
additional keys.  Tenant, upon termination of its tenancy, shall deliver to
Landlord the keys of all doors which have been furnished to, or otherwise
procured by Tenant.

7.   Communication cabling, other than that for telephones and burglar alarms,
shall not be installed in the Premises except with the approval and under the
direction of Landlord.

8.   Tenant shall not use or keep in the Premises any kerosene, gasoline or
inflammable or combustible fluid or material other than those limited quantities
necessary for the operation or maintenance of office equipment, subject to any
express provisions of Tenant's Lease to the contrary.  Tenant shall not use or
permit to be used in the Premises any foul or noxious gas or substance which may
escape the Premises and cause any nuisance to neighboring property occupants, or
permit or allow the Premises to be occupied or used in a manner offensive or
objectionable to Landlord by reason of noise, odors or vibrations, nor shall
Tenant bring into or keep in or about the Premises any birds or animals.

9.   Other than individual space heaters used as designed.  Tenant shall not use
any method of heating or air-conditioning other than that supplied by Landlord.

10.  Landlord reserves the right from time to time, in Landlord's sole and
absolute discretion, exercisable without prior notice and without liability to
Tenant: (a) to name or change the name of the Premises or Project; (b) to change
the address of the Premises, and/or (c) to install, replace or change any signs
in, on or about the Common Areas, the Premises or Project (except for Tenant's
signs, if any, which are expressly permitted by Tenant's Lease): Provided,
however, if Landlord elects to change the address of the Premises, Landlord
agrees to Provide Tenant with at least sixty (60) days prior written notice of
such intended change and Landlord agrees to reimburse Tenant for Tenant's
reasonable and actual costs of printing stationary, brochures and the like.

                                 EXHIBIT "E"-1
<PAGE>

11.  Tenant shall close and lock all doors of its Premises and entirely shut off
all water faucets or other water apparatus, unless otherwise needed for Tenant's
business and, except with regard to Tenant's computers and other equipment, if
any, which reasonably require electricity on a 24-hour basis, turn off all
appliances which consume electricity or gas before Tenant and its employees
leave the Premises.  Tenant shall be responsible for any damage or injuries
sustained by Landlord for noncompliance with this rule.

12.  The toilet roams, toilets, urinals, wash bowls and other apparatus shall
not be used for any purpose other than that for which they were constructed, and
no foreign substances of any kind whatsoever shall be thrown therein.

13.  Tenant shall not use the Premises for any business or activity other than
that specifically provided for in the Lease.

14.  Tenant shall not install any radio or television antenna, loudspeaker or
other device on the roof or exterior walls of the Building or any other part of
the Premises.  Tenant shall not interfere with radio or television broadcasting
or reception from or in the Premises or elsewhere.

15.  Except as expressly permitted in Tenant's Lease, Tenant shall not in any
way deface the Premises or any part thereof and shall not make any penetrations
of the roof.  Tenant shall repair any damage resulting from noncompliance under
this rule.

16.  Canvassing, soliciting and distribution of handbills or any other written
material, and peddling in the Common Area and other portions of the Project are
expressly prohibited, and each tenant shall cooperate to prevent same.

17.  Landlord reserves the right to exclude or expel from the Project any person
who, in Landlord's judgment, is intoxicated or under the influence of liquor or
drugs or who is in violation of any of the Rules and Regulations of the Project.

18.  Tenant shall store all its trash and garbage within its Premises or in
designated trash containers or enclosures within the Project.  Tenant shall not
place in any trash box or receptacle any material which cannot be disposed of in
the ordinary and customary manner of trash and garbage disposal.  All garbage
and refuse disposal shall be made in accordance with directions reasonably
issued from time to time by Landlord.

19.  The Premises shall not be used for lodging of any kind.

20.  Tenant agrees that it shall comply with all fire and security regulations
that may be issued from time to time by Landlord, and Tenant also shall provide
Landlord with the name of a designated responsible principal or employee to
represent Tenant in all matters pertaining to such fire or security regulations.
Tenant shall cooperate fully with Landlord in all matters concerning fire and
other emergency procedures.

