<PAGE>

                  521 Cottonwood Drive, Milpitas, California

                        STANDARD SINGLE TENANT NNN LEASE


                              W I T N E S S E T H
                              -------------------

This lease ("Lease") is entered into by and between Limar Realty Corp. #22, a
California corporation ("Landlord") and Medarex, Inc., a New Jersey corporation
("Tenant").  For and in consideration of the payment of rents and the
performance of the covenants herein set forth by Tenant, Landlord does lease to
Tenant and Tenant accepts the Premises described below subject to the agreements
herein contained.

<TABLE>
<CAPTION>

1.      BASIC LEASE TERMS
<S>            <C>                             <C>

        a.      DATE OF LEASE:                 March 14, 2000

        b.      TENANT:                        Medarex, Inc.

                Address (of the Premises):     521Cottonwood Drive, Milpitas, California

                Address (for Notices):         (Please provide if other than Premises.)

        c.      LANDLORD:                      Limar Realty Corp. #22

                Address (for Notices):         1730 S. El Camino Real
                                               Suite 400
                                               San Mateo, California 94402
                                               Attn: Thomas A. Numainville

        d.      TENANT'S USE OF PREMISES:      General office and laboratory, biotechnology/pharmaceutical research and
                                               development, manufacturing and warehousing

        e.      PREMISES AREA:                 57,206 Rentable Square Feet

        f.      INSURING PARTY:                Landlord is the "Insuring Party" unless otherwise stated herein.

        g.      TERM (inclusive):              Commencement Date:  See (P)30. ("Commencement Date")

                                               Expiration Date:  July 31, 2010 ("Expiration Date")

                                               Number of Months:  Approximately 116

        h.      INITIAL BASE RENT:             One Hundred Twelve Thousand Five Hundred Twenty and
                                               95/100 Dollars ($112,520.95) per month

        i.      BASE RENT ADJUSTMENT:

                Step Increase.  The step adjustment provisions apply for the periods shown below:

                                                                                   Monthly Base Rent
                             Periods (inclusive)                                        Amount

                             8/1/2001 - 7/31/2002                                    $115,192.47

                             8/1/2002 - 7/31/2003                                    $117,926.91

                             8/1/2003 - 7/31/2004                                    $120,730.01

                             8/1/2004 - 7/31/2005                                    $123,607.47

                             8/1/2005 - 7/31/2006                                    $126,553.58

                             8/1/2006 - 7/31/2007                                    $129,574.06

                             8/1/2007 - 7/31/2008                                    $132,668.90

                             8/1/2008 - 7/31/2009                                    $135,838.11

                             8/1/2009 - 7/31/2010                                    $139,093.14

        j.      TOTAL TERM BASE RENT (assuming an exact 116 month Lease Term):  $14,594,383.40


        k.      PREPAID BASE RENT:      $112,520.95
</TABLE>
                                      -1-
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<TABLE>
<CAPTION>

1.      BASIC LEASE TERMS
<S>            <C>                             <C>

        l.      SECURITY DEPOSIT:              $450,083.80

        m.      BROKER(S):                     Technology Commercial, Inc. and BT commercial Real Estate (Tenant)

        n.      GUARANTOR(S):                  None

        o.      EXHIBITS:  Exhibits lettered "A" through "C" are attached hereto and made a part hereof.
</TABLE>

2.      PREMISES

        a.      Premises. Landlord leases to Tenant the premises described in
                (P)1. and in Exhibit A (the "Premises"). The term "Premises"
                             ---------
                includes all the land and improvements (including buildings,
                landscaping, parking lot, etc.) as described on Exhibit A.
                                                                ---------
                Subject to any additional work Landlord has agreed herein to do,
                Tenant hereby accepts the Premises in their condition existing
                as of the date of the execution hereof, subject to all
                applicable zoning, municipal, county and state laws, ordinances
                and regulations governing and regulating the use of the
                Premises, and accepts this Lease subject thereto and to all
                matters disclosed thereby and by any exhibits attached hereto.
                Tenant acknowledges that neither Landlord nor Landlord's Broker
                has made any representation or warranty as to the suitability of
                the Premises for the conduct of Tenant's business. Tenant agrees
                with the square footage specified for the Premises in (P)1. and
                will not hereafter challenge such determination and agreement.
                The rental payable by Tenant pursuant to this Lease is not
                subject to revision in the event of any discrepancy in the
                rentable square footage for the Premises.

        b.      Acceptance; Quiet Enjoyment. Landlord represents that it is the
                fee simple owner of the Premises and has full right and
                authority to make this Lease. Landlord hereby leases the
                Premises to Tenant and Tenant hereby accepts the same from
                Landlord, in accordance with the provisions of this Lease.
                Landlord covenants that Tenant shall have peaceful and quiet
                enjoyment of the Premises during the Term (as defined below) of
                this Lease.

3.      Term. The term ("Term") of this Lease is for the period that commences
        at 12:01 a.m. on the Commencement Date and expires at 11:59 p.m. on the
        Expiration Date. Landlord shall use commercially reasonable efforts to
        deliver the Premises to Tenant on or about July 1, 2000. Provided
        Landlord uses commercially reasonable efforts as set forth above, then
        if Landlord, for any reason, cannot deliver possession of the Premises
        to Tenant on or before the Commencement Date, this Lease shall not be
        void or voidable, nor shall Landlord be liable to Tenant for any loss or
        damage resulting from such delay. In that event, however, there shall be
        an abatement of Rent (as defined below) covering the period between the
        Commencement Date and the date when Landlord delivers possession to
        Tenant, and all other terms and conditions of this Lease shall remain in
        full force and effect. If a delay in possession is caused by Tenant's
        failure to perform any obligation in accordance with this Lease, the
        Term shall commence as of the Commencement Date, and there shall be no
        reduction of Rent between the Commencement Date and the time Tenant
        takes possession.

4.      RENT

        a.      Base Rent. Tenant shall pay Landlord in lawful money of the
                United States, without notice, demand, offset or deduction, rent
                in the amount(s) set forth in (P)1. which shall be payable in
                advance on the first day of each and every calendar month ("Base
                Rent") provided, however, the first month's Base Rent is due and
                payable upon execution of this Lease. Unless otherwise specified
                in writing by Landlord, all installments of Base Rent shall be
                payable at Limar Realty Corp. #22, Department #44294, P.O. Box
                44000, San Francisco, CA 94144-4294. Base Rent for any partial
                month at the beginning or end of this Lease will be prorated in
                accordance with the number of days in the subject month.

                For purposes of Section 467 of the Internal Revenue Code, the
                parties to this Lease hereby agree to allocate the stated Base
                Rent provided herein to the periods which correspond to the
                actual Base Rent payments as provided under the terms and
                conditions of this Agreement.

        b.      Step Increase. The Base Rent shall be increased periodically to
                the amounts and at the times set forth in (P)1.i.

        c.      Rent Without Offset and Late Charge. All Rent shall be paid
                without prior demand or notice and without any deduction or
                offset whatsoever. All Rent shall be paid in lawful currency of
                the United States of America. Tenant acknowledges that late
                payment by Tenant to Landlord of any Rent will cause Landlord to
                incur costs not contemplated by this Lease, the exact amount of
                such cost being extremely difficult and impracticable to
                ascertain. Such costs include, without limitation, processing
                and accounting charges and late charges that may be imposed on
                Landlord by the terms of any encumbrance or note secured by the
                Premises. Therefor, if any Rent is not received by Landlord
                within five (5) days of its due date, Tenant shall pay to
                Landlord a late charge equal to six percent (6%) of such overdue
                payment. Landlord and Tenant hereby agree that such late charge
                represents a fair and reasonable estimate of the costs that
                Landlord will incur by reason of any such late payment and that
                the late charge is in addition to any and all remedies available
                to the Landlord and that the assessment and/or collection of the
                late charge shall not be deemed a waiver of any other default.
                Additionally, all such delinquent Rent or other sums, plus this
                late charge, shall bear

                                      -2-
<PAGE>

                interest from the due date thereof at the lesser of ten percent
                (10%) per annum or the maximum legal interest rate permitted by
                law. Any payments of any kind returned for insufficient funds
                will be subject to an additional handling charge of $25.00, and
                thereafter, Landlord may require Tenant to pay all future
                payments of Rent or other sums due by cashier's check.

        d.      Prepaid Base Rent. Upon the execution of this Lease, Tenant
                shall pay to Landlord the Prepaid Base Rent set forth in 1., and
                such Prepaid Base Rent shall be applied toward the Base Rent due
                for the first month of the Term for which Rent is due. Landlord
                shall be entitled to immediately endorse and cash Tenant's
                Prepaid Base Rent.

        e.      Rent. The term "Rent" as used in this Lease shall refer to Base
                Rent, Prepaid Base Rent, Real Property Taxes, Operating
                Expenses, Insurance Costs, repairs and maintenance costs,
                utilities, late charges and other similar charges payable by
                Tenant pursuant to this Lease either directly to Landlord or
                otherwise.

5.      OPERATING EXPENSES

        a.      Payment by Tenant. During the Term of this Lease Tenant shall
                pay to Landlord, as additional Rent, on a monthly basis one
                hundred percent (100%) of the Operating Expenses.

        b.      Operating Expenses. The term "Operating Expenses" shall mean all
                expenses, costs and disbursements (not specifically excluded
                from the definition of Operating Expenses below) of every kind
                and nature which Landlord shall pay or become obligated to pay
                because of or in connection with the ownership, maintenance,
                repair and operation of the Premises. Operating Expenses shall
                include, but not be limited to, the following:

                1)      Wages and salaries of all employees engaged in the
                        operation, maintenance and security of the Premises,
                        including taxes, insurance and benefits relating
                        thereto; and the rental cost and overhead of any office
                        and storage space used to provide such services.

                2)      All supplies and materials used in the operation, repair
                        or maintenance of the Premises.

                3)      Cost of all utilities, including surcharges, for the
                        Premises, including the cost of water, power and
                        lighting which are not separately billed to and paid for
                        by Tenant.

                4)      Cost of all maintenance and service agreements for the
                        Premises and the equipment thereon, including but not
                        limited to, security services, exterior window cleaning,
                        janitorial service, engineers, gardeners and trash
                        removal services.

                5)      All Insurance Costs, as such term is defined in (P)16.

                6)      Cost of all repairs and general maintenance (excluding
                        repairs and general maintenance paid by proceeds of
                        insurance or by Tenant or other third parties.

                7)      A reasonable management fee for the property management
                        of the Premises not to exceed three percent (3%) of
                        Rent.

                8)      The costs of any additional services not provided to the
                        Premises at the Commencement Date but thereafter
                        provided by Landlord in its management of the Premises.

                9)      The cost of any capital improvements made to the
                        Premises after the date of this Lease, with such cost
                        thereof to be amortized over the useful life of the
                        improvements as reasonably determined by Landlord.

                10)     Real Property Taxes as that term is defined in (P)11.c.

                11)     Assessments, dues and other amounts payable pursuant to
                        the CC&R's described in (P)7.c.

        c.      Operating Expenses shall not include:

                1)      Costs paid for directly by Tenant or other tenants;

                2)      Costs incurred in connection with the financing, sale or
                        acquisition of the Premises or any portion thereof;

                3)      Costs incurred in leasing or procuring tenants
                        (including without limitation, lease commissions,
                        advertising expenses, attorneys' fees and expenses of
                        renovating space for tenants);

                4)      Executive salaries of off-site personnel employed by
                        Landlord except for the charge (or pro rata share) of
                        the property manager of the Premises;

                5)      Subject to the provisions of (P)5.b.9) above,
                        depreciation on the Building or other improvements on
                        the Premises;

                                      -3-
<PAGE>

                6)      Legal expenses for disputes with Tenant and any other
                        professional fees of attorneys, auditors or consultants
                        not incurred in connection with the normal maintenance
                        and operation of the Premises;

                7)      Costs incurred that are reimbursed by Tenant, or third
                        parties, including insurers;

                8)      Expenses for repair or replacement covered by
                        warranties, and any costs due to casualty (except for
                        the insurance deductible) or condemnation;

                9)      Rentals and other payments by Landlord under any ground
                        lease or other lease underlying the Lease, and interest,
                        principal, points and other fees on debt or amortization
                        of any debt secured in whole or part by all or any
                        portion of the Premises;

                10)     Repairs or replacements caused by Landlord's gross
                        negligence or the gross negligence of Landlord's
                        employees or agents;

                11)     Net income, franchise, capital stock, estate or
                        inheritance taxes or taxes which are the personal
                        obligation of Landlord;

                12)     Landlord's charitable or political contributions;

                13)     Payments to subsidiaries and affiliates of Landlord for
                        services to the Premises for supplies or other materials
                        to the extent that the cost of such services, supplies
                        or materials exceed the cost which would have been paid
                        had the services, supplies or materials been provided by
                        unaffiliated parties on a competitive basis (provided,
                        however, any fee for management services paid to an
                        affiliate of Landlord shall be in the amount set forth
                        in (P)5.b.7);

                14)     Any obligation to perform or to pay for costs incurred
                        in connection with the presence of any Hazardous
                        Material in, on, under or about the Premises except to
                        the extent caused by the release or emission of the
                        Hazardous Material in question by Tenant; or

                15)     Costs of insurance covering Tenant's personal property.

        d.      Extraordinary Services. Tenant shall pay within ten (10) days of
                receipt of an invoice from Landlord the cost of additional or
                extraordinary services provided to Tenant at Tenant's request
                and not paid or payable by Tenant pursuant to other provisions
                of this Lease.

        e.      Impound. Landlord reserves the right, at Landlord's option, to
                estimate the annual cost of Operating Expenses performed by
                Landlord ("Projected Operating Expenses") and to require same to
                be paid in advance. Tenant shall pay to Landlord, monthly in
                advance as additional Rent, one-twelfth (1/12) of the Projected
                Operating Expenses.

        f.      Adjustment.

