Document:

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                   AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

             STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE--NET

(Do not use this form for Multi-Tenant Property)

1.       Basic Provisions ("Basic Provisions")

     1.1.  Parties:  This Lease  ("Lease"),  dated for reference  purposes only,
September  18,  1998,  is made by and between W.H.  POMERADO,  LLC, a California
limited  liability   company   ("Lessor"),   and  AETRIUM,   INC.,  a  Minnesota
corporation,  San Diego  Division  ("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 by the street  address of 13000 Gregg Street,  Poway,  CA 92064 located in
the  County  of San  Diego,  State of  California  and  generally  described  as
(describe briefly the nature of the property) Lot 89, an approximately 45,000 sf
concrete  tilt-up  manufacturing,  distribution,  office building with expansion
capability of 15,000 sf ("Premises"). (See Paragraph 2 for further provisions.)

     1.3.  Term:  10  years  and  3  months  ("Original  Term")  commencing  See
AddendumP.  3  ("Commencement  Date") and ending 123 months  later  ("Expiration
Date"). (See Paragraph 3 for further provisions.)

     1.4. Early Possession:  N/A ("Early Possession Date").  (See Paragraphs 3.2
and 3.3 for further provisions.)

     1.5. Base Rent:  $35,082.00 per month ("Base  Rent"),  payable on the first
day of each month  commencing  Commencement  Date.  (See Paragraph 4 for further
provisions.) |X| If this box is checked,  there are provisions in this Lease for
the Base Rent to be adjusted.

     1.6. Base Rent Paid Upon  Execution:  $ See AddendumP.  14 as Base Rent for
the period.

     1.7. Security Deposit: $70,164.00 See Add'nP. 14 ("Security Deposit"). (See
Paragraph 5 for further provisions.)

     1.8.  Permitted  Use:   Office/warehouse/distribution   use  or  any  other
permitted use under  applicable  zoning or applicable  law. (See Paragraph 6 for
further provisions.)

     1.9. Insuring Party: Lessor is the "Insuring Party" unless otherwise stated
herein. (See Paragraph 8 for further provisions.)

     1.10. Real Estate Brokers: The following real estate brokers (collectively,
the "Brokers") and brokerage  relationships  exist in this  transaction  and are
consented to by the Parties (check applicable boxes):

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                  CB Richard Ellis represents

|X|      Lessor exclusively ("Lessor's Broker"); | | both Lessor and Lessee, and
         Colliers Iliff Thorn represents

|X|      Lessee exclusively ("Lessee's Broker"): | | both Lessee and Lessor.
         (See Paragraph 15 for further provisions.)

     1.11.  Guarantor.  The obligations of the Lessee under this Lease are to be
guaranteed by N/A("Guarantor"). (See Paragraph 37 for further provisions.)

     1.12.  Addenda.  Attached  hereto is an Addendum or Addenda  consisting  of
Paragraphs 1 through 19 and  Exhibits "1" through "6" 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 square  footage set forth in this Lease,  or that may
have been used in  calculating  rental,  is an  approximation  which  Lessor and
Lessee  agree is  reasonable  and the rental  based  thereon  is not  subject to
revision whether or not the actual square footage is more or less.

     2.2. Condition.  Lessor shall deliver the Premises to Lessee clean and free
of debris on the  Commencement  Date and  warrants to Lessee  that the  existing
plumbing,  fire sprinkler  system,  lighting,  air  conditioning,  heating,  and
loading doors, if any, in the Premises,  other than those constructed by Lessee,
shall  be  in  good  operating   condition  on  the  Commencement   Date.  If  a
non-compliance  with said warranty exists as of the  Commencement  Date,  Lessor
shall,  except as otherwise  provided in this Lease,  promptly  after receipt of
written  notice  from  Lessee  setting  forth  with  specificity  the nature and
["extent   of"  -  words  not  readable  due  to  hole  punched  in  page]  such
non-compliance, rectify same at Lessor's expense. If Lessee does not give Lessor
written notice of a  non-compliance  with this warranty  within thirty (30) days
after the  Commencement  Date,  correction of that  non-compliance  shall be the
obligation of Lessee at Lessee's sole cost and expense.

     2.3.  Compliance with  Covenants,  Restrictions  and Building Code.  Lessor
warrants  to  Lessee  that the  improvements  on the  Premises  comply  with all
applicable  covenants or restrictions  of record and applicable  building codes,
regulations  and ordinances in effect on the  Commencement  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.  If the  Premises  do not comply with said  warranty,  Lessor
shall,  except as otherwise  provided in this Lease,  promptly  after receipt of
written notice from Lessee setting forth with  specificity the nature and extent
of such non-compliance, rectify the same at Lessor's expense. If Lessee does not
give Lessor written notice of a non-compliance with this warranty within six (6)
months following the Commencement Date,  correction of that non-compliance shall
be the obligation of Lessee at Lessee's sole cost and expense.

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     2.4. Acceptance of Premises.  Lessee hereby  acknowledges:  (a) that it has
been advised by the Brokers to satisfy  itself with respect to the  condition of
the Premises  (including  but not limited to the  electrical  and fire sprinkler
systems,  security,  environmental  aspects,  compliance with Applicable Law, as
defined in Paragraph 6.3) and the present and future suitability of the Premises
for Lessee's  intended  use, (b) that Lessee has made such  investigation  as it
deems  necessary with  reference to such matters and assumes all  responsibility
therefor as the same relate to Lessee's  occupancy  of the  Premises  and/or the
term of this Lease, and (c) that neither Lessor, nor any of Lessor's agents, has
made any oral or written  representations or warranties with respect to the said
matters other than as set forth in this Lease.

     2.5.  Lessee Prior  Owner/Occupant.  The warranties  made by Lessor in this
Paragraph 2 shall be of no force or effect if immediately  prior to the date set
forth in Paragraph 1.1 Lessee was the owner or occupant of the Premises. In such
event,   Lessee  shall,   at  Lessee's  sole  cost  and  expense,   correct  any
non-compliance of the Premises with said warranties.

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, however,
(including  but not limited to the  obligations  to pay Real Property  Taxes and
insurance  premiums and to maintain the Premises) shall be in effect during such
period.  Any such early  possession  shall not affect nor advance the Expiration
Date of the Original Term.

     3.3.  Delay  In  Possession.  If  for  any  reason  Lessor  cannot  deliver
possession  of the Premises to Lessee as agreed  herein by the Early  Possession
Date, if one is specified in Paragraph 1.4, or, if no Early  Possession  Date is
specified,  by  the  Commencement  Date,  Lessor  shall  not be  subject  to any
liability therefor, nor shall such failure affect the validity of this Lease, or
the  obligations  of Lessee  hereunder,  or extend the term hereof,  but in such
case, Lessee shall not, except as otherwise provided herein, be obligated to pay
rent or perform  any other  obligation  of Lessee  under the terms of this Lease
until Lessor  ["d________s"  - word(s) not readable due to hole punched in page]
possession  of the  Premises to Lessee.  If  possession  of the  Premises is not
delivered to Lessee within sixty (60) days alter the Commencement  Date.  Lessee
may,  at its  option,  by  notice in  writing  to  Lessor  within  ten (10) days
thereafter,  cancel this Lease,  in which event the Parties  shall be discharged
from all obligations hereunder;  provided,  however, that if such written notice
by Lessee is not  received by Lessor  within said ten (10) day period,  Lessee's
right to cancel this Lease shall terminate and be of no further force or effect.
Except as may be otherwise  provided,  and  regardless of when the term actually
commences,  if  possession is not tendered to Lessee when required by this Lease
and Lessee does not terminate this Lease,  as aforesaid,  the period free of the
obligation to pay Base Rent, if any,  that Lessee would  otherwise  have enjoyed
shall run from the date of  delivery of  possession  and  continue  for a period
equal to what Lessee would  otherwise  have enjoyed under the terms hereof,  but
minus any days of delay caused by the acts,  changes or omissions of Lessee. See
Addendum P. 3.3

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4.       Rent.

     4.1.  Base Rent.  Lessee shall cause payment of Base Rent and other rent or
charges, as the same may be adjusted from time to time, to be received by Lessor
in lawful money of the United States without  offset or deduction,  on or before
the day on which it is due  under  the  terms of this  Lease,  Base Rent and all
other rent and charges for any period  during the term hereof  which is for less
than one (1) full calendar  month shall be prorated based upon the actual number
of days of the calendar month  involved.  Payment of Base Rent and other charges
shall be made to Lessor at its address stated herein or to such other persons or
at such other  addresses as Lessor may from time to time designate in writing to
Lessee.

5. Security Deposit.  Lessee shall deposit with Lessor upon execution hereof the
Security  Deposit set forth in Paragraph  1.7 as security for Lessee's  faithful
performance  of Lessee's  obligations  under this Lease.  If Lessee fails to pay
Base Rent or other rent or charges due  hereunder,  or otherwise  Defaults under
this Lease (as defined in Paragraph  13.1),  Lessor may use, apply or retain all
or any portion of said Security Deposit for the payment of any amount due Lessor
or to reimburse or compensate Lessor for any liability,  cost, expense,  loss or
damage  (including  attorneys'  fees) which Lessor may suffer or incur by reason
thereof.  If Lessor uses or applies all or any portion of said Security Deposit,
Lessee shall within ten (10) days after written request  therefor deposit moneys
with  Lessor  sufficient  to restore  said  Security  Deposit to the full amount
required by this Lease. Any time the Base Rent increases during the term of this
Lease, Lessee shall, upon written request from Lessor, deposit additional moneys
with Lessor  sufficient to maintain the same ratio between the Security  Deposit
and the Base Rent as those amounts are specified in the Basic Provisions. Lessor
shall not be required to keep all or any part of the Security  Deposit  separate
from  its  general  accounts.   Lessor  shall,  at  the  expiration  or  earlier
termination of the term hereof and after Lessee has vacated the Premises, return
to Lessee (or, at Lessor's  option,  to the last  assignee,  if any, of Lessee's
Interest  herein),  that portion of the Security  Deposit not used or applied by
Lessor.  Unless otherwise  expressly agreed in writing by Lessor, no part of the
Security  Deposit shall be  considered to be held in trust,  to bear interest or
other  increment for its use, or to be  prepayment  for any moneys to be paid by
Lessee under this Lease.

6.       Use.

     6.1.  Use.  Lessee shall use and occupy the Premises  only for the purposes
set forth in Paragraph  1.8, or any other use which is comparable  thereto,  and
for no other purpose.  Lessee shall not use or permit the use of the Premises in
a manner  that  creates  waste or a nuisance,  or that  disturbs  owners  and/or
occupants of, or causes damage to,  neighboring  premises or properties.  Lessor
hereby agrees to not  unreasonably  withhold or delay its consent to any written
request by Lessee, Lessees assignees or subtenants, and by prospective assignees
and subtenants of the Lessee,  its assignees and subtenants,  for a modification
of said  permitted  purpose for which the premises  may be used or occupied,  so
long as the same will not impair the structural integrity of the ["improvements"
- word not readable due to hole punched in page] on the Premises, the mechanical
or electrical  systems  therein,  is not  significantly  more  burdensome to the
Premises and the improvements, thereon, and is otherwise permissible pursuant to
this Paragraph 6. If Lessor elects to withhold such consent, Lessor shall within
five (5) business days give a written  notification of same,  which notice shall
include an explanation of Lessor's reasonable objections to the change in use.

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6.2.     Hazardous Substances.

     (a) Reportable Uses Require Consent. The term "Hazardous Substance" as used
in this Lease shall mean any  product,  substance,  chemical,  material or waste
whose  presence,   nature,   quantity  and/or   intensity  of  existence,   use,
manufacture,  disposal,  transportation,  spill,  release or  effect,  either by
itself or in combination with other materials expected to be on the Premises, is
either: (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 liability of Lessor to any governmental  agency
or third party  under any  applicable  statute or common law  theory.  Hazardous
Substance  shall  include,  but  not be  limited  to,  hydrocarbons,  petroleum,
gasoline,  crude oil or any products,  by-products or fractions thereof.  Lessee
shall not engage in any activity in, on or about the Premises which  constitutes
a Reportable Use (as hereinafter  defined) of Hazardous  Substances  without the
express  prior written  consent of Lessor and  compliance in a timely manner (at
Lessee's sole cost and expense) with all Applicable Law (as defined in Paragraph
6.3).  "Reportable  Use" shall mean (i) the  installation or use of any above or
below ground  storage  tank,  (ii) the  generation,  possession,  storage,  use,
transportation,  or  disposal of a Hazardous  Substance  that  requires a permit
from, or with respect to which a report,  notice,  registration or business plan
is required to be filed with, any governmental  authority.  Reportable Use shall
also include  Lessee's  being  responsible  for the presence in, on or about the
Premises of a  Hazardous  Substance  with  respect to which any  Applicable  Law
requires that a notice be given to persons entering or occupying the Premises or
neighboring  properties.  Notwithstanding  the  foregoing,  Lessee may,  without
Lessor's  prior  consent,  but in compliance  with all  Applicable  Law, use any
ordinary and customary materials reasonably required to be used by Lessee in the
normal course of Lessee's  business  permitted on the Premises,  so long as such
use is not a  Reportable  Use and does not expose the  Premises  or  neighboring
properties to any meaningful risk of contamination or damage or expose Lessor to
any liability therefor.  In addition,  Lessor may (but without any obligation to
do so) condition its consent to the use or presence of any Hazardous  Substance,
activity or storage tank by Lessee upon Lessee's  giving Lessor such  additional
assurances as Lessor, in its reasonable  discretion,  deems necessary to protect
itself,   the  public,   the  Premises  and  the  environment   against  damage,
contamination or injury and/or liability therefrom or therefor,  including,  but
not limited to, the  installation  (and removal on or before Lease expiration or
earlier  termination) of reasonably  necessary  protective  modifications to the
Premises  (such as concrete  encasements)  and/or the  deposit of an  additional
Security Deposit under Paragraph 5 hereof.

     (b) Duty to Inform  Lessor.  If Lessee knows,  or has  reasonable  cause to
believe, that a Hazardous Substance,  or a condition involving or resulting from
same, 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.  Lessee shall also immediately give Lessor a copy of any
statement,  report, notice,  registration,  application,  permit, business plan,
license,   claim,   action  or  proceeding  given  to,  or  received  from,  any
governmental  authority or private party,  or persons  entering or occupying the
Premises, concerning the presence, spill, release, discharge of, or exposure to,
any  Hazardous  Substance  or  contamination  in,  on,  or about  the  Premises,
including  but not  limited  to all such  documents  as may be  involved  in any
Reportable Uses involving the Premises.

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     (c)  Indemnification.  Lessee  shall  indemnify,  protect,  defend and hold
Lessor,  its agents,  employees,  lenders  and ground  lessor,  if any,  and the
Premises,  harmless  from and against any and all loss of rents and/or  damages,
liabilities,  judgments, costs, claims, liens, expenses,  penalties, permits and
attorney's  and  consultant's  fees  arising out of or involving  any  Hazardous
Substance  or storage  tank  brought onto the Premises by or for Lessee or under
Lessee's control. Lessee's obligations under this Paragraph 6 shall include, but
not be  limited  to,  the  effects  of any  contamination  or injury to  person,
["property" - word not readable due to hole punched in page] or the  environment
created  or  suffered  by  Lessee,  and  the  cost of  investigation  (including
consultant's and attorney's fees and testing), removal, remediation, restoration
and/or abatement thereof,  or of any contamination  therein involved,  and shall
survive the  expiration or earlier  termination of this Lease.  No  termination,
cancellation  or release  agreement  entered  into by Lessor  and  Lessee  shall
release Lessee from its  obligations  under this Lease with respect to Hazardous
Substances or storage tanks,  unless specifically so agreed by Lessor in writing
at the time of such agreement.

     6.3.  Lessee's  Compliance with Law.  Except as otherwise  provided in this
Lease, Lessee, shall, at Lessee's sole cost and expense,  fully,  diligently and
in a timely manner, comply with all "Applicable Law," which term is used in this
Lease to include all laws, rules, regulations, ordinances, directives covenants,
easements  and  restrictions  of  record,   permits,  the  requirements  of  any
applicable fire insurance  underwriter or rating bureau, and the recommendations
of Lessor's engineers and/or consultants, relating in any manner to the Premises
(including but not limited to matters pertaining to (i) industrial hygiene, (ii)
environmental conditions on, in, under or about the Premises, including soil and
groundwater conditions, and (iii) the use, generation, manufacture,  production,
installation, maintenance, removal, transportation, storage, spill or release of
any Hazardous  Substance or storage tank),  now in effect or which may hereafter
come into  effect,  and  whether or not  reflecting  a change in policy from any
previously existing policy.  Lessee shall, within five (5) days after receipt of
Lessor's  written  request,  provide  Lessor  with copies of all  documents  and
information,  including, but not limited to, permits, registrations,  manifests,
applications, reports and certificates,  evidencing Lessee's compliance with any
Applicable Law specified by Lessor,  and shall immediately upon receipt,  notify
Lessor in writing (with copies of any documents  involved) of any  threatened or
actual claim, notice,  citation,  warning,  complaint or report pertaining to or
involving failure by Lessee or the Premises to comply with any Applicable Law.

     6.4. Inspection;  Compliance.  Lessor and Lessor's Lender(s) (as defined in
Paragraph 8.3(a)) shall have the right to enter the Premises at any time, in the
case of an  emergency,  and otherwise at  reasonable  times,  for the purpose of
inspecting  the  condition of the Premises and for  verifying  compliance by the
Lessee with this Lease and all  Applicable  Laws (as defined in Paragraph  6.3),
and to employ  experts  and/or  consultants  in connection  therewith  and/or to
advise Lessor with respect to Lessee's activities,  including but not limited to
the installation,  operation,  use, monitoring,  maintenance,  or removal of any
Hazardous  Substance  or  storage  tank on or from the  Premises.  The costs and
expenses of any such inspections shall be paid by the party requesting ["same" -
word not  readable  due to hole  punched in page]  unless a Default or Breach of
this  Lease,  violation  of  Applicable  Law,  or  a  contamination,  caused  or
materially  contributed  to by Lessee is found ["to exist" - words not  readable
due to hole  punched  in page] or be  imminent,  or  unless  the  inspection  is
requested  or  ordered  by a  governmental  authority  as the result of any such
existing or imminent violation or contamination.  In any such case, Lessee shall
upon request  reimburse Lessor or Lessor's  Lender,  as the case may be, for the
costs and expenses of such inspections.

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7.       Maintenance; Repairs; Utility Installations; Trade Fixtures
         and Alterations.

     7.1. Lessee's Obligations.

     (a) Subject to the  provisions of Paragraphs  2.2 (Lessor's  warranty as to
condition),  2.3 (Lessor's warranty as to compliance with covenants,  etc.), 7.2
(Lessor's   obligations  to  repair),   9  (damage  and  destruction),   and  14
(condemnation),  Lessee  shall,  at  Lessee's  sole cost and  expense and at all
times,  keep the Premises and every part  thereof in good order,  condition  and
repair ["structural and" - appear to be struck through]  non-structural (whether
or not such 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,  without
limiting the  generality of the foregoing,  all equipment or facilities  serving
the  Premises,  such  as  plumbing,  heating,  air  conditioning,   ventilating,
electrical,  lighting facilities,  boilers,  fired or unfired ["pressure" - word
not  readable  due to hole  punched  in page]  vessels,  fire  sprinkler  and/or
standpipe and hose or other automatic fire extinguishing system,  including fire
alarm and/or smoke  detection  systems and equipment,  fire hydrants,  fixtures,
walls  (interior ["and  exterior),  foundations," - appear to be struck through]
ceilings,  roofs, floors,  windows,  doors, plate glass,  skylights landscaping,
driveways,  parking  lots,  fences,  ["retaining  walls,"  - appear to be struck
through] signs, sidewalks and parkways located in, on, about, or adjacent to the
Premises. 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,  the elements
surrounding  same,  or  neighboring  properties,  that was caused or  materially
contributed to by Lessee, or pertaining to or involving any Hazardous  Substance
and/or  storage  tank  brought  onto the  Premises by or for Lessee or under its
control,  Lessee,  in keeping the Premises in good order,  condition and repair,
shall  exercise and perform good  maintenance  practices.  Lessee's  obligations
shall include restorations,  replacements or renewals when necessary to keep the
Premises and all improvements thereon or a part thereof in good order, condition
and state of repair.  If Lessee  occupies the Premises for ["seven (7)" - struck
through,  replaced by "eight (8)"] years or more,  Lessor may require  Lessee to
repaint the exterior of the  buildings on the Premises as  reasonably  required,
but not more frequently than once every ["seven (7)" - struck through,  replaced
by "eight (8)"] years.

     (b) Lessee shall,  at Lessee's sole cost and expense,  procure and maintain
contracts,  with copies to Lessor,  in customary form and substance for and with
contractors  specializing  and experienced  in, the inspection,  maintenance and
service of the following  equipment  and  improvements,  if any,  located on the
Premises: (i) heating, air conditioning and ventilation equipment,  (ii) boiler,
fired or unfired  pressure  vessels,  (iii) fire sprinkler  and/or standpipe and
hose or other automatic fire extinguishing systems,  including fire alarm and/or
smoke  detection,  (iv)  landscaping  and irrigation (v) root covering and drain
maintenance and (vi) asphalt and parking lot maintenance, See Addendum P. 8.

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     7.2.  Lessor's  Obligations.  Except for the  warranties  and agreements of
Lessor  contained in Paragraphs  2.2 (relating to condition of the Premises) 2.3
(relating to compliance  with  covenants,  restrictions  and building  code),  9
(relating to  destruction of the Premises) and 14 (relating to  condemnation  of
the  Premises),  it is  intended  by the  Parties  hereto  that  Lessor  have no
obligation,  in any manner  whatsoever,  to repair and  maintain  the  Premises,
improvements  located thereon,  or the equipment therein,  whether structural or
non-structural,  all of which  obligations are intended to be that of the Lessee
under Paragraph 7.1 hereof. 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. Lessee and Lessor expressly waive the benefit of any
statute now or  hereafter  in effect to the extent it is  inconsistent  with the
terms of this Lease with respect to, or which  affords  Lessee the right to make
repairs  at the  expense of Lessor or to  terminate  this Lease by reason of any
needed repairs. See Addendum P. 20

7.3.     Utility Installations; Trade Fixtures; Alterations.

     (a) Definitions; Consent Required. The term "Utility Installations" is used
in this Lease to refer to all  carpeting,  window  coverings,  air lines,  power
panels,   electrical   distribution,    security,   fire   protection   systems,
communication  systems,  lighting  fixtures,  heating,   ventilating,   and  air
conditioning equipment,  plumbing, and fencing in, on or about the Premises. The
term "Trade  Fixtures"  shall mean Lessee's  machinery and equipment that can be
removed  without doing material damage to the Premises.  The term  "Alterations"
shall mean any  modification of the improvements on the Premises from that which
are  provided  by Lessor  under  the terms of this  Lease,  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 as defined
in  Paragraph  7.4(a).   Lessee  shall  not  make  any  Alterations  or  Utility
Installations in, on, under or about the Premises without Lessor's prior written
consent.  ["Lessee"  - word not  readable  due to hole  punched  in  page]  may,
however,  make  non-structural  Utility  Installations  to the  interior  of the
Premises (excluding the roof), 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 the term of this Lease as extended
does not exceed $25,000.

     (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  proposed  detailed  plans.  All  consents  given by
Lessor, whether by virtue of Paragraph 7.3(a) or by subsequent specific consent,
shall be deemed  conditioned upon: (i) Lessee's acquiring all applicable permits
required by  governmental  authorities,  (ii) the  furnishing  of copies of such
permits together with a copy of the plans and  specifications for the Alteration
or Utility Installation to Lessor prior to commencement of the work thereon, and
(iii) the  compliance by Lessee with all  conditions of said permits in a prompt
and  expeditious  manner.  Any  Alterations or Utility  Installations  by Lessee
during the term of this Lease  shall be done in a good and  workmanlike  manner,
with good and sufficient  materials,  and in compliance with all Applicable Law.
Lessee shall promptly upon completion thereof furnish Lessor with as-built plans
and  specifications  therefor.  Lessor  may (but  without  obligation  to do so)
condition its consent to any requested  Alteration or Utility  Installation that
costs $10,000 or more upon Lessee's  providing Lessor with a lien and completion
bond in an amount equal to one and  one-half  times the  estimated  cost of such
Alteration or Utility  Installation  and/or upon Lessee's  posting an additional
Security Deposit with Lessor under Paragraph 36 hereof.

                                       8
<PAGE>

     (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  mechanics'  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  in or on the  Premises  as  provided  by law. If
Lessee  shall,  in good faith,  contest the validity of any such lien,  claim or
demand, then Lessee shall, at its sole expense defend and protect itself, Lessor
and the  Premises  against the same and shall pay and  satisfy any such  adverse
judgment that may be rendered thereon before the enforcement thereof against the
Lessor or the Premises. If Lessor shall require,  Lessee shall furnish to Lessor
a surety  bond  satisfactory  to Lessor in an amount  equal to one and  one-half
times the amount of such  contested  lien claim or demand,  indemnifying  Lessor
against  liability  for the same,  as  required  by law for the  holding  of the
Premises  free from the effect of such lien or claim.  In  addition,  Lessor may
require Lessee to pay Lessor's  attorney's  fees and costs in  participating  in
such action if Lessor shall decide it is to its best interest to do so.

7.4.     Ownership; Removal; Surrender; and Restoration.

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

     (b) Removal.  Unless otherwise  agreed in writing,  Lessor may require that
any or all Lessee Owned  Alterations or Utility  Installations be removed by the
expiration  or  earlier  termination  of  this  Lease,   notwithstanding   their
installation  may have been  consented  to by  Lessor.  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 of Lessor.

     (c)  Surrender/Restoration.  Lessee shall surrender the Premises by the end
of the last day of the Lease term or any earlier  termination  date,  with ["all
the" - words not readable due to hole punched in page]  improvements,  parts and
surfaces thereof clean and free of debris and in good operating order, condition
and state of repair,  ordinary  wear and ["tear" - word not readable due to hole
punched in page] accepted. "Ordinary wear and tear" shall not include any damage
or deterioration that would have been prevented by good maintenance  practice or
by  Lessee  performing  all of its  obligations  under  this  Lease.  Except  as
otherwise  agreed  or  specified  in  writing  by  Lessor,   the  Premises,   as
surrendered,  shall include the Utility Installations.  The obligation of Lessee
shall  include  the  repair  of  any  damage  occasioned  by  the  installation,
maintenance or removal of Lessee's Trade Fixtures,  furnishings,  equipment, and
Alterations and/or Utility Installations,  as well as the removal of any storage
tank installed by or for Lessee, and the removal, replacement, or remediation of
any soil,  material or ground water  contaminated by Lessee,  all as may then be
required by Applicable Law and/or good service practice. Lessee's Trade Fixtures
shall  remain the  property of Lessee and shall be removed by Lessee  subject to
its obligation to repair and restore the Premises per this Lease.

                                       9
<PAGE>

8.       Insurance; Indemnity.

     8.1.  Payment for Insurance.  Regardless of whether the Lessor or Lessee is
the Insuring  Party,  Lessee  shall pay for all  insurance  required  under this
Paragraph 8 except to the extent of the cost attributable to liability insurance
carried by Lessor in excess of $1,000,000  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 for any amount due.

8.2.     Liability Insurance.

     (a) Carried by Lessee.  Lessee  shall  obtain and keep in force  during the
term of this Lease a Commercial General Liability policy of insurance protecting
Lessee and Lessor (as an additional  insured)  against claims for bodily injury,
personal injury and property damage based upon,  involving or arising out of the
ownership,  use,  occupancy  or  maintenance  of  the  Premises  and  all  areas
appurtenant  thereto.  Such insurance shall be on an occurrence  basis providing
single limit coverage in an amount not less than  $1,000,000 per occurrence with
an "Additional  Insured-Managers or Lessors of Premises" Endorsement and contain
the "Amendment of the Pollution  Exclusion" for damage caused by heat,  smoke or
fumes  from a hostile  fire.  The policy  shall not  contain  any  intra-insured
exclusions  as between  insured  persons  or  organizations,  but shall  include
coverage for  liability  assumed  under this Lease ["as an" - words not readable
due to hole punched in page] "insured  contract" for the performance of Lessee's
indemnity obligations under this Lease. The limits of said insurance required by
this Lease or ["as carried" - words not readable due to hole punched in page] by
Lessee shall not,  however,  limit the liability of Lessee nor relieve Lessee of
any obligation hereunder. All insurance to be carried by Lessee shall be primary
to and not  contributory  with any similar  insurance  carried by Lessor,  whose
insurance shall be considered excess insurance only.

     (b) Carried by Lessor.  In the event Lessor is the Insuring  Party,  Lessor
shall also maintain liability insurance described in Paragraph 8.2(a), above, in
addition  to, and not in lieu of, the  insurance  required to be  maintained  by
Lessee. Lessee shall not be named as an additional insured therein.

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

     (a) Building and Improvements.  The Insuring Party shall obtain and keep in
force  during the term of this Lease a policy or policies in the name of Lessor,
with loss payable to Lessor and to the holders of any mortgages,  deeds of trust
or ground  leases on the Premises  ("Lender(s)"),  insuring  loss ["or damage" -
words not readable due to hole punched in page] 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 Lenders,  but
in no event more than the commercially  reasonable and available insurable value
thereof if, by reason of the unique nature or age of the improvements  involved,
such latter amount is less than full replacement cost. If Lessor is the Insuring
Party,  however,  Lessee Owned  Alterations and Utility  Installations  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 any
additional  costs  resulting  from  debris  removal  and  reasonable  amounts of
coverage  for  the   enforcement   of  any  ordinance  or  law   regulating  the
reconstruction or replacement of any undamaged sections of the Premises required
to be  demolished  or  removed  by reason of the  enforcement  of any  building,
zoning,  safety or land use laws as the result of a covered cause of 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, as defined in Paragraph 9.1(c).

                                       10
<PAGE>

     (b) Rental Value. The Insuring Party shall, in addition, obtain and keep in
force  during the term of this Lease a policy or policies in the name of Lessor,
with loss payable to Lessor and Lender(s),  insuring the loss of the full rental
and other charges  payable by Lessee to Lessor under this Lease for one (1) year
(including  all real estate taxes,  insurance  costs,  and any scheduled  rental
increases).  Said  insurance  shall  provide  that in the  event  the  Lease  is
terminated  by reason of an  insured  loss,  the  period of  indemnity  for such
coverage  shall be  extended  beyond  the date of the  completion  of repairs or
replacement  of the  Premises,  to provide  for one full  year's  loss of rental
revenues from the date of any such loss.  Said insurance shall contain an agreed
valuation  provision  in lieu of any  coinsurance  clause,  and  the  amount  of
coverage  shall be adjusted  annually to reflect the  projected  rental  income,
property taxes,  insurance premium costs and other expenses,  if any,  otherwise
payable by Lessee,  for the next,  twelve  (12) month  period.  Lessee  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 if
the Premises are part 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.

     (d) Tenant's Improvements.  If the Lessor is the Insuring Party, the Lessor
shall  not  be  required  to  insure  Lessee  Owned   Alterations   and  Utility
Installations  unless the item in  question  has become the  property  of Lessor
under the terms of this  Lease.  If Lessee is the  Insuring  Party,  the  policy
carried by Lessee under this Paragraph 8.3 shall insure Lessee Owned Alterations
and Utility Installations.

                                      11
<PAGE>

     8.4. Lessee's Property Insurance.  Subject to the requirements of Paragraph
8.5, Lessee at its cost shall either by separate policy or, at Lessor's  option,
by endorsement to a policy already carried,  maintain  insurance coverage on all
of  Lessee's   personal   property,   Lessee  Owned   Alterations   and  Utility
Installations  in, on, or about the Premises similar in coverage to that carried
by the  Insuring  Party  under  Paragraph  8.3.  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 or the restoration of Lessee Owned Alterations
and Utility  Installations.  Lessee shall be the Insuring  Party with respect to
the  insurance  required by this  Paragraph  8.4 and shall  provide  Lessor with
written evidence that such insurance is in force.

     8.5. Insurance Policies. Insurance required hereunder shall be in companies
duly licensed to transact business in the state where the Premises are ["held" -
word not  readable  due to hole  punched in page],  and  maintaining  during the
policy  term a "General  Policyholders  Rating" of at least B+, V, or such other
rating as may be  required  by a Lender  having a lien on the  Premises,  as set
forth in the most current issue of "Best's Insurance Guide." Lessee shall not do
or permit to be done anything  which shall  invalidate  the  insurance  policies
referred to in this Paragraph 8. If Lessee is the Insuring  Party,  Lessee shall
cause to be delivered to Lessor  certified  copies of policies of such insurance
or certificates  evidencing the existence and amounts of such insurance with the
insureds  and loss  payable  clauses as required  by this Lease.  No such policy
shall be  cancellable 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. If the Insuring Party shall fail to procure and
maintain the insurance  required to be carried by the Insuring  Party under this
Paragraph  8, the other  Party may,  but shall not be required  to,  procure and
maintain the same, but at Lessee's expense.

     8.6. Waiver of Subrogation. Without affecting any other rights or remedies,
Lessee and Lessor  ("Waiving  Party") each hereby release and relieve the other,
and waive their entire right to recover damages (whether in contract or in tort)
against the other, for loss of or damage to the Waiving Party's property arising
out of or incident to the perils  required to be insured against under Paragraph
8. The effect of such releases and waivers of the right to recover damages shall
not be  limited  by the  amount of  insurance  carried  or  required,  or by any
deductibles applicable thereto.

     8.7.  Indemnity.  Except for Lessor's  negligence  and/or breach of express
warranties,  Lessee  shall  indemnify,  protect,  defend and hold  harmless  the
Premises,  Lessor and its agents, Lessor's master or ground lessor, partners and
Lenders,  from and  against any and all claims,  loss of rents  and/or  damages,
costs, liens, judgments,  penalties,  permits, attorney's and consultant's fees,
expenses and/or liabilities  arising out of, involving,  or in dealing with, the
occupancy of the Premises by Lessee, the conduct of Lessee's business,  any act,
omission or neglect of Lessee, Its agents,  contractors,  employees or Invitees,
and out of any Default or Breach by Lessee in the performance in a timely manner
of any  obligation  on  Lessee's  part to be  performed  under this  Lease.  The
foregoing  shall  include,  but not be limited to, the defense or pursuit of any
claim or any action or proceeding  Involved therein,  and whether or not (in the
case of claims made against Lessor)  litigated  and/or reduced to judgment,  and
whether well founded or not. In case any action or proceeding be brought against
Lessor by reason of any of the foregoing matters, Lessee upon notice from Lessor
shall defend the same at Lessee's expense by counsel reasonably  satisfactory to
Lessor and Lessor shall  cooperate with Lessee in such defense.  Lessor need not
have first paid any such claim in order to be so Indemnified.

                                       12
<PAGE>

     8.8.  Exemption  of Lessor from  Liability.  Lessor shall not be liable for
injury or damage to the person or goods, wares, merchandise or other property of
Lessee,  Lessee's  employees,  contractors,  Invitees,  customers,  or any ether
person in or about the  Premises,  whether such damage or Injury is caused by or
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage,  obstruction  or  other  defects  of  pipes,  fire  sprinklers,  wires,
appliances,  plumbing,  air conditioning or lighting fixtures, or from any other
cause,  whether 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,  and  regardless of whether the cause of
such damage or injury or the means of repairing  the same is  accessible or not.
Lessor  shall not be liable for any damages  arising  from any act or neglect of
any other 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) "Promises  Partial Damage" shall mean damage or destruction to the
improvements on the Premises,  other than Lessee Owned Alterations ["and" - word
not readable due to hole punched in page] Utility Installations, the repair cost
of which damage or destruction is less than 50% of the then  Replacement Cost of
the Premises  immediately  prior to such damage or  destruction,  excluding from
such calculation the value of the land and Lessee Owned  Alterations and Utility
Installations.

          (b) "Premises Total  Destruction"  shall mean damage or destruction to
the Premises,  other than Lessee Owned Alterations and Utility installations the
repair  cost  of  which  damage  or  destruction  is 50%  or  more  of the  then
Replacement  Cost  of  the  Premises   immediately   prior  to  such  damage  or
destruction,  excluding from such  calculation  the value of the land and Lessee
Owned Alterations and Utility Installations.

          (c) "Insured Loss" shall mean damage or destruction to improvements on
the Premises,  other than Lessee Owned  Alterations  and Utility  Installations,
which was caused by an event required to be covered by. The insurance  described
in Paragraph 8.3(a),  irrespective of any deductible  amounts or coverage limits
involved.

          (d)  "Replacement  Cost"  shall mean the cost to repair or rebuild the
improvements  owned by Lessor at the time of the  occurrence to their  condition
existing  immediately prior thereto,  including  demolition,  debris removal and
upgrading required by the operation of applicable building codes,  ordinances or
laws, and without deduction for depreciation.

                                       13
<PAGE>

          (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 the 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,  the shortage in proceeds  was due to the fact that,  by
reason of the unique nature of the improvements,  full ["replacement" - word not
entirely  readable due to hole punched in page] cost insurance  coverage was not
commercially  reasonable and  available,  Lessor shall have no obligation to pay
for the shortage in insurance  ["proceeds"  - word not entirely  readable due to
hole  punched in page] 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 Lessor does not receive  such
funds or assurance within said period,  Lessor may nevertheless elect by written
notice to Lessee within ten (10) days  thereafter to make such  restoration  and
repair  as is  commercially  reasonable  with  Lessor  paying  any  shortage  in
proceeds,  in which case this Lease shall remain in full force and effect. If in
such case Lessor does not so elect,  then this Lease shall  terminate sixty (60)
days following the  occurrence of the damage or  destruction.  Unless  otherwise
agreed, Lessee shall in no event have any right to reimbursement from Lessor for
any  funds  contributed  by Lessee to  repair  any such  damage or  destruction.
Premises Partial Damage due to flood or earthquake shall be subject to Paragraph
9.3 rather than Paragraph 9.2,  notwithstanding that there may be some insurance
coverage, but the net proceeds of any such insurance shall be made available for
the repairs if made by either Party.

     9.3.  Partial Damage - Uninsured Loss. If 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 and
this Lease  shall  continue  In full force and  effect,  but subject to Lessor's
["rights" - word not readable due to hole punched in page] (under Paragraph 13),
Lessor  may at  Lessor's  option,  either:  (i)  repair  such  damage as soon as
reasonably  possible at Lessor's expense,  in which ["event" - word not readable
due to hole punched in page] this Lease shall continue in full force and effect,
or (ii) give written  notice to Lessee  within thirty (30) days after receipt by
Lessor of  knowledge  of the  occurrence  of such damage of  Lessor's  desire to
terminate this Lease as of the date sixty (60) days following the giving of such
notice. In the event Lessor elects to give such notice of Lessor's  intention to
terminate this Lease, Lessee shall have the right within ten (10) days after the
receipt of such notice to give written  notice to Lessor of Lessee's  commitment
to pay for the repair of such  damage  totally at  Lessee's  expense and without
reimbursement  from Lessor.  Lessee shall provide Lessor with the required funds
or  satisfactory  assurance  thereof within thirty (30) days following  Lessee's
said  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  and the  required  funds are  available.  If Lessee does not give such
notice and provide the funds or  assurance  thereof  within the times  specified
above, this Lease shall terminate as of the date specified in Lessor's notice of
termination.

                                       14
<PAGE>

     9.4. Total  Destruction.  Notwithstanding  any other provision hereof, if a
Premises Total  Destruction  occurs  (including any destruction  required by any
authorized  public  authority),  this  Lease  shall  terminate  sixty  (60) days
following the date of such Premises Total Destruction, whether or not the damage
or destruction is an Insured Loss or was caused by a negligent or willful act of
Lessee,  In the event,  however,  that the damage or  destruction  was caused by
Lessee,  Lessor  shall have the right to recover  Lessor's  damages  from Lessee
except as released and waived in Paragraph 8.6.

     9.5. Damage Near End of Term. If at any time during the last six (6) months
of the term of this Lease  there is damage for which the cost to repair  exceeds
one (1)  month's  Base Rent,  whether or not an Insured  Loss,  Lessor  may,  at
Lessor's  option,  terminate this Lease  effective sixty (60) days following the
date of occurrence of such damage by giving written notice ho Lessee of Lessor's
election to do so within  thirty (30) days after the date of  occurrence of such
damage.  Provided,  however, if Lessee at that time has an exercisable option to
extend this Lease or to purchase the  Premises,  then Lessee may  preserve  this
Lease by, within twenty (20) days  following  the  occurrence of the damage,  or
before the  expiration  of the time  provided in such  option for its  exercise,
whichever is earlier  ("Exercise  Period"),  (i) exercising such option and (ii)
providing Lessor with any shortage in insurance  proceeds (or adequate assurance
thereof) needed to make the repairs. If Lessee duly exercises such option during
said  Exercise  Period and  provides  Lessor with funds (or  adequate  assurance
thereof) to cover any shortage in insurance proceeds,  Lessor shall, at Lessor's
expense  repair such damage as soon as reasonably  possible and this Lease shall
continue in full force and effect.  If Lessee fails to exercise  such option and
provide such funds or assurance during said Exercise Period,  then Lessor may at
Lessor's option terminate this Lease as of the expiration of said sixty (60) day
period  following  the  occurrence  of such damage by giving  written  notice to
Lessee of Lessor's  election to do so within ton (10) days after the  expiration
of the Exercise  Period,  notwithstanding  any term or provision in the grant of
option to the contrary.

9.6.     Abatement of Rent; Lessee's Remedies.

          (a) In the  event  of  damage  described  in  Paragraph  9.2  (Partial
Damage-Insured),  whether  or not  Lessor  or Lessee  repairs  or  restores  the
Premises,  the Base Rent, Real Property  Taxes,  insurance  premiums,  and other
charges,  if any,  payable by Lessee  hereunder for the period during which such
damage,  its repair or the  restoration  continues (not to exceed the period for
which  rental value  insurance is required  under  Paragraph  8.3(b)),  shall be
abated in  proportion  to the degree to which  Lessee's  use of the  Premises is
impaired,  Except for  abatement of Base Rent,  Real Property  Taxes,  insurance
premiums,  and other  charges,  if any, as aforesaid,  all other  obligations of
Lessee  hereunder  shall be performed by Lessee,  and Lessee shall have no claim
against  Lessor  for any  damage  suffered  by  reason  of any  such  repair  or
restoration.

                                       15
<PAGE>

          (b) If Lessor  shall be  obligated  to repair or restore the  Premises
under  the  provisions  of  this  Paragraph  9  and  shall  not  commence,  in a
substantial  and ["and  meaningful"  - words not  entirely  readable due to hole
punched in page] way, the repair or  restoration  of the Premises  within ninety
(90) days after such obligation  shall accrue,  Lessee may, at any time prior to
["the  commencement" - words not entirely  readable due to hole punched in page]
of such repair or restoration,  give written notice to Lessor and to any Lenders
of which Lessee has actual notice of Lessee's  election to terminate  this Lease
on a date not less than sixty (60) days following the giving of such notice.  If
Lessee  gives  such  notice  to  Lessor  and such  Lenders  and such  repair  or
restoration  is not  commenced  within  thirty  (30) days after  receipt of such
notice,  this Lease shall terminate as of the date specified in said notice.  If
Lessor or a Lender  commences the repair or restoration  of the Premises  within
thirty (30) days after receipt of such notice, this Lease shall continue in full
force and effect.  "Commence"  as used in this  Paragraph  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. Hazardous  Substance  Conditions.  If a Hazardous  Substance Condition
occurs,  unless  Lessee is legally  responsible  therefor  (in which case Lessee
shall make the investigation and remediation  thereof required by Applicable Law
and this Lease shall continue in full force and effect,  but subject to Lessor's
rights under Paragraph 13), Lessor may at Lessor's option either (i) investigate
and  remediate  such  Hazardous  Substance  Condition,  if required,  as soon as
reasonably  possible  at  Lessor's  expense,  in which  event this  Lease  shall
continue in full force and effect,  or (ii) if the estimated cost to investigate
and remediate  such  condition  exceeds  twelve (12) times the then monthly Base
Rent or $100,000,  whichever is greater,  give written  notice to Lessee  within
thirty (30) days after receipt by Lessor of knowledge of the  occurrence of such
Hazardous  Substance  Condition of Lessor's desire to terminate this Lease as of
the date  sixty (60) days  following  the  giving of such  notice.  In the event
Lessor elects to give such notice of Lessor's intention to terminate this Lease,
Lessee  shall  have the right  within  ten (10) days  after the  receipt of such
notice to give written  notice to Lessor of Lessee's  commitment  to pay for the
investigation and remediation of such Hazardous  Substance  Condition totally at
Lessee's expense and without  reimbursement  from Lessor except to the extent of
an amount  equal to twelve (12) limes the then  monthly  Base Rent or  $100,000,
whichever is greater.  Lessee shall  provide  Lessor with the funds  required of
Lessee or  satisfactory  assurance  thereof  within  thirty (30) days  following
Lessee's said commitment.  In such event this Lease shall continue in lull force
and effect,  and Lessor shall proceed to make such investigation and remediation
as soon as reasonably  possible and the required funds are available.  If Lessee
does not give such notice and provide the required  funds or  assurance  thereof
within the times  specified  above,  this Lease shall  terminate  as of the date
specified in Lessor's notice of termination.  If a Hazardous Substance Condition
occurs for which Lessee is not legally responsible,  there shall be abatement of
Lessee's  obligations  under  this  Lease  to the same  extent  as  provided  in
Paragraph 9.6(a) for a period of not to exceed twelve (12) months.

     9.8.  Termination  -  Advance  Payments.  Upon  termination  of this  Lease
pursuant to this 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 under the terms
of this Lease.

                                       16
<PAGE>

     9.9. 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.

          (a) Payment of Taxes.  Lessee shall pay the Real  Property  Taxes,  as
defined in Paragraph  10.2,  applicable to the Premises  during the term of this
Lease.  Subject to Paragraph  10.1(b),  all such payments shall be made at least
ten (10)  days  prior to the  delinquency  date of the  applicable  installment.
Lessee shall promptly furnish Lessor with satisfactory  evidence that such taxes
have been paid. If any such taxes to be paid by Lessee shall cover any period of
time prior to or after the expiration or earlier termination of the term hereof,
Lessee's share of such taxes shall be equitably  prorated to cover ["only the" -
words not  readable  due to hole  punched in page] period of time within the tax
fiscal year this Lease is in effect,  and Lessor shall reimburse  Lessee for any
overpayment  after such proration.  If ["Lessee" - word not readable due to hole
punched in page]  shall fail to pay any Real  Property  Taxes  required  by this
Lease to be paid by Lessee,  Lessor  shall  have the right to pay the same,  and
Lessee shall reimburse Lessor therefor upon demand. See Addendum P. 8

          (b) Advance  Payment.  In order to insure  payment when due and before
delinquency  of any or all Real  Property  Taxes,  Lessor  reserves the right at
Lessor's  option,  to estimate the current Real Property Taxes applicable to the
Premises,  and to require such current  year's Real Property Taxes to 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 that
equal monthly amount which, over the number of months remaining before the month
in which the applicable tax  installment  would become  delinquent  (and without
interest  thereon),  would provide a fund large enough to fully discharge before
delinquency  the  estimated  installment  of taxes to be paid.  When the  actual
amount of the  applicable  tax bill is known,  the amount of such equal  monthly
advance  payment shall be adjusted as required to provide the fund needed to pay
the applicable taxes before delinquency. If the amounts paid to Lessor by Lessee
under the  provisions  of this  Paragraph  are  insufficient  to  discharge  the
obligations  of Lessee to pay such Real  Property  Taxes as the same become due,
Lessee shall pay to Lessor,  upon Lessor's  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 the
obligations of Lessee under this Lease, then any balance of funds paid to Lessor
under the provisions of this Paragraph may,  subject to proration as provided in
Paragraph 10.1(a), at the option of Lessor, be treated as an additional Security
Deposit under Paragraph 5.

                                       17
<PAGE>

     10.2.  Definition of "Real Property Taxes." As used herein,  the term "Real
Property  Taxes"  shall  include  any  form of real  estate  tax or  assessment,
general,  special,  ordinary or extraordinary,  and any license fee,  commercial
rental tax,  improvement  bond or bonds,  levy or tax (other  than  inheritance,
personal  income or estate  taxes)  imposed upon the  Premises by any  authority
having the direct or indirect power to tax, including any city, state or federal
government,  or any school,  agricultural,  sanitary,  fire, street, drainage or
other  improvement  district  thereof,  levied  against  any legal or  equitable
interest or Lessor in the Premises or in the real property of which the Premises
are a part,  Lessor's right to rent or other income  therefrom,  and/or Lessor's
business of leasing the  Premises.  The term "Real  Property  Taxes"  shall also
include any tax,  fee,  levy,  assessment  or charge,  or any increase  therein,
["imposed"  - word not readable due to hole punched in page] by reason of events
occurring,  or changes in applicable law taking effect,  during the term of this
Lease, including but not limited to a change in the ownership of the Premises or
in the improvements  thereon,  the execution of this Lease, or any modification,
amendment or transfer thereof, and whether or not contemplated by the Parties.

     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  determined  by Lessor  from the  respective  valuations
assigned  in the  assessor's  work  sheets or such other  information  as may be
reasonably available.  Lessor's reasonable determination thereof, in good faith,
shall be conclusive.

     10.4.  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 contained in the Premises or elsewhere.  When possible, Lessee ["shall
use" - words  not  readable  due to hole  punched  in page]  shall use its Trade
Fixtures, furnishings,  equipment and all other personal properly to be assessed
and billed separately from the real property of Lessor. If ["all of" - words not
readable due to hole punched in page]  Lessee's said personal  property shall be
assessed  with  Lessor's  real  property.  Lessee  shall  pay  Lessor  the taxes
attributable to Lessee within ten (10) days after receipt of a written statement
setting forth the taxes applicable to Lessee's  property or, at Lessor's option,
as provided in Paragraph 10.1(b).

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 with other premises.

12.      Assignment and Subletting.

     12.1. Lessor's Consent Required.

          (a)  Lessee  shall not  voluntarily  or by  operation  of law  assign,
transfer, mortgage or otherwise transfer or encumber (collectively "assignment")
or sublet all or any part of Lessee's  interest in this Lease or in the Premises
without  Lessor's prior written  consent given under and subject to the terms of
Paragraph 36.

          (b) A change in the control of Lessee shall  constitute  an assignment
requiring Lessor's consent. The transfer,  on a cumulative basis, of twenty-five
percent (25%) or more of the voting control of Lessee shall  Constitute a change
in control for this purpose.

                                       18
<PAGE>

          (c) The  involvement  of Lessee or its assets in any  transaction,  or
series  of  transactions  (by  way  of  merger,  sale,  acquisition,  financing,
refinancing,  transfer, leveraged buy-out or otherwise), whether or not a formal
assignment  or  hypothecation  of this Lease or Lessee's  assets  occurs,  which
results or will result in a reduction of the Net Worth of Lessee, as hereinafter
defined, by an amount equal to or greater than twenty-five percent (25%) of such
Net Worth of Lessee as it was represented to Lessor at the time of the execution
by Lessor of this Lease or at the time of the most  recent  assignment  to which
Lessor has consented,  or as it exists  immediately prior to said transaction or
transactions  constituting  such reduction,  at whichever time said Net Worth of
Lessee was or is greater,  shall be  considered  an  assignment of this Lease by
Lessee to which  Lessor  may  reasonably  withhold  its  consent.  "Net Worth of
Lessee" for  purposes of this Lease shall be the net worth of Lessee  (excluding
any guarantors)  established  under  generally  accepted  accounting  principles
consistently applied.

          (d) An assignment  or  subletting  of Lessee's  interest in this Lease
without Lessor's  specific prior written  consent,  ["which consent has not been
unreasonably  withheld," - inserted]  shall,  at Lessor's  option,  be a Default
curable after notice per Paragraph  13.1(c),  or a noncurable Breach without the
necessity  of any  notice  and  grace  period.  If Lessor  elects to treat  such
unconsented  to assignment or  subletting as a noncurable  Breach,  Lessor shall
have the right to either:  (i)  terminate  this Lease,  or (ii) upon thirty (30)
days written notice ("Lessor's Notice"),  increase the monthly Base Rent to fair
market  rental value or one hundred ten percent  (110%) of the Base Rent then in
effect,  whichever  is  greater.  Pending  determination  of the new fair market
rental  value,  if disputed by Lessee,  Lessee shall pay the amount set forth in
Lessor's Notice,  with any overpayment  credited against the next installment(s)
of Base Rent coming due, and any  underpayment  for the period  retroactively to
the effective date of the adjustment being due and payable  immediately upon the
determination  thereof.  Further,  in the event of such Breach and market  value
adjustment,  (i) the purchase  price of any option to purchase the Premises held
by Lessee shall be subject to similar  adjustment  to the then fair market value
(without  the  Lease  being  considered  an  encumbrance  or any  deduction  for
depreciation  or  obsolescence,  and considering the Premises at its highest and
best use and in good condition),  or one hundred ten percent (110%) of the price
previously in effect,  whichever is greater,  (ii) any index-oriented  rental or
price adjustment  formulas  contained in this Lease shall be adjusted to require
that the base index be determined with reference to the index  applicable to the
time of such adjustment, and (iii) any fixed rental adjustments scheduled during
the  remainder of ["the Lease" - words not readable due to hole punched in page]
term shall be increased in the same ratio as the new market  rental bears to the
Base Rent in effect  immediately prior to the market value  ["adjustment" - word
not readable due to hole punched in page].

          (e) Lessee's  remedy for any breach of this  Paragraph  12.1 by Lessor
shall be limited to compensatory damages and 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 Base  Rent and  other  sums  due  Lessor  hereunder  or for the
performance of any other obligations to be performed by Lessee under this Lease.

                                       19
<PAGE>

          (b) Lessor may accept any rent or performance of Lessee's  obligations
from any  person  other  than  Lessee  pending  approval  or  disapproval  of an
assignment.  Neither a delay in the approval or disapproval  of such  assignment
nor the  acceptance  of any rent or  performance  shall  constitute  a waiver or
estoppel of Lessor's right to exercise its remedies for the Default or Breach by
Lessee of any of the terms, covenants or conditions of this Lease.

          (c) The consent of Lessor to any  assignment or  subletting  shall not
constitute a consent to any subsequent  assignment or subletting by Lessee or to
any subsequent or successive assignment or subletting by the sublessee. However,
Lessor may consent to subsequent  sublettings and assignments of the sublease or
any amendments or modifications  thereto without notifying Lessee or anyone else
liable on the Lease or sublease and without  obtaining  their consent,  and such
action  shall not  relieve  such  persons  from  liability  under  this Lease or
sublease.

          (d) In the event of any  Default  or Breach  of  Lessee's  obligations
under this Lease,  Lessor may proceed directly against Lessee, any Guarantors or
any one else responsible for the performance of the Lessee's  obligations  under
this Lease, including the sublessee,  without first exhausting Lessor's remedies
against  any other  person or entity  responsible  therefor  to  Lessor,  or any
security held by Lessor or Lessee.

          (e) Each request for consent to an assignment  or subletting  shall be
in writing,  accompanied by information relevant to Lessor's determination as to
the financial and operational responsibility and appropriateness of the proposed
assignee or  sublessee,  including  but not limited to the  intended  use and/or
required  modification of the Premises,  if any,  together with a non-refundable
deposit of $1,000  ["or ten  percent  (10%) of the  current  monthly  Base Rent,
whichever  is  greater,"  - struck  through]  as  reasonable  consideration  for
Lessor's  considering  and processing the request for consent.  Lessee agrees to
provide Lessor with such other or additional information and/or documentation as
may be reasonably requested by Lessor.

          (f) Any assignee of, or sublessee  under,  this Lease shall, by reason
of accepting such assignment or entering Into such sublease,  be deemed, for the
benefit of Lessor,  to have  assumed  and agreed to conform and comply with each
and every term,  covenant,  condition  and  obligation  herein to be observed or
performed by Lessee during the term of said  assignment or sublease,  other than
such  obligations  as are  contrary to or  inconsistent  with  provisions  of an
assignment or sublease to which Lessor has specifically consented in writing.

          (g) The  occurrence  of a transaction  described in Paragraph  12,1(c)
shall  give  Lessor  the right  (but not the  obligation)  to  require  that the
Security  Deposit  be  increased  to an  amount  equal to six (6) times the then
monthly  Base Rent,  and  Lessor  may make the  actual  receipt by Lessor of the
amount  required to  establish  such  Security  Deposit a condition  to Lessor's
consent to such transaction.

                                       20
<PAGE>

          (h) Lessor,  as a condition to giving its consent to any assignment or
subletting,  may require  that the amount and  adjustment  structure of the rent
payable  under this Lease be  adjusted to what is then the market  value  and/or
adjustment  structure for property similar to the Premises as then  constituted.
[This entire Section 12.2(h) struck through]

     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" - words not  readable  due to hole  punched in page] 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 rentals and income arising from any sublease of all or a portion
of the Premises  heretofore or hereafter made by Lessee,  and Lessor may collect
such rent and income  and apply  same  toward  Lessee's  obligations  under this
Lease;  provided,  however,  that until a Breach (as defined in Paragraph  13.1)
shall occur in the performance of Lessee's  obligations under this Lease, Lessee
may, except as otherwise provided in this Lease, receive,  collect and enjoy the
rents accruing  under such sublease.  Lessor shall not, by reason of this or any
other assignment of such sublease to Lessor,  nor by reason of the collection of
the rents from a sublessee, be deemed liable to the sublessee for any failure of
Lessee to perform and comply with any of Lessee's  obligations to such sublessee
under such sublease.  Lessee hereby irrevocably  authorizes and directs any such
sublessee,  upon receipt of a written  notice from Lessor  stating that a Breach
exists in the  performance of Lessee's  obligations  under this Lease, to pay to
Lessor the rents and other  charges  due and to become  due under the  sublease.
Sublessee  shall rely upon any such  statement and request from Lessor and shall
pay such rents and other  charges to Lessor  without any  obligation or right to
inquire as to whether such Breach exists and  notwithstanding any notice from or
claim from Lessee to the  contrary,  Lessee shall have no right or claim against
said sublessee,  or, until the Breach has been cured,  against  Lessor,  for any
such rents and other charges so paid by said sublessee to Lessor.

          (b) In the  event of a Breach  by  Lessee  in the  performance  of its
obligations  under this Lease,  Lessor, at its option and without any obligation
to do so, may require any  sublessee to attorn to Lessor,  in which event Lessor
shall  undertake the  obligations of the sublessor  under such sublease from the
time of the  exercise  of  said  option  to the  expiration  of  such  sublease;
provided,  however, Lessor shall not be liable for any prepaid rents or security
deposit paid by such sublessee to such sublessor or for any other prior Defaults
or Breaches of such sublessor under such sublease.

          (c) Any matter or thing requiring the consent of the sublessor under a
sublease shall also require the consent of Lessor herein.

          (d) No sublessee 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" - word not readable due to hole punched in page] 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" - word not  readable  due to
hole punched in page]Defaults cured by the sublessee.

                                       21
<PAGE>

13.      Default; Breach; Remedies.

     13.1.  Default;  Breach.  Lessor and Lessee  agree that if an  attorney  is
consulted  by  Lessor  in  connection  with  a  Lessee  Default  or  Breach  (as
hereinafter  defined),  $350.00 is a reasonable  minimum sum per such occurrence
for legal  services  and costs in the  preparation  and  service  of a notice of
Default, and that Lessor may include the cost of such services and costs in said
notice as rent due and payable to cure said Default. A "Default" is defined as a
failure  by the Lessee to  observe,  comply  with or  perform  any of the terms,
covenants, conditions or rules applicable to Lessee under this Lease. A "Breach"
is defined as the occurrence of any one or more of the following Defaults,  and,
where a grace period for cure after notice is specified  herein,  the failure by
Lessee to cure such Default  prior to the  expiration  of the  applicable  grace
period, shall entitle Lessor to pursue the remedies set forth in Paragraphs 13.2
and/or 13.3:

          (a) The  vacating of the  Premises  without the  intention to reoccupy
same, or the abandonment of the Premises.