21.  Tenant assumes any and all responsibility for protecting its Premises from
theft, robbery and pilferage.  Such responsibility shall include keeping doors
locked and other means of entry to the Premises closed.

22.  The requirements of Tenant will be attended to only upon the appropriate
application to Landlord or Landlord's designated representative by an authorized
individual.  Employees of Landlord shall not perform any work or do anything
outside of their regular duties unless under special instructions from Landlord.

23.  Landlord may waive any one or more of these Rules and Regulations for the
benefit of Tenant, but no such waiver by Landlord shall be construed as a waiver
of such Rules and Regulations in favor of Tenant nor prevent Landlord from
thereafter enforcing any such Rules and Regulations against Tenant.

                                 EXHIBIT "E"-2
<PAGE>

24.  These Rules and Regulations are in addition to, and shall not be construed
to in any way modify or amend, in whole or in part, the terms, covenants,
agreements and conditions of any lease of premises in the Project.

25.  Landlord reserves the night to make such other and reasonable Rules and
Regulations as, in its judgment, may from time to time be needed for safety,
security, care and cleanliness of the Project and for the reservation of good
order therein.  Tenant agrees to abide by all such Rules and Regulations
hereinabove stated and any additional rules and regulations which are adopted.

26.    Tenant shall be responsible for the observance of all of the foregoing
rules by Tenant's employees agents, clients, customers, invitees or guests.

                                 EXHIBIT "E"-3
<PAGE>

                         PARKING RULES AND REGULATIONS
                         -----------------------------


In addition to the foregoing rules and regulations and the parking provisions
contained in the Lease to which this Exhibit "E" is attached, the following
rules and regulations shall apply with respect to the use of the Project's
parking areas, including the Premises' parking areas.

1.   Every parker is required to park and lock his/her own vehicle.  All
responsibility for damage to or loss of vehicles is assumed by the parker and
Landlord shall not be responsible for any such damage or lose by water, fire,
defective brakes, the act or omissions of others, theft, or for any other cause.

2.   Tenant and its employees shall only park in parking areas designated by
Landlord.  Tenant shall not leave vehicles in the parking areas overnight nor
park any vehicles in the parking areas other than automobiles, motorcycles,
motor driven or non-motor driven bicycles or four wheeled trucks.

3.   No extended term storage of vehicles shall be permitted.

4.   Vehicles must be parked entirely within painted stall lines of a single
parking stall.

5.   All directional signs and arrows must be observed.

6.   The speed limit within all parking areas shall be five (5) miles per hour.

7.   Parking is prohibited: (a) in areas not striped for parking; (b) in aisles:
(c) where "no parking" signs are posted; (d) on ramps; (e) in cross-hatched
areas; and (f) in reserved spaces and in such other areas as may be designated
by Landlord.

8.   Washing, waxing, cleaning or servicing of any vehicle in any area not
specifically reserved for such purpose is prohibited.

9.   Landlord may refuse to permit any person who violates these rules to park
in the parking areas, and any violation of the rules shall subject the vehicle
to removal, at such vehicle owners expense.

                                 EXHIBIT "E"-4
<PAGE>

                   SAMPLE FORM OF TENANT ESTOPPEL CERTIFICATE
                   ------------------------------------------


The undersigned ("Tenant") hereby certifies to __________, ("Landlord"), and
__________ as follows:

1.   Attached hereto is a true, correct and complete copy of that certain
Project Lease dated __________, 19____, between Landlord and Tenant (the
"Lease"), which demises Premises which are located at.  The Lease is now in full
force and effect and has not been amended, modified or supplemented, except as
set forth in Section 6 below.

2.   The term of the Lease commenced on __________, 19_____.

3.   The term of the Lease is currently scheduled to expire on __________,
19_____.

4.   Tenant has no option to renew or extend the Term of the Lease except:
__________.

5.   Tenant has no preferential right to purchase the Premises or any portion of
the Project upon which the Premises are located.

6.   The Lease has: (initial One)

(   )  not been amended, modified, supplemented, extended, renewed or assigned.
(   )  been amended, modified, supplemented, extended, renewed or assigned by
the following described agreements, copies of which are attached hereto:
__________.

7.   Tenant has accepted and is now in possession of the Premises and has not
sublet, assigned or encumbered the Lease, the Premises or any portion thereof
except as follows: __________.

8.   The current Monthly Basic Rent is $__________; and current monthly parking
charges are $__________.

9.   Tenant's Monthly Operating Expense Charge currently payable by Tenant is
$__________ per month.

10.  The amount of security deposit (if any) is $__________.  No other security
deposits have been made.

11.  All rental payments payable by Tenant have been paid in full as of the date
hereof.  No rent under the Lease has been paid for more than thirty (30) days in
advance of its due date.

12.  All work required to be performed by Landlord under the Lease has been
completed and has been accepted by Tenant, and all tenant improvement allowances
have been paid in full.

13.  To the best of Tenant's knowledge, as of the date hereof, there are no
defaults on the part of Landlord or Tenant under the Lease.

14.  Tenant has no defense as to its obligations under the Lease and claims no
set-off or counterclaim against Landlord.

15.  Tenant has no right to any concession (rental or otherwise) or similar
compensation in connection with renting the space it occupies, except as
expressly provided in the Lease.

                                 EXHIBIT "F"-1
<PAGE>

16.  All insurance required of Tenant under the Lease has been provided by
Tenant and all premiums have been paid.

17.  There has not been filed by or against Tenant a petition in bankruptcy,
voluntary or otherwise, an, assignment for the benefit of creditors, any
petition seeking reorganization or arrangement under the bankruptcy laws of the
United States or any state thereof, or any other action brought pursuant to such
bankruptcy laws with respect to Tenant.

18.  Tenant pays rent due Landlord under the Lease to Landlord and does not have
any knowledge of any other person who has any right to such rents by collateral
assignment or otherwise.

The foregoing certification is made with the knowledge that __________ is about
to [FUND A LOAN TO LANDLORD OR PURCHASE THE BUILDING FROM LANDLORD], and that
__________ is relying upon the representations herein made in [FUNDING SUCH LOAN
OR PURCHASING THE BUILDING].

Dated: __________, 19_____

"TENANT"



By: __________

By: __________

                                 EXHIBIT "F"-2
<PAGE>

                       TENANT ENVIRONMENTAL QUESTIONNAIRE
                       ----------------------------------



The purpose of this form is to obtain information regarding the use or proposed
use of hazardous material at the premises.  Prospective tenants should answer
the questions in light of their proposed operations at the premises.  Existing
tenants should answer the questions as they relate to ongoing operations at the
premise and should update any information previously submitted.  If additional
space is needed to answer the questions, you may attach separate sheets of paper
to this form.

Your cooperation in this matter is appreciated.

1.   GENERAL INFORMATION

Name of Responding Company:_____________________________________________________

Check the Applicable Status:  Prospective Tenant _____  Existing Tenant _____

Mailing Address:________________________________________________________________

Contact Person and Title:_______________________________________________________

________________________________________________________________________________

Telephone Number: (     ) __________

Address of Leased Premises:_____________________________________________________

________________________________________________________________________________

Length of Lease Term: __________

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

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

2.   STORAGE OF HAZARDOUS MATERIALS

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

Wastes         Yes _____ No _____

Chemical Products  Yes _____  No _____

2.2  Attach a list of any hazardous materials to be used or stored, the
quantities that will be on-site at any given time, and the location and method
of storage (e.g., 55-gallon drums on concrete pad).

                                 EXHIBIT "J"-1
<PAGE>

3.   STORAGE TANKS AND SUMPS

3.1  Is any above or below ground storage of gasoline, diesel or other hazardous
substances in tanks or sumps proposed or currently conducted at the premises?

Yes _____ No _____

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

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

3.2  Have any of the tanks or sumps been inspected or tested for leakage?

Yes _____ No _____

If so, attach the results.

3.3  Have any spills of leaks occurred from such tanks or sumps?

Yes _____ No _____

If so, describe.

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

3.4  Were any regulatory agencies notified of the spill or leak?

Yes _____ No ____

If so, attach copies of any spill reports filed, any clearance letters or other
correspondence from regulatory agencies relating to the spill or leak.

3.5  Have any underground storage tanks or sumps been taken out of service or
removed?

Yes _____ No _____

If yes, attach copies of any closure permits and clearance obtained from
regulatory agencies relating to closure and removal of such tanks.

4.   SPILLS

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

Yes _____ No _____

                                 EXHIBIT "J"-2
<PAGE>

If yes, please describe the location of the spill.

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

4.2  Were any agencies notified in connection with such spills?

Yes _____ No _____

If yes, attach copies of any spill reports or other correspondence with
regulatory agencies.

4.3  Were any clean-up actions undertaken in connection with the spills?

Yes _____ No _____

Attach copies of any clearance letters obtained from any regulatory agencies
involved and the results of any final soil or groundwater sampling done upon
completion of the clean-up work.

5.   WASTE MANAGEMENT

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

Yes _____ No _____

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

Yes _____ No _____

If so, attach a copy of the most recent report filed.

5.3  Attach a list of the hazardous wastes, if any, generated or to be generated
at the premises, its hazard class and the quantity generated on a monthly basis.

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


_____   On-site treatment or recovery         __________________________________
_____  Discharged to sewer                    __________________________________
_____  Transported and disposed of off-site   __________________________________
_____  Incinerator                            __________________________________

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

________________________________________________________________________________


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

Yes _____ No _____

                                 EXHIBIT "J"-3
<PAGE>

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

________________________________________________________________________________

________________________________________________________________________________

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

6.   WASTEWATER TREATMENT/DISCHARGE

6.1  Do you discharge wastewater to:

_____  storm drain?  sewer? _____

_____  surface water?  no industrial discharge _____

6.2  Is your wastewater treated before discharge?

Yes _____ No _____

If yes, describe the type of treatment conducted.

________________________________________________________________________________

________________________________________________________________________________

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

7.   AIR DISCHARGES

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

Yes _____ No _____

7.2  Do you operate any of the following types of equipment or any other
equipment requiring an air emissions permit?

_____  Spray booth

_____  Dip tank

_____  Drying oven

_____  Incinerator

_____  Other (please describe)

_____  No equipment requiring air permits

7.3  Are air emissions from your operations monitored?

Yes _____ No _____

                                 EXHIBIT "J"-4
<PAGE>

If so, indicate the frequency of monitoring and a description of the monitoring
results.

________________________________________________________________________________

________________________________________________________________________________

7.4  Attach copies of any air emissions permits pertaining to your operations at
the premises.

8.   HAZARDOUS MATERIALS DISCLOSURES

8.1  Does your company handle hazardous materials in a quantity equal to or
exceeding an aggregate of 500 pounds, 55 gallons, or 200 cubic feet per month?

Yes _____ No _____

8.2  Has your company prepared a hazardous materials management plan pursuant to
any applicable requirements of a local fire department or governmental agency?

Yes _____ No _____

If so, attach a copy of the business plan.

8.3  Has your company adopted any voluntary environmental, health or safety
program?

Yes _____ No _____

If so, attach a copy of the program.

9.   ENFORCEMENT ACTIONS, COMPLAINTS

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

Yes _____ No _____

If so, describe the actions and any continuing compliance obligations imposed as
a result of these actions.

________________________________________________________________________________

________________________________________________________________________________

9.2  Has your company ever received requests for information, notice or demand
letters, or any other inquiries regarding its operations?

Yes _____ No _____

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

Yes _____ No _____

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

Yes _____ No _____

                                 EXHIBIT "J"-5
<PAGE>

If so, identify who conducted the audit and when it was conducted.

________________________________________________________________________________

________________________________________________________________________________

Company

By:     __________

Title:  __________

Date:   __________

                                 EXHIBIT "J"-6