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                                                                 Exhibit 10.11

              [LOGO] AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

              STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE--NET
                 (DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)

1.     BASIC PROVISIONS ("BASIC PROVISIONS")

       1.1     PARTIES:  This Lease ("Lease"), dated for reference purposes
only May 28, 1998, is made by and between Del Mar Capital Group/Ridgeveiw,
LLC ("LESSOR") and Cytovia, Inc., a Delaware corporation ("LESSEE"),
(collectively the "PARTIES," or individually a "PARTY").

       1.2     PREMISES:  That certain real property, including all
improvements therein or to be provided by Lessor under the terms of this
Lease, and commonly known as 6650 Nancy Ridge Drive, located in the County of
San Diego, State of California 92121, and generally described as (describe
briefly the nature of the property and, if applicable, the "PROJECT", if the
property is located within a Project) an approximately 23,501 square foot
freestanding building ("PREMISES"). (See also Paragraph 2)

       1.3     TERM:  10 years and 0 months ("ORIGINAL TERM") commencing
November 1, 1998 ("COMMENCEMENT DATE") and ending October 31, 2008
("EXPIRATION DATE"). (See also Paragraph 3)

       1.4     EARLY POSSESSION:  ____________________________________________
("EARLY POSSESSION DATE"). (See also Paragraphs 3.2 and 3.3) See Addendum to
Lease

       1.5     BASE RENT:  $28,918.00 per month ("BASE RENT"), payable on the
First day of each month commencing November 1, 1998 (see Addendum #51 for
rental sched.) (See also Paragraph 4)
/X/ If this box is checked, there are provisions in this Lease for the Base Rent
    to be adjusted. See Addendum

       1.6     BASE RENT PAID UPON EXECUTION:  $28,918.00 as Base Rent for
the period November 1998.

       1.7     SECURITY DEPOSIT:  $ See Addendum for Letter of Credit
("SECURITY DEPOSIT"). (See also Paragraph 5)

       1.8     AGREED USE:  General offices, light manufacturing, assembly,
research and development, warehousing and laboratory related uses. (See also
Paragraph 6)

       1.9     INSURING PARTY.  Lessor is the "INSURING PARTY" unless otherwise
stated herein. (See also Paragraph 8)

       1.10    REAL ESTATE BROKERS:  (See also Paragraph 15)

               (a) REPRESENTATION:  The following real estate brokers
(collectively, the "BROKERS") and brokerage relationships exist in this
transaction (check applicable boxes):

/ / _____________________  represents Lessor exclusively ("LESSOR'S BROKER");
/ / _____________________  represents Lessee exclusively ("LESSEE'S BROKER"); or
/X/ CB Richard Ellis, Inc. represents both Lessor and Lessee ("DUAL AGENCY").

               (b) PAYMENT TO BROKERS:  Upon execution and delivery of this
Lease by both Parties, Lessor shall pay to the Broker the fee agreed to in
their separate written agreement (or if there is no such agreement, the sum
of per agreement % of the total Base Rent for the brokerage services rendered
by said Broker).

       1.11    GUARANTOR.  The obligations of the Lessee under this Lease are
to be guaranteed by None ("GUARANTOR"). (See also Paragraph 37)

       1.12    ADDENDA AND EXHIBITS.  Attached hereto is an Addendum or
Addenda consisting of Paragraphs 50 through 56 and Exhibits A - Site and
Building Floor Plan and B - Letter of Credit, all of which constitute a part
of this Lease.

2.     PREMISES.

       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 size set forth in this Lease, or
that may have been used in calculating rental, is an approximation which the
Parties agree is reasonable and the rental based thereon is not subject to
revision whether or not the actual size is more or less.

       2.2     CONDITION.  Lessor shall deliver the Premises to Lessee broom
clean and free of debris on the Commencement Date or the Early Possession
Date, whichever first occurs ("START DATE"), and, so long as the required
service contracts described in Paragraph 7.1(b) below are obtained by Lessee
within thirty (30) days following the Start Date, warrants that the existing
electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air
conditioning systems ("HVAC"), loading doors, if any, and all other such
elements in the Premises, other than those constructed by Lessee, shall be in
good operating condition on said date and that the structural elements of the
roof, bearing walls and foundation of any buildings on the Premises (the
"BUILDING") shall be free of material defects.  If a non-compliance with said
warranty exists as of the Start Date, Lessor shall, as Lessor's sole
obligation with respect to such matter, except as otherwise provided in this
Lease, promptly after receipt of written notice from the Lessee setting forth
with specificity the nature and extent of such non-compliance, rectify same
at Lessor's expense. If, after the Start Date, Lessee does not give Lessor
written notice of any non-compliance with this warranty within: (i) one year
as to the surface of the roof and the structural portions of the roof,
foundations and bearing walls, (ii) six (6) months as to the HVAC systems,
(iii) six (6) months as to the remaining systems and other elements of the
Building, correction of such non-compliance shall be the obligation of Lessee
at Lessee's sole cost and expense to the extent not covered under
construction warranties.

       2.3     COMPLIANCE.  Lessor warrants that the improvements on the
Premises comply with all applicable laws, covenants or restrictions of
record, building codes, regulations and ordinances ("APPLICABLE
REQUIREMENTS") in effect on the Start Date.  Said warranty does not apply to
the use to which Lessee will put the Premises or to any Alterations or
Utility Installations (as defined in Paragraph 7.3(a)) made or to be made by
Lessee. NOTE: Lessee is responsible for determining whether or not the zoning
is appropriate for Lessee's intended use, and acknowledges that past uses of
the Premises may no longer be allowed. If the Premises do not comply with
said warranty, Lessor shall, except as otherwise provided, promptly after
receipt of written notice from Lessee setting forth with specificity the
nature and extent of such non-compliance, rectify the same at Lessor's
expense. If Lessee does not give Lessor written notice of a non-compliance
with this warranty within one (1) year following the Start Date, correction
of that non-compliance shall be the obligation of Lessee at Lessee's sole
cost and expense to the extend that it is not the obligation of the
construction contractor or subcontractor. If the Applicable Requirements are
hereafter changed (as opposed to being in existence at the Start Date, which
is addressed in Paragraph 6.2(e) below) so as to require during the term of
this Lease the construction of an addition to or an alteration of the
Building, the remediation of any Hazardous Substance, or the reinforcement or
other physical modification of the Building ("CAPITAL EXPENDITURE"), Lessor
and Lessee shall allocate the cost of such work as follows:

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               (a)  Subject to Paragraph 2.3(c) below, if such Capital
Expenditures are required as a result of the specific and unique use of the
Premises by Lessee as compared with uses by tenants in general, Lessee shall
be fully responsible for the cost thereof, provided, however that if such
Capital Expenditure is required during the last two (2) years of this Lease
and the cost thereof exceeds six (6) months' Base Rent, Lessee may instead
terminate this Lease unless Lessor notifies Lessee, in writing, within ten
(10) days after receipt of Lessee's termination notice that Lessor has
elected to pay for the difference between the actual cost thereof and the
amount equal to six (6) months' Base Rent. If Lessee elects termination,
Lessee shall immediately cease the use of the Premises which requires such
Capital Expenditure and deliver to Lessor written notice specifying a
termination date at least ninety (90) days thereafter. Such termination date
shall, however, in no event be earlier than the last day that Lessee could
legally utilize the Premises in accordance with its use without commencing
such Capital Expenditure.

               (b)  If such Capital Expenditure is not the result of the
specific and unique use of the Premises by Lessee (such as, governmentally
mandated seismic modifications), then Lessor and Lessee shall allocate the
obligation to pay for such costs pursuant to the provisions of Paragraph
7.1(c); provided, however, that if such Capital Expenditure is required
during the last two years of this Lease or if Lessor reasonably determines
that it is not economically feasible to pay its share thereof, Lessor shall
have the option to terminate this Lease upon ninety (90) days prior written
notice to Lessee unless Lessee notifies Lessor, in writing, within ten (10)
days after receipt of Lessor's termination notice that Lessee will pay for
such Capital Expenditure. If Lessor does not elect to terminate, and fails to
tender its share of any such Capital Expenditure, Lessee may advance such
funds and deduct same, with Interest, from Rent until Lessor's share of such
costs have been fully paid. If Lessee is unable to finance Lessor's share, or
if the balance of the Rent due and payable for the remainder of this Lease is
not sufficient to fully reimburse Lessee on an offset basis, Lessee shall
have the right to terminate this Lease upon thirty (30) days written notice
to Lessor.

               (c)  Notwithstanding the above, the provisions concerning
Capital Expenditures are intended to apply only to non-voluntary, unexpected,
and new Applicable Requirements. If the Capital Expenditures are instead
triggered by Lessee as a result of an actual or proposed change in use,
change in intensity of use, or modification to the Premises then, and in that
event, Lessee shall be fully responsible for the cost thereof, and Lessee
shall not have any right to terminate this Lease.

       2.4     ACKNOWLEDGEMENTS.  Lessee acknowledges that: (a) it has been
advised by Lessor and/or Brokers to satisfy itself with respect to the
condition of the Premises (including but not limited to the electrical, HVAC
and fire sprinkler systems, security, environmental aspects, and compliance
with Applicable Requirements), and their suitability for Lessee's intended
use, (b) Lessee has made such investigation as it deems necessary with
reference to such matters and assumes all responsibility therefor as the same
relate to its occupancy of the Premises, and (c) neither Lessor, Lessor's
agents, nor any Broker has made any oral or written representations or
warranties with respect to said matters other than as set forth in this
Lease. The foregoing shall not be deemed to limit any construction warranties
or representations from building contractors or subcontractors for the
Premises. In addition, Lessor acknowledges that: (a) Broker has made no
representations, promises or warranties concerning Lessee's ability to honor
the Lease or suitability to occupy the Premises, and (b) it is Lessor's sole
responsibility to investigate the financial capability and/or suitability of
all proposed tenants.

       2.5     LESSEE AS PRIOR OWNER/OCCUPANT.  The warranties made by Lessor in
Paragraph 2 shall be of no force or effect if immediately prior to the Start
Date Lessee was the owner or occupant of the Premises. In such event, Lessee
shall be responsible for any necessary corrective work.

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 Lessee totally or partially occupies the
Premises prior to the Commencement Date, the obligation to pay Base Rent shall
be abated for the period of such early possession. All other terms of this Lease
(including but not limited to the obligations to pay Real Property Taxes and
insurance premiums and to maintain the Premises) shall, however, be in effect
during such period. Any such early possession shall not affect the Expiration
Date.

       3.3     DELAY IN POSSESSION.  Lessor agrees to use its best
commercially reasonable efforts to deliver possession of the Premises to
Lessee by the Commencement Date. If, despite said efforts, Lessor is unable
to deliver possession as agreed, Lessor shall not be subject to any liability
therefor, nor shall such failure affect the validity of this Lease. Lessee
shall not, however, be obligated to pay Rent or perform its other obligations
until it receives possession of the Premises. If possession is not delivered
within one hundred eighty (180) days after the Commencement Date, Lessee may,
at its option, by notice in writing delivered at any time after the end of
such one hundred eighty (180) day period but prior to delivery of possession,
cancel this Lease, in which event the Parties shall be discharged from all
obligations hereunder. If such written notice is not received by Lessor
effective ten (10) days after receipt of such notice, Lessee's right to
cancel shall terminate. Except as otherwise provided, if possession is not
tendered to Lessee by the Start Date and Lessee does not terminate this
Lease, as aforesaid, any period of rent abatement that Lessee would otherwise
have enjoyed shall run from the date of delivery of possession and continue
for a period equal to what Lessee would otherwise have enjoyed under the
terms hereof, but minus any days of delay caused by the acts or omissions of
Lessee. If possession of the Premises is not delivered within four (4) months
after the Commencement Date, this Lease shall terminate unless other
agreements are reached between Lessor and Lessee, in writing.

       3.4     LESSEE COMPLIANCE.  Lessor shall not be required to tender
possession of the Premises to Lessee until Lessee complies with its
obligation to provide evidence of insurance (Paragraph 8.5). Pending delivery
of such evidence, Lessee shall be required to perform all of its obligations
under this Lease from and after the Start Date, including the payment of
Rent, notwithstanding Lessor's election to withhold possession pending
receipt of such evidence of insurance. Further, if Lessee is required to
perform any other conditions prior to or concurrent with the Start Date, the
Start Date shall occur but Lessor may elect to withhold possession until such
conditions are satisfied.

4.     RENT.

       4.1     RENT DEFINED.  All monetary obligations of Lessee to Lessor under
the terms of this Lease (except for the Security Deposit) are deemed to be rent
("RENT").

       4.2     PAYMENT.  Lessee shall cause payment of Rent to be received by
Lessor in lawful money of the United States, without offset or deduction
(except as specifically permitted in this Lease), on or before the day on
which it is due.  Rent for any period during the term hereof which is for
less than one (1) full calendar month shall be prorated based upon the actual
number of days of said month. Payment of Rent shall be made to Lessor at its
address stated herein or to such other persons or place as Lessor may from
time to time designate in writing. Acceptance of a payment which is less than
the amount then due shall not be a waiver of Lessor's rights to the balance
of such Rent, regardless of Lessor's endorsement of any check so stating.

5.     SECURITY DEPOSIT.  See Addendum

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6.     USE.

       6.1     USE.  Lessee shall use and occupy the Premises only for the
Agreed Use, 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 damage, waste or a nuisance,
or that disturbs owners and/or occupants of, or causes damage to neighboring
properties.  Lessor shall not unreasonably withhold or delay its consent to
any written request for a modification of the Agreed Use, so long as the same
will not impair the structural integrity of the improvements on the Premises
or the mechanical or electrical systems therein, is not significantly more
burdensome to the Premises.  If Lessor elects to withhold consent, Lessor
shall within five (5) business days after such request give written
notification of same, which notice shall include an explanation of Lessor's
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, or waste
whose presence, use, manufacture, disposal, transportation, or release,
either by itself or in combination with other materials expected to be on the
Premises, is either: (i) potentially injurious to the public health, safety
or welfare, the environment or the Premises, (ii) regulated or monitored by
any governmental authority, or (iii) a basis for potential liability of
Lessor to any governmental agency or third party under any applicable statute
or common law theory.  Hazardous Substances shall include, but not be limited
to, hydrocarbons, petroleum, gasoline, and/or crude oil or any products,
by-products or fractions thereof.  Lessee shall not engage in any activity in
or on the Premises which constitutes a Reportable Use of Hazardous Substances
without the express prior written consent of Lessor and timely compliance (at
Lessee's expense) with all Applicable Requirements.  "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/or (iii) the presence at the Premises of a
Hazardous Substance with respect to which any Applicable Requirements
requires that a notice be given to persons entering or occupying the Premises
or neighboring properties.  Notwithstanding the foregoing, Lessee may use any
ordinary and customary materials reasonably required to be used in the normal
course of the Agreed Use, so long as such use is in compliance with all
Applicable Requirements, is not a Reportable Use, and does not expose the
Premises or neighboring property to any meaningful risk of contamination or
damage or expose Lessor to any liability therefor.  In addition, Lessor may
condition its consent to any Reportable Use upon receiving such additional
assurances as Lessor reasonably deems necessary to protect itself, the
public, the Premises and/or the environment against damage, contamination,
injury and/or liability, including, but not limited to, the installation (and
removal on or before Lease expiration or termination) of protective
modifications (such as concrete encasement) and/or increasing the Security
Deposit.

               (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, other than as previously consented to by Lessor,
Lessee shall immediately give written notice of such fact to Lessor, and
provide Lessor with a copy of any report, notice, claim or other
documentation which it has concerning the presence of such Hazardous
Substance.

               (c)  LESSEE REMEDIATION.  Lessee shall not cause or permit any
Hazardous Substance to be spilled or released in, on, under, or about the
Premises (including through the plumbing or sanitary sewer system) and shall
promptly, at Lessee's expense, take all investigatory and/or remedial action
reasonably recommended, whether or not formally ordered or required, for the
cleanup of any contamination of, and for the maintenance, security and/or
monitoring of the Premises or neighboring properties, that was caused or
materially contributed to by Lessee, or pertaining to or involving any
Hazardous Substance brought onto the Premises during the term of this Lease,
by or for Lessee, or any third party.

               (d)  LESSEE INDEMNIFICATION.  Lessee shall indemnify, defend
and hold Lessor, its agents, employees, lenders and ground lessor, if any,
harmless from and against any and all loss of rents and/or damages,
liabilities, judgments, claims, expenses, penalties, and attorneys' and
consultants' fees arising out of or involving any Hazardous Substance brought
onto the Premises by or for Lessee, or any third party invitee of lessee
(provided, however, that Lessee shall have no liability under this Lease with
respect to underground migration of any Hazardous Substance under the
Premises from adjacent properties).  Lessee's obligations 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, removal, remediation, restoration and/or abatement, and shall
survive the expiration or 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.

               (e)  LESSOR INDEMNIFICATION.  Lessor and its successors and
assigns shall Indemnify, defend, reimburse and hold Lessee, its employees and
lenders, harmless from and against any and all environmental damages,
including the cost of remediation, which existed as a result of Hazardous
Substances on the Premises prior to the Start Date or which are caused by the
negligence or willful misconduct of Lessor, its agents or employees.
Lessor's obligations, as and when required by the Applicable Requirements,
shall include, but not be limited to, the cost of investigation, removal,
remediation, restoration and/or abatement, and shall survive the expiration
or termination of this Lease.

               (f)  INVESTIGATIONS AND REMEDIATIONS.  Lessor shall retain the
responsibility and pay for any investigations or remediation measures
required by governmental entities having jurisdiction with respect to the
existence of Hazardous Substances on the Premises prior to the Start Date,
unless such remediation measure is required as a result of Lessee's use
(including "alterations", as defined in paragraph 7.3(a) below) of the
Premises, in which event Lessee shall be responsible for such payment.
Lessee shall cooperate fully in any such activities at the request of Lessor,
including allowing Lessor and Lessor's agents to have reasonable access to
the Premises at reasonable times on prior written notice in order to carry
out Lessor's investigative and remedial responsibilities.