                1)      Accounting. Within ninety (90) days (or as soon
                        thereafter as possible) after the close of each calendar
                        year or portion thereof of occupancy, Landlord shall
                        provide Tenant a statement of such year's actual
                        Operating Expenses showing the actual Operating Expenses
                        compared to the Projected Operating Expenses. If the
                        actual Operating Expenses are more than the Projected
                        Operating Expenses then Tenant shall pay Landlord,
                        within thirty (30) days of receipt of a bill therefor,
                        the difference. If the actual Operating Expenses are
                        less than the Projected Operating Expenses, then Tenant
                        shall receive a credit against future Operating Expenses
                        payments equal to the difference; provided, that in the
                        case of an overpayment for the final lease year of the
                        Term, Landlord shall credit the difference against any
                        sums due from Tenant to Landlord in accordance with the
                        terms of this Lease; and if no sums are due and unpaid,
                        shall promptly refund the amount to Tenant.

                2)      Tenant's Right to Audit. Within sixty (60) days after
                        receipt of Landlord's statement setting forth actual
                        Operating Expenses (the "Statement"), Tenant shall have
                        the right to audit at Landlord's local offices, at
                        Tenant's expense, Landlord's accounts and records
                        relating to Operating Expenses. Such audit shall be
                        conducted by a certified public accountant approved by
                        Landlord, which approval shall not be unreasonably
                        withheld. If such audit reveals that Landlord has
                        overcharged Tenant, the amount overcharged shall be paid
                        to Tenant within thirty (30) days after the audit is
                        concluded. If such audit reveals that Landlord has
                        undercharged Tenant, the amount of undercharge shall be
                        paid by Tenant to Landlord within 30 days after the
                        audit is conducted. In addition, if the Statement
                        exceeds the actual Operating Expenses which should have
                        been charged to Tenant by more than six percent (6%),
                        the cost of the audit shall be paid by Landlord.

                3)      Proration. Tenant's liability to pay Operating Expenses
                        shall be prorated on the basis of a 365 (or 366, as the
                        case may be) day year to account for any fractional
                        portion of a year included at the commencement or
                        expiration of the Term of this Lease.

                                      -4-
<PAGE>

                4)      Survival. Landlord and Tenant's obligations to pay for
                        or credit any increase or decrease in payments pursuant
                        to this (P)5. shall survive this Lease.

        g.      Failure to Pay. Failure of Tenant to pay any of the charges
                required to be paid under this (P)5. beyond applicable notice
                and cure periods shall constitute a material default and breach
                of this Lease and Landlord's remedies shall be as specified in
                (P)21.

6.      SECURITY DEPOSIT. Upon execution of this Lease, Tenant shall deposit a
        security deposit ("Security Deposit") in the amount set forth in (P)1.
        with Landlord. If Tenant is in default beyond applicable notice and cure
        periods, Landlord can (but without any requirement to do so) use the
        Security Deposit or any portion of it to cure the default or to
        compensate Landlord for any damages sustained by Landlord resulting from
        Tenant's default. Upon demand, Tenant shall immediately pay to Landlord
        a sum equal to the portion of the Security Deposit expended or applied
        by Landlord to restore the Security Deposit to its full amount. In no
        event will Tenant have the right to apply any part of the Security
        Deposit to any Rent due under this Lease. Landlord's obligations with
        respect to the Security Deposit are those of a debtor and not a trustee,
        and Landlord can commingle the Security Deposit with Landlord's general
        funds. Landlord shall not be required to pay Tenant interest on the
        Security Deposit. Each time the Base Rent is increased, Tenant shall
        deposit additional funds with Landlord sufficient to increase the
        Security Deposit to an amount which bears the same relationship to the
        Base Rent as the initial Security Deposit bore to the initial Base Rent.
        If Tenant is not in default at the expiration or termination of this
        Lease and has fully complied with the provisions of (P)9. and
        (P)13.d.6), Landlord shall return the Security Deposit to Tenant.

7.      USE OF PREMISES

        a.      Tenant's Use. Tenant shall use the Premises solely for the
                purposes stated in (P)1. and for no other purposes without
                obtaining the prior written consent of Landlord. Tenant
                acknowledges that neither Landlord nor any agent of Landlord has
                made any representation or warranty with respect to the Premises
                or with respect to the suitability of the Premises to the
                conduct of Tenant's business, nor has Landlord agreed to
                undertake any modification, alteration or improvement to the
                Premises, except as provided in writing in this Lease. Tenant
                acknowledges that Landlord may from time to time, at its sole
                discretion, make such modifications, alterations, deletions or
                improvements to the Premises as Landlord may reasonably deem
                necessary or desirable, without compensation or notice to
                Tenant. Landlord, however, shall not make any modifications,
                alterations, deletions or improvements to the Premises that
                unreasonably interfere with Tenant's use of the Premises or
                unreasonably decrease Tenant's rights or unreasonably increase
                Tenant's obligations under the Lease. Tenant shall promptly
                comply with all laws, statutes, ordinances, orders and
                governmental regulations now or hereafter existing affecting the
                Premises. Tenant shall not do or permit anything to be done in
                or about the Premises or bring or keep anything in the Premises
                that will in any way increase the premiums paid by Landlord on
                its insurance related to the Premises. Tenant will not perform
                any act or carry on any practices that may injure the Premises.
                Tenant shall not use the Premises for sleeping, washing clothes,
                cooking or the preparation, manufacture or mixing of anything
                that emits any objectionable odor, noises, vibrations or lights
                onto such other tenants. If sound insulation is required to
                muffle noise produced by Tenant on the Premises, Tenant at its
                own cost shall provide all necessary insulation. Tenant shall
                not do anything on the Premises which will overload any existing
                parking or service to the Premises. Pets and/or animals of any
                type (other than seeing eye dogs and laboratory animals) shall
                not be kept on the Premises. Tenant covenants that it will not
                interfere with other tenants' quiet enjoyment of their premises.

        b.      Rules and Regulations. Tenant shall comply with and use the
                Premises in accordance with the Rules and Regulations attached
                hereto as Exhibit B and to any reasonable modifications to such
                          ---------
                Rules and Regulations as Landlord may adopt from time to time,
                provided however that if any rule or regulation is in conflict
                with any term, covenant or condition of this Lease, this Lease
                shall prevail. In addition, no such rule or regulation, or any
                subsequent amendment thereto adopted by Landlord, shall in any
                material way alter, reduce or adversely affect any of Tenant's
                rights or materially enlarge Tenant's obligations under this
                Lease.

        c.      CC&R's. Tenant agrees that this Lease is subject and subordinate
                to the Covenants, Conditions and Restrictions, a copy of which
                is attached hereto as Exhibit C, as they may be amended from
                time to time ("CC&R's"), and further agrees that the CC&R's are
                an integral part of this Lease. Throughout the Term or any
                extension thereof, notwithstanding any other provision hereof,
                Tenant shall faithfully and timely assume and perform all
                obligations of Landlord and/or Tenant under the CC&R's and any
                modifications or amendments thereto, including the payment of
                any periodic or special dues or assessments against the
                Premises. Such dues and assessments shall be included within the
                definition of Operating Expenses pursuant to (P)5.b.11), and
                Tenant shall pay such amounts as further set forth in (P)5.
                Tenant shall hold Landlord, its subsidiaries, shareholders,
                directors, officers, agents and employees harmless and indemnify
                Landlord, its subsidiaries, shareholders, directors, officers,
                agents and employees against any loss, expense and damage,
                including attorneys' fees and costs, arising out of the failure
                of Tenant to perform or comply with the CC&R's.

                                      -5-
<PAGE>

8.      EMISSIONS; STORAGE, USE AND DISPOSAL OF WASTE

        a.      Emissions.  Tenant shall not:

                1)      Permit any vehicle on the Premises to emit exhaust which
                        is in violation of any governmental law, rule,
                        regulation or requirement;

                2)      Except as permitted by law, discharge, emit or permit to
                        be discharged or emitted, any liquid, solid or gaseous
                        matter, or any combination thereof, into the atmosphere
                        or on, into or under the Premises, any building or other
                        improvements of which the Premises are a part, or the
                        ground or any body of water which matter, as reasonably
                        determined by Landlord or any governmental entity, does
                        or may pollute or contaminate the same, or is, or may
                        become, radioactive or does, or may, adversely affect
                        the (a) health or safety of persons, wherever located,
                        whether on the Premises or anywhere else, (b) condition,
                        use or enjoyment of the Premises or any other real or
                        personal property, whether on the Premises or anywhere
                        else, or (c) Premises or any of the improvements thereto
                        including buildings, foundations, pipes, utility lines,
                        landscaping or parking areas;

                3)      Produce, or permit to be produced, any intense glare,
                        light or heat;

                4)      Create, or permit to be created, any sound pressure
                        level which will interfere with the quiet enjoyment of
                        any real property outside the Premises, or which will
                        create a nuisance or violate any governmental law, rule,
                        regulation or requirement;

                5)      Create, or permit to be created, any vibration that is
                        discernible outside the Premises; or

                6)      Transmit, receive or permit to be transmitted or
                        received, any electromagnetic, microwave or other
                        radiation which is or may be harmful or hazardous to any
                        person or property in, or about the Premises, or
                        anywhere else.

        b.      Storage and Use.

                1)      Storage. Subject to the uses permitted and prohibited to
                        Tenant under this Lease, Tenant shall store in
                        appropriate leak proof containers all solid, liquid or
                        gaseous matter, or any combination thereof, which
                        matter, if discharged or emitted into the atmosphere,
                        the ground or any body of water, does or may (a) pollute
                        or contaminate the same, or (b) adversely affect the (i)
                        health or safety of persons, whether on the Premises or
                        anywhere else, (ii) condition, use or enjoyment of the
                        Premises or any real or personal property, whether on
                        the Premises or anywhere else, or (iii) Premises.

                2)      Use. In addition, without Landlord's prior written
                        consent, Tenant shall not use, store or permit to remain
                        on the Premises any solid, liquid or gaseous matter
                        which is, or may become radioactive. If Landlord does
                        give its consent, Tenant shall store the materials in
                        such a manner that no radioactivity will be detectable
                        outside a designated storage area and Tenant shall use
                        the materials in such a manner that (a) no real or
                        personal property outside the designated storage area
                        shall become contaminated thereby and (b) there are and
                        shall be no adverse effects on the (i) health or safety
                        of persons, whether on the Premises or anywhere else,
                        (ii) condition, use or enjoyment of the Premises or any
                        real or personal property thereon or therein, or (iii)
                        Premises or any of the improvements thereto or thereon
                        provided, however, Tenant shall have the right to use
                        those Hazardous Materials used by Tenant in the ordinary
                        course of its business operations provided such use
                        shall be in compliance with all environmental laws.

                3)      Hazardous Materials. Subject to the uses permitted and
                        prohibited to Tenant under this Lease, Tenant shall
                        store, use, employ, transport and otherwise deal with
                        all Hazardous Materials (as defined below) employed on
                        or about the Premises in accordance with all federal,
                        state, or local law, ordinances, rules or regulations
                        applicable to Hazardous Materials in connection with or
                        respect to the Premises.

        c.      Disposal of Waste.

                1)      Refuse Disposal. Tenant shall not keep any trash,
                        garbage, waste or other refuse on the Premises except in
                        sanitary containers and shall regularly and frequently
                        remove same from the Premises. Tenant shall keep all
                        incinerators, containers or other equipment used for
                        storage or disposal of such materials in a clean and
                        sanitary condition.

                2)      Sewage Disposal. Tenant shall properly dispose of all
                        sanitary sewage and shall not use the sewage disposal
                        system (a) for the disposal of anything except sanitary
                        sewage or (b) amounts in excess of the lesser of: (i)
                        that reasonably contemplated by the uses permitted under
                        this Lease or (ii) that permitted by any governmental
                        entity. Tenant shall keep the sewage disposal system
                        free of all obstructions and in good operating
                        condition.

                3)      Disposal of Other Waste. Tenant shall properly dispose
                        of all other waste or other matter delivered to, stored
                        upon, located upon or within, used on, or removed from,
                        the Premises

                                      -6-
<PAGE>

                        in such a manner that it does not, and will not,
                        adversely affect the (a) health or safety of persons,
                        wherever located, whether on the Premises or elsewhere,
                        (b) condition, use or enjoyment of the Premises or any
                        other real or personal property, wherever located,
                        whether on the Premises or anywhere else, or (c)
                        Premises or any of the improvements thereto or thereon
                        including buildings, foundations, pipes, utility lines,
                        landscaping or parking areas.

        d.      Information. Tenant shall make available at the Premises for
                review by Landlord during ordinary business hours, and upon
                request provide Landlord with copies of, any and all information
                regarding Hazardous Materials in the Premises, including copies
                of all filings and reports to governmental entities at the time
                they are originated, and any other information requested by
                Landlord. In the event of any accident, spill or other incident
                involving Hazardous Materials which is required to be reported
                to a governmental authority under law, Tenant shall immediately
                report the same to Landlord and supply Landlord with all
                information and reports with respect to the same. All
                information described herein shall be provided to Landlord
                regardless of any claim by Tenant that it is confidential or
                privileged.

        e.      Compliance with Law. Notwithstanding any other provision in this
                Lease to the contrary, Tenant shall comply with all laws,
                statutes, ordinances, regulations, rules and other governmental
                requirements now or hereafter existing in complying with its
                obligations under this Lease, and in particular, relating to
                Tenant's or its agents' storage, use and disposal of Hazardous
                Materials, provided, however, Tenant shall not be required to
                comply with or cause the Premises to comply with any laws, rules
                or regulations requiring alterations or improvements unless the
                compliance with any of the foregoing is necessitated solely due
                to Tenant's particular use of the Premises.