          (b) Except as expressly  otherwise provided in this Lease, the failure
by  Lessee  to make any  payment  of Base  Rent or any  other  monetary  payment
["required"  - word  not  readable  due to hole  punched  in page] to be made by
Lessee  hereunder,  whether to Lessor or to a third party,  as and when due, the
failure by Lessee to provide  Lessor with  reasonable  evidence of  insurance or
surety bond required  under this Lease,  or the failure of Lessee to fulfill any
obligation under this Lease which endangers or threatens life or property, where
such failure  continues for a period of three (3) days following  written notice
thereof by or on behalf of Lessor to Lessee.

          (c) Except as expressly  otherwise provided in this Lease, the failure
by Lessee to provide Lessor with reasonable  written  evidence (in duly executed
original  form,  if  applicable)  of (i)  compliance  with  Applicable  Law  per
Paragraph 6.3, (ii) the inspection,  maintenance and service contracts  required
under Paragraph  7.1(b),  (iii) the recission of an  unauthorized  assignment or
subletting per Paragraph 12.1(b),  (iv) a Tenancy Statement per Paragraphs 16 or
37, (v) the subordination or  non-subordination  of this Lease per Paragraph 30,
(vi) the guaranty of the performance of Lessee's obligations under this Lease if
required  under  Paragraphs  1.11 and 37,  (vii) the  execution  of any document
requested under Paragraph 42 (easements),  or (viii) any other  documentation or
information  which  Lessor may  reasonably  require of Lessee under the terms of
this  Lease,  where  any such  failure  continues  for a period of ten (10) days
following written notice by or on behalf of Lessor to Lessee.

          (d) A Default  by Lessee as to the  terms,  covenants,  conditions  or
provisions of this Lease,  or of the rules  adopted  under  Paragraph 40 hereof,
that are to be observed,  complied with or performed by Lessee, other than those
described in subparagraphs  (a), (b) or (c), above, where such Default continues
for a period of thirty (30) days after written notice thereof by or on behalf of
Lessor to Lessee;  provided,  however, that if the nature of Lessee's Default is
such that more than thirty (30) days are reasonably  required for its cure, then
it  shall  not be  deemed  to be a Breach  of this  Lease by  Lessee  if  Lessee
commences such cure within said thirty (30) day period and thereafter diligently
prosecutes such cure to completion.

                                       22
<PAGE>

          (e) The occurrence of any of the following  events:  (i) The making by
lessee of any general  arrangement  or assignment  for the benefit of creditors;
(ii)  Lessee's  becoming  a  "debtor"  as  defined  in 11 U.S.C.  ss. 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  by Lessor that any  financial  statement  given to
Lessor  by  Lessee  or any  Guarantor  of  Lessee's  obligations  hereunder  was
materially false.

          (g) If the  performance  of Lessee's  obligations  under this Lease is
guaranteed:  (i) the death of a guarantor, (ii) the termination of a guarantor's
liability with respect to this Lease other than in accordance  with the terms of
such  guaranty,  (iii) a  guarantor's  becoming  insolvent  or the  subject of a
bankruptcy filing,  (iv) a guarantor's  refusal to honor the guaranty,  or (v) a
guarantor's breach of its guaranty  obligation on an anticipatory  breach basis,
and Lessee's  failure,  within sixty (60) days following written notice by or on
behalf of Lessor to Lessee of any such event,  to provide  Lessor  with  written
alternative  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  affirmative  duty or
obligation of Lessee under this Lease, within ten (10) days after written notice
to Lessee (or in case of an emergency, without notice), Lessor may at its option
(but without  obligation to do so),  perform such duty or obligation on Lessee's
behalf, including but not limited to the obtaining of reasonably required bonds,
insurance policies, or governmental  licenses,  permits or approvals.  The costs
and ["expenses" - word not entirely readable due to hole punched in page] of any
such  performance  by Lessor  shall be due and  payable by Lessee to Lessor upon
invoice therefor. If any check given to Lessor by Lessee shall not be honored by
the bank upon which it is drawn,  Lessor, at its option,  may require all future
payments  to be made  under  this  Lease by Lessee to be made only by  cashier's
check. In the event of a Breach of this Lease by Lessee, as defined in Paragraph
13.1, with or without further notice or demand,  and without  limiting Lessor in
the  exercise  of any right or remedy  which  Lessor  may have by reason of such
Breach, Lessor may:

          (a)  Terminate  Lessee's  right to  possession  of the Premises by any
lawful means,  in which case this Lease and the term hereof shall  terminate and
Lessee shall immediately surrender possession of the Premises to Lessor. In such
event Lessor shall be entitled to recover from Lessee: (i) the worth at the time
of the  award  of the  unpaid  rent  which  had  been  earned  at  the  time  of
termination;  (ii) the  worth at the time of award of the  amount  by which  the
unpaid  rent which would have been earned  after  termination  until the time of
award  exceeds the amount of such rental loss that the Lessee  proves could have
been reasonably  avoided;  (iii) the worth at the time of award of the amount by
which  the  unpaid  rent for the  balance  of the term  after  the time of award
exceeds  the  amount  of such  rental  loss  that  the  Lessee  proves  could be
reasonably avoided; and (iv) any other amount necessary to compensate Lessor for
all the  detriment  proximately  caused by the  Lessee's  failure to perform its
obligations  under this Lease or which in the ordinary course of things would be
likely to result therefrom,  including but not limited to the cost of recovering
possession  of  the  Premises,   expenses  of  reletting,   including  necessary
renovation and alteration of the Premises,  reasonable attorneys' fees, and that
portion of the leasing  commission  paid by Lessor  applicable  to the unexpired
term of this Lease.  The worth at the time of award of the amount referred to in
provision  (iii) of the prior  sentence  shall be computed by  discounting  such
amount at the discount rate of the Federal  Reserve Bank of San Francisco at the
time of award  plus one  percent  (1%).  Efforts by Lessor to  mitigate  damages
caused by  Lessee's  Default  or Breach of this Lease  shall not waive  Lessor's
right to recover damages under this  Paragraph.  If termination of this Lease is
obtained through the provisional remedy of unlawful detainer,  Lessor shall have
the right to  recover in such  proceeding  the  unpaid  rent and  damages as are
recoverable  therein,  or Lessor may reserve therein the right to recover all or
any part thereof in a separate  suit for such rent and/or  damages.  If a notice
and  grace  period  required  under  subparagraphs  13.1(b),  (c) or (d) was not
previously  given,  a notice to pay rent or quit,  or to perform or quit, as the
case may be, given to Lessee under any statute  authorizing  the  forfeiture  of
leases for unlawful  detainer shall also  constitute  the applicable  notice for
grace period purposes  required by  subparagraphs  13.1(b),  (c) or (d). In such
case, the applicable grace period under  subparagraphs  13.1(b),  (c) or (d) and
under the unlawful  defamer  statute shall run  concurrently  after the one such
statutory  notice,  and the  failure  of Lessee to cure the  Default  within the
greater of the two 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.

                                       23
<PAGE>

          (b) Continue the Lease and Lessee's  right to possession in effect (in
California under California Civil Code Section 1951.4) after Lessee's Breach and
abandonment  and recover  the rent as it becomes  due,  provided  Lessee has the
right  to  sublet  or  assign,  subject  only  to  reasonable  limitations.  See
Paragraphs 12 and 36 for the  limitations  on assignment  and  subletting  which
limitations  Lessee and Lessor  agree are  reasonable.  Acts of  maintenance  or
preservation, efforts to relet the Premises, or the appointment of a receiver to
protect  the  Lessor's  interest  under  the  Lease,   shall  not  constitute  a
termination of the Lessee's right to possession.

          (c) Pursue any other remedy now or hereafter available to Lessor under
the laws or judicial decisions of the state wherein the Premises are located.

          (d) The expiration or termination of this Lease and/or the termination
of Lessee's right to possession  shall not relieve  Lessee from liability  under
any  indemnity  provisions  of this Lease as to matters  occurring  or  accruing
during the term hereof or by reason of Lessee's occupancy of the Premises.

     13.3.  Inducement Recapture In Event Of Breach. Any agreement by Lessor for
free or abated rent or other  charges  applicable  to the  Premises,  or for the
["giving" - word not  readable  due to hole punched in page] or paying by Lessor
to or for Lessee of any cash or other bonus,  inducement  or  consideration  for
Lessee's  entering into this Lease,  all of which  concessions  are  hereinafter
referred  to as  "Inducement  Provisions,"  shall  be  deemed  conditioned  upon
Lessee's  full and  faithful  performance  of all of the  terms,  covenants  and
conditions  of this Lease to be performed or observed by Lessee  during the term
hereof  as the same may be  extended.  Upon the  occurrence  of a Breach of this
Lease by Lessee,  as defined in Paragraph  13.1, any such  inducement  Provision
shall automatically be deemed deleted from this Lease and of no further force or
effect,  and  any  rent,  other  charge,  bonus,   inducement  or  consideration
theretofore abated,  given or paid by Lessor under such an Inducement  Provision
shall be  immediately  due and payable by Lessee to Lessor,  and  recoverable by
Lessor as additional rent due under this Lease,  notwithstanding  any subsequent
cure of said Breach by Lessee.  The  acceptance by Lessor of rent or the cure of
the Breach which initiated the operation of this Paragraph shall not 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.

                                       24
<PAGE>

     13.4. Late Charges.  Lessee hereby acknowledges that late payment by Lessee
to lessor of rent and other sums due hereunder  will cause Lessor to incur costs
not  contemplated  by this Lease,  the exact  amount of which will be  extremely
difficult to ascertain.  Such costs include,  but are not limited to, processing
and accounting charges, and late charges which may be imposed upon Lessor by the
terms of any  ground  lease,  mortgage  or trust  deed  covering  the  Premises.
Accordingly,  if any  installment of rent or any other sum due from Lessee shall
not be received by Lessor or Lessor's  designee  within five (5) days after such
amount shall be due, then, without any requirement for notice to Lessee,  Lessee
shall pay to Lessor a late  charge  equal to six  percent  (6%) of such  overdue
amount.  The parties  hereby  agree that such late charge  represents a fair and
reasonable  estimate of the costs Lessor will incur by reason of late payment by
Lessee.  Acceptance of such late charge by Lessor shall in no event constitute a
waiver of Lessee'  Default or Breach with  respect to such overdue  amount,  nor
prevent  Lessor from  exercising  any of the other rights and  remedies  granted
hereunder. In the event that a late charge is payable hereunder,  whether or not
collected,   for  three  (3)   consecutive   installments  of  Base  Rent,  then
notwithstanding  Paragraph  4.1 or any  other  provision  of this  Lease  to the
contrary,  Base Rent shall, at Lessor's option, become due and payable quarterly
in advance.

     13.5. Breach by Lessor.  Lessor shall not be deemed in breach of this Lease
unless  Lessor  fails  within  a  reasonable   time  to  perform  an  obligation
["required"  - word not readable due to hole punched in page] to be performed by
Lessor. For purposes of this Paragraph 13.5, a reasonable time shall in no event
be less than thirty (30) days after receipt by Lessor, and by the holders of any
ground  lease,  mortgage or deed of trust  covering the Premises  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  after  such  notice  are  reasonably  required  for its
performance,  then Lessor shall not be in breach of this Lease if performance is
commenced within such thirty (30) day period and thereafter  diligently  pursued
to completion.

14.  Condemnation.  If the  Premises or any portion  thereof are taken under the
power of eminent  domain or sold under the threat of the  exercise of said power
(all of which are herein called  "condemnation"),  this Lease shall terminate as
to the part so taken as of the date  the  condemning  authority  takes  title or
possession,  whichever first occurs. If more than ten percent (10%) of the floor
area of the Premises,  or more than  twenty-five  percent (25%) of the land area
not occupied by any building, is taken by condemnation,  Lessee may, at Lessee's
option,  to be exercised in writing within ten (10) days after Lessor shall have
given  Lessee  written  notice of such taking (or in the absence of such notice,
within ten (10) days after the condemning authority shall have taken possession)
terminate  this  Lease  as of the  date  the  condemning  authority  takes  such
possession.  If Lessee does not terminate this Lease in ["accordance" - word not
entirely  readable due to hole punched in page] 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  ["re_______" - word not readable
due to hole punched in page] in the same  proportion as the rentable  floor area
of the  Premises  taken bears to the total  rentable  floor area of the building
located on the  Premises.  No  reduction  of Base Rent  shall  occur if the only
portion of the Premises  taken is land on which there is no building.  Any award
for the  taking of all or any part of the  Premises  under the power of  eminent
domain or any payment  made under  threat of the exercise of such power shall be
the  property of Lessor,  whether such award shall be made as  compensation  for
diminution  in value  of the  leasehold  or for the  taking  of the  fee,  or as
severance  damages;  provided,  however,  that  Lessee  shall be entitled to any
compensation  separately  awarded to Lessee  for  Lessee's  relocation  expenses
and/or  loss of  Lessee's  Trade  Fixtures.  In the event that this Lease is not
terminated by reason of such condemnation, Lessor shall to the extent of its net
severance damages received, over and above the legal and other expenses incurred
by Lessor in the condemnation  matter,  repair any damage to the Premises caused
by such  condemnation,  except to the extent  that  Lessee  has been  reimbursed
therefor  by the  condemning  authority.  Lessee  shall be  responsible  for the
payment  of any  amount in  excess of such net  severance  damages  required  to
complete such repair.

                                       25
<PAGE>

15.      Broker's Fee.

     15.1. The Brokers named in Paragraph 1,10 are the procuring  causes of this
Lease.

     15.2.  Upon  execution of this Lease by both  Parties,  Lessor shall pay to
said Brokers jointly,  or in such separate shares as they may mutually designate
in writing,  a fee as set forth in a separate written  agreement  between Lessor
and said Brokers (or in the event there is no separate written agreement between
Lessor and said  Brokers,  the sum of  $_____________)  for  brokerage  services
rendered by said Brokers to Lessor in this transaction.

     15.3.  Unless Lessor and Brokers have otherwise  agreed in writing,  Lessor
further agrees that: (a) if Lessee exercises any Option (as defined in Paragraph
39.1) or any Option  subsequently  granted which is substantially  similar to an
Option granted to Lessee in this Lease,  or (b) if Lessee acquires any rights to
the Premises or other premises  described in this Lease which are  substantially
similar to what  Lessee  would have  acquired  had an Option  herein  granted to
Lessee been  exercised,  or (c) if Lessee remains in possession of the Premises,
with the consent of Lessor, after the expiration of the term of this Lease after
having  failed to exercise an Option,  or (d) if said Brokers are the  procuring
cause of any other lease or sale entered into between the Parties  pertaining to
the Premises  and/or any adjacent  property in which Lessor has an interest,  or
(e) if  Base  Rent  is  increased,  whether  by  agreement  or  operation  of an
escalation clause herein, then as to any of said transactions,  Lessor shall pay
said Brokers a fee in accordance  with the schedule of said Brokers in effect at
the time of the execution of this Lease.

                                       26
<PAGE>

     15.4. Any buyer or transferee of Lessor's  interest in this Lease,  whether
such  transfer is by agreement  or by operation of law,  shall be deemed to have
assumed  Lessor's  obligation  under this  Paragraph  15. Each Broker shall be a
third party  beneficiary of the provisions of this Paragraph 15 to the extent of
its  interest in any  commission  arising  from this Lease and may enforce  that
right directly against Lessor and its successors.

     15.5. 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 named in Paragraph 1.10) in connection with the negotiation of this Lease
and/or the  consummation of the  transaction  contemplated  hereby,  and that no
broker or other person, firm or entity other than said named Brokers is entitled
to any commission or finder's fee in connection  with said  transaction.  Lessee
and Lessor do each hereby agree to indemnify, protect, defend and hold the other
harmless  from and against  liability for  compensation  or charges which may be
claimed by any such unnamed  broker,  finder or other similar party by reason of
any  dealings  or  actions  of the  indemnifying  Party,  including  any  costs,
expenses, attorneys' fees reasonably incurred with respect thereto.

     15.6.   Lessor  and  Lessee  hereby  consent  to  and  approve  all  agency
relationships, including any dual agencies, indicated in Paragraph 1.10. [Entire
Section 15 struck through.]

16.      Tenancy Statement.

     16.1. Each Party (as  "Responding  Party") shall within ten (10) days after
written  notice  from  the  other  Party  (the   "Requesting   Party")  execute,
acknowledge  and deliver to the Requesting  Party a statement in writing in form
similar to the then most  current  "Tenancy  Statement"  form  published  by the
American Industrial Real Estate Association,  plus such additional  information,
confirmation and/or statements as may be reasonably  requested by the Requesting
Party.

     16.2. If Lessor desires to finance,  refinance,  or sell the Premises,  any
part thereof,  or the building of which the Premises are a part,  Lessee and all
Guarantors  of Lessee's  performance  hereunder  shall  deliver to any potential
lender or purchaser designated by Lessor such financial statements of Lessee and
such  Guarantors  as may be  reasonably  required by such  lender or  purchaser,
including but not limited to Lessee's  financial  statements  for the past three
(3) years.  All such financial  statements  shall be received by Lessor and such
lender or purchaser in confidence and shall be used only for the purposes herein
set forth.

     17.  Lessor's  Liability.  The term  "Lessor" as used herein shall mean the
owner or owners at the time in question of the fee title to the Premises, 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 in this Lease,
Lessor shall  deliver to the  transferee  or assignee (in cash or by credit) any
unused  Security  Deposit  held  by  Lessor  at the  time of  such  transfer  or
assignment. Except as provided in Paragraph 15, 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.

                                       27
<PAGE>

18.  Severability.  The invalidity of any provision of this Lease, as determined
by a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.

19. Interest on Past-Due Obligations. Any monetary payment due Lessor hereunder,
other  than late  charges,  not  received  by  Lessor  within  thirty  (30) days
following  the  date  on  which  it  was  due,  shall  bear  interest  from  the
thirty-first  (31st) day after it was due at the rate of 12% per annum,  but not
exceeding  the  maximum  rate  allowed by law,  in  addition  to the late charge
provided for in Paragraph 13.4.

20. Time of Essence.  Time is of the essence with respect to the  performance of
all obligations to be performed or observed by the Parties under this Lease.

21. Rent Defined.  All monetary  obligations of Lessee to Lessor under the terms
of this Lease are deemed to be rent.

22. No Prior or Other  Agreements:  Broker  Disclaimer.  This Lease contains all
agreements  between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each  represents and warrants to the Brokers that it has made,
and is relying solely upon,  its own  investigation  as to the nature,  quality,
character and financial  responsibility  of the other Party to this Lease and as
to  the  nature,  quality  and  character  of  the  Premises.  Brokers  have  no
responsibility  with  respect  thereto or with  respect to any default or breach
hereof by either Party.

23.      Notices.

     23.1.  All notices  required or permitted by this Lease shall be in writing
and may be delivered  in person (by hand or by messenger or courier  service) or
["may" - word not  readable  due to hole  punched  in page] be sent by  regular,
certified or  registered  mail or U.S.  Postal  Service  Express  Mail,  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 notice  purposes.  Either Party may by written notice to the other
specify a different  address  for notice  purposes,  except  that upon  Lessee's
taking  possession  of the  Premises,  the Premises  shall  constitute  Lessee's
address for the purpose of mailing or  delivering  notices to Lessee.  A copy of
all notices  required or permitted to be given to ["Lessor"  struck  through and
replaced by "a party"] hereunder shall be concurrently transmitted to such party
or parties at such  addresses as ["Lessor"  struck through and replaced by "such
party"] may from time to time hereafter designate by written notice to ["Lessee"
struck  through and replaced by "the other party or parties  hereunder".]  ["See
Add'm P. 21" inserted]

     23.2.  Any notice sent by  registered  or certified  mail,  return  receipt
requested,  shall be deemed  given on the date of delivery  shown on the receipt
card, or if no delivery date is shown, the postmark thereon.  If sent by regular
mail the notice shall be deemed given  forty-eight  (48) hours after the same is
addressed as required herein and mailed with postage prepaid.  Notices delivered
by United  States  Express Mail or overnight  courier that  guarantees  next day
delivery shall be deemed given twenty-four (24) hours after delivery of the same
to the United States Postal Service or courier.  If any notice is transmitted by
facsimile  transmission  or similar  means,  the same shall be deemed  served or
delivered upon telephone  confirmation of receipt of the  transmission  thereof,
provided a copy is also delivered via delivery or mail. If notice is received on
a Sunday or legal holiday, it shall be deemed received on the next business day.

                                       28
<PAGE>

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.  Regardless of Lessor's
knowledge of a Default or Breach at the time of accepting  rent,  the acceptance
of rent by Lessor  shall not be a waiver of any  preceding  Default or Breach by
Lessee of any  provision  hereof,  other  than the  failure of Lessee to pay the
particular rent so accepted.  Any payment given Lessor 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 or taxes applicable thereto.

26.  No Right to  Holdover.  Lessee  has no right to  retain  possession  of the
Premises or any part thereof  beyond the  expiration or earlier  termination  of
this Lease.

27.  Cumulative  Remedies.  No  remedy  or  election  hereunder  shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.

28.  Covenants and  Conditions.  All  provisions of this Lease to be observed or
performed by Lessee are both covenants and conditions.

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"
- words not readable due to hole punched in page] 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" - word not  readable due to
hole punched in page] the Premises are located.

30.      Subordination; Attornment; Non-Disturbance.

     30.1.  Subordination.  This Lease and any Option  granted  hereby  shall be
subject and subordinate to any ground lease,  mortgage,  deed of trust, or other
hypothecation  or security  device  (collectively,  "Security  Device"),  now or
hereafter  placed by Lessor upon the real  property of which the  Premises are a
part, to any and all advances made on the security thereof, and to all renewals,
modifications,  consolidations,  replacements  and  extensions  thereof.  Lessee
agrees that the Lenders  holding any such  Security  Device  shall have no duty,
liability or obligation to perform any of the  obligations  of Lessor under this
Lease,  but that in the  event of  Lessor's  default  with  respect  to any such
obligation,  Lessee  will  give any  Lender  whose  name and  address  have been
furnished  Lessee in writing for such  purpose  notice of  Lessor's  default and
allow such Lender thirty (30) days following receipt of such notice for the cure
of said default before  invoking any remedies Lessee may have by reason thereof.
If any Lender  shall elect to have this Lease and/or any Option  granted  hereby
superior  to the lien of its  Security  Device  and shall  give  written  notice
thereof to Lessee,  this Lease and such  Options  shall be deemed  prior to such
Security  Device,  notwithstanding  the relative dates of the  documentation  or
recordation thereof.

                                       29
<PAGE>

     30.2.  Attornment.  Subject to the non-disturbance  provisions of Paragraph
30.3,  Lessee  agrees to attorn  to a Lender  or any  other  party who  acquires
ownership of the Premises by reason of a foreclosure of a Security  Device,  and
that in the event of such  foreclosure,  such new owner shall not: (i) be liable
for any act or omission of any prior lessor or with respect to events  occurring
prior to  acquisition  of ownership,  (ii) be subject to any offsets or defenses
which  Lessee  might  have  against  any  prior  lessor,  or  (iii)  be bound by
prepayment of more than one (1) month's rent.

     30.3.  Non-Disturbance.  With respect to Security  Devices  entered into by
Lessor after the execution of this Lease,  Lessee's  subordination of this Lease
shall be subject to receiving assurance (a "non-disturbance agreement") from the
Lender that Lessee's possession and this Lease,  including any options to extend
the term hereof, will not be disturbed so long as Lessee is not in Breach hereof
and attorns to the record owner of the Premises.

     30.4.  Self-Executing.  The agreements contained in this Paragraph 30 shall
be effective without the execution of any further documents;  provided, however,
that,  upon written  request from Lessor or a Lender in connection  with a sale,
financing or refinancing  of the Premises,  Lessee and Lessor shall execute such
further writings as may be reasonably  required to separately  document any such
subordination or non-subordination,  attornment and/or non-disturbance agreement
as is provided for herein.

31.  Attorney's  Fees.  If any Party or Broker brings an action or proceeding to
enforce the terms hereof or declare rights  hereunder,  the Prevailing Party (as
hereafter defined) or Broker in any such proceeding,  action, or appeal thereon,
shall be entitled to reasonable attorney's 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 attorney's fees award shall not be computed in accordance
with any  court  fee  schedule,  but  shall be such as to  fully  reimburse  all
attorney's  fees  reasonably  incurred.  Lessor shall be entitled to  attorney's
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.

                                       30
<PAGE>

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"
- word not  readable due to hole  punched in page] and  otherwise at  reasonable
times for the purpose of showing the same to prospective purchasers, lenders, or
lessees,  and making such ["alterations" - word not readable due to hole punched
in page], repairs,  improvements or additions to the Premises or to the building
of which they are a part, as Lessor may reasonably deem necessary. Lessor may at
any time place on or about the  Premises or  building  any  ordinary  "For Sale"
signs and Lessor may at any time during the last one hundred  twenty  (120) days
of the term  hereof  place on or about the  Premises  any  ordinary  "For Lease"
signs.  All such  activities  of Lessor  shall be without  abatement  of rent or
liability to Lessee.

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

34. Signs. Lessee shall not place any sign upon the Premises, except that Lessee
may, with Lessor's  prior  written  consent,  install (but not on the roof) such
signs as are  reasonably  required  to  advertise  Lessee's  own  business.  The
installation  of any sign on the  Premises by or for Lessee  shall be subject to
the  provisions of Paragraph 7  (Maintenance,  Repairs,  Utility  Installations,
Trade Fixtures and  Alterations).  ["Unless  otherwise  expressly agreed herein,
Lessor reserves all rights to the use of the roof and the right to install,  and
all revenues from the installation  of, such advertising  signs on the Premises,
including  the  roof,  as do not  unreasonably  interfere  with the  conduct  of
Lessee's business." - struck through]

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, Lessor shall, in the event of any such surrender,
termination or  cancellation,  have the option to continue any one or all of any
existing subtenancies.  Lessor's failure within ten (10) days following any such
event to make a written election to the contrary by written notice to the holder
of any such lesser  interest,  shall constitute  Lessor's  election to have such
event constitute the termination of such interest.

36.      Consents.

          (a) Except for Paragraph 33 hereof (Auctions) or as otherwise provided
herein,  wherever  in this Lease the consent of a Party is required to an act by
or for the other  Party,  such  consent  shall not be  unreasonably  withheld or
delayed.  Lessor's  actual  reasonable  costs and  expenses  (including  but not
limited to  architects',  attorneys'.  engineers'  or other  consultants'  fees)
incurred in the  consideration  of, or response  to, a request by Lessee for any
Lessor  consent  pertaining  to this Lease or the  Premises,  including  but not
limited to consents to an  assignment,  a subletting or the presence or use of a
Hazardous Substance, practice or storage tank, shall be paid by Lessee to Lessor
upon receipt of an invoice and  supporting  documentation  therefor.  Subject to
Paragraph  12.2(e)  (applicable to assignment or  subletting),  Lessor may, as a
condition to considering any such request by Lessee, require that Lessee deposit
with Lessor an amount of money (in addition to the  Security  Deposit held under
Paragraph 5)  reasonably  calculated by Lessor to represent the cost Lessor will
incur in  considering  and responding to Lessee's  request.  Except as otherwise
provided, any unused portion of said deposit shall be refunded to Lessee without
interest. Lessor's consent to any act, assignment of this Lease or subletting of
the Premises by Lessee shall not constitute an  acknowledgement  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.

                                       31
<PAGE>

          (b) All conditions to Lessor's  consent.  authorized by this Lease are
acknowledged by Lessee as being reasonable.  The failure to specify herein ["any
particular"  - words not  readable  due to hole  punched in page]  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" - word not readable
due to hole punched in page] reasonable with reference to the particular  matter
for which consent is being given.

37.      Guarantor.

     37.1. If there are to be any  Guarantors of this Lease per Paragraph  1.11,
the form of the guaranty to be executed by each such  Guarantor  shall be in the
form most recently published by the American Industrial Real Estate Association,
and each said  Guarantor  shall have the same  obligations  as Lessee under this
Lease,  including  but not  limited to the  obligation  to provide  the  Tenancy
Statement and information called for by Paragraph 16.

     37.2.  It shall  constitute a Default of the Lessee under this Lease if any
such Guarantor fails or refuses,  upon reasonable request by Lessor to give: (a)
evidence  of the  due  execution  of the  guaranty  called  for by  this  Lease,
including  the  authority  of  the  Guarantor  (and  of  the  party  signing  on
Guarantor's  behalf) to obligate such Guarantor on said Guaranty,  and including
in the case of a corporate  Guarantor,  a certified  copy of a resolution of its
board of directors  authorizing  the making of such  guaranty,  together  with a
certificate  of incumbency  showing the  signature of the persons  authorized to
sign on its behalf,  (b) current  financial  statements of Guarantor as may from
time to time be requested  by Lessor,  (c) a Tenancy  Statement,  or (d) written
confirmation that the guaranty is still in effect.

38.  Quiet  Possession.  Upon payment by Lessee of the rent for the Premises and
the  observance  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  of the Premises for the entire term hereof
subject to all of the provisions of this Lease.

39.      Options.

     39.1.  Definition.  As used in this  Paragraph 39 the word "Option" has the
following  meaning:  (a) the right to extend  the term of this Lease or to renew
this Lease or to extend or renew any lease that Lessee has on other  property of
Lessor;  (b) the right of first  refusal to lease the  Premises  or the right of
first offer to lease the  Premises or the right of first  refusal to lease other
property  of Lessor  or the  right of first  offer to lease  other  property  of
Lessor; (c) the right ["to purchase" - words not readable due to hole punched in
page] the Premises,  or the right of first refusal to purchase the Premises,  or
the right of first offer to purchase the Premises, or the right to ["purchase" -
word not readable due to hole punched in page] other property of Lessor,  or the
right of first  refusal to purchase  other  property of Lessor,  or the right of
first offer to purchase other property of Lessor.

                                       32
<PAGE>

     39.2. Options Personal to Original Lessee. Each Option granted to Lessee in
this Lease is personal to the original Lessee named in Paragraph 1.1 hereof, and
cannot be  voluntarily or  involuntarily  assigned or exercised by any person or
entity other than said original  Lessee while the original Lessee is in full and
actual  possession  of the  Premises  and without the  intention  of  thereafter
assigning or subletting.  The Options,  if any, herein granted to Lessee are not
assignable,  either as a part of an  assignment  of this Lease or  separately or
apart  therefrom,  and no Option may be separated from this Lease in any manner,
by reservation or otherwise.

     39.3.  Multiple Options.  In the event that Lessee has any Multiple Options
to extend or renew this Lease,  a later Option  cannot be  exercised  unless the
prior Options to extend or renew this Lease have been validly exercised,

     39.4. Effect of Default on Options.

          (a) Lessee shall have no right to exercise an Option.  notwithstanding
any  provision  in the grant of Option to the  contrary:  (i)  during the period
["commencing"  - word not  readable due to hole punched in page] with the giving
of any notice of Default under  Paragraph 13.1 and continuing  until the noticed
Default is cured, or (ii) during the period of time any monetary  obligation due
Lessor from Lessee is unpaid  (without regard to whether notice thereof is given
Lessee),  or (iii) during the time Lessee is in Breach of this Lease, or (iv) in
the event that Lessor has given to Lessee  three (3) or more  notices of Default
under Paragraph 13.1,  whether or not the Defaults are cured,  during the twelve
(12) month period immediately preceding the exercise of the Option.

          (b) The period of time within which an Option may be  exercised  shall
not be  extended or  enlarged  by reason of  Lessee's  inability  to exercise an
Option because of the provisions of Paragraph 39.4(a).

          (c) All  rights of  Lessee  under the  provisions  of an Option  shall
terminate and be of no further force or effect, notwithstanding Lessee's due and
timely  exercise of the Option,  if, after such  exercise and during the term of
this Lease,  (i) Lessee fails to pay to Lessor a monetary  obligation  of Lessee
tar a period of thirty (30) days after such obligation  becomes due (without any
necessity of Lessor to give notice  thereof to Lessee),  or (ii) Lessor gives to
Lessee  three (3) or more  notices of Default  under  Paragraph  13.1 during any
twelve (12) month  period,  whether or not the Defaults  are cured,  or (iii) if
Lessee commits a Breach of this Lease.

40.  Multiple  Buildings.  If the  Premises  are  part of a group  of  buildings
controlled by Lessor,  Lessee agrees that it will abide by, keep and observe all
reasonable rules and regulations which Lessor may make from time to time for the
management,  safety,  care,  and  cleanliness  of the  grounds,  the parking and
unloading of vehicles  and the  preservation  of good order,  as well as for the
convenience  of other  occupants  or tenants of such other  buildings  and their
invitees, and that Lessee will pay its fair share of common expenses incurred in
connection therewith.

                                       33
<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 under the  provisions  of this
Lease,  ["together  with  interest at the rate  provided  under  Paragraph 19" -
inserted].

44.  Authority.  If either Party hereto is a corporation,  trust,  or general or
limited  partnership,  each  individual  executing  this Lease on behalf of such
entity  represents and warrants that he or she is duly authorized to execute and
deliver  this  Lease  on its  behalf.  If  Lessee  is a  corporation,  trust  or
partnership, ["Lessee" - word not entirely readable due to hole punched in page]
shall,  within  thirty  (30) days after  request  by  Lessor,  deliver to Lessor
evidence satisfactory to Lessor of such authority.

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

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

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

48. Multiple  Parties.  Except as otherwise  expressly  provided herein, if more
than one  person or entity is named  herein  as  either  Lessor or  Lessee,  the
obligations   of  such   Multiple   Parties  shall  be  the  joint  and  several
responsibility of all persons or entities named herein as such Lessor or Lessee.

                                       34
<PAGE>

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

         IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN  PREPARED FOR  SUBMISSION
         TO YOUR ATTORNEY FOR HIS APPROVAL  FURTHER  EXPERTS SHOULD BE CONSULTED
         TO EVALUATE THE  CONDITION OF THE PROPERTY AS TO THE POSSIBLE  PRESENCE
         OF ASBESTOS' STORAGE TANKS OR HAZARDOUS  SUBSTANCES.  NO REPRESENTATION
         OR  RECOMMENDATION  IS  MADE BY THE  AMERICAN  INDUSTRIAL  REAL  ESTATE
         ASSOCIATION  OR BY  THE  REAL  ESTATE  BROKER(S)  OR  THEIR  AGENTS  OR
         EMPLOYEES  AS  TO  THE  LEGAL   SUFFICIENCY,   LEGAL  EFFECT,   OR  TAX
         CONSEQUENCES  OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES' THE
         PARTIES  SHALL RELY  SOLELY  UPON THE ADVICE OF THEIR OWN COUNSEL AS TO
         THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE IF THE SUBJECT PROPERTY IS
         LOCATED IN A STATE OTHER THAN  CALIFORNIA,  AN ATTORNEY  FROM THE STATE
         WHERE THE PROPERTY IS LOCATED SHOULD BE CONSULTED.

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

                                       35
<PAGE>

<TABLE>
<S>                                              <C>
Executed at El Cajon, California                 Executed at St. Paul, Minnesota
on ___________________________________           _______________________________
by LESSOR:                                       by LESSEE:
   W.H. Pomerado LLC                                Aetrium Incorporated
   By Its Manager:  Hamann Properties, Inc.

By:___________________________________           By:____________________________

Name Printed:  Gregg Hamann                         Name Printed:  Douglas Hemer
Title:  Secretary                                   Title:  Group Vice President

By:___________________________________           By:____________________________
Name Printed:_________________________           Name Printed:__________________
Address:  475 W. Bradley Ave.                    Address:  2350 Helen Street
          El Cajon, CA  92020                              St. Paul, MN  55109
Tel #:  619-440-7424  Fax #:  619-440-8914                 Tel. # 651-704-1810 Fax # 651-704-0339
                                                           San Diego:  619-623-5656

Net
</TABLE>

NOTICE: 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,  345 South Figueroa
Street,  Suite  M-1,  Los  Angeles,  CA 90071,  (213)  687-8777,  Fax No.  (213)
687-8616.

                                       36
<PAGE>

                                ADDENDUM TO LEASE

     This Addendum to Lease  ("Addendum")  is made by and between W.H.  POMERADO
LLC,  a  California   limited   liability   company   ("LESSOR"),   and  AETRIUM
INCORPORATED., a Minnesota corporation ("LESSEE"), and is intended to supplement
that certain  Standard  Industrial/Commercial  Single-Tenant  Lease-Net  between
LESSOR and LESSEE dated  September 17, 1998  ("Lease") to which this Addendum is
annexed. If there is any inconsistency  between this Addendum and the Lease, the
terms of this Addendum shall  supersede and control.  LESSOR and LESSEE agree as
follows:

     1. Premises and Building Shell  Description.  The Premises shall be located
on the real property  legally  depicted in EXHIBIT "1" annexed to this Addendum.
The Building Shell, as defined in section 4 of this Addendum,  shall be designed
and  constructed in accordance  with the general design  elements shown on those
certain "Site Plan", "Floor Plan" and "Elevation drawings prepared by Kenneth D.
Smith & Associates,  Inc., which LESSEE hereby approves ("Approved Drawings"); a
copy of the Approved  Drawings is attached as EXHIBIT "2" to this Addendum.  The
components  of  the  Building  Shell  construction  shall  also  conform  to the
specifications  attached  as EXHIBIT  "3" to this  Addendum  ("Specifications").
Following  the  execution  of this  Lease,  LESSOR  shall  cause final plans and
specifications  ("Working  Drawings")  for the Building Shell to be prepared and
submitted  to LESSEE for its approval in  accordance  with the  requirements  of
subsection  1.2  of  this  Addendum  and  not  later  than  November  15,  1998.
Notwithstanding  any other provisions in this Lease, LESSOR shall be entitled to
make  modifications  to the  Building  Shell  design  and/or  Specifications  as
provided in subsection 1.2 of this Addendum.

          1.1  Planned  Size  and  Final  Measurement.  It is  planned  that the
Building Shell (as defined  below) will contain  approximately  45,000  rentable
square  feet on the  ground  level  of the  Building  Shell  and the  structural
elements for an  approximately  15,000  rentable  square foot mezzanine level as
more  particularly  described in section 4 of this Addendum.  All square footage
measurements  shall be from the roof "drip line" and shall  otherwise be made in
accordance with the BOMA standards for industrial/commercial projects. Following
Substantial  Completion  (as  defined  below)  of the  Building  Shell per field
measurement, LESSOR will, in good faith, certify the actual rentable square feet
of the  Building  Shell to  establish  the exact  rentable  square  feet for all
purposes of the Lease.

          1.2 Modifications. LESSEE agrees that LESSOR may make modifications to
the Building  Shell design on account of government or lender  requirements  and
otherwise  as  reasonably  determined  by LESSOR;  provided,  however,  any such
modifications  shall not: (a)  increase or decrease the rentable  square feet of
the Building by more than 2%; (b) materially relocate the Premises from the area
shown in the Approved Drawings;  (c) materially change the  Specifications;  (d)
reduce the number of planned parking spaces or significantly  change ingress and
egress to the  Building or (e)  materially  increase  the cost or  decrease  the
utilization of Tenant Improvements.

     2.  Rent.  "Rent"  for the  Premises  shall be the sum of (a) the Base Rent
described in subsection 2.1 of this Addendum,  subject to adjustment as provided
in  subsections  1.1 and 2.2 of this  Addendum,  (b)  the  amount  of  Operating
Expenses  payable by LESSEE as provided in section 8 of this  Addendum,  and (c)
any other amounts  becoming payable by LESSEE under the Lease. The Rent shall be
payable on the first day of each month.

          2.1 Base Rent. The monthly Base Rent set forth in Paragraph 1.5 of the
Lease  for the  first  Lease  Year  (as  defined  below)  of the  Original  Term
represents  the full Base Rent  payable  beginning  upon the  Commencement  Date
consisting  of (a) an amount  determined by  multiplying  the amount of $.52 per
rentable  square foot by the estimated  total 45,000 rentable square feet of the
Premises ("SF Rate Rent), and (b) adding to such amount,  the sum of $11,682 per
month for the Allowance  Amortization  Charge as determined under subsection 2.3
of this Addendum.  Such Base Rent shall be subject to adjustment as follows: (i)
if there is a  variance  in the  rentable  square  footage  of the  Premises  as
actually  constructed,  the Base Rent for the first Lease Year shall be adjusted
based on the actual  rentable square feet within the Premises  multiplied  times
$.52 per  rentable  square  foot;  and/or  (ii) if the full amount of the Tenant
Improvement Allowance is not disbursed,  then the Base Rent shall be adjusted to
reflect a lower Allowance Amortization Charge as calculated under subsection 2.3
of this Addendum.

<PAGE>

          2.2  Increase in SF Rate Rent.  The SF Rate Rent shall be increased at
the  beginning of the second Lease Year and at the  beginning of each Lease Year
thereafter  until the sixth Lease Year, in an amount equal to three percent (3%)
of the amount of the scheduled SF Rate Rent for the immediately  preceding Lease
Year.  At the  beginning  of the sixth Lease Year and at the  beginning  of each
Lease Year thereafter, the SF Rate Rent shall be increased in an amount equal to
three and one-half  percent  (3.5%) of the amount of the  scheduled SF Base Rent
for the immediately preceding Lease Year.

          2.3 Tenant Improvement  Allowance  Amortization.  As more particularly
provided in section 4 of this Addendum, LESSOR will provide a Tenant Improvement
Allowance in the amount of up to $900,000.00 to pay for Tenant Improvement Costs
(as  defined  below)  for Tenant  Improvements  requested  by  LESSEE.  The term
"Allowance  Amortization Charge" means an amount to be included in the Base Rent
calculated as follows:  (a) from and after the Commencement Date,  determine the
aggregate  amount of the Allowance  expended by LESSOR for Tenant  Improvements;
(b) amortize  eighty percent (80%) of the amount of the Allowance  actually used
based on an economic  return  equivalent  to eleven  percent  (11%) per annum to
derive a monthly payment sufficient to pay in full an amount equal to 80% of the
Allowance  and such  economic  return over a period of time equal to one hundred
and twenty (120) months and the remaining  twenty percent (20%) of the amount of
the  Allowance  actually used based on an economic  return  equivalent to eleven
percent (11%) per annum to derive a monthly payment sufficient to pay in full an
amount equal to 20% of the Allowance  and such economic  return over a period of
time equal to three hundred months;  and (c) the resulting monthly payment shall
equal  the  Allowance  Amortization  Charge.  If the  amount  of  the  Allowance
Amortization  Charge is determined after the  Commencement  Date on account of a
delay in finalizing the Tenant  Improvement  Costs, then LESSEE shall pay LESSOR
the amount accruable from the  Commencement  Date to the end of the then current
month,  adjusted  for any Free Rent  within  fifteen  (15) days  after  LESSOR's
billing for such accrued amounts, and shall thereafter pay the monthly Allowance
Amortization Charge with each payment of Base Rent.

          2.4 Free Rent.  Provided  LESSEE is not in default  under the terms of
the Lease,  LESSOR  hereby  agrees to give LESSEE the first three  months of the
term free of Base Rent.  LESSEE shall still be  obligated  to pay the  Operating
Expenses as provided  in section 8 of this  Addendum  during such free Base Rent
period.

     3.  Effective   Date/Term/Commencement   Date.  Notwithstanding  any  other
provision of the Lease,  this Lease shall be effective  upon execution by LESSOR
and LESSEE  ("Effective  Date") and shall  constitute a legally binding contract
for  LESSOR  to  deliver  possession  of the  Premises  in  accordance  with the
requirements  of this  Lease and for  LESSEE to  accept  possession  and pay the
rentals beginning on the Commencement Date.  Notwithstanding  that the Effective
Date of this Lease is the date of execution of this Lease,  LESSEE's  obligation
to commencement  payment of the Rent payable under this Lease shall not commence
until the occurrence of the Commencement Date.

          3.1 Commencement  Date. Except as otherwise provided in subsection 4.5
of this Addendum,  the  Commencement  Date of the Lease shall be the date of the
Substantial  Completion  (as defined below) of the Building Shell and the Tenant
Improvements; provided, however, the Commencement Date shall not be earlier than
July 31,  1999 nor later  than  November  30,  1999,  except  (a) with  LESSEE's
consent,  in its sole  discretion,  (b) on account of delays caused by LESSEE as
described in subsection 4.5 of this Addendum, or (c) for delays not the fault of
the  LESSOR  or  LESSOR's  contractor  caused  by  fire,   earthquake  or  other
unavoidable   casualties  or  inclement   weather   conditions   not  reasonably
anticipatable,  extraordinary  governmental  action  other than usual permit and
inspection  procedures,  delays  encountered in processing  building permits and
other governmental  approvals or inspections,  delays encountered as a result of
the  discovery of any unknown or concealed  conditions  affecting  the Premises,
delays caused by general area wide labor or material shortages or labor disputes
(such as strikes or  lock-outs),  or any other causes not the fault of LESSOR or
LESSOR's  Contractor,  subcontractors,  agents or employees.  If the Substantial
Completion  is not  achieved  by  December  31,  1990 except for delays per this
section then LESSEE may elect to be released from all LEASE  obligations  and be
refunded the deposit.

          3.2 Lease Term/"Lease Year" Defined.  Unless otherwise  provided,  the
initial Term of the Lease ("Original  Term") shall be a period of ten (10) years
and three (3) months beginning on the Commencement Date;  provided,  however, if
the  Commencement  Date occurs other than on the first day of a calendar  month,
the  Original  Term shall be deemed  extended  for a period of time equal to the
number of days between the Commencement Date and the beginning of the first full
calendar month following the Commencement Date. The term "Lease Year" means each
consecutive  period of twelve (12) months  during the Lease Term,  provided that
(a) if the "Commencement  Date" is other than the first day of a calendar month,
then the first  Lease  Year  shall be a period of twelve  (12)  months  plus the
period  between  the  Commencement  Date and the  first  day of the  first  full
calendar  month  thereafter;  and (b) the last  Lease  Year shall be a period of
three (3) months.

                                       2
<PAGE>

          3.3 LESSOR's Delay. In the event that the Commencement Date is delayed
beyond  twelve (12) months from the execution of this Lease solely on account of
the  Default  of LESSOR or on  account of the fault of  LESSOR's  Contractor  in
failing to timely cause Substantial  Completion of the Building Shell and Tenant
Improvements,  LESSEE shall be entitled to a "Delay Credit" in the amount of the
lesser of (a)  $30,000.00  per  month,  or any part  thereof,  or (b) the amount
actually paid to LESSEE's  existing  landlord in excess of the scheduled monthly
rent in effect at the end of the term of LESSEE's  existing  lease on account of
LESSEE's continued  possession of its existing premises.  Any Delay Credit shall
be applied to the Base Rent  becoming due on the fourth month of the first Lease
Year and each  month  thereafter,  until  fully  applied.  Except for such Delay
Credit,  LESSOR shall not otherwise  have any liability to LESSEE  whatsoever on
account of a delay in the Commencement Date caused by LESSOR or its Contractor.

     4. Building Shell and Tenant  Improvements.  LESSOR, at its expense,  shall
cause the  construction of the Building Shell. The phrase "Building Shell" means
the  improvements  to be  constructed  as shown in the  Approved  Drawings,  the
Specifications and the Approved Working Drawings, including (a) roofing, fascia,
exterior walls, doors and windows, (b) footings and concrete floors, (c) "shell"
fire sprinkler system in accordance with minimum code requirements, (d) conduits
and pipes for telephone,  electricity, water, fire sprinklers and sewage brought
to "stub out"  termination  points in or above a perimeter wall of the Building,
(e) a main electrical  termination panel for the Building, (f) paving and finish
of parking areas,  entrance areas and walkways,  (g) landscaping as shown on the
Approved  Drawings and as otherwise  reasonably  determined by LESSOR,  (h) site
improvements consisting of street, gutters,  sidewalks,  curbs, storm drains and
erosion control  (construction  period and permanent) as required to comply with
governmental requirements,  and (i) structural elements,  consisting of footings
and exterior wall  reinforcement only for a future mezzanine level consisting of
approximately 15,000 rentable square feet ("Mezzanine Area").

          4.1  Tenant  Improvements  Description.  The costs of  completing  the
initial Tenant  Improvements will be shared by LESSOR and LESSEE as described in
subsection 4.4 of this  Addendum.  The phrase  "Tenant  Improvements"  means all
interior improvements which are not a part of the Building Shell,  including (a)
partitions,   walls,  and  doors,  (b)  all  surface  finishes,  including  wall
coverings,  paint, floor coverings,  suspended ceilings and other similar items,
(c) duct work, heat pumps, vents, diffusers,  terminal boxes and accessories for
completion  of heating,  ventilation  and air  conditioning  systems  within the
Premises,  (d) electrical  distribution  systems (including  panels,  subpanels,
wires and outlets),  lighting fixtures,  outlets,  switches and other electrical
work  to be  installed  in  the  Premises,  (e)  plumbing  lines,  fixtures  and
accessories, (f) all fire and life safety control systems such as fire walls and
fire alarms  (including  piping,  wiring and  accessories)  to be located in the
Premises,  and fire sprinklers and lines attributable to the Tenant Improvements
and/or  LESSEE's  fixture,  furnishing  or  equipment,  beyond that  included in
Exhibit 3, 5.3, (g) entrance door signage and directory listings,  as authorized
by LESSOR,  (h)  improvements  required  for  compliance  with Title 24, and (i)
flooring,  suspended ceilings, air conditioning and heating, walls and stairways
for a portion of the Mezzanine  Area, if elected by LESSEE;  provided,  however,
LESSEE's trade fixtures,  equipment and personal property  (including  telephone
systems,  chairs,  tables,  furniture  and  other  equipment  used  in  LESSEE's
business) shall not be considered a part of the Tenant Improvements.

          4.2 Design of Tenant Improvements.  LESSEE shall furnish to LESSOR for
its  approval,  a space plan showing the  configuration  of the Improved  Office
Space no later than  November 1, 1998,  which shall be the  Approved  Space Plan
following LESSOR's  approval.  LESSEE shall furnish to LESSOR, a complete set of
plans  and  specifications  detailing  all  Tenant  Improvements  no later  than
February 1, 1999 ("Tenant  Improvement  Plans").  Unless  otherwise  approved by
LESSOR,  the Tenant  Improvement  Plans will be prepared by the  Architect,  who
shall also obtain permits for the plans. If LESSEE delays in providing the Space
Plan  or  the  Tenant  Improvement  Plans,  such  delay  shall  not  change  the
Commencement Date of the Lease,  which shall be the date the Premises would have
been available for  occupancy,  but for any such delay.  The Tenant  Improvement
Plans  shall  be  subject  to  LESSOR's  prior  approval,   which  will  not  be
unreasonably withheld;  provided,  however, LESSOR shall have the absolute right
of disapproval,  in its sole discretion,  of any Tenant  Improvements  which (a)
alter or otherwise  affect any structural  component of the Building  and(b) are
visible from the exterior of the  Premises.  LESSOR shall have fifteen (15) days
after receipt of the Tenant  Improvement Plans in which to approve or disapprove
the  Tenant  Improvement  Plans.  If  LESSOR  does  not  disapprove  the  Tenant
Improvement Plans within such fifteen (15) day period, LESSOR shall be deemed to
have approved the Tenant Improvement Plans. If LESSOR reasonably disapproves the
Tenant  Improvement  Plans,  LESSEE,  at its expense,  shall  promptly cause the
Tenant  Improvement Plans to be revised and resubmitted to LESSOR for its review
and  approval  within  fifteen  (15) days from notice of  LESSOR's  disapproval.
Following  LESSOR's  approval,  LESSOR will have the Architect submit the Tenant
Improvement  Plans  ("Approved  Tenant  Improvement  Plans") for government plan
checking and a building  permit,  if required,  provided,  LESSOR shall have the
right to approve any  changes  required by such  governmental  authorities.  The
final  Tenant  Improvement  Plans  shall be subject to any  changes  required by
governmental authorities.

                                       3
<PAGE>

               4.2.1 "Improved  Space" Defined.  The term "Improved Space" means
portions of the rentable area of the Building  Shell other than those to be used
for shipping,  which are improved with suspended ceilings,  air conditioning and
heating  systems,  finished  flooring and walls other than the  perimeter  walls
forming the Building Shell.

          4.3  Approved  Contractor.  Hamann  Construction,  a licensed  general
contractor,  will be the general  contractor  for  construction  of the Building
Shell and the  Tenant  Improvements.  LESSOR and LESSEE  hereby  approve  Hamann
Construction acting as the general contractor ("Contractor").

               4.3.1 LESSEE's  Subcontractors' Bids. LESSEE shall have the right
to approve,  which approval shall not be unreasonably  withheld, the subcontract
proposals  ("Bids")  for the  Major  Trades  (as  defined  below)  required  for
construction of the Tenant Improvements. No later than thirty (30) days prior to
the  commencement of  construction,  LESSOR shall cause Contractor to deliver to
LESSEE  Bids  for  each  Major  Trade  from  no less  than  three  (3)  licensed
subcontractors  together  with a  written  notice  specifying  the  Bids,  which
Contractor recommends for acceptance.  LESSEE shall have the right to reasonably
disapprove of the Bids selected by Contractor by giving LESSOR written notice of
any  objection  that  LESSEE may have to one or more of the Bids within ten (10)
days from  LESSEE's  receipt  of the Bids from  Contractor;  provided,  however,
LESSEE  shall not have the right to  disapprove  all Bids within a Major  Trade.
LESSEE's  notice  of  disapproval  shall  explain  in  detail  the basis for the
disapproval  of any Bid  recommended by  Contractor.  Contractor  shall have the
right to utilize any  subcontractors  submitting  Bids for which LESSEE does not
timely give notice of its disapproval. The term "Major Trades" means portions of
the  construction  work  consisting of the supply or installation of electrical,
heating and air conditioning, fire sprinkler system, framing, drywall, plumbing,
painting, floor coverings, suspended ceilings, glass, doors and ceramic tile.

          4.4  Payment  of  Tenant   Improvement   Costs.   The  phrase  "Tenant
Improvement   Costs"  means  all  direct  and  indirect   costs  of  furnishing,
constructing  and  installing the Tenant  Improvements,  including (a) any costs
incurred by LESSOR for design and/or architectural  services of the Architect in
preparing the Tenant  Improvement  Plans, (b) government permit costs applicable
to  the  Tenant   Improvements,   (c)   amounts   payable  to   Contractor   for
overhead/profit, job site supervision, cleanup, trash and janitorial services as
shown in the Cost Breakdown Tenant Improvement which is annexed to this Addendum
as  EXHIBIT  "4",  except  that the 12%  overhead  and  profit  fee  payable  to
Contractor  shall  not  apply  to the  costs  of (i) the  design  of the  Tenant
Improvements,  or (ii) the building  permit(s)  for  construction  of the Tenant
Improvements,  or (iii) "hard costs" exceeding the Tenant Improvement  Allowance
but not exceeding  $1,100,000 (d) the actual "hard costs" of construction of the
Tenant Improvements and (e) financing costs attributable to financing to pay the
LESSOR's  Allowance,  including,  construction  period interest from the initial
loan funding  until the  Commencement  Date,  loan points,  fees and other costs
customarily  incurred in  connection  with such  financing;  provided,  however,
financing  costs incurred after the  Commencement  Date shall not be included in
determining the Tenant Improvement Costs.

               4.4.1  Estimate  for  Tenant  Improvement  Costs.  Prior  to  the
commencement  of  construction,  LESSOR shall cause  Contractor  to make a final
selection  of the Bids for each  Major  Trade and  LESSOR  shall  provide  final
estimates of all other Tenant  Improvement Costs ("Estimated  Tenant Improvement
Costs").  LESSOR shall provide LESSEE  written  notice of such Estimated  Tenant
Improvement  Costs,  which notice will include  copies of the Bids for the Major
Trades.

                                       4
<PAGE>

               4.4.2  LESSOR's  Allowance.  LESSOR  agrees to pay a  maximum  of
$900,000.00 for the Tenant Improvement Costs ("Allowance").  The Allowance shall
be  applied  solely  to pay the cost of the  Tenant  Improvements,  and under no
circumstances  shall  LESSEE be entitled to any payment on account of any unused
portion of the Allowance  following  completion of the Tenant  Improvements  and
payment of the Tenant  Improvement  Costs. The amount of the Allowance  actually
expended  for  payment of Tenant  Improvement  Costs shall be the amount used to
determine the amount of the Allowance  Amortization  Charge under subsection 2.3
above.   LESSOR  shall  pay  its  share  of  the  Tenant  Improvement  Costs  as
construction  progresses  in the same  manner that LESSEE is required to pay its
Initial Contribution under subsection 4.4.3 of this Addendum.

               4.4.3 LESSEE's Payment/Initial Contribution.  Except for LESSOR's
Allowance, LESSEE shall be responsible for the payment of all Tenant Improvement
Costs. The amount of LESSEE's initial  contribution  will be determined based on
the  Estimated  Tenant  Improvement  Costs,  and LESSEE shall pay to LESSOR,  as
provided in this subsection,  an amount equal to the difference between LESSOR's
Allowance and the Estimated Tenant  Improvement Costs ("Initial  Contribution").
LESSEE  shall  pay  such  Initial  Contribution  in  installments,  based on the
percentage of completion of the Tenant Improvements, as reasonably determined by
LESSOR,  and each installment will be due and payable within 10 days of LESSOR's
delivery  of  an  invoice  to  LESSEE.   Such  payments  shall  be  paid  to  an
institutional  fund  control  established  by LESSOR  for  payment of the Tenant
Improvement  Costs.  The  amount  of each  installment  payment  of the  Initial
Contribution  shall be calculated by multiplying the amount of LESSEE's  Initial
Contribution  by the  percentage  of progress as  determined  by LESSOR and then
multiplying that product by ninety percent (90%).

               4.4.4  Final   Reconciliation.   Following   completion   of  the
construction  of the Tenant  Improvements,  LESSOR  shall to deliver to LESSEE a
final accounting of the Tenant  Improvement Costs. If additional amounts are due
from LESSEE on account of differences between the LESSEE's payments on Estimated
Tenant  Improvement Costs and the actual costs incurred,  LESSEE shall reimburse
LESSOR in the amount of such difference following completion of the construction
of the  Tenant  Improvements  and  within  fifteen  (15) days from  receipt of a
written notice and accounting from LESSOR's accounting. If such final accounting
shows  that the  actual  Tenant  Improvement  Costs are less  than the  LESSEE's
payment on Estimated Tenant  Improvement Costs, then LESSEE shall be entitled to
a credit in the  amount of any  excess  paid by LESSEE,  which  credit  shall be
applied to the next payment of Base Rent then becoming due.

               4.4.5 Costs  Attributable to Changes.  LESSEE will be responsible
for payment of any excess Tenant Improvement Costs resulting from any changes to
the Work  requested  by  LESSEE  or  necessitated  by  government  requirements,
following  LESSOR's approval of the Tenant  Improvement  Plans. Any such changes
shall result in the recalculation of the Estimated Tenant  Improvement Costs and
LESSEE's required payments under Section 4.4.3 of this Addendum.

               4.4.6   Inspection  of  Records.   LESSEE,   or  its   designated
representative,  shall have the right  during the course of  performance  of the
construction of the Building Shell and the Tenant Improvements and in connection
with the final  reconciliation  of the Tenant  Improvement  Costs as provided in
subsection  4.4.4 of this  Addendum to a reasonable  review of books and records
maintained  by LESSOR  and  Contractor  relating  to such  costs.  Such right of
inspection is exercisable on reasonable  written notice to LESSOR and during the
regular business hours of LESSOR or Contractor, whichever is applicable.

          4.5   Completion   and   Acceptance  of  Building   Shell  and  Tenant
Improvements.  The  Commencement  Date  of  the  Lease  shall  not  occur  until
Substantial Completion (as defined in subsection 4.5.2 of this Addendum), except
if  Substantial  Completion is delayed on account of LESSEE's  failure to timely
submit the Tenant Improvement Plans (or any revisions thereto), LESSEE's request
for special materials,  finishes or installations (i.e.  materials which are not
readily  available or  customarily  and  ordinarily  used in similarly  situated
construction  work) not shown in the Tenant  Improvement  Plans as  approved  by
LESSOR,  changes to the approved Tenant  Improvement  Plans requested by LESSEE,
LESSEE's  failure  to  timely  pay  amounts  required  to be paid by  LESSEE  in
connection  with such  construction  or other delays  caused by LESSEE.  If such
delays are encountered, the Commencement Date of this Lease shall occur prior to
Substantial Completion of the Tenant Improvements and as of the date such Tenant
Improvements  would have been  substantially  completed  but for such  delays by
LESSEE.  LESSEE  and  LESSOR  shall  conduct a  walk-through  inspection  of the
Premises and prepare and sign a punch-list of all items needing  additional work
by LESSOR,  and LESSEE shall  thereafter  have an additional  sixty (60) days in
which to identify to LESSOR any construction  deficiencies or defects which were
not readily  observable at the time of the preparation of the first  punch-list,
whereupon  any  items  so  identified  in no  more  than  three  (3)  additional
punch-lists and agreed to by LESSOR following  consultation with LESSEE, will be
added to the final  punch-list.  The  punch-lists to be prepared by LESSEE shall
not include any damage to the Premises caused by LESSEE's move-in,  which damage
shall be repaired or  corrected by LESSEE,  at its  expense.  If LESSEE fails to
submit  the  final  punch-list  to  LESSOR  within  the  sixty  (60) day  period
immediately  following the Commencement  Date, it shall be deemed that there are
no items needing additional work or repair.  LESSOR's  contractor shall complete
all reasonable  punch-list  items within thirty (30) days after the walk-through
inspection  and  within  thirty  (30) days  following  LESSOR's  receipt  of any
additional  punch-lists,  or as soon as practicable  thereafter.  Upon LESSOR or
LESSOR's contractor's  indication to LESSEE of the completion of such punch-list
items,  LESSEE  shall  acknowledge  the  completion  of such items in writing to
LESSOR.  If LESSEE fails either to so  acknowledge  the completion of such items
within seven (7) days of such stated  completion or within such seven day period
to specify in writing to LESSOR in reasonable  detail any such previously listed
punch-list  items  that  remain  uncompleted,  all such  items  shall be  deemed
approved by LESSEE.

                                       5
<PAGE>

               4.5.1 Construction/Substantial Completion. Promptly following the
approval of the Tenant  Improvement  Plans and conditioned  upon LESSEE's timely
payment of the LESSEE's Initial  Contribution,  LESSOR shall cause Contractor to
cause the  Substantial  Completion of the Tenant  Improvements in no event later
than the date  determined  in  subsection  3.1 of this  Addendum.  Following the
Substantial Completion,  LESSOR shall cause Contractor to correct all immaterial
defects and  deficiencies  to fully complete the Tenant  Improvements as soon as
reasonably possible.

               4.5.2  "Substantial  Completion"  Defined.  The term "Substantial
Completion"  means the date upon which  LESSOR  satisfies  all of the  following
requirements:  (a) the  construction  of the  Building  Shell  is  substantially
completed in accordance with the Approved Working Drawings,  as modified only by
any changes requested by LESSEE or as otherwise permitted by this Lease, subject
only to minor corrective work which does not affect or limit LESSEE's use of the
Premises;  (b) the  construction  of the Tenant  Improvements  is  substantially
completed in accordance  with the Tenant  Improvement  Plans as modified only by
any changes requested by LESSEE or as otherwise permitted by this Lease, subject
only to minor corrective work which does not affect or limit LESSEE's use of the
Premises;  (c) LESSOR has procured a certificate of occupancy (whether temporary
or permanent) or other applicable permit permitting  LESSEE's  immediate use and
occupancy  of the  Premises;  and (d) LESSOR  has given  LESSEE  written  notice
stating that such Substantial  Completion has occurred and that the Premises are
available  for  LESSEE's   immediate   possession  and  occupancy   ("Notice  of
Possession").

               4.5.3 LESSOR's Enforcement of Contractor's Warranties. LESSOR has
obtained from Contractor the following warranties ("Contractor's Warranties"):

          "CONTRACTOR  unconditionally  warrants  all  materials  and  equipment
     furnished under this Contract will be new, unless  otherwise  specified and
     approved in advance by LESSEE,  and that all Work will be of good  quality,
     free from material faults and defects and in conformance  with the Contract
     Documents.  CONTRACTOR,  at its  expense,  shall repair or replace any Work
     requiring  replacement or repair within one (1) year from completion of the
     Project,  except with respect to the roof membrane only,  which  CONTRACTOR
     will repair or replace  within two (2) years as  required to prevent  water
     penetration.  In the event  CONTRACTOR fails to timely perform its warranty
     obligation,   OWNER  shall  have  the  right  to  cause  such   repairs  or
     replacements  and CONTRACTOR  shall be liable for the  reasonable  costs of
     such  repairs  or  replacements.  In the event of any  action to  enforce a
     warranty  claim,  the  prevailing  party  shall be  entitled to recover its
     reasonable attorney's fees and costs."

                                       6
<PAGE>

Notwithstanding  the limitation on LESSOR's  warranty under Paragraph 2.2 of the
Lease or the time for  enforcement  of LESSOR's  warranty  has  expired,  to the
extent LESSOR has any claim under the Contractor's  Warranties on account of any
defect or  deficiency  in the  construction  of the  Premises,  upon the written
request of LESSEE,  LESSOR  shall take such  commercially  reasonable  action as
necessary to enforce any such  warranties or claims for the benefit of LESSEE to
the extent LESSEE incurs or will incur any out-of-pocket  expense or cost in the
performance of its obligations under this Lease for the repair or maintenance of
the Premises on account of any items covered by the Contractor's Warranties as a
result of any such defects or deficiencies,  provided that LESSOR shall first be
entitled  to  recover  its  Legal  Expenses  (as  defined  below)  prior  to any
reimbursement to LESSEE of any such out-of-pocket expenses;  provided,  however,
if LESSOR determines, based on its good faith belief, that pursuit of such claim
against Contractor would not be commercially reasonable,  then LESSOR shall have
the right to satisfy its  obligations  under this section by assigning to LESSEE
the  right  to  enforce  any such  Contractor's  Warranties,  provided  any such
assignment shall be effective only to the extent LESSEE incurs or will incur any
out-of-pocket  expense or cost in the performance of its obligations  under this
Lease for the  repair or  maintenance  of the  Premises  on account of any items
covered  by the  Contractor's  Warranties  as a result  of any such  defects  or
deficiencies,  and LESSOR shall be entitled to receive any excess recovery after
deduction of LESSEE's Legal Expenses. The term "Legal Expenses" means reasonable
attorneys'  fees and  costs  (including  any  expert  witness  fees),  including
attorneys'  fees and costs in connection  with the  enforcement  of any award or
judgment or any  appellate  proceedings,  which Legal  Expenses  are incurred by
LESSOR in the event LESSOR  elects to enforce  warranties or claims in any legal
proceedings  against  Contractor,  or  incurred by LESSEE,  in the event  LESSOR
assigns  the right to LESSEE  to  enforce  such  warranties  or claims  directly
against Contractor.

               4.5.4   Exclusion   From   Common   Area   Operating    Expenses.
Notwithstanding any other provision,  any costs of repairs or replacement of any
patent  or  latent  defect  or  deficiency  identified  during  the  period  the
applicable  Contractor's  Warranties  remain in effect  shall not be included in
calculating Common Area Operating Expenses.

     5. LESSOR's Contingencies. LESSOR's obligations under the Lease are subject
to satisfaction of the following  contingencies  within one month following full
execution of the Lease: (a) LESSOR procures a commitment for a construction loan
and permanent loan on terms and conditions  reasonably acceptable to LESSOR; (b)
LESSOR  reasonably  determines  that the total  cost of all  governmental  fees,
exactions and charges for development of the Building Shell and the Allowance of
LESSOR shall not exceed  $50,000;  and (c) LESSOR  approves the  disclosures  in
LESSEE's  Hazardous  Materials  Questionnaire  described  in  section 11 of this
Addendum.  LESSOR  agrees to use its  reasonable,  best  efforts to satisfy  the
contingencies  described  in  preceding  clauses  (a) and (b)  within  one month
following  full  execution of the Lease,  and LESSOR shall have thirty (30) days
following the receipt of the Hazardous  Materials  Questionnaire  to give LESSEE
notice of its approval or disapproval  under  preceding  clause (c). LESSOR will
promptly give LESSEE notice as and when each contingency is satisfied. If LESSOR
does not give notice to LESSEE that all contingencies have been satisfied within
one month  following full  execution of the Lease,  then either LESSOR or LESSEE
shall have the right to  terminate  the Lease by giving the other notice of such
decision.  If the Lease is so  terminated,  LESSOR  shall  return  the  Security
Deposit to LESSEE and neither party will have any further  obligations under the
Lease, except that the obligation of LESSEE to provide indemnification to LESSOR
as provided in section 6 of this Addendum shall survive such termination.

     6. Access to Premises/Indemnification. LESSEE and its agents, employees and
design  consultants  shall be entitled to reasonable  access to the property for
the purpose of carrying out the preparation of the Tenant  Improvement Plans and
inspecting the progress of the  construction of the Building Shell or the Tenant
Improvements.  LESSEE's  entitlement to access shall be conditioned  upon LESSEE
giving LESSOR prior written  notice of the date and time for such access,  which
shall not be less than three (3) business days prior to the desired access date.
LESSEE  agrees  that it will  pay for the  cost or  expense  of any  repairs  or
replacements,  including  damage  to  landscaping,  roads,  irrigation  systems,
utilities and other improvements, resulting from LESSEE's exercise of the access
rights  provided in this section,  and LESSEE shall  indemnify,  defend and hold
harmless  LESSOR and  Contractor  from and against any loss,  liability,  claim,
expense  (including  reasonable  attorneys'  fees and  court  costs)  or  damage
resulting  from  LESSEE's  exercise of such access  rights,  including,  without
limitation,  any  claims  arising  from the  activities  of LESSEE or its agent,
employees or design consultants.  LESSOR may require,  upon reasonable notice to
LESSEE,  that LESSEE provide  evidence of adequate general  liability  insurance
coverage  from an insurer  acceptable to LESSOR and name LESSOR as an additional
insured under LESSEE's policy as a condition to LESSEE's exercise of such access
rights.  LESSEE agrees not to interfere with the progress of the construction on
the property or otherwise  interfere with any other  activities of LESSOR or its
agents or contractors while present on the property.

                                       7
<PAGE>

          6.1  LESSEE's  Fixturization.  No later than thirty (30) days prior to
the expected date of Substantial Completion of the Building, LESSOR shall permit
LESSEE to enter upon the  Premises  for the  purposes  of  permitting  LESSEE to
commence  installation of LESSEE's machinery and trade fixtures  ("Fixturization
Period").  LESSEE  agrees  to carry  out such  work in such  manner  as will not
interfere  with the  Contractor's  work.  LESSOR  shall not be  responsible  for
securing the Premises or liable for any loss or damage to any such  machinery or
trade  fixtures  installed by LESSEE prior to the delivery of  possession of the
Premises.  LESSEE shall not be responsible for payment of any of the Rent during
the  Fixturization  Period,  provided LESSEE shall be responsible for compliance
with all other terms and  conditions of the Lease,  including the  provisions in
Paragraph 8.2 (a) of the Lease requiring LESSEE to maintain certain insurance.

     7. No Restriction on LESSOR'S  Remedies.  In the event that LESSEE Defaults
under the Lease by failing or refusing to take  possession  of the  Premises and
commence  paying the rent,  nothing in the Lease is  intended to nor shall it be
applied to restrict  any rights or  remedies  that LESSOR may have on account of
such Default,  including,  without limitation,  LESSOR's  entitlement to recover
consequential  and  incidental  damages  from LESSEE on account of such  breach.
LESSEE  acknowledges  that it is aware that,  based upon LESSEE's  inducement in
entering  into this Lease,  LESSOR is entering  into a contract to purchase  the
land on which the Building is to be  constructed  and is  purchasing  such land,
LESSOR is procuring financing in connection with such acquisition and to pay for
the costs of  construction  of the Building Shell and the  Allowance,  LESSOR is
otherwise making a substantial  investment of its own funds and creditworthiness
to acquire the land and develop the Building,  and, in the event of such Default
by LESSEE,  LESSOR will suffer  substantial  damages and losses,  including lost
profits  and the  economic  value of the loss of use of its  invested  funds and
credits in the real  estate  development  project  which is the  subject of this
Lease.

     8. LESSEE's Payment of Operating Expenses. Subject to subsection 8.1 below,
beginning  on the  Commencement  Date,  in addition to payment of the Base Rent,
LESSEE shall be responsible for payment of all "Operating  Expenses" (as defined
below). The term "Operating  Expenses" means the following expenses and costs of
the ownership and operation of the Premises: (a) amounts payable for maintenance
contracts required to be procured pursuant to Paragraph 7.1(b) of the Lease (but
not the cost of  repairs  or  replacements  payable by  LESSEE),  (b)  insurance
required to be maintained by LESSOR or LESSEE under the Lease  (exclusive of the
insurance  maintained  by LESSEE  under  Paragraph  8.4 of the Lease),  (c) Real
Property  Taxes,  (d) a  reasonable  reserve  for  replacement  of the  roof and
heating/air  conditioning  units,  (e)  assessments  and  dues  payable  to  any
association  or other  governing  body  established  pursuant to any  covenants,
conditions or  restrictions  affecting the Premises as of the date of the Lease,
(f) payment of Mello Roos Bond  installments,  (g) a fire  sprinkler  monitoring
contract  if  payable  separate  from the fire  sprinkler  maintenance  contract
described in Paragraph 7.1(b) of the Lease, (h) the Administrative Fee described
in  subsection  8.2 of this  Addendum,  and (i) the  reasonable  amount of other
ordinary and necessary  expenses and costs of operation of the  Premises,  which
are  customarily  incurred in the  operation of similarly  situated  real estate
projects;  provided, however, the term "Operating Expenses" does not include (i)
the costs of repairs or  maintenance  required to be  performed by LESSEE to the
extent  such  costs  exceed  the  amount of any  reserves  accumulated  from the
Operating Expense  collections for the particular repair or maintenance item, or
(ii) any other  items of expense or cost which the terms of the Lease  expressly
require be paid or incurred by LESSEE,  including  all utility and trash charges
payable by LESSEE under  Paragraph 11 of the Lease.  Interest at the Wells Fargo
savings account rate on any unused portion of the above reserves shall accrue to
the reserve account and not to the LESSOR.

          8.1  Method  of  Payment.  LESSEE  shall  pay to  LESSOR  monthly,  as
additional  rent,  an amount  equal to 1/12 of the  projected  annual  Operating
Expenses.  Such amount shall be due and payable concurrently with the payment of
the applicable Base Rent. Prior to the beginning of each Lease Year, LESSOR will
provide  LESSEE an  annual  estimated  Operating  Budget  ("Estimated  Operating
Budget") for each calendar year or partial year.  Subject to LESSEE's payment to
LESSOR of the Operating Expenses as provided in this Addendum, LESSOR shall make
prompt  payment  of the  Operating  Expenses.  Any  excess or  deficit  from the
estimates shown in the Estimated  Operating Budget will be credited or billed to
LESSEE within sixty (60) days following the end of the applicable calendar year,
and LESSOR shall  concurrently  furnish LESSEE with a detailed statement showing
the actual  Operating  Expenses  incurred  for such year.  Any  deficit  will be
payable as additional  rent within ten (10) days of receipt of a final Operating
Budget setting forth the actual  expenditures  for the  applicable  year and the
deficit.  Any excess  shall be credited  against the next  payments of Operating
Expenses due from LESSEE. A copy of the Estimated Operating Budget for the first
calendar  year is attached  to the Lease as EXHIBIT  "5",  provided  that LESSEE
acknowledges  that such budget  represents  only LESSOR's good faith estimate of
the such expenses and that actual expenses may vary. LESSEE further acknowledges
that the amounts  and/or  categories of expense will likely vary in future years
as the Premises ages. Promptly following LESSEE's request,  LESSOR shall furnish
LESSEE with such  additional  information as LESSEE may reasonably  request with
respect to such Operating Expenses.

                                       8
<PAGE>

          8.2 LESSOR'S Administrative Services. LESSOR agrees to provide certain
administrative  services  to  assist  LESSEE  in  the  performance  of  LESSEE's
obligations  under  Paragraphs 7, 8.2, 8.3 and 10 of the Lease in  consideration
for LESSEE's monthly payment of an administrative fee to LESSOR two percent (2%)
of the SF Rate Rent per month  ("Administrative  Fee"). Such  Administrative Fee
shall be payable as a part of the Operating Expenses payable by LESSEE. LESSOR's
administrative services shall consist of the following: LESSOR shall procure, on
behalf of LESSEE,  maintenance contracts required to be procured by LESSEE under
Paragraph  7.1(b) of the Lease,  and shall  otherwise  procure bids and contract
proposals  from  contractors  when  necessary  for LESSEE's  performance  of its
general  maintenance and repair obligations under Paragraph 7.1(a) of the Lease.
Except  with the  prior  written  consent  of  LESSEE,  major  items of  expense
exceeding  $10,000.00 shall be competitively bid and LESSOR shall not submit any
contracts or proposals for any of such services to be performed by LESSOR or any
affiliate  of LESSOR,  except to the extent such  affiliation  is  disclosed  to
LESSEE and such contract is competitively priced. LESSOR shall not be liable for
any acts or  omissions  of any such  contractors,  nor for  LESSEE's  default in
failing  to perform  any  obligation  under the  Lease,  except to the extent of
LESSOR's failure to pay any Operating Expense from funds previously  provided by
LESSEE for the payment of such Operating Expense.

     9.  Additional  Insurance  Provisions.  In addition to the  insurance to be
maintained  by LESSEE  pursuant to Paragraph  8.2(a) of the Lease,  LESSOR shall
have the right, but not the obligation,  to maintain,  at LESSOR's sole cost and
expense,  any additional  general  liability  insurance that LESSOR may elect to
procure  for the sole and  exclusive  benefit  of  LESSOR.  LESSEE  shall not be
obligated  to  reimburse  LESSOR for the cost of any such  additional  liability
insurance and LESSEE shall not be named as an insured under any such  additional
insurance  nor shall the  existence  of such  additional  insurance  effect  any
obligations or liabilities of LESSEE under the Lease.

     10.  Option to Extend.  Subject to the  provisions  of  Paragraph 39 of the
Lease,  LESSEE shall have the option to extend the Lease Term for one additional
term of five (5) years, which option is exercisable only by LESSEE giving LESSOR
written  notice of the election to exercise  such option no earlier than fifteen
(15)  months  and no later than nine (9) months  before  the  expiration  of the
Original  Term.  If LESSEE  fails for any  reason to timely  give such  Election
Notice,  such option rights shall  automatically  terminate and be of no further
force or effect and LESSEE shall not have any other right to extend the Original
Term.  LESSEE may withdraw a notice to elect to excercise  the option up to nine
months before the end of the term of the Lease.

          10.1 Remaining Lease Terms  Remaining Lease Terms.  Except as provided
in this subsection and in subsection 10.2 of this Addendum,  if LESSEE elects to
extend the Original Term, all other terms and conditions of the Lease, including
annual  Base Rent  Adjustments  of 3.5%,  shall  remain in  effect  during  such
extended  term.  LESSEE  shall have no  further  right to extend the term of the
Lease;  and the Base Rent applicable  during the option term shall be determined
in accordance with subsection 10.2 of this Addendum.

          10.2  Adjustment to Base Rent.  The Base Rent for the first Lease Year
of the  extension  period shall be an amount equal to the "fair rental value" of
the Premises as determined in the following manner:

          (a) Within thirty (30) days from LESSEE's Election Notice,  LESSOR and
     LESSEE shall meet in an effort to negotiate, in good faith, the fair rental
     value of the  Premises for the first year of the option  period.  If LESSOR
     and LESSEE have not agreed upon such fair rental  value of the  Premises at
     least  ninety (90) days prior to the  beginning  of the  applicable  option
     period,  the fair rental value shall be determined by appraisal,  by one or
     more appraisers  ("Appraiser(s)").  The Appraisers shall have at least five
     (5)  years  experience  in  the  appraisal  of  commercial/industrial  real
     property in the area in which the  Premises is located and shall be members
     of professional organizations such as M.A.I. or equivalent.

          (b) If LESSOR and  LESSEE  are not able to agree upon the fair  rental
     value of the Premises  within the prescribed  time period,  then LESSOR and
     LESSEE  shall  attempt to agree in good faith upon a single  Appraiser  not
     later than  seventy-five (75) days prior to the beginning of the applicable
     option  period.  If LESSOR  and  LESSEE  are  unable to agree upon a single
     Appraiser  within  such time  period,  then  LESSOR and  LESSEE  shall each
     appoint  one  Appraiser  not later than  sixty-five  (65) days prior to the
     beginning of the applicable option period. Within ten (10) days thereafter,
     the two (2) appointed Appraisers shall appoint a third Appraiser. If either
     LESSOR or LESSEE fails to appoint its Appraiser  within the prescribed time
     period,  the single  Appraiser  appointed shall  determined the fair rental
     value of the Premises.  If both parties fail to appoint  Appraisers  within
     the prescribed time periods,  then the first Appraiser  thereafter selected
     by a party shall  determine  the fair rental  value of the  Premises.  Each
     party shall bear the cost of its own  Appraiser and the parties shall share
     equally the cost of the single or third Appraiser, if applicable.

                                       9
<PAGE>

          (c) For the purposes of such  appraisal,  the term "fair rental value"
     shall mean the price that a ready and willing  tenant  would pay, as of the
     beginning of the applicable  option period, as monthly Base Rent to a ready
     and  willing  landlord  of  property  comparable  to the  Premises  if such
     property were exposed for lease on the open market for a reasonable  period
     of time and taking into account all of the purposes for which such property
     may be used. If a single  Appraiser is chosen,  then such  Appraiser  shall
     determine the fair rental value of the Premises. Otherwise, the fair rental
     value of the Premises shall be the arithmetic average of the two (2) of the
     three (3) appraisals  which are closest in amount,  and the third appraisal
     shall be disregarded.  LESSOR and LESSEE shall instruct the Appraiser(s) to
     complete the  determination  of the fair rental value not later than thirty
     (30) days prior to the beginning of the applicable  option  period.  If the
     fair rental value is not  determined  prior to the  beginning of the option
     period,  then  LESSEE  shall  continue  to  pay to  LESSOR  the  Base  Rent
     applicable to the Premises  immediately prior to such extension,  until the
     fair rental value is determined. When the fair rental value of the Premises
     is determined,  LESSOR shall deliver  notice thereof to LESSEE,  and if the
     fair rental value is higher,  LESSEE  shall pay to LESSOR,  within ten (10)
     days after  receipt of such notice,  the  difference  between the Base Rent
     actually  paid  by  LESSEE  to  LESSOR  and the new  Base  Rent  determined
     hereunder.

          (d)  Notwithstanding  any other  provision of this Lease,  in no event
     shall the Base Rent for the first Lease Year of the extension  term be less
     than the Base Rent in effect for the last Lease Year of the  Original  Term
     ("Prior  Base Rent").  If the fair rental value of the Premises  determined
     under this section is less than the Prior Base Rent, then the Base Rent for
     the first Lease Year of the extension term shall equal the Prior Base Rent.

          (e) The  Base  Rent  determined  for the  first  Lease  Year  shall be
     adjusted at the  beginning of the second Lease Year and at the beginning of
     each Lease Year  thereafter  during the extension term. The Base Rent shall
     be increased in an amount equal to three and one-half percent (3.5%) of the
     amount of the scheduled Base Rent for the immediately preceding Lease Year.

          (f) In the event the  foregoing  extension is  exercised,  LESSEE will
     receive  a Tenant  Improvement  retrofit  allowance  equal  to two  dollars
     ($2.00) per square  foot of the  Premises,  which will be credited  against
     Base Rent due under the extension term in the first month after evidence of
     money spent on the building is presented to LESSOR, until credited in full.

     11.  Hazardous   Materials   Questionnaire.   Without   limiting   LESSEE's
obligations  under  Paragraph  6.2  of  the  Lease  regarding   compliance  with
Applicable Laws concerning Hazardous  Substances,  LESSEE shall, within ten (10)
days from the  execution,  complete and deliver to LESSOR for its approval under
section 5 of this Addendum and, following such approval,  filing with applicable
government  authorities,  a Hazardous Materials Questionnaire in the form as set
forth in EXHIBIT "6" annexed to this Addendum.

     12. Additional  Provisions Regarding Tenancy Statement.  In addition to the
information  required under  Paragraph 16 of the Lease,  LESSOR may also require
that LESSEE certify to the absence of any violations of any Hazardous  Substance
Laws and  require  that  LESSEE  provide  and  certify to an  updated  Hazardous
Materials Questionnaire.

                                       10
<PAGE>

     13. Corporate Resolution.  Within ten (10) days of Lease execution,  LESSEE
shall provide LESSOR with a certified copy of a Corporate Resolution authorizing
the person(s) designated below to execute this Lease on the behalf of LESSEE and
thereupon become a binding contractual obligation of LESSEE.

     14.  Security  Deposit.  If  LESSEE  is not in  default  on or  before  the
Commencement Date of the Lease, then 1/2 of the security deposit under Paragraph
1.7 of the Lease will be applied to the Base Rent becoming due during the fourth
month of the first Lease Year.

     15. Rent  Adjustment  Upon  Assignment or Sublease.  The provisions of this
section  shall only apply  during the  Original  Term of the Lease and shall not
apply during the option period  Provided that LESSEE is not in Default under the
Lease, if LESSEE subleases or assigns the Premises,  LESSEE shall pay to LESSOR,
as additional  rental due under this Lease,  at LESSOR's  option,  the following
amounts:  (a) in the case of an assignment,  LESSOR shall be entitled to receive
an amount equal to fifty percent  (50%) of the total value of the  consideration
received by LESSEE on account of such  assignment,  less an amount  equal to any
real estate  commissions  payable by LESSEE on account of the assignment of this
Lease  amortized  over  the  duration  of the  Lease  following  the  applicable
assignment,  and the  additional  amount  payable to LESSOR shall be paid within
five (5) days from the date(s) as and when LESSEE  receives such  consideration;
and (b) in the case of a sublease(s),  an amount equal to fifty percent (50%) of
the Excess Rental  payable by any subtenant on account of such sublease less the
costs of any real  estate  commissions  payable  by  LESSEE  amortized  over the
duration  of the  sublease.  The term  "Excess  Rental"  means the rent or other
consideration  received by LESSEE from the  subtenant in excess of the amount of
Base Rent, additional rent and other charges payable by LESSEE under this Lease.
In no event shall this provision be construed or applied to reduce the Base Rent
or other  charges  payable by LESSEE  under this  Lease,  nor  modify,  waive or
otherwise affect LESSOR's entitlement to increase the rentals payable under this
Lease  pursuant to Paragraph  12.1(d) of the Lease in the event of an assignment
or  subletting  without the consent of LESSOR.  For purposes of this  Paragraph,
LESSEE will not be deemed to be in Default if all conditions of Default  noticed
by LESSOR to LESSEE in  connection  with  LESSEE's  request  for  consent to the
applicable  assignment or subletting are cured within the grace periods  allowed
therefor under Paregraph 13.1 of the Lease.

     16. Limited Right to Holdover.  Notwithstanding  Paragraph 26 of the Lease,
Lessee shall have the right to retain  possession  of the Premises for a maximum
six months after upon the expiration  (but not the earlier  termination) of this
Lease or any renewal or extension term,  LESSEE shall have the right to holdover
and retain  possession  of the Premises  for a maximum  period of six (6) months
subject to  LESSEE's  compliance  with each of the  following  requirements  and
conditions:  (a) At least one hundred  twenty (120) days prior to the expiration
of the then-current  term, LESSEE shall give written notice ("Holdover  Notice")
to LESSOR of its  election to  holdover,  which notice shall state the period of
the  holdover,  which  shall not be less than three (3) months nor more than six
(6) months ("Holdover Period");  (b) LESSEE shall not be in Default or Breach of
the Lease either at the time of the giving of the Holdover Notice or at the time
of the  commencement of the Holdover  Period;  (c) LESSEE shall pay as Base Rent
(i) for the first three months of the Holdover  Period,  an amount equal to 125%
of the Base Rent in effect  for the month  immediately  preceding  the  Holdover
Period, and (ii) for the second three months, if applicable,  an amount equal to
150% of the  Base  Rent  in  effect  for the  month  immediately  preceding  the
beginning of the Holdover  Period;  and (d) LESSEE shall continue to comply with
all of the other terms,  covenants and  conditions of this Lease,  including the
payment of any other rent,  charges or fees  payable  during the Lease term.  If
LESSEE complies with each of the above-described  conditions,  LESSEE's holdover
shall be deemed to be with the consent of LESSOR and the provisions of Paragraph
26 of the Lease shall not apply.  Upon  expiration of the Holdover Period stated
in the Holdover Notice, LESSEE shall have no further right to holdover or retain
possession of the Premises.  If LESSEE does not timely give a Holdover Notice or
LESSEE otherwise fails to comply with each of the  above-described  requirements
and conditions,  LESSEE shall have no right to retain possession of the Premises
or any part thereof beyond the  expiration of this Lease,  and the provisions of
Paragraph 26 of the Lease shall apply.

     17. Additional Provisions Regarding Alteration Removal. Notwithstanding any
contrary  provision  in  Paragraph  7.4(b) of the Lease,  LESSEE may  request in
writing, at the time of submitting any Alterations or Utility  Installations for
LESSOR's  consent,  that LESSOR  agree not to require the removal of any of such
LESSEE's  Alterations or Utility  Installations upon expiration of the Lease. If
LESSEE makes such request, LESSOR shall notify LESSEE at the time of giving such
consent  whether or not  LESSOR  will  require  the  removal of any of  LESSEE's
Alterations or Utility  Installations,  and LESSOR's failure to so notify LESSEE
shall  constitute  a waiver of LESSOR's  right to require  LESSEE to remove such
Alterations or Utility  Installations  upon  expiration of the Lease.  If LESSOR
gives such notice  that it will  require  such  removal,  then  LESSEE  shall be
obligated to remove such Alterations or Utility Installations upon expiration of
the Lease.

                                       11
<PAGE>

     18. Additional  Provisions  Regarding Hazardous  Materials.  Subject to the
limitations described in this section,  LESSOR shall indemnify,  defend and hold
harmless LESSEE from and against any action,  demand or claim (including a claim
for reasonable attorneys' fees and court costs) constituting a Third Party Claim
(as  defined   below)  which  is  based  solely  on  any   Hazardous   Substance
contamination  in, under or about the  Premises  (including  groundwater)  which
existed as of the Commencement Date of the Lease ("Preexisting  Contamination"),
but only to the extent LESSEE  incurs a loss,  liability,  claim and/or  expense
exceeding the sum of $5,000.00.  The phrase "Third Party Claim" means a lawsuit,
administrative  action  or other  proceeding  commenced  and  maintained  by any
governmental  agency or by any owner or occupant of adjacent land other than the
Premises o cause the remediation of any Preexisting Contamination.  LESSEE shall
promptly give LESSOR notice of any such Third Party Claim.  LESSOR's  obligation
of  indemnification  includes the  obligation  to defend the Third Party Claims,
after LESSEE has first paid losses, liabilities, costs and/or expenses in excess
of  $5,000.00  on account of such Third Party  Claim.  LESSEE  shall  reasonably
cooperate,  without  expense to LESSOR,  with LESSOR in such  defense.  LESSOR's
indemnification  obligation  under this  section does not (a) increase or expand
any  obligation  of  LESSOR  under  Paragraph  9.7 of the  Lease  to  cause  the
remediation  of  any  such  Preexisting  Contamination,  (b)  modify,  waive  or
otherwise  change  any of  LESSOR's  rights  under  Paragraph  9.7 of the Lease,
including the right to terminate the Lease,  or (c) otherwise  subject LESSOR to
any liability for losses of or damages to LESSEE  resulting  from the disruption
of LESSEE's  business  operation on the Premises on account of such  Preexisting
Contamination  and/or from any order or judgment resulting from such Third Party
Claim limiting or restricting the use or occupancy of the Premises, provided the
preceding provision does not affect LESSEE's entitlement to abatement of rent in
accordance with Paragraph 9.7 of the Lease.

     19. No Binding Offer. LESSOR'S SUBMISSION OF THIS DOCUMENT FOR EXAMINATION,
NEGOTIATION  AND/OR  SIGNATURE BY LESSEE DOES NOT  CONSTITUTE AN OFFER TO LEASE,
NOR A RESERVATION OF, NOR AN OPTION FOR THE LEASE OF THE PREMISES.  THE DOCUMENT
SHALL NOT BE  BINDING  AND IN EFFECT  AGAINST  EITHER  PARTY  UNTIL AT LEAST ONE
COUNTERPART OF THIS LEASE IS FULLY EXECUTED AND DELIVERED BY LESSOR AND LESSEE.

     20. LESSOR's  Maintenance  Obligations.  Notwithstanding  the provisions of
Subparagraphs 7.1 and 7.2 of the Lease, LESSOR, not LESSEE, shall be responsible
for the maintenance and repair of certain LESSOR  Maintained  Improvements.  The
phrase "LESSOR  Maintained  Improvements",  refers only to and is limited to the
structural  elements of the Building Shell,  being the structural portion of the
exterior  Building Shell walls,  foundations  and  structural  roof (but not the
non-structural  roof membrane,  roof drainage  system,  gutters and  downspouts,
which shall be maintained by LESSEE).

          20.1 Limitations on LESSOR's  Responsibility.  LESSOR's obligation for
repair and  maintenance  of the  LESSOR  Maintained  Improvements  is limited to
maintaining  the LESSOR  Maintained  Improvements  in an operable  condition and
sound structural condition, and LESSEE, not LESSOR, shall be responsible for any
painting or other  resurfacing of the exterior  surfaces of exterior or interior
walls or LESSOR  Maintained  Improvements in order to maintain such improvements
in a neat and  attractive  appearance.  LESSOR  shall not be in  default  of its
repair and  maintenance  obligation if LESSOR  performs the required  repairs or
maintenance within thirty (30) days after written notice from LESSEE of the need
for such repairs or maintenance. If, due to the nature of a particular repair or
maintenance  obligation,  more than thirty (30) days is  reasonably  required to
complete such repairs or maintenance,  LESSOR shall not be in default so long as
LESSOR  commences  work  within  such  thirty  (30) day  period  and  diligently
prosecutes the work to completion. Except as expressly provided in this section,
no  abatement  of rent and no liability of LESSOR shall result for any injury to
or interference with LESSEE's business from the making of or failure to make any
repairs or replacements,  and LESSEE waives and releases its rights,  if any, to
make repair at LESSOR's expense, under California Civil Code Sections 1941-42 or
any similar law, statute or ordinance in effect now or in the future;  provided,
however,  nothing in the preceding provisions shall limit LESSOR's liability for
the  costs   and   expenses   of  such   maintenance   or  repair   obligations.
Notwithstanding the foregoing,  if any such repair and or maintenance obligation
of LESSOR  constitutes an emergency  situation  involving  significant  property
damage or personal injury, LESSOR shall make such repair as soon as commercially
reasonable following notice from LESSEE. If LESSOR cannot perform such repair or
maintenance  obligation in time to mitigate any such significant property damage
or personal injury,  LESSEE shall have the right to perform such maintenance and
repair and LESSOR shall reimburse LESSEE for the reasonable,  out-of-pocket cost
thereof  within  thirty  (30) days from the receipt of an invoice  from  LESSEE,
which invoice shall include backup information  substantiating the expenses.  In
the case of such emergency situations, the notice given to LESSOR may be made by
telephonic  communication  so long as LESSEE  continues with its best efforts to
contact a responsible employee or agent of LESSOR or LESSOR's designated manager
until  successful and LESSEE  simultaneously  sends a facsimile  transmission to
LESSOR  notifying  LESSOR of the emergency.  If LESSEE's  ability to conduct its
business  from the  Premises  is  materially  impaired  as a result of  LESSOR's
default in failing to timely perform its maintenance and repair obligations, the
Base Rent shall be abated in the same  manner and to the same extent as provided
in  Paragraph  9.6 of the Lease  with  respect to damage or  destruction  of the
Premises until LESSOR has cured any such default.

                                       12
<PAGE>

          20.2   Exclusions.   The   provisions   of  Paragraph  9  (damage  and
destruction) and Paragraph 14  (condemnation)  of the Lease shall control in the
event of any damage, destruction or condemnation of any of the LESSOR Maintained
Improvements.  In addition,  LESSOR shall have no  responsibility to maintain or
repair such LESSOR Maintained Improvements in the following circumstances:

          (a) repairs or replacements  are  necessitated by LESSEE's  failure to
     promptly   perform  its  repair  and   maintenance   obligations  of  other
     improvements;

          (b) repairs or  replacements  are  necessitated  by any intentional or
     negligent act or omission of LESSEE, its employees,  agents or contractors,
     including misuse or abuse of the LESSOR Maintained Improvements;

          (c) to the extent that LESSEE makes any  modification or alteration of
     any of the LESSOR Maintained  Improvements,  with or without the consent of
     LESSOR,  including,  without  limitation,   penetrations  of  the  roof  or
     structural  elements,  and  LESSEE  shall be  deemed to have  assumed  full
     responsibility  for the  repair  and  maintenance  of any  improvements  so
     modified, altered or added;

          (d) repairs or replacements  are  necessitated by LESSEE exceeding the
     designed load bearing capacities of the walls, foundations, roof structure,
     floor slab or other structural elements;

          (e) repairs or  replacements  of the Building Shell plumbing and sewer
     lines resulting from normal blockages and not from any defect or deficiency
     in such improvements; or

          (f) repairs or  replacement to the Building  Shell  electrical  system
     resulting  from any  unusual or  intensive  power  demand  requirements  of
     LESSEE,  or on  account  of any  power  fluctuation  or  other  malfunction
     attributable  to equipment or other  electrical  system  improvements to be
     maintained by LESSEE.

     21. Additional Notice Procedures.  In the event that any notice is given by
personal  delivery,  messenger or courier service,  the date of delivery of such
notice  shall be the date such notice is actually  delivered  to the  recipient.
Notwithstanding  any  contrary  provision  in  Paragraph  23 of the  Lease,  the
addresses of LESSOR and LESSEE for notice, unless otherwise changed by a written
notice, shall be as follows:

         If to LESSOR:           Hamann Consolidated, Inc.
                                 Attn: Jeffrey C. Hamann, Pres.
                                 475 W. Bradley Avenue
                                 El Cajon, CA  92020
                                 Fax No. (619) 440-8914

         If to LESSEE:           Aetrium Incorporated
                                 Attn:  Brent Conyers
                                 10790 Roselle Street
                                 San Diego, CA 92121
                                 Fax No. (619) 623-5699

                                       13
<PAGE>

        With a Copy to:          Aetrium Incorporated
                                 Attn: Chief Executive Officer
                                 2350 Helen Street
                                 North St. Paul, MN  55109
                                 Fax No. (612) 770-7975

     IN WITNESS WHEREOF,  LESSOR and LESSEE have executed this Addendum to Lease
to be effective as of the date set forth herein.

                                       "LESSOR"
                                       W.H. POMERADO LLC,
                                       a California limited liability company

                                       By:      Hamann Properties, Inc.,
                                                a California corporation,
                                                Its Manager

                                                By:  ___________________________
                                                     Gregg Hamann, Secretary

                                       "LESSEE"

                                       AETRIUM INCORPORATED
                                       a Minnesota corporation

                                       By:  __________________________________
                                            Douglas Hemer, Group Vice President

                                       14
<PAGE>

                                    EXHIBITS

Exhibit "1"                Legal Description
Exhibit "2"                Building Plans
                  2.1      Site Plan
                  2.2      Floor Plan
                  2.3      Building Elevation
                  2.4      Rendering
Exhibit "3"                Building Shell Specifications
Exhibit "4"                Blank Tenant Improvement Specifications
Exhibit "5"                1998 Estimated Common Area Operating Expenses Budget
Exhibit "6"                Hazardous Materials Questionnaire

                                       15
<PAGE>

                                   EXHIBIT "1"
                                Legal Description

     Lot 89 of City of Poway  Tract  No.  85-04,  Unit II, in the City of Poway,
State of California,  according to map thereof No. 12572,  filed inthe office of
the County  Recorder of San Diego County,  February 28, 1990, as Instrument  No.
90-107515.

                                       16
<PAGE>

                                   EXHIBIT "3"
                          BUILDING SHELL SPECIFICATIONS
                Concrete Tilt-up Shell Building for Aetrium, Inc.
                               September 19 , 1998

1    DESIGN, ENGINEERING, AND PERMITS:

     .1   Drawings to be drawn,  engineered  and  permitted by Kenneth D. Smith,
          Architect. All architectural drawings,  structural engineering,  shell
          plumbing   drawings,   shell   electrical   drawings,   shell   energy
          calculations,   landscaping   drawings,   and  civil  engineering  are
          included.  Where the  plans  differ  from  these  specifications,  the
          specifications shall control.

     .2   Any  and  all  additional  space  planning,  interior  design,  energy
          calculations,mechanical, electrical, or plumbing drawings required for
          the tenant  improvements  will be the  responsibility  of the  tenant.
          Tenant  shall  be  responsible  for  all  warehouse   racking  design,
          permitting and installation.

     .3   Tenant shall be responsible for all Construction Costs associated with
          the Tenant Improvements subject to the Tenant Improvement Allowance as
          specified  in  Paragraph  4.1  of the  Addendum  to  the  Lease  dated
          September 17, 1998 .

     .4   All  shell  building  permits,   third  party   inspections,   special
          inspections  required  by the City  and all  utility  fees  (including
          SDG&E) are included.  There will be additional  permit and  inspection
          fees  required  for  the  tenant   improvements   which  will  be  the
          responsibility of the Tenant.

     .5   The  following  Shell  Building  plans  are  hereby  approved  will be
          initialed  and attached to the Lease:  1) Site Plan 2) Floor Plan,  3)
          Elevations and 4) Rendering.

     .6   The  Shell   Architect  will  be  responsible  for  all  external  ADA
          compliance, PID approvals and POA approvals.

2    SITE WORK:

     .1   Necessary construction staking and site survey is included.

     .2   Grading  and  required  soils  reporting  and  testing  are  included.
          Buildings  to be  designed  in  conformance  with the  existing  soils
          reports.  Shell  Contractor  shall be responsible  for site grading to
          balance.

     .3   We include all necessary  shell  building  utility lines to and on the
          site including primary and secondary  electrical,  telephone conduits,
          fire hydrants and water mains per code  requirements,  fire  services,
          and storm  drains.  We include a gas service to the building  provided
          that tenant  elects to install gas  appliances,  sufficient  to induce
          SDG&E to engineer  and install  requested  service type at the time of
          initial construction. Cable TV service is not included.

     .4   One drive Aprons to be provided as shown on Site Plan.

     .5   Dock area to be drained to the site storm drainage.

     .6   Landscaping to include soils amendments, plant materials and automatic
          sprinkler systems to City standards and of equal quality to Lot 73B.

     .7   We include building numbers and all other  code-required  signage such
          as handicap signs but exclude Tenant name/logo signage or lettering.

     .8   One (1) trash  enclosure  sufficient to accommodate one three yard bin
          and two (2) trash enclosures  sufficient to accommodate two three yard
          bins will be provided.

     .9   Protective 4" concrete filled,  steel bollards will be installed where
          required by the City or the Utility companies.

     .10  The Lot will not be fenced.

                                       1
<PAGE>

     .11  One 10' x 10' compressor  enclosure  will be supplied  adjacent to the
          building with two concrete  sides,  metsl roof and a chain link fence(
          or equivalent to be determined) and gate on the front.

     .12  One  approximately  12' x 12' x 12" concrete  pad for a nitrogen  tank
          will be supplied at a location to be specified by LESSEE.

     .13  One Patio/ lunch area as generally  depicted on the site plan (EXHIBIT
          2.1)with concrete paving and screen walls.

3    CONCRETE WORK:

     .1   The concrete  slabs will be minimum 5 1/2" thick,  4,000 psi concrete,
          reinforced  with  #3's at 18" on  center.  Concrete  footings  will be
          engineered  and  constructed  per  industry  standards.  All  concrete
          sealers,  sealing of slab joints and smooth  dowels at control  joints
          are excluded.

     .2   We exclude  visqueen  or other  waterproofing  in the slab  areas.  If
          Lessee   desires  to  install  vapor   sensitive   floorings  such  as
          vinyl-reinforced   tiles,   sheet  vinyl  or  epoxy   coatings,   then
          waterproofing, alternative concrete mixes, and/or vapor testing should
          be  considered.  We do not  recommend  the  storage  of boxes or other
          non-porous materials directly on the concrete slab.

     .3   Concrete walls will be engineered and constructed with thicknesses and
          concrete strengths per the industry standards.  (i.e.:  minimum 6 1/2"
          wall  thickness  and  minimum  strengths  of 3,000  psi).  We  exclude
          texture.

     .4   All  parking  and  drive  areas  to  be  non-reinforced,   2,500  psi,
          broom-finished  concrete on native,  5 1/2" thick in car parking areas
          and 7" thick in truck traffic areas.

     .5   On site sidewalks to be 3 1/2" thick.

     .6   Onsite  curbs  to be 6" x 6"  extruded  in areas  of low  traffic  and
          monolithic in areas subject to truck traffic.

     .7   French drains and waterproofing at below grade walls are excluded.

4    ROOF:

     .1   Roof to be  panelized  roof  structure,  24' clear with 8" round metal
          interior  posts.  Warehouse  areas to be designed  for 11 psf with 2x4
          subpurlins and area over mezznanine to be disigned for 13 psf with 2x6
          subpurlins. Additionally, roof will support 500 lbs of extra equipment
          at any purlin.

     .2   Roofing to be a four-ply built up roof with a two-year guarantee.

     .3   We  include  35  non-ventilated,  curb-mounted,  4'  x  8'  Bristolite
          fiberglass skylights,  framing for 35 additional skylights, and 70 14"
          rotary  vents.   Location  of  skylights  and  rotary  vents  will  be
          coordinated with the Space Planner and the Shell Architect .

     .4   It has been our intention to provide parapets on all sides high enough
          to hide standard mechanical equipment (30"); however,  additional roof
          screening if required by the City would be a tenant improvement item.

     .5   Roof drains to be ABS plastic and interior mounted.

     .6   Contractor    will   coordinate    location   and    installation   of
          Tenant-provided   factory   curbs  and  roof  jacks  for  HVAC  units.
          Contractor to include  rough framing  supports for the HVAC as part of
          the Shell.  The goal is to avoid any penetrations of the roof membrane
          during Tenant Improvement Construction.

                                       2
<PAGE>

5    MECHANICAL:

     .1   ABS plastic  underground  plumbing to the  building  is  included.  We
          include one backflow prevention device, 1 1/2" domestic water service,
          at least one hose bib per  building  face and  appropriate  water line
          grounds  for  the  electrical  system.  Provided  that  locations  are
          supplied in a timely  manner so that they can be installed  before the
          slab is poured,  we include  plumbing  stub-ins  for up to 30 plumbing
          fixtures.  Permit fees,  gas piping,  top out and finish  plumbing for
          said fixtures are excluded.

     .2   Air conditioning and condensate (except for any code-required  exhaust
          of the electrical room) will be a part of the tenant improvement work.

     .3   Shell  building Fire  Sprinklers are included to a density of .45/3000
          with plugs for future tenant improvements (locations to be coordinated
          with the space  planner  prior to City  plan  check  submittal  of the
          Tenant  Improvements  drawings).  We  include  fire  service  and fire
          service  fees,  but exclude  in-rack  sprinklers,  knox boxes or other
          special locking  mechanisms,  fire  extinguishers,  supervisory  alarm
          panels and tenant improvement drops.

6    ELECTRICAL:

     .1   Contractor  to provide  required  switch gear,  main  disconnect,  and
          transformer  to supply 3,000 amps of 480/277 3 phase,  4 wire power to
          the building..

     .2   Primary  phone  service for both  buildings  will be terminated in the
          computer/phone  rooms.  Locations will be  coordinated  with the Space
          Planner.

     .3   We exclude all power distribution and lighting.

     .4   The  exterior  of  the   building   will  be  lit  with  14  90  watt,
          high-pressure sodium wallpacks mounted on the building.

     .5   All other electrical will be part of the tenant improvements.

7    EXTERIOR FINISH:

     .1   The  exterior  of  building  will be painted  with two coats of Frazee
          paint.

     .2   Soffit areas will be finished with exterior  gypsum  ceiling board and
          skim coat. We exclude Frye molding.

     .3   Exterior  doors  to be 3' x 7' 1 3/4",  18  gauge,  metal  doors  with
          Schlage "L" series, lever-handled, mortise locks with tamper-resistant
          butts  and  weather-stripping  if  necessary.  We  include  three  (3)
          personnel doors at the concrete  perimeter  walls,  two glass doors at
          the cafeteria and glass double doors at the front entry.

     .4   Overhead doors to be 26 gauge Porvene Roll-ups or equal as follows: 1)
          Two 9' x 10' Dock High Doors and 2) Two (2) 12' x 14' Grade Doors.

     .5   We include 2,500 square feet blue-reflective,  medium-performance, LOF
          or equal  glass,  with  Kynar  finished  aluminum  frames.  We exclude
          operable windows.

8    INTERIOR FINISH:

     .1   All  office  and  interior   improvements   are  part  of  the  tenant
          improvement work.

     .2   We exclude all  appliances,  equipment,  equipment  installation,  and
          associated electrical.

     .3   We exclude draperies, blinds and other window treatments.

     .4   We exclude all insulation.

                                       3
<PAGE>

     .5   Our price includes structural  provisions for an approximately  15,000
          square foot 125 psf future mezzanine including increased exterior wall
          reinforcement and footings only.

                                       4
<PAGE>

Triple Net Calculations for Pomerado Business Park, Lot 89             3/21/2000
AETRIUM

Leased SF                        45,000
Total Bldg. SF                   45,000
Percentage of Project           100.00%

<TABLE>
<S>                                    <C>              <C>              <C>             <C>
                                                         Annually          Monthly        Monthly
Description                                Annual       /sf of bldg      /sf of bldg        NNN

Bonds                                   $38,072.23        $0.8460         $0.0705         $3,172.69
LMD                                      $2,760.62        $0.0613         $0.0051           $230.05
Property Taxes                          $22,384.89        $0.4974         $0.0415         $1,865.41
Owners Association                       $1,612.19        $0.0358         $0.0030           $134.35
Administrative Fee                       $5,292.00        $0.1176         $0.0098           $441.00
Insurance                                $2,160.00        $0.0480         $0.0040           $180.00
Utilities:
  Electricity                           BY TENANT         $0.0000         $0.0000             $0.00
  Telephone                                $162.00        $0.0036         $0.0003            $13.50
  Alarm - FIRE ONLY                        $450.00        $0.0100         $0.0008            $37.50
  Landscape Water                            $0.00        $0.0000         $0.0000             $0.00
Security                                BY TENANT         $0.0000         $0.0000             $0.00
HVAC Maint.                              $4,050.00        $0.0900         $0.0075           $337.50
Elevator Maint. & Reserve                  N/A            $0.0000         $0.0000             $0.00
Landscape                                $3,375.00        $0.0750         $0.0063           $281.25
Roof Maint. & Reserve                    $3,375.00        $0.0750         $0.0063           $281.25
Painting Reserve                           $891.00        $0.0198         $0.0017            $74.25
Paving Maint. & Reserve                  $2,250.00        $0.0500         $0.0042           $187.50

TOTAL                                   $86,834.93        $1.9297         $0.1608         $7.236.24

Per month for AETRIUM                    $7,236.24        $0.1608
</TABLE>

<PAGE>

Assumptions

Saleable Acreage                           3.999
Net Acreage                                3.276
Bonds                                $11,621.56   Annually
Landscape Maint. District               $842.68   Annually
Prop Taxes                                 1.12% of Appraised Value  $1,998,651
Owners Association                      $492.12   Annually
Monthly Rental rate                       $0.49
Monthly NNN Rent                     $22,050.00
Management Fee Percentage                  2.00%
Management Fee                            $0.1176 Annually/sf
Insurance                                 $0.0480 Annually/sf
Utilities:
   Electricity                       BY TENANT    Annually/sf
   Telephone                              $0.0036 Annually/sf
   Alarm                                  $0.0100 Annually/sf
   Landscape Water                        $0.0720 Annually/sf
Security                             BY TENANT    Annually/sf
HVAC Maint.                               $0.0900 Annually/sf
Elevator Maint. & Reserve                 $0.0234 Annually/sf
Landscape                                 $0.0750 Annually/sf
Roof Maint. & Reserve                     $0.0750 Annually/sf
Painting Reserve                          $0.0198 Annually/sf
Paving Maint. & Reserve                   $0.0500 Annually/sf

          [Remaining Exhibits intentionally omitted]<PAGE>

STANDARD LEASE AGREEMENT                                      13,430 square feet
Trammell Crow Company
Dallas Industrial 85-Mod NE                                        Markison Road

                                                               Dallas, TX  75238

                                                                Code:  214211-24

                                 Lease Agreement

     THIS LEASE  AGREEMENT,  made and entered into by and between  CROW-MARKISON
22-27,  LIMITED  PARTNERSHIP   hereinafter  referred  as  "Landlord",   and  WEB
TECHNOLOGY, INC. hereinafter referred to as "Tenant";

                              W I T N E S S E T H:

     1. PREMISES AND TERM. In  consideration  of the obligation of Tenant to pay
rent as herein provided, and in consideration of the other terms, provisions and
covenants  hereof,  Landlord  hereby  demises  and leases to Tenant,  and Tenant
hereby  takes  from  Landlord  certain  premises  situated  within the County of
Dallas,  State of Texas,  more  particularly  described  on EXHIBIT "A" attached
hereto  and  incorporated  herein  by  reference,   together  with  all  rights,
privileges,  easements,  appurtenances, and amenities belonging to or in any way
pertaining to the premises. If the premises consist of the entire leaseable area
of the  building  shown on EXHIBIT "A",  then the  premises  include such entire
building  with all land and  improvements  shown on  EXHIBIT  "A"  (such  entire
building, land and improvements being called the "Project").

     TO HAVE AND TO HOLD the same  for a term  commencing  on the  "commencement
date" as  hereinafter  defined,  and  ending  60  months  thereafter,  provided,
however,  that,  in the event the  "commencement  date" is a date other than the
first day of a calendar month,  said term shall extend for said number of months
in addition to the remainder of the calendar month  following the  "commencement
date".

     A. The  "commencement  date" shall be  ___________________________________.
Tenant  acknowledges  that  it has  inspected  and  accepts  the  premises,  and
specifically  the  buildings  and  improvements  comprising  the same,  in their
present condition as suitable for the purpose for which the premises are leased.
Taking of possession by Tenant shall be deemed  conclusively  to establish  that
said buildings and other improvements are in good and satisfactory  condition as
of  when   possession   was  taken.   Tenant   further   acknowledges   that  no
representations as to the repair of the premises, nor promises to alter, remodel
or improve the premises  have been made by Landlord,  unless such are  expressly
set forth in this lease.  If this lease is executed  before the premises  become
vacant or otherwise available and ready for occupancy,  or if any present tenant
or occupant of the premises holds over, and Landlord  cannot acquire  possession
of the premises prior to said "commencement  date," Landlord shall not be deemed
to be in  default  hereunder,  and  Tenant  agrees to accept  possession  of the
premises at such time as  Landlord is able to tender the same,  which date shall
thenceforth  be deemed the  "commencement  date";  and  Landlord  hereby  waives
payment of rent  covering any period prior to the  tendering  of  possession  to
Tenant hereunder. After the commencement date Tenant shall, upon demand, execute
and deliver to Landlord a letter of acceptance of delivery of the premises.

                                       1
<PAGE>

     [Paragraph A Intentionally Deleted]

     B. In the event this lease  pertains to a building to be  constructed,  the
provisions  of this  subparagraph  B shall  apply in lieu of the  provisions  of
subparagraph  A above and the  "commencement  date" shall be the date upon which
the buildings and other improvements erected and to be erected upon the premises
shall  have  been  substantially  completed  in  accordance  with  the  plan and
specifications  described on Exhibit "B" attached hereto and incorporated herein
by  reference.  Delays  of any  nature  whatsoever  attributable  to the acts or
omissions of Tenant or its employees, agents or contractors,  shall not be cause
for delay of the commencement  date.  Landlord shall notify Tenant in writing as
soon as Landlord deems said buildings and other improvements to be completed and
ready for  occupancy as  aforesaid.  In the event that said  buildings and other
improvements have not in fact been substantially completed as aforesaid,  Tenant
shall  notify  Landlord  in writing  of its  objections.  Landlord  shall have a
reasonable  time after delivery of such notice in which to take such  corrective
action as may be  necessary,  and shall  notify  Tenant in writing as soon as it
deems such corrective action has been completed so that said buildings and other
improvements  are  completed  and ready for  occupancy.  Taking of possession by
Tenant shall be deemed  conclusively  to establish that said buildings and other
improvements have been completed in accordance with the plans and specifications
and  that  the  premises  are in good  and  satisfactory  condition,  as of when
possession was so taken.  Tenant  acknowledges that no representations as to the
repair of the premises have been made by Landlord, unless such are expressly set
forth in this lease. After such  "commencement  date" Tenant shall, upon demand,
execute  and  deliver to  Landlord a letter of  acceptance  of  delivery  of the
premises.  In the event of any  dispute  as to  substantial  completion  or work
performed or required to be performed by Landlord, the certificate of Landlord's
architect or general contractor shall be conclusive,

     2. BASE RENT AND SECURITY DEPOSIT.

     A. Tenant  agrees to pay to  Landlord  rent for the  premises,  in advance,
without demand,  deduction or set off, for the entire term hereof at the rate of
See  Special  Provision  22a  Dollars  ($  *?  ) per  month.  One  such  monthly
installment  plus other monthly charges as set forth in paragraph 2C below shall
be due and payable on the date hereof and a like  monthly  installment  shall be
due and payable on or before the first day of each calendar month succeeding the
commencement  date recited above during the hereby demised term, except that the
rental payment for any fractional  calendar month at the  commencement or end of
the lease period shall be prorated.

     B. In addition  Tenant  agrees to deposit with  Landlord on the date hereof
the sum of Seven Thousand Five and 98/100 Dollars  ($7,005.98),  which sum shall
be held by  Landlord,  without  obligation  for  interest,  as security  for the
performance of Tenant's  covenants and  obligations  under this lease,  it being
expressly  understood  and agreed  that such  deposit  is not an advance  rental
deposit or a measure of Landlord's damages in case of Tenant's default. Upon the
occurrence  of any event of default by Tenant,  Landlord may, from time to time,
without  prejudice to any other remedy  provided  herein or provided by law, use
such fund to the  extent  necessary  to make good any  arrears  of rent or other
payments  due  Landlord  hereunder,  and any other  damage,  injury,  expense or
liability  caused by such event of default;  and Tenant shall pay to Landlord on
demand the amount so applied  in order to restore  the  security  deposit to its
original  amount.  Although the security deposit shall be deemed the property of
Landlord, any remaining balance of such deposit shall be returned by Landlord to
Tenant  at such  time  after  termination  of this  lease  that all of  Tenant's
obligations  under this lease have been  fulfilled.  If, during the term of this
Lease,  Landlord,  in Landlord's sole opinion,  judgment and  discretion,  deems
itself insecure as to the performance or prospect of performance by Tenant as to
any of Tenant's  obligations pursuant to this Lease, Tenant shall be required to
provide  Landlord with an  additional  security  deposit,  in an amount and form
acceptable to Landlord. [Last sentence intentionally deleted.]

                                       2
<PAGE>

     C. Tenant  agrees to pay its  proportionate  share of (i) Taxes  payable by
Landlord  pursuant to Paragraph 3(A) below,  (ii) common  utilities  pursuant to
Paragraph 8 below,  and (iii)  Landlord's  costs of carrying  fire and  extended
coverage insurance on the Project improvements pursuant to Paragraph 9(A) below.
During each month of the term of this lease,  Tenant shall make a monthly escrow
deposit  with  Landlord,  equal to 1/12 of its  proportionate  share of all such
items which will be due and payable for that particular year.  Tenant authorizes
Landlord to use the funds  deposited  with Landlord under this Paragraph 2(C) to
pay such costs.  The initial  monthly  escrow  payments are based upon  Tenant's
proportionate  share of the estimated amounts for the year in question,  and the
monthly  escrow  payments are subject to increase or decrease as  determined  by
Landlord  to  reflect  an  accurate   monthly   escrow  of  Tenant's   estimated
proportionate  share of all such  items.  The escrow  payment  account of Tenant
shall be reconciled  annually.  If the Tenant's  total escrow  payments are less
than Tenant's actual  proportionate share of all such items, Tenant shall pay to
Landlord upon demand the difference;  if the total escrow payments of Tenant are
more than Tenant's actual proportionate share of all such items,  Landlord shall
retain  such  excess and credit it to  Tenant's  next  accruing  escrow  account
payments.  Tenant's  "proportionate share" shall be a fraction, the numerator of
which  shall be the  number  of  leaseable  square  feet of  floor  space in the
premises  and the  denominator  of which shall be the number of leasable  square
feet of the entire  building.  The amount of the initial monthly escrow payments
are as follows:

(1)  Base Rent as set forth in Paragraph 2(A)..........................    $*
(2)  Initial Tax Escrow Payment........................................  $559.58
(3)  Initial Insurance Escrow Payment..................................   $11.19
(4)  Initial Utility charge, Electric: $44.77, Water: $22.38...........   $67.15
(5)  Other, Landscaping: $201.45, Maintenance: $11.19..................  $212.64
(6)  Administrative fee of 10% of items (2) through (5)................  $n/a
                  Monthly Payment Total................................    $*

     3. TAXES.

     A.  Landlord  agrees  to pay  before  they  become  delinquent  all  taxes,
assessments and governmental charges of any kind and nature whatsoever including
without   limitation   assessments  due  to  deed   restrictions   and/or  owner
associations  (collectively  referred to herein as "Taxes") which accrue against
the Project or any part thereof.

                                       3
<PAGE>

     B. If at any time  during the term of this  lease,  the  present  method of
taxation shall be changed so that in lieu of the whole or any part of any taxes,
assessments or governmental  charges levied,  assessed or imposed on real estate
and the  improvements  thereon,  there  shall be levied,  assessed or imposed on
Landlord a capital  levy or other tax directly on the rents  received  therefrom
and/or a franchise  tax,  assessment,  levy or charge  measured by or based,  in
whole or in part,  upon such rents for the  present or any  future  building  or
buildings on the premises, then all such taxes, assessments,  levies or charges,
or the part, thereof so measured or based, shall be deemed to be included within
the term "Taxes" for the purposes hereof.

     C. The  Landlord  shall have the right to employ a tax  consulting  firm to
attempt  to assure a fair tax  burden on the  building  and  grounds  within the
applicable  taxing  jurisdiction.  Tenant shall pay to Landlord upon demand from
time to time, as additional rent, the amount of Tenant's  proportionate share of
the cost of such service.

     D. Any payment to be made pursuant to this  Paragraph 3 with respect to the
calendar year in which this lease commences or terminates shall be prorated.

     4.  LANDLORD'S  REPAIRS.  Landlord  shall at his expense  maintain only the
roof,  foundation  and the  structural  soundness of the  exterior  walls of the
building in good repair,  reasonable wear and tear excepted. Tenant shall repair
and pay for any damage caused by negligence  of Tenant,  or Tenant's  employees,
agents or invitees, or caused by Tenant's default hereunder. The term "walls" as
used herein  shall not include  windows,  glass or plate glass,  doors,  special
store fronts or office entries.  Tenant shall  immediately give Landlord written
notice of defect or need for repairs, after which Landlord shall have reasonable
opportunity  to  repair  same or cure such  defect.  Landlord's  liability  with
respect to any defects, repairs or maintenance for which Landlord is responsible
under any of the  provisions  of this lease shall be limited to the cost of such
repairs or maintenance or the curing of such defect.

     5. TENANT'S REPAIRS.

     A. Tenant  shall at its own cost and expense keep and maintain all parts of
the premises (except those for which Landlord is expressly responsible under the
terms of this lease) in good condition,  promptly  making all necessary  repairs
and replacements,  including but not limited to, windows, glass and plate glass,
doors,  any special  office entry,  interior  walls and finish work,  floors and
floor covering, downspouts,  gutters, heating and air conditioning systems, dock
boards, truck doors, dock bumpers,  paving, plumbing work and fixtures,  termite
and pest extermination,  regular removal of trash and debris,  regular mowing of
any grass, trimming,  weed removal and general landscape maintenance,  including
rail spur areas, keeping the parking areas,  driveways,  alleys and the whole of
the premises in a clean and sanitary  condition,  and maintaining any spur track
servicing the premises (Tenant agrees to sign a joint maintenance agreement with
the  railroad  company  servicing  the  premises,  if  requested by the railroad
company).  Tenant shall at its own cost and expense  repaint  exterior  overhead
doors,  canopies,  entries,  handrails,  gutters, and other exposed parts of the
building which reasonably require periodic  repainting to prevent  deterioration
or to maintain aesthetic standards.

                                       4
<PAGE>

     B. The cost of maintenance  and repair of any common party wall, (any wall,
divider,  partition or any other  structure  separating  the  premises  from any
adjacent  premises  occupied by other tenants) shall be shared equally by Tenant
and the tenant occupying  adjacent  premises.  Tenant shall not damage any party
wall or disturb the integrity and support  provided by any party wall and shall,
at its sole cost and expense,  promptly repair any damage or injury to any party
wall caused by Tenant or its employees, agent or invitees.

     C. In the event the premises  constitute a portion of a multiple  occupancy
building,  Tenant and its  employees,  customers  and  licensees  shall have the
exclusive  right to use the parking areas  designated  on Exhibit "C",  attached
hereto, if any, as may be designated by Landlord in writing,  [previous sentence
intentionally  omitted]  subject to such  reasonable  rules and  regulations  as
Landlord  may from time to time  prescribe  and subject to rights of ingress and
egress  of other  tenants.  Landlord  shall  not be  responsible  for  enforcing
Tenant's exclusive parking rights against any third parties. Parking spaces have
been provided in accordance  with  applicable  local  building  codes and Tenant
agrees not to use more spaces than so provided.

     D. Further, Landlord reserves the right to perform the paving and landscape
maintenance,  exterior  painting  and  common  sewage  line  plumbing  which are
otherwise Tenant's  obligations under subparagraph A above, and Tenant shall, in
lieu of the  obligations  set forth under  subparagraph  A above with respect to
such items,  be liable for its  proportionate  share (as defined in subparagraph
21B) of the cost and  expense of the care for the grounds  around the  building,
including  but not  limited  to,  the mowing of grass,  care of shrubs,  general
landscaping,  maintenance  of parking  areas,  driveways  and  alleys,  exterior
repainting and common sewage line  plumbing;  provided,  however,  that Landlord
shall have the right to require Tenant to pay such other  reasonable  proportion
of said mowing,  shrub care and general  landscaping costs and security services
costs as may be  determined  by  Landlord  in its sole  discretion;  and further
provided  that if Tenant or any other  particular  tenant of the building can be
clearly  identified as being  responsible  for  obstructions  or stoppage of the
common  sanitary sewage line,  then Tenant,  if Tenant is  responsible,  or such
other  responsible  tenant,  shall pay the entire cost thereof,  upon demand, as
additional rent.  Tenant shall pay when due its share,  determined as aforesaid,
of such costs and  expenses  along with the other  tenants  of the  building  to
Landlord  upon  demand,  as  additional  rent,  for the  amount  of its share as
aforesaid of such costs and expenses in the event Landlord  elects to perform or
cause to be performed such work.

     E. In the event the premises  constitute a portion of a multiple  occupancy
building,  Landlord  shall have the right to  coordinate  any  repairs and other
maintenance of any rail tracks  serving or to serve the building,  and if Tenant
uses such rail tracks,  Tenant shall  reimburse  Landlord from time to time upon
demand,  as  additional  rent,  for a share  of the  costs of such  repairs  and
maintenance and any other sums specified in any agreement to which Landlord is a
party  respecting  such tracks,  such share to be a fraction,  the  numerator of
which is the space  contained in the premises,  and the  denominator of which is
the entire space occupied by rail users in the building.

     F.  Tenant  shall,  at its own cost and  expense,  enter  into a  regularly
scheduled   preventative   maintenance/service   contract   with  a  maintenance
contractor for servicing all hot water, heating and air conditioning systems and
equipment within the premises.  The maintenance contractor and the contract must
be approved  by  Landlord.  The  service  contract  must  include  all  services
suggested by the equipment manufacturer within the operation/ maintenance manual
and must become  effective  (and a copy thereof  delivered  to Landlord)  within
thirty (30) days of the date Tenant takes possession of the premises.

                                       5
<PAGE>

     6.  ALTERATIONS.  Tenant  shall  not make  any  alterations,  additions  or
improvements  to the  premises  (including  but not  limited  to roof  and  wall
penetrations) without the prior written consent of Landlord. Tenant may, without
the  consent  of  Landlord,  but at  its  own  cost  and  expense  and in a good
workmanlike manner erect such shelves,  bins, machinery and trade fixtures as it
may deem  advisable,  without  altering  the basic  character of the building or
improvements and without  overloading or damaging such building or improvements,
and in each case complying with all applicable  governmental  laws,  ordinances,
regulations and other requirements. All alterations, additions, improvements and
partitions  erected by Tenant shall be and remain the property of Tenant  during
the term of this lease and Tenant shall,  unless  Landlord  otherwise  elects as
hereinafter  provided,  remove  all  alterations,  additions,  improvements  and
partitions  erected  by  Tenant  and  restore  the  premises  to their  original
condition by the date of termination  of this lease or upon earlier  vacating of
the premises; provided, however, that if Landlord so elects prior to termination
of this  lease or upon  earlier  vacating  of the  premises,  such  alterations,
additions,  improvements and partitions shall become the property of Landlord as
of the  date of  termination  of this  lease  or upon  earlier  vacating  of the
premises  and shall be  delivered  up to the  Landlord  with the  premises.  All
shelves,  bins,  machinery and trade fixtures installed by Tenant may be removed
by Tenant prior to the termination of this lease if Tenant so elects,  and shall
be removed by the date of termination of this lease or upon earlier  vacating of
the premises if required by Landlord; upon such removal Tenant shall restore the
premises to their original condition. All such removals and restoration shall be
accomplished  in  good  workmanlike  manner  so as not  to  damage  the  primary
structure  or  structural  qualities  of the  buildings  and other  improvements
situated on the premises.

     7. SIGNS.

     A. Tenant agrees to have signage program approved by Landlord in accordance
with Landlord's criteria and subject to Landlord's written approval prior to the
commencement date of this lease. The Tenant,  upon vacation of the premises,  or
the removal or alteration of its sign for any reason,  shall be responsible  for
the repair, painting,  and/or replacement of the building facia surface to which
signs are  attached.  Landlord  gives its approval for Tenant to apply  exterior
signage to the  premises  that is  similar in  appearance  to  Tenant's  current
exterior signage at 10520 Plano Road, Suite 104, Dallas, Texas.

     B. Tenant shall not, without  Landlord's prior written consent (i) make any
changes  to or paint the store  front;  or (ii)  install  any  exterior  lights,
decorations or paintings;  or (iii) erect or install any signs,  windows or door
lettering,  placards,  decorations or advertising media of any type which can be
viewed from the exterior of the premises,  excepting only dignified  displays of
customary  type for its display  windows.  All signs,  decorations,  advertising
media,  blinds,  draperies and other window  treatment of bars or other security
installations visible from outside the premises shall conform in all respects to
the  criteria  established  by Landlord for the Project from time to time in the
exercise  of its sole  discretion,  and shall be  subject  to the prior  written
approval of Landlord as to  construction,  method of  attachment,  size,  shape,
height, lighting, color and general appearance.  All signs shall be kept in good
condition  and in proper  operating  order at all times.  Landlord  reserves the
right to  designate a uniform  type of sign for the Project to be  installed  by
Tenant (or, at Landlord's option, by Landlord),  but in any event to be paid for
by Tenant.

                                       6
<PAGE>

     8. UTILITIES.  Landlord agrees to provide at its cost water and electricity
service connections into the premises;  but Tenant shall pay for all water, gas,
heat, light, power, telephone,  sewer, sprinkler charges and other utilities and
services  used on or from the  premises,  together  with any  taxes,  penalties,
surcharges  or the like  pertaining  thereto  and any  maintenance  charges  for
utilities  and shall  furnish all  electric  light bulbs and tubes.  If any such
services  are not  separately  metered to Tenant,  Tenant shall pay a reasonable
proportion as determined by Landlord of all charges  jointly  metered with other
premises.  Landlord shall in no event be liable for any  interruption or failure
of utility services on the premises.

     9. FIRE AND CASUALTY DAMAGE.

     A. Landlord agrees to maintain insurance covering the building of which the
premises  are a part in an amount not less than  eighty  percent  (80%) (or such
greater  percentage  as may be  necessary to comply with the  provisions  of any
co-insurance  clauses of the policy) of the  "replacement  cost" thereof as such
coverage is defined in the Replacement Cost Endorsement to be attached  thereto,
insuring against the perils of Fire, Lightning, Extended Coverage, Vandalism and
Malicious Mischief,  extended by Special Extended Coverage Endorsement to insure
against all other Risks of Direct Physical Loss, such coverages and endorsements
to be as defined,  provided and limited in the standard bureau forms  prescribed
by the  insurance  regulatory  authority for the State in which the premises are
situated for use by insurance  companies  admitted in such state for the writing
of such insurance on risks located within such state.  Subject to the provisions
of subparagraphs  9B and 9D below,  such insurance shall be for the sole benefit
of Landlord and under its sole control.  Tenant  agrees to pay, to Landlord,  as
additional  rental,  Landlord's  cost  of  maintaining  such  insurance  on said
building  (or,  in the event the  premises  constitute  a portion  of a multiple
occupancy   building,   Tenant's  full   proportionate   share  (as  defined  in
subparagraph  21B) of such cost). Said payments shall be made to Landlord within
ten (10) days after presentation to Tenant of Landlord's statement setting forth
the amount due.  Any payment to be made  pursuant to this  subparagraph  A, with
respect to the year in which this lease  commences or terminates  shall bear the
same ratio to the  payment  which would be required to be made for the full year
as that  part of such year  covered  by the term of this  lease  bears to a full
year.

     B. If the  buildings  situated  upon the  premises  should  be  damaged  or
destroyed  by fire,  tornado or other  casualty,  Tenant  shall  give  immediate
written notice thereof to Landlord.

     C. If the buildings  situated upon the premises should be totally destroyed
by fire, tornado or other casualty, or if they should be so damaged thereby that
rebuilding or repairs  cannot in Landlord's  estimation be completed  within two
hundred  (200) days after the date upon which  Landlord is notified by Tenant of
such damage,  this lease shall terminate and the rent shall be abated during the
unexpired  portion of this lease,  effective  upon the date of the occurrence of
such damage.

                                       7
<PAGE>

     D. If the  buildings  situated  upon the premises  should be damaged by any
peril  covered by the  insurance to be provided by Landlord  under  subparagraph
9(A) above, but only to such extent that rebuilding or repairs can in Landlord's
estimation be completed  within two hundred (200) days after the date upon which
Landlord is notified by Tenant of such damage,  this lease shall not  terminate,
and  Landlord  shall  at its  sole  cost  and  expense  thereupon  proceed  with
reasonable  diligence to rebuild and repair such buildings to substantially  the
condition in which they existed prior to such damage, except that Landlord shall
not be  required  to  rebuild,  repair or  replace  any part of the  partitions,
fixtures,  additions  and other  improvements  which may have been placed in, or
about the premises by Tenant.  and except that Tenant shall pay to Landlord upon
demand any amount by which  Landlord's  cost of such  rebuilding,  repair and/or
replacement  exceeds net insurance  proceeds paid to Landlord in connection with
such  damage.  [previous  sentence  intentionally  omitted] If the  premises are
untenantable  in whole  or in part  following  such  damage,  the  rent  payable
hereunder during the period in which they are  untenantable  shall be reduced to
such extent as may be fair and reasonable under all of the circumstances. In the
event that Landlord  should fail to complete such repairs and rebuilding  within
two hundred (200) days after the date upon which  Landlord is notified by Tenant
of such  damage,  Tenant may at its option  terminate  this lease by  delivering
written  notice  of  termination  to  Landlord  as  Tenant's  exclusive  remedy,
whereupon all rights and obligations hereunder shall cease and terminate.

     E. Notwithstanding anything herein to the contrary, in the event the holder
of any indebtedness secured by a mortgage or deed of trust covering the premises
requires  that the  insurance  proceeds  be applied to such  indebtedness,  then
Landlord  shall have the right to  terminate  this lease by  delivering  written
notice of termination to Tenant within fifteen (15) days after such  requirement
is made by any such holder, whereupon all rights and obligations hereunder shall
cease and terminate.

     F.  Anything in this lease to the  contrary  notwithstanding,  Landlord and
Tenant  hereby  waive and  release  each other of and from any and all rights of
recovery,  claim,  action or cause of action,  against each other, their agents,
officers and  employees,  for any loss or damage that may occur to the premises,
improvements  to the  building  of which the  premises  are a part,  or personal
property  (building  contents)  within  the  building,  by reason of fire or the
elements  regardless  of cause or origin,  including  negligence  of Landlord or
Tenant and their agents,  officers and employees,  but only to the extent of the
insurance  proceeds  payable  under  the  policies  of  insurance  covering  the
property.  Because this  subparagraph  will preclude the assignment of any claim
mentioned in it by way of subrogation (or otherwise) to an insurance company (or
any other  person),  each party to this lease  agrees  immediately  to give each
insurance  company which has issued to it policies of fire and extended coverage
insurance,  written notice of the terms of the mutual waivers  contained in this
subparagraph,   and  to  have  the  insurance  policies  property  endorsed,  if
necessary,  to prevent the invalidation of the insurance  coverages by reason of
the mutual waivers contained in this subparagraph.

     10.  LIABILITY.  Landlord  shall  not  be  liable  to  Tenant  or  Tenant's
employees,  agents, patrons or visitors, or to any other person whomsoever,  for
any injury to person or damage to property on or about the  premises,  resulting
from and/or  caused in part or whole by the  negligence or misconduct of Tenant,
its  agents,  servants  or  employees  of any  other  person  entering  upon the
premises,  or caused by the buildings and  improvements  located on the premises
becoming out of repair,  or caused by leakage of gas, oil,  water or steam or by
electricity  emanating from the premises,  or due to any cause  whatsoever,  and
Tenant hereby  covenants and agrees that it will at all times indemnify and hold
safe and harmless the property,  the Landlord  (including without limitation the
trustee  and  beneficiaries  if  Landlord  is a trust),  Landlord's  agents  and
employees from any loss, liability,  claims, suits, costs,  expenses,  including
without limitation attorney's fees and damages,  both real and alleged,  arising
out of any such damage or injury; except injury to persons or damage to property
the sole cause of which is the negligence of Landlord or the failure of Landlord
to repair any part of the  premises  which  Landlord is  obligated to repair and
maintain  hereunder within a reasonable time after the receipt of written notice
from Tenant of needed repairs.  Tenant shall procure and maintain throughout the
term of this  lease a policy  or  policies  of  insurance,  at its sole cost and
expense,  insuring  both  Landlord  and Tenant  against all  claims,  demands or
actions  arising  out of or in  connection  with:  (i) the  premises;  (ii)  the
condition of the premises;  (iii) Tenant's operations in and maintenance and use
of the premises;  and (iv)  Tenant's  liability  assumed  under this lease,  the
limits of such policy or policies to be in the amount of not less than  $500,000
per  occurrence in respect of injury to persons  (including  death),  and in the
amount of not less than $100,000 per occurrence in respect of property damage or
destruction,  including loss of use thereof, All such policies shall be procured
by  Tenant  from  reaponsible  insurance  companies  satisfactory  to  Landlord.
Certified copies of such policies,  together with receipt  evidencing payment of
premiums therefor, shall be delivered to Landlord prior to the Commencement date
of this lease.  Not less than fifteen (15) days prior to the expiration  date of
any such policies,  certified copies of the renewals thereof (bearing  notations
evidencing the payment of renewal premiums shall be delivered to Landlord.  Such
policies  shall  further  provide  that not less than thirty  (30) days  written
notice shall be given to Landlord before such policy may be cancelled or changed
to reduce insurance provided thereby.

                                       8
<PAGE>

     11.  USE.  The  demised  premises  shall be used  only for the  purpose  of
receiving, storing, shipping and selling (other than retail) products, materials
and  merchandise  made and/or  distributed  by Tenant and for such other  lawful
purposes  as may be  incidental  thereto.  Outside  storage,  including  without
limitation,  trucks and other vehicles,  is prohibited  without Landlord's prior
written  consent.  Tenant  shall at its own cost and expense  obtain any and all
licenses and permits  necessary  for any such use.  Tenant shall comply with all
governmental  laws,  ordinances  and  regulations  applicable  to the use of the
premises,  and shall promptly comply with all governmental orders and directives
for the  correction,  prevention  and  abatement  of  nuisances  in or upon,  or
connected  with,  the premises,  all at Tenant's sole expense.  Tenant shall not
permit any  objectionable  or  unpleasant  odors,  smoke,  dust,  gas,  noise or
vibrations to emanate from the  premises,  nor take any other action which would
constitute  a nuisance  or would  disturb or endanger  any other  tenants of the
building in which the premises are situated or unreasonably interfere with their
use of their  respective  premises.  Without  Landlord's  prior written consent,
Tenant shall not receive,  store or  otherwise  handle any product,  material or
merchandise which is explosive or highly inflammable, Tenant will not permit the
premises  to be  used  for  any  purpose  or in any  manner  (including  without
limitation any method of storage) which would render the insurance  thereon void
or the  insurance  risk more  hazardous or cause the State Board of Insurance or
other insurance  authority to disallow any sprinkler credits. If any increase in
the fire and  extended  coverage  insurance  premiums  paid by Landlord or other
Tenants for the  building in which Tenant  occupies  space is caused by Tenant's
use and occupancy of the premises,  or if Tenant vacates the premises and causes
an increase in such  premiums,  then Tenant shall pay as  additional  rental the
amount of such increase to Landlord.

                                       9
<PAGE>

     12. INSPECTION.  Landlord and Landlord's agents and  representatives  shall
have the right to enter and inspect the premises at any  reasonable  time during
business hours, for the purpose of ascertaining the condition of the premises or
in order  to make  such  repairs  as may be  required  or  permitted  to made by
Landlord under the terms of this lease. During the period that is six (6) months
prior  to the  end of the  term  hereof,  Landlord  and  Landlord's  agents  and
representatives  shall have the right to enter the  premises  at any  reasonable
time during  business  hours for the purpose of showing the  premises  and shall
give the right to erect on the premises a suitable sign  indicating the premises
are available. Tenant shall give written notice to Landlord at least thirty (30)
days prior to vacating the premises and shall  arrange to meet with Landlord for
a joint  inspection of the premises prior to vacating.  In the event of Tenant's
failure  to give such  notice  or  arrange  such  joint  inspection,  Landlord's
inspection  at or after  Tenant's  vacating the premises  shall be  conclusively
deemed correct for purposes of determining  Tenant's  responsibility for repairs
and restoration.

     13. ASSIGNMENT AND SUBLETTING.

     A. Tenant shall not have the right to assign, sublet,  transfer or encumber
this  lease,  or any  interest  therein,  without the prior  written  consent of
Landlord.  Any attempted  assignment,  subletting,  transfer or  encumbrance  by
Tenant in violation of the terms and covenants of this Paragraph  shall be void.
All cash or other  proceeds  of any  assignment,  such  proceeds  as exceed  the
rentals  called for hereunder in the case of a subletting  and all cash or other
proceeds of any other  transfer of Tenant's  interest in ths lease shall be paid
to Landlord, whether such assignment,  subletting or other transfer is consented
to by Landlord or not, unless  Landlord  agrees to the contrary in writing,  and
Tenant  hereby  assigns  all  rights it might  have or ever  acquire in any such
proceeds to Landlord.  Any assignment,  subletting or other transfer of Tenant's
interest  in this  lease  shall be for an amount  equal to the then fair  market
value of such interest.  These  covenants shall run with the land and shall bind
Tenant and Tenant's heirs, executors, administrators,  personal representatives,
representatives  in any  bankruptcy  proceeding,  successors  and  assigns.  Any
assignee,  sublessee or transferee of Tenant's  interest in this lease (all such
assignees,   sublessees  and  transferees  being  hereinafter   referred  to  as
"successors"), by assuming Tenant's obligations hereunder shall assume liability
to  Landlord  for all  amounts  paid to  persons  other  than  Landlord  by such
successors in  contravention  of this  Paragraph.  No assignment,  subletting or
other transfer, whether consented to by Landlord or not, shall relieve Tenant of
its  liability  hereunder.  Upon the  occurrence  of an  "event of  default"  as
hereinafter  defined,  if the premises or any part thereof are then  assigned or
sublet, Landlord, in addition to any other remedies herein provided, or provided
by law, may at its option  collect  directly from such assignee or subtenant all
rents  becoming due to Tenant under such  assignment  or sublease and apply such
rent  against  any sums  due to  Landlord  from  Tenant  hereunder,  and no such
collection  shall be construed  to  constitute a novation or a release of Tenant
from the further performance of Tenant's obligations hereunder.

     B. If this  Lease is  assigned  to any  person  or entity  pursuant  to the
provisions of the Bankruptcy  Code, 11 U.S.C. ss. 101 et. seq., (the "Bankruptcy
Code"),  any and all monies or ther  considerations  payable or  otherwise to be
delivered  in  connection  with such  assignment  shall be paid or  delivered to
Landlord,  shall be and remain the exclusive  property of Landlord and shall not
constitute  property of Tenant or of the estate of Tenant  within the meaning of
the  Bankruptcy  Code. Any and all monies or other  considerations  constituting
Landlord's  property  under the  preceding  sentence  not paid or  delivered  to
Landlord shall be held in trust for the benefit of Landlord and be promptly paid
or delivered to Landlord.

                                       10
<PAGE>

     C. Any  person or entity to which this lease is  assigned  pursuant  to the
provisions  of the  Bankruptcy  Code,  11 U.S.C.ss.  et. seq.,  shall be deemed,
without  further act or deed,  to have  assumed all of the  obligations  arising
under this  Lease on and after the date of such  assignment.  Any such  assignee
shall upon demand  execute and deliver to Landlord an  instrument  of confirming
such assumption.

     14. CONDEMNATION.

     A. If the whole or any  substantial  part as  determined by Landlord of the
premises should be taken for any public or quasi-public  use under  governmental
law,  ordinance  or  regulation,  or by right of eminent  domain,  or by private
purchase in lieu thereof and the taking would  prevent or  materially  interfere
with the use of the premises  for the purpose for which they are being used,  as
determined by Landlord  this lease shall  terminate and the rent shall be abated
during the unexpired  portion of this lease,  effective when the physical taking
of said premises shall occur.

     B. If part of the  premises  shall be taken for any public or  quasi-public
use under any governmental law, ordinance or regulation,  or by right of eminent
domain, or by private purchase in lieu thereof, and this lease is not terminated
as provided in the  subparagraph  above,  this lease shall not terminate but the
rent  payable  hereunder  during the  unexpired  portion of this lease  shall be
reduced  to  such  extent  as  may  be  fair  and  reasonable  under  all of the
circumstances.

     C. All compensation awarded for any taking (or the proceeds of private sale
in lieu thereof) of the Project,  or any part thereof,  shall be the property of
Landlord and Tenant  hereby  assigns its interest in any such award to Landlord;
provided,  however,  Landlord shall have no interest in any award made to Tenant
for loss of business or for the taking of Tenant's  fixtures and improvements if
a separate award for such items is made to Tenant.

     15. HOLDING OVER. Tenant will, at the termination of this lease by lapse of
time or  otherwise,  yield up immediate  possession to Landlord with all repairs
and maintenance required herein to be performed by Tenant completed. If Landlord
agrees in writing that Tenant may hold over after the  expiration or termination
of this lease, unless the parties hereto otherwise agree in writing on the terms
of such holding over,  the hold over tenancy shall be subject to  termination by
Landlord at any time upon not less than five (5) days advance written notice, or
by Tenant at any time upon not less than thirty (30) days  advance  notice,  and
all of the other terms and  provisions of this lease shall be applicable  during
that  period,  except  that  Tenant  shall pay  Landlord  from time to time upon
demand, as rental for the period of any hold over, an amount equal to double the
rent in effect on the termination  date,  computed on a daily basis for each day
of the hold over  period.  No holding  over by Tenant,  whether  with or without
consent of  Landlord  shall  operate to extend  this lease  except as  otherwise
expressly provided.  The preceding  provisions of this paragraph 14 shall not be
construed consent for Tenant to hold over.

                                       11
<PAGE>

     16. QUIET  ENJOYMENT.  Landlord  covenants that it now has, or will acquire
before Tenant takes possession of the premises, good title to the premises, free
and clear of all liens and  encumbrances,  excepting  only the lien for  current
taxes not yet due,  such  mortgage or mortgages as are permitted by the terms of
this  lease,  zoning  ordinances  and other  building  and fire  ordinances  and
governmental  regulations  relating to the use of such property,  and easements,
restrictions  and other  conditions  of  record.  In the event  this  lease is a
sublease,  then Tenant agrees to take the premises  subject to the provisions of
the prior leases.  Landlord  represents and warrants that it has full rights and
authority  to enter  into this  lease and that  Tenant,  upon  paying the rental
herein set forth and  performing its other  covenants and agreements  herein set
forth,  shall  peaceably and quietly  have,  hold and enjoy the premises for the
term hereof without hindrance or molestation from Landlord, subject to the terms
and provisions of this lease,

     17. EVENTS OF DEFAULT. The following events shall be deemed to be events of
default by Tenant under this lease:

     A. Tenant  shall fail to pay any  installment  of the rent herein  reserved
when due, or any other payment or reimbursement to Landlord required herein when
due, and such failure shall continue for a period of five (5) days from the date
such payment was due.

     B. The Tenant or any guarantor of the Tenant's obligations  hereunder shall
generally  not pay its debts as they  become due or shall  admit in writing  its
inability to pay its debts or shall make a general assignment for the benefit of
creditors;  or the  Tenant  or any  such  guarantor  shall  commence  any  case,
proceeding  or other action  seeking to have an order for relief  entered on its
behalf as a debtor or to  adjudicate  it a  bankrupt  or  insolvent,  or seeking
reorganization, arrangement, adjustment, liquidation, dissolution or composition
of  it  or  its  debts  under  any  law  relating  to  bankruptcy,   insolvency,
reorganization  or relief of  debtors  or  seeking  appointment  of a  receiver,
trustee,  custodian  or  other  similar  official  for it or  for  all or of any
substantial part of its property; or the Tenant or any such guarantor shall take
any action to  authorize  or in  contemplation  of any of the  actions set forth
above in this paragraph; or

     C. Any case, proceeding or other action against the Tenant or any guarantor
of the Tenant's  obligations  hereunder  shall be  commenced  seeking to have an
order for relief entered  against it as debtor or to adjudicate it a bankrupt or
insolvent,  or seeking  reorganization,  arrangement,  adjustment,  liquidation,
dissolution  or  composition  of it or its  debts  under  any  law  relating  to
bankruptcy,  insolvency,   reorganization  or  relief  of  debtors,  or  seeking
appointment of a receiver,  trustee,  custodian or other similar official for it
or for all or any substantial part of its property, and such case, proceeding or
other action (i) results in the entry of an order for relief against it which it
is not fully stayed  within seven  business days after the entry thereof or (ii)
shall remain undismissed for a period of 45 days.

     D. A receiver or trustee shall be appointed for all or substantially all of
the assets of Tenant.

     E. Tenant shall generally not pay its debts as such debts become due.

     F.  Tenant  shall  vacate all or a  substantial  portion  of the  premises,
whether or not Tenant is in default of the rental payments due under this lease.

                                       12
<PAGE>

     G. Tenant  shall fail to  discharge  any lien  placed upon the  premises in
violation of Paragraph 20 hereof  within twenty (20) days after any such lien or
encumbrance is filed against the premises.

     H. Tenant shall fail to comply with any term, provision or covenant of this
lease (other than the foregoing in this  Paragraph  17), and shall not cure such
failure within twenty (20) days after written notice thereof to Tenant.

     I. Tenant  shall fail to  continuously  operate its business at the Demised
Premises for the permitted use set forth in paragraph 11,  whether or not Tenant
is in default of the rental payments due under this Lease,

     18. REMEDIES.

     A. Upon the  occurrence  of any of such  events  of  default  described  in
Paragraph 17 hereof, Landlord shall have the option to pursue any one or more of
the following remedies without any notice or demand whatsoever;

          (1)  Terminate  this lease,  in which event Tenant  shall  immediately
     surrender the premises to Landlord,  and if Tenant fails so to do, Landlord
     may, without prejudice to any other remedy which it may have for possession
     or arrearages in rent,  enter upon and take  possession of the premises and
     expel or remove  Tenant  and any other  person  who may be  occupying  such
     premises or any part thereof,  by force if necessary,  without being liable
     for prosecution or any claim of damages therefor.

          (2) Enter upon and take possession of the premises and expel or remove
     Tenant and any other person who maybe  occupying  such premises or any part
     thereof, by force if necessary, without being liable for prosecution or any
     claim for damages  therefor,  and relet the  premises  and receive the rent
     therefor.

          (3) Enter upon the  premises,  by force if  necessary,  without  being
     liable for prosecution or any claim for damages  therefor,  and do whatever
     Tenant is obligated to do under the terms of this lease;  and Tenant agrees
     to reimburse  Landlord on demand for any expenses  which Landlord may incur
     in thus effecting  compliance with Tenant's  obligations  under this lease,
     and Tenant further agrees that Landlord shall not be liable for any damages
     resulting to the Tenant from such action,  whether caused by the negligence
     of Landlord or otherwise.

          (4) Alter all locks and other security devices at the premises without
     terminating  this  lease.

     B. In the  event  Landlord  may  elect to regain possession of the
premises by a forcible detainer proceeding, Tenant hereby specifically
waives any  statutory  notice which may be required  prior to such
proceeding,  and agrees that Landlord's execution of this lease is, in part,
consideration for this waiver.

                                       13
<PAGE>

     C. In the event Tenant fails to pay any  installment  of rent  hereunder as
and when such installment is due, to help defray the additional cost to Landlord
for processing  such late payments Tenant shall pay to Landlord on demand a late
charge in an amount  equal to five  percent  (5%) of such  installment;  and the
failure to pay such amount within ten (10) days after demand  therefor  shall be
an event of default  hereunder.  The  provision for such late charge shall be in
addition to all of Landlord's other rights and remedies  hereunder or at law and
shall not be construed as liquidated damages or as limiting  Landlord's remedies
in any manner.

     D. In the event Tenant's check,  given to Landlord in payment,  is returned
by the bank for  non-payment,  Tenant  agrees to pay all  expenses  incurred  by
Landlord as a result thereof.

     E.  Exercise by Landlord of any one or more remedies  hereunder  granted or
otherwise  available shall not be deemed to be an acceptance of surrender of the
premises  by Tenant,  whether by  agreement  or by  operation  of law,  it being
understood that such surrender can be effected only by the written  agreement of
Landlord and Tenant.  No such alteration of locks or other security  devices and
no removal or other exercise of dominion by Landlord over the property of Tenant
or  others  at the  premises  shall  be  deemed  unauthorized  or  constitute  a
conversion,  Tenant  hereby  consenting,  after  any  event of  default,  to the
aforesaid  exercise of dominion over Tenant's property within the premises.  All
claims  for  damages  by  reason of such  re-entry  and/or  repossession  and/or
alteration  of locks or other  security  devices are hereby  waived,  as are all
claims  for  damages  by  reason  of any  distress  warrant,  forcible  detainer
proceedings,  sequestration  proceedings or other legal  process.  Tenant agrees
that any re-entry by Landlord  may be pursuant to judgment  obtained in forcible
detainer proceedings or other legal proceedings or without the necessity for any
legal  proceedings,  as Landlord may elect,  and Landlord shall not be liable in
trespass or otherwise.

     F. In the  event  Landlord  elects to  terminate  the lease by reason of an
event of default, then notwithstanding such termination,  Tenant shall be liable
for and shall pay to Landlord,  at the address  specified for notice to Landlord
herein,  the sum of all  rental and other  indebtedness  accrued to date of such
termination,  plus, as damages, an amount equal to the greater of (i) [preceding
words  intentionally  omitted]  the total  rental  hereunder  for the  remaining
portion of the lease term (had such term not been  terminated by Landlord  prior
to the date of  expiration  stated in  Paragraph  1). and (ii) the then  present
value of the then fair rental value of the premises for such period.  [preceding
words intentionally omitted.]

     G. In the event that  Landlord  elects to repossess  the  premises  without
terminating  the lease,  or in the event Landlord elects to terminate the Lease,
then Tenant, at Landlord's option shall be liable for and shall pay to Landlord,
at the address  specified  for notice to Landlord  herein,  all rental and other
indebtedness  accrued to the date of such repossession,  plus rental required to
be paid by Tenant to Landlord  during the  remainder of the lease term until the
date of  expiration  of the term as stated in Paragraph 1 diminished  by any net
sums thereafter  received by Landlord through reletting the premises during said
period  (after   deducting   expenses   incurred  by  Landlord  as  provided  in
subparagraph 18(G) below). In no event shall Tenant be entitled to any excess of
any rental  obtained by  reletting  over and above the rental  herein  reserved.
Actions to collect amounts due by Tenant to Landlord under this subparagraph may
be brought from time to time, on one or more occasions, without the necessity of
Landlord's waiting until expiration of the lease term.

                                       14
<PAGE>

     H. In case of any event of default or breach by Tenant,  or  threatened  or
anticipatory breach or default, Tenant shall also be liable for and shall pay to
Landlord, at the address specified for notice to Landlord herein, in addition to
any sum  provided  to be paid  above,  brokers'  fees  incurred  by  Landlord in
connection  with  reletting the whole or any part of the premises;  the costs of
removing  and  storing  Tenant's  or other  occupant's  property;  the  costs of
repairing, altering, remodeling or otherwise putting the premises into condition
acceptable to a new tenant or tenants;  and all reasonable  expenses incurred by
Landlord in enforcing or defending  Landlord's rights and/or remedies  including
reasonable attorney's fees which shall be not less than fifteen percent (15%) of
all sums then owing by Tenant to Landlord whether suit is actually filed or not.

     I. In the event of termination or repossession of the premises for an event
of default,  Landlord  shall not have any  obligations to relet or to attempt to
relet  the  premises,  or  any  portion  thereof,  or to  collect  rental  after
reletting;  and in the event of  reletting,  Landlord may relet the whole or any
portions  of the  premises  for any  period  to any  tenant  and for any use and
purpose.

     J. If Tenant should fail to make any payment or cure any default  hereunder
within the time herein permitted,  Landlord,  without being under any obligation
to do so and without thereby waiving such default,  may make such payment and/or
remedy such other  default for the account of Tenant (and enter the premises for
such,  purpose),  and thereupon Tenant shall be obligated to, and hereby agrees,
to pay Landlord,  upon demand, all costs, expenses and disbursements  (including
reasonable attorney's fees) incurred by Landlord in taking such remedial action.

     K. In the event of any default by Landlord, Tenant's exclusive remedy shall
be an  actions  for  damages  (Tenant  hereby  waiving  the  benefit of any laws
granting  it a liens  upon  the  property  of  Landlord  and/or  upon  rent  due
Landlord), but prior to any such action Tenant will give Landlord written notice
specifying  such default with  particularity,  and Landlord shall thereupon have
thirty days in which to cure any such default.  Unless and until  Landlord fails
to so cure any default  after such  notice,  Tenant shall not have any remedy or
cause of action by reason thereof. All obligations of Landlord hereunder will be
construed as covenants, not conditions; and all such obligations will be binding
upon Landlord  only during the period of its  possession of the premises and not
thereafter. The term "Landlord" shall mean only the owner, for the time being of
the premises,  and in the event of the transfer by such owner of its interest in
the premises,  such owner shall  thereupon be released and  discharged  from all
covenants  and  obligations  of  the  Landlord  thereafter  accruing,  but  such
covenants and  obligations  shall be binding during the lease term upon each new
owner for the  duration of such  owner's  ownership.  Notwithstanding  any other
provisions hereof,  Landlord shall not have any personal liability hereunder. In
the event of any breach or default by Landlord in any term or  provision of this
lease,  Tenant  agrees to look  solely to the equity or  interest  then owned by
Landlord in the premises; however, in no event, shall any deficiency judgment or
any money judgment of any kind be sought or obtained against any party Landlord.

                                       15
<PAGE>

     L. In the event that Landlord  shall have taken  possession of the premises
pursuant to the authority  herein  granted then Landlord shall have the right to
keep in  place  and use all of the  furniture,  fixtures  and  equipment  at the
premises,  including  that  which is owned by or  leased  to Tenant at all times
prior to any  foreclosure  thereon by  Landlord or  repossession  thereof by any
lessor  thereof or third party having a lien thereon.  Landlord  shall also have
the right to remove from such  premises  (without  the  necessity of obtaining a
distress  warrant,  writ of  sequestration  or other legal  process)  all or any
portions of such  furniture,  fixtures,  equipment  and other  property  located
thereon and to place same in storage at any premises  within the County in which
the premises is located;  and in such event,  Tenant shall be liable to Landlord
for costs  incurred by Landlord in  connection  with such  removal and  storage.
Landlord  shall  also  have the  right to  relinquish  possession  of all or any
portion of such furniture,  fixtures, equipment and other property to any person
("Claimant")  claiming  to be  entitled to  possession  thereof who  presents to
Landlord a copy of any  instrument  represented  to Landlord by Claimant to have
been executed by Tenant (or any  predecessor  of Tenant)  granting  Claimant the
right  under  various  circumstances  to  take  possession  of  such  furniture,
fixtures,  equipment  or other  property,  without the  necessity on the part of
Landlord to inquire into the authenticity of said  instrument's copy of Tenant's
or  Tenant's  Predecessor's  signature  thereon and  without  the  necessity  of
Landlord making any nature of investigation or inquiry as to the validity of the
factual or legal basis upon which Claimant purports to act; and Tenant agrees to
indemnify and hold Landlord  harmless from all cost,  expense,  loss, damage and
liability  incident to  Landlord's  relinquishment  of  possession of all or any
portion of such  furniture,  fixtures,  equipment or other property to Claimant.
The rights of Landlord  herein  stated shall be in addition to any and all other
rights which Landlord has or may hereafter have at law or in equity;  and Tenant
stipulates and agrees that the rights herein granted  Landlord are  commercially
reasonable.

     M.  Notwithstanding  anything  in this Lease to the  contrary,  all amounts
payable by Tenant to or on behalf of Landlord  under this Lease,  whether or not
expressly denominated as rent, shall constitute rent for the purposes of section
502(b)(7) of the Bankruptcy Code, 11 U.S.C.ss. 502(b)(7).

     N. This is a contract  under which  applicable  law excuses  Landlord  from
accepting  performance  from (or rendering  performance to) any person or entity
other than Tenant  within the meaning of sections  365(c) and  365(e)(2)  of the
Bankruptcy Code, 11 U.S.C.ss.ss. 365(c), 365(e)(2).

     O. If this  Lease is  assigned  to any  person  or entity  pursuant  to the
provisions of the Bankruptcy  Code, 11 U.S.C.  ss. 101 et seq., (the "Bankruptcy
Code"),  any and all monies or other  considerations  payable or otherwise to be
delivered  in  connection  with such  assignment  shall be paid or  delivered to
Landlord,  shall be and remain the exclusive  property of Landlord and shall not
constitute  property of Tenant or of the estate of Tenant  within the meaning of
the  Bankruptcy  Code.  Any  and  all  monies  or  considerations   constituting
Landlord's  property  under the  preceding  sentence  not paid or  delivered  to
Landlord shall be held in trust for the benefit of Landlord and be promptly paid
or delivered to Landlord.

     P. Any  person or entity to which this lease is  assigned  pursuant  to the
provisions of the Bankruptcy  Code, 11 U.S.C.  ss. 101 et seq., shall be deemed,
without  further act or deed,  to have  assumed all of the  obligations  arising
under this  Lease on and after the date of such  assignment.  Any such  assignee
shall upon demand execute and deliver to Landlord an instrument  confirming such
assumption.

                                       16
<PAGE>

     19.  MORTGAGES.  Tenant  accepts this lease subject and  subordinate to any
mortgage(s) and/or deed(s) of trust now or at any time hereafter  constituting a
lien or charge upon the premises or the improvements situated thereon, provided,
however, that if the mortgagee,  trustee, or holder of any such mortgage or deed
of trust  elects to have  Tenant's  interest in this lease  superior to any such
instrument,  then by notice to Tenant  from such  mortgagee,  trustee or holder,
this  lease  shall be deemed  superior  to such  lien,  whether  this  lease was
executed  before or after said  mortgage or deed of trust.  Tenant  shall at any
time hereafter on demand execute any  instruments,  releases or other  documents
which may be  required  by any  mortgagee  for the  purpose  of  subjecting  and
subordinating this lease to the lien of any such mortgage.

     20. MECHANIC'S LIENS AND TENANT'S PERSONAL PROPERTY TAXES.

     A. Tenant shall have no authority,  express or implied,  to create or place
any lien or encumbrance of any kind or nature  whatsoever upon, or in any manner
to bind,  the  interest of  Landlord or Tenant in the  premises or to charge the
rentals  payable  hereunder  for any claim in favor of any person  dealing  with
Tenant,  including  those who may  furnish  materials  or perform  labor for any
construction or repairs.  Tenant  covenants and agrees that it will pay or cause
to be paid all sums  legally  due and  payable  by it on  account  of any  labor
performed or materials  furnished in connection  with any work  performed on the
premises on which any lien is or can be validly and legally asserted against its
leasehold interest in the premises or the improvements  thereon and that it will
save and hold Landlord  harmless from any and all loss, cost or expense based on
or arising  out of asserted  claims or liens  against  the  leasehold  estate or
against the right,  title and  interest of the Landlord in the premises or under
the terms of this lease. Tenant agrees to give Landlord immediate written notice
of the placing of any lien or encumbrance against the premises.

     B. Tenant shall be liable for all taxes levied or assessed against personal
property,  furniture or fixtures  placed by Tenant in the premises.  If any such
taxes for which  Tenant is liable are levied or  assessed  against  Landlord  or
Landlord's  property  and if Landlord  elects to pay the same or if the assessed
value of  Landlord's  property is increased  by inclusion of personal  property,
furniture or fixtures  placed by Tenant in the premises,  and Landlord elects to
pay the taxes based on such  increase,  Tenant shall pay to Landlord upon demand
that part of such taxes.

     21. MISCELLANEOUS

     A. Words of any gender  used in this lease shall be held and  construed  to
include any other  gender,  and words in the  singular  number  shall be held to
include the plural, unless the context otherwise requires.

     B. In the event the premises  constitute a portion of a multiple  occupancy
building,  Tenant's  "proportionate  share", as used in this lease, shall mean a
fraction,  the numerator of which is the space contained in the premises and the
denominator of which is the entire space contained in the building.

                                       17
<PAGE>

     C. The terms,  provisions  and covenants and  conditions  contained in this
lease shall apply to, inure to the benefit of, and be binding upon,  the parties
hereto and upon their respective heirs,  legal  representatives,  successors and
permitted assigns, except as otherwise herein expressly provided. Landlord shall
have the right to  transfer  and  assigns,  in whole or in part,  its rights and
obligations  in the building  and  property  that are the subject of this lease.
Each party agrees to furnish to the other,  promptly  upon  demand,  a corporate
resolution,  proof  of due  authorization  by  partners,  or  other  appropriate
documentation  evidencing  the due  authorization  of such  party to enter  this
lease.

     D. The captions  inserted in this lease are for convenience  only and in no
way define,  limit or otherwise  describe the scope or intent of this lease,  or
any provision hereof, or in any way affect the interpretation of this lease.

     E. Tenant  agrees  from time to time within ten (10) days after  request of
Landlord,  to deliver to Landlord,  or Landlord's  designee,  a  Certificate  of
Occupancy and an estoppel  certificate  stating that this lease is in full force
and effect,  the date to which rent has been paid,  the  unexpired  term of this
lease and such other  matters  pertaining  to this lease as may be  requested by
Landlord.  It is understood and agreed that Tenant's  obligation to furnish such
estoppel  certificates  in  a  timely  fashion  is  a  material  inducement  for
Landlord's execution of this lease.

     F.  This  lease  may  not be  altered,  changed  or  amended  except  by an
instrument in writing signed by both parties hereto.

     G. This Lease  constitutes  the entire  understanding  and agreement of the
Landlord  and Tenant  with  respect to the  subject  matter of this  Lease,  and
contains all of the covenants and agreements of Landlord and Tenant with respect
thereto.   Landlord  and  Tenant  each  acknowledge  that  no   representations,
inducements, promises or agreements, oral or written, have been made by Landlord
or Tenant,  or anyone  acting on behalf of  Landlord  or  Tenant,  which are not
contained  herein,  and  any  prior  agreements,   promises,   negotiations,  or
representations not expressly set forth in this Lease are of no force or effect.

     H. All  obligations  of  Tenant  hereunder  not fully  performed  as of the
expiration  or earlier  termination  of the term of this lease shall survive the
expiration  or  earlier  termination  of  the  term  hereof,  including  without
limitation all payment  obligations  with respect to taxes and insurance and all
obligations  concerning  the condition of the premises.  Upon the  expiration or
earlier  termination  of the term  hereof,  and  prior to  Tenant  vacating  the
premises,  Tenant  shall pay to  Landlord  any amount  reasonably  estimated  by
Landlord as necessary to put the  premises,  including  without  limitation  all
heating and air conditioning  systems and equipment  therein,  in good condition
and repair.  Tenant shall also, prior to vacating the premises,  pay to Landlord
the amount, as estimated by Landlord,  of Tenant's obligation hereunder for real
estate taxes and  insurance  premiums for the year in which the lease expires or
terminates.  All such amounts  shall be used and held by Landlord for payment of
such  obligations  of  Tenant  hereunder,  with  Tenant  being  liable  for  any
additional  costs  therefor  upon demand by  Landlord,  or with any excess to be
returned to Tenant after all such obligations have been determined and satisfied
as the case may be. Any  security  deposit  held by  Landlord  shall be credited
against the amount payable by Tenant under this Paragraph 21(H).

                                       18
<PAGE>

     I. If any  clause  or  provision  of this  lease  is  illegal,  invalid  or
unenforceable  under  present or future laws  effective  during the term of this
lease,  then and in that event,  it is the intention of the parties  hereto that
the  remainder of this lease shall not be affected  thereby,  and it is also the
intention  of the parties to this lease that in lieu of each clause or provision
of this lease that is  illegal,  invalid or  unenforceable,  there be added as a
part of this lease  contract a clause or  provision  as similar in terms to such
illegal, invalid or unenforceable clause or provisions as may be possible and be
legal, valid and enforceable.

     J.  Because the  premises  are on the open market and are  presently  being
shown,  this lease shall be treated as an offer with the premises  being subject
to prior  lease and such  offer  subject  to  withdrawal  or  non-acceptance  by
Landlord or to other use of the premises  without  notice,  and this lease shall
not be valid or binding  unless and until  accepted by Landlord in writing and a
fully executed copy delivered to both parties hereto.

     K. All references in this lease to "the date hereof" or similar  references
shall be deemed to refer to the last date, in point of the, on which all parties
hereto have executed this lease.

     L. Tenant  represents and warrants that it has dealt with no broker,  agent
or other person, in connection with this transaction,  or that no broker,  agent
or other person brought about this transaction, other Phil Collins Realtors, and
Tenant  agrees to  indemnify  and hold  Landlord  harmless  from and against any
claims by any other broker, agent or other person claiming a commission or other
form of  compensation  by virtue of having dealt with Tenant with regard to this
leasing transaction.

     M.  If and  when  included  within  the  term  "Landlord",  as used in this
instrument,  there are more than one  person,  firm or  corporations,  all shall
jointly  arrange  among  themselves  for their joint  execution of such a notice
specifying some  individual at some specific  address for the receipt of notices
and payments to Landlord; if and when included within the term "Tenant", as used
in this  instrument,  there are more than one person,  firm or corporation,  all
shall  jointly  arrange  among  themselves  for their joint  execution of such a
notice   specifying  some  individual  at  some  specific   address  within  the
continental United States for the receipt of notices and payments to Tenant. All
parties included within the terms "Landlord" and "Tenant", respectively shall be
bound by notices given in accordance  with the provisions of Paragraph 23 hereof
to the same effect as if each had received such notice.

     22. ADDITIONAL PROVISIONS.

     See Special Provisions

     23.  NOTICES.  Each  provision  of  this  instrument  or of any  applicable
governmental laws, ordinances, regulations and other requirements with reference
to the  sending,  mailing or delivery of any notice or the making of any payment
by Landlord to Tenant or with  reference to the sending,  mailing or delivery of
any notice or the making of any payment by Tenant to Landlord shall be deemed to
be complied with when and if the following steps are taken:

                                       19
<PAGE>

          (a) All rent and  other  payments  required  to be made by  Tenant  to
     Landlord hereunder shall be payable to Landlord at the address for Landlord
     hereinbelow set forth or at such other address as Landlord may specify from
     time to time by written notice delivered in accordance  herewith.  Tenant's
     obligation to pay rent and any other amounts to Landlord under the terms of
     this lease shall not be deemed  satisfied until such rent and other amounts
     have been actually received by Landlord.

          (b) All payments  required to be made by Landlord to Tenant  hereunder
     shall be payable to Tenant at the address hereinbelow set forth, or at such
     other address  within the  continental  United States as Tenant may specify
     from time to time by written notice delivered in accordance herewith.

          (c) Any notice or  document  required  or  permitted  to be  delivered
     hereunder shall be deemed to be delivered  whether actually received or not
     when  deposited in the United States Mail,  postage  prepaid,  Certified or
     Registered  Mail,  addressed  to  the  parties  hereto  at  the  respective
     addresses set out below, or at such other address as they have  theretofore
     specified by written notice delivered in accordance herewith:

                             LANDLORD:                          TENANT:

         CROW-MARKISON 22-27 LIMITED PARTNERSHIP       WEB TECHNOLOGY, INC.
         3500 LTV Center                               ___________ Markison Road
         2001 Ross Avenue                              Dallas, TX  75238
         Dallas, TX  75201-2997

         With notice to:

         9696 Skillman, #250
         Dallas, TX  75234

                                       20
<PAGE>

     24.  LANDLORD'S  LIEN.  In  addition  to any  statutory  lien  for  rent in
Landlord's  favor,  Landlord  shall have and Tenant  hereby grants to Landlord a
continuing  security  interest for all rentals and other sums of money  becoming
due  hereunder  from  Tenant,  upon  all  goods,  wares,  equipment,   fixtures,
furniture,  inventory,  accounts,  contract  rights,  chattel  paper  and  other
personal  property  of Tenant  situated on the  premises  subject to this Lease,
which is located at _____  Markison Road, and such property shall not be removed
therefrom  without the consent of Landlord  until all arrearages in rent well as
any and all other sums of money then due to Landlord  hereunder shall first have
been paid and discharged.  Products of collateral are also covered. In the event
of a default  under this lease,  Landlord  shall have, in additions to any other
remedies  provided  herein or by law, all rights and remedies  under the Uniform
Commercial  Code,  including  without  limitation the right to sell the property
described in this  paragraph at public or private sale upon five (5) days notice
to Tenant.  Tenant hereby agrees to execute such other instruments  necessary or
desirable  in  Landlord's  discretion  to perfect the security  interest  hereby
created.  Any  statutory  lien  for  rent  is not  hereby  waived,  the  express
contractual  lien herein  granted being in addition and  supplementary  thereto.
Landlord  and Tenant agree that this Lease and  security  agreement  serves as a
financing  statement and that a copy or  photographic  or other  reproduction of
this  portion of this Lease may be filed of record by Landlord and have the same
force  and  effect  as the  original.  This  security  agreement  and  financing
statement also covers fixtures located at the premises subject to thus Lease and
legally  described in Exhibit "A",  attached hereto and  incorporated  herein by
this  reference,  and is to filed for  record in the real  estate  records.  The
record owner of this property is Trammell Crow Company. Tenant warrants that the
collateral  subject to the security  interest granted herein is not purchased or
used by Tenant for personal, family or household purposes.

     EXECUTED BY LANDLORD, this ___ day of ____________, 19__.

Attest/Witness                               CROW-MARKISON 22-27, LIMITED
                                             PARTNERSHIP

__________________________________           By_________________________________
                                               Russell I. McArron, Jr.

Title:____________________________           Title:  Managing General Partner

     EXECUTED BY TENANT, this ___ day of ____________, 19__.

Attest/Witness                               WEB TECHNOLOGY, INC.

__________________________________           By_________________________________

Title:____________________________           Title:_____________________________

                                       21
<PAGE>

                             SPECIAL PROVISIONS FOR
                              WEB TECHNOLOGY, INC.

22a. Base Rent.  Tenant's base rental payment  schedule (using the definition of
     rental as described in 2A of the Lease) shall be as follows:

                    Months                        Monthly Base Rental
                    ------                        -------------------
                     1-12                              $5,179.44
                    13-24                              $5,649.44
                    25-36                              $6,149.44
                    37-48                              $6,649.44
                    49-60                              $7,149.44

22b. Cap on  Landscape  Maintenance  and General  Maintenance.  It is agreed and
     understood that landscape maintenance and general maintenance only will not
     exceed the  following  amounts  throughout  the primary term of this lease.
     This cap on  landscape  maintenance  and  general  maintenance  will not be
     granted for any renewal term.

                            Landscape Maintenance           Monthly Landscape
             Months          Per Sq Ft. Per Year             Maint. Charges
             ------          -------------------             --------------
              1-12                  $0.1800                     $201.45
              13-24                 $0.1890                     $211.52
              25-36                 $0.1985                     $222.15
              37-48                 $0.2084                     $233.23
              49-60                 $0.2188                     $244.87

                             General Maintenance           Monthly Maintenance
             Months          Per Sq Ft. Per Year                 Charges
             ------          -------------------                 -------
              1-12                  $0.0100                      $11.19
              13-24                 $0.0105                      $11.75
              25-36                 $0.0110                      $12.31
              37-48                 $0.0116                      $12.98
              49-60                 $0.0122                      $13.65

<PAGE>

22c. Renewal Option. Provided that Tenant is not in default of any of the terms,
     covenants and  conditions  hereof,  and this Lease has not been assigned or
     the premises (or a part  thereof)  sublet,  Tenant shall have the right and
     option to extend the original  term of this Lease for two (2) further terms
     of thirty six (36) months.  Such extension of the original term shall be on
     the same terms,  covenants  and  conditions as provided for in the original
     term  except for this  paragraph  and except  that the Base Rent during the
     extended  term  shall  be at the  fair  market  rental  then in  effect  on
     equivalent  properties,  of equivalent size, in equivalent areas (but in no
     event less than the Base Rent  specified  in Paragraph 2a of this Lease nor
     greater than one hundred  thirty-five  percent (135%) of the average of the
     Base Rents specified in Paragraph 22a, above). Tenant shall deliver written
     notice to  Landlord  of Tenant's  intent to  exercise  the  renewal  option
     granted  herein  not more than six (6) months nor less than four (4) months
     prior to the  expiration of the original  term of this Lease.  In the event
     Tenant  fails to deliver  such  written  notice  within the time period set
     forth above,  Tenant's  right to extend the term hereof shall expire and be
     of no further  force and effect.  In the event  Landlord and Tenant fail to
     agree in writing upon the fair market  rental within thirty (30) days after
     exercise by Tenant of this  renewal  option,  Tenant's  right  hereunder to
     extend the term shall become null and void.

22d. During the original term of this lease, provided that Tenant is not then in
     default  hereunder,  Tenant  shall have the first right and option to lease
     the adjacent space to the south of Tenant's space in Northgate II, Building
     24. Landlord shall, by written notice to Tenant,  first offer to lease such
     space to Tenant upon the same terms and  conditions  and at the same rental
     rate as has been agreed to by Landlord  and a third  party.  If within five
     (5) days after Landlord  `gives Tenant such written  notice,  Landlord does
     not  receive  notice in writing  that  Tenant  elects to lease all (and not
     part) of such space within five (5) days, then Tenant's right to lease such
     additional  space  shall  terminate  and expire  and  Tenant  shall have no
     further rights pursuant to this paragraph.

22e. Nondisturbance.  Upon written request from Tenant,  Landlord shall use best
     efforts to obtain a Nondisturbance  Agreement from the construction  lender
     for this project.  Furthermore,  Landlord agrees to use its reasonable best
     efforts to obtain,  upon separate  written  request from Tenant,  a similar
     Nondisturbance Agreement from the mortgage lender for this project.

22f. Exhibit B. This Lease is contingent upon the signature of Exhibit B by both
     Tenant and Landlord.

                            END OF SPECIAL PROