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                                                                  EXHIBIT 10.1

           STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE - GROSS

                  AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
             [LOGO OF AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION]

     Basic Provisions ("Basic Provisions").
     1.1  Parties: This Lease ("Lease"), dated for reference purposes only, 
January 25, 1999, is made by and between Pacific Gulf Properties Inc., a 
Maryland Corporation ("Lessor") and Chatcom, Inc., a California Corporation 
("Lessee"), (collectively the "Parties," or individually a "Party").
     1.2(a) Premises: That certain portion of the Building, including all 
improvements therein or to be provided by Lessor under the terms of this Lease,
commonly known by the street address of 9420 Lurline Avenue, Unit D, located in 
the City of Chatsworth, County of Los Angeles, State of California, with zip 
code 91311, as outlined on Exhibit A attached hereto ("Premises"). The 
"Building" is that certain building containing the Premises and generally 
described as (described briefly the nature of the Building) multi tenant 
industrial unit consisting of approximately 8,925 sq. ft. of industrial space 
within the Lurline Industrial Park, a 124,585 sq. ft. industrial park. In 
addition to Lessee's rights to use and occupy the Premises as hereinafter 
specified, Lessee shall have non-exclusive rights to the Common Areas (as 
defined in Paragraph 2.7 below) as hereinafter specified, but shall not have any
rights to the roof, exterior walls or utility raceways of the Building or to any
other buildings in the Industrial Center. The Premises, the Building, the Common
Areas, the land upon which they are located, along with all other buildings and
improvements thereon, are herein collectively referred to as the "Industrial
Center." (Also see Paragraph 2).
     1.2(b) Parking: 16 unreserved vehicle parking spaces ("Unreserved Parking 
Spaces"); and 0 reserved vehicle parking spaces ("Reserved Parking Spaces"). 
Also see Paragraph 2.6.)
     1.3 Term: 2 years and 0 months ("Original Term") commencing March 1, 1999 
("Commencement Date") and ending February 28, 2001 ("Expiration Date"). Also see
Paragraph 3.)
     1.4 Early possession: Upon mutual lease execution, ("Early Possession 
Date"). (Also see Paragraphs 3.2 and 3.3.)
     1.5 Base Rent: $5.622.75 per month ("Base Rent"), payable on the First day 
of each month commencing March 1, 1999. (Also see Paragraph 4.)
[X]  If this box is checked, this Lease provides for the Base Rent to be 
adjusted per Addendum 62, attached hereto.
     1.6(a) Base Rent Paid Upon Execution: $5,622.75 as Base Rent for the period
March 1 - March 31, 1999.
     1.6(b) Lessee's Share of Common Area Operating Expenses: 7 & 16/100 percent
(7.16%) ("Lessee's Share") as determined by [X] prorata square footage of the 
Premises as compared to the total square footage of the Building or [_] other 
criteria as described in addendum Project.
     1.7 Security Deposit: $5,622.75 ("Security Deposit"). (Also see Paragraph 
5.)
     1.8 Permitted Use: General Office, engineering, electronic assembly, 
warehouse & distribution, ("Permitted Use") (Also see paragraph 6.)
     1.9 Insuring Party. Lessor is the "Insuring Party." (Also see Paragraph 8.)
     1.10(a) Real Estate Brokers. The following real estate broker(s) 
(collectively, the "Brokers") and brokerage relationships exist in this 
transaction and are consented to by the Parties (check applicable boxes):
[_] ________________________________________ represents Lessor exclusively 
("Lessor's Broker");
[_] ________________________________________ represents Lessee exclusively 
("Lessee's Broker"); or
[X] Delphi Commercial/DAUM Commercial represents both Lessor and Lessee ("Dual 
Agency"). (Also see Paragraph 15.)
     1.10(b) Payment to Brokers. Upon the execution of this Lease by both 
Parties, Lessor shall pay to said Broker(s) jointly, or in such separate shares 
as they may mutually designate in writing, a fee as set forth in a separate 
written agreement between Lessor and said Broker(s) (or in the event there is no
separate written agreement between Lessor and said Broker(s), the sum of $N/A) 
for brokerage services rendered by said Broker(s) in connection with this 
transaction.
     1.11 Guarantor. The obligations of the Lessee under this Lease are to be 
guaranteed by __________________________________________________________________
________________________________________________________________________________
("Guarantor"). (Also see Paragraph 37.)
     1.12 Addenda and Exhibits. Attached hereto is an Addendum or Addenda 
consisting of Paragraphs 49 through 64, and Exhibits A through D, all of which 
constitute a part of this Lease.
2. Premises, Parking and Common Areas.
     2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from 
Lessor, the Premises, for the term, at the rental, and upon all of the terms, 
covenants and conditions set forth in this Lease. Unless otherwise provided 
herein, any statement of square footage set forth in this Lease, or that may 
have been used in calculating rental and /or Common Area Operating Expenses, is 
an approximation which Lessor and Lessee agree is reasonable and the rental and 
Lessee's Share (as defined in Paragraph 1.6(b)) based thereon is not subject to 
revision whether or not the actual square footage is more or less.
     2.2 Condition. Lessor shall deliver the Premises to Lessee clean and free 
of debris on the Commencement Date and warrants to Lessee that the existing 
plumbing, electrical systems, fire sprinkler system, lighting, air conditioning 
and heating systems and loading doors, if any, in the Premises, other than those
constructed by Lessee, shall be in good operating condition on the Commencement 
Date. If a non-compliance with said warranty exists as of the Commencement Date,
Lessor shall, except as otherwise provided in this Lease, promptly after receipt
of written notice from Lessee setting forth with specificity the nature and 
extent of such non-compliance, rectify same at Lessor's expense. If Lessee does 
not give Lessor written notice of a non-compliance with this warranty within 
thirty (30) days after the Commencement Date, correction of that non-compliance 
shall be the obligation of Lessee at Lessee's sole cost and expense.
     2.3 Compliance with Covenants, Restrictions and Building Code. Lessor 
warrants that any improvements (other than those constructed by Lessee or at 
Lessee's direction) on or in the Premises which have been constructed or 
installed by Lessor or with Lessor's consent or at Lessor's direction shall 
comply with all applicable covenants or restrictions of record and applicable 
building codes, regulations and ordinances in effect on the Commencement Date. 
Lessor further warrants to Lessee that Lessor has no knowledge of any claim 
having been made by any governmental agency that a violation or violations of 
applicable building codes, regulations, or ordinances exist with regard to the 
Premises as of the Commencement Date. Said warranties shall not apply to any 
Alterations or Utility Installations (defined in Paragraph 7.3(a)) made or to be
made by Lessee. If the Premises do not comply with said warranties, Lessor 
shall, except as otherwise provided in this Lease, promptly after receipt of 
written notice from Lessee given within six (6) months following the 
Commencement Date and setting forth with specificity the nature and extent of 
such non-compliance, take such action, at Lessor's expense, as may be reasonable
or appropriate to rectify the non-compliance. Lessor makes no warranty that the 
Permitted Use in Paragraph 1.8 is permitted for the Premises

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under Applicable Laws (as defined in Paragraph 2.4).
     2.4  Acceptance of Premises. Lessee hereby acknowledges: (a) that it has 
been advised by the Broker(s) to satisfy itself with respect to the condition of
the Premises (including, but not limited to, the electrical and fire sprinkler 
systems, security, environmental aspects, seismic and earthquake requirements, 
and compliance with the Americans with Disabilities Act and applicable zoning, 
municipal, county, state and federal laws, ordinances and regulations and any 
covenants or restrictions of record (collectively, "Applicable Laws") and the 
present and future suitability of the Premises for Lessee's intended use; (b) 
that Lessee has made such investigation as it deems necessary with reference to 
such matters, is satisfied with reference thereto, and assumes all 
responsibility therefore as the same relate to Lessee's occupancy of the 
Premises and/or the terms of this Lease; and (c) that neither Lessor, nor any of
Lessor's agents, has made any oral or written representations or warranties with
respect to said matters other than as set forth in this Lease.
     2.5  Lessee as Prior Owner/Occupant. The warranties made by Lessor in this 
Paragraph 2 shall be of no force or effect if immediately prior to the date set 
forth in Paragraph 1.1 Lessee was the owner or occupant of the Premises. In such
event, Lessee shall, at Lessee's sole cost and expense, correct any 
non-compliance of the Premises with said warranties.
     2.6  Vehicle Parking. Lessee shall be entitled to use the umber of 
Unreserved Parking Spaces and Reserved Parking Spaces specified in Paragraph 
1.2(b) on those portions of the Common Areas designated from time to time by 
Lessor for parking. Lessee shall not use more parking spaces than said number. 
Said parking spaces shall be used for parking by vehicles no larger than 
full-size passenger automobiles or pick-up trucks, herein called "Permitted Size
Vehicles." Vehicles other than Permitted Size Vehicles shall be parked and 
loaded or unloaded as directed by Lessor in the Rules and Regulations (as 
defined in Paragraph 40) issued by Lessor. (Also see Paragraph 2.9.)
          (a) Lessee shall not permit or allow any vehicles that belong to or
are controlled by Lessee or Lessee's employees, suppliers, shippers, customers,
contractors or invitees to be loaded, unloaded, or parked in areas other than
those designated by Lessor for such activities.
          (b) If Lessee permits or allows any of the prohibited activities 
described in this Paragraph 2.6, then Lessor shall have the right, without 
notice, in addition to such other rights and remedies that it may have, to 
remove or tow away the vehicle involved and charge the cost to Lessee, which 
cost shall be immediately payable upon demand by Lessor.
          (c) Lessor shall at the Commencement Date of this Lease, provide the
parking facilities required by Applicable Law.
     2.7  Common Areas -- Definition. The term "Common Areas" is defined as all 
areas and facilities outside the Premises and within the exterior boundary line 
of the Industrial Center and interior utility raceways within the Premises that 
are provided and designated by the Lessor from time to time for the general 
non-exclusive use of Lessor, Lessee and other lessees of the Industrial Center 
and their respective employees, suppliers, shippers, customers, contractors and 
invitees, including parking areas, loading and unloading areas, trash areas, 
roadways, sidewalks, walkways, parkways, driveways and landscaped areas.
     2.8  Common Areas -- Lessee's Rights. Lessor hereby grants to Lessee, for 
the benefit of Lessee and its employees, suppliers, shippers, contractors, 
customers and invitees, during the term of this Lease, the non-exclusive right 
to use, in common with others entitled to such use, the Common Areas as they 
exist from time to time, subject to any rights, powers, and privileges reserved 
Lessor under the terms hereof or under the terms of any rules and regulations or
restrictions governing the use of the Industrial Center. Under no circumstances 
shall the right herein granted to use the Common Areas be deemed to include the 
right to store any property, temporarily or permanently, in the Common Areas. 
Any such storage shall be permitted only by the prior written consent of Lessor 
or Lessor's designated agent, which consent may be revoked at any time. In the 
event that any unauthorized storage shall occur then Lessor shall have the 
right, without notice, in addition to such other rights and remedies that it may
have, to remove the property and charge the cost to Lessee, which cost shall be 
immediately payable upon demand by Lessor.
     2.9  Common Areas -- Rules and Regulations. Lessor or such other person(s) 
as Lessor may appoint shall have the exclusive control and management of the 
Common Areas and shall have the right, from time to time, to establish, modify, 
amend and enforce reasonable Rules and Regulations with respect thereto in 
accordance with Paragraph 40. Lessee agrees to abide by and conform to all such 
Rules and Regulations, and to cause its employees, suppliers, shippers, 
customers, contractors and invitees to so abide and conform. Lessor shall not be
responsible to Lessee for the non-compliance with said rules and regulations by 
other lessees of the Industrial Center.
     2.10 Common Areas -- Changes. Lessor shall have the right, in Lessor's sole
discretion, from time to time: 
          (a) To make changes to the Common Areas, including, without 
limitations, changes in the location, size, shape and number of driveways, 
entrances, parking spaces, parking areas, loading and unloading areas, ingress, 
egress, direction of traffic, landscaped areas, walkways and utility raceways;
          (b) To close temporarily any of the Common Areas for maintenance 
purposes so long as reasonable access to the Premises remains available;
          (c) To designate other land outside the boundaries of the Industrial 
Center to be a part of the Common Areas;
          (d) To add additional buildings and improvements to the Common Areas;
          (e) To use the Common Areas while engaged in making additional 
improvements, repairs or alterations to the Industrial Center, or any portion 
thereof; and
          (f) To do and perform such other acts and make such other changes in, 
to or with respect to the Common Areas and Industrial Center as Lessor may, in 
the exercise of sound business judgment, deem to be appropriate.
3.   Term.
     3.1  Term. The Commencement Date, Expiration Date and Original Term of this
Lease are as specified in Paragraph 1.3.
     3.2  Early Possession. If an Early Possession Date is specified in 
Paragraph 1.4 and if Lessee totally or partially occupies the Premises after the
Early Possession Date but prior to the Commencement Date, the obligation to pay 
Base Rent shall be abated for the period of such early occupancy. All other 
terms of this Lease, however, (including, but not limited to, the obligations to
pay Lessee's Share of Common Area Operating Expenses and to carry the insurance 
required by Paragraph 8) shall be in effect during such period. Any such early 
possession shall not affect nor advance the Expiration Date of the Original 
Term.
     3.3  Delay in Possession. If for any reason Lessor cannot deliver 
possession of the Premises to Lessee by the Early Possession Date, if one is 
specified in Paragraph 1.4, or if no Early Possession Date is specified, by the 
Commencement Date, Lessor shall not be subject to any liability therefor, nor 
shall such failure affect the validity of this Lease, or the obligations of 
Lessee hereunder, or extend the term hereof, but in such case, Lessee shall not,
except as otherwise provided herein, be obligated to pay rent or perform any 
other obligation of Lessee under the terms of this Lease until Lessor delivers 
possession of the Premises to Lessee. If possession of the Premises is not 
delivered to Lessee within sixty (60) days after the Commencement Date, Lessee 
may, at its option, by notice in writing to Lessor within ten (10) days after 
the end of said sixty (60) day period, cancel this Lease, in which event the 
Parties shall be discharged from all obligations hereunder; provided further, 
however, that if such written notice of Lessee is not received by Lessor within 
said ten (10) day period, Lessee's right to cancel this Lease hereunder shall 
terminate and be of no further force or effect. Except as may be otherwise 
provided, and regardless of when the Original Term actually commences, if 
possession is not tendered to Lessee when required by this Lease and Lessee does
not terminate this Lease, as aforesaid, the period free of the obligation to pay
Base Rent, if any, that Lessee would otherwise have enjoyed shall run from the
date of delivery of possession and continue for a period equal to the period
during which the Lessee would have otherwise enjoyed under the terms hereof, but
minus any days of delay caused by the acts, changes or omissions of Lessee.
4.   Rent.
     4.1  Base Rent. Lessee shall pay Base Rent and other rent or charges, as 
the same may be adjusted from time to time, to Lessor in lawful money of the
United States, without offset or deduction, on or before the day on which it is
due under the terms of this Lease. Base Rent and all other rent and charges for
any period during the term hereof which is for less than one full month shall be
prorated based upon the actual number of days of the month involved. Payment of
Base Rent and other charges shall be made to Lessor at its address stated herein
or to such other persons or at such other addresses as Lessor may from time to
time designate in writing to Lessee.
     4.2  Common Area Operating Expenses. Lessee shall pay to Lessor during the 
term hereof, in addition to the Base Rent, Lessee's Share (as specified in 
Paragraph 1.6(b)) of all Common Area Operating Expenses, as hereinunder defined,
during each calendar year of the term of this Lease, in accordance with the 
following provisions:
          (a) "Common Area Operating Expenses" are defined, for purposes of this
Lease, as all costs incurred by Lessor relating to the ownership and operation 
of the Industrial Center, including, but not limited to, the following:
              (i) The operation, repair and maintenance, in neat, clean, good 
order and condition, of the following:
                  (aa) The Common Areas, including parking areas, loading and 
unloading areas, trash areas, roadways, sidewalks, walkways, parkways, 
driveways, landscaped areas, striping, bumpers, irrigation systems, Common Area 
lighting facilities, fences and gates, elevators and roof.
                  (bb) Exterior signs and any tenant directories.
                  (cc) Fire detection and sprinkler systems.

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          (ii)  The cost of water, gas, electricity telephone to service the 
Common Areas.
          (iii) Trash disposal, property management and security services and 
the costs of any environmental inspections.
          (iv)  Reserves set aside for maintenance and repair of Common Areas.
          (v)   Any increases above the Base Real Property Taxes (as defined in
Paragraph 10.2(b)) for the Building and the Common Areas.
          (vi)  Any "Insurance Cost Increase" (as defined in Paragraph 8.1).
          (vii) The cost of insurance carried by Lessor with respect to the 
Common Areas.
          (viii) Any deductible portion of an insured loss concerning the 
Building or the Common Areas.
          (ix)  Any other services to be provided by Lessor that are stated 
elsewhere in this Lease to be a Common Area Operating Expense.
     (b) Any Common Area Operating Expenses and Real Property Taxes that are 
specifically attributable to the Building or to any other building in the 
Industrial Center or to the operation, repair and maintenance thereof, shall be 
allocated entirely to the Building or to such other building. However, any 
Common Area Operating Expenses and Real Property Taxes that are specifically 
attributable to the Building or to any other building or to the operation, 
repair and maintenance thereof, shall be equitably allocated by Lessor to all 
buildings in the Industrial Center.
     (c) The inclusion of the improvements, facilities and services set forth in
Subparagraph 4.2(a) shall not be deemed to impose an obligation upon Lessor to 
either have said improvements or facilities or to provide those services unless 
the Industrial Center already has the same, Lessor already provides the 
services, or Lessor has agreed elsewhere in this Lease to provide the same or 
some of them.
     (d) Lessee's Share of Common Area Operating Expenses shall be payable by
Lessee within ten (10) days after a reasonably detailed statement of actual
expenses is presented to Lessee by Lessor. At Lessor's option, however, an
amount may be estimated by Lessor from time to time of Lessee's Share of annual
Common Area Operating Expenses and the same shall be payable monthly or
quarterly, as Lessor shall designate, during each 12-month period of the Lease
term, on the same day as the Base Rent is due hereunder. Lessor shall deliver to
Lessee within sixty (60) days after the expiration of each calendar year a
reasonably detailed statement showing Lessee's Share of the actual Common Area
Operating Expenses incurred during the preceding year. If Lessee's payments
under this Paragraph 4.2(d) during said preceding year exceed Lessee's Share as
indicated on said statement, Lessee shall be credited the amount of such
overpayment against Lessee's Share of Common Area Operating Expenses next
becoming due. If Lessee's payments under this Paragraph 4.2(d) during said
preceding year were less than Lessee's Share as indicated on said statement,
Lessee shall pay to Lessor the amount of the deficiency within ten (10) days
after delivery by Lessor to Lessee of said statement.
5. Security Deposit.
Lessee shall deposit with Lessor upon Lessee's execution hereof the Security
Deposit set forth in Paragraph 1.7 as security for Lessee's faithful performance
of Lessee's obligations under this Lease. If Lessee fails to pay Base Rent or
other rent or charges due hereunder, or otherwise Defaults under this Lease (as
defined in Paragraph 13.1), Lessor may use, apply or retain all or any portion
or said Security Deposit for the payment of any amount due Lessor or to
reimburse or compensate lessor for any liability, cost, expense, loss or damage
(including attorneys' fees) which Lessor may suffer or incur by reason thereof.
If Lessor uses or applies all or any portion of said Security Deposit, Lessee
shall within ten (10) days after written request therefore deposit monies with
Lessor sufficient to restore said Security Deposit to the full amount required
by this Lease. Any time the Base Rent increases during the term of this Lease,
Lessee shall, upon written request from Lessor, deposit additional monies with
Lessor as an addition to the Security Deposit so that the total amount of the
Security Deposit shall at all times bear the same proportion to the then current
Base Rent as the initial Security Deposit bears to the initial Base Rent set
forth in Paragraph 1.5. Lessor shall not be required to keep all or any part of
the Security Deposit separate from its general accounts. Lessor shall, at the
expiration or earlier termination of the term hereof and after Lessee has
vacated the Premises, return to Lessee (or, at Lessor's option, to the last
assignee, if any, of Lessee's interest herein), that portion of the Security
Deposit not used or applied by Lessor. Unless otherwise expressly agreed in
writing by Lessor, no part of the Security Deposit shall be considered to be
held in trust, to bear interest or other increment for its use, or to be
prepayment for any monies to be paid by Lessee under this Lease.
6.   Use.
     6.1  Permitted Use.
          (a) Lessee shall use and occupy the Premises only for the Permitted
Use set forth in Paragraph 1.8 or any other legal use which is reasonably
comparable thereto, and for no other purpose. Lessee shall not use or permit
the use of the Premises in a manner that is unlawful, creates waste or a
nuisance, or that disturbs owners and/or occupants of, or causes damage to the
Premises or neighboring premises or properties.
          (b) Lessor hereby agrees to not unreasonably withhold or delay its 
consent to any written request by Lessee, Lessee's assignees or subtenants, and 
by prospective assignees and subtenants of Lessee, its assignees and subtenants,
for a modification of said Permitted Use, so long as the same will not impair 
the structural integrity of the improvements on the Premises or in the Building 
or the mechanical or electrical systems therein, does not conflict with uses by 
other lessees, is not significantly more burdensome to the Premises or the 
Building and the improvements thereon, and is otherwise permissible pursuant to 
this Paragraph 6. If Lessor elects to withhold such consent, Lessor shall within
five (5) business days after such request give a written notification of same, 
which notice shall include an explanation of Lessor's reasonable objections to 
the change in use.
     6.2  Hazardous Substances.
          (a) Reportable Uses Require Consent. The term "Hazardous Substance" as
used in this Lease shall mean any product, substance, chemical, material or
waste whose presence, nature, quantity and/or intensity of existence, use,
manufacture, disposal, transportation, spill, release or effect, either by 
itself or in combination with other materials expected to be on the Premises, is
either: (1) potentially injurious to the public health, safety or welfare, the 
environment, or the Premises (ii) regulated or monitored by any governmental 
authority; or (iii) a basis for potential liability of Lessor to any 
governmental agency or third party under any applicable statute or common law 
theory. Hazardous Substance shall include, but not be limited to, hydrocarbons, 
petroleum, gasoline, crude oil or any products or by-products thereof. Lessee 
shall not engage in any activity in or about the Premises which constitutes a 
Reportable Use (as hereinafter defined) of Hazardous Substances without the 
express prior written consent of Lessor and compliance in a timely manner (at 
Lessee's sole cost and expense) with all Applicable Requirements (as defined in 
Paragraph 6.3). "Reportable Use" shall mean (i) the installation or use of any 
above or below ground storage tank, (ii) the generation, possession, storage, 
use, transportation, or disposal of a Hazardous Substance that requires a permit
from, or with respect to which a report, notice, registration or business plan 
is required to be filed with, any governmental authority, and (iii) the presence
in, on or about the Premises of a Hazardous Substance with respect to which any 
Applicable Laws require that a notice be given to persons entering or occupying 
the Premises or neighboring properties. Notwithstanding the foregoing, Lessee 
may, without Lessor's prior consent, but upon notice to Lessor and in compliance
with all Applicable Requirements, use any ordinary and customary materials 
reasonably required to be used by Lessee in the normal course of the Permitted 
Use, so long as such use is not a Reportable Use and does not expose the 
Premises, or neighboring properties to any meaningful risk of contamination or 
damage or expose Lessor to any liability therefor. In addition, Lessor may (but 
without any obligation to do so) condition its consent to any Reportable Use of 
any Hazardous Substance by Lessee Upon Lessee's giving Lessor such additional 
assurances as Lessor, in its reasonable discretion, deems necessary to protect 
itself, the public, the Premises and the environment against damage, 
contamination or injury and/or liability therefor, including, but not limited 
to, the installation (and, at Lessor's option, removal on or before Lease 
expiration or earlier termination) of reasonably necessary protective 
modifications to the Premises (such as concrete encasements) and/or the deposit 
of an additional Security Deposit under a Paragraph 5 hereof.
     (b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to 
believe that a Hazardous Substance has come to be located in, on, under or about
the Premises or the Building, other than as previously consented to by Lessor, 
Lessee shall immediately give Lessor written notice thereof, together with a 
copy of any statement, report, notice, registration, application, permit, 
business plan, license, claim, action, or proceeding given to, or received from,
any governmental authority or private party concerning the presence, spill, 
release, discharge of, or exposure to, such Hazardous Substance including, but 
not limited to, all such documents as may be involved in any Reportable Use 
Involving the Premises. Lessee shall not cause or permit any Hazardous Substance
to be spilled or released in, on, under or about the Premises (including,
without limitation, through the plumbing or sanitary sewer system).
     (c) Indemnification. Lessee shall indemnify, protect, defend and hold
Lessor, its agents, employees, lenders and ground lessor, if any, and the 
Premises, harmless from and against any and all damages, liabilities, judgments,
costs, claims, liens, expenses, penalties, loss of permits and attorneys' and 
consultants' fees arising out of or involving any Hazardous Substance brought 
onto the Premises by or for Lessee or by anyone under Lessee's control. Lessee's
obligations under this Paragraph 6.2(c) shall include, but not be limited to, 
the effects of any contamination or injury to person, property or the 
environment created or suffered by Lessee, and the cost of investigation 
(including consultants' and attorneys' fees and testing), removal, remediation, 
restoration and/or abatement thereof, or of any contamination therein involved, 
and shall survive the expiration or earlier termination of this Lease. No 
termination, cancellation or release agreement entered into by Lessor and Lessee
shall release Lessee from its obligations under this Lease with respect to 
Hazardous Substances, unless specifically so agreed by Lessor in writing at the 
time of such agreement.
     6.3  Lessee's Compliance with Requirements. Lessee shall, at Lessee's sole 
cost and expense, fully, diligently and in a timely manner, comply with all 
"Applicable Requirements," which term is used in this Lease to mean all laws, 
rules, regulations, ordinances, directives, covenants, easements and 
restrictions of record, permits, the requirements of any applicable fire 
insurance underwriter or rating bureau, and the recommendations of Lessor's 
engineers

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and/or consultants, relating in any manner to the Premises (including, but not 
limited to, matters pertaining to (i) industrial hygiene, (ii) environmental 
conditions on, in, under or about the Premises, including soil and groundwater 
conditions, and (iii) the use, generation, manufacture, production, 
installation, maintenance, removal, transportation, storage, spill, or release 
of any Hazardous Substance), now in effect or which may hereafter come into 
effect.  Lessee shall, within five (5) days after receipt of Lessor's written 
request, provide Lessor with copies of all documents and information, including,
but not limited to, permits, registrations, manifests, applications, reports and
certificates, evidencing Lessee's compliance with any Applicable Requirements 
specified by Lessor, and shall immediately upon receipt, notify Lessor in 
writing (with copies of any documents involved) of any threatened or actual 
claim, notice, citation, warning, complaint or report pertaining to or involving
failure by Lessee or the Premises to comply with any Applicable Requirements.
     6.4  Inspection; Compliance with Law.  Lessor, Lessor's agents, employees, 
contractors and designated representatives, and the holders of any mortgages, 
deeds of trust or ground leases on the Premises ("Lenders") shall have the right
to enter the Premises at any time in the case of an emergency, and otherwise at
reasonable times, for the purpose of inspecting the condition of the Premises
and for verifying compliance by Lessee with this Lease and all Applicable
Requirements (as defined in Paragraph 6.3), and Lessor shall be entitled to
employ experts and/or consultants in connection therewith to advise Lessor with
respect to Lessee's activities, including, but not limited to, Lessee's
installation, operation, use, monitoring, maintenance, or removal of any
Hazardous Substance on or from the Premises. The costs and expenses of any such
inspections shall be paid by the party requesting same, unless a Default or
Breach of this Lease by Lessee or a violation of Applicable Requirements or a
contamination, caused or materially contributed to by Lessee, is found to exist
or to be imminent, or unless the inspection is requested or ordered by a
governmental authority as the result of any such existing or imminent violation
or contamination. In such case, Lessee shall upon request reimburse Lessor or
Lessor's Lender, as the case may be, for the costs and expenses of such
inspections.
7.   Maintenance, Repairs, Utility Installations, Trade Fixtures and
     Alterations.
     7.1  Lessee's Obligations.
          (a) Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 
(Compliance with Covenants, Restrictions and Building Code), 7.2 (Lessor's 
Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee shall, at
Lessee's sole cost and expense and at all times, keep the Premises and every 
part thereof in good order, condition and repair (whether or not such portion of
the Premises requiring repair, or the means of repairing the same, are 
reasonably or readily accessible to Lessee, and whether or not the need for such
repairs occurs as a result of Lessee's use, any prior use, the elements or the 
age of such portion of the Premises), including, without limiting the generality
of the foregoing, all equipment or facilities specifically serving the Premises,
such as plumbing, heating, air conditioning, ventilating, electrical, lighting 
facilities, boilers, fired or unfired pressure vessels, fire hose connections if
within the Premises, fixtures, interior walls, interior surfaces of exterior 
walls, ceilings, floors, windows, doors plate glass, and skylights, but 
excluding any items which are the responsibility of Lessor pursuant to Paragraph
7.2 below.  Lessee, in keeping the Premises in good order, condition and repair,
shall exercise and perform good maintenance practices.  Lessee's obligations 
shall include restorations, replacements or renewals when necessary to keep the 
Premises and all improvements thereon or a part thereof in good order, condition
and state of repair.
          (b) Lessee shall, at Lessee's sole cost and expense, procure and
maintain a contract, with copies to Lessor, in customary form and substance for
and with a contractor specializing and experienced in the inspection,
maintenance and service of the heating, air conditioning and ventilation system
for the Premises. However, Lessor reserves the right, upon notice to Lessee, to
procure and maintain the contract for the heating, air conditioning and
ventilating systems, and if Lessor so elects, Lessee shall reimburse Lessor,
upon demand, for the cost thereof.
          (c) If Lessee falls to perform Lessee's obligations under this
Paragraph 7.1, Lessor may enter upon the Premises after ten (10) days' prior
written notice to Lessee (except in the case of an emergency, in which case no
notice shall be required), perform such obligations on Lessee's behalf, and put
the Premises in good order, condition and repair, in accordance with Paragraph
13.2 below.
     7.2  Lessor's Obligations.  Subject to the provisions of Paragraphs 2.2 
(Condition), 2.3 (Compliance with Covenants, Restrictions and Building Code), 
4.2 (Common Area Operating Expenses), 6 (Use), 7.1 (Lessee's Obligations), 9 
(Damage or Destruction) and 14 (Condemnation), Lessor, subject to reimbursement 
pursuant to Paragraph 4.2, shall keep in good order, condition and repair the 
foundations, exterior walls, structural condition of interior bearing walls, 
exterior roof, fire sprinkler and/or standpipe and hose (if located in the 
Common Areas) or other automatic fire extinguisher system including fire alarm
and/or smoke detection systems and equipment, fire hydrants, parking lots, 
walkways, parkways, driveways, landscaping, fences, signs and utility systems 
serving the Common Areas and all parts thereof, as well as providing the 
services for which there is a Common Area Operating Expense pursuant to 
Paragraph 4.2.  Lessor shall not be obligated to paint the exterior or interior 
surfaces of exterior walls nor shall Lessor be obligated to maintain, repair or 
replace windows, doors or plate glass of the Premises.  Lessee expressly waives 
the benefit of any statute now or hereafter in effect which would otherwise 
afford Lessee the right to make repairs at Lessor's expense or to terminate this
Lease because of Lessor's failure to keep the Building, Industrial Center of 
Common Areas in good order, condition and repair.
     7.3  Utility Installations, Trade Fixtures, Alterations.
          (a) Definitions; Consent Required.  The term "Utility Installations" 
is used in this Lease to refer to all air lines, power panels, electrical 
distribution, security, fire protection systems, communications systems, 
lighting fixtures, heating, ventilating and air conditioning equipment,
plumbing, and fencing in, on or about the Premises. The term "Trade Fixtures"
shall mean Lessee's machinery and equipment which can be removed without doing
material damage to the Premises. The term "Alterations" shall mean any
modification of the improvements on the Premises which are provided by Lessor
under the terms of this Lease, other than Utility Installations or Trade
Fixtures. "Lessee-Owned Alterations and/or Utility Installations" are defined as
Alterations and/or Utility Installations made by Lessee that are not yet owned
by Lessor pursuant to Paragraph 7.4(a). Lessee shall not make nor cause to be
made any Alterations or Utility Installations in, on, under or about the
Premises without Lessor's prior written consent. Lessee may, however, make non-
structural Utility Installations to the interior of the Premises (excluding the
roof) without Lessor's consent but upon notice to Lessor, so long as they are 
not visible from the outside of the Premises, do not involve puncturing,
relocating or removing the roof or any existing walls, or changing or
interfering with the fire sprinkler or fire detection systems and the cumulative
cost thereof during the term of this Lease as extended does not exceed
$2,500.00.
          (b) Consent.  Any Alterations or Utility Installations that Lessee 
shall desire to make and which require the consent of the Lessor shall be 
presented to Lessor in written form with detailed plans.  All consents given by 
Lessor, whether by virtue of Paragraph 7.3(a) or by subsequent specific consent,
shall be deemed conditioned upon; (i) Lessee's acquiring all applicable permits 
required by governmental authorities; (ii) the furnishing of copies of such 
permits together with a copy of the plans and specifications for the Alteration 
or Utility Installation to Lessor prior to commencement of the work thereon; and
(iii) the compliance by Lessee with all conditions of said permits in a prompt 
and expeditious manner.  Any Alterations or Utility Installations by Lessee 
during the term of this Lease shall be done in a good and workmanlike manner, 
with good and sufficient materials, and be in compliance with all Applicable 
Requirements.  Lessee shall promptly upon completion thereof furnish Lessor with
as-built plans and specifications therefor.  Lessor may (but without obligation 
to do so) condition its consent to any requested Alteration or Utility 
Installation that costs $2,500.00 or more upon Lessee's providing Lessor with a 
lien and completion bond in an amount equal to one and one-half times the 
estimated cost of such Alteration or Utility Installation.
          (c) Lien Protection.  Lessee shall pay when due all claims for labor 
or materials furnished or alleged to have been furnished to or for Lessee at or 
for use on the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises or any interest therein.  Lessee shall 
give Lessor not less than tenn (10) days' notice prior to the commencement of 
any work in, on, or about the Premises, and Lessor shall have the right to post 
notices of non-responsibility in or on the Premises as provided by law.  If 
Lessee shall, in good faith, contest the validity of any such lien, claim or 
demand, then Lessee shall, at its sole expense, defend and protect itself, 
Lessor and the Premises against the same and shall pay and satisfy any such 
adverse judgment that may be rendered thereon before the enforcement thereof 
against the Lessor or the Premises.  If Lessor shall require, Lessee shall 
furnish to Lessor a surety bond satisfactory to Lessor, in an amount equal to 
one and one-half times the amount of such contested lien claim or demand, 
indemnifying Lessor against liability for the same, as required by law for the 
holding of the Premises free from the effect of such lien or claim.  In 
addition, Lessor may require Lessee to pay Lessor's attorneys' fees and costs in
participating in such action if Lessor shall decide it is to its best interest 
to do so.
     7.4  Ownership, Removal, Surrender, and Restoration.
          (a) Ownership.  Subject to Lessor's right to require their removal and
to cause Lessee to become the owner thereof as hereinafter provided in this
Paragraph 7.4, all Alterations and Utility Installations made to the Premises by
Lessee shall be the property of and owned by Lessee, but considered a part of
the Premises. Lessor may, at any time and at its option, elect in writing to
Lessee to be the owner of all or any specified part of the Lessee-Owned
Alterations and Utility Installation. Unless otherwise instructed per
Subparagraph 7.4(b) hereof, all Lessee-Owned Alterations and Utility
Installations shall, at the expiration or earlier termination of this Lease,
become the property of Lessor and remain upon the Premises and be surrendered
with the Premises by Lessee.
          (b) Removal.  Unless otherwise agreed in writing, Lessor may require 
that any or all Lessee-Owned Alterations or Utility Installations be removed by 
the expiration or earlier termination of this Lease, notwithstanding that their 
Installation may have been been consented to by Lessor.  Lessor may require the 
removal at any time of all or any part of any Alterations or Utility 
Installations made without the required consent of Lessor.

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          (c) Surrender/Restoration.  Lessee shall surrender the Premises by the
end of the last day of the Lease term or any earlier termination date, clean and
free of debris and in good operating order, condition and state of repair,
ordinary wear and tear excepted. Ordinary wear and tear shall not include any
damage or deterioration that would have been prevented by good maintenance
practice or by Lessee performing all of its obligations under this Lease. Expect
as otherwise agreed or specified herein, the Premises, as surrendered, shall
include the Alterations and Utility Installations. The obligation of Lessee
shall include the repair of any damage occasioned by the installation,
maintenance or removal of Lessee's Trade Fixtures, furnishings, equipment, and
Lessee-Owned Alterations and Utility Installations, as well as the removal of
any storage tank installed by or for Lessee, and the removal, replacement, or
remediation of any soil, material or ground water contaminated by Lessee, all as
may then be required by Applicable Requirements and/or good practice. Lessee's
Trade Fixtures shall remain the property of Lessee and shall be removed by
Lessee subject to its obligation to repair and restore the Premises per this
Lease.
8.   Insurance; Indemnity.
     8.1  Payment of Premium Increases.
          (a) As used herein, the term "Insurance Cost Increase" is defined as 
any increase in the actual cost of the insurance applicable to the Building and 
required to be carried by Lessor pursuant to Paragraphs 8.2(b), 8.3(a) and 
8.3(b), ("Required Insurance"), over and above the Base Premium, as hereinafter 
defined, calculated on an annual basis.  "Insurance Cost Increase" shall 
include, but not be limited to, requirements of the holder of a mortgage or deed
of trust covering the Premises, increased valuation of the Premises, and/or a 
general premium rate increase.  The term "Insurance Cost Increase" shall not, 
however, include any premium increases resulting from the nature of the 
occupancy of any other lessee of the Building.  If the Parties insert a dollar 
amount in Paragraph 1.9, such amount shall be considered the "Base Premium."  If
a dollar amount has not been inserted in Paragraph 1.9 and if the Building has 
been previously occupied during the twelve (12) month period immediately 
preceding the Commencement Date, the "Base Premium" shall be the annual premium 
applicable to such twelve (12) month period.  If the Building was not fully 
occupied during such twelve (12) month period, the "Base Premium" shall be the 
lowest annual premium reasonably obtainable for the Required Insurance as of the
Commencement Date, assuming the most nominal use possible of the Building. In no
event, however, shall Lessee be responsible for any portion of the premium cost
attributable to liability insurance coverage in excess of $1,000,000 procured
under Paragraph 8.2(b).
          (b) Lessee shall pay any Insurance Cost Increase to Lessor pursuant to
Paragraph 4.2.  Premiums for policy periods commencing prior to, or extending 
beyond, the term of this Lease shall be prorated to coincide with the 
corresponding Commencement Date or Expiration Date.
     8.2  Liability Insurance.
          (a) Carried by Lessee.  Lessee shall obtain and keep in force during 
the term of this Lease a Commerical General Liability policy of insurance 
protecting Lessee, Lessor and any Lender(s) whose names have been provided to 
Lessee in writing (as additional insureds) against claims for bodily injury, 
personal injury and property damage based upon, involving or arising out of the 
ownership, use, occupancy or maintenance of the Premises and all areas 
appurtenant thereto.  Such insurance shall be on an occurrence basis providing 
single limit coverage in an amount not less than $1,000,000 per occurrence with 
an "Additional Insured-Managers or Lessors of Premises" endorsement and contain 
the "Amendment of the Pollution Exclusion "endorsement for damage caused by
heat,smoke or fumes from a hostile fire.  The policy shall not contain any 
intra-insured exclusions as between insured persons or organizations, but shall 
include coverage for liability assumed under this Lease as an "insured contract"
for the performance of Lessee's indemnity obligations under this Lease.  The 
limits of said insurance required by this Lease or as carried by Lessee shall 
not, however, limit the liability of Lessee nor relieve Lessee of any obligation
hereunder.  All insurance to be carried by Lessee shall be primary to and not 
contributory with any similar insurance carried by Lessor, whose insurance shall
be considered excess insurance only.
          (b) Carried by Lessor.  Lessor shall also maintain liability insurance
described in Paragraph 8.2(a) above, in addition to and not in lieu of, the 
insurance required to be maintained by Lessee.  Lessee shall not be named as an 
additional insured therein.
     8.3  Property Insurance - Building, Improvements and Rental Value.
          (a) Building and Improvements.  Lessor shall obtain and keep in force 
during the term of this Lease a policy or policies in the name of Lessor, with 
loss payable to Lessor and to any Lender(s), insuring against loss or damage to 
the Premises.  Such insurance shall be for full replacement cost, as the same 
shall exist from time to time, or the amount required by any Lender(s), but in 
no event more than the commercially reasonable and available insurable value 
thereof if, by reason of the unique nature or age of the improvements involved, 
such latter amount is less than full replacement cost. Lessee-Owned Alterations
and Utility Installations, Trade Fixtures and Lessee's personal property shall
be insured by Lessee pursuant to Paragraph 8.4. If the coverage is available and
commercially appropriate, Lessor's policy or policies shall insure against all
risks of direct physical loss or damage (except the perils of flood and/or
earthquake unless required by a Lender or included in the Base Premium),
including coverage for any additional costs resulting from debris removal and
reasonable amounts of coverage for the enforcement of any ordinance or law
regulating the reconstruction or replacement of any undamaged sections of the
Building required to be demolished or removed by reason of the enforcement of
any building, zoning, safety or land use laws as the result of a covered loss,
but not including plate glass insurance. Said policy or policies shall also
contain an agreed valuation provision in lieu of any co-insurance clause, waiver
of subrogation, and inflation guard protection causing an increase in the annual
property insurance coverage amount by a factor of not less than the adjusted
U.S. Department of Labor Consumer Price Index for All Urban Consumers for the
city nearest the where the Premises are located.
          (b) Rental Value.  Lessor shall also obtain and keep in force during 
the term of this Lease a policy or policies in the name of Lessor, with loss 
payable to Lessor and any Lender(s), insuring the loss of the full rental and 
other charges payable by all lessees of the Building to Lessor for one year 
(including all Real Property Taxes, insurance costs, all Common Area Operating 
Expenses and any scheduled rental increases).  Said insurance may provide that 
in the event the Lease is terminated by reason of an insured loss, the period of
indemnity for such coverage shall be extended beyond the date of the completion 
of repairs or replacement of the Premises, to provide for one full year's loss 
of rental revenues from the date of any such loss. Said insurance shall contain
an agreed valuation provision in lieu of any co-insurance clause, and the
amount of coverage shall be adjusted annually to reflect the projected rental
income, Real Property Taxes, insurance premium costs and other expenses, if any,
otherwise payable, for the next 12-month period. Common Area Operating Expenses
shall include any deductible amount in the event of such loss.
          (c) Adjacent Premises.  Lessee shall pay for any increase in the 
premiums for the property insurance of the Building and for the Common Areas or 
other buildings in the Industrial Center if said increase is caused by Lessee's
acts, omissions, use or occupancy of the Premises.
          (d) Lessee's Improvements.  Since Lessor is the insuring Party, Lessor
shall not be required to insure Lessee-Owned Alterations and Utility 
Installations unless the item in question has become the property of Lessor 
under the terms of this Lease.
     8.4  Lessee's Property Insurance.  Subject to the requirements of Paragraph
8.5, Lessee at its cost shall either by separate policy or, at Lessor's option, 
by endorsement to a policy already carried, maintain insurance coverage on all 
of Lessee's personal property.  Trade Fixtures and Lessee-Owned Alterations and 
Utility Installations in, on, or about the Premises similar in coverage to that 
carried by Lessor as the insuring Party under Paragraph 8.3(a).  Such insurance 
shall be full replacement cost coverage with a deductible not to exceed $1,000 
per occurrence.  The proceeds from any such insurance shall be used by Lessee 
for the replacement of personal property and the restoration of Trade Fixtures 
and Lessee-Owned Alterations and Utility Installations.  Upon request from 
Lessor, Lessee shall provide Lessor with written evidence that such insurance is
in force.
     8.5  Insurance Policies.  Insurance required hereunder shall be in 
companies duly licensed to transact business in the state where the Premises 
are located, and maintaining during the policy term a "General Policyholders 
Rating" of at least B+, V, or such other rating as may be required by a Lender, 
as set forth in the most current issue of "Best's Insurance Guide."  Lessee 
shall not do or permit to be done anything which shall invalidate the insurance 
policies referred to in this Paragraph 8.  Lessee shall cause to be delivered to
Lessor, within seven (7) days after the earlier of the Early Possession Date, or
the Commencement Date, certified copies of, or certificates evidencing the 
existence and amounts of, the insurance required under Paragraph 8.2(a) and 8.4.
No such policy shall be cancelable or subject to modification except after
thirty (30) days' prior written notice to Lessor. Lessee shall at least thirty
(30) days prior to the expiration of such policies, furnish Lessor with evidence
of renewals or "insurance binders" evidencing renewal thereof, or Lessor may
order such insurance and charge the cost thereof to Lessee, which amount shall
be payable by Lessee to Lessor upon demand.
     8.6  Waiver of Subrogation.  Without affecting any other rights or 
remedies, Lessee and Lessor each hereby release and relieve the other, and waive
their entire right to recover damages (whether in contract or in tort) against
the other, for loss or damage to their property arising out of or incident to
the perils required to be insured against under Paragraph 8. The effect of such
releases and waivers of the right to recover damages shall not be limited by the
amount of insurance carried or required, or by any deductibles applicable
thereto. Lessor and Lessee agree to have their respective insurance companies
issuing property damage insurance waive any right to subrogation that such
companies may have against Lessor or Lessee, as the case may be, so long as the
insurance is not invalidated thereby.
     8.7  Indemnity.  Except for Lessor's negligence and/or breach of express 
warranties, Lessee shall indemnify, protect, defend and hold harmless the 
Premises, Lessor and its agents, Lessor's master or ground lessor, partners and 
Lenders, from and against any and all claims, loss of rents and/or damages, 
costs, liens, judgments, penalties, loss of permits, attorneys' and consultants'
fees, expenses and/or liabilities arising out of, involving, or in connection 
with,

                                                                Initials:  CLM
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the occupancy of the Premises by Lessee, the conduct of Lessee's business, any 
act, omission or neglect of Lessee, its agents, contractors, employees or 
invitees, and out of any Default or Breach by Lessee in the performance in a 
timely manner of any obligation on Lessee's part to be performed under this 
Lease.  The foregoing shall include, but not be limited to, the defense or 
pursuit for any claim or any action or proceeding involved therein, and whether 
or not in the case of claims made against Lessor) litigated and/or reduced to 
judgment.  In case any action or proceeding be brought against Lessor by reason 
of any of the foregoing matters, Lessee, upon notice from Lessor, shall defend 
the same at Lessee's expense by counsel reasonably satisfactory to Lessor and 
Lessor shall cooperate with Lessee in such defense.  Lessor need not have first 
paid any such claim in order to be so indemnified.
     8.8  Exemption of Lessor from Liability.  Lessor shall not be liable for 
injury or damage to the person or goods, wares, merchandise or other property of
Lessee, Lessee's employees, contractors, invitees, customers, or any other 
person in or about the Premises, whether such damage or injury is caused by or 
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, fire sprinklers, wires, 
appliances, plumbing, air conditioning or lighting fixtures, or from any other 
cause, whether said injury or damage results from conditions arising upon the 
Premises or upon other portions of the Building of which the Premises are a 
part, from other sources or places, and regardless of whether the cause of such 
damage or injury or the means of repairing the same is accessible or not.  
Lessor shall not be liable for any damages arising from any act or neglect of 
any other lessee of Lessor nor from the failure by Lessor to enforce the 
provisions of any other lease in the Industrial Center.  Notwithstanding 
Lessor's negligence or breach of this Lease, Lessor shall under no circumstances
be liable for injury to Lessee's business or for any loss of income or profit 
therefrom.
9.   Damage or Destruction.
     9.1  Definitions.
          (a) "Premises Partial Damage" shall mean damage or destruction to the 
Premises, other than Lessee-Owned Alterations and Utility Installations, the
repair cost of which damage or destruction is less than fifty percent (50%) of
the then Replacement Cost (as defined in Paragraph 9.1(d)) of the Premises
(excluding Lessee-Owned Alterations and Utility Installations and Trade
Fixtures) immediately prior to such damage or destruction.
          (b) "Premises Total Destruction" shall mean damage or destruction to 
the Premises, other than Lessee-Owned Alterations and Utility installations, the
repair cost of which damage or destruction is fifty percent (50%) or more of the
then Replacement Cost of the Premises (excluding Lessee-Owned Alterations and 
Utility Installations and Trade Fixtures) immediately prior to such damage or 
destruction.  In addition, damage or destruction to the Building, other than 
Lessee-Owned Alterations and Utility Installations and Trade Fixtures of any 
lessees of the Building, the cost of which damage or destruction is fifty 
percent (50%) or more of the then Replacement Cost (excluding Lessee-Owned 
Alterations and Utility Installations and Trade Fixtures of any lessees of the 
Building) of the Building shall, at the option of Lessor, be deemed to be 
Premises Total Destruction.
          (c) "Insured Loss" shall mean damage or destruction to the Premises, 
other than Lessee-Owned Alterations and Utility Installations and Trade 
Fixtures, which was caused by an event required to be covered by the insurance 
described in Paragraph 8.3(a) irrespective of any deductible amounts or coverage
limits involved.
          (d) "Replacement Cost" shall mean the cost to repair or rebuild the 
improvements owned by Lessor at the time of the occurrence to their condition 
existing immediately prior thereto, including demolition, debris removal and 
upgrading required by the operation of applicable building codes, ordinances or
laws, and without deduction for depreciation.
          (e) "Hazardous Substance Condition" shall mean the occurrence or 
discovery of a condition involving the presence of, or a contamination by, a 
Hazardous Substance as defined in Paragraph 6.2(a), in, on or under the
Premises.
     9.2  Premises Partial Damage - Insured Loss.  If Premises Partial Damage 
that is an insured Loss occurs, the Lessor shall, at Lessor's expense, repair 
such damage (but not Lessee's Trade Fixtures or Lessee-Owned Alterations and 
Utility Installations) as soon as reasonably possible and this Lease shall 
continue in full force and effect.  In the event, however, that there is a 
shortage of insurance proceeds and such shortage is due to the fact that, by 
reason of the unique nature of the improvements in the Premises, full 
replacement cost insurance coverage was not commercially reasonable and 
available, Lessor shall have no obligation to pay for the shortage in insurance 
proceeds or to fully restore the unique aspects of the Premises unless Lessee 
provides Lessor with the funds to cover same, or adequate assurance thereof, 
within ten (10) days following receipt of written notice of such shortage and 
request therefor.  If Lessor receives said funds or adequate assurance thereof 
within said ten (10) day period, Lessor shall complete them as soon as
reasonably possible and this Lease shall remain in full force and effect. If
Lessor does not receive such funds or assurance within said period, Lessor may
nevertheless elect by written notice to Lessee within ten (10) days thereafter
to make such restoration and repair as is commercially reasonable with Lessor
paying any shortage in proceeds, in which case this Lease shall remain in full
force and effect. If Lessor does not receive such funds or assurance within such
ten (10) day period, and if Lessor does not so elect to restore and repair, then
this Lease shall terminate sixty (60) days following the occurrence of the
damage or destruction. Unless otherwise agreed, Lessee shall in no event have
any right to reimbursement from Lessor for any funds contributed by Lessee to
repair any such damage or destruction. Premises Partial Damage due to flood or
earthquake shall be subject to Paragraph 9.3 rather than Paragraph 9.2,
notwithstanding that there may be some insurance coverage, but the net proceeds
of any such insurance shall be made available for the repairs if made by either
Party.
     9.3  Partial Damage - Uninsured Loss.  If Premises Partial Damage that is 
not an insured Loss occurs, unless caused by a negligent or willful act of 
Lessee (in which event Lessee shall make the repairs at Lessee's expense and 
this Lease shall continue in full force and effect), Lessor may, at Lessor's 
option, either (i) repair such damage as soon as reasonably possible at Lessor's
expense, in which event this Lease shall continue in full force and effect, or 
(ii) give written notice to Lessee within thirty (30) days after receipt by 
Lessor knowledge of the occurrence of such damage of Lessor's desire to 
terminate this Lease as of the date sixty (60) days following the date of such 
notice.  In the event Lessor elects to give such notice of Lessor's intention to
terminate this Lease, Lessee shall have the right within ten (10) days after the
receipt of such notice to give written notice to Lessor of Lessee's commitment 
to pay for the repair of such damage totally at Lessee's expense and without 
reimbursement from Lessor.  Lessee shall provide Lessor with the required funds 
or satisfactory assurance thereof within thirty (30) days following such 
commitment from Lessee.  In such event this Lease shall continue in full force 
and effect, and Lessor shall proceed to make such repairs as soon as reasonably 
possible after the required funds are available.  If Lessee does not give such 
notice and provide the funds or assurance thereof within the times specified 
above, this Lease shall terminate as of the date specified in Lessor's notice of
termination.
     9.4  Total Destruction.  Notwithstanding any other provision hereof, if 
Premises Total Destruction occurs (including any destruction required by any 
authorized public authority), this Lease shall terminate sixty (60) days 
following the date of such Premises Total Destruction, whether or not the damage
or destruction is an insured Loss or was caused by a negligent or willful act of
Lessee. In the event, however, that the damage or destruction was caused by
Lessee, Lessor shall have the right to recover Lessor's damages from Lessee
except as released and waived in Paragraph 9.7.
     9.5  Damage Near End of Term.  If at any time during the last six (6) 
months of the term of this Lease there is damage for which the cost to repair 
exceeds one month's Base Rent, whether or not an insured Loss, Lessor may, at 
Lessor's option, terminate this Lease effective sixty (60) days following the 
date of occurrence of such damage by giving written notice to Lessee of Lessor's
election to do so within thirty (30) days after the date of occurrence of such 
damage.  Provided, however, if Lessee at that time has an exercisable option to 
extend this Lease or to purchase the Premises, then Lessee may preserve this 
Lease by (a) exercising such option, and (b) providing Lessor with any shortage 
in insurance proceeds (or adequate assurance thereof) needed to make the repairs
on or before the earlier of (i) the date which is ten (10) days after Lessee's
receipt of Lessor's written notice purporting to terminate this Lease, or (ii)
the day prior to the date upon which such option expires. If Lessee duly
exercises such option during such period and provides Lessor with funds (or
adequate assurance thereof) to cover any shortage in insurance proceeds, Lessor
shall, at Lessor's expense, repair such damage as soon as reasonably possible
and this Lease shall continue in full force and effect. If Lessee fails to
exercise such option and provide such funds or assurance during such period,
then this Lease shall terminate as of the date set forth in the first sentence
of this Paragraph 9.5.
     9.6  Abatement of Rent; Lessee's Remedies.
          (a) In the event of (i) Premises Partial Damage or (ii) Hazardous 
Substance Condition for which Lessee is not legally responsible, the Base Rent, 
Common Area Operating Expenses and other charges, if any, payable by Lessee 
hereunder for the period during which such damage or condition, its repair, 
remediation or restoration continues, shall be abated in proportion to the 
degree to which Lessee's use of the Premises is impaired, but not in excess of 
proceeds from insurance required to be carried under Paragraph 8.3(b).  Except 
for abatement of Base Rent, Common Area Operating Expenses and other charges, if
any, as aforesaid, all other obligations of Lessee hereunder shall be performed 
by Lessee, and Lessee shall have no claim against Lessor for any damage suffered
by reason of any such damage, destruction, repair, remediation or restoration.
          (b) If Lessor shall be obligated to repair or restore the Premises 
under the provisions of this Paragraph 9 and shall not commence, in a 
substantial and meaningful way, the repair or restoration of the Premises within
ninety (90) days after such obligation shall accrue, Lessee may, at any time 
prior to the commencement of such repair or restoration, give written notice to 
Lessor and to any Lenders of which Lessee has actual notice of Lessee's election
to terminate this Lease on a date not less than sixty (60) days following the 
giving of such notice.  If Lessee gives such notice to Lessor and such Lenders 
and such repair or restoration is not commenced within thirty (30) days after 
receipt of such notice, this Lease shall terminate as of the date specified

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in said notice.  If Lessor or a Lender commences the repair or restoration of 
the Premises within thirty (30) days after the receipt of such notice, this 
Lease shall continue in full force and effect.  "Commence" as used in this 
Paragraph 9.6 shall mean either the unconditional authorization of the 
preparation of the required plans, or the beginning of the actual work on the 
Premises, whichever occurs first.
     9.7 Hazardous Substance Conditions. If a Hazardous Substance Condition
occurs, unless Lessee is legally responsible therefor (in which case Lessee
shall make the investigation and remediation thereof required by Applicable
Requirements and this Lease shall continue in full force and effect, but subject
to Lessor's rights under Paragraph 6.2(c) and Paragraph 13), Lessor may at
Lessor's option either (i) investigate and remediate such Hazardous Substance
Condition, if required, as soon as reasonably possible at Lessor's expense, in
which event this Lease shall continue in full force and effect, or (ii) if the
estimated cost to investigate and remediate such condition exceeds twelve (12)
times the then monthly Base Rent or $100,000, whichever is greater, give written
notice to Lessee within thirty (30) days after receipt by Lessor of knowledge
of the occurrence of such Hazardous Substance Condition of Lessor's desire to
terminate this Lease as of the data sixty (60) days following the date of such 
notice. In the event Lessor elects to give such notice of Lessor's intention to
terminate this Lease, Lessee shall have the right within ten (10) days after the
receipt of such notice to give written notice to Lessor of Lessee's commitment
to pay for the excess costs of (a) Investigation and remediation of such
Hazardous Substance Condition to the extent required by Applicable Requirements,
over (b) an amount equal to twelve (12) times the then monthly Base Rent or
$100,00 whichever is greater. Lessee shall provide Lessor with the funds
required of Lessee or satisfactory assurance thereof within thirty (30 Days
following said commitment by Lessee. In such event this Lease shall continue in
full force and effect, and Lessor shall proceed to make such investigation and
remediation as soon as reasonably possible after the required funds are
available. If Lessee does not give such notice and provide the required funds or
assurance thereof within the time period specified above, this Lease shall
terminate as of the date specified in Lessor's notice of termination.
     9.8 Termination - Advance Payments. Upon termination of this Lease pursuant
to this Paragraph 9, Lessor shall return to Lessee any advance payment made by
Lessee to Lessor and so much of Lessee's Security Deposit as has not been, or is
not then required to be, used by Lessor under the terms of this Lease. 
     9.9 Waiver of Statutes. Lessor and Lessee agree that the terms of this
Lease shall govern the effect of any damage to or destruction of the Premises
and the Building with respect to the termination of this Lease and hereby waive
the provisions of any present or future statute to the extent it is consistent
herewith.
10.  Real Property Taxes.
     10.1  Payment of Taxes.  Lessor shall pay the Real Property Taxes, as 
defined in Paragraph 10.2(a), applicable to the Industrial Center, and except 
as otherwise provided in Paragraph 10.3, any increases in such amounts over the 
Base Real Property Taxes shall be included in the calculation of Common Area
Operating Expenses in accordance with the provisions of Paragraph 4.2.
     10.2 Real Property Tax Definitions.          
          (a) As used herein, the term  "Real Property Taxes" shall include any 
form of real estate tax or assessment, general, special, ordinary or 
extraordinary, and any license fee, commercial rental tax, improvement bond or 
bonds, levy or tax (other than inheritance, personal income or estate taxes) 
imposed upon the Industrial Center by any authority having the direct or 
indirect power to tax, including any city, state or federal government, or any 
school, agricultural, sanitary, fire, street, drainage, or other improvement 
district thereof, levied against any legal or equitable interest or Lessor in 
the Industrial Center or any portion thereof, Lessor's right to rent or other
income therefrom, and/or Lessor's business of leasing the Premises. The term
"Real Property Taxes" will also include any tax, fee, levy, assessment or
charge, or any increase therein, imposed by reason of events occurring, or
changes in Applicable Law taking effect, during the term of this Lease,
including but not limited to a change in the ownership of the Industrial Center
or in the improvements thereon, the execution of this Lease, or any
modification, amendment or transfer thereof, and whether or not contemplated by
the Parties.
          (b) As used herein, the term "Base Real Property Taxes" shall be the 
amount of Real Property Taxes which are assessed against the Premises, Building 
or Common Areas in the calendar year during which the Lease is executed.  In 
calculating Real Property Taxes for any calendar year, the Real Property Taxes 
for any real estate tax year shall be included in the calculation of Real 
Property Taxes for such calendar year based upon the number of days which
such calendar year and tax year have in common.
     10.3  Additional Improvements.  Common Area Operating Expenses shall not
include Real Property Taxes specified in the tax assessor's records work sheets
as being caused by additional improvements placed upon the Industrial Center by
other lessees or by Lessor for the exclusive enjoyment of such other lessees.
Notwithstanding Paragraph 10.1 hereof, Lessee shall, however, pay to Lessor at
the time Common Area Operating Expenses are payable under Paragraph 4.2, the
entirety of any increase in Real Property Taxes if assessed solely by reason of
Alterations, Trade Fixtures or Utility Installations placed upon the Premises by
Lessee or at Lessee's request.
     10.4  Joint Assessment.  If the Building is not separately assessed, Real 
Property Taxes allocated to the Building shall be an equitable proportion of the
Real Property Taxes for all of the land and improvements included within the tax
parcel assessed, such proportion to be determined by Lessor from the respective 
valuations assigned in the assessor's work sheets or such other information as 
may be reasonably available.  Lessor's reasonable determination thereof, in good
faith, shall be conclusive.
     10.5  Lessee's Property Taxes.  Lessee shall pay prior to delinquency all 
taxes assessed against and levied upon Lessee-Owned Alterations and Utility 
Installations, Trade Fixtures, furnishings, equipment and all personal property 
of Lessee contained in the Premises or stored within the Industrial Center.  
When possible, Lessee shall cause its Lessee-Owned Alterations and Utility 
Installations, Trade Fixtures, furnishings, equipment and all other personal 
property to be assessed and billed separately from the real property of Lessor. 
If any of Lessee's said property shall be assessed with Lessor's real property, 
Lessee shall pay Lessor the taxes attributable to Lessee's property within ten 
(10) days after receipt of a written statement setting forth the taxes
applicable to Lessee's property.
11.  Utilities.  Lessee shall pay directly for all utilities and services 
supplied to the Premises, including, but not limited to, electricity, telephone,
security, gas and cleaning of the Premises, together with any taxes thereon.  If
any such utilities or services are not separately metered to the Premises or 
separately billed to the Premises, Lessee shall pay to Lessor a reasonable 
proportion to be determined by Lessor of all such charges jointly metered or 
billed with other premises in the Building, in the manner and within the time 
periods set forth in Paragraph 4.2(d).
12.  Assignment and Subletting.
     12.1 Lessor's Consent Required.
          (a) Lessee shall not voluntarily or by operation of law assign, 
transfer, mortgage or otherwise transfer or encumber (collectively, "assign") or
sublet all or any part of Lessee's interest in this Lease or in the Premises 
without Lessor's prior written consent given under and subject to the terms of 
Paragraph 36.
          (b) A change in the control of Lessee shall constitute an assignment 
requiring Lessor's consent.  The transfer, on a cumulative basis, of twenty-five
percent (25%) or more of the voting control of Lessee shall constitute a change 
in control for this purpose.
          (c) The involvement of Lessee or its assets in any transaction, or 
series of transactions (by way of merger, sale, acquisition, financing, 
refinancing, transfer, leveraged buy-out or otherwise), whether or not a formal 
assignment or hypothecation of this Lease or Lessee's assets occurs, which 
results or will result in a reduction of the Net Worth of Lessee, as hereinafter
defined, by an amount equal to or greater than twenty-five percent (25%) of such
Net Worth of Lessee as it was represented to Lessor at the time of full
execution and delivery of this Lease or at the time of the most recent
assignment to which Lessor has consented, or as it exists immediately prior to
said transaction or transactions constituting such reduction, at whichever time
said Net Worth of Lessee was or is greater, shall be considered an assignment
of this Lease by Lessee to which Lessor may reasonably withhold its consent.
"Net Worth of Lessee" for purposes of this Lease shall be the net worth of
Lessee (excluding any Guarantors) established under generally accepted
accounting principles consistently applied.
          (d) An assignment or subletting of Lessee's interest in this Lease 
without Lessor's specific prior written consent shall, at Lessor's option, be a 
Default curable after notice per Paragraph 13.1, or a non-curable Breach without
the necessity of any notice and grace period.  If Lessor elects to treat such 
unconsented to assignment of subletting as a non-curable Breach, Lessor shall 
have the right to either; (i) terminate this Lease, or (ii) upon thirty (30) 
days' written notice ("Lessor's Notice"), increase the monthly Base Rent for the
Premises to the greater of the then fair market rental value of the Premises, as
reasonably determined by Lessor, or one hundred ten percent (110%) of the Base 
Rent then in effect.  Pending determination of the new fair market rental 
value, if disputed by Lessee, Lessee shall pay the amount set forth in Lessor's 
Notice, with any overpayment credited against the next installment(s) of Base 
Rent coming due, and any underpayment for the period retroactively to the 
effective date of the adjustment being due and payable immediately upon the 
determination thereof.  Further, in the event  of such Breach and rental 
adjustment, (i) the purchase price of any option to purchase the Premises held 
by Lessee shall be subject to similar adjustment to the then fair market value 
as reasonably determined by Lessor (without the Lease being considered an 
encumbrance or any deduction for depreciation or obsolescence, and considering 
the Premises at its highest and best use and in good condition) or one hundred 
ten percent (110%) of the price previously in effect, (ii) any index-oriented 
rental or price adjustment formulas contained in this Lease shall be

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adjusted to require that the base index be determined with reference to the
index applicable to the time of such adjustment, and (iii) any fixed rental 
adjustments scheduled during the remainder of the Lease term shall be increased 
in the same ratio as the new rental bears to the Base Rent in effect immediately
prior the adjustment specified in Lessor's Notice.
           (e) Lessee's remedy for any breach this Paragraph 12.1 by Lessor 
shall be limited to compensatory damages and/or injunctive relief.
     12.2  Terms and Conditions Applicable to Assignment and Subletting.
           (a) Regardless of Lessor's consent, any assignment or subletting
shall not (i) be effective without the express written assumption by such 
assignee or sublessee of the obligations of Lessee under this Lease (ii) release
Lessee of any obligations hereunder, nor (iii) alter the primary liability of 
Lessee for the payment of Base Rent and other sums due Lessor hereunder or for 
the performance of any other obligations to be performed by Lessee under this 
Lease.
           (b) Lessor may accept any rent or performance of Lessee's obligations
from any person other than Lessee pending approval or disapproval of an 
assignment.  Neither a delay in the approval or disapproval of such assignment 
nor the acceptance of any rent for performance shall constitute a waiver or 
estoppel of Lessor's right to exercise its remedies for the Default or Breach by
Lessee of any of the terms, covenants or conditions of this Lease.
           (c) The consent of Lessor to any assignment or subletting shall not 
constitute a consent to any subsequent assignment or subletting by Lessee or to 
any subsequent or successive assignment or subletting by the assignee or 
sublessee.  However, Lessor may consent to subsequent sublettings and 
assignments of the sublease or any amendments or modifications thereto without 
notifying Lessee or anyone else liable under this Lease or the sublease and 
without obtaining their consent, and such action shall not relieve such persons 
from liability under this Lease or the sublease.
           (d) In the event of any Default or Breach of Lessee's obligation 
under this Lease, Lessor may proceed directly against Lessee, any Guarantors or 
anyone else responsible for the performance of the Lessee's obligations under 
this Lease, including any sublessee, without first exhausting Lessor's remedies 
against any other person or entity responsible therefore to Lessor, or any 
security held by Lessor.
           (e) Each request for consent to an assignment or subletting shall be
in writing, accompanied by information relevant to Lessor's determination as to
the financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, including, but not limited to, the intended use and/or
required modification of the Premises, if any, together with a non refundable
deposit of $1,000 or ten percent (10%) of the monthly Base Rent applicable to
the portion of the Premises which is the subject of the proposed assignment or
sublease, whichever is greater, as reasonable consideration for Lessor's
considering and processing the request for consent. Lessee agrees to provide
Lessor with such other or additional information and/or documentation as may be
reasonably requested by Lessor.
           (f) Any assignee of, or sublessee under, this Lease shall, by reason 
of accepting such assignment or entering into such sublease, be deemed, for the 
benefit of Lessor, to have assumed and agreed to conform and comply with each 
and every term, covenant, condition and obligation herein to be observed or 
performed by Lessee during the term of said assignment or sublease, other than 
such obligations as are contrary to or inconsistent with provisions of an 
assignment or sublease to which Lessor has specifically consented in writing.
           (g) The occurrence of a transaction described in Paragraph 12.2(c) 
shall give Lessor the right (but not the obligation) to require that the 
Security Deposit be increased by an amount equal to six (6) times the then 
monthly Base Rent, and Lessor may make the actual receipt by Lessor of the 
Security Deposit increase a condition to Lessor's consent to such transaction.
           (h) Lessor, as a condition to giving its consent to any assignment or
subletting, may require that the amount and adjustment schedule of the rent 
payable under this Lease be adjusted to what is then the market value and/or 
adjustment schedule for property similar to the Premises as then constituted, as
determined by Lessor.
      12.3  Additional Terms and Conditions Applicable to subletting.  The 
following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly Incorporated there:
           (a) Lessee hereby assigns and transfers to Lessor all of Lessee's 
interest in all rentals and income arising from any sublease of all or a portion
of the Premises heretofore or hereafter made by Lessee, and Lessor may collect 
such rent and income and apply same toward Lessee's obligations under this
Lease: provided, however, that until a Breach (as defined in Paragraph 13.1) 
shall occur in the performance of Lessee's obligations under this Lease, Lessee 
may, except as otherwise provided in this Lease, receive, collect enjoy the
rents accruing under such sublease. Lessor shall not, by reason of the foregoing
provision or any other assignment of such sublease to Lessor, nor by reason of
the collection of the rents from a sublessee, be deemed liable to the sublessee
for any failure of Lessee to perform and comply with any of Lessee's obligations
to such sublessee under such Sublease. Lessee hereby irrevocably authorizes and
directs any such sublessee, upon receipt of a written notice from Lessor stating
that a Breach exists in the performance of Lessee's obligations under this
Lease, to pay to Lessor the rents and other charges due and to become due under
the sublease. Sublessee shall rely upon any such statement and request from
Lessor and shall pay such rents and other charges to Lessor without any
obligation or right to inquire as to whether such Breach exists and
notwithstanding any notice from or claim from Lessee to the contrary. Lessee
shall have no right or claim against such sublessee, or, until the Breach has
been cured, against Lessor, for any such rents and other charges so paid by said
sublessee to Lessor.
           (b) In the event of a Breach by Lessee in the performance of its 
obligations under this Lease, Lessor, at its option and without any obligation 
to do so, may require any sublessee to attorn to Lessor, in which event Lessor 
shall undertake the obligations of the sublessor under such sublease from the 
time of the exercise of said option to the expiration of such sublease;
provided, however, Lessor shall not be liable for any prepaid rents or security 
deposit paid by such sublessee to such sublessor or for any other prior defaults
or breaches of such sublessor under such sublease.
           (c) Any matter or thing requiring the consent of the sublessor under
a sublease shall also require the consent of Lessor herein.
           (d) No sublessee under a sublease approved by Lessor shall further 
assign or sublet all of any part of the Premises without Lessor's prior 
written consent.
           (e) Lessor shall deliver a copy of any notice of Default of Breach by
Lessee to the sublessee, who shall have the right to cure the Default of Lessee 
within the grace period, if any, specified in such notice.  The sublessee shall 
have a right of reimbursement and offset from and against Lessee for any such 
Defaults cured by the sublessee.
13.  Default; Breach; Remedies.
     13.1   Default; Breach.  Lessor and Lessee agree that if an attorney is 
consulted by Lessor in connection with a Lessee Default or Breach (as 
hereinafter defined), $350.00 is a reasonable minimum sum per such occurrence 
for legal services and costs in the preparation and service of a notice of 
Default, and that Lessor may include the cost of such services and costs in said
notice as rent due and payable to cure said default.  A "Default" by Lessee is 
defined as a failure by Lessee to observe, comply with or perform any of the 
terms, covenants, conditions or rules applicable to Lessee under this Lease. 
A "Breach" by Lessee is defined as the occurrence of any one or more of the 
following Defaults, and where a grace period for cure after notice is specified 
herein, the failure by Lessee to cure such Default prior to the expiration of 
the applicable grace period, and shall entitle Lessor to pursue the remedies 
set forth in Paragraphs 13.2 and/or 13.3:
           (a) The vacating of the Premises without the intention to reoccupy 
same, or the abandonment of the Premises.
           (b) Except as expressly otherwise provided in this Lease, the failure
by Lessee to make any payment of Base Rent, Lessee's Share of Common Area 
Operating Expenses, or any other monetary payment required to be made by Lessee 
hereunder as and when due, the failure by Lessee to provide Lessor with 
reasonable evidence of insurance or surety bond required under this Lease, or 
failure of Lessee to fulfill any obligation under this lease which endangers or 
threatens life or property, where such failure continues for a period of three 
(3) days following written notice thereof by or on behalf of Lessor to lessee.
           (c) Except as expressly otherwise provided in this Lease, the failure
by Lessee to provide Lessor with reasonable written evidence (in duly executed 
original form, if applicable) of (i) compliance with Applicable Requirements per
Paragraph 6.3, (ii) the inspection, maintenance and service contracts required 
under Paragraph 7.1(b), (iii) the rescission of an unauthorized assignment or 
subletting per Paragraph 12.1, (iv) a Tenancy Statement per Paragraphs 16 or 37.
(v) the subordination or non-subordination of this Lease per Paragraph 30, (vi)
the guaranty of the performance of Lessee's obligations under this Lease if 
required under Paragraphs 1.11 and 37, (vii)) the execution of any document 
requested under Paragraph 42 (easements), or (viii) any other under this
documentation or information which Lessor may reasonably require of Lessee under
the terms of this Lease, where any such failure continues for a period of ten 
(10) days following written notice by or on behalf of Lessor to Lessee.
           (d) A Default by Lessee as to the terms, covenants, conditions or 
provisions of this Lease, or of the rules adopted under Paragraph 40 hereof that
are to be observed, complied with or performed by Lessee, other than those 
described in subparagraphs 13.1(a), (b) or (c), above, where such Default 
continues for a period of thirty (30) days after written notice thereof by or on
behalf of Lessor to Lessee; provided, however, that if the nature of Lessee's 
Default is such that more than thirty (30) days are reasonably required for its 
cure, then it shall not be deemed to be a Breach of this Lease by Lessee if 
Lessee commences such cure within said thirty (30) day period and thereafter 
diligently prosecutes such cure to completion.
           (e) The occurrence of any of the following events: (i) the making by
Lessee of any general arrangement or assignment for the benefit of

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creditors; (ii) Lessee's becoming a "debtor" as defined in 11 U.S. Code Section 
101 or any successor statue thereto (unless, in the case of a petition filed 
against Lessee, the same is dismissed within sixty (60) days); (iii) the 
appointment of a trustee or receiver to take possession of substantially all of 
Lessee's assets located at the Premises or of Lessee's interest in this Lease, 
where possession is not restored to Lessee within thirty (30) days; or (iv) the 
attachment, execution or other judicial seizure of substantially all of Lessee's
assets located at the Premises or of Lessee's interest in this Lease, where such
seizure is not discharge within thirty (30) days; provided, however, in the 
event that any provision of this Subparagraph 13.1(e) is contrary to any 
applicable law, such provision shall be of no force or effect, and shall not 
affect the validity of the remaining provisions.
          (f) The discovery by Lessor that any financial statement of Lessee or 
of any Guarantor, given to Lessor by Lessee or any Guarantor, was materially 
false.
          (g) If the performance of Lessee's obligations under this Lease is 
guaranteed: (i) the death of a Guarantor, (ii) the termination of a Guarantor's 
liability with respect to this Lease other than in accordance with the terms of 
such guaranty, (iii) a Guarantor's becoming insolvent or the subject of a 
bankruptcy filing, (iv) a Guarantor's refusal to honor the guaranty, or (v) a 
Guarantor's breach of its guaranty obligation on an anticipatory breach basis, 
and Lessee's failure, within sixty (60) days following written notice by or on 
behalf of Lessor to Lessee of any such event, to provide Lessor with written 
alternative assurances of security, which, when coupled with the then existing 
resources of Lessee, equals or exceeds the combined financial resources of 
Lessee and the Guarantors that existed at the time of execution of this Lease.
     13.2  Remedies.  If Lessee fails to perform any affirmative duty or 
obligation of Lessee under this Lease, within ten (10) days after written notice
to Lessee (or in case of an emergency, without notice), Lessor may, at its 
option (but without obligation to do so), perform such duty or obligation on 
Lessee's behalf, including, but not limited to, the obtaining of reasonably 
required bonds, insurance policies, or governmental licenses, permits or 
approvals.  The costs and expenses of any such performance by Lessor shall be 
due and payable by Lessee to Lessor upon invoice therefor.  If any check given 
to Lessor by Lessee shall not be honored by the bank upon which it is drawn, 
Lessor, at its own option, may require all future payments to be made under this
Lease by Lessee to be made only by cashier's check.  In the event of a Breach of
this Lease by Lessee (as defined in paragraph 13.1), with or without further 
notice or demand, and without limiting Lessor in the exercise of any right or 
remedy which Lessor may have by reason of such Breach, Lessor may:
          (a) Terminate Lessee's right to possession of the Premises by any 
lawful means, in which case this Lease and the term hereof shall terminate and 
Lessee shall immediately surrender possession of the Premises to Lessor.  In 
such event Lessor shall be entitled to recover from Lessee: (i) the worth at the
time of the award of the unpaid rent which had been earned at the time of 
termination; (ii) the worth at the time of award of the amount by which the 
unpaid rent which would have been earned after termination until the time of 
award exceeds the amount of such rental loss that the Lessee proves could have 
been reasonably avoided; (iii) the worth at the time of award of the amount by 
which the unpaid rent for the balance of the term after the time of award 
exceeds the amount of such rental loss that the Lessee proves could be
reasonably avoided; and (iv) any other amount necessary to compensate Lessor for
all the detriment proximately caused by the Lessee's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including, but not limited to, the cost of
recovering possession of the Premises, expenses of reletting, including
necessary renovation and alteration of the Premises, reasonable attorneys' fees,
and that portion of any leasing commission paid by Lessor in connection with
this Lease applicable to the unexpired term of this Lease. The worth at the time
of award of the amount referred to in provision (iii) of the immediately
preceding sentence shall be computed by discounting such amount at the discount
rate of the Federal Reserve Bank of San Francisco or the Federal Reserve Bank
District in which the Premises are located at the time of award plus one percent
(1%). Efforts by Lessor to mitigate damages caused by Lessee's Default or Breach
of this Lease shall not waive Lessor's right to recover damages under this
Paragraph 13.2. If termination of this Lease is obtained through the provisional
remedy of unlawful detainer, Lessor shall have the right to recover in such
proceeding the unpaid rent and damages as are recoverable therein, or Lessor may
reserve the right to recover all or any part thereof in a separate suit for such
rent and/or damages. If a notice and grace period required under Subparagraph
13.1(b), (c) or (d) was not previously given, a notice to pay rent or quit, or
to perform or quit, as the case may be, given to Lessee under any statute
authorizing the forfeiture of leases for unlawful detainer shall also constitute
the applicable notice for grace period purposes required by Subparagraph
13.1(b), (c) or (d). In such case, the applicable grace period under the
unlawful detainer statute shall run concurrently after the one such statutory
notice, and the failure of Lessee to cure the Default within the greater of the
two (2) such grace periods shall constitute both an unlawful detainer and a
Breach of this Lease entitling Lessor to the remedies provided for in this Lease
and/or by said statute.
          (b) Continue the Lease and Lessee's right to possession in effect (in 
California under California Civil Code Section 1951.4) after Lessee's Breach and
recover the rent as it becomes due, provided Lessee has the right to sublet or 
assign, subject only to reasonable limitations.  Lessor and Lessee agree that 
the limitations on assignment and subletting in this Lease are reasonable.  Acts
of maintenance or preservation, efforts to relet the Premises, or the 
appointment of a receiver to protect the Lessor's interest under this Lease, 
shall not constitute a termination of the Lessee's right to possession.
          (c) Pursue any other remedy now or hereafter available to Lessor under
the laws or judicial decisions of the state wherein the Premises are located.
          (d) The expiration or termination of this Lease and/or the termination
of Lessee's right to possession shall not relieve Lessee from liability under 
any indemnity provisions of this Lease as to matters occurring or accruing 
during the term hereof or by reason of Lessee's occupancy of the Premises.
     13.3  Inducement Recapture in Event of Breach.  Any agreement by Lessor for
free or abated rent or other charges applicable to the Premises, or for the 
giving or paying by Lessor to or for Lessee of any cash or other bonus, 
inducement or consideration for Lessee's entering into this Lease, all of which 
concessions are hereinafter referred to as "Inducement Provisions" shall be 
deemed conditioned upon Lessee's full and faithful performance of all of the 
terms, covenants and conditions of this Lease to be performed or observed by 
Lessee during the term hereof as the same may be extended.  Upon the occurrence 
of a Breach (as defined in Paragraph 13.1) of this Lease by Lessee, any such 
Inducement Provision shall automatically be deemed deleted  from this Lease and 
of no further force or effect, and any rent, other charge, bonus, inducement or 
consideration theretofore abated, given or paid by Lessor under such an 
Inducement Provision shall be immediately due and payable by Lessee to Lessor, 
and recoverable by Lessor, as additional rent due under this Lease, 
notwithstanding any subsequent cure of said Breach by Lessee.  The acceptance by
Lessor of rent or the cure of the Breach which initiated the operation of this 
Paragraph 13.3 shall not be deemed a waiver by Lessor of the provisions of this 
Paragraph 13.3 unless specifically so stated in writing by Lessor at the time of
such acceptance.
     13.4  Late Charges.  Lessee hereby acknowledges that late payment by Lessee
to Lessor of rent and other sums due hereunder will cause Lessor to incur costs 
not contemplated by this Lease, the exact amount of which will be extremely 
difficult to ascertain.  Such costs include, but are not limited to, processing 
and accounting charges, and late charges which may be imposed upon Lessor by the
terms of any ground lease, mortgage or deed of trust covering the Premises.  
Accordingly, if any installment of rent or other sum due from Lessee shall not 
be received by Lessor or Lessor's designee within ten (10) days after such 
amount shall be due, then, without any requirement for notice to Lessee, Lessee 
shall pay to Lessor a late charge equal to ten percent (10%) of such overdue 
amount.  The parties hereby agree that such late charge represents a fair and 
reasonable estimate of the costs Lessor will incur by reason of late payment by 
Lessee.  Acceptance of such late charge by Lessor shall in no event constitute a
waiver of Lessee's Default or Breach with respect to such overdue amount, nor 
prevent Lessor from exercising any of the other rights and remedies granted 
hereunder.  In the event that a late charge is payable hereunder, whether or not
collected, for three (3) consecutive installments of Base Rent, then 
notwithstanding Paragraph 4.1 or any other provision of this Lease to the 
contrary, Base Rent shall, at Lessor's option, become due and payable quarterly 
in advance.
     13.5  Breach by Lessor.  Lessor shall not be deemed in breach of this Lease
unless Lessor falls within a reasonable time to perform an obligation required 
to be performed by Lessor.  For purposes of this Paragraph 13.5, a reasonable 
time shall in no event be less than thirty (30) days after receipt by Lessor, 
and by any Lender(s) whose name and address shall have been furnished to Lessee 
in writing for such purpose, of written notice specifying wherein such 
obligation of Lessor has not been performed; provided, however, that if the 
nature of Lessor's obligation is such that more than thirty (30) days after such
notice are reasonably required for its performance, then Lessor shall not be in 
breach of this Lease if performance is commenced within such thirty (30) day 
period and thereafter diligently pursued to completion.
14.  Condemnation.  If the Premises or any portion thereof are taken under the 
power of eminent domain or sold under the threat of the exercise of said power 
(all of which are herein called "condemnation"), this Lease shall terminate as 
to the part so taken as of the date the condemning authority takes title or 
possession, whichever first occurs.  If more than ten percent (10%) of the floor
area of the Premises, or more than twenty-five percent (25%) of the portion of 
the Common Areas designated for Lessee's parking, is taken by condemnation, 
Lessee may, at Lessee's option, to be exercised in writing within ten (10) days 
after Lessor shall have given Lessee written notice of such taking (or in the 
absence of such notice, within ten (10) days after the condemning authority 
shall have taken possession) terminate this Lease as of the date the condemning 
authority takes such possession.  If Lessee does not terminate this Lease in 
accordance with the foregoing, this Lease shall remain in full force and effect 
as to the portion of the Premises remaining, except that the Base Rent shall be 
reduced in the same proportion as the rentable floor area of the Premises taken 
bears to the total rentable floor area of the Premises.  No reduction of Base 
Rent shall occur if the condemnation does not apply to any portion of the 
Premises.  Any award for the taking of all or any part of the Premises under the
power of eminent domain or any payment made under threat of the exercise of such
power shall be the property of Lessor, whether such award shall be

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made as compensation for diminution of value of the leasehold or for the taking 
of the fee, or as severance damages; provided, however, that Lessee shall be 
entitled to any compensation, separately awarded to Lessee for Lessee's 
relocation expenses and/or loss of Lessee's Trade Fixtures. In the event that 
this lease is not terminated by reason of such condemnation, Lessor shall to the
extent of its net severance damages received, over and above Lessee's share of 
the legal and other expenses incurred by Lessor in the condemnation matter, 
repair any damage to the Premises caused by such condemnation authority. Lessee 
shall be responsible for the payment of any amount in excess of such net 
severance damages required to complete such repair.
15.  Brokers' Fees
     15.1 Procuring Cause. The Broker(s) named in Paragraph 1.10 is/are the 
procuring cause of this Lease.
     15.4 Representations and Warranties. Lessee and Lessor each represent and 
warrant to the other that it has had no dealings with any person, firm, broker 
or finder other than as named in Paragraph 1.10(a) in connection with the 
negotiation of this Lease and/or the consummation of the transaction 
contemplated hereby, and that no broker or other person, firm or entity other 
than said named Broker(s) is entitled to any commission or finder's fee in 
connection with said transaction. Lessee and Lessor do each hereby agree to 
indemnify, protect, defend and hold the other harmless from and against 
liability for compensation or charges which may be claimed by any such unnamed 
broker, finder or other similar party by reason of any dealings or actions of 
the Indemnifying Party, including any costs, expenses, and/or attorneys' fees 
reasonably incurred with respect thereto.
16.  Tenancy and Financial Statements.
     16.1 Tenancy Statement. Each Party (as "Responding Party") shall within ten
(10) days after written notice from the other Party (the "Requesting Party") 
execute, acknowledge and deliver to the Requesting Party a statement in writing 
in a form similar to the then most current "Tenancy Statement" form published 
by the American Industrial Real Estate Association, plus such additional 
information, confirmation and/or statements as may be reasonably requested by 
the Requesting Party.
     16.2 Financial Statement. If Lessor desires to finance, refinance, or sell 
the Premises or the Building, or any part thereof, Lessee and all Guarantors 
shall deliver to any potential lender or purchaser designated by Lessor such 
financial statements of Lessee and such Guarantors as may be reasonably required
by such lender or purchaser, including, but not limited to, Lessee's financial 
statements for the past three (3) years. All such financial statements shall be 
received by Lessor and such lender or purchaser in confidence and shall be used 
only for the purposes herein set forth.
17.  Lessor's Liability. The term "Lessor" as used herein shall mean the owner 
or owners at the time in question of the fee title to the Premises. In the event
of a transfer of Lessor's title or interest in the Premises or in this Lease, 
Lessor shall deliver to the transferee or assignee (in cash or by credit) any 
unused Security Deposit held by Lessor at the time of such transfer or 
assignment. Except as provided in Paragraph 15.3, upon such transfer or 
assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor 
shall be relieved of all liability with respect to the obligations and/or 
covenants under this Lease thereafter to be performed by the Lessor. Subject to 
the foregoing, the obligations and/or covenants in this Lease to be performed by
the Lessor shall be binding only upon the Lessor as hereinabove defined.
18.  Severability. The invalidity of any provision of this Lease, as determined 
by a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.
19.  Interest on Past-Due Obligations. Any monetary payment due Lessor 
hereunder, other than late charges, not received by Lessor within ten (10) days 
following the date on which it was due, shall bear interest from the date due at
the prime rate charged by the largest state chartered bank in the state in which
the Premises are located plus four percent (4%) per annum, but not exceeding the
maximum rate allowed by law, in addition to the potential late charge provided 
for in Paragraph 13.4.
20.  Time of Essence. Time is of the essence with respect to the performance of 
all obligations to be performed or observed by the Parties under this Lease.
21.  Rent Defined. All monetary obligations of Lessee to Lessor under the terms 
of this Lease are deemed to be rent.
22.  No Prior or other Agreements; Broker Disclaimer. This Lease contains all 
agreements between the Parties with respect to any matter mentioned herein, and 
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each represents and warrants to the Brokers that it has made, 
and is relying solely upon, its own investigation as to the nature, quality,
character and financial responsibility of the other Party to this Lease and as
to the nature, quality and character of the Premises. Brokers have no
responsibility with respect thereto or with respect to any default or breach
hereof by either Party. Each Broker shall be an intended third party beneficiary
of the provisions of this Paragraph 22.
23.  Notices.
     23.1 Notice Requirements. All notices required or permitted by this Lease 
shall be in writing and may be delivered in person (by hand or by messenger or 
courier service) or may be sent by regular, certified or registered mail or U.S.
Postal Service Express Mail, with postage prepaid, or by facsimile transmission 
during normal business hours, and shall be deemed sufficiently given if served 
in a manner specified in this Paragraph 23. The addresses noted adjacent to a 
Party's signature on this Lease shall be that Party's address for delivery or 
mailing of notice purposes. Either Party may by written notice to the other
specify a different address for notice purposes, except that upon Lessee's
taking possession of the Premises, the Premises shall constitute Lessee's
address for the purpose of mailing or delivering notices to Lessee. A copy of
all notices required or permitted to be given to Lessor hereunder shall be
concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate by written notice to Lessee.
     23.2 Date of Notice. Any notice sent by registered or certified mail, 
return receipt requested, shall be deemed given on the date of delivery shown on
the receipt card, or if no delivery date is shown, the postmark thereon. If sent
by regular mail, the notice shall be deemed given forty-eight (48) hours after 
the same is addressed as required herein and mailed with postage prepaid. 
Notices delivered by United States Express Mail or overnight courier that 
guarantees next day delivery shall be deemed given twenty-four (24) hours after 
delivery of the same to the United States Postal Service or courier. If any 
notice is transmitted by facsimile transmission or similar means, the same shall
be deemed served or delivered upon telephone or facsimile confirmation of 
receipt of the transmission thereof, provided a copy is also delivered via 
delivery or mail. If notice is received on a Saturday or a Sunday or a legal 
holiday, it shall be deemed received on the next business day.
24.  Waivers. No waiver by Lessor of the Default or Breach of any term, covenant
or condition hereof by Lessee, shall be deemed a waiver of any other term, 
covenant or condition hereof, or of any subsequent Default or Breach by Lessee 
of the same or any other term, covenant or condition hereof. Lessor's consent 
to, or approval of, any such act shall not be deemed to render unnecessary the 
obtaining of Lessor's consent to, or approval of, any subsequent or similar act 
by Lessee, or be construed as the basis of an estoppel to enforce the provision 
or provisions of this Lease requiring such consent. Regardless of Lessor's 
knowledge of a Default or Breach at the time of accepting rent, the acceptance 
of rent by Lessor shall not be a waiver of any Default or Breach by Lessee of 
any provision hereof. Any payment given Lessor by Lessee may be accepted by 
Lessor on account of monies or damages due Lessor, notwithstanding any 
qualifying statements or conditions made by Lessee in connection therewith, 
which such statements and/or conditions shall be of no force or effect 
whatsoever unless specifically agreed to in writing by Lessor at or before the 
time of deposit of such payment.
25.  Recording. Either Lessor or Lessee shall, upon request of the other, 
execute, acknowledge and deliver to the other a short form memorandum of this 
Lease for recording purposes. The Party requesting recordation shall be 
responsible for payment of any fees or taxes applicable thereto.
26.  No Right to Holdover. Lessee has no right to retain possession of the 
Premises or any part thereof beyond the expiration or earlier termination of 
this Lease. In the event that Lessee holds over in violation of this Paragraph 
26 then the Base Rent payable from and after the time of the expiration or 
earlier termination of this Lease shall be increased to two hundred percent 
(200%) of the Base Rent applicable during the month immediately preceding such 
expiration or earlier termination. Nothing contained herein shall be construed 
as a consent by Lessor to any holding over by Lessee.
27.  Cumulative Remedies. No remedy or election hereunder shall be deemed 
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
28.  Covenants and Conditions. All provisions of this Lease to be observed or 
performed by Lessee are both covenants and conditions.

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29.  Binding Effect; Choice of Law.  This Lease shall be binding upon the 
Parties, their personal representatives, successors and assigns and be governed 
by the laws of the state in which the Premises are located.  Any litigation 
between the Parties hereto concerning this Lease shall be initiated in the 
county in which the Premises are located.
30.  Subordination; Attornment; Non-Disturbance.
     30.1  Subordination.  This Lease and any Option granted hereby shall be 
subject and subordinate to any ground lease, mortgage, deed of trust, or other 
hypothecation or security device (collectively, "Security Device"), now or 
hereafter placed by Lessor upon the real property of which the Premises are a 
part, to any and all advances made on the security thereof, and to all renewals,
modifications, consolidations, replacements and extensions thereof.  Lessee 
agrees that the Lenders holding any such Security Device shall have no duty, 
liability or obligation to perform any of the obligations of Lessor under this 
Lease, but that in the event of Lessor's default with respect to any such 
obligation, Lessee will give any Lender whose name and address have been 
furnished Lessee in writing for such purpose notice of Lessor's default pursuant
to Paragraph 13.5.  If any Lender shall elect to have this Lease and/or any 
Option granted hereby superior to the lien of its Security Device and shall give
written notice thereof to Lessee, this Lease and such Options shall be deemed 
prior to such Security Device, notwithstanding the relative dates of the 
documentation or recordation thereof.
     30.2  Attornment.  Subject to the non-disturbance provisions of Paragraph 
30.3, Lessee agrees to attorn to a Lender or any other party who acquires 
ownership of the Premises by reason of a foreclosure of a Security Device, and 
that in the event of such foreclosure, such new owner shall not: (i) be liable 
for any act or omission of any prior lessor or with respect to events occurring 
prior to acquisition of ownership, (ii) be subject to any offsets or defenses 
which Lessee might have against any prior lessor, or (iii) be bound by 
prepayment of more than one (1) month's rent.
     30.3  Non-Disturbance.  With respect to Security Devices entered into by 
Lessor after the execution of this Lease, Lessee's subordination of this Lease 
shall be subject to receiving assurance (a "non-disturbance agreement") from the
Lender that Lessee's possession and this Lease, including any options to extend 
the term hereof, will not be disturbed so long as Lessee is not in Breach hereof
and attorns to the record owner of the Premises.
     30.4  Self-Executing.  The agreements contained in this Paragraph 30 shall 
be effective without the execution of any further documents; provided, however, 
that upon written request from Lessor or a Lender in connection with a sale, 
financing or refinancing of Premises, Lessee and Lessor shall execute such 
further writings as may be reasonably required to separately document any such 
subordination or non-subordination, attornment and/or non-disturbance agreement 
as is provided for herein.
31.  Attorneys' Fees.  If any Party or Broker brings an action or proceeding to 
enforce the terms hereof or declare rights hereunder, the Prevailing Party (as 
hereafter defined) in any such proceeding, action, or appeal thereon, shall be 
entitled to reasonable attorneys' fees.  Such fees may be awarded in the same 
suit or recovered in a separate suit, whether or not such action or proceeding 
is pursued to decision or judgment.  The term "Prevailing Party" shall include, 
without limitation, a Party or Broker who substantially obtains or defeats the 
relief sought, as the case may be, whether by compromise, settlement, judgment, 
or the abandonment by the other Party or Broker of its claim or defense.  The 
attorneys' fee award shall not be computed in accordance with any court fee 
schedule, but shall be such as to fully reimburse all attorneys' fees reasonably
incurred.  Lessor shall be entitled to attorneys' fees, costs and expenses 
incurred in preparation and service of notices of Default and consultations in 
connection therewith, whether or not a legal action is subsequently commenced in
connection with such Default or resulting Breach.  Broker(s) shall be intended  
third part beneficiaries of this Paragraph 31.
32.  Lessor's Access; Showing Premises; Repairs.  Lessor and Lessor's agents 
shall have the right to enter the Premises at any time, in the case of an 
emergency, and otherwise at reasonable times for the purpose of showing the 
same to prospective purchasers, lenders, or lessees, and making such
alterations, repairs, improvements or additions to the Premises or to the
Building, as Lessor may reasonably deem necessary. Lessor may at any time place
on or about the Premises or Building any ordinary "For Sale" signs and Lessor
may at any time during the last one hundred eighty (180) days of the term hereof
place on or about the Premises any ordinary "For Lease" signs. All such
activities of Lessor shall be without abatement of rent or liability to Lessee.
33.  Auctions.  Lessee shall not conduct, nor permit to be conducted, either 
voluntarily or involuntarily, any auction upon the Premises without first having
obtained Lessor's prior written consent. Notwithstanding anything to the
contrary in this Lease, Lessor shall not be obligated to exercise any standard
of reasonableness in determining whether to grant such consent.
34.  Signs.  Lessee shall not place any sign upon the exterior of the Premises 
or the Building, except that Lessee may, with Lessor's prior written consent, 
install (but not on the roof) such signs as are reasonably required to advertise
Lessee's own business so long as such signs are in a location designated by 
Lessor and comply with Applicable Requirements and the signage criteria 
established for the Industrial Center by Lessor.  The installation of any sign 
on the Premises by or for Lessee shall be subject to the provisions of Paragraph
7 (Maintenance, Repairs, Utility Installations, Trade Fixtures and Alterations).
Unless otherwise expressly agreed herein, Lessor reserves all rights to the use
of the roof of the Building, and the right to install advertising signs on the 
Building, including the roof, which do not unreasonably interfere with the 
conduct of Lessee's business; Lessor shall be entitled to all revenues from such
advertising signs.
35.  Termination; Merger.  Unless specifically stated otherwise in writing by 
Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual 
termination of cancellation hereof, or a termination hereof by Lessor for 
Breach by Lessee, shall automatically terminate any sublease or lesser estate in
the Premises; provided, however, Lessor shall, in the event of any such 
surrender, termination or cancellation, have the option to continue any one or 
all of any existing subtenancies.  Lessor's failure within ten (10) days 
following any such event to make a written election to the contrary by written 
notice to the holder of any such lesser interest, shall constitute Lessor's 
election to have such event constitute the termination of such interest.
36.  Consents.
          (a) Except for Paragraph 33 hereof (Auctions) or as otherwise provided
herein, wherever in this Lease the consent of a Party is required to an act by
or for the other Party, such consent shall not be unreasonably withheld or
delayed. Lessor's actual reasonable costs and expenses (including, but not
limited to, architects', attorneys', engineers' and other consultants' fees)
incurred in the consideration of, or response to, a request by Lessee for any
Lessor consent pertaining to this Lease or the Premises, including, but not
limited to, consents to an assignment a subletting or the presence or use of a
Hazardous Substance, shall be paid by Lessee to Lessor upon receipt of an
invoice and supporting documentation therefor. In addition to the deposit
described in Paragraph 12.2(e), Lessor may, as a condition to considering any
such request by Lessee, require that Lessee deposit with Lessor an amount of
money (in addition to the Security Deposit held under Paragraph 5) reasonably
calculated by Lessor to represent the cost Lessor will incur in considering and
responding to Lessee's request. Any unused portion of said deposit shall be
refunded to Lessee without interest. Lessor's consent to any act, assignment of
this Lease or subletting of the Premises by Lessee shall not constitute an
acknowledgment that no Default or Breach by Lessee of this Lease exists, nor
shall such consent be deemed a waiver of any then existing Default or Breach,
except as may be otherwise specifically stated in writing by Lessor at the time
of such consent.
          (b) All conditions to Lessor's consent authorized by this Lease are 
acknowledged by Lessee as being reasonable.  The failure to specify herein any 
particular condition to Lessor's consent shall not preclude the impositions by 
Lessor at the time of consent of such further or other conditions as are then 
reasonable with reference to the particular matter for which consent is being 
given.
37.  Guarantor.
     37.1  Form of Guaranty.  If there are to be any Guarantors of this Lease 
per Paragraph 1.11, the form of the guaranty to be executed by each such 
Guarantor shall be in the form most recently published by the American 
Industrial Real Estate Association, and each such Guarantor shall have the same 
obligations as Lessee under this Lease, including, but not limited to, the 
obligation to provide the Tenancy Statement and information required in 
Paragraph 16.
     37.2  Additional Obligations of Guarantor.  It shall constitute a Default 
of the Lessee under this Lease if any such Guarantor fails or refuses, upon 
reasonable request by Lessor to give: (a) evidence of the due execution of the 
guaranty called for by this Lease, including the authority of the Guarantor (and
of the party signing on Guarantor's behalf) to obligate such Guarantor on said 
guaranty, and resolution of its board of directors authorizing the making of 
such guaranty, together with a certificate of incumbency showing the signatures 
of the persons authorized to sign on its behalf, (b) current financial 
statements of Guarantor as may from time to time be requested by Lessor, (c) a 
Tenancy Statement, or (d) written confirmation that the guaranty is still in 
effect.
38.  Quiet Possession.  Upon payment by Lessee of the rent for the Premises and 
the performance of all of the covenants, conditions and provisions on Lessee's 
part to be observed and performed under this Lease, Lessee shall have quiet 
possession of the Premises for the entire term hereof subject to all of the 
provisions of this Lease.
39.  Options.
     39.1  Definition.  As used in this Lease, the word "Option" has the 
following meaning: (a) the right to extend the term of this Lease or to renew 
this Lease or to extend or renew any lease that Lessee has on other property of 
Lessor; (b) the right of first refusal to lease the Premises or the right of 
first offer to lease the Premises or the right of first refusal to lease other 
property of Lessor or the right of first offer to lease other property of 
Lessor; (c) the right to purchase the Premises, or the right of first refusal to
purchase the Premises, or the right of first offer to purchase the Premises, or 
the right to purchase other property of Lessor, or the right of first refusal to
purchase other property of Lessor, or the right of first offer to purchase other
property of Lessor.

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     39.2  Opinions Personal to Original Lessee.  Each Option granted to Lessee 
in this Lease is personal to the original Lessee named in Paragraph 1.1 hereof, 
and cannot be voluntarily or involuntarily assigned or exercised by any person 
or entity other than said original Lessee while the original Lessee is in full 
and actual possession of the Premises and without the intention of thereafter 
assigning or subletting. The Options, if any, herein granted to Lessee are not 
assignable, either as part of an assignment of this Lease or separately or apart
therefrom, and no Option may be separated from this Lease in any manner, be 
reservation or otherwise.
     39.3  Multiple Options.  In the event that Lessee has any multiple Options 
to extend or renew this Lease, a later option cannot be exercised unless the 
prior Options to extend or renew this Lease have been validly exercised.
     39.4  Effect of Default on Options.  
           (a) Lessee shall have no right to exercise an Option, notwithstanding
any provision in the grant of Option to the contrary: (i) during the period 
commencing with the giving of any notice of Default under Paragraph 13.1 and 
continuing until the noticed Default is cured, or (ii) during the period of time
any monetary obligation due Lessor from Lessee is unpaid (without regard to 
whether notice thereof is given Lessee), or (iii) during the time Lessee is in 
Breach of this Lease, or (iv) in the event that Lessor has given to Lessee three
(3) or more notices of separate Defaults under Paragraph 13.1 during the twelve 
(12) month period immediately preceding the exercise of the Option, whether or 
not the Defaults are cured.
           (b) The period of time within which an Option may be exercised shall
not be extended or enlarged by reason of Lessee's inability to exercise an
Option because of the provisions of Paragraph 39.4(a).
           (c) All rights of Lessee under the provisions of an Option shall 
terminate and be of no further force or effect, notwithstanding Lessee's due and
timely exercise of the Option, if, after such exercise and during the term of 
this Lease, (i) Lessee fails to pay to Lessor a monetary obligation of Lessee 
for a period of thirty (30) days after such obligation becomes due (without any 
necessity of Lessor to give notice thereof to Lessee), or (ii) Lessor gives to 
Lessee three (3) or more notices of separate Defaults under Paragraph 13.1 
during any twelve (12) months period, whether or not the Defaults are cured, or 
(iii) if Lessee commits a Breach of this Lease.
40.  Rules and Regulations.  Lessee agrees that it will abide by, and keep and 
observe all reasonable rules and regulations ("Rules and Regulations") which 
Lessor may make from time to time for the management, safety, care, and 
cleanliness of the grounds, the parking and unloading of vehicles and the 
preservation of good order, as well as for the convenience of other occupants 
or tenants of the Building and the Industrial Center and their invitees.
41.  Security Measures.  Lessee hereby acknowledges that the rental payable to 
Lessor hereunder does not include the cost of guard service or other security 
measures, and that Lessor shall have no obligation whatsoever to provide same. 
Lessee assumes all responsibility for the protection of the Premises, Lessee,
its agents and invitees and their property from the acts of third parties.
42. Reservations. Lessor reserves the right, from time to time, to grant,
without the consent or joinder of Lessee, such easements, rights of way, utility
raceways, and dedications that Lessor deems necessary, and to cause the
recordation of parcel maps and restrictions, so long as such easements, rights
of way, utility raceways, dedications, maps and restrictions do not reasonably
interfere with the use of the Premises by Lessor. Lessee agrees to sign any
documents reasonable requested by Lessor to effectuate any such easement rights,
dedication, map or restrictions.
43.  Performance Under Protest.  If at any time a dispute shall arise as to any 
amount or sum of money to be paid by one Party to the other under the provisions
hereof, the Party against whom the obligations to pay the money is asserted 
shall have the right to make payment "under protest" and such payment shall not 
be regarded as a voluntary payment and there shall survive the right on the part
of said Party to institute suit for recovery of such sum. If it shall be 
adjusted that there was no legal obligation on the part of said Party to pay 
such sum or any part thereof, said Party shall be entitled to recover such sum 
or so much thereof as it was not legally required to pay under the provisions of
this Lease.
44.  Authority.  If either party hereto is a corporation, trust, or general or 
limited partnership, each individual executing this Lease on behalf of such 
entity represents and warrants that he or she is duly authorized to execute and
deliver this Lease on its behalf. If Lessee is a corporation, trust or 
partnership, Lessee shall, within thirty (30) days after request by Lessor, 
deliver to Lessor evidence satisfactory to Lessor of such authority.
45.  Conflict.  Any conflict between the printed provisions of this Lease and 
the typewritten or handwritten provisions shall be controlled by the typewritten
or handwritten provisions.
46.  Offer.  Preparation of this Lease by either Lessor or Lessee or Lessor's 
agent or Lessee's agent and submission of same to Lessee or Lessor shall not be 
deemed an offer to lease. This Lease is not intended to be binding until 
executed and delivered by all Parties hereto.
47.  Amendments.  This Lease may be modified only in writing, signed by the 
Parties in interest at the time of the modification. The Parties shall amend
this Lease from time to time to reflect any adjustments that are made to the
Base Rent or other Rent payable under this Lease. As long as they do not
materially change Lessee's obligations hereunder, Lessee agrees to make such
reasonable non-monetary modifications to this Lease as may be reasonably
required by an institutional insurance company or pension plan Lender in
connection with the obtaining of normal financing or refinancing of the property
of which the Premises are a part.
48.  Multiple Parties.  Except as otherwise expressly provided herein, if more 
than one person or entity is named herein as either Lessor or Lessee, the 
obligations of such multiple parties shall be the joint and several 
responsibility of all persons or entities named herein as such Lessor or Lessee.


LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND 
PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR 
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE 
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY 
REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH 
RESPECT TO THE PREMISES.

     IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR YOUR ATTORNEY'S
     REVIEW AND APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED TO EVALUATE THE
     CONDITION OF THE PROPERTY FOR THE POSSIBLE PRESENCE OF ASBESTOS, AMERICAN
     INDUSTRIAL REAL ESTATE ASSOCIATION OR BY THE REAL ESTATE BROKERS OR THEIR
     CONTRACTORS, AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL
     EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT
     RELATES; THE PARTIES SHALL RELY SOLEY UPON THE ADVICE OF THEIR OWN COUNSEL
     AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. IF THE SUBJECT PROPERTY
     IS IN A STATE OTHER THAN CALIFORNIA, AN ATTORNEY FROM THE STATE WHERE THE
     PROPERTY IS LOCATED SHOULD BE CONSULTED.

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

Executed at:                              Executed at:
            -------------------------                 --------------------------
                                                                                
on:                                       on: 
    ---------------------------------         ----------------------------------
                                                                                
By LESSOR:                                By LESSEE:                            
                                                                                
Pacific Gulf Properties Inc.              Chatcom, Inc.
-------------------------------------     --------------------------------------
a Maryland Corporation                    a California Corporation 
-------------------------------------     --------------------------------------
                                                                                
By:                                       By:             /s/ E. Carey Walters
    ---------------------------------         ----------------------------------
Name Printed:      Jonathan Carley        Name Printed:       E. Carey Walters  
              -----------------------                   ------------------------
Title:            Regional Manager        Title:             President and CEO
       ------------------------------            -------------------------------


                                                               Initials:  CLM 
                                                                        -------
                                                                              
                                                                        -------

                              MULTI-TENANT GROSS
                                 Page 12 of 13
<PAGE>

<TABLE>

<S>                                           <C>
By:______________________________________     By:______________________________________
Name Printed:  Donna Montgomery               Name Printed:  
             ----------------------------                  ----------------------------
Title:  Leasing Manager                       Title:  
      -----------------------------------           -----------------------------------

Address: 9774 Crescent Center Drive, #506     Address: 
        ---------------------------------             ---------------------------------
         Rancho Cucamonga, CA 91730                    
        ---------------------------------             ---------------------------------
Telephone: (909)   483-1166                   Telephone: 
           ------------------------------                ------------------------------
Facsimile: (909)   483-1163                   Facsimile:  
           ------------------------------                ------------------------------

BROKER:                                       BROKER:

Executed at:_____________________________     Executed at:_____________________________

on:______________________________________     on:______________________________________

By:______________________________________     By:______________________________________
Name Printed:____________________________     Name Printed:____________________________
Title:___________________________________     Title:___________________________________
Address:_________________________________     Address:_________________________________
_________________________________________     _________________________________________

Telephone: (___) ________________________     Telephone: (___) ________________________
Facsimile: (___) ________________________     Facsimile: (___) ________________________
</TABLE>
NOTE: These forms are often modified to meet changing requirements of law and 
      needs of the industry. Always write or call to make sure you are utilizing
      the most current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 
      700 South Flower Street, Suite 600, Los Angeles, California 90017 (213)
      687-8777.

                                                                Initials:  CLM
                                                                          -----
                                                                          -----

                              MULTI-TENANT GROSS
                                 Page 13 of 13
<PAGE>
ADDENDUM to Lease dated January 25, 1999 by and between Pacific Gulf Properties,
Inc., a Maryland Corporation, as "Lessor" and Chatcom, Inc., a California 
Corporation, as "Lessee", on the premises known as 9420 Lurline Avenue, Unit D, 
Chatsworth, California.

The above referenced Lease is hereby amended as follows:

49.    TRASH DISPOSAL:  Lessee agrees that all trash and debris are to be 
       --------------
deposited in receptacles provided by Lessee at Lessee's expense within the 
Premises parking lot and all receptacles shall remain inside enclosures.  If it 
is determined that Lessee is regularly disposing of an unusually large amount of
refuse, Lessee shall, within ten (10) days receipt of written notice from Lessor
and at Lessee's sole expense, provide for an additional trash bin and pickup 
service at his or her leased Premises.  Lessor reserves the right to stipulate 
location of storage for Lessee's additional receptacle.  Lessor reserves the 
right to stipulate location of storage for Lessee's additional receptacle.
Lessee agrees not to store any items or leave any debris outside the Premises in
any of the common area, including the parking lot and in the event Lessor must
remove items or debris, Lessor shall charge the cost of removing said items or
debris to Lessee, and Lessee shall pay the same upon demand or be in default of
this Lease as defined in Paragraph 13 of this Lease.

50.    GOVERNMENTAL AUTHORITY COMPLIANCE:  Lessee shall, at Lessee's expense, 
       ---------------------------------
comply promptly with all governmental authorities and all applicable statues, 
ordinances, rules, regulations, orders, covenants and restrictions of record, 
and requirements in effect during the term or any part of the term hereof, 
regulating the use by Lessee of the Premises, including compliance with the 
Uniform Fire Code.  Lessee shall have the sole responsibility to secure any and 
all governmental approvals relating to Lessee's use of the premises, including 
but not necessarily limited to an Occupancy Permit issued by the City of Los 
Angeles/Chatsworth.  Lessee shall secure such approvals promptly and hold Lessor
harmless from any costs and fees incurred in the process, and from any fines or 
penalties arising from Lessee's nonconformance with applicable law or 
regulations.

51.    EFFECT OF DEFAULT ON FREE OR ABATED RENT:  In the event of Lessee's 
       ---------------------------------------
default under Paragraph 13 of this Lease, and said default by Lessee is not 
cured by Lessee, any previous free rent, abated rent, or early possession free 
occupancy, shall due and payable to Lessor immediately.

52.    WAIVER OF JURY TRIAL:  The parties hereto shall and they hereby do waive
       --------------------
trial by jury in any action, proceeding or counterclaim brought by either of
the parties hereto against the other on any matters whatsoever arising out of or
in any way related to this Lease, the relationship of Lessor and Lessee, 
Lessee's use or occupancy of the Premises, the Building or the Park, and/or any 
claim of injury, loss or damage.

53.    COUNTERCLAIMS:  In the event Lessor commences any proceedings for 
       -------------
nonpayment of rent, or any other sums or amounts due hereunder, Lessee shall not
interpose any counterclaim of whatever nature or description in any such 
proceedings, provided, however, nothing contained herein shall be deemed or 
construed as a waiver of the Lessee's right to assert such claims in any 
separate action brought by Lessee or the right to offset the amount of any final
judgment owed by Lessor to Lessee.

54.    WARRANTY OF AUTHORITY: Each person executing this agreement on behalf
       ---------------------
of a party represents and warrants that (1) such person is duly and validly
authorized to do so on behalf of the entity it purports to so bind, and (2) if
such party is partnership, corporation or trustee, that such partnership,
corporation or trustee has full right and authority to enter into this Lease
and perform all its obligations hereunder.

55.    LESSOR'S PERSONAL LIABILITY:  The liability of Lessor (which, for 
       ---------------------------
purposes of this Lease, shall include Lessor and the owner of the Building if 
other than Lessor) to Lessee for any default by Lessor under the terms of this 
Lease shall be limited to the actual interest of Lessor and its present or 
future partners in the Premises or the Building and Lessee agrees to look solely
to the Premises for satisfaction of any liability and shall not look to other 
assets of Lessor nor seek any recourse against the assets of the individual 
partners, directors, officers, shareholders, agents or employees of Lessor; it 
being intended that Lessor and the individual partners, directors, officers, 
shareholders, agents or employees of Lessor shall not be personally liable in 
any manner whatsoever for any judgment or deficiency.  The liability of Lessor 
under this Lease is limited to its actual period of ownership of title to the 
Building, and Lessor shall be automatically released from further performance 
under this Lease and from all further liabilities and expenses hereunder upon 
transfer of Lessor's interest in the Premises or the Building.  Lessee agrees to
attorn to any entity purchasing or otherwise acquiring the Premises.


                                                                 Initials  CLM
                                                                         -------
                                                                         -------

<PAGE>
 
                                  EXHIBIT "A"

           [SITE PLAN 9400 - 9420 - 9430 - 9440 LURLINE, CHATSWORTH]

                                                                  Initial   CLM
                                                                           -----
                                                                           -----
<PAGE>
 
                                  EXHIBIT "B"

Lessor or Broker makes no representation or guarantee as to the accuracy of this
floor plan. Lessee shall be solely responsible in verifying all specifications 
contained herein.

                                 [FLOOR PLAN]

--------------------------------------------------------------------------------
         9420 South Lurline Avenue, Suite D, Chatsworth     8,925 S.F.
--------------------------------------------------------------------------------
OFFICE SPACE 7,532 S.F.   WAREHOUSE SPACE 1,393 S.F.   WAREHOUSE CEILING HEIGHT.
                                                           (APPROX.) 15'-0'
--------------------------------------------------------------------------------
                            LURLINE INDUSTRIAL PARK
                           For information contact:
                         PACIFIC GULF PROPERTIES, INC.
        9500 7th Street, Suite L, Rancho Cucamonga TEL: (909) 483-1166
--------------------------------------------------------------------------------
 NOTE: All information represented on this drawing is believed to be accurate. 
  However, tenant should verify all pertinent information prior to committing
                                  to a lease.


                                                                    Initial CLM
                                                                           -----
                                                                           -----
<PAGE>
 
                                  EXHIBIT "C"
                             
                             RULES AND REGULATIONS
                             ---------------------
                            
1.     No sign, placard, picture, advertisement, name or notice shall be
installed or displayed on any part of the outside of the Building without the 
prior written consent of Lessor.  Lessor shall have the right to remove, at 
Lessee'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 Lessee by a 
person satisfactory to Lessor.

2.     If Lessee requires telegraphic, telephonic or burglar alarm systems, 
Lessee shall provide Lessor with operating instructions prior to their 
installation.

3.     Lessor reserves the right, exercisable without notice and without 
liability to Lessee, to change the name of the Building/Project.

4.     The cost of repairing damage of any kind caused by Lessee, its 
employees, guests, agents or invitees whether by negligence, carelessness, or 
for any other reason, shall be paid for by Lessee.

5.     Lessee shall not install any radio or television antenna, loudspeaker or 
other devise on the roof or exterior walls of the Building.  Lessee shall not 
interfere with radio or television broadcasting or reception from or in the 
Building or elsewhere.

6.     Without the written consent of Lessor, Lessee shall not use the name of 
the Building/project in connection with or in promoting or advertising the 
business of Lessee except as Lessee's address.

7.     Lessee shall comply with all safety, fire protection and evacuation 
procedures and regulations established by Lessor or any governmental agency.

8.     Lessor may waive any one or more of these Rules and Regulations for the 
benefit of Lessee or any other lessee, but no such waiver by Lessor shall be 
construed as a waiver of such Rules and Regulations in favor of Lessee or any 
other lessee, nor prevent Lessor form thereafter enforcing any such Rules and 
Regulations against any or all of lessees of the Project.

9.     These Rules and Regulations are in addition to, and shall not be 
construed to in any way modify or amend, in whole or in part, the terms, 
covenants, agreements and conditions of any Lease of premises in the Project.  
Lessor, at its sole discretion, reserves the right to amend or modify this 
Exhibit "C" as it deems necessary.

10.    Lessor reserves the right to change, rescind or to make such other and 
reasonable rules and regulations as in its judgment may from time to time be 
needed for safety and security, for care and cleanliness of the Project and
for the preservations of good order therein.  Lessee agrees to abide by all such
rules and regulations hereinabove stated and any additional rules and 
regulations which are adopted.

11.    Lessor shall have no liability or responsibility to any lessee for the 
safety or well being of Lessee, his employees, invitees or business clients in 
their use pr presence within the premises, or any place within the Project other
than may be construed to be normally assumed as Lessor's liability or 
responsibility as defined elsewhere in the Lease.

12.    Lessee agrees that all trash and debris is to be deposited in receptacles
provided within the complex and all receptacles shall remain inside enclosures 
as provided by Lessor.  If it is determined that Lessee is regularly disposing 
of an unusually large amount of refuse, Lessee shall within ten (10) days 
receipt of written notice from Lessor and at Lessee's sole expense, provide 
written notice from Lessor and at Lessee's sole expense, provide for an 
additional trash bin and pick up service at this leased premises.  Lessor 
reserves the right to stipulate location of storage for Lessee's additional 
receptacle.

13.    The Premises shall not be used for lodging or for any improper, immoral 
or objectionable purpose.  No cooking shall be done or permitted by Lessee on 
the Premises, except that use by Lessee of Underwriters' Laboratory approved 
equipment for brewing coffee, tea, hot chocolate and similar beverages shall be 
permitted, provided that such equipment and use is in accordance with all 
applicable federal, state, county and city laws, codes, ordinances, rules and 
regulations.  Lessee shall have the right to use microwave ovens and 
refrigerators to serve its employees and customers.

14.    Lessee assumes any and all responsibility for protecting its Premises 
from theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed.

                                                                        Initials
                                                                           CLM
                                                                        --------
                                                                        --------

<PAGE>
 
                                  EXHIBIT "D"

                        HAZARDOUS MATERIALS DISCLOSURE
                        ------------------------------


This Hazardous Materials Disclosure is incorporated by reference into the lease 
dated January 25, 1999, by and between Pacific Gulf Properties, Inc., a Maryland
      ----------------
Corporation, as Lessor, and Chatcom, Inc., A CA Corporation, as Lessee, for the 
                            -------------------------------
premises located at 9420 Lurline Avenue, Unit D, Chatsworth, California.
                    ---------------------------------------------------

I, E. Carey Walters           , represent that the following disclosure 
  ----------------------------
accurately reflects the usage or nonusage of hazardous materials on the leased
Premises.


Description of Lessee's usage and business operations:

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


Petroleum products, chemicals, container sizes, and amounts to be utilized by 
Lessee at any time during tenancy:

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

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


Method and storage locations of hazardous materials:

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

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


List any operations discharges in or on Premises:

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

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



I, E. Carey Walters           , certify that I will comply fully with all 
  ----------------------------
applicable environmental laws governing hazardous materials and their usage in
our operations.


Lessee:

Chatcom, Inc. a California Corporation,



By:     /s/ E. Carey Walters
      --------------------------
            E. Carey Walters

Its:    President & CEO
      --------------------------