        f.      Indemnity. Tenant hereby agrees to indemnify, defend and hold
                Landlord, its agents, employees, lenders, shareholders,
                directors, representatives, successors and assigns harmless from
                and against any and all actions, causes of action, losses,
                damages, costs, claims, expenses, penalties, obligations or
                liabilities of any kind whatsoever (including but not limited to
                reasonable attorneys' fees) arising out of or relating to any
                Hazardous Materials employed, used, transported across, or
                otherwise dealt with by Tenant (or invitees, or persons or
                entities under the control of Tenant) in connection with or with
                respect to the Premises. Notwithstanding any of the provisions
                of this Lease, the indemnity obligation of Tenant pursuant to
                this (P)8.f. shall survive the termination of this Lease and
                shall relate to any occurrence as described in this (P)8.f.
                occurring in connection with this Lease. Landlord hereby agrees
                to indemnify, defend and hold Tenant harmless from and against
                any and all actions, causes of action, losses, damages, costs,
                claims, expenses, penalties, obligations or liabilities of any
                kind whatsoever (including reasonable attorneys' fees) arising
                out of or relating to (i) Hazardous Materials employed, used,
                transported to the Premises, for which the Premises are a part
                thereof, by Landlord, its agents or employees or (ii) Hazardous
                Materials existing on, in or under the Premises as of the date
                of this Lease. For purposes of this Lease the term "Hazardous
                Materials" shall mean any hazardous, toxic or dangerous waste,
                substance or material, pollutant or contaminant, as defined for
                purposes of the Comprehensive Environmental Response,
                Compensation and Liability Act of 1980 (42 U.S.C. Sections 9601
                et seq.), as amended, or the Resource Conservation and Recovery
                Act (42 U.S.C. Sections 6901 et seq.), as amended, or any other
                federal, state, or local law, ordinance, rule or regulation
                applicable to the Premises, or any substance which is toxic,
                explosive, corrosive, flammable, infectious, radioactive,
                carcinogenic, mutagenic, or otherwise hazardous, or any
                substance which contains gasoline, diesel fuel or other
                petroleum hydrocarbons, polychlorinated biphenyls (PCB's), or
                radon gas, urea formaldehyde, asbestos or lead. Tenant shall not
                be liable for any losses, costs, claims, liabilities and damages
                (including attorneys' and consultants' fees) of every type and
                nature, directly or indirectly arising out of or in connection
                with any Hazardous Material present at any time on or about the
                Premises, or the soil, air, improvements, groundwater or surface
                water thereof, or the violation of any laws, orders or
                regulations, relating to any such Hazardous Material, except to
                the extent that any of the foregoing actually results from the
                release or emission of Hazardous Material by Tenant or its
                agents or employees in violation of applicable environmental
                laws.

9.      SIGNS AND COMMUNICATIONS ANTENNAE. Tenant shall not place any sign or
        communications antennae upon or adjacent to the Premises, except that
        Tenant may, with Landlord's prior written consent, which consent shall
        not be unreasonably withheld, install (but not on the roof) such signs
        as are reasonably required to indicate Tenant's company name or logo
        provided such signs are in compliance with Landlord's standard sign
        criteria or install communications antennae used exclusively by Tenant
        provided such signs and/or communications antennae are in compliance
        with all applicable governmental requirements and the CC&R's. Tenant
        shall have the right to install signage on the existing monument sign
        and on the exterior of the building subject to the approval of Landlord
        and the City of Milpitas. The installation of any sign or communications
        antennae on or adjacent to the Premises by or for Tenant shall be
        subject to the provisions of (P)13. (Repairs and Maintenance). Tenant
        shall remove any sign or communications antennae placed on or adjacent
        to the Premises by Tenant upon the expiration of the Term or sooner
        termination of this Lease, and Tenant shall repair any damage or injury
        to the Premises caused thereby, all at Tenant's expense. If any signs or
        communications antennae are not removed, or necessary repairs not made,
        Landlord shall have the right to remove the signs or communications
        antennae and repair any damage or injury to the Premises at Tenant's
        sole cost and expense. Notwithstanding any other provision of this Lease
        to the contrary, Landlord reserves all rights to the use of the roof and
        the right to install and receive all revenues from the installation of
        such other signs or communications antennae on the Premises, including
        the roof, as do not unreasonably interfere with the conduct of Tenant's
        business within the Premises.

                                      -7-
<PAGE>

10.     PERSONAL PROPERTY TAXES. Tenant shall pay at least ten (10) days prior
        to delinquency all taxes assessed against and levied upon Tenant owned
        leasehold improvements, trade fixtures, furnishings, equipment and all
        personal property of Tenant contained in the Premises or elsewhere. When
        possible, Tenant shall cause its leasehold improvements, trade fixtures,
        furnishings, equipment and all other personal property to be assessed
        and billed separately from the real property of Landlord. If any of
        Tenant's said personal property shall be assessed with Landlord's real
        property, Tenant shall pay Landlord the taxes attributable to Tenant
        within ten (10) days after receipt of a written statement setting forth
        the taxes applicable to Tenant's property.

11.     REAL PROPERTY TAXES

        a.      Payment of Taxes. Landlord shall pay the Real Property Taxes, as
                defined in (P)11.c., during the Term of this Lease. Subject to
                (P)11.b., Tenant shall promptly reimburse Landlord according to
                (P)5. for such Real Property Taxes paid by Landlord.

        b.      Advance Payment. In order to ensure payment when due and before
                delinquency of any or all Real Property Taxes, Landlord shall
                estimate the current Real Property Taxes applicable to the
                Premises, and require Tenant to pay monthly in advance with the
                payment of the Base Rent an amount which, over the number of
                months remaining before the month in which the applicable tax
                installment would become delinquent, would provide a fund large
                enough to fully discharge before delinquency the estimated
                installment of Real Property Taxes to be paid. When the actual
                amount of the applicable tax bill is known, Landlord may, but is
                not required to, adjust the amount of such equal monthly advance
                payment so as to provide the funds needed to pay the applicable
                Real Property Taxes before delinquency. If the amounts paid to
                Landlord by Tenant under the provisions of this (P)11. are
                insufficient to discharge the obligations of Tenant to pay such
                Real Property Taxes as the same become due, Tenant shall pay to
                Landlord, upon Landlord's demand, such additional sums as are
                necessary to pay such obligations. All moneys paid to Landlord
                under this (P)11. may be intermingled with other moneys of
                Landlord and shall not bear interest.

        c.      Definition of "Real Property Taxes". As used herein, the term
                "Real Property Taxes" shall include any form of real estate tax
                or assessment, general, special, ordinary or extraordinary, and
                any license fee, commercial rental tax, improvement bond or
                bonds, levy or tax or other fee, charge, or excise which may be
                imposed as a substitute for any of the foregoing (other than
                inheritance, personal income or estate taxes) imposed upon the
                Premises by any authority having the direct or indirect power to
                tax, including any city, county, state or federal government, or
                any school, agricultural, sanitary, fire, street, drainage or
                other improvement district thereof, levied against any legal or
                equitable interest of Landlord in the Premises, Landlord's right
                to rent or other income therefrom, and/or Landlord's business of
                leasing the Premises. The term "Real Property Taxes" shall also
                include any tax, fee, levy, assessment or charge, or any
                increase therein, imposed by reason of events occurring, or
                changes in applicable law taking effect, during the Term of this
                Lease, including but not limited to a change in the ownership of
                the Premises or in the improvements thereon, the execution of
                this Lease, or any modification, amendment or transfer thereof,
                and whether or not contemplated by the parties hereto. Real
                Property Taxes shall not include and Tenant shall not be
                required to pay any portion of any tax or assessment expense or
                any increase therein in excess of the amount which would be
                payable if such tax or assessment expense were paid in
                installments over the longest possible term. Tenant may, at
                Tenant's sole cost and expense, in Tenant's own name and on
                Tenant's own behalf, or in the name and on behalf of Landlord,
                in good faith, contest any Real Property Taxes, and Landlord
                shall cooperate fully with Tenant in any such contest.

12.     UTILITIES. Tenant shall pay for all water, gas, heat, light, power,
        telephone, trash disposal and other utilities and services supplied to
        the Premises, together with any taxes thereon. If any such services are
        not separately metered to Tenant, Tenant shall pay a reasonable
        proportion, to be determined by Landlord, of all charges jointly metered
        with other premises.

13.     REPAIRS AND MAINTENANCE

        a.      Tenant's Obligations.

                1)      General. Tenant shall, at Tenant's sole cost and expense
                        and at all times, contract for janitorial services and
                        supplies and keep the Premises and every part thereof in
                        good order, condition and repair, structural and non-
                        structural (whether or not such portion of the Premises
                        requiring repairs, or the means of repairing same, are
                        reasonably or readily accessible to Tenant, and whether
                        or not the need for such repairs occurs as a result of
                        Tenant's use, any prior use, the elements or the age of
                        such portion of the Premises), including, without
                        limiting the generality of the foregoing, all equipment
                        or facilities serving the Premises, such as plumbing,
                        heating, air conditioning, ventilating, electrical,
                        lighting facilities, boilers, fired or unfired pressure
                        vessels, fire sprinkler and/or standpipe and hose or
                        other automatic fire extinguishing system, including
                        fire alarm and/or smoke detection systems and equipment,
                        fire hydrants, fixtures, walls (interior and exterior),
                        foundations, ceilings, roofs, floors, windows, doors,
                        plate glass, skylights, landscaping, driveways, parking
                        lots, fences, retaining walls, signs, sidewalks and
                        parkways located in, on, about or adjacent to the
                        Premises. Tenant shall not cause or permit any Hazardous
                        Material to be

                                      -8-
<PAGE>

                        spilled or released in, on, under or about the Premises
                        (including through the plumbing or sanitary sewer
                        system) and shall promptly, at Tenant's expense, take
                        all investigatory and/or remedial action reasonably
                        recommended, whether or not formally ordered or
                        required, for the cleanup of any contamination of, and
                        for the maintenance, security and/or monitoring of the
                        Premises, the elements surrounding same, or neighboring
                        properties, that was caused or materially contributed to
                        by Tenant, or pertaining to or involving any Hazardous
                        Materials and/or storage tank brought onto the Premises
                        by or for Tenant or under its control. Tenant, in
                        keeping the Premises in good order, condition and
                        repair, shall exercise and perform good maintenance
                        practices. Tenant's obligations shall include
                        restorations, replacements or renewals when necessary to
                        keep the Premises and all improvements thereon or a part
                        thereof in good order, condition and state of repair.
                        If, inclusive of Tenant's occupancy pursuant to earlier
                        lease agreement(s) and amendments thereto, Tenant has
                        occupied the Premises for seven (7) years or more,
                        Landlord may require Tenant to repaint the exterior of
                        the buildings on the Premises as reasonably required,
                        but not more frequently than once every seven (7) years.
                        Notwithstanding the foregoing, to the extent that
                        capital expenditures must be made to properly repair,
                        maintain, or replace any portion of the Premises,
                        Landlord shall cause such work to be completed and such
                        capital expenditure shall become an Operating Expense,
                        and Tenant shall pay the amortized portions of such
                        Operating Expense as provided in (P)5.b.9) of the Lease.

                2)      Contracts. Tenant shall, at Tenant's sole cost and
                        expense, procure and maintain contracts, with copies to
                        Landlord, in customary form and substance for, and with
                        contractors specializing and experienced in, the
                        inspection, maintenance and service of the following
                        equipment and improvements, if any, located on the
                        Premises: (i) heating, air conditioning and ventilation
                        equipment, (ii) boiler, fired or unfired pressure
                        vessels, (iii) fire sprinkler and/or standpipe and hose
                        or other automatic fire extinguishing systems, including
                        fire alarm and/or smoke detection, (iv) landscaping and
                        irrigation systems, (v) roof covering and drain
                        maintenance and (vi) asphalt and parking lot
                        maintenance. Tenant shall keep a detailed preventative
                        maintenance schedule and log showing the frequency of
                        maintenance on all HVAC, mechanical, electrical and
                        other systems of the Premises and provide Landlord with
                        a copy of same quarterly.

                3)      As-ls Condition. The parties affirm that Landlord, its
                        subsidiaries, officers, shareholders, directors, agents
                        and/or employees have made no representations to Tenant
                        respecting the condition of the Premises except as
                        specifically stated herein.

                4)      Americans with Disabilities Act. Tenant acknowledges
                        that as of the Commencement Date, the Premises may not
                        comply with the Americans with Disabilities Act of 1990
                        ("ADA"), and that Landlord shall have no obligation with
                        respect to any such failure of the Premises to so
                        comply. Tenant shall, at its cost, at any time during
                        the Term as required by any applicable governmental
                        agency having jurisdiction over the Premises, make such
                        modifications and alterations to the Premises as may be
                        required in order to fully comply with the provisions of
                        the ADA, as from time to time amended, and any and all
                        regulations issued pursuant to or in connection with the
                        ADA in such a manner as to satisfy the applicable
                        governmental agency or agencies requiring remediation.
                        Tenant shall at least ten (10) days prior to the
                        commencement of any construction in connection with
                        satisfaction of the ADA, give written notice to Landlord
                        of its intended commencement of construction together
                        with sufficient details so as to reasonably disclose to
                        Landlord the nature of the proposed construction, copies
                        of any notices received by Tenant from applicable
                        governmental agencies in connection with the ADA and
                        such other documents or information as Landlord may
                        reasonably request. In any event, notwithstanding
                        anything to the contrary contained in this Lease, prior
                        to the termination of the Term, Tenant shall, at its
                        cost, make such modifications and alterations to the
                        Premises as may be required to comply fully with the ADA
                        as from time to time amended and any and all regulations
                        issued thereunder. Tenant shall give the Landlord thirty
                        (30) days prior written notice as described above in
                        connection with any such construction. Any and all
                        construction required to so comply with the ADA shall be
                        completed by Tenant prior to the expiration of the Term.

        b.      Landlord's Obligations.

                Landlord shall have no obligation, in any manner whatsoever, to
                repair and maintain the Premises, or the equipment therein,
                whether structural or non structural, all of which obligations
                are intended to be that of the Tenant under (P)13.a. hereof.

        c.      Compliance with Governmental Regulations. Tenant shall, at its
                own cost and expense, promptly and properly observe and comply
                with all present and future orders, regulations, directions,
                rules, laws, ordinances, and requirements of all governmental
                authorities (including but not limited to state, municipal,
                county and federal governments and their departments, bureaus,
                boards and officials) arising from the use or occupancy of, or
                applicable to, the Premises or privileges appurtenant to or in
                connection with the enjoyment of the Premises. Tenant shall also
                comply with all such rules, laws, ordinances and requirements at
                the time Tenant makes any alteration, addition or change to the
                Premises.

                                      -9-
<PAGE>

        d.      Miscellaneous.

                1)      Landlord and Tenant shall each do all acts required to
                        comply with all applicable laws, ordinances and rules of
                        any public authority relating to their respective
                        maintenance obligations as set forth herein.

                2)      Tenant expressly waives the benefits of any statute now
                        or hereafter in effect which would otherwise afford the
                        Tenant the right to make repairs at Landlord's expense
                        or to terminate this Lease because of Landlord's failure
                        to keep the Premises in good order, condition and
                        repair. Specifically, Tenant waives the provisions of
                        California Civil Code Sections 1941 and 1942 with
                        respect to Landlord's obligations for Tenant
                        tenantability of the Premises and Tenant's right to make
                        repairs and deduct the expenses of such repairs from
                        Rent.

                3)      Tenant shall not place a load upon any floor of the
                        Premises which exceeds the load per square foot which
                        such floor was designed to carry, as determined by
                        Landlord or Landlord's structural engineer. The cost of
                        any such determination made by Landlord's structural
                        engineer shall be paid for by Tenant upon demand.

                4)      Except as otherwise expressly provided in this Lease,
                        Landlord shall have no liability to Tenant nor shall
                        Tenant's obligations under this Lease be reduced or
                        abated in any manner whatsoever by reason of any
                        inconvenience, annoyance, interruption or injury to
                        business arising from Landlord making any repairs or
                        changes which Landlord is required to make or is
                        permitted to make by this Lease or by any tenant's lease
                        or is required by law to make in or to any portion of
                        the Premises. Landlord shall nevertheless use reasonable
                        efforts to minimize any interference with Tenant's
                        business in the Premises.

                5)      Tenant shall give Landlord prompt notice of any damage
                        to or defective condition in any part or appurtenance of
                        the Premises' mechanical, electrical, plumbing, HVAC or
                        other systems serving, located in or passing through the
                        Premises. Upon request by Landlord, Tenant shall provide
                        Landlord with evidence reasonably acceptable to Landlord
                        of service contracts on such systems.

                6)      Upon the expiration or early termination of this Lease,
                        Tenant shall return the Premises to Landlord clean and
                        in the same condition as on the date Tenant took
                        possession, except for normal wear and tear and damage
                        from casualty and condemnation. Any damage to the
                        Premises, including any structural damage, resulting
                        from Tenant's use or from the removal of Tenant's
                        fixtures, furnishings and equipment shall be repaired by
                        Tenant at Tenant's expense.

                7)      Landlord may, at Landlord's option, choose to perform
                        any of the Tenant's obligations in this (P)13.
                        ("Tenant's Obligations") in the event Landlord
                        reasonably determines that Tenant has failed to properly
                        perform such obligations. The cost of any such Tenant's
                        Obligations so performed by Landlord shall be at
                        Tenant's sole cost and expense. Tenant shall reimburse
                        Landlord for any such costs incurred by Landlord in the
                        performance of Tenant's Obligations within ten (10) days
                        of receipt of a billing from Landlord.

14.     ALTERATIONS. Tenant shall not make any alterations to the Premises
        without Landlord's prior written consent, which consent shall not be
        unreasonably withheld. Tenant may make non-structural alterations
        costing less than $25,000 per event without Landlord's consent.
        Regardless of whether Landlord's consent for alteration is required,
        Tenant must provide Landlord at least fifteen (15) business days prior
        to the commencement of any alteration with a complete description of
        each such alteration including any building permit drawing(s) and
        specifications. Landlord may post notices regarding non-responsibility
        in accordance with the laws of the state in which the Premises are
        located. All alterations made by Tenant, whether or not subject to the
        approval of Landlord, shall be performed by Tenant and its contractors
        in a first class workmanlike manner and permits and inspections shall be
        obtained from all required governmental entities. Any alterations made
        shall remain on and be surrendered with the Premises upon expiration or
        termination of this Lease, except that Landlord may elect to require
        Tenant to remove some or all of the alterations which Tenant may have
        made to the Premises upon the expiration or earlier termination of the
        Term by giving Tenant written notice of such election at the time
        Landlord consented to such alterations. If Landlord so elects, Tenant
        shall at its own cost restore the Premises to the condition designated
        by Landlord in its election, before the last day of the Term. Should
        Landlord consent in writing to Tenant's alteration of the Premises,
        Tenant shall contract with a contractor reasonably approved by Landlord
        for the construction of such alterations, shall secure all appropriate
        governmental approvals and permits, and shall complete such alterations
        with due diligence in compliance with plans and specifications approved
        by Landlord. Tenant shall pay all costs for such construction and shall
        keep the Premises free and clear of all mechanics' liens which may
        result from construction by Tenant.

15.     RELEASE AND INDEMNITY. As material consideration to Landlord, Tenant
        agrees that Landlord shall not be liable to Tenant for any damage to
        Tenant or Tenant's property from any cause, except for damages resulting
        from Landlord's or its agents' or contractors' gross negligence or
        willful misconduct, and Tenant waives all claims against Landlord for
        damage to persons or property arising for any reason, except for damage
        resulting directly from Landlord's or its agents' or contractors' gross
        negligence or willful misconduct. Except to the extent of the gross
        negligence or willful misconduct of Landlord or its agents or
        contractors, Tenant shall indemnify and hold Landlord, its subsidiaries,
        officers, shareholders, directors,

                                      -10-
<PAGE>

        agents and employees harmless from all damages including attorneys' fees
        and costs arising out of any damage to any person or property occurring
        in, on or about the Premises or Tenant's use of the Premises or Tenant's
        breach of any term of this Lease.

16.     INSURANCE

        a.      Payment For Insurance. Regardless of whether the Landlord or
                Tenant is the Insuring Party, Tenant shall pay for all insurance
                for the Premises required under this (P)16. ("Insurance Costs")
                either directly or by reimbursement to Landlord as set forth in
                this (P)16. Premiums for policy periods commencing prior to or
                extending beyond the Lease Term shall be prorated to correspond
                to the Lease Term. Payment shall be made by Tenant to Landlord
                within thirty (30) days following receipt of an invoice for any
                amount due.

        b.      Liability Insurance.

                1)      Carried by Tenant. Whether or not Tenant is the Insuring
                        Party, Tenant shall obtain and keep in force during the
                        Term of this Lease a commercial general liability policy
                        of insurance protecting Tenant and Landlord (as an
                        additional insured) against claims for bodily injury,
                        personal injury and property damage based upon,
                        involving or arising out of the ownership, use,
                        occupancy or maintenance of the Premises and all areas
                        appurtenant thereto. Such insurance shall be on an
                        occurrence basis providing single limit coverage in an
                        amount not less than $5,000,000 per occurrence with an
                        "Additional Insured-Managers or Landlords of Premises"
                        endorsement and contain an "Amendment of the Pollution
                        Exclusion" for damage caused by heat, smoke or fumes
                        from a hostile fire. The policy shall not contain any
                        intra-insured exclusions as between insured persons or
                        organizations, but shall include coverage for liability
                        assumed under this Lease as an "insured contract" for
                        the performance of Tenant's indemnity obligations under
                        this Lease. The limits of said insurance required by
                        this Lease or as carried by Tenant shall not, however,
                        limit the liability of Tenant nor relieve Tenant of any
                        obligation hereunder. All insurance to be carried by
                        Tenant shall be primary to and not contributory with any
                        similar insurance carried by Landlord, whose insurance
                        shall be considered excess insurance only. All insurance
                        coverage required pursuant to this (P)16. which is to
                        name Landlord as a named insured shall also name
                        Landlord's subsidiaries, directors, agents, officers and
                        employees as named insureds.

                2)      Carried by Landlord. In the event Landlord is the
                        Insuring Party, Landlord shall also maintain liability
                        insurance as described in (P)16.b.1), in addition to,
                        and not in lieu of the insurance required to be
                        maintained by Tenant. In the event Tenant is the
                        Insuring Party, Landlord shall in addition carry
                        Lessor's Risk Coverage and insure the Premises on
                        Landlord's umbrella policy. Tenant shall not be named as
                        an additional insured therein under any insurance
                        obtained by Landlord in accordance with this (P)16.b.2).

        c.      Property Insurance - Building, Improvements and Rental Value.

                1)      Building and Improvements. The Insuring Party shall
                        obtain and keep in force during the Term of this Lease a
                        policy or policies in the name of Landlord, with loss
                        payable to Landlord and to the holders of any mortgages,
                        deeds of trust or ground leases on the Premises
                        ("Lender(s)"), insuring loss or damage to the Premises.
                        The amount of such insurance shall be equal to the full
                        replacement cost of the Premises, as the same shall
                        exist from time to time, or the amount required by
                        Lender(s) if more, but in no event more than the
                        commercially reasonable and available insurable value
                        thereof if, by reason of the unique nature or age of the
                        improvements involved, such latter amount is less than
                        full replacement cost. If the coverage is available at a
                        commercially reasonable cost, such policy or policies
                        shall insure against all risks of direct physical loss
                        or damage (including Boiler and Machinery coverage and
                        the perils of flood and earthquake if commercially
                        reasonable), including coverage for any additional costs
                        resulting from debris removal and reasonable amounts of
                        coverage for the enforcement of any ordinance or law
                        regulating the reconstruction or replacement of any
                        undamaged sections of the Premises required to be
                        demolished shall also contain an agreed valuation
                        provision in lieu of any coinsurance clause, waiver of
                        subrogation and inflation guard protection causing an
                        increase in the annual property insurance coverage
                        amount by a factor of not less than the adjusted U.S.
                        Department of Labor Consumer Price Index for All Urban
                        Consumers for the city nearest to where the Premises are
                        located. If such insurance coverage has a deductible
                        clause, then Tenant shall be liable for such deductible
                        amount (not to exceed $10,000). Even if Landlord is the
                        Insuring Party, Tenant's personal property shall be
                        insured by Tenant under (P)16.d. rather than by
                        Landlord.

                2)      Rental Value. The Insuring Party shall, in addition,
                        obtain and keep in force during the term of this Lease a
                        policy or policies in the name of Landlord, with loss
                        payable to Landlord and Lender(s), insuring the loss of
                        the full rental and other charges payable by Tenant to
                        Landlord under this Lease for one (1) year (including
                        all Real Property Taxes, Insurance Costs and any
                        scheduled Rent increases). Said insurance shall provide
                        that in the event the Lease is terminated by reason of
                        an insured loss, the period of indemnity for such
                        coverage shall be extended beyond the date of the
                        completion of repairs or

                                      -11-
<PAGE>

                        replacement of the Premises, to provide for one full
                        year's loss of Rent from the date of any such loss. Said
                        insurance shall contain an agreed valuation provision in
                        lieu of any coinsurance clause, and the amount of
                        coverage shall be adjusted annually to reflect the
                        projected Rent, Real Property Taxes, Insurance Costs and
                        other expenses, if any, otherwise payable by Tenant, for
                        the next twelve (12) month period. Tenant shall be
                        liable for any deductible amount in the event of such
                        loss.

                3)      Adjacent Premises. If the Premises are part of a larger
                        building, or if the Premises are part of a group of
                        buildings owned by Landlord which are adjacent to the
                        Premises, the Tenant shall pay for any increase in the
                        premiums for the property insurance of such building or
                        buildings if said increase is caused by Tenant's acts,
                        omissions, use or occupancy of the Premises.

                4)      Tenant's Improvements. If the Landlord is the Insuring
                        Party, the Landlord shall not be required to insure
                        Tenant's personal property and leasehold improvements
                        unless the item in question has become the property of
                        Landlord under the terms of this Lease. If Tenant is the
                        Insuring Party, the policy carried by Tenant under this
                        (P)16.c. shall insure Tenant's personal property and
                        leasehold improvements.

        d.      Tenant's Property Insurance. Subject to the requirements of
                (P)16.e., Tenant at its cost shall either by separate policy, or
                by endorsement to a policy already carried, maintain insurance
                coverage on all of Tenant's personal property and Tenant's
                leasehold improvements in, on or about the Premises similar in
                coverage to that carried by the Insuring Party under (P)16.c.
                Such insurance shall be full replacement cost coverage with a
                deductible of not to exceed $10,000 per occurrence. The proceeds
                from any such insurance shall be used by Tenant for the
                replacement of personal property or the restoration of Tenant
                owned leasehold improvements as required to maintain business
                operations in the Premises. Tenant shall be the Insuring Party
                with respect to the insurance required by this (P)16.d. and
                shall provide Landlord with written evidence that such insurance
                is in force.

        e.      Insurance Policies. If Tenant is the Insuring Party, Insurance
                required per this (P)16. shall be with companies duly licensed
                to transact business in the state where the Premises are
                located, and maintaining during the policy term a "General
                Policyholders Rating" of at least A- X, or such other minimal
                rating as may be required by Lender(s) as set forth in the most
                current issue of "Best's Insurance Guide". Tenant shall not do
                or permit to be done anything which shall invalidate the
                insurance policies referred to in this (P)16. If Tenant is the
                Insuring Party, Tenant shall cause to be delivered to Landlord
                certified copies of policies of such insurance or certificates
                evidencing the existence and amounts of such insurance with the
                insureds and loss payable clauses as required by this Lease. No
                such policy shall be cancelable or subject to modification
                except after thirty (30) days prior written notice to Landlord.
                Tenant shall at least thirty (30) days prior to the expiration
                of such policies, furnish Landlord with evidence of renewals or
                "insurance binders" evidencing renewal thereof, or Landlord may
                order such insurance and charge the cost thereof to Tenant,
                which amount shall be payable by Tenant to Landlord upon demand.
                If either party shall fail to procure and maintain the insurance
                required to be carried by such party under this (P)16., the
                other party may, but shall not be required to, procure and
                maintain the same, but at Tenant's expense.

        f.      Mutual Waiver. Notwithstanding anything to the contrary
                contained in this Lease, to the extent that this release and
                waiver does not invalidate or impair their respective insurance
                policies, the parties hereto release each other and their
                respective agents, employees, officers, directors, shareholders,
                successors, assignees and subtenants from all liability for
                injury to any person or damage to any property that is caused by
                or results from a risk which is actually insured against or
                required to be insured against pursuant to the provisions of
                this Lease without regard to the negligence or willful
                misconduct of the parties so released. Each party shall use its
                best efforts to cause each insurance policy it obtains to
                provide that the insurer thereunder waives all right of recovery
                by way of subrogation as required herein in connection with any
                injury or damage covered by the policy. If such insurance policy
                cannot be obtained with such waiver of subrogation, or if such
                waiver of subrogation is only available at additional cost and
                the party for whose benefit the waiver is not obtained does not
                pay such additional costs after reasonable notice, then the
                party obtaining such insurance shall promptly notify the other
                party of the inability to obtain insurance coverage with the
                waiver of subrogation.

17.     DAMAGE AND DESTRUCTION

        a.      Damage - Restoration Required. In the event that the Premises is
                damaged by fire or other casualty which is covered under
                insurance pursuant to the provisions of (P)16. above, Landlord
                shall restore such damage provided that: (i) the destruction of
                the Premises does not exceed sixty percent (60%) of the then
                replacement value of the Premises; (ii) the insurance proceeds
                are available (inclusive of any deductible amounts) to pay one
                hundred percent (100%) of the cost of restoration; and (iii) in
                the reasonable judgment of Landlord, the restoration can be
                completed within two hundred and seventy (270) days after the
                date of the damage or casualty under the laws and regulations of
                the state, federal, county and municipal authorities having
                jurisdiction. The deductible amount of any insurance coverage
                shall be paid by Tenant except in the case of flood or
                earthquake and in such case the deductible amount in excess of
                $10,000 per occurrence shall be paid by Landlord. If such
                conditions apply so as to require Landlord to restore such
                damage

                                      -12-
<PAGE>

                pursuant to this (P)17.a., this Lease shall continue in
                full force and effect, unless otherwise agreed to in writing by
                Landlord and Tenant. Tenant shall be entitled to a proportionate
                reduction of Rent while such restoration takes place, such
                proportionate reduction to be based on the extent to which the
                damage and restoration efforts interfere with Tenant's business
                in the Premises. Tenant's right to a reduction of Rent hereunder
                shall be Tenant's sole and exclusive remedy in connection with
                any such damage.

        b.      Damage - Restoration Not Required. In the event that the
                Premises is damaged by a fire or other casualty and Landlord is
                not required to restore such damage in accordance with the
                provisions of (P)17.a. immediately above, Landlord shall have
                the option to either (i) repair or restore such damage, with the
                Lease continuing in full force and effect, but Rent to be
                proportionately abated as provided in (P)17.a. above; or (ii)
                give notice to Tenant at any time within thirty (30) days after
                the occurrence of such damage terminating this Lease as of a
                date to be specified in such notice which date shall not be less
                than thirty (30) nor more than sixty (60) days after the date on
                which such notice of termination is given. In the event of the
                giving of such notice of termination, this Lease shall expire
                and all interest of Tenant in the Premises shall terminate on
                the date so specified in such notice and the Rent, reduced by
                any proportionate reduction in Rent as provided for in (P)17.a.
                above, shall be paid to the date of such termination.
                Notwithstanding the foregoing, if Tenant delivers to Landlord
                the funds necessary to make up the shortage (or absence) in
                insurance proceeds and the restoration can be completed in a two
                hundred seventy (270) day period, as reasonably determined by
                Landlord, and the destruction of the Premises does not exceed
                sixty percent (60%) of the then replacement value, Landlord
                shall restore the Premises as provided in (P)17.a. above.

        c.      End of Term Casualty. Notwithstanding the provisions of (P)17.a.
                and (P)17.b. above, Landlord may terminate this Lease if the
                Premises is damaged by fire or other casualty (and Landlord's
                reasonably estimated cost of restoration of the Premises exceeds
                ten percent (10%) of the then replacement value of the Premises)
                and such damage or casualty occurs during the last twelve (12)
                months of the Term of this Lease (or the Term of any renewal
                option, if applicable) by giving the other notice thereof at any
                time within thirty (30) days following the occurrence of such
                damage or casualty. Such notice shall specify the date of such
                termination which date shall not be less than thirty (30) nor
                more than sixty (60) days following the date on which such
                notice of termination is given. In the event of the giving of
                such notice of termination, this Lease shall expire and all
                interest of Tenant in the Premises shall terminate on the date
                so specified in such notice and the Rent shall be paid to the
                date of such termination.

        d.      Termination by Tenant. In the event that the destruction to the
                Premises cannot reasonably be restored as required herein under
                applicable laws and regulations within two hundred seventy (270)
                days of the damage or casualty, notwithstanding the availability
                of insurance proceeds, Tenant shall have the right to terminate
                this Lease by giving the Landlord notice thereof within thirty
                (30) days of date of the occurrence of such casualty specifying
                the date of termination which shall not be less than thirty (30)
                days nor more than sixty (60) days following the date on which
                such notice of termination is given. In the event of the giving
                of such notice of termination, this Lease shall expire and all
                interest of Tenant in the Premises shall terminate on the date
                so specified in such notice and the Rent, reduced by any
                proportionate reduction in Rent as provided for in (P)17.a.
                above, shall be paid to the date of such termination. Landlord
                shall not have the right to terminate the Lease if the damage to
                the Premises is relatively minor (e.g., repair or restoration
                would cost less than ten percent (10%) of the replacement cost
                of the Premises).

        e.      Restoration. Landlord agrees that, in any case in which Landlord
                is required to, or otherwise agrees to restore the Premises,
                that Landlord shall proceed with due diligence to make all
                appropriate claims and applications for the proceeds of
                insurance and to apply for and obtain all permits necessary for
                the restoration of the Premises. Landlord shall use reasonable
                efforts to enforce any and all provisions in any mortgage, deed
                of trust or other encumbrance on the Premises requiring Landlord
                and Lender to permit insurance proceeds to be used for
                restoration. Landlord shall restore the Premises to the
                condition existing prior to the date of the damage if permitted
                by applicable law. Landlord shall not be required to restore
                alterations made by Tenant, Tenant's improvements, Tenant's
                trade fixtures and Tenant's personal property, such excluded
                items being the sole responsibility of Tenant to restore as
                required to maintain business operations in the Premises
                provided, however, that Landlord shall, to the extent of
                available insurance proceeds, restore Tenant Improvements to the
                Premises made by Tenant such as interior offices, lab and
                production improvements and other like improvements.

        f.      Waiver. Tenant waives the provisions of Civil Code (S)1932(2)
                and Civil Code (S)1933(4) with respect to any destruction of the
                Premises.

18.     CONDEMNATION

        a.      Definitions. The following definitions shall apply: (1 )
                "Condemnation" means (a) the exercise of any governmental power
                of eminent domain, whether by legal proceedings or otherwise by
                condemnor, or (b) the voluntary sale or transfer by Landlord to
                any condemnor either under threat of condemnation or while legal
                proceedings for condemnation are proceeding; (2) "Date of
                Taking" means the date the condemnor has right to possession of
                the property being condemned; (3) "Award" means all
                compensation, sums or anything of value awarded, paid or
                received on a total or

                                      -13-
<PAGE>

                partial condemnation; and (4) "Condemnor" means any public or
                quasi-public authority, or private corporation or individual.
                having power of condemnation.

        b.      Obligations to be Governed by Lease. If during the Term of the
                Lease there is any taking of all or any part of the Premises,
                the rights and obligations of the parties shall be determined
                strictly pursuant to this Lease. Each party waives the
                provisions of Code of Civil Procedure (S)1265.130 allowing
                either party to petition the Superior Court to terminate this
                Lease in the event of a partial condemnation of the Premises.

        c.      Total or Partial Taking. If the Premises are totally taken by
                Condemnation, this Lease shall terminate on the Date of Taking.
                If any portion of the Premises is taken by Condemnation, this
                Lease shall remain in effect, except that Tenant can elect to
                terminate this Lease if the remaining portion of the Premises is
                rendered unsuitable for Tenant's continued use of the Premises.
                If Tenant elects to terminate this Lease, Tenant must exercise
                its right to terminate by giving notice to Landlord within
                thirty (30) days after the nature and extent of the Condemnation
                have been finally determined. If Tenant elects to terminate this
                Lease, Tenant shall also notify Landlord of the date of
                termination, which date shall not be earlier than thirty (30)
                days nor later than ninety (90) days after Tenant has notified
                Landlord of its election to terminate; except that this Lease
                shall terminate on the Date of Taking if the Date of Taking
                falls on a date before the date of termination as designated by
                Tenant. If any portion of the Premises is taken by Condemnation
                and this Lease remains in full force and effect, on the Date of
                Taking the Base Rent shall be reduced by an amount in the same
                ratio as the total number of square feet in the building(s)
                which are a part of the Premises taken bears to the total number
                of square feet in the building(s) which are a part of the
                Premises immediately before the Date of Taking. Any Award for
                the taking of all or any part of the Premises under the power of
                eminent domain or any payment made under threat of the exercise
                of such power shall be the property of Landlord, whether such
                Award shall be made as compensation for diminution in value of
                the leasehold or for the taking of the fee, or as severance
                damages; provided, however, that Tenant shall be entitled to any
                compensation separately awarded to Tenant for Tenant's
                relocation expenses and/or loss of Tenant's trade fixtures.

19.     ASSIGNMENT OR SUBLEASE

        a.      Tenant shall not assign or encumber its interest in this Lease
                or the Premises or sublease all or any part of the Premises or
                allow any other person or entity (except Tenant's authorized
                representatives, employees, invitees or guests) to occupy or use
                all or any part of the Premises without first obtaining
                Landlord's consent, which consent shall not be unreasonably
                withheld. Any assignment, encumbrance or sublease without
                Landlord's prior written consent shall be voidable and at
                Landlord's election, shall constitute a default. If Tenant is a
                partnership, a withdrawal or change, voluntary, involuntary or
                by operation of law of any partner, or the dissolution of the
                partnership, shall be deemed a voluntary assignment. If Tenant
                consists of more than one person, a purported assignment,
                voluntary or involuntary or by operation of law from one person
                to the other shall be deemed a voluntary assignment. If Tenant
                is a corporation, any dissolution, merger, consolidation or
                other reorganization of Tenant, or sale or other transfer of a
                controlling percentage of the capital stock of Tenant, or the
                sale of at least fifty percent (50%) of the value of the assets
                of Tenant shall be deemed a voluntary assignment.
                Notwithstanding the sentence immediately above, if the Tenant is
                a corporation, the Tenant shall be entitled to assign this Lease
                without Landlord's prior written consent to: (i) a successor
                corporation related to Tenant by merger, consolidation or non-
                bankruptcy reorganization, provided that the surviving
                corporation in connection with any such assignment shall have a
                minimum net worth as of the date of the assignment at least
                equal to that of Tenant immediately prior to completion of the
                subject merger, consolidation or reorganization, (ii) a
                purchaser of at least fifty percent (50%) of Tenant's capital
                stock or substantially all of Tenant's assets, provided that
                immediately following such purchase, such purchaser shall have a
                net worth at least equal to that of Tenant immediately prior to
                the completion of the subject purchase, or (iii) a
                reorganization of Tenant through the sale of all or a portion of
                Tenant's capital stock by Initial Public Offering (an event
                described in (i), (ii), or (iii) above shall be referred to as a
                transfer to a "Permitted Transferee"). Further, Landlord shall
                not have consent rights if there is public trading of Tenant's
                capital stock which aggregates to more than 50% of the common
                stock of Tenant where such trading is unrelated to any
                acquisition offer to purchase at least 50% of the company (also
                a "Permitted Transferee"). In connection with any assignment as
                described in the two sentences immediately above, Landlord shall
                be entitled to require an increase in the Security Deposit to
                the extent that such increase should be commercially reasonable
                in Landlord's discretion given the financial condition of Tenant
                and the assignee following such event. Tenant shall give
                Landlord at least thirty (30) days prior written notice of any
                intended transfer to a Permitted Transferee and in connection
                with such transfer shall provide to Landlord copies of any
                documents or other information as Landlord may reasonably
                request. Unless otherwise expressly agreed in writing by
                Landlord, no assignment shall relieve Tenant of any of its
                obligations pursuant to this Lease. All Rent received by Tenant
                from its subtenants in excess of the Rent payable by Tenant to
                Landlord under this Lease applicable to the portion of the
                Premises subleased, after deducting therefrom the commercially
                reasonable brokerage commissions, moving allowance to
                subtenants, tenant improvements made at the request of
                subtenants and attorneys' fees incurred by Tenant in negotiating
                and documenting the sublease, shall be deemed "Bonus Rent" and
                Seventy-five percent (75%) of the Bonus Rent shall be promptly
                paid to Landlord, or, as the case may be, Seventy-five percent
                (75%) of all sums (determined in the same manner as Bonus Rent)
                to be paid by an assignee to Tenant in consideration of the
                assignment of this Lease shall be promptly paid to

                                      -14-
<PAGE>

                Landlord. If Tenant requests Landlord to consent to a proposed
                assignment or subletting, Tenant shall pay to Landlord, whether
                or not consent is ultimately given, an amount equal to
                Landlord's reasonable attorneys' fees and costs incurred in
                connection with such request. Each request for consent to an
                assignment or subletting shall be in writing, and shall be
                accompanied by information as may be relevant to Landlord's
                determination as to the financial and operational responsibility
                and stability of the proposed assignee or sublessee and the
                appropriateness of the proposed use by such assignee or
                sublessee. Such information shall include a summary of the
                proposed use of, and any proposed modifications to, the
                Premises. Tenant shall provide Landlord with such other or
                additional information and/or documentation as may reasonably be
                requested by Landlord. Tenant shall, upon completion of any
                assignment or subletting of all or any portion of the Premises,
                immediately and irrevocably assign to Landlord as security for
                Tenant's obligations under the Lease, all Rent from any such
                subletting or assignment. Landlord, as assignee and attorney in
                fact for Tenant, shall have the right to collect all rent and
                other revenues collectable pursuant to any such sublet or
                assignment and apply such rent and other revenues towards
                Tenant's obligations under the Lease. Tenant may, without
                Landlord's prior written consent, sublet the Premises to a
                subsidiary, affiliate, division or corporation controlled by
                Tenant (an "Affiliate"). In no event shall an assignment or
                proposed assignment to a Permitted Transferee or a sublease to
                an Affiliate be subject to any recapture or termination rights
                or bonus rent provisions under this (P)19. of the Lease.

        b.      No interest of Tenant in this Lease shall be assignable by
                involuntary assignment through operation of law (including
                without limitation the transfer of this Lease by testacy or
                intestacy). Each of the following acts shall be considered an
                involuntary assignment: (a) if Tenant is or becomes bankrupt or
                insolvent, makes an assignment for the benefit of creditors, or
                institutes proceedings under the Bankruptcy Act in which Tenant
                is the bankrupt; or if Tenant is a partnership or consists of
                more than one person or entity, if any partner of the
                partnership or other person or entity is or becomes bankrupt or
                insolvent, or makes an assignment for the benefit of creditors;
                or (b) if a writ of attachment or execution is levied on this
                Lease; or (c) if in any proceeding or action to which Tenant is
                a party, a receiver is appointed with authority to take
                possession of the Premises. An involuntary assignment shall
                constitute a default by Tenant and Landlord shall have the right
                to elect to terminate this Lease, in which case this Lease shall
                not be treated as an asset of Tenant.

        c.      Notwithstanding any provision in this Lease to the contrary, in
                any event where Landlord's consent is required for assignment or
                sublease, Landlord may, at its option, elect to terminate the
                Lease as to the portion of the Premises being subleased instead
                of approving the requested assignment or sublease unless, in the
                event of a requested sublease, (i) the rentable area of the
                requested sublease when combined with the rentable area of any
                existing sublease(s) is less than fifty percent (50%) of the
                rentable area of the Premises, or (ii) the term of the requested
                                               --
                sublease (including the period(s) of any renewal options for the
                requested sublease) is for less than fifty percent (50%) of the
                remaining Term of this Lease. Should Landlord so elect to
                terminate this Lease, all of the obligations of the parties
                thereunder shall terminate on the later of sixty (60) days
                following Landlord's notice to Tenant of its election hereunder,
                or the effective date of the proposed assignment or subletting
                sought by the Tenant, but in no event later than one hundred
                twenty (120) days following the date of Landlord's election
                under this (P)19.c. At the time of termination, all obligations
                of both parties hereunder shall terminate as to obligations
                thereafter accruing except as otherwise expressly provided in
                this Lease.

20.     DEFAULT. The occurrence of any of the following shall constitute a
        default by Tenant: (a) a failure of Tenant to pay Rent within five (5)
        days of its due date; (b) abandonment of the Premises; or (c) failure to
        timely perform any other provision of this Lease. Tenant shall give
        written notice to Landlord of any default by Landlord of its obligations
        pursuant to this Lease asserted by Tenant (with a copy of such notice to
        any lender ("Lender") against the Premises). Landlord and Landlord's
        Lender shall be afforded a reasonable opportunity to cure any claimed
        default by Landlord and Landlord shall not be considered in default so
        long as Landlord (or Landlord's Lender) commences such cure within a
        reasonable period of time and thereafter, diligently continues to
        prosecute such cure to completion. Landlord, from time to time, shall
        provide Tenant with the name and address of its Lender.

21.     LANDLORD'S REMEDIES. Landlord shall have the following remedies if
        Tenant is in default (These remedies are not exclusive; they are
        cumulative and in addition to any remedies now or later allowed by law):

        a.      Landlord may continue this Lease in full force and effect, and
                this Lease will continue in effect so long as Landlord does not
                terminate Tenant's right to possession, and Landlord shall have
                the right to collect Rent when due. During the period Tenant is
                in default, Landlord can enter the Premises and relet the
                Premises, or any part of the Premises, to third parties for
                Tenant's account. Tenant shall be liable immediately to Landlord
                for all costs Landlord incurs in reletting the Premises,
                including without limitation, brokers' commissions, expenses of
                remodeling the Premises required by the reletting, and like
                costs. Reletting can be for a period shorter or longer than the
                remaining Term of this Lease. Tenant shall pay to Landlord the
                Rent due under this Lease on the dates the Rent is due, less the
                Rent Landlord receives from any reletting. No act by Landlord
                allowed by this (P)21.a. shall terminate this Lease unless
                Landlord notifies Tenant in writing that Landlord elects to
                terminate this Lease. After Tenant's default and for so long as
                Landlord does not terminate Tenant's right to possession of the
                Premises, if Tenant obtains Landlord's consent, Tenant shall
                have the right to assign or sublet its interest in this Lease,
                but Tenant shall not be released from liability. Landlord's
                consent to such a proposed assignment or subletting shall not be
                unreasonably

                                      -15-
<PAGE>

                withheld. If Landlord elects to relet the Premises as provided
                in this (P)21.a., Rent that Landlord receives from reletting
                shall be applied to the payment of: first, any indebtedness from
                Tenant to Landlord other than Rent due from Tenant; second, all
                costs, including for maintenance incurred by Landlord in
                reletting; and third, Rent due and unpaid under this Lease.
                After deducting the payments referred to in this (P)21.a., any
                sum remaining from the Rent Landlord receives from reletting
                shall be held by Landlord and applied in payment of future Rent
                as Rent becomes due under this Lease. In no event shall Tenant
                be entitled to any excess Rent received by Landlord. If, on the
                date Rent is due under this Lease, the Rent received from the
                reletting is less than the Rent due on that date, Tenant shall
                pay to Landlord, in addition to the remaining Rent due, all
                costs including for maintenance Landlord incurred in reletting
                that remain after applying the Rent received from the reletting
                as provided in this (P)21.a.; and

        b.      Landlord may terminate Tenant's right to possession of the
                Premises at any time. No act by Landlord other than giving
                express written notice thereof to Tenant shall terminate this
                Lease. Acts of maintenance, efforts to relet the Premises, or
                the appointment of a receiver on Landlord's initiative to
                protect Landlord's interest under this Lease shall not
                constitute a termination of Tenant's right to possession. Upon
                termination of Tenant's right to possession, Landlord has the
                right to recover from Tenant: (1) the Worth of the unpaid Rent
                that had been earned at the time of termination of Tenant's
                right to possession; (2) the Worth of the amount by which the
                unpaid Rent that would have been earned after the date of
                termination until the time of award exceeds the amount of the
                loss of Rent that Tenant proves could have been reasonably
                avoided; (3) the Worth of the amount of the unpaid Rent that
                would have been earned after the award throughout the remaining
                Term of the Lease to the extent such unpaid Rent exceeds the
                amount of the loss of Rent that Tenant proves could have been
                reasonably avoided; and (4) any other amount, including but not
                limited to, expenses incurred to relet the Premises, court
                costs, attorneys' fees and collection costs necessary to
                compensate Landlord for all detriment caused by Tenant's
                default. The "Worth", as used above in (1) and (2) in this
                (P)21.b. is to be computed by allowing interest at the lesser of
                eighteen percent (18%) per annum or the maximum legal interest
                rate permitted by law. The "Worth", as used above in (3) in this
                (P)21.b. is to be computed by discounting the amount at the
                discount rate of the Federal Reserve Bank of San Francisco at
                the time of the award, plus one percent (1%).

22.     ENTRY OF PREMISES. Landlord and/or its authorized representatives shall
        have the right after at least twenty-four hours' prior notice except for
        emergencies to enter the Premises at all reasonable times for any of the
        following purposes: (a) to determine whether the Premises are in good
        condition and whether Tenant is complying with its obligations under
        this Lease; (b) to do any necessary maintenance and to make any
        restoration to the Premises that Landlord has the right or obligation to
        perform; (c) to post "for sale" signs at any time during the Term, or to
        post "for rent" or "for lease" signs during the last one hundred eighty
        (180) days of the Term or during any period while Tenant is in default;
        (d) to show the Premises to prospective brokers, lenders, agents,
        buyers, tenants or persons interested in leasing or purchasing the
        Premises, at any time during the Term; or (e) to repair, maintain or
        improve the Premises and to erect scaffolding and protective barricades
        around and about the Premises but not so as to prevent entry to the
        Premises and to do any other act or thing necessary for the safety or
        preservation of the Premises provided, however, Landlord shall comply
        with all reasonable security measures of Tenant and shall be accompanied
        by an employee of Tenant at all times. Landlord shall not be liable in
        any manner for any inconvenience, disturbance, loss of business,
        nuisance or other damage arising out of Landlord's entry onto the
        Premises as provided in this (P)22. Tenant shall not be entitled to an
        abatement or reduction of Rent if Landlord exercises any rights reserved
        in this (P)22. Landlord shall conduct its activities on the Premises as
        provided herein in a commercially reasonable manner that will lessen the
        inconvenience, annoyance or disturbance to Tenant.

23.     SUBORDINATION.

        a.      Automatic Subordination. Without the necessity of any additional
                document being executed by Tenant for the purpose of effecting a
                subordination, and at the election of Landlord or Landlord's
                Lender, this Lease shall be subject and subordinate at all times
                to (i) all ground leases or underlying leases which may now
                exist or hereafter be executed affecting the Premises, (ii) the
                lien of any mortgage or deed of trust which may now exist or
                hereafter be executed affecting the Premises, and (iii) the lien
                of any mortgage or deed of trust which may hereafter be executed
                in any amount for which the Premises, ground leases or
                underlying leases, or Landlord's interest or estate in any of
                said items is specified as security. In the event that any
                ground lease or underlying 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, Tenant shall,
                notwithstanding any subordination, attorn to and become the
                Tenant of the successor in interest (including without
                limitation to Lender) to Landlord ("Successor"). In connection
                with any such termination of a ground lease or underlying lease
                or any foreclosure or conveyance in lieu of foreclosure made in
                connection with any mortgage or deed of trust, then so long as
                Tenant is not in default after all applicable notice and cure
                periods pursuant to this Lease, Tenant shall not be disturbed in
                its possession of the Premises or in the enjoyment of its rights
                pursuant to this Lease during the Term of this Lease or any
                extension or renewal thereof. Notwithstanding any subordination
                of this Lease to the lien of any mortgage or deed of trust, the
                Lender, at any time, shall be entitled to subordinate the lien
                of its mortgage or deed of trust to this Lease by filing a
                notice of subordination in the County in which the Premises are
                located, and Lender shall agree in connection with any such
                filing, that Tenant shall not be disturbed in its possession of
                the Premises so long as Tenant is not in default pursuant to
                this Lease. In

                                      -16-
<PAGE>

                connection with any such filing, Tenant shall be obligated to
                attorn to and to become a Tenant of any Successor. Upon written
                request from Tenant, Landlord shall use its reasonable best
                efforts to obtain from any existing or future mortgagees,
                lenders, ground lessors and other parties holding a security
                interest affecting the Premises a Subordination, Non-Disturbance
                and Attornment Agreement.

        b.      Additional Subordination. From time to time at the request of
                Landlord, Tenant covenants and agrees to execute and deliver
                within ten (10) business days following the date of written
                request from Landlord, documents evidencing the priority or
                subordination of this Lease with respect to any ground lease or
                underlying lease or the lien of any mortgage or deed of trust in
                connection with the Premises. Any and all such documents shall
                be in such form as is reasonably acceptable to the Lender(s).
                Any subordination agreement so requested by Landlord shall
                provide for Tenant to attorn to the Successor and shall further
                provide that Tenant shall not be disturbed in its possession of
                the Premises or in the enjoyment of its rights pursuant to this
                Lease so long as Tenant is not in default after all applicable
                notice and cure periods with respect to its obligations pursuant
                to the Lease. Any such Subordination, Non-disturbance and
                Attornment Agreement shall be recorded in the official records
                of the office of the County Recorder in the County in which the
                Premises is located.

        c.      Notice from Lender. Tenant shall be entitled to rely upon any
                notice given by a Lender in connection with the Premises
                requesting that Tenant make all future Rent payments to such
                Lender, and Tenant shall not be liable to Landlord for any
                payment made to such Lender in accordance with such notice.
                Notwithstanding any provision to the contrary of this Lease, a
                Successor shall not be (i) obligated to recognize the payment of
                Rent for a period of more than one month in advance; (ii)
                responsible for liabilities accrued pursuant to this Lease prior
                to the date ("Succession Date") upon which the Successor becomes
                the "Landlord" hereunder; (iii) responsible to cure defaults of
                the Landlord pursuant to this Lease existing as of the
                Succession Date, except for defaults of a continuing nature of
                which Successor received notice (as provided in Paragraph 20)
                and in respect of which Tenant afforded Successor a reasonable
                cure period following such notice; (iv) responsible for any
                Security Deposit delivered by Tenant pursuant to this Lease not
                actually received by the Successor; or (v) bound by any
                execution, modification, termination or extension of this Lease
                or any grant of a purchase option or right of first refusal or
                any other action taken by the Landlord pursuant to this Lease,
                except in accordance with the provisions of an assignment of
                Leases executed by Landlord in favor of a Lender.

24.     ESTOPPEL CERTIFICATE; TENANT FINANCIAL STATEMENTS. Tenant, at any time
        and from time to time, upon not less than ten (10) business days written
        notice from Landlord, will execute, acknowledge and deliver to Landlord
        and, at Landlord's request, to any existing or prospective purchaser,
        ground lessor or mortgagee of any part of the Premises, a certificate of
        Tenant stating: (a) that Tenant has accepted the Premises (or, if Tenant
        has not done so, Tenant has not accepted the Premises and specifying the
        reasons therefor); (b) the Commencement and Expiration Dates of this
        Lease; (c) that this Lease is unmodified and in full force and effect
        (or, if there have been modifications, that same is in full force and
        effect as modified and stating the modifications); (d) whether or not to
        the best of Tenant's knowledge there are then existing any defenses
        against the enforcement of any of the obligations of Tenant under this
        Lease (and, if so, specifying same); (e) whether or not to the best of
        Tenant's knowledge there are then existing any defaults by Landlord in
        the performance of its obligations under this Lease (and, if so,
        specifying same); (f) the dates, if any, to which the Rent and other
        charges under this Lease have been paid; (g) whether or not there are
        Rent increases during the Lease Term and if so the amount of same; (h)
        whether or not the Lease contains any options or rights of first offer
        or first refusal; (i) the amount of any Security Deposit or other sums
        due Tenant; (j) the current notice address for Tenant; and (k) any other
        information that may reasonably be required by any of such persons. It
        is intended that any such certificate of Tenant delivered pursuant to
        this (P)24. may be relied upon by Landlord and any existing or
        prospective purchaser, ground lessor or mortgagee of the Premises.
        Tenant agrees, at any time upon request by Landlord, to deliver to
        Landlord the current financial statements of Tenant with an opinion of a
        certified public accountant, if available, including a balance sheet and
        profit and loss statement for the most recent prior three years all
        prepared in accordance with generally accepted accounting principles
        consistently applied.

25.     WAIVER. No delay or omission in the exercise of any right or remedy by
        either party shall impair such right or remedy or be construed as a
        waiver. No act or conduct of Landlord, including without limitation,
        acceptance of the keys to the Premises, shall constitute an acceptance
        of the surrender of the Premises by Tenant before the expiration of the
        Term. Only written notice from Landlord to Tenant shall constitute
        acceptance of the surrender of the Premises and accomplish termination
        of the Lease. Landlord's consent to or approval of any act by Tenant
        requiring Landlord's consent or approval shall not be deemed to waive or
        render unnecessary Landlord's consent to or approval of any subsequent
        act by Tenant. Any waiver by Landlord of any Default must be in writing
        and shall not be a waiver of any other Default concerning the same or
        any other provision of the Lease.

26.     SURRENDER OF PREMISES. Upon expiration of the Term, Tenant shall
        surrender to Landlord the Premises and all tenant improvements and
        alterations in the same condition as existed at the Commencement Date,
        except for ordinary wear and tear, damage from casualty and condemnation
        and alterations which Tenant has the right or is obligated to remove
        under the provisions of (P)14. herein. Tenant's trade fixtures,
        furniture, equipment and other personal property ("Tenant's Property")
        shall at all times be and remain Tenant's property. Tenant may at any
        time remove Tenant's Property from the Premises, provided that Tenant
        repairs all damage caused by such removal. Tenant shall remove all

                                      -17-
<PAGE>

        personal property including, without limitation, all wallpaper, paneling
        and other decorative improvements or fixtures and shall perform all
        restoration made necessary by the removal of any alterations or Tenant's
        personal property before the expiration of the Term, including, for
        example, restoring all wall surfaces to their condition as of the
        Commencement Date. Landlord can elect to retain or dispose of in any
        manner Tenant's personal property not removed from the Premises by
        Tenant prior to the expiration of the Term. Tenant waives all claims
        against Landlord for any damage to Tenant resulting from Landlord's
        retention or disposition of Tenant's personal property. Tenant shall be
        liable to Landlord for Landlord's cost for storage, removal and disposal
        of Tenant's personal property.

27.     HOLDOVER. If Tenant with Landlord's consent remains in possession of the
        Premises after expiration of the Term or after the date in any notice
        given by Landlord to Tenant terminating this Lease, such possession by
        Tenant shall be deemed to be a month to month tenancy cancelable by
        either party on thirty (30) days written notice given at any time by
        either party and all provisions of this Lease, except those pertaining
        to Term, renewal options and Base Rent, shall apply and Tenant shall
        thereafter pay monthly Base Rent computed on a per month basis, for each
        month or part thereof (without reduction for any partial month) that
        Tenant remains in possession, in an amount equal to one hundred fifty
        percent (150%) of the Base Rent that was in effect for the last full
        calendar month immediately preceding expiration of the Term.

        If Tenant holds over after the expiration or earlier termination of the
        Term hereof, without the consent of Landlord, Tenant shall become a
        Tenant at sufferance only with a continuing obligation to pay Rent
        provided that the Base Rent shall be one hundred fifty percent (150%) of
        the Base Rent that was in effect for the last full calendar month
        immediately preceding expiration of the Term for the first thirty (30)
        days of such holdover, and two hundred percent (200%) of such Base Rent
        thereafter during the pendency of such holdover. Acceptance by Landlord
        of Rent after expiration or earlier termination of the Term shall not
        constitute a consent to a holdover hereunder or result in a renewal. The
        foregoing provisions of this (P)27. are in addition to and do not affect
        Landlord's right of re-entry or any rights of Landlord hereunder or as
        otherwise provided by law. If Tenant fails to surrender the Premises
        upon the expiration of this Lease despite demand to do so by Landlord,
        Tenant shall indemnify and hold Landlord harmless from all loss or
        liability arising out of such failure, including without limitation, any
        claim made by any succeeding tenant founded on or resulting from such
        failure to surrender. No provision of this (P)27. shall be construed as
        implied consent by Landlord to any holding over by Tenant. Landlord
        expressly reserves the right to require Tenant to surrender possession
        of the Premises to Landlord as provided in this Lease upon expiration or
        other termination of this Lease. The provisions of this (P)27. shall not
        be considered to limit or constitute a waiver of any other rights or
        remedies of Landlord provided in this Lease or at law.

28.     NOTICES. All notices, demands, or other communications required or
        contemplated under this Lease, including any notice delivered to Tenant
        by the Lender, shall be in writing and shall be deemed to have been duly
        given three (3) business days from the time of mailing if mailed by
        registered or certified mail, return receipt requested, postage prepaid,
        or one (1) business day from the time of shipping by overnight carrier,
        or the actual time of delivery if delivered by personal service to the
        parties at the addresses specified in (P)1. Either Tenant or Landlord
        may change the address to which notices are to be given to such party
        hereunder by giving written notice of such change of address to the
        other in accordance with the notice provisions hereof.

29.     TENANT IMPROVEMENTS. Landlord shall deliver the Premises to Tenant in
        its "as is" condition with the roof water tight and the existing
        electrical, lighting, HVAC and plumbing systems in good working order.
        Landlord hereby grants Tenant a one-time construction allowance of up to
        One Hundred Seventy One Thousand Six Hundred Eighteen Dollars
        ($171,618.00) ("Tenant's Construction Allowance") for the cost of the
        initial tenant improvements to be installed in the Premises by Tenant
        including all associated architectural, engineering and professional
        fees and costs (exclusive of any overhead costs of Landlord). Tenant
        shall submit its plans for the tenant improvements for Landlord's
        written approval (the "Approved Work"), which approval shall not be
        unreasonably withheld, prior to Tenant's commencement of construction of
        the Approved Work, and Landlord shall respond within five (5) business
        days of the date Tenant provides Landlord any specific set of complete
        preliminary or complete final plans required for Landlord's approval.
        All work performed by Tenant shall be performed in strict compliance
        with the plans submitted for the Approved Work and no modification shall
        be made in such plans without the prior written approval of Landlord,
        which approval shall not be unreasonably withheld. Landlord shall pay
        Tenant's outside vendors or contractors for materials and services
        constituting the Approved Work, up to the maximum Tenant's Construction
        Allowance set forth in this (P)29, within thirty (30) days following
        Landlord's receipt of Tenant's submittal to Landlord of approved
        invoices and conditional lien releases for payment. Tenant shall also be
        reimbursed from Tenant's Construction Allowance for the reasonable cost
        of all preliminary and final plans and specifications and all permits
        relating to the installation of the Approved Work. All of the work to be
        done by Tenant under this (P)29. shall be done in accordance with the
        provisions of (P)14. hereof, and Tenant shall be required to follow
        Landlord's reasonable rules and regulations relating to contractors
        working in the Project. Landlord shall have the right to reasonably
        approve all of Tenant's proposed contractors and subcontractors related
        to the installation of the Approved Work. Landlord shall not charge an
        administrative fee relating to the installation of the Approved Work.
        Tenant shall have the right to access the Premises upon substantial
        vacation of the Premises by the present tenant for the purpose of
        installing the Approved Work (the "Construction Period"), provided,
        however, Tenant shall be bound by the terms and conditions of the Lease
        during the Construction Period except for Tenant's obligation to pay
        Base Rent or Operating Expenses.

30.     COMMENCEMENT DATE. The term of the Lease shall commence on the earliest
        to occur of (i) commencement of occupancy of the Premises by Tenant's
        personnel; (ii) substantial completion of the

                                      -18-
<PAGE>

        Approved Work (as defined above) as determined by the building
        architect; or (iii) one hundred fifty (150) days after the date of the
        Premises are delivered by Landlord to Tenant, provided, however if the
        Premises are not delivered to Tenant on or before November 30, 2000 for
        any reason whatsoever, then, in addition to Tenant's other rights or
        remedies, Tenant may between the period of December 1, 2000 and December
        10, 2000 (inclusive), provided that the Premises have not been delivered
        to Tenant prior to Tenant's notice to Landlord, terminate the Lease by
        written notice to Landlord, whereupon any monies previously paid by
        Tenant to Landlord shall be reimbursed to Tenant.

31.     OPTION(S) TO RENEW.

        a.      Grant of Option(s). Tenant shall have the right, at its option,
                to extend the Lease for two (2) period(s) of five (5) years each
                ("Extended Term(s)") on an "as is" basis commencing at the
                expiration of the previous Term, provided that at the time of
                exercise and at the time of commencement of each Extended Term,
                Tenant is not in default beyond any applicable cure period under
                this Lease.

        b.      Exercise of Option(s). If Tenant decides to extend the Lease for
                an Extended Term, Tenant shall give written notice to Landlord
                of its election to extend not less than ten (10) months prior to
                the expiration of the previous Term. Tenant's failure to give
                timely notice to Landlord of Tenant's election to extend shall
                be deemed a waiver of Tenant's right to extend. The terms and
                conditions applicable to each Extended Term shall be the same
                terms and conditions contained in this Lease except that Tenant
                shall not be entitled to any further option to extend beyond the
                second Extended Term. The Base Rent for each Extended Term shall
                be as determined in accordance with (P)31.c.

        c.      Determination of Base Rent During the Extended Term(s).

                1)      Agreement on Initial Base Rent. Landlord shall not be
                        obligated to provide Tenant with the proposed fair
                        market rental value until six (6) months prior to the
                        expiration of the previous Term. Landlord and Tenant
                        shall have thirty (30) days after Landlord provides the
                        proposed fair market rental value in which to agree on
                        the Base Rent during each Extended Term, which shall be
                        the fair market rental value of the Premises during said
                        Extended Term. The fair market rental value of the
                        Premises during said Extended Term shall be based on the
                        uses of the Premises permitted under this Lease, the
                        quality, size, design and location of the Premises, and
                        the rental value for lease renewals or extensions of
                        comparable size, quality and location and shall include
                        annual CPI or similar periodic adjustments. If Landlord
                        and Tenant agree on the Base Rent for each Extended Term
                        during the thirty (30) day period, they shall
                        immediately execute an amendment to this Lease stating
                        the new Base Rent.

                2)      Selection of Appraisers. If Landlord and Tenant are
                        unable to agree on the Base Rent (including any periodic
                        adjustments) for the subject Extended Term within the
                        thirty (30) day period, then within ten (10) days after
                        the expiration of the thirty (30) day period and
                        provided that Tenant has timely exercised the subject
                        renewal option in accordance with (P)31.b., Landlord and
                        Tenant each at its own cost and by giving notice to the
                        other party, shall appoint a competent and disinterested
                        real estate appraiser with at least five (5) years full-
                        time commercial appraisal experience in the Silicon
                        Valley market area to appraise the fair market rental
                        value of the Premises and set the Base Rent (including
                        periodic adjustments) during said Extended Term. If
                        either Landlord or Tenant does not appoint an appraiser
                        within said ten (10) days, the single appraiser
                        appointed shall be the sole appraiser and shall set the
                        Base Rent (including periodic adjustments) during said
                        Extended Term. If two (2) appraisers are appointed by
                        Landlord and Tenant as stated herein, they shall meet
                        promptly and attempt to set the Base Rent for said
                        Extended Term. If the two (2) appraisers are unable to
                        agree within thirty (30) days after the second appraiser
                        has been appointed, they shall attempt to select a third
                        appraiser meeting the same qualifications within ten
                        (10) days after the last day the two (2) appraisers are
                        given to set the Base Rent (including periodic
                        adjustments). If they are unable to agree on the third
                        appraiser, either Landlord or Tenant, by giving ten (10)
                        days' notice to the other party, can apply to the then
                        President of the Real Estate Board or to the Presiding
                        Judge of the Superior Court of the County in which the
                        Premises are located, for the selection of a third
                        appraiser who meets the qualifications stated herein.
                        Landlord and Tenant each shall bear one-half ( 1/2) of
                        the cost of appointing the third appraiser and of paying
                        the third appraiser's fee. The third appraiser, however
                        selected, shall be a person who has not previously acted
                        in any capacity for either Landlord or Tenant, or their
                        affiliates.

                3)      Value Determined by Three (3) Appraisers. Within thirty
                        (30) days after the selection of the third appraiser, a
                        majority of the appraisers shall set the Base Rent
                        (including periodic adjustments) for each Extended Term.
                        If a majority of the appraisers are unable to set the
                        Base Rent (including periodic adjustments) within the
                        stipulated period of time, Landlord's appraiser shall
                        arrange for simultaneous exchange of written appraisals
                        from each of the appraisers and the three (3) appraisals
                        shall be added together and their total divided by three
                        (3); the resulting quotient shall be the Base Rent
                        (including periodic adjustments) for the Premises during
                        each Extended Term. If, however, the low appraisal
                        and/or the high appraisal are/is more than fifteen
                        percent (15%) lower and/or higher than the middle
                        appraisal, such low appraisal and/or high appraisal
                        shall be disregarded. If only one (1)

                                      -19-
<PAGE>

                        appraisal is disregarded, the remaining two (2)
                        appraisals shall be added together and their total
                        divided by two (2); the resulting quotient shall be the
                        Base Rent for the Premises (including periodic
                        adjustments) during each Extended Term. If both the low
                        appraisal and the high appraisal are disregarded as
                        stated in this (P)31.c.3), the middle appraisal shall be
                        the Base Rent (including periodic adjustments) for the
                        Premises during each Extended Term.

                4)      Minimum Base Rent Level. Notwithstanding any other
                        provision of this Lease, in no event shall the initial
                        Base Rent for the subject Extended Term be less than the
                        Base Rent prevailing immediately prior to the expiration
                        of the previous Term.

32.     MISCELLANEOUS PROVISIONS.

        a.      Time of Essence. Time is of the essence of each provision of
                this Lease.

        b.      Successor. This Lease shall be binding on and inure to the
                benefit of the parties and their successors, except as provided
                in (P)19.

        c.      Landlord's Consent. Any consent required by Landlord under this
                Lease must be granted in writing and may be withheld or
                conditioned by Landlord in its sole and absolute discretion
                unless otherwise provided.

        d.      Personal Rights. Notwithstanding any other provision(s) of this
                Lease to the contrary, any provisions of this Lease providing
                for the renewal, extension or early termination of the Lease
                and/or for the expansion of the Premises (to include without
                limitation rights to negotiate, rights of first refusal, etc.)
                shall be (i) personal to the original Tenant and shall not be
                assignable or otherwise transferable other than to a Permitted
                Transferee (either voluntarily or involuntarily) to any third
                party for any reason whatsoever, and (ii) conditioned upon
                Tenant not then being in default under this Lease.

        e.      Year 2000. Notwithstanding any covenant or provision contained
                in this Lease to the contrary, Landlord shall have no liability
                or responsibility whatsoever to Tenant for (i) any disruption or
                interruption in Tenant's business, (ii) any disruption or
                interruption in Tenant's use or possession of the Premises, or
                (iii) any other damage or consequence suffered or experienced by
                Tenant, arising from or relating in any way to the malfunction,
                shut down or other abnormal behavior of any computer or computer
                controlled system which provides utilities or services to the
                Premises, or controls any systems serving the Premises (whether
                such computer is within the control of Landlord or otherwise)
                resulting from the inability or failure of any such computer or
                computer controlled system to recognize the year 2000, and
                distinguish said year from the year 1900 (sometimes referred to
                as the "Y2K problem", or the "failure to be year 2000
                compliant").

        f.      Commissions. Each party represents that it has not had dealings
                with any real estate broker, finder or other person with respect
                to this Lease in any manner, except for the Broker(s) identified
                in (P)1., who shall be compensated by Landlord in accordance
                with the separate agreement between Landlord and the Broker(s).

        g.      Other Charges; Legal Fees. Except to the extent of the gross
                negligence or willful misconduct of Landlord or its agents or
                contractors or a breach of Landlord's obligations under the
                Lease, if Landlord becomes a party to any litigation concerning
                this Lease or the Premises by reason of any act or omission of
                Tenant or Tenant's authorized representatives, Tenant shall be
                liable to Landlord for reasonable attorneys' fees and court
                costs incurred by Landlord in the litigation. Should the court
                render a decision which is thereafter appealed by any party
                thereto, Tenant shall be liable to Landlord for reasonable
                attorneys' fees and court costs incurred by Landlord in
                connection with such appeal.

                If either party commences any litigation against the other party
                or files an appeal of a decision arising out of or in connection
                with the Lease, the prevailing party shall be entitled to
                recover from the other party reasonable attorneys' fees and
                costs of suit. If Landlord employs a collection agency to
                recover delinquent charges, Tenant agrees to pay all collection
                agency and attorneys' fees charged to Landlord in addition to
                Rent, late charges, interest and other sums payable under this
                Lease.

        h.      Landlord's Successors. In the event of a sale or conveyance by
                Landlord of the Premises, the same shall operate to release
                Landlord from any liability under this Lease accruing thereafter
                to the extent Landlord's successor-in-interest assumes such
                liability in writing, including as to any Security Deposit to
                the extent transferred to Landlord's successor-in-interest, and
                in such event Landlord's successor in interest shall be solely
                responsible for all obligations of Landlord under this Lease .

        i.      Interpretation. This Lease shall be construed and interpreted in
                accordance with the laws of the state in which the Premises are
                located. This Lease constitutes the entire agreement between the
                parties with respect to the Premises, except for such guarantees
                or modifications as may be executed in writing by the parties
                from time to time. When required by the context of this Lease,
                the singular shall include the plural, and the masculine shall
                include the feminine and/or neuter. "Party" shall mean Landlord
                or Tenant. If more than one person or entity constitutes
                Landlord or Tenant,

                                      -20-
<PAGE>

                the obligations imposed upon that party shall be joint and
                several. The enforceability, invalidity or illegality of any
                provision shall not render the other provisions unenforceable,
                invalid or illegal.

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

        k.      Quiet Possession. Upon payment by Tenant of the Rent for the
                Premises and the observance and performance of all of the
                covenants, conditions and provisions on Tenant's part to be
                observed and performed under this Lease, Tenant shall have quiet
                possession of the Premises for the entire Term hereof subject to
                all of the provisions of this Lease.

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

        m.      Offer. Preparation of this Lease by Landlord or Landlord's agent
                and submission of same to Tenant shall not be deemed an offer to
                lease to Tenant. This Lease is not intended to be binding until
                executed by all Parties hereto.

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

        o.      Construction. The Landlord and Tenant acknowledge that each has
                had its counsel review this Lease, and hereby agree that the
                normal rule of construction to the effect that any ambiguities
                are to be resolved against the drafting party shall not be
                employed in the interpretation of this Lease or in any
                amendments or exhibits hereto.

        p.      Captions. Article, section and paragraph captions are not a part
                hereof.

        q.      Exhibits.  For reference purposes the Exhibits are listed below:

                    Exhibit A: The Premises
                    Exhibit B: Rules and Regulations
                    Exhibit C: Covenants, Conditions And Restrictions




<TABLE>
<CAPTION>
LANDLORD:                                                             TENANT:
<S>                                                                   <C>
LIMAR REALTY CORP. #22, a California corporation                      MEDAREX, INC., a New Jersey corporation

        /s/ Thomas A. Numainville                                            /s/ Nils Lonberg
By:     ____________________________________                          By:    ______________________________________
                                                                             Nils Lonberg
Name:   Thomas A. Numainville                                         Name:  ______________________________________
                                                                              V.P. Scientific Director
Title:  Sr. Vice President                                           Title:  ______________________________________

         4-21-00                                                               4-14-00
Date:   ____________________________________                           Date:  ______________________________________

        /s/ Thomas A. Numainville                                             /s/ Michael Appelbaum
By:     ____________________________________                          By:     ______________________________________
                                                                              Michael Appelbaum
Name:   Thomas A. Numainville                                         Name:  ______________________________________
                                                                              Executive V.P.
Title:  Assistant Secretary                                           Title:  ______________________________________
        4/21/00                                                               4/18/00
Date:  ____________________________________                           Date:  ______________________________________

</TABLE>

                                      -21-
<PAGE>

                                   EXHIBIT A

                                  The Premises
                                  ------------

This Exhibit A is attached to and made a part of that certain Lease (the
"Lease") dated March 14, 2000 by and between Limar Realty Corp. #22 as Landlord
and Medarex, Inc. as Tenant.
<PAGE>

                                   EXHIBIT B
                              Rules & Regulations
                              -------------------

This Exhibit B is attached to and made a part of that certain Lease dated March
14, 2000 by and between Limar Realty Corp. #22 as Landlord and Medarex, Inc. as
Tenant.

For the purpose of these Rules & Regulations the word Premises shall refer to
the Premises Tenant is leasing as described in the Lease.

1.   No sign, placard, picture, advertisement, name or notice (collectively,
     "Signs") shall be installed or displayed on any part of the Premises
     without the prior written consent of Landlord, except that Tenant may post
     Signs inside the Building which are not visible from the exterior of the
     Building.  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 walls shall be printed,
     painted, affixed or inscribed at the expense of Tenant.

2.   Except as consented to in writing by Landlord, no draperies, curtains,
     blinds, shades, screens or other devices shall be hung at or used in
     connection with any window or exterior door or doors of the Premises and no
     awning shall be permitted on any part of the Premises.  Tenant shall not
     place anything against or near glass partitions or doors or windows which
     may appear unsightly from outside the Premises.

3.   Neither Tenant nor any employee or invitee of Tenant, shall make any
     structural roof or terrace penetrations except as reasonably approved by
     Landlord.

4.   Tenant shall not cause any unnecessary labor by carelessness or
     indifference to the good order and cleanliness of the Premises.  Landlord
     shall not in any way be responsible to any Tenant for any loss of property
     on the Premises, or for any damage to any Tenant's property.

5.   Landlord will furnish Tenant, free of charge, with six (6) keys to the
     Premises.

6.   Tenant shall not place a load upon any floor of the Premises which exceeds
     the load per square foot which such floor was designed to carry and which
     is allowed by law.  Landlord shall have the reasonable right to prescribe
     the weight, size and position of all equipment, materials, furniture or
     other property brought into the Premises.  Heavy objects shall, if
     considered necessary by Landlord, stand on such platforms as determined by
     Landlord to be necessary to properly distribute the weight.  Business
     machines and mechanical equipment belonging to Tenant, which cause noise or
     vibration that may be transmitted to the structure of the Premises to such
     a degree as to be objectionable to Landlord, shall be placed and maintained
     by Tenant, at Tenant's expense, on vibration eliminators or other devices
     sufficient to eliminate noise or vibrations.  Landlord will not be
     responsible for loss of, or damage to, any such equipment or other property
     from any cause, and all damage done to the Premises by maintaining or
     moving such equipment or other property shall be repaired at the expense of
     Tenant.

7.   Tenant shall not waste electricity, water or air-conditioning and agrees to
     cooperate fully with Landlord to comply with any governmental energy-saving
     rules, laws or regulations of which Tenant has actual notice.

8.   Landlord reserves the right, exercisable with one hundred twenty (120) days
     prior written notice but without liability to Tenant, to change the name
     and street address of the Premises.

9.   Tenant shall close and lock the doors of its Premises and entirely shut off
     all water faucets or other water apparatus, and other equipment which is
     not required to be continuously run.

10.  The toilet rooms, 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 substance of any kind whatsoever shall be thrown therein.
     The expense of any breakage, stoppage or damage resulting for the violation
     of this rule shall be borne by the Tenant who, or whose employees or
     invitees, shall have caused it.

11.  Tenant shall not sell, or permit the retail sale of newspapers, magazines,
     periodicals, theater tickets or any other goods or merchandise to the
     general public in or on the Premises.  Tenant shall not use the Premises
     for any business or activity other than that specifically provided for in
     Tenants Lease.  Notwithstanding the above, Tenant shall have the right to
     install vending machines for use by Tenant, its employees and invitees.

12.  Tenant shall not interfere with radio or television broadcasting or
     reception from or in neighboring areas.

13  Canvassing, soliciting and distribution of handbills or any other written
     materials, and peddling in the Property are prohibited, and Tenant shall
     cooperate to prevent same.

14.  Landlord reserves the right to exclude or expel from the Premises 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 Premises or in violation of the CC&R's.
<PAGE>

                                   EXHIBIT B

                              Rules & Regulations
                              -------------------
                                  (continued)

15.  Tenant shall store all its trash and garbage within its Premises or in
     reasonable locations specifically identified by Landlord for such purposes.
     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 reasonable directions issued from time to time by Landlord.

16.  The Premises shall not be used for the storage of merchandise held for sale
     to the general public, or for lodging nor shall the Premises by used for
     any improper, immoral or objectionable purpose.  No cooking shall be done
     or permitted by any tenant on the Premises, except that use by Tenant in
     its kitchen, if any, located in the Premises and Underwriters Laboratory's
     approved equipment for brewing coffee, tea, hot chocolate and similar
     beverages and microwaving food shall be permitted, provided that such
     kitchen, equipment and use is in accordance with all applicable federal,
     state, county and city laws, codes, ordinances, rules and regulations.

17.  Tenant shall not use in any part of the Premises any hand truck except
     those equipped with rubber tires and side guards or such other reasonable
     material-handling equipment as Landlord may approve.

18.  Without the written consent of Landlord, Tenant shall not use the name of
     the Premises in connection with or in promoting or advertising the business
     of Tenant except as Tenant's address.

19.  Tenant shall comply with all safety, fire protection and evacuation
     procedures and regulations established by Landlord or any governmental
     agency.

20.  Tenant assumes any and all responsibility for protecting its Premises from
     theft, robbery and pilferage, which includes locking doors and securing
     other means of entry to the Premises closed.

21.  The requirements of Tenant will be attended to only upon appropriate
     application to the office of Landlord 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.

22.  Tenant shall not park its vehicles in any parking areas outside the
     Premises.  Tenant shall not store or abandon vehicles in the Premises
     parking areas nor park any vehicles in the Premises parking areas other
     than automobiles, motorcycles, motor driven or non-motor driven bicycles,
     four-wheeled trucks, or other equipment used in the operation of Tenant's
     business.  Tenant, its agents, employees and invitees shall not park any
     one (1) vehicle in more than one (1) parking space.

23.  Landlord reserves the right to make such other reasonable Rules and
     Regulations as, in its judgment, may from time to time be appropriate for
     safety and security, for care and cleanliness of the Premises and for the
     preservation of good order therein.  Tenant agrees to abide for all such
     Rules and Regulations hereinabove stated and any additional Rules and
     Regulations which are adopted.

24.  Tenant shall be responsible for the observance of all of the foregoing
     Rules and Regulations by Tenant's employees, agents, clients, customers,
     invitees and guests.
<PAGE>

                                   EXHIBIT C
                     Covenants, Conditions and Restrictions
                     --------------------------------------

This Exhibit C is attached to and made a part of that certain Lease dated March
14, 2000 by and between Limar Realty Corp. #22 as Landlord and Medarex, Inc. as
Tenant.