               (g)  LESSOR TERMINATION OPTION.  If a Hazardous Substance
Condition occurs during the term of this Lease, unless Lessee is legally
responsible therefor (in which case Lessee shall make the investigation and
remediation thereof required by the Applicable Requirements and this Lease
shall continue in full force and effect, but subject to Lessor's rights under
Paragraph 6.2c(d) and Paragraph 13), Lessor shall (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.

       6.3     LESSEE'S COMPLIANCE WITH APPLICABLE REQUIREMENTS.  Except as
otherwise provided in this Lease, Lessee shall, at Lessee's sole expense,
fully, diligently and in a timely manner, materially comply with all
Applicable Requirements, the requirements of any applicable fire insurance
underwriter or rating bureau, and the recommendations of Lessor's engineers
and/or consultants which relate in any manner to the Premises, without regard
to whether said requirements are now in effect or become effective after the
Start Date.  Lessee shall, within ten (10) days after receipt of Lessor's
written request, provide Lessor with copies of all permits and other
documents, and other information 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 the failure of Lessee or the Premises to
comply with any Applicable Requirements.

       6.4     INSPECTION; COMPLIANCE.  Lessor and Lessor's "Lender" (as
defined in Paragraph 30 on prior written notice below) and consultants shall
have the right to enter into Premises at any time, in the case of an
emergency, and otherwise at reasonable times on prior written notice, for the
purpose of inspecting the condition of the Premises and for verifying
compliance by Lessee with this Lease.  The cost of any such inspections shall
be paid by Lessor, unless a violation of Applicable Requirements, or a
contamination is found to exist or be imminent, or the inspection is
requested or ordered by a governmental authority.  In the case of a violation
or contamination, Lessee shall upon request reimburse Lessor for the cost of
Lessor's consultants for such inspections, so long as such inspection is
reasonably related to the violation or contamination.

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7.     MAINTENANCE; REPAIRS, UTILITY INSTALLATIONS; TRADE FIXTURES AND
ALTERATIONS.

       7.1     LESSEE'S OBLIGATIONS.

               (a)  IN GENERAL.  Subject to the provisions of Paragraph 2.2
(Condition), 2.3 (Compliance), 6.3 (Lessee's Compliance with Applicable
Requirements), 7.2 (Lessor's Obligations), 9 (Damage or Destruction), and 14
(Condemnation), Lessee shall, at Lessee's sole expense, keep the Premises,
Utility Installations, and Alterations in good order, condition and repair
(whether or not the portion of the Premises requiring repairs, 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, but not limited to, all equipment or facilities, such as plumbing,
heating, ventilating, air-conditioning, electrical, lighting facilities,
boilers, pressure vessels, fire protection system, fixtures, walls (interior
and exterior), foundations, ceilings, roofs, floors, windows, doors, plate
glass, skylights, landscaping, driveways, parking lots, fences, retaining
walls, signs, sidewalks and parkways located in, on, or adjacent to the
Premises.  Lessee, in keeping the Premises in good order, condition and
repair, shall exercise and perform good maintenance practices, specifically
including the procurement and maintenance of the service contracts required
by Paragraph 7.1(b) below. 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.  Lessee shall, during the term of this Lease, keep the exterior
appearance of the Building in a first-class condition consistent with the
exterior appearance of other similar facilities of comparable age and size in
the vicinity, including, when necessary, the exterior  repainting of the
Building.

               (b)  SERVICE CONTRACTS.  Lessee shall, at Lessee's sole
expense, procure and maintain contracts, with copies to Lessor, in customary
form and substance for, and with contractors specializing and experienced in
the maintenance of the following equipment and improvements ("Basic
Elements"), if any, if and when installed on the Premises: (i) HVAC
equipment, (ii) boiler, and pressure vessels, (iii) fire extinguishing
systems, including fire alarm and/or smoke detection, (iv) landscaping and
irrigation systems, (v) roof covering and drains, (vi) driveways and parking
lots, (vii) clarifiers (viii) basic utility feed to the perimeter of the
Building, and (ix) any other equipment, if reasonably required by Lessor.

               (c)  REPLACEMENT.  Subject to Lessee's indemnification of
Lessor as set forth in Paragraph 8.7 below, and without relieving Lessee of
liability resulting from Lessee's failure to exercise and perform good
maintenance practices, if the Basic Elements described in Paragraph 7.1(b)
cannot be repaired other than at a cost which is in excess of 50% of the cost
of replacing such Basic Elements, then such Basic Elements shall be replaced
by Lessor, and the cost thereof shall be prorated between the Parties and
Lessee shall only be obligated to pay, each month during the remainder of the
term of this Lease, on the date on which Base Rent is due, an amount equal to
the product of multiplying the cost of such replacement by a fraction, the
numerator of which is one, and the denominator of which is the number of
months of the useful life of such replacement as such useful life is
specified pursuant to Federal income tax regulations or guidelines for
depreciation thereof (including interest on the unamortized balance as is
then commercially reasonable in the judgment of Lessor's accountants), with
Lessee reserving the right to prepay its obligation at any time.

       7.2     LESSOR'S OBLIGATIONS.  Subject to the provisions of Paragraph
2.2 (Condition), 2.3 (Compliance), 9 (Damage or Destruction) and 14
(Condemnation), it is intended by the Parties hereto that Lessor have no
obligation, in any manner whatsoever, to repair and maintain the Premises, or
the equipment therein, all of which obligations are intended to be that of
the Lessee.  It is the intention of the Parties that the terms of this Lease
govern the respective obligations of the Parties as to maintenance and repair
of the Premises, and they expressly waive the benefit of any statute now or
hereafter in effect to the extent it is inconsistent with the terms of this
Lease.

       7.3     UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS.

               (a)  DEFINITIONS; CONSENT REQUIRED.  The term "UTILITY
INSTALLATIONS" refers to all floor and window coverings, air lines, power
panels, electrical distribution, security and fire protection systems,
communication systems, lighting fixtures, HVAC equipment, plumbing, and
fencing in or on the Premises.  The term "TRADE FIXTURES" shall mean Lessee's
machinery and equipment that can be removed without doing material damage to
the Premises. The term "ALTERATIONS" shall mean any modification of the
improvements, other than Utility Installations or Trade Fixtures, whether by
addition or deletion. "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 any Alterations or Utility Installations to 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 such consent but upon notice to Lessor, as long as they are not
visible from the outside, do not involve puncturing, relocating or removing
the roof or any existing walls, and the cumulative cost thereof during this
Lease as extended does not exceed $50,000 in the aggregate or $10,000 in any
one year.

               (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.  Consent shall be
deemed conditioned upon Lessee's: (i) acquiring all applicable governmental
permits, (ii) furnishing Lessor with copies of both the permits and the plans
and specifications prior to commencement of the work, and (iii) compliance with
all conditions of said permits and other Applicable Requirements in a prompt and
expeditious manner.  Any Alterations or Utility Installations shall be performed
in a workmanlike manner with good and sufficient materials. Lessee shall
promptly upon completion furnish Lessor with as-built plans and specifications.
For work which costs an amount equal to the greater of one month's Base Rent, or
$10,000, Lessor may condition its consent upon Lessee providing a lien and
completion bond in an amount equal to one and one-half times the estimated cost
of such Alteration or Utility Installation and/or upon Lessee's posting an
additional Security Deposit with Lessor.

               (c)  INDEMNIFICATION.  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 ten (10) days' notice prior
to the commencement of any work in, on or about the Premises, and Lessor
shall have the right to post notices of non-responsibility. If Lessee shall
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. If Lessor shall require,
Lessee shall furnish a surety bond 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.

       7.4     OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION.

               (a)  OWNERSHIP.  Subject to Lessor's right to require removal or
elect ownership as hereinafter provided, all Alterations and Utility
Installations made by Lessee shall be the property of Lessee, but considered a
part of the Premises. Lessor may, at any time, elect in writing to be the owner
of all or any specified part of the Lessee Owned Alterations and Utility
Installations.  Unless otherwise instructed per Paragraph 7.4(b) hereof, all
Lessee Owned Alterations and Utility Installations shall, at the expiration or
termination of this Lease, become the property of Lessor and be surrendered by
Lessee with the Premises.

               (b)  REMOVAL.  If Lessor consents to alterations when made,
they must specify whether consent is contingent on removal. Lessor cannot
require subsequent removal. Lessor may require the removal at any time of all
or any part of any Lessee Owned Alterations or Utility Installations made
without the required consent.

               (c)  SURRENDER/RESTORATION.  Lessee shall surrender the
Premises by the Expiration Date or any earlier termination date, with all of
the improvements, parts and surfaces thereof broom 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.
Lessee shall repair any damage occasioned by the installation, maintenance or
removal of Trade Fixtures, Lessee Owned Alterations and/or Utility
Installations, furnishings, and equipment 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 groundwater contaminated by Lessee.
Trade Fixtures shall remain the property of Lessee and shall be removed by
Lessee.  The failure by Lessee to timely vacate the Premises pursuant to this
Paragraph 7.4(c) without the express written consent of Lessor shall
constitute a holdover under the provisions of Paragraph 26 below.

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8.     INSURANCE; INDEMNITY.

       8.1     PAYMENT FOR INSURANCE.  Lessee shall pay for all insurance
required under Paragraph 8 except to the extent of the cost attributable to
liability insurance carried by Lessor under Paragraph 8.2(b) in excess of
$2,000,000 per occurrence.  Premiums for policy periods commencing prior to or
extending beyond the Lease term shall be prorated to correspond to the Lease
term.  Payment shall be made by Lessee to Lessor within ten (10) days following
receipt of an invoice.

       8.2     LIABILITY INSURANCE.

               (a)  CARRIED BY LESSEE.  Lessee shall obtain and keep in force a
Commercial General Liability Policy of Insurance protecting Lessee and Lessor
against claims for bodily injury, personal injury and property damage based upon
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 $2,000,000 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 shall not, however, limit the
liability of Lessee nor relieve Lessee of any obligation hereunder.  All
insurance 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 maintain liability
insurance as described in Paragraph 8.2(a), 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.  The Insuring Party shall obtain
and keep in force a policy or policies in the name of Lessor, with loss payable
to Lessor, any groundlessor, and to any Lender(s) insuring loss or damage to the
Premises.  The amount of such insurance shall be equal to the full replacement
cost of the Premises, as the same shall exist from time to time, or the amount
required by any Lenders, but in no event more than the commercially reasonable
and available insurable value thereof.  If Lessor is the Insuring Party,
however, Lessee Owned Alterations and Utility Installations, Trade Fixtures, and
Lessee's personal property shall be insured by Lessee under Paragraph 8.4 rather
than by Lessor.  If the coverage is available and commercially appropriate, such
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), including coverage for debris removal and the enforcement of any
Applicable Requirements requiring the upgrading, demolition, reconstruction or
replacement of any portion of the Premises as the result of a covered loss.
Said policy or policies shall also contain an agreed valuation provision in lieu
of any coinsurance clause, waiver of subrogation, and inflation guard protection
causing an increase in the annual property insurance coverage amount by a factor
of not less than the adjusted U.S. Department of Labor Consumer Price Index for
All Urban Consumers for the city nearest to where the Premises are located.  If
such insurance coverage has a deductible clause, the deductible amount shall not
exceed $1,000 per occurrence, and Lessee shall be liable for such deductible
amount in the event of an Insured Loss.

               (b)  RENTAL VALUE.  The Insuring Party shall obtain and keep
in force a policy or policies in the name of Lessor with loss payable to
Lessor and any Lender, insuring the loss of the full Rent for one (1) year.
Said insurance shall provide that in the event the Lease is terminated by
reason of an insured loss, the period of indemnity for such coverage shall be
extended beyond the date of the completion of repairs or replacement of the
Premises, to provide for one full year's loss of Rent from the date of any
such loss.  Said insurance shall contain an agreed valuation provision in
lieu of any coinsurance clause, and the amount of coverage shall be adjusted
annually to reflect the projected Rent otherwise payable by Lessee, for the
next twelve (12) month period.  Lessor shall be liable for any deductible
amount in the event of such loss.

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

       8.4     LESSEE'S PROPERTY/BUSINESS INTERRUPTION INSURANCE.

               (a)  PROPERTY DAMAGE.  Lessee shall obtain and maintain insurance
coverage on all of Lessee's personal property, Trade Fixtures, and Lessee Owned
Alterations and Utility Installations.  Such insurance shall be full replacement
cost coverage with a deductible of not to exceed $1,000 per occurrence.  The
proceeds from any such insurance shall be used by Lessee for the replacement of
personal property, Trade Fixtures and Lessee Owned Alterations and Utility
Installations.  Lessee shall provide Lessor with written evidence that such
insurance is in force.

               (b)  BUSINESS INTERRUPTION.  Lessee shall obtain and maintain
loss of income and extra expense insurance in amounts as will reimburse
Lessee for direct or indirect loss of earnings attributable to all perils
commonly insured against by prudent lessees in the business of Lessee or
attributable to prevention of access to the Premises as a result of such
perils.

               (c)  NO REPRESENTATION OF ADEQUATE COVERAGE.  Lessor makes no
representation that the limits or forms of coverage of insurance specified
herein are adequate to cover Lessee's property, business operations or
obligations under this Lease.

       8.5     INSURANCE POLICIES.  Insurance required herein shall be by
companies duly licensed or admitted 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, as set forth in the most current
issue of "Best's Insurance Guide", or such other rating as may be required by
a Lender.  Lessee shall not do or permit to be done anything which
invalidates the required insurance policies.  Lessee shall, prior to the
Start Date, deliver to Lessor certified copies of policies of such insurance
or certificates evidencing the existence and amounts of the required
insurance.  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.  Such
policies shall be for a term of at least one year, or the length of the
remaining term of this Lease, whichever is less. If either Party shall fail
to procure and maintain the insurance required to be carried by it, the other
Party may, but shall not be required to, procure and maintain the same.

       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 against the other, for loss of or damage
to its property arising out of or incident to the perils required to be insured
against herein.  The effect of such releases and waivers is not limited by the
amount of insurance carried or required, or by any deductibles applicable
hereto.  The Parties agree to have their respective property damage insurance
carriers 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 gross negligence or willful
misconduct, 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, liens, judgments, penalties, attorneys' and consultants' fees,
expenses and/or liabilities arising out of, involving, or in connection with,
the use and/or occupancy of the Premises by Lessee.  If any action or
proceeding is brought against Lessor by reason of any of the foregoing
matters, Lessor shall provide prompt notice to Lessee and Lessee shall upon
notice 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 defended or
indemnified.

       8.8     EXEMPTION OF LESSOR FROM LIABILITY.  Except to the extent of
Lessor's negligence or willful misconduct, 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, HVAC or lighting fixtures, or from any other
cause, whether the 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, or from other sources or places.  Lessor shall not be liable for any
damages arising from any act or neglect of any other tenant of Lessor.
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 improvements on the Premises, other than Lessee Owned Alterations and
Utility Installations, which can reasonably be repaired in six (6) months or
less from the date of the damage or destruction.

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Lessor shall notify Lessee in writing within thirty (30) days from the date of
the damage or destruction as to whether or not the damage is Partial or Total.

               (b)  "PREMISES TOTAL DESTRUCTION" shall mean damage or
destruction to the Premises, other than Lessee Owned Alterations and Utility
Installations and Trade Fixtures, which cannot reasonably be repaired in six (6)
months or less from the date of the damage or destruction. Lessor shall notify
Lessee in writing within thirty (30) days from the date of the damage or
destruction as to whether or not the damage is Partial or Total.

               (c)  "INSURED LOSS" shall mean damage or destruction to
improvements on 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 Requirements, 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     PARTIAL DAMAGE -- INSURED LOSS.  If a Premises Partial Damage
that is an Insured Loss occurs, then Lessor shall, at Lessor's expense,
repair such damage (but not Lessee's Trade Fixtures or Lessee Owned
Alterations and Utility Installations) as soon as reasonably possible and
this Lease shall continue in full force and effect; provided, however, that
Lessee shall, at Lessor's election, make the repair of any damage or
destruction the total cost to repair of which is $10,000 or less, and, in
such event, Lessor shall make any applicable insurance proceeds available to
Lessee on a reasonable basis for that purpose. Notwithstanding the
foregoing, if the required insurance was not in force or the insurance
proceeds are not sufficient to effect such repair, the Insuring Party shall
promptly contribute the shortage in proceeds (except as to the deductible
which is Lessee's responsibility) as and when required to complete said
repairs.  In the event, however, such shortage was due to the fact that, by
reason of the unique nature of the improvements, 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, the party responsible for making the
repairs shall complete them as soon as reasonably possible and this Lease
shall remain in full force and effect. If such funds or assurance are not
received, Lessor may nevertheless elect by written notice to Lessee within
ten (10) days thereafter to: (i) 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; or (ii) have this
Lease terminate thirty (30) days thereafter to the extent shortage of funds
is due to fault of Lessee. Lessee shall not be entitled to reimbursement of
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, 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 a 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),
Lessor may 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) terminate this Lease by giving written notice to Lessee within
thirty (30) days after receipt by Lessor of knowledge of the occurrence of such
damage. Such termination shall be effective sixty (60) days following the date
of such notice. In the event Lessor elects to terminate this Lease, Lessee
shall have the right within ten (10) days after receipt of the termination
notice to give written notice to Lessor of Lessee's commitment to pay for the
repair of such damage without reimbursement from Lessor. Lessee shall provide
Lessor with said funds or satisfactory assurance thereof within thirty (30) days
after making such commitment.  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
make the required commitment, this Lease shall terminate as of the date
specified in the termination notice.

       9.4     TOTAL DESTRUCTION.  Notwithstanding any other provision hereof,
if a Premises Total Destruction occurs, this Lease shall terminate sixty (60)
days following such Destruction. If the damage or destruction was caused by the
gross negligence or willful misconduct of Lessee, Lessor shall have the right to
recover Lessor's damages from Lessee, except as provided in Paragraph 8.6.

       9.5     DAMAGE NEAR END OF TERM.  If at any time during the last six
(6) months of this Lease there is damage for which the cost to repair exceeds
one (1) month's Base Rent, whether or not an Insured Loss, Lessor may
terminate this Lease effective sixty (60) days following the date of
occurrence of such damage by giving a written termination notice to Lessee
within thirty (30) days after the date of occurrence of such damage.
Notwithstanding the foregoing, 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 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 commercially
reasonable 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 on the date specified in the termination
notice and Lessee's option shall be extinguished.

       9.6     ABATEMENT OF RENT; LESSEE'S REMEDIES.

               (a)  ABATEMENT.  In the event of Premises Partial Damage or
Premises Total Destruction or a Hazardous Substance Condition for which
Lessee is not responsible under this Lease, the Rent payable by Lessee for
the period required for the repair, remediation or restoration of such damage
shall be abated in proportion to the degree to which Lessee's use of the
Premises is impaired, but not to exceed the proceeds received from the Rental
Value insurance.  All other obligations of Lessee hereunder shall be
performed by Lessee, and Lessor shall have no liability for any such damage,
destruction, remediation, repair or restoration except as provided herein.

               (b)  REMEDIES.  If Lessor shall be obligated to repair or
restore the Premises and does not commence, in a substantial and meaningful
way, such repair or restoration 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 and such repair or restoration is not commenced
within thirty (30) days thereafter, this Lease shall terminate as of the date
specified in said notice. If the repair or restoration is commenced within
said thirty (30) days, this Lease shall continue in full force and effect.
"COMMENCE" shall mean either the unconditional authorization of the
preparation of the required plans, or the beginning of the actual work on the
Premises, whichever first occurs.

       9.7     TERMINATION -- ADVANCE PAYMENTS.  Upon termination of this
Lease pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment
shall be made concerning advance Base Rent and any other advance payments
made by Lessee to Lessor.  Lessor shall, in addition, return to Lessee so
much of Lessee's Security Deposit as has not been, or is not then required to
be, used by Lessor.

       9.8     WAIVE STATUTES.  Lessor and Lessee agree that the terms of this
Lease shall govern the effect of any damage to or destruction of the Premises
with respect to the termination of this Lease and hereby waive the provisions of
any present or future statute to the extent inconsistent herewith.

10.    REAL PROPERTY TAXES.

       10.1    DEFINITION OF "REAL PROPERTY TAXES."  As used herein, the term
"REAL PROPERTY TAXES" shall include any form of assessment; real estate,
general, special, ordinary or extraordinary, or rental levy or tax (other
than inheritance, personal income or estate taxes); improvement bond; and/or
license fee imposed upon or levied against any legal or equitable interest of
Lessor in the Premises, Lessor's right to other income therefrom, and/or
Lessor's business of leasing, by any authority having the direct or indirect
power to tax and where the funds are generated

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with reference to the Building address and where the proceeds so generated are
to be applied by the city, county or other local taxing authority of a
jurisdiction within which the Premises are located.  The term "REAL PROPERTY
TAXES" shall also include any tax, fee, levy, assessment or charge, or any
increase therein, imposed by reason of events occurring during the term of this
Lease, including but not limited to, a change in the ownership of the Premises.

       10.2

               (a)  PAYMENT OF TAXES.  Lessee shall pay the Real Property
Taxes applicable to the Premises during the term of this Lease.  Subject to
Paragraph 10.2(b), all such payments shall be made at least ten (10) days
prior to any delinquency date.  Lessee shall promptly furnish Lessor with
satisfactory evidence that such taxes have been paid.  If any such taxes
shall cover any period of time prior to or after the expiration or
termination of this Lease, Lessee's share of such taxes shall be prorated to
cover only that portion of the tax bill applicable to the period that this
Lease is in effect, and Lessor shall reimburse Lessee for any overpayment.
If Lessee shall fail to pay any required Real Property Taxes, Lessor shall
have the right to pay the same, and Lessee shall reimburse Lessor therefor
upon demand.

               (b)  ADVANCE PAYMENT.  In the event Lessee incurs a late charge
on any Rent payment, Lessor may, at Lessor's option, estimate the current
Real Property Taxes, and require that such taxes be paid in advance to Lessor
by Lessee, either: (i) in a lump sum amount equal to the installment due, at
least twenty (20) days prior to the applicable delinquency date, or (ii)
monthly in advance with the payment of the Base Rent.  If Lessor elects to
require payment monthly in advance, the monthly payment shall be an amount
equal to the amount of the estimated installment of taxes divided by the
number of months remaining before the month in which said installment becomes
delinquent.  When the actual amount of the applicable tax bill is known, the
amount of such equal monthly advance payments shall be adjusted as required
to provide the funds needed to pay the applicable taxes.  If the amount
collected by Lessor is insufficient to pay such Real Property Taxes when due,
Lessee shall pay Lessor, upon demand, such additional sums as are necessary
to pay such obligations.  All moneys paid to Lessor under this Paragraph may
be intermingled with other moneys of Lessor and shall not bear interest.  In
the event of a Breach by Lessee in the performance of its obligations under
this Lease, then any balance of funds paid to Lessor under the provisions of
this Paragraph may at the option of Lessor, be treated as an additional
Security Deposit.

       10.3    JOINT ASSESSMENT.  If the Premises are not separately
assessed, Lessee's liability 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 conclusively determined by Lessor from
the respective valuations assigned in the assessor's work sheets or such
other information as may be reasonably available.

       10.4    PERSONAL PROPERTY TAXES.  Lessee shall pay, prior to
delinquency, all taxes assessed against and levied upon Lessee Owned
Alterations, Utility Installations, Trade Fixtures, furnishings, equipment
and all personal property of Lessee.  When possible, Lessee shall cause such
property to be assessed and billed separately from the real property of
Lessor.  If any of Lessee's said personal 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.

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

12.    ASSIGNMENT AND SUBLETTING.

       12.1    LESSOR'S CONSENT REQUIRED.

               (a)  Lessee shall not voluntarily or by operation of law
assign, transfer, mortgage or encumber (collectively, "ASSIGN OR ASSIGNMENT")
or sublet all or any part of Lessee's interest in this Lease or in the
Premises without Lessor's prior written consent.

               (b)  A change in the control of Lessee shall not constitute an
assignment requiring consent.

               (e)  Lessee's remedy for any breach of 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, or (iii) alter the primary
liability of Lessee for the payment of Rent or for the performance of any
other obligations to be performed by Lessee.

               (b)  Lessor may accept 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 Rent or performance shall constitute a
waiver or estoppel of Lessor's right to exercise its remedies for Lessee's
Default or Breach.

               (c)  Lessor's consent to any assignment or subletting shall
not constitute a consent to any subsequent assignment or subletting.

               (d)  In the event of any Default or Breach by Lessee, Lessor
may proceed directly against Lessee, any Guarantors or anyone else
responsible for the performance of Lessee's obligations under this Lease,
including any assignee or 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. Lessee agrees to provide Lessor with such other or additional
information and/or documentation as may be reasonably requested.

               (f)  Any assignee of, or sublessee under, this Lease shall, by
reason of accepting such assignment or entering into such sublease, be deemed
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 to in
writing.

       12.3    ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO  SUBLETTING.  The
following terms and conditions shall apply to any subletting by Lessee of all
or any part of the Premises and shall be deemed included in all subleases
under this Lease whether or not expressly incorporated therein:

               (a)  Lessee hereby assigns and transfers to Lessor all of
Lessee's interest in all Rent payable on any sublease, and Lessor may collect
such Rent and apply same toward Lessee's obligations under this Lease;
provided, however, that until a Breach shall occur in the performance of
Lessee's obligations, Lessee may collect said Rent.  Lessor shall not, by
reason of the foregoing or any assignment of such sublease, nor by reason of
the collection of Rent, be deemed liable to the sublessee for any failure of
Lessee to perform and comply with any of Lessee's obligations to such
sublessee.  Lessee hereby irrevocably authorizes and directs any such
sublessee, upon receipt of a written notice

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from Lessor with copy to Lessee stating that a Breach exists in the
performance of Lessee's obligations under this Lease, to pay to Lessor all
Rent due and to become due under the sublease.  Sublessee shall rely upon any
such notice from Lessor and shall pay all Rents to Lessor without any
obligation or right to inquire as to whether such Breach exists,
notwithstanding any claim from Lessee to the contrary.

               (b)  In the event of a Breach by Lessee, Lessor may, at its
option, require 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 prior Defaults or Breaches
of such sublessor.

               (d)  No sublessee shall further assign or sublet all or any part
of the Premises without Lessor's prior written consent.

               (e)  Lessor shall deliver a copy of any notice of Default or
Breach by Lessee to the sublessee, who shall have the right to cure the
Default of Lessee within the grace period, if any, specified in such notice.
The sublessee shall have a right of reimbursement and offset from and against
Lessee for any such Defaults cured by the sublessee.

13.    DEFAULT; BREACH; REMEDIES.

       13.1    DEFAULT; BREACH.  A "DEFAULT" is defined as a failure by the
Lessee to comply with or perform any of the terms, covenants, conditions or
rules under this Lease.  A "BREACH" is defined as the occurrence of one or more
of the following Defaults, and the failure of Lessee to cure such Default within
any applicable grace period:

               (a)  The abandonment of the Premises; or the vacating of the
Premises without providing a commercially reasonable level of security, or where
the coverage of the property insurance described in Paragraph 8.3 is jeopardized
as a result thereof, or without providing reasonable assurances to minimize
potential vandalism.

               (b)  The failure of Lessee to make any payment of Rent or any
Security Deposit required to be made by Lessee hereunder, whether to Lessor or
to a third party, when due, to provide reasonable evidence of insurance or
surety bond, or to fulfill any obligation under this Lease which endangers or
threatens life or property, where such failure continues for a period of five
(5) business days following written notice to Lessee.

               (c)  The failure by Lessee to provide (i) reasonable written
evidence of compliance with Applicable Requirements, (ii) the service
contracts, (iii) the rescission of an unauthorized assignment or subletting,
(iv) a Estoppel Certificate, (v) a requested subordination, (vi) evidence
concerning any guaranty and/or Guarantor, (vii) any document requested under
Paragraph 42 (easements), or (viii) any other documentation or information
which Lessor may reasonably require of Lessee under the terms of this Lease,
where any such failure continues for a period of twenty (20) days following
written notice 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,
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;
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 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 of any general arrangement or assignment for the benefit of creditors;
(ii) becoming a "DEBTOR" as defined in 11 U.S.C. Section 101 or any successor
statute thereto (unless, in the case of a petition filed against Lessee, the
same is dismissed within sixty (60) days); (iii) the appointment of a trustee
or receiver to take possession of substantially all of Lessee's assets
located at the Premises or of Lessee's interest in this Lease, where
possession is not restored to Lessee within thirty (30) days; or (iv) the
attachment, execution or other judicial seizure of substantially all of
Lessee's assets located at the Premises or of Lessee's interest in this
Lease, where such seizure is not discharged within thirty (30) days;
provided, however, in the event that any provision of this subparagraph (e)
is contrary to any applicable law, such provision shall be of no force or
effect, and not affect the validity of the remaining provisions.

               (f)  The discovery that any financial statement of Lessee or
of any Guarantor given to Lessor was materially and adversely 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 basis, and Lessee's failure, within sixty (60) days following
written notice of any such event, to provide written alternative assurance or
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 of its affirmative
duties or obligations, within ten (10) days after written notice (or in case
of an emergency, without notice), Lessor may, at its option, 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 upon receipt of
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 option, may require all
future payments to be made by Lessee to be by cashier's check. In the event
of a Breach, Lessor may, 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:

               (a)  Terminate Lessee's right to possession of the Premises by
any lawful means, in which case this Lease shall terminate and Lessee shall
immediately surrender possession to Lessor. In such event Lessor shall be
entitled to recover from Lessee: (i) 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 the 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 the District within which the Premises are located at the
time of award plus one percent (1%). Efforts by Lessor to mitigate damages
caused by Lessee's Breach of this Lease shall not waive Lessor's right to
recover damages under Paragraph 12. If termination of this Lease is obtained
through the provisional remedy of unlawful detainer, Lessor shall have the
right to recover in such proceeding any repaid Rent and damages as are
recoverable therein, or Lessor may reserve the right to recover all or any
part thereof in a separate suit. If a notice and grace period required under
Paragraph 13.1 was not previously given, a notice to pay rent or quit, or to
perform or quit given to Lessee under the unlawful detainer statute shall
also constitute the notice required by Paragraph 13.1. In such case, the
applicable grace period required by Paragraph 13.1 and the unlawful detainer
statute shall run concurrently, and the failure of Lessee to cure the Default
within the greater of the two 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 and
recover the Rent as it becomes due, in which event Lessee may sublet or
assign, subject only to reasonable limitations. Acts of maintenance, efforts
to relet, and/or the appointment of a receiver to protect the Lessor's
interests, shall not constitute a termination of the Lessee's right to
possession.

               (c)  Pursue any other remedy now or hereafter available under
the laws or judicial decisions of the state where in the Premises are
located. The expiration or termination of this Lease and/or the termination
of Lessee's right to possession shall not relieve Lessee from liability

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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.  Any agreement for free or abated rent
or other charges, 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. Upon Breach 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 unless
subsequently cured, by Lessee. The acceptance by Lessor of rent shall be
deemed a waiver by Lessor of the provisions of this paragraph 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 of Rent 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 any Lender.
Accordingly, if any Rent shall not be received by Lessor within five (5) days
after such amount shall be due, then, without any requirement for notice to
Lessee, Lessee shall pay to Lessor a one-time late charge equal to ten
percent (10%) of each 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 such late payment. 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 the exercise of 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 any provision of this Lease
to the contrary, Base Rent shall, at Lessor's option, become due and payable
quarterly in advance.

       13.5    INTEREST.  Any monetary payment due Lessor hereunder, other
than late charges, not received by Lessor, when due as to scheduled payments
(such as Base Rent) or within thirty (30) days following the date on which it
was due for non-scheduled payment, shall bear interest from the date when
due, as to scheduled payments, or the thirty-first (31st) day after it was
due as to non-scheduled payments. The interest ("INTEREST") charged shall be
equal to the prime rate reported in the Wall Street Journal as published
closest prior to the date when due plus four percent (4%), but shall not
exceed the maximum rate allowed by law. Interest is payable in addition to
the potential late charge provided for in Paragraph 13.4.

       13.6    BREACH BY LESSOR.

               (a)  NOTICE OF BREACH.  Lessor shall not be deemed in breach
of this Lease unless Lessor fails within a reasonable time to perform an
obligation required to be performed by Lessor. For purposes of this
Paragraph, a reasonable time shall in no event be less than thirty (30) days
after receipt by Lessor, and any Lender whose name and address shall have
been furnished 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 are reasonably required for its performance, then
Lessor shall not be in breach if performance is commenced within such thirty
(30) day period and thereafter diligently pursued to completion.

               (b)  PERFORMANCE BY LESSEE ON BEHALF OF LESSOR.  In the event
that neither Lessor nor Lender cures said breach within thirty (30) days
after receipt of said notice, or if having commenced said cure they do not
diligently pursue it to completion, then Lessee may elect to cure said breach
at Lessee's expense and offset from Rent an amount equal to the greater of
one month's Base Rent or the Security Deposit, and to pay an excess of such
expense under protest, reserving Lessee's right to reimbursement from Lessor.
Lessee shall document the cost of said cure and supply said documentation to
Lessor.

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 (collectively "CONDEMNATION"), this Lease shall terminate as to the
part taken as of the date the condemning authority takes title or possession,
whichever first occurs. If more than ten percent (10%) of any building
portion of the premises, or more than twenty-five percent (25%) of the land
area portion of the premises not occupied by any building, is taken by
Condemnation, Lessee may, at Lessee's option, to be exercised in writing
within twenty (20) days after Lessor shall have given Lessee written notice
of such taking (or in the absence of such notice, within twenty (20) 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 proportion to the
reduction in utility of the Premises caused by such Condemnation.
Condemnation awards and/or payments shall be the property of Lessor, whether
such award shall be made as compensation for diminution in value of the
leasehold, the value of the part taken, or for severance damages; provided,
however, that Lessee shall be entitled to any compensation for Lessee's
relocation expenses, loss of business goodwill and/or Trade Fixtures, without
regard to whether or not this Lease is terminated pursuant to the provisions
of this Paragraph. All Alterations and Utility Installations made to the
Premises by Lessee, for purposes of Condemnation only, shall be considered
the property of the Lessee and Lessee shall be entitled to any and all
compensation which is payable therefor. In the event that this Lease is not
terminated by reason of the Condemnation, Lessor shall repair any damage to
the Premises caused by such Condemnation.

15.    BROKERS' FEE.

       15.1    ADDITIONAL COMMISSION.  In addition to the payments owed
pursuant to Paragraph 1.10 above, and unless Lessor and the Brokers otherwise
agree in writing, Lessor agrees that: (a) if Lessee exercises any Option, (b)
if Lessee acquires any rights to the Premises or other premises owned by
Lessor and located within the same Project, if any, within which the Premises
is located, (c) if Lessee remains in possession of the Premises, with the
consent of Lessor, after the expiration of this Lease, or (d) if Base Rent is
increased, whether by agreement or operation of an escalation clause herein,
then, Lessor shall pay Brokers a fee in accordance with the schedule of said
Brokers in effect at the time of the execution of this Lease.

       15.2    ASSUMPTION OF OBLIGATIONS.  Any buyer or transferee of Lessor's
interest in this Lease shall be deemed to have assumed Lessor's obligation
hereunder. Each Broker shall be a third party beneficiary of the provisions of
Paragraphs 1.10, 15, 22 and 31. If Lessor fails to pay to a Broker any amounts
due as and for commissions pertaining to this Lease when due, then such amounts
shall accrue Interest. In addition, if Lessor fails to pay any amounts to
Lessee's Broker when due, Lessee's Broker may send written notice to Lessor and
Lessee of such failure and if Lessor fails to pay such amounts within ten (10)
days after said notice, Lessee shall pay said monies to its Broker and offset
such amounts against Rent. In addition, Lessee's Broker shall be deemed to be a
third party beneficiary of any commission agreement entered into by and/or
between Lessor and Lessor's Broker.

       15.3    REPRESENTATIONS AND INDEMNITIES OF BROKER RELATIONSHIPS.
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 the Brokers, if
any) in connection with this Lease, and that no one other than said named
Brokers is entitled to any commission or finder's fee in connection herewith.
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, attorneys' fees reasonably incurred with
respect thereto.

16.    ESTOPPEL CERTIFICATES.

               (a)  Each Party (as "RESPONDING PARTY") shall within ten (10)
business days after written notice from the other Party (the "REQUESTING
PARTY") execute, acknowledge and deliver to the Requesting Party a statement
in writing in form similar to the then most current "ESTOPPEL CERTIFICATE"
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.

               (b)  If the Responding Party shall fail to execute or deliver
the Estoppel Certificate within such ten business day period, the Requesting
Party may execute an Estoppel Certificate stating that: (i) the Lease is in
full force and effect without modification except as may be represented by
the Requesting Party, (ii) there are no uncured defaults in the Requesting
Party's performance, and (iii) if Lessor is the Requesting Party, not more
than one month's rent has been paid in advance. Prospective purchasers and
encumbrances may rely upon the Requesting Party's Estoppel Certificate, and
the Responding Party shall be estopped from denying the truth of the facts
contained in said Certificate.

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               (c)  If Lessor desires to finance, refinance, or sell the
Premises, or any part thereof, Lessee and all Guarantors shall delivery to any
potential lender or purchaser designated by Lessor such financial statements 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.    DEFINITION OF LESSOR.  The term "LESSOR" as used herein shall mean the
owner or owners at the time in question of the fee title to the Premises, or, if
this is a sublease, of the Lessee's interest in the prior lease. In the event of
a transfer of Lessor's title or interest in the Premises or this Lease, Lessor
shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor. Except as provided in Paragraph 15, 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. Notwithstanding the above, and subject to the provisions of Paragraph
20 below, the original Lessor under this Lease, and all subsequent holders of
the Lessor's interest in this Lease shall remain liable and responsible with
regard to the potential duties and liabilities of Lessor pertaining to Hazardous
Substances as outlined in Paragraph 6 above.

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.    DAYS.  Unless otherwise specifically indicated to the contrary, the word
"days" as used in this Lease shall mean and refer to calendar days.

20.    LIMITATION ON LIABILITY.  Subject to the provisions of Paragraph 17
above, the obligations of Lessor under this Lease shall not constitute personal
obligations of Lessor, the individual partners of Lessor or its or their
individual partners, directors, officers or shareholders, and Lessee shall look
to the Premises, and to no other assets of Lessor, for the satisfaction of any
liability of Lessor with respect to this Lease, and shall not seek recourse
against the individual partners of Lessor, or its or their individual partners,
directors, officers or shareholders, or any of their personal assets for such
satisfaction.

21.    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.

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. The liability (including court costs and Attorneys'
fees), of any Broker with respect to negotiation, execution, delivery or
performance by either Lessor or Lessee under this Lease or any amendment or
modification hereto shall be limited to an amount up to the fee received by such
Broker pursuant to this Lease; provided, however, that the foregoing limitation
on each Broker's liability shall not be applicable to any gross negligence or
willful misconduct of such Broker.

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 courier)
or may be sent by regular, certified or registered mail or U.S. Postal Service
Express Mail, with postage prepaid, or by facsimile transmission, 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 notices. Either Party may by written
notice to the other specify a different address for notice, except that upon
Lessee's taking possession of the Premises, the Premises shall constitute
Lessee's address for notice. A copy of all notices to Lessor shall be
concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate in writing.

       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 on receipt.
Notices delivered by United States Express Mail or overnight courier that
guarantee next day delivery shall be deemed given one (1) business day after
delivery of the same to the Postal Service or courier. Notices transmitted by
facsimile transmission or similar means shall be deemed delivered upon
telephone confirmation of receipt, provided a copy is also delivered via
delivery or mail. If notice is received on a Saturday, Sunday or 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 of any other term, covenant or condition hereof.
Lessor's consent to, or approval of, any 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.  The acceptance of Rent by Lessor shall not be a waiver of any
Default or Breach by Lessee. Any payment by Lessee may be accepted by
Lessor on account of moneys 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 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 termination of this
Lease. In the event that Lessee holds over, then the Base Rent shall be
increased to one hundred fifty percent (150%) of the Base Rent applicable
during the month immediately preceding the expiration or termination.
Nothing contained herein shall be construed as 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; CONSTRUCTION OF AGREEMENT.  All provisions
of this Lease to be observed or performed by Lessee are both covenants and
conditions.  In construing this Lease, all headings and titles are for the
convenience of the parties only and shall not be considered a part of this
Lease.  Whenever required by the context, the singular shall include the
plural and vice versa.  This Lease shall not be construed as if prepared by
one of the parties, but rather according to its fair meaning as a whole, as
if both parties had prepared it.

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 upon the Premises, to any and all advances
made on the security thereof, and to all renewals, modifications, and
extensions thereof. Lessee agrees that the holders of any such Security
Devices (in this Lease together referred to as "Lender") shall have no
liability or obligation to perform any of the obligations of Lessor under
this Lease.  Any Lender may elect to have this Lease and/or any Option
granted hereby superior to the lien of its Security Device by giving written
notice thereof to Lessee, whereupon 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

                                        PAGE 10         Initials  RC     PN
                                                                 ------ -----

                                                              FORM 204N-R-2/97

<Page>

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 a commercially reasonable non-disturbance
agreement (a "NON-DISTURBANCE AGREEMENT") from the Lender which Non-Disturbance
Agreement provides that Lessee's possession of the Premises, 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.  Further, within sixty (60) days after the execution of this Lease,
Lessor shall use its commercially reasonable efforts to obtain a Non-Disturbance
Agreement from the holder of any pre-existing Security Device which is secured
by the Premises.  In the event that Lessor is unable to provide the
Non-Disturbance Agreement within said sixty (60) days, then Lessee may, at
Lessee's option, directly contact Lessor's lender and attempt to negotiate for
the execution and delivery of a Non-Disturbance Agreement.

       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 the Premises, Lessee and Lessor shall execute
such further writings as may be reasonably required to separately document any
subordination, attornment and/or Non-Disturbance Agreement provided for herein.

31.    ATTORNEYS' FEES.  If any Party or Broker brings an action or proceeding
involving the Premises to enforce the terms hereof or to 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' fees 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.  In addition, Lessor
shall be entitled to attorneys' fees, costs and expenses incurred in the
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.

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 on not less than one (1)
business day prior written notice for the purpose of showing the same to
prospective purchasers, lenders, or lessees, and making such alterations,
repairs, improvements or additions to the Premises as Lessor may deem
necessary. All such activities shall be without abatement of rent or
liability to Lessee. Lessor may at any time place on the Premises any
ordinary "FOR SALE" signs and Lessor may during the last six (6) months of
the term hereof place on the Premises any ordinary "FOR LEASE" signs.  Lessee
may at any time place on or about the Premises any ordinary "FOR SUBLEASE"
sign.

33.    AUCTIONS.  Lessee shall not conduct, nor permit to be conducted, any
auction upon the Premises without Lessor's prior written consent, Lessor shall
not be obligated to exercise any standard of reasonableness in determining
whether to permit an auction.

34.    SIGNS.  Except for ordinary "For Sublease" signs, Lessee shall not place
any sign upon the Premises without Lessor's prior written consent.  All signs
must comply with all Applicable Requirements.

35.    TERMINATION; MERGER.  Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate in the
Premises; provided, however, that Lessor may elect to continue any one or all
existing subtenancies.  Lessor's failure within ten (10) days following any such
event to elect 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.  Except 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,
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 upon receipt
of an invoice and supporting documentation therefor.  Lessor's consent to any
act, assignment or subletting 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.
The failure to specify herein any particular condition to Lessor's consent shall
not preclude the imposition 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.  In the event that either Party disagrees with
any determination made by the other hereunder and reasonably requests the
reasons for such determination, the determining party shall furnish its reasons
in writing and in reasonable detail within ten (10) business days following such
request.

37.

38.    QUIET POSSESSION.  Subject to payment by Lessee of the Rent and
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 and quiet enjoyment of the Premises during the term hereof.

39.    OPTIONS.

       39.1    DEFINITION.  "OPTION" shall mean: (a) the right to extend the
term of or renew this Lease or to extend or renew any Lease that Lessee has
on other property of Lessor; (b) the right of first refusal or first offer to
lease either the Premises or other property of Lessor; (c) the right to
purchase or the right of first refusal to purchase the Premises or other
property of Lessor.

       39.2    OPTIONS PERSONAL TO ORIGINAL LESSEE.  Each Option granted to
Lessee in this Lease is personal to the original Lessee, and cannot be assigned
or exercised by anyone other than said original Lessee and only while the
original Lessee is in full possession of the Premises and, if requested by
Lessor, with Lessee certifying that Lessee has no intention of thereafter
assigning or subletting.

       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 have been validly exercised.

       39.4    EFFECT OF DEFAULT ON OPTIONS.

               (a)  Lessee shall have no right to exercise an Option: (i) during
the period commencing with the giving of any notice of Default and continuing
until said Default is cured, (ii) during the period of time any Rent is unpaid
(without regard to whether notice thereof is given Lessee), (iii) during the
time Lessee is in Breach of this Lease.

               (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)  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 prior to the commencement of the extended term.

                                        PAGE 11         Initials  RC     PN
                                                                 ------ -----

                                                              FORM 204N-R-2/97

<Page>

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 to itself the right, from time to time,
to grant, without the consent or joinder of Lessee, such easements, rights and
dedications that Lessor deems necessary, and to cause the recordation of parcel
maps and restrictions, so long as such easements, rights, dedications, maps and
restrictions do not unreasonably interfere with the use of the Premises by
Lessee.  Lessee agrees to sign any documents reasonably requested by Lessor to
effectuate any such easement rights, dedication, map or restrictions.

43.    PERFORMANCE UNDER PROTEST.  If at any time a dispute shall arise as to
any amount or sum of money to be paid by one Party to the other under the
provisions hereof, the Party against whom the obligation to pay the money is
asserted shall have the right to make payment "under protest" and such payment
shall not be regarded as a voluntary payment and there shall survive the right
on the part of said Party to institute suit for recovery of such sum.  If it
shall be adjudged that there was no legal obligation on the part of said Party
to pay such sum or any part thereof, said Party shall be entitled to recover
such sum or so much thereof as it was not legally required to pay.

44.    AUTHORITY.  If either Party hereto is a corporation, trust, limited
liability company, partnership, or similar entity, 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.  Each party
shall, within thirty (30) days after request, deliver to the other party
satisfactory evidence 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 Party or their agent and
submission of same to the other Party shall not be deemed an offer to lease to
the other Party.  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.  As long as they do not
materially change Lessee's obligations or rights hereunder, Lessee agrees to
make such reasonable non-monetary modifications to this Lease as may be
reasonably required by a Lender in connection with the obtaining of normal
financing or refinancing of the Premises.

48.    MULTIPLE PARTIES.  If more than one person or entity is named herein as
either Lessor or Lessee, such multiple Parties shall have joint and several
responsibility to comply with the terms of this Lease.

49.    MEDIATION AND ARBITRATION OF DISPUTES.  An Addendum requiring the
Mediation and/or the Arbitration of all disputes between the Parties and/or
Brokers arising out of this Lease / / IS /X/ IS NOT attached to this Lease.

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.

--------------------------------------------------------------------------------
ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN
INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY,
LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT
RELATES. THE PARTIES ARE URGED TO:

1.     SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS
LEASE.

2.     RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION
OF THE PREMISES.  SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE
POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE
STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND THE
SUITABILITY OF THE PREMISES FOR LESSEE'S INTENDED USE.

WARNING: IF THE PREMISES IS LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN
PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE
STATE IN WHICH THE PREMISES IS LOCATED.
--------------------------------------------------------------------------------

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

<Table>
<S>                                                    <C>
Executed at:                                           Executed at: 2:00pm,
             10:45 AM   San Diego                                   213 Technology Drive, Irvine, CA
           --------------------------------------                  -------------------------------------
on: June 29, 1998                                      on: June 26, 1998
   ----------------------------------------------         ----------------------------------------------
By LESSOR:                                             By LESSEE:
   Del Mar Capital Group/Ridgeview, LLC                   CYTOVIA, INC., A DELAWARE CORPORATION
-------------------------------------------------      -------------------------------------------------

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

By: /s/Paul Newkirk                                    By: /s/Richard Canote
   ----------------------------------------------         ----------------------------------------------
Name Printed: Paul Newkirk                             Name Printed: Richard Canote
            -------------------------------------                  -------------------------------------
Title: Officer                                         Title: Corporate Secretary
      -------------------------------------------            -------------------------------------------

By:                                                    By:
   ----------------------------------------------         ----------------------------------------------
Name Printed: Brian Sipe                               Name Printed:
            -------------------------------------                  -------------------------------------
Title: Officer                                         Title:
      -------------------------------------------            -------------------------------------------
Address: P.O. Box 2026                                 Address: 201 Technology Drive
        -----------------------------------------              -----------------------------------------
         Del Mar, CA 92014                                      Irvine, CA 92618
-------------------------------------------------      -------------------------------------------------
Telephone: (619)  481-5105                              Telephone: (949) 753-6115
                  -------------------------------                        -------------------------------
Facsimile: (619)  259-8973                              Facsimile: (949) 753-6109
                  -------------------------------                        -------------------------------
Federal ID No.                                         Federal ID No.   33-0787805
                ---------------------------------                      ---------------------------------
</Table>

NOTE: These forms are often modified to meet changing requirements of law and
industry needs. Always write or call to make sure you are utilizing the most
current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 700 So. Flower
Street, Suite 600, Los Angeles, California 90017. (213) 687-8777.
Fax No. (213) 687-8616.

                                        PAGE 12               FORM 204N-R-2/97

-C-COPYRIGHT 1997 - BY AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION. ALL
RIGHTS RESERVED. NO PART OF THESE WORKS MAY BE REPRODUCED IN ANY FORM WITHOUT
PERMISSION IN WRITING.

<Page>

ADDENDUM TO THAT STANDARD INDUSTRIAL/COMMERCIAL SINGLE TENANT LEASE-NET DATED
MAY 28, 1998 BY AND BETWEEN DEL MAR CAPITAL GROUP/RIDGEVIEW, LLC, AS LESSOR,
AND CYTOVIA, INC., A CALIFORNIA CORPORATION, AS LESSEE, FOR THAT SPACE
LOCATED AT 6650 NANCY RIDGE DRIVE, IN THE CITY OF SAN DIEGO, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA.

================================================================================

Page 1 of 2

50.      TENANT IMPROVEMENTS: Lessee shall contract with a licensed architect
         approved by Lessor for preparation of plans and specifications for
         tenant improvements. Lessor and Lessee hereby agree that plans and
         specifications for the tenant improvements of the Lessee's area
         will be approved by the Lessor and the Lessee jointly which shall
         not be unreasonably withheld by Lessor, within forty-five (45) days
         from the full execution of this lease. Lessor shall be responsible
         for the construction associated with the tenant improvements
         illustrated and set forth in Exhibit "B" which shall be attached
         hereto and made a part of this lease at a later date. Lessor shall
         obtain a building permit to construct the improvements as soon as
         possible and Lessor shall diligently and expeditiously complete the
         construction of the improvements as soon as reasonably possible
         after obtaining necessary building permits. The term "completion"
         is hereby defined to mean the date the City of San Diego Building
         Department makes final inspection of the premises and authorizes
         the final release of restrictions on the use of public utilities in
         connection therewith and the same are in broom clean condition and
         an occupancy permit is issued. Lessor shall provide Lessee with a
         "Tenant Improvement Allowance" equal to One Million Eight Hundred
         and Eighty Thousand Dollars ($1,880,000.00). The above mentioned
         Tenant Improvement Allowance shall include all architectural
         planning and permitting fees. Any additional cost associated with
         construction on the tenant improvements shall be paid for by the
         Lessee at Lessee's sole cost and expense. Lessee shall pay to
         Lessor, upon Lessor's written demand, or as otherwise required by
         Lessor's lender, all contractor's invoices in excess of the above
         mentioned Tenant Improvement Allowance for the overage tenant
         improvement costs. "Tenant improvements" shall include all
         improvements required for Lessee's use and occupancy which do not
         presently exist in the building.

         Prior to the construction of any tenant improvements, it is
         understood by both Lessee and Lessor that the basic shell of the
         Building, consisting of a two story concrete tilt-up structure,
         footings, foundations, floors, exterior walls, roof, fire sprinkler
         riser and trunk lines from which to develop the fire sprinkler
         system (but excluding the distribution system, including drops and
         nipples, and the monitoring system), and central electrical room
         (with main service stubbed to the room), with building electrical
         service, telephone, water, plumbing, and other utilities necessary
         for the Lessee Improvements extended from the street and stubbed to
         the Building.

         The estimated Term Commencement Date and Lessee's obligation to pay
         Basic Annual Rent and Additional Rent under the Lease shall be
         extended one day for each day of delay in Substantial Completion of
         Lessor's Work and the Lessee Improvement Work which results from a
         Force-Majeure Delay or Lessor-Caused Delay. Lessee-Caused Delays
         shall not extend the estimated Term Commencement Date, but shall
         extend Lessor's obligation to substantially complete Lessor's Work
         and the Lessee Improvement Work by the Estimated Term Commencement
         Date; Lessee's obligation to pay Basic Annual Rent shall commence
         at such time as the Term Commencement Date would have occurred for
         Lessee-Caused Delays.

51.      RENTAL SCHEDULE:

<Table>
<S>                           <C>              <C>
         Months 1-4    /      $28,918.00       per month plus operating expenses
         Months 5-12   /      $43,947.00       per month plus operating expenses
         Months 13-24  /      $45,265.00       per month plus operating expenses
         Months 25-36  /      $46,623.00       per month plus operating expenses
         Months 37-48  /      $48,022.00       per month plus operating expenses
         Months 49-60  /      $49,463.00       per month plus operating expenses
         Months 61-72  /      $50,947.00       per month plus operating expenses
         Months 73-84  /      $52,475.00       per month plus operating expenses
         Months 85-96  /      $54,049.00       per month plus operating expenses
         Months 97-109 /      $55,671.00       per month plus operating expenses
         Months 109-120/      $57,341.00       per month plus operating expenses
</Table>

52.      SIGNAGE: Lessee shall have the option to install building and/or
         monument signage at Lessee's sole cost and expense. Lessee must
         first submit sign design to Lessor for Lessor's approval which
         shall not be unreasonably be withheld. Any signage that Lessee
         installs must be in compliance with all City of San Diego signage
         codes and ordinances.

53.      PARKING: Approximately 65 surface parking spaces will be provided
         free of charge exclusively for Lessee.

/s/ RC                                  /s/ PN
-------------------------------------   ---------------------------------------
LESSEE'S INITIALS                       LESSOR'S INITIALS

<Page>

ADDENDUM TO THAT STANDARD INDUSTRIAL/COMMERCIAL SINGLE TENANT LEASE-NET DATED
MAY 28, 1998 BY AND BETWEEN DEL MAR CAPITAL GROUP/RIDGEVIEW, LLC, AS LESSOR,
AND CYTOVIA, INC., A CALIFORNIA CORPORATION, AS LESSEE, FOR THAT SPACE
LOCATED AT 6650 NANCY RIDGE DRIVE, IN THE CITY OF SAN DIEGO, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA.

================================================================================

Page 2 of 2

54.      TRIPLE NET LEASE: Lessee understands that this is a triple net lease
         agreement and that in addition to the stated rental schedule,
         Lessee shall also be responsible for the property taxes, property
         insurance, common area maintenance (trash, water, landscaping,
         etc.), all utilities, property management fees and all other costs
         and expenses payable by Lessee pursuant to the terms of the lease.

55.      LENDER APPROVAL: This lease agreement is subject to Lender's approval.
         Should Lessor's Lender reject the terms and conditions, as well as
         Lessee's Tenant Improvement Allowance, set forth in this lease, the
         lease should then immediately become null and void. Lessee shall
         have the option to terminate this lease agreement if Lessor's
         Lender has not approved this lease document, in writing, within
         thirty (30) days following the day this lease is fully executed by
         both parties.

56.      AUDIT RIGHT: Lessee reserves the right to audit charges made by Lessor
         for taxes, insurance and common area charges on an annual basis.
         Cost of the audit shall be borne by Lessee unless the audit
         discovers overcharges in excess of $10,000. In the case of
         overcharges being in excess of $10,000 on an annual basis, Lessor
         shall bear the cost of the audit.

/s/ RC                                  /s/ PN
-------------------------------------   ---------------------------------------
LESSEE'S INITIALS                       LESSOR'S INITIALS

<Page>

                                   EXHIBIT A

                       SITE PLAN AND SHELL BUILDING PLAN

                            6650 NANCY RIDGE DRIVE

                         [MEZZANINE LEVEL FLOOR PLAN]

                                 [SITE PLAN]

<Page>

                                  EXHIBIT B

                [FORMER FOR LETTER OF CREDIT SECURITY DEPOSIT]

     1.  SECURITY DEPOSIT

         1.1  Promptly upon execution of the Lease, Lessee shall deposit with
Lessor an irrevocable stand-by letter of credit ("Letter of Credit") in favor
of Lessor in the principal amount of $263,681.00 in a form reasonably
acceptable to Lessor, to be held by Lessor as security for the payment of
Rent and for Lessee's faithful performance of all of its other obligations
under this Lease. If Lessee fails to pay Rent, or otherwise Defaults under
this Lease, Lessor may (but shall not be required to) draw from the Letter of
Credit the amount required to cure the Default. Lessor and Lessee agree that
Lessee's required contribution to payment of tenant improvements shall be
included within the term "rent" as used in Section 1950.7 of the Civil Code.

         1.2  Lessee shall be responsible for any expenses in obtaining and
maintaining the Letter of Credit.

         1.3  The Letter of Credit, and any replacement Letter of Credit,
shall be issued by a financial institution reasonably acceptable to Lessor,
with an office in San Diego County authorized to disburse funds upon a draw
request. Should the institution be placed in conservatorship or receivership
by the Federal Deposit Insurance Corporation or any other state of federal
regulatory agency, Lessee shall, within thirty (30) days after written
request by Lessor, provide a replacement Letter of Credit from a financial
institution reasonably acceptable to Lessor, and in the event Lessee fails to
do so, Lessor may draw on the Letter of Credit and use the proceeds thereof
as a security deposit in accordance with the provisions of Section 9.9 below.

         1.4  In the event of a partial draw on the Letter of Credit, Lessee
shall immediately replenish the Letter of Credit, or substitute a new Letter
of Credit, to the full amount set forth above.

         1.5  The Letter of Credit shall provide (i) that the issuer of the
Letter of Credit shall pay to Lessor the amount in Default immediately upon
presentation in San Diego County of a sight draft by Lessor accompanied by a
certified statement signed by an officer of the manager of Lessor (or, if any
successor Lessor is a corporation or a partnership, by any officer of the
corporation or general partner of the partnership, as the case may be)
stating that a Default has occurred under the Lease as a result of which
Lessor is entitled to collect the amount specified in the site draft in order
to cure the Default, and (ii) that the issuer shall have no obligation to
confirm that a Default has occurred, or the amount which Lessor is entitled
to draw, or that notice of the Default has been given to Lessee.

         1.6  The initial Letter of Credit shall be for a period of not less
than one (1) year, and any replacement Letter of Credit shall be for a period
of not less than one (1) year. The initial Letter of Credit (or any later
replacement Letter of Credit) shall be replaced by Lessee by delivering to
Lessor a replacement Letter of Credit at least thirty (30) days prior to

                                      -1-
<Page>

the expiration of the then current Letter of Credit. If Lessee fails to
deliver a replacement Letter of Credit at least thirty (30) days prior to the
expiration of the then current Letter of Credit, Lessor shall have the right
to draw the total amount of the then current Letter of Credit and hold the
proceeds thereof as a security deposit pursuant to the provisions hereof.
Subject to the provisions of Section 1.12, the Letter of Credit shall be
successively renewed or replaced until that date which is forty-five (45)
days after the expiration of the term of this Lease.

         1.7  The Letter of Credit and any replacement Letter of Credit shall
be transferable by Lessor to a successor Lessor or mortgagee or beneficiary
of a deed of trust encumbering the Premises, or, in the alternative, a
substitute Letter of Credit shall be issued to any such entity at the request
of Lessor; provided, however, that Lessor shall pay any expenses incurred by
Lessee on account of any such transfer or issuance.

         1.8  Upon drawing any Letter of Credit, Lessor shall use, apply or
retain, at any time and from time to time, all or any portion of the proceeds
of the Letter of Credit for the payment of any Rent then in Default, and to
compensate Lessor for any other loss or damage which Lessor may suffer by
reason of any such Default. If at any time any portion of said proceeds is so
used or applied, Lessee shall, within fifteen (15) days after receipt of
written demand therefor, deposit cash or a replacement Letter of Credit with
Lessor in an amount sufficient to restore the security to its original amount
(or such lesser amount as is required by Section 9.12) and Lessee's failure
to do so shall be a material breach of this Lease. Lessor shall promptly
refund to Lessee any portion of said proceeds not so used or applied,
provided that Lessee has restored the Letter of Credit as required under the
preceding sentence; in the event Lessee has not done so, Lessor shall deposit
any such portion in an interest bearing account to be used, applied or
retained under the terms of this Article 9, with interest added to principal.

         1.9  If at any time Lessor has drawn on the Letter of Credit but has
not yet used the proceeds to cure the Default, and Lessee has cured the
Default and restored the Letter of Credit as set forth in Section 1.6 above,
Lessor shall pay the proceeds to Lessee less compensation for any other loss
or damage which Lessor suffered by reason of the Default.

         1.10 In the event of bankruptcy or other debtor/creditor proceedings
against Lessee, the Letter of Credit, and/or the proceeds of the Letter of
Credit shall be deemed to be applied first to the payment of Rent and other
charges due Lessor for all periods prior to the filing of such proceedings.

         1.11 Lessor shall deliver the Letter of Credit, any replacement
Letter of Credit, and any proceeds of a Letter of Credit to any purchaser
of Lessor's interest in the Premises, and thereupon Lessor shall be
discharged from any further liability with respect thereto provided that such
purchaser has agreed to assume in writing the obligations of Lessor
hereunder. This provision shall also apply to any subsequent transfers.

         1.12 If Lessee is not then in Default of any provision of this Lease
to be performed by it, then the Letter of Credit, any replacement Letter of
Credit, the proceeds of a

                                       -2-
<Page>

Letter of Credit, or any balance thereof, shall be reduced by the amount of
$43,946.00 on the first day of the thirteenth (13th), twenty-fifth (25th),
thirty-seventh (37th) and forty-ninth (49th) months of the term.

         1.13 The Letter of Credit, any replacement Letter of Credit, and any
proceeds of a Letter of Credit shall be returned to Lessee, less any amounts
required to cure a Default, within thirty (30) days following the expiration
of this Lease, except for amounts which are needed by Lessor to cure any
Default by Lessee.

                                      -3-<PAGE>

                                                                    Exhibit 10.8

================================================================================

                            STOCK PURCHASE AGREEMENT

                          Dated as of October 26, 2001

                                     Between

                             RHM Teleservices, Inc.

                  And the Investors Listed on Exhibit A Hereto
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
===================================================================================================================
                                                                                                               PAGE
                                                                                                               ----
<S>                                                                                                            <C>
1.       Subscription for Shares and Warrants.................................................................    3
         1.1      Subscription for Shares.....................................................................    3
         1.2      Subscription for Warrants...................................................................    4
         1.3      Placement Fee...............................................................................    4
         1.4      Closing.....................................................................................    4

2.       Representations and Warranties of the Company........................................................    5
         2.1      Organization and Standing...................................................................    5
         2.2      Corporate Power.............................................................................    5
         2.3      Capitalization..............................................................................    5
         2.4      Authorization...............................................................................    6
         2.5      Valid Issuance..............................................................................    6
         2.6      SEC Documents; Financial Statements.........................................................    6
         2.7      No Conflicts................................................................................    7
         2.8      Contracts...................................................................................    7
         2.9      Litigation..................................................................................    7
         2.10     Tax Returns.................................................................................    8
         2.11     Governmental Consents.......................................................................    8
         2.12     Employment Matters; ERISA Matters...........................................................    8
         2.13     Intellectual Property Rights................................................................    9
         2.14     Environmental Laws..........................................................................    9
         2.15     Regulatory Permits; Compliance..............................................................   10
         2.16     Investment Company Status...................................................................   10
         2.17     Accuracy of Information.....................................................................   11
         2.18     Labor Disturbances..........................................................................   11
         2.19     Internal Accounting Controls................................................................   11
         2.20     S-3 Registration............................................................................   11
         2.21     Use of Proceeds.............................................................................   11
         2.22     No Material Adverse Changes.................................................................   11
         2.23     Listing and Maintenance Requirements Compliance.............................................   11
         2.24     Title.......................................................................................   12
         2.25     Insurance...................................................................................   12
         2.26     Registration Rights; Rights of Participation................................................   12

3.       Representations and Warranties of Investor...........................................................   12
         3.1      Organization and Standing; Power............................................................   12
         3.2      Authorization...............................................................................   13
         3.3      Experience..................................................................................   13
         3.4      Investment Purpose..........................................................................   13
         3.5      Access to Data..............................................................................   13
         3.6      Residency...................................................................................   14
         3.7      Accredited Investor.........................................................................   14
</TABLE>
<PAGE>

<TABLE>
<S>                                                                                                            <C>
         3.8      Restrictive Legends.........................................................................   14
         3.9      Transactions in Common Stock................................................................   15
         3.10     No General Solicitation.....................................................................   15

4.       Registration Rights and Termination Events...........................................................   15
         4.1      Registration Rights.........................................................................   15
         4.2      Termination Events..........................................................................   15

5.       Closing Conditions...................................................................................   15
         5.1      Conditions to the Company's Obligation to Sell..............................................   15
         5.2      Conditions to Each Investor's Obligation to Purchase........................................   16

6.       Right of First Refusal...............................................................................   17
         6.1      Right of First Refusal......................................................................   17
         6.2      Definition of New Securities................................................................   17
         6.3      Notice of Right.............................................................................   18
         6.4      Exercise of Right...........................................................................   18
         6.5      Lapse and Reinstatement of Right............................................................   18

7.       Miscellaneous........................................................................................   18
         7.1      Governing Law...............................................................................   18
         7.2      Expenses....................................................................................   18
         7.3      Survival....................................................................................   18
         7.4      Successors and Assigns......................................................................   19
         7.5      Entire Agreement............................................................................   19
         7.6      Assignment and Transfer.....................................................................   19
         7.7      Amendment and Waiver........................................................................   19
         7.8      Notices.....................................................................................   19
         7.9      Counterparts................................................................................   20
</TABLE>

                                      ii
<PAGE>

STOCK PURCHASE AGREEMENT

         This Stock Purchase Agreement (including the Exhibits hereto, the
"Agreement"), dated as of October 26, 2001, is entered into by and among the
investors listed on Exhibit A hereto, LLC (each an "Investor" or jointly, the
"Investors") and RMH Teleservices, Inc., a Pennsylvania corporation (the
"Company").

         WHEREAS, pursuant to a Special Meeting of the Board of Directors of the
Company held on September 25, 2001 and a Special Meeting of the Board of
Directors of the Company held on September 28, 2001, the Company was authorized
to issue up to 3,000,000 shares of its Common Stock, no par value per share (the
"Common Stock"), and warrants to purchase up to an additional 3,000,000 shares
of Common Stock (the "Offering"), to a group of investors, including certain of
the Company's existing investors;

         WHEREAS, the Company previously issued a portion of these shares of
Common Stock and warrants pursuant to the terms of the Stock Purchase Agreement
dated as of September 28, 2001 by and among the Company and the investors listed
on Schedule A attached thereto;

         WHEREAS, pursuant to the authority of the Board of Directors of the
Company, the Company desires to issue additional shares of Common Stock and
warrants in completion of the Offering, such Shares and Warrants (as such terms
are defined below) to be issued to the Investors pursuant to the terms and
conditions set forth in this Agreement;

         WHEREAS, the Company will at the Closing (as defined below) sell up to
217,804 shares of its Common Stock, to the Investors and the Investors will
purchase the Shares of Common Stock from the Company on the terms and conditions
set forth herein;

         WHEREAS, the Company will at the Closing sell up to 72,601 Warrants to
the Investors and the Investors will purchase the Warrants from the Company on
the terms and conditions set forth herein and therein;

         WHEREAS, in consideration for the Investors entering into this
transaction, the Company will pay to the Investors, in cash, an aggregate of
$100,000 to be allocated among the Investors as set forth on Exhibit A and issue
to the Investors an additional 10,890 Warrants from the Company on the terms and
conditions set forth herein and therein in the respective amounts set forth on
Exhibit A; and

     NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements contained in this Agreement, the parties agree as
follows:

     1.     Subscription for Shares and Warrants.

     1.1    Subscription for Shares.

     (a)    Authorization of Shares. The Company will authorize the sale and
issuance of up to 217,804 shares of its Common Stock (the "Shares"), having the
rights, privileges and
<PAGE>

preferences as set forth in the Company's Articles of Incorporation, as amended
to date (the "Articles of Incorporation").

     (b)    Sale of Common Stock. Subject to the terms and conditions hereof,
each Investor agrees, severally and not jointly, to purchase at the Closing (as
defined below) and the Company agrees to issue and sell to each Investor, that
number of shares of the Company's Common Stock set forth opposite each Investors
name on Exhibit A, at a price of $9.60 per share (the "Share Purchase Price").

     1.2    Subscription for Warrants.

     (a)    Authorization of Warrants. The Company will authorize the sale and
issuance of up to 228,694 of its Warrants (each a "Warrant" and collectively,
the "Warrants") to purchase one (1) share of its Common Stock (collectively, the
"Warrant Shares") at an exercise price of $12.00, having the rights, privileges
and preferences as set forth in the form of Warrant attached hereto as Exhibit
B.

     (b)    Sale of Warrants. Subject to the terms and conditions hereof, each
Investor agrees, severally and not jointly, to purchase at the Closing and the
Company agrees to issue and sell to each Investor, that number of Warrants set
forth opposite each Investor's name on Exhibit A, at a price of $0.1251 per
Warrant (the "Warrant Purchase Price"). The sum of the Warrant Purchase Price
and the Share Purchase Price is referred to herein as the "Purchase Price."

     1.3    Placement Fee. In consideration of the Investors agreeing to
purchase the Shares described in Section 1.1 and the Warrants described in
Section 1.2, Company will authorize the issuance and issue to the Investors an
aggregate of an additional 10,890 Warrants (the "Placement Warrants"), in the
respective amount set forth in Exhibit A, and pay to the Investors an aggregate
amount of $100,000 (the "Cash Placement Fee"), to be allocated among the
Investors in their sole discretion, in the respective amounts set forth in
Exhibit A; provided, that the Placement Warrants issued pursuant to this Section
1.3 shall not be subject to Section 4 herein, including, but not limited to, the
provisions relating to the declaration of a Termination Event (as defined
below). The Cash Placement Fee will be not be paid, but will be credited against
the Purchase Price of the Shares and Warrants to be purchased by the Investors
at Closing.

     1.4    Closing. The closing (the "Closing") of the purchase and sale of the
Shares shall take place at the offices of Wolf, Block, Schorr and Solis-Cohen
LLP, 1650 Arch Street, Philadelphia, PA 19103, at 10:00 a.m., on October 26,
2001, or at such other time and place as the Company and the Investors mutually
agree upon orally or in writing (the "Closing Date"). At the Closing, the
Company shall deliver to each Investor certificates representing the shares of
Common Stock and the Warrants which such Investor is purchasing and the
Placement Warrants (as set forth in Exhibit A) against delivery to the Company
by such Investors of a wire transfer in immediately available funds in the
aggregate amount of $2,100,000, the Purchase Price therefor, minus the

                                      -2-
<PAGE>

Cash Placement Fee.

     2.     Representations and Warranties of the Company.

     As a material inducement to the Investors to enter into this Agreement and
purchase the Shares and the Warrants issued to such Investor hereunder, the
Company hereby represents and warrants to each Investor as follows:

     2.1    Organization and Standing. The Company and its subsidiaries are
corporations duly organized, validly existing, and in good standing under the
laws of the jurisdiction in which they are incorporated and have all requisite
corporate power and authority and all material qualifications, licenses, permits
and authorizations necessary to own and operate their properties, to carry on
their businesses as now conducted and as proposed to be conducted by them for
the foreseeable future, and to carry out the transactions contemplated by this
Agreement, the Joinder Agreement and Waiver dated as of October 26, 2001 by and
among the Company, the Investors and the other parties thereto (the "Joinder
Agreement") attached as Exhibit C hereto, and the Warrants. Each of the Company
and its subsidiaries is duly qualified to do business as a foreign corporation
in all jurisdictions in which the failure to be so qualified would have a
material adverse effect on the Company's or its subsidiaries' properties or
business as now conducted or as proposed to be conducted. The Company has
furnished to each of the Investors true and correct copies of the Company's
Articles of Incorporation and Bylaws, as amended, and as in effect on the date
hereof, and true, complete and accurate copies of all documents evidencing all
classes of securities convertible into or exchangeable for Common Stock (other
than documents relating to stock option plans and other similar arrangements
that the Company has entered into with its employees, officers and directors in
the ordinary course of business) and all other material rights holders thereof
and in respect to.

     2.2    Corporate Power. The Company has all requisite legal and corporate
power to execute and deliver this Agreement, the Joinder Agreement and the
Warrants and the other agreements contemplated hereby, to issue and sell the
Common Stock hereunder and under the Warrants, and to carry out and perform its
obligations under the terms of this Agreement, the Joinder Agreement and the
Warrants.

     2.3    Capitalization. The authorized capital stock of the Company, the
designations of classes of capital stock and the rights and preferences of
capital stock are set forth in the Articles of Incorporation. As of October 26,
2001, 12,772,480 shares of the Common Stock are issued and outstanding,
excluding the Shares and the Warrant Shares, and no shares of preferred stock
are issued and outstanding. All issued and outstanding shares of the Company's
Common Stock as of the date hereof have been duly authorized and validly issued,
are fully paid and nonassessable, and were issued in compliance with applicable
federal and state securities laws. Except as set forth on

                                      -3-
<PAGE>

Schedule 2.3, as of the date hereof, there are no outstanding options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares of capital
stock of the Company or any of its subsidiaries, or contracts, commitments,
understandings or arrangements by which the Company or any of its subsidiaries
is or may become bound to issue additional shares of capital stock of the
Company or any of its subsidiaries. No shareholder of the Company has any rights
or preferences not afforded all shareholders of the Company, except pursuant to
this Agreement. Except as set forth on Schedule 2.3, no shareholder of the
Company has any options or warrants to purchase Common Stock, except pursuant to
options issued under the Company's stock option plan, stock incentive plan or
any other equity-based compensation plans. Except as set forth on Schedule 2.3,
no shareholder has any pre-emptive or approval right or authority pertaining to
the sale and purchase of the Shares of Common Stock pursuant to this Agreement
or the Warrant Shares pursuant to the Warrants, whether by statute, Nasdaq
National Market Rules, contractual obligation or otherwise, except pursuant to
Section 6 of this Agreement.

     2.4    Authorization. All corporate action on the part of the Company, its
officers, directors and shareholders necessary for the authorization, execution,
delivery and performance by the Company of this Agreement, the Joinder
Agreement, and the Warrants and each of the other agreements contemplated hereby
to which the Company is a party; the authorization, issuance, sale and delivery
of the Shares, the Warrants and the Warrant Shares; and the performance of all
of the Company's obligations hereunder and thereunder has been taken. This
Agreement, the Joinder Agreement and the Warrants, and each of the other
agreements contemplated hereby to which the Company is a party, have been duly
authorized and when executed and delivered by the Company and each Investor,
shall constitute a valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to laws of
general application relating to bankruptcy, insolvency or creditors' rights and
rules of law governing specific performance, injunctive relief or other
equitable remedies.

     2.5    Valid Issuance. The Shares, the Warrants and the Warrant Shares
issuable upon exercise of the Warrants, when issued, sold and delivered in
accordance with this Agreement and, in the case of the Warrant Shares, the
Warrants, will be duly authorized and validly issued, fully paid and
nonassessable, and will be free and clear of any liens or encumbrances, except
for restrictions imposed under applicable state and federal securities laws.

     2.6    SEC Documents; Financial Statements. The Company has filed all
reports, schedules, forms, statements and other documents required to be filed
by it with the SEC pursuant to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act") (all of the foregoing filed
prior to the date hereof and all exhibits included therein and financial
statements and schedules thereto and documents incorporated by reference therein
being hereinafter referred to as the "SEC Documents"). The Company (i) has
                                                                    -
delivered or made available to each Investor or its

                                      -4-
<PAGE>

representative true and complete copies of the SEC Documents to the extent that
each Investor or its representative has requested any such SEC Documents from
the Company and (ii) agrees to deliver or make available to each Investor or its
                 --
representative true and complete copies of any additional SEC Documents, upon
request. As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. As of their respective dates, the financial statements of the
Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared in accordance with United States generally accepted accounting
principles, consistently applied during the periods involved (except in the case
of unaudited interim statements, to the extent they may exclude footnotes or may
be condensed or summary statements) and fairly present in all material respects
the financial position of the Company as of the dates thereof and the results of
its operations and cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal year-end audit adjustments). No other
information provided by or on behalf of the Company to each Investor which is
not included in the SEC Documents, including, without limitation, information
referred to in Section 3.5 of this Agreement, contains any untrue statement of a
material fact or omits to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they are or
were made, not misleading.

     2.7    No Conflicts. The Company is not in violation of any term of (i) the
                                                                          -
Articles of Incorporation or its Bylaws, (ii) any contract, agreement, mortgage,
                                          --
indebtedness, indenture, instrument, judgment, decree, order to which the
Company is subject or (iii) any statute, rule or regulation applicable to the
                       ---
Company, except in the case of clause (ii) above, for any such violations that,
                                       --
individually or in the aggregate, could not reasonably be expected to have a
material adverse effect on the Company's business, properties, financial
condition, results of operations or prospects, taken as a whole ("Material
Adverse Effect"). The execution and delivery by the Company of this Agreement,
the Joinder Agreement and the Warrants and each of the other agreements
contemplated hereby to which the Company is a party, the offering, sale and
issuance of the Shares, the Warrants and the Warrant Shares and the fulfillment
of and compliance with the respective terms hereof and thereof and the
consummation of the transactions contemplated hereby and thereby, do not and
shall not (i) conflict with or result in a breach (which conflict or breach has
           -
not been waived) of the terms, conditions or provisions of, (ii) constitute a
                                                             --
default under, (iii) result in the creation of any lien, security interest,
                ---
charge or encumbrance upon the Company's capital stock or assets pursuant to,
(iv) give any third party the right to modify, terminate or accelerate any
 --
obligation under, (v) result in a violation (which violation has not been
                   -
waived) of, or (vi) require any authorization, consent, approval, exemption or
                --
other action by or notice to any court or administrative or governmental body
pursuant to, (a) the Articles of Incorporation or Bylaws of the Company, or any
              -
law, statute, rule or regulation to which the

                                      -5-
<PAGE>

Company is subject, or (b) any agreement, instrument, order, judgment or decree
                        -
to which the Company is subject, except, in the case of clause (b), with respect
to any of the foregoing which could not reasonably be expected to have a
Material Adverse Effect. The Company is not in violation of the listing
requirements of The Nasdaq National Market and is unaware of any facts or
circumstances that reasonably might cause the Common Stock to be delisted by The
Nasdaq National Market in the foreseeable future.

     2.8    Contracts. All descriptions in the Compendium of Public Filing
Documents, dated September 27, 2001, (the "Compendium") or incorporated by
reference therein, of contracts and other documents to which the Company or its
subsidiaries are a party are accurate in all material respects; none of the
Company's contracts, including, but not limited to, those described in the
Compendium, have been terminated, nor is the Company aware that any client has
the intention of terminating any contract in the near future.

     2.9    Litigation. Except as disclosed in the SEC Documents, there are no
actions, suits, proceedings, orders, investigations or claims pending or, to the
best of the Company's knowledge, threatened against or affecting the Company (or
to the best of the Company's knowledge, pending or threatened against or
affecting any of the officers, directors or employees of the Company with
respect to the Company's business or proposed business activities) at law or in
equity, or before or by any governmental department, commission, board, bureau,
agency or instrumentality (including, without limitation, any actions, suit,
proceedings or investigations with respect to the transactions contemplated by
this Agreement) which individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect; and the Company is not a party to
any arbitration proceedings under collective bargaining agreements or otherwise
or, to the best of the Company's knowledge, any governmental investigations or
inquiries (including inquiries as to the qualification to hold or receive any
license or permit). The Company is not subject to any judgment, order or decree
of any court or other governmental agency.

     2.10   Tax Returns. The Company has filed all tax returns which it is
required to file under applicable foreign, federal, state and local laws and
regulations; all such returns are complete and correct in all material respects;
and the Company has paid all taxes which have become due and payable. The
Company has not been advised that any of its returns, federal, state or other,
have been or are being audited as of the date thereof. The Company has not
waived any statute of limitations with respect to taxes or agreed to any
extension of time with respect to a tax assessment or deficiency, and there are
no agreements, waivers or other arrangements providing for an extension of time
with respect to the assessment of any tax or deficiency. There are no actions,
suits, proceedings or claims now pending against the Company in respect of any
tax or assessment. There is no pending or, to the Company's knowledge,
threatened investigation of the Company by any federal, state, foreign or local
authority relating to any taxes or assessments,

                                      -6-
<PAGE>

or any claims for additional taxes or assessments asserted by any such
authority.

     2.11   Governmental Consents. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
governmental authority on the part of the Company is required in connection with
the valid execution and delivery of this Agreement, the Joinder Agreement and
the Warrants, the offer, sale or issuance of the Shares, the Warrants or the
Warrant Shares, or the consummation of any other transaction contemplated hereby
or thereby, except under applicable state securities laws, which filings and
qualifications, if required, will be accomplished within the required statutory
period, for the filing pursuant to Regulation D promulgated under the Securities
Act of 1933, as amended (the "1933 Act"), which filing will be made within 15
days of the execution hereof, and for the filing of the NASDAQ National Market
Additional Listing Application, which filing shall be made as soon as
practicable.

     2.12   Employment Matters; ERISA Matters. The Company and its subsidiaries
are in compliance with all federal, state, local and foreign laws and
regulations respecting employment and employment practices, terms and conditions
of employment and wages and hours, except where failure to be in compliance
could not have a Material Adverse Effect. To the best of the Company's
knowledge, there are no pending investigations involving the Company or any of
its subsidiaries by the U.S. Department of Labor or any other governmental
agency responsible for the enforcement of such federal, state, local or foreign
laws and regulations. There is no unfair labor practice charge or complaint
against the Company or any of its subsidiaries pending before the National Labor
Relations Board or any strike, picketing, boycott, dispute, slowdown or stoppage
pending or threatened against or involving the Company or any of its
subsidiaries. No representation question exists respecting the employees of the
Company or any of its subsidiaries, and no collective bargaining agreement or
modification thereof is currently being negotiated by the Company or any of its
subsidiaries. No grievance or arbitration proceeding is pending under any
expired or existing collective bargaining agreements of the Company or any of
its subsidiaries. No material labor dispute with the employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company, is imminent.
Except for such failures that could not result in a Material Adverse Effect,
every employee benefit plan (whether or not subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) maintained or contributed to
by the Company has been maintained and administered in accordance with their
terms, ERISA, the Internal Revenue Code of 1986, as amended (the "Code"), and
other applicable laws. None of the plans is subject to Title IV of ERISA and no
plan is a multi-employer plan (within the meaning of Section 3(37) of ERISA).
Each plan intended to qualify under Section 401(a) or 501(c)(9) of the Code has
received a favorable determination or approval letter from the Internal Revenue
Service regarding its qualification under such section and to the best of the
Company's knowledge no event has occurred which could reasonably be expected to
cause any such plan to lose its qualification.

     2.13   Intellectual Property Rights.

                                      -7-
<PAGE>

The Company and its subsidiaries own or possess the requisite rights or licenses
to use all trademarks, trade names, service marks, service mark registrations,
service names, patents, patent rights, copyrights, inventions, licenses,
approvals, governmental authorizations, trade secrets and rights (collectively
"Intellectual Property Rights") necessary to conduct their respective businesses
as now conducted and as proposed to be conducted through the foreseeable future.
None of the Intellectual Property Rights or other intellectual property rights
have expired or terminated, or are expected to expire or terminate on or before
September 30, 2006 other than expirations or terminations which, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect. The Company and its subsidiaries do not have any knowledge of any event,
fact or circumstance relating to (i) any infringement by the Company or its
subsidiaries of any trademarks, trade names, service marks, service mark
registrations, service names, patents, patent rights, copyrights, inventions,
licenses, approvals, governmental authorizations, trade secrets or other similar
rights of others, or (ii) any person or entity now infringing any Intellectual
Property Rights or other similar rights, or (iii) any person or entity now
infringing any Intellectual Property Rights or other similar rights, except for
such infringements that could not reasonably be expected to result in a Material
Adverse Effect. There is no claim, action or proceeding being made or brought
against, or to the Company's knowledge, being threatened against, the Company or
its subsidiaries regarding any trademarks, trade names, service marks, service
mark registrations, service names, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets or
other similar rights of others. The Company and its subsidiaries have taken
reasonable security measures to protect the secrecy, confidentiality and value
of all of their Intellectual Property Rights.

     2.14   Environmental Laws.

     (a)    Except as would not, individually or in the aggregate, have a
Material Adverse Effect, the Company and its subsidiaries (1) are in compliance
                                                           -
with any and all Environmental Laws, (2) have received all permits, licenses or
                                      -
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses, and (3) are in compliance with all terms and
                                  -
conditions of any such permit, license or approval, except in each case where
the failure could not reasonably be expected to have a Material Adverse Effect.
To the knowledge of the Company, with respect to the Company (A) there are no
                                                              -
past or present releases of any Hazardous Materials into the environment,
actions, activities, circumstances, conditions, events, incidents, or
contractual obligations which may give rise to any common law environmental
liability or any liability under any Environmental Law in any material respect
and (B) the Company has not received any notice with respect to the foregoing,
     -
nor is any action pending or to the Company's knowledge, threatened in
connection with the foregoing, except in each case where the condition or
obligation could not reasonably be expected to have a Material Adverse Effect.
The term "Environmental Laws" means all federal, state, local or foreign laws
regulations, codes, orders, decrees, judgments or injunctions issued promulgated
or approved or entered thereunder relating to pollution or protection of human
health or the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata), including, without
limitation, laws relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, or toxic or hazardous
substances or

                                      -8-
<PAGE>

wastes (collectively, "Hazardous Materials") into the environment, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials, as well as all
authorizations, codes, decrees, demands or demand letters, injunctions,
judgments, licenses, notices or notice letters, orders, permits, plans or
regulations issued, entered, promulgated or approved thereunder.

     (b)    Other than those that are or were stored, used or disposed of in
compliance with applicable law, to the knowledge of the Company, no Hazardous
Materials are contained on or about any real property currently owned, leased or
used by the Company, and no Hazardous Materials were released on or about any
real property previously owned, leased or used by the Company during the period
the property was owned, leased or used by the Company.

     (c)    To the knowledge of the Company, there are no underground storage
tanks on or under any real property owned, leased or used by the Company or any
of its subsidiaries that are not in compliance with applicable law.

     2.15   Regulatory Permits; Compliance. The Company possesses all
franchises, grants, authorizations, licenses permits, easements, consents,
certificates, approvals and orders necessary to own, lease and operate its
properties and to conduct its business as currently being conducted
(collectively, the "Company Permits"), except where the failure to obtain a
Company Permit could not reasonably be expected to have a Material Adverse
Effect. There is no action pending, or to the knowledge of the Company,
threatened regarding the suspension or cancellation of any of the Company
Permits. The Company is not in conflict with, or in default or violation of, any
of the Company Permits except where such violation could not reasonably be
expected to have a Material Adverse Effect. The Company has not received any
notification with respect to possible conflicts, defaults, or violations of
applicable laws.

     2.16   Investment Company Status. The Company is not and upon consummation
of the sale of the Common Stock will not be an "investment company," a company
controlled by an "investment company" or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended.

     2.17   Accuracy of Information. The information that has been furnished to
the Investors is true and correct and accurate in all material respects as of
the date hereof except for financial data that is accurate as of the date shown
therein, and the Company has not omitted to state any material fact necessary in
order to make the statements made herein or therein, in light of the
circumstances under which they were made, not misleading. No event or
circumstance has occurred or information exists with respect to the Company or
its business, properties, operations or financial condition, which, under
applicable law, rule or regulation, requires public disclosure or announcement
by the

                                      -9-
<PAGE>

Company but which has not been so publicly disclosed or announced.

     2.18   Labor Disturbances. No labor disturbance by the employees of the
Company exists, or to the knowledge of the Company, is imminent which could
reasonably be expected to have a Material Adverse Effect.

     2.19   Internal Accounting Controls. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurances that:
(i) transactions are recorded as necessary to permit preparation of financial
 -
statements in conformity with United States generally accepted accounting
principles and to maintain accountability for assets; (ii) transactions are
                                                       --
executed in accordance with management's general or specific authorization;
(iii) access to assets is available only if permitted in accordance with
 ---
management's general or specific authorization; and (iv) the recorded
                                                     --
accountability for amounts is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.

     2.20   S-3 Registration. The Company is currently eligible to register
secondary offerings of securities, including the resale of the Shares, on a
registration statement on Form S-3 under the 1933 Act.

     2.21   Use of Proceeds. The proceeds received from the sale of the Shares
shall be used for repayment of indebtedness, working capital and general
corporate purposes.

     2.22   No Material Adverse Changes. Since the respective dates of which
information was given in the investment materials, except as otherwise
specifically stated therein, there has been no (i) material adverse change in
the business, results of operations, assets, prospects, or financial condition
of the Company, taken as a whole, whether or not arising in the ordinary course
of business, or (ii) dividend or distribution of any kind declared, paid or made
by the Company on its capital stock.

     2.23   Listing and Maintenance Requirements Compliance. The principal
market on which the Common Stock is currently traded is Nasdaq. The Company has
not in the three (3) years preceding the date hereof received notice (written or
oral) from Nasdaq (or any stock exchange, market or trading facility on which
the Common Stock is or has been traded or listed (or on which it has been
quoted)) to the effect that the Company is not in compliance with the listing or
maintenance requirements of any such market, exchange or trading facility. The
Company is not aware of any facts that would reasonably lead to delisting or
suspension of the Common Stock by Nasdaq. After giving effect to the
transactions

                                      -10-
<PAGE>

contemplated by this Agreement and the Registration Rights Agreement (as defined
below), the Company is and will be in compliance with all such maintenance
requirements.

     2.24   Title. Except as disclosed on Schedule 2.24, the Company has good
and valid title to all real property and personal property owned by it which is
material to the business of the Company, in each case free and clear of all
liens and encumbrances, except for liens that do not materially affect the value
of such property and do not interfere with the use made and proposed to be made
of such property by the Company. Any real property and facilities held under
lease by the Company are held by it under valid, subsisting and enforceable
leases, with such exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and facilities by the Company.

     2.25   Insurance. The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
management of the Company believes to be prudent and customary in the business
in which the Company is engaged. The Company has no reason to believe that it
will not be able to renew its existing insurance coverages as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business, at a cost that would not materially and
adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company, taken as a whole.

     2.26   Registration Rights; Rights of Participation. Except as set forth in
Section 2.1(b) of the Registration Rights Agreement dated as of September 28,
2001 between the Company and the other parties thereto (the "Registration Rights
Agreement") or on Schedule 2.26, the Company has not granted or agreed to grant
any Person any rights (including "piggy-back" registration rights) to have any
securities of the Company registered with the Commission or any other
governmental authority which have not been satisfied. Additionally, no person,
including, but not limited to, current or former stockholders of the Company,
underwriters, brokers or agents, has any right of first refusal, preemptive
right, right of participation, or any similar right to participate in the
transactions contemplated by this Agreement or the Registration Rights
Agreement.

     3.     Representations and Warranties of Investor.

     Each Investor hereby represents and warrants to the Company as follows:

     3.1    Organization and Standing; Power.

     (a)    The Investor is an entity duly organized, validly existing, and in
good standing under the laws of the jurisdiction in which it is formed and has
all requisite power and authority and all material qualifications, licenses,
permits and authorizations necessary to own and operate its properties, to carry
on its business as now conducted and as proposed to be conducted through

                                      -11-
<PAGE>

the current fiscal year and to carry out the transactions contemplated by this
Agreement. Such Investor has all requisite power to execute and deliver this
Agreement, the Joinder Agreement and the other agreements contemplated hereby to
which it is a party, and to carry out and perform its obligations under the
terms of this Agreement.

     3.2    Authorization. This Agreement, the Joinder Agreement and each of the
other agreements contemplated hereby to which an Investor is a party, when
executed and delivered by the Investor and the Company, will constitute valid
and legally binding obligations of the Investor, enforceable against the
Investor in accordance with their terms, subject to laws of general application
relating to bankruptcy, insolvency or creditors' rights and rules of law
governing specific performance, injunctive relief or other equitable remedies.

     3.3    Experience. The Investor has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of its investment in the Company and has the capacity to protect its own
interests. The Investor acknowledges that investment in the Shares, the Warrants
and the Warrant Shares is a speculative risk. The Investor is able to fend for
itself in the transactions contemplated by this Agreement, can bear the economic
risk of its investment in the Shares, the Warrants and the Warrant Shares
(including possible complete loss of such investment) for an indefinite period
of time and has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of the investment in the
Shares, the Warrants and the Warrant Shares. The Investor understands that
nothing in this Agreement, the Joinder Agreement or the Warrants or any other
materials presented to the Investor in connection with the purchase and sale of
the Shares, the Warrants and the Warrant Shares constitutes legal, tax or
investment advice. The Investor has consulted such legal, tax and investment
advisors as such Investor, in its sole discretion, has deemed necessary or
appropriate.

     3.4    Investment Purpose. The Investor is acquiring the Shares, the
Warrants and the Warrant Shares for investment for its own account, and not with
a view to, or for resale in connection with, any distribution thereof. The
Investor understands that the Shares, the Warrants and the Warrant Shares have
not been registered under the Securities Act of 1933, as amended (the "1933
Act"), by reason of a specific exemption from the registration provisions of the
1933 Act, the availability of which depends upon, among other things, the bona
fide nature of the investment intent and the accuracy of such Investor's
representations as expressed herein. The Investor understands that the Shares,
the Warrants and the Warrant Shares are characterized as "restricted securities"
under the federal securities laws inasmuch as they are being acquired from the
Company in a transaction not involving any public offering and that under such
laws and applicable regulations, the Shares may be resold without registration
under the 1933 Act only in certain limited circumstances. The Investor shall
not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose
of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge
of) any of the Shares, the Warrants or the Warrant Shares except in compliance

                                      -12-
<PAGE>

with the 1933 Act, applicable state securities laws and the respective rules and
regulations thereunder.

     3.5    Access to Data. The Investor and its representatives have been
afforded access to corporate books, financial statements, records, contracts,
documents and other information concerning the Company (to the extent such
exists), and to its offices and facilities, have been afforded an opportunity to
ask such questions of the Company's officers, employees, agents, accountants and
representatives concerning the Company's existing and proposed business,
operations, financial condition, assets, liabilities and other relevant matters
as they have deemed necessary or desirable, and have been given all such
information as has been requested, in order to evaluate the merits and risks of
the prospective investments contemplated herein. The Investor further represents
and acknowledges that it has been solely responsible for its own "due diligence"
investigation of the Company and its management and business, for its own
analysis of the merits and risks of this investment, and for its own analysis of
the fairness and desirability of the terms of the investment. The foregoing,
however, does not limit or modify the representations and warranties of the
Company in Section 2 hereof.

     3.6    Residency. For purposes of the application of state securities laws,
the Investor represents and warrants to the Company that it is a bona fide
resident of, or a duly formed entity domiciled in, the state of Texas.

     3.7    Accredited Investor. The Investor is an accredited investor within
the meaning of Rule 501(a) of Regulation D of the Securities and Exchange
Commission and has substantial experience in evaluating and investing in private
placement transactions of securities in companies similar to the Company so that
the Investor is capable of evaluating the merits and risks of its investment in
the Company and has the capacity to protect its own interests.

     3.8    Restrictive Legends. The Investors agree that, so long as the
Shares, the Warrants and the Warrant Shares remain restricted securities, the
Company shall place a restrictive legend on the certificate(s) representing them
in substantially the following forms:

            (a)    Shares:

            "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
            BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
            AMENDED, AND MAY NOT BE TRANSFERRED WITHOUT REGISTRATION
            UNDER SUCH ACT OR AN OPINION OF COUNSEL REASONABLY

                                      -13-
<PAGE>

            ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT
            REQUIRED."

            (b)    Warrants:

            "THIS WARRANT AND ANY SECURITIES ACQUIRED UPON EXERCISE OF
            THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
            ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THE
            SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
            OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
            STATEMENT FOR THE SECURITIES UNDER SUCH ACT OR APPLICABLE
            STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE
            EXEMPTION TO THE REGISTRATION REQUIREMENTS OF SUCH ACT AND
            SUCH LAWS."

            (c)    Warrant Shares:

            "THE TRANSFER OF THE SHARES REPRESENTED BY THIS
            CERTIFICATE IS RESTRICTED PURSUANT TO THE TERMS OF A
            COMMON STOCK PURCHASE WARRANT DATED OCTOBER 26, 2001,
            ISSUED BY RMH TELESERVICES, INC., A COPY OF WHICH IS
            AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF RMH
            TELESERVICES, INC. TRANSFER MAY NOT BE MADE EXCEPT IN
            ACCORDANCE WITH THE TERMS OF THE COMMON STOCK PURCHASE
            WARRANT. IN ADDITION, NO SALE, OFFER TO SELL OR TRANSFER
            OF THE SHARES REPRESENTED BY THIS CERTIFICATE SHALL BE
            MADE UNLESS A REGISTRATION STATEMENT UNDER THE SECURITIES
            ACT OF 1933, AS AMENDED (THE "1933 ACT"), WITH RESPECT TO
            SUCH SHARES IS THEN IN EFFECT OR AN EXEMPTION FROM THE
            REGISTRATION REQUIREMENTS OF THE 1933 ACT IS THEN IN FACT
            APPLICABLE TO SUCH SHARES."

     3.9    Transactions in Common Stock. Investor has not, during the 30
trading days immediately preceding the Closing Date, sold or established a short
position in any shares of the Common Stock or other capital stock of the
Company.

     3.10   No General Solicitation. Investor did not learn of the investment in
the Common Stock as a result of any public

                                      -14-
<PAGE>

advertising or general solicitation.

     4.     Registration Rights and Termination Events.

     4.1    Registration Rights. The Shares and the Warrant Shares shall have
the registration rights set forth in the Registration Rights Agreement..

     4.2    Termination Events. Upon the declaration of a Termination Event (as
defined the Registration Rights Agreement), each Investor will receive from the
Company warrants to purchase shares of Common Stock of the Company in an amount
such that the number of Warrants that each Investor purchased at Closing plus
the warrants received by such Investor pursuant to this Section 4.2 shall, in
the aggregate, be equal to the number of Shares of Common Stock purchased by
such Investor at the Closing (the "Additional Warrants"). The Additional
Warrants will be exercisable at a price equal to 125% of the Stock Price and
will have a five (5) year life from the date of issuance and will be
substantially similar in form and substance to the Warrants. For purposes of
this Section 4.2, Stock Price means $9.60 per share.

     5.     Closing Conditions.

     5.1    Conditions to the Company's Obligation to Sell. The Company's
obligation to sell and deliver the Shares and the Warrants to the Investors
shall, unless waived by the Company, be subject to the satisfaction, with
respect to each Investor, prior to or on the Closing Date, of each of the
following conditions:

            (a)    Each Investor shall have executed this Agreement and the
     Joinder Agreement and delivered the same to the Company.

            (b)    Each Investor shall have delivered to the Company the
     purchase price for the Shares and the Warrants being purchased by the
     Investor at the Closing by wire transfer of immediately available funds
     pursuant to the wire instructions provided by the Company.

            (c)    The representations, covenants and warranties contained in
     Section 3 hereof shall be true and correct in all material respects at and
     as of the Closing as though then made, except to the extent of changes
     caused by the transactions expressly contemplated herein, and each Investor
     shall have performed, satisfied and complied in all material respects with
     the covenants, agreements and conditions required by this Agreement and the
     Registration Rights Agreement to be performed, satisfied and complied with
     by such Investor at or prior to the Closing.

     5.2    Conditions to Each Investor's Obligation to Purchase.

                                      -15-
<PAGE>

Each Investor's obligation hereunder to purchase the Shares and the Warrants at
the Closing shall, unless waived by such Investor, be subject to the
satisfaction, prior to or on the Closing Date, of each of the following
conditions:

            (a)    The Company and each other Investor shall have executed this
     Agreement and the Joinder Agreement and any other transaction document (to
     the extent a party thereto), including, in the case of the Company, the
     Warrants, and delivered the same to such Investor.

            (b)    The representations, covenants and warranties contained in
     Section 2 hereof shall be true and correct in all material respects at and
     as of the Closing as though then made, except to the extent of changes
     caused by the transactions expressly contemplated herein, and the Company
     shall have performed, satisfied and complied with the covenants, agreements
     and conditions required by this Agreement, the Registration Rights
     Agreement and the Warrants to be performed, satisfied and complied with by
     the Company at or prior to the Closing.

            (c)    Each Investor shall have received from Wolf, Block, Schorr
     and Solis-Cohen LLP, counsel for the Company, an opinion substantially as
     set forth in Exhibit D attached hereto, which shall be addressed to the
     Investors and dated as of the Closing Date.

            (d)    The Company shall have delivered to the Investors all of the
     following documents, which shall be satisfactory in form and substance to
     the Investors:

(1)         An Officer's Certificate, executed by the Company's Chief Executive
            Officer and Chief Financial Officer and dated the Closing Date,
            stating that the conditions specified in Section 5.2(b) have been
            fully satisfied;

(2)         Certified copies of the resolutions duly adopted by the Company's
            Board of Directors (or a duly authorized committee thereof)
            authorizing the execution, delivery and performance of this
            Agreement, the Joinder Agreement and the Warrants and each of the
            other agreements contemplated hereby, the issuance and sale of the
            Shares, the Warrants and the Warrant Shares, and all other
            transactions contemplated by this Agreement, the Joinder Agreement
            and the Warrants;

(3)         Copies of all third party and governmental consents, approvals and
            filings required in connection with the consummation of the
            transactions hereunder (including, without limitation, all blue sky
            law filings required to be made prior to the Closing (provided, that
            the Company agrees to deliver copies of all other required blue sky
            filings within 10 days of the Closing) and waivers of all preemptive
            rights and rights of first refusal, if any);

(4)         The legal opinion referred to in Section 5.2(c) hereof;

(5)         Certificates representing the Shares and the Warrants as described
            in Section 1

                                      -16-
<PAGE>

            hereof; and

(6)         Such other documents relating to the transactions contemplated by
            this Agreement as the Investors may reasonably request before the
            Closing.

     Any condition specified in this Section 5.2 may be waived with respect to
the Investors only if consented to in writing by the Investors granting such
waiver. In furtherance of the foregoing, if the Company does not satisfy all of
the conditions set forth in this Section 5.2, the Investors will nevertheless
have the option to purchase the Shares and the Warrants at the Closing.

     6.     Right of First Refusal.

     6.1    Right of First Refusal. Subject to the terms and conditions
contained in this Section 6, the Company hereby grants to each Investor the
right of first refusal, for 180 days after September 28, 2001, to purchase such
Investor's Pro Rata Portion of any New Securities (as defined below) which the
Company may, from time to time, propose to sell and issue. An Investor's "Pro
Rata Portion" for purposes of this Section 6.1 is equal to the fraction obtained
by dividing (a) the number of Shares held by such Investor by (b) the aggregate
             -                                                 -
number of shares of Common Stock then outstanding, assuming in each case the
conversion, exercise or exchange of all securities by their terms convertible
into or exercisable for Common Stock and the exercise of all options to purchase
or rights to subscribe for Common Stock or such convertible or exchangeable
securities, whether or not the terms of such securities or rights then permit
such conversion, exercise or exchange.

     6.2    Definition of New Securities. Except as set forth below, "New
Securities" shall mean any shares of capital stock of the Company, and rights,
options or warrants to purchase said shares of capital stock, and securities of
any type whatsoever that are, or may become, convertible into said shares of
capital stock. Notwithstanding the foregoing, "New Securities" does not include
(i) securities offered in an underwritten public offering pursuant to a
 -
registration statement under the 1933 Act, (ii) all shares of Common Stock,
                                            --
warrants or options to purchase Common Stock or other securities issued upon the
approval of the Board of Directors to employees, officers, directors and
consultants of the Company (x) who have provided or will provide bona fide
                            -
services to the Company not in connection with the offer or sale of securities
in a capital raising transaction and (y) who do not, directly or indirectly,
                                      -
promote or maintain a market for the Company's securities, pursuant to any plan
or arrangement approved by the Board of Directors or the shareholders of the
Company, (iii) all securities issued to lending or leasing institutions upon the
          ---
approval of the Board of Directors in connection with loans from or leasing
transactions with such institutions, (iv) stock issued pursuant to any private
                                      --
placement completed on substantially similar terms or within 45 days of
September 28, 2001, or (v) stock issued in connection with any merger or
                        -
acquisition by the Company.

                                      -17-
<PAGE>

     6.3    Notice of Right. In the event the Company proposes to undertake an
issuance of New Securities, it shall give each Investor written notice of its
intention, describing the type of New Securities and the price and terms upon
which the Company proposes to issue the same. Each Investor shall have 15 days
from the date of receipt of any such notice to agree to purchase shares of such
New Securities (up to the amount referred to in Section 6.1), for the price and
upon the terms specified in the notice, which price and terms shall be the same
as are applicable to the investors purchasing the New Securities, by giving
written notice to the Company and stating therein the quantity of New Securities
to be purchased.

     6.4    Exercise of Right. If any Investor exercises its right of first
refusal hereunder, the closing of the purchase of the New Securities by such
Investor with respect to which such right has been exercised shall take place on
the date set by the Company for the sale of New Securities; provided that such
closing shall not occur prior to the date 20 days following the date of the
written notice provided to the Investors, and provided, further, that the date
of such closing shall be extended in order to comply with applicable laws and
regulations.

     6.5    Lapse and Reinstatement of Right. In the event an Investor fails to
exercise the right of first refusal provided in Section 6.1 within said 15 day
period, the Company shall have 60 days thereafter to sell the New Securities not
elected to be purchased by such Investor at the price and upon the terms no more
favorable to the purchasers of such securities than specified in the Company's
notice. In the event the Company has not sold the New Securities or entered into
an agreement to sell the New Securities within said 60 day period, the Company
shall not thereafter issue or sell any New Securities without first offering
such securities to the Investors in the manner provided above.

     7.     Miscellaneous.

     7.1    Governing Law. This Agreement shall be governed by and construed
under the laws of the Commonwealth of Pennsylvania, without giving effect to any
choice of law or conflict of law provision or rule (whether of the Commonwealth
of Pennsylvania or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Pennsylvania.

     7.2    Expenses. The Company and each of the Investors shall bear its own
expenses in connection with the transactions contemplated by this Agreement.

     7.3    Survival.

                                      -18-
<PAGE>

The representations, warranties, covenants, and agreements made herein by the
Company and each Investor shall survive any investigation made by the Company or
any Investor and shall survive the Closing. All statements as to factual matters
contained in any certificate or other instrument delivered by or on behalf of
the Company or each Investor pursuant hereto shall be deemed to be
representations and warranties by the Company or such Investor, as appropriate,
hereunder as of the date of such certificate or instrument.

     7.4    Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
parties hereto.

     7.5    Entire Agreement. This Agreement, including the Schedules and
Exhibits hereto, and the Joinder Agreement constitute the full and entire
understanding and agreement among the parties with regard to the subjects hereof
and no party shall be liable or bound to any other party in any manner by any
representations, warranties, covenants, or agreements except as specifically set
forth herein or therein. Nothing in this Agreement, express or implied, is
intended to confer upon any party, other than the parties hereto and their
respective successors and assigns, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
herein.

     7.6    Assignment and Transfer. The Investors may transfer such Shares,
Warrants and Warrant Shares in whole or in part, to another person or entity and
may, in connection with such transfer, assign its rights in whole or in part
under this Agreement in accordance with the provisions of this Section 7.6. The
Company agrees to execute and deliver such instruments, documents and
certificates as the Investors, holders or any such transferees may reasonably
request in order to document the transfer in whole or in part of rights
hereunder, which instruments, documents and certificates shall be satisfactory
in form and substance to counsel for the Investors, or holders or such
transferees. Any such transfer shall be subject to compliance with applicable
federal and state securities laws.

     7.7    Amendment and Waiver. Any term of this Agreement may be amended and
the observance of any term of this Agreement may be waived (either generally or
in a particular instance and either retroactively or prospectively) only with
the written consent of the Company and Investors holding two thirds of the
Shares then held by the Investors.

     7.8    Notices. All notices or other communications to a party required or
permitted hereunder shall be

                                      -19-
<PAGE>

in writing and shall be delivered personally or by telecopy (receipt confirmed)
to such party (or, in the case of an entity, to an executive officer of such
party) or shall be sent by a reputable express delivery service or by certified
mail, postage prepaid with return receipt requested, addressed as follows:

     If to an Investor:

     To the address set forth on Exhibit A or such other address as may be
     designated in writing hereafter, in the same manner, by such Investor.

     and with a copy to:

     __________________________
     __________________________
     __________________________
     __________________________
     __________________________
     if to the Company:

     RMH Teleservices, Inc.
     40 Morris Avenue
     Bryn Mawr, PA 19010
     Attention: John A. Fellows
     Fax: 610-520-5354

     with a copy to:

     Wolf, Block, Schorr and Solis-Cohen LLP
     1650 Arch Street
     22/nd/ Floor
     Philadelphia, PA 19103-2097
     Attention: John M. Coogan, Jr.
     Fax: 215-977-2334

     Any party may change the above-specified recipient and/or mailing address
by notice to all other parties given in the manner herein prescribed. All
notices shall be deemed given on the day when actually delivered as provided
above (if delivered personally or by telecopy) or on the day shown on the return
receipt (if delivered by mail or delivery service).

     7.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument. A facsimile signature shall be
considered due execution and shall be binding upon the signatory thereto with
the same force and effect as if the signature were an original, not a facsimile
signature.

     IN WITNESS WHEREOF, the Company and the Investors have executed this
Agreement as of the date first written above.

                                                     RMH TELESERVICES, INC.

                                      -20-
<PAGE>

                                                     By: /s/ Scot Brunke
                                                         -----------------------
                                                     Name:  Scot Brunke
                                                          ----------------------
                                                     Title: CFO
                                                            --------------------

                                      -21-
<PAGE>

                            INVESTOR EXECUTION PAGE

                                     INVESTOR SIGNATURE

                                     By: /s/ Ronald Jensen
                                         ---------------------------------------
                                     Name:  Ronald Jensen
                                           -------------------------------------
                                     Title: Member
                                            ------------------------------------

                                            2121 Precinct Line Rd
                                     -------------------------------------------
                                            Hurst, TX 76054
                                     -------------------------------------------
                                     Address
                                     Dollar Amount of Investment:  $ 1,144,296
                                                                    ------------
                                     Number of Shares Subscribed:   118,682
                                                                    ------------
                                     State of Residence/Domicile:   Texas
                                                                    ------------
                                     TIN/SSN:  74-3017734
                                               ---------------------------------

         Status as an "Accredited Investor". The Investor is an "accredited
investor" as defined in the regulations of the U.S. Securities and Exchange
Commission by virtue of meeting the criteria which have been checked below
(check all that apply):

         ____ (i) A natural person whose individual net worth (assets less
liabilities), or joint net worth with his or her spouse, exceeds $1,000,000.

         ____ (ii) A natural person whose individual income was in excess of
$200,000, or whose joint income with his or her spouse was in excess of
$300,000, each of the two most recent years, and who has a reasonable
expectation of reaching the same income level for the current year.

         ____ (iii) A bank, insurance company, registered investment company,
business development company, small business investment company or employee
benefit plan.

         ____ (iv) A savings and loan association, credit union, or similar
financial institution, or a registered broker or dealer.

         ____ (v) A private business development company.

         ____ (vi) An organization described in Section 501(c)(3) of the
Internal Revenue Code with assets in excess of $5,000,000.

         ____ (vii) A corporation, Massachusetts or similar business trust, or
partnership with assets in excess of $5,000,000.

         ____ (viii) A trust with assets in excess of $5,000,000.

         ____ (ix) A director or an executive officer of the Company.

          X   (x) An entity in which all of the equity owners are accredited
         ----
investors.

         ____ (xi) A self-directed IRA, Keogh, or similar plan of which the
individual directing the investments qualifies as an "accredited investor" under
one or more of items (i)-(x) above. Also check the item(s) (i)-(x) above that
applies.

                                      -22-
<PAGE>

                            INVESTOR EXECUTION PAGE

                                     INVESTOR SIGNATURE

                                     By: /s/ Martin Phillips
                                         ---------------------------------------
                                     Name:  Texas Margins, LLC
                                           -------------------------------------
                                     Title: Member
                                            ------------------------------------

                                            2121 Precinct Line Rd
                                     -------------------------------------------
                                            Hurst, TX 76054
                                     -------------------------------------------
                                     Address

                                     Dollar Amount of Investment:  $ 732,769
                                                                    ------------
                                     Number of Shares Subscribed:   76,000
                                                                    ------------
                                     State of Residence/Domicile:   Texas
                                                                    ------------
                                     TIN/SSN:  74-3017730
                                               ---------------------------------

         Status as an "Accredited Investor". The Investor is an "accredited
investor" as defined in the regulations of the U.S. Securities and Exchange
Commission by virtue of meeting the criteria which have been checked below
(check all that apply):

         ____ (i) A natural person whose individual net worth (assets less
liabilities), or joint net worth with his or her spouse, exceeds $1,000,000.

         ____ (ii) A natural person whose individual income was in excess of
$200,000, or whose joint income with his or her spouse was in excess of
$300,000, each of the two most recent years, and who has a reasonable
expectation of reaching the same income level for the current year.

         ____ (iii) A bank, insurance company, registered investment company,
business development company, small business investment company or employee
benefit plan.

         ____ (iv) A savings and loan association, credit union, or similar
financial institution, or a registered broker or dealer.

         ____ (v) A private business development company.

         ____ (vi) An organization described in Section 501(c)(3) of the
Internal Revenue Code with assets in excess of $5,000,000.

         ____ (vii) A corporation, Massachusetts or similar business trust, or
partnership with assets in excess of $5,000,000.

         ____ (viii) A trust with assets in excess of $5,000,000.

         ____ (ix) A director or an executive officer of the Company.

          X   (x) An entity in which all of the equity owners are accredited
         ----
investors.

         ____ (xi) A self-directed IRA, Keogh, or similar plan of which the
individual directing the investments qualifies as an "accredited investor" under
one or more of items (i)-(x) above. Also check the item(s) (i)-(x) above that
applies.

                                      -23-
<PAGE>

                            INVESTOR EXECUTION PAGE

                                     INVESTOR SIGNATURE

                                     By: /s/ Martin Phillips
                                         ---------------------------------------
                                     Name:  Gladeshare I, LLC
                                           -------------------------------------
                                     Title: Member
                                            ------------------------------------

                                            2121 Precinct Line Rd
                                     -------------------------------------------
                                            Hurst, TX 76054
                                     -------------------------------------------
                                     Address
                                     Dollar Amount of Investment:  $ 222,935
                                                                    ------------
                                     Number of Shares Subscribed:   23,122
                                                                    ------------
                                     State of Residence/Domicile:   Texas
                                                                    ------------
                                     TIN/SSN:  74-3017727
                                               ---------------------------------

         Status as an "Accredited Investor". The Investor is an "accredited
investor" as defined in the regulations of the U.S. Securities and Exchange
Commission by virtue of meeting the criteria which have been checked below
(check all that apply):

         ____ (i) A natural person whose individual net worth (assets less
liabilities), or joint net worth with his or her spouse, exceeds $1,000,000.

         ____ (ii) A natural person whose individual income was in excess of
$200,000, or whose joint income with his or her spouse was in excess of
$300,000, each of the two most recent years, and who has a reasonable
expectation of reaching the same income level for the current year.

         ____ (iii) A bank, insurance company, registered investment company,
business development company, small business investment company or employee
benefit plan.

         ____ (iv) A savings and loan association, credit union, or similar
financial institution, or a registered broker or dealer.

         ____ (v) A private business development company.

         ____ (vi) An organization described in Section 501(c)(3) of the
Internal Revenue Code with assets in excess of $5,000,000.

         ____ (vii) A corporation, Massachusetts or similar business trust, or
partnership with assets in excess of $5,000,000.

         ____ (viii) A trust with assets in excess of $5,000,000.

         ____ (ix) A director or an executive officer of the Company.

          X   (x) An entity in which all of the equity owners are accredited
         ----
investors.

         ____ (xi) A self-directed IRA, Keogh, or similar plan of which the
individual directing the investments qualifies as an "accredited investor" under
one or more of items (i)-(x) above. Also check the item(s) (i)-(x) above that
applies.

                                      -24-
<PAGE>

Exhibits
--------

Exhibit A         List of Investors
Exhibit B         Form of Warrant
Exhibit C         Form of Joinder Agreement
Exhibit D         Form of Opinion of Company Counsel

Disclosure Schedules
--------------------

2.3      Capitalization
2.26     Registration Rights; Rights of Participation

<PAGE>

                                   EXHIBIT A

                               LIST OF INVESTORS

<TABLE>
<CAPTION>
                                                                                                       State of
Investor Name                                                 Sale          Placement     Placement    Domicile
and Address              Closing ($)       Shares (#)     Warrants (#)     Warrants (#)    Fee ($)
<S>                      <C>               <C>            <C>              <C>            <C>          <C>
Gladshare 1, LLC         $  222,935          23,122          6,514               977       $ 10,616      Texas
Texas Margins, LLC       $  732,769          76,000         66,087             9,913       $ 34,894      Texas
JFO 1, LLC               $1,144,296         118,682              0                 0       $ 54,490      Texas

Total                    $2,100,000         217,804         72,601            10,890       $100,000
</TABLE>

                                       2
<PAGE>

                                   EXHIBIT D

                              FORM OF OPINION OF
                    WOLF, BLOCK, SCHORR and SOLIS-COHEN LLP

                                                                October __, 2001

         Based on the foregoing and subject to the qualifications and
limitations set forth below, we are of the opinion that:

         1.    The Company has been duly incorporated and is subsisting as a
corporation in good standing under the laws of the Commonwealth of Pennsylvania.

         2.    The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Compendium of Public Filing Documents delivered to each of the Investors (the
"Compendium") and to enter into and perform its obligations under the
Transaction Documents.

         3.    The shares of Common Stock (including shares of Common Stock to
be purchased upon the exercise of any Warrants) and the Warrants to be purchased
by the Investor from the Company have been duly authorized for issuance and sale
to the Investor pursuant to the Purchase Agreement and the Warrants, and, when
issued and delivered by the Company pursuant to the Purchase Agreement and the
Warrants, against payment of the consideration set forth in the Purchase
Agreement and the Warrants, will be validly issued and fully paid and non-
assessable.

         4.    No securityholder of the Company has, pursuant to the terms of
the Articles of Incorporation or bylaws of the Company, any statute, or any
rules of The NASDAQ National Market, any preemptive, approval or similar rights
or authority pertaining to the issuance, sale and purchase of (i) the shares of
Common Stock to be purchased pursuant to the Purchase Agreement or the shares of
Common Stock issuable upon exercise of the Warrants, or (ii) the Warrants.

         5.    Each subsidiary of the Company has been duly incorporated and is
validly existing or subsisting as a corporation in good standing under the laws
of the jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as presently
being conducted; except where the failure so to be in good standing could not
reasonably be expected to result in a Material Adverse Effect; except as
otherwise disclosed in the Compendium, all of the issued and outstanding capital
stock of each subsidiary has been duly authorized and validly issued, is fully
paid and non-assessable and, to our knowledge, is owned by the Company, directly
or through subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity other than the pledge of the equity
interests in such subsidiaries in favor of PNC Bank, N.A., securing obligations
of the Company and its subsidiaries thereto; none of the outstanding shares of
capital stock of any subsidiary was issued in violation of the preemptive or
similar rights of any securityholder of such subsidiary set forth in the
Articles of Incorporation (or comparable governing document)

                                       3
<PAGE>

or bylaws of the subsidiary.

         6.    Each of the Transaction Documents has been duly authorized,
executed and delivered by the Company, and constitutes a valid and legally
binding obligation of the Company enforceable against the Company in accordance
with its terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
arrangement, moratorium and other similar laws affecting creditors' rights
generally and by general equitable principles (whether considered in a
proceeding in equity or at law) and, in the case of the Registration Rights
Agreement, except to the extent that the indemnification provisions thereof may
be unenforceable; and all corporate action required to be taken for the due and
proper authorization, execution and delivery of each of the Transaction
Documents and the consummation of the transactions contemplated thereby has been
duly and validly taken.

         7.    Each of the Transaction Documents conforms in all material
respects to the description thereof contained in the Compendium and the shares
of Common Stock and Warrants conform in all material respects to the description
thereof contained in the Compendium.

         8.    Based in part on the representations of the Investor in the Stock
Purchase Agreement, except for (a) the listing of the Shares and the Warrant
Shares on The NASDAQ National Market, (b) post-closing filings with the
Commission and (c) post-closing filings as may be necessary to comply with the
"blue sky" laws of various states, no filing with, or authorization, approval,
consent, license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign, is necessary or required
in connection with the due authorization, execution and delivery of the
Transaction Documents or for the offering, issuance, sale or delivery of the
shares of Common Stock and the Warrants pursuant to the terms of the Transaction
Documents.

         9.    The execution, delivery and performance of the Transaction
Documents and the consummation of the transactions contemplated therein
(including the issuance and sale of the Common Stock and the Warrants, and the
use of the proceeds from the sale of the Common Stock and the Warrants as
described in the Compendium) and compliance by the Company with its obligations
under the Transaction Documents do not and will not, whether with or without the
giving of notice or lapse of time or both, conflict with or constitute a breach
of, or default under or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or any subsidiary
pursuant to any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or any other agreement or instrument, known to us, to
which the Company or any subsidiary is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or any
subsidiary is subject and which is listed as an exhibit to the Company's Form
10-K for the year ended September 30, 2000 or listed as an exhibit to any
documents filed with the Commission after the Company's Form 10-K for the year
ended June 30, 2000 (except for such

                                       4
<PAGE>

conflicts, breaches or defaults or liens, charges or encumbrances that could not
reasonably be expected to have a Material Adverse Effect), nor will such action
result in any violation of the provisions of the charter or by-laws of the
Company or any subsidiary, or any applicable law, statute, rule, regulation,
judgment, order, writ or decree, known to us, of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any subsidiary or any of their respective properties, assets or
operations.

         10.   Neither the Company nor any of its subsidiaries is an "investment
company" or an entity "controlled" by an "investment company," as such terms are
defined in the 1940 Act.

         11.   Based in part on the representations of the Investor in the Stock
Purchase Agreement, no registration of the Securities under the Securities Act
is required in connection with the issuance and sale of the shares of Common
Stock and the Warrants by the Company in the manner contemplated by the
Transaction Documents.

                                       5
<PAGE>

                     Schedules to Stock Purchase Agreement

                                 Schedule 2.3
                                 ------------

         As of September 26, 2001, there were 1,079,935 outstanding options to
purchase shares of common stock at a weighted average exercise price of $4.00
per share.

         As of September 26, 2001, there were 199,735 options to purchase shares
of common stock available for future issuance under the RMH Teleservices, Inc.
1996 stock incentive plan.

         As of September 28, 2001 there were 930,340 outstanding warrants to
purchase shares of common stock at an exercise price of $12.00 per share.

         As of September 28, 2001, the Company may have to issue up to 1,617,991
warrants to purchase shares of common stock at an exercise price of $12.00 if
the Company defaults on certain provisions under the stock purchase agreement
dated September 28, 2001 by and among the Company and the investors listed on
Exhibit A thereto.

                                       6
<PAGE>

                                 Schedule 2.26
                                 -------------

         Certain rights to have securities of the Company registered with the
Commission which have not been satisfied were granted under a Registration
Rights Agreement dated as of September 28, 2001 by and among the Company,
ThinkEquity Partners LLC and the investors listed on Schedule I thereto.

         Certain rights to participate in the transactions contemplated by this
Agreement were granted under a Stock Purchase Agreement dated as of September
28, 2001 by and among the Company and the investors listed on Exhibit A thereto.

                                       7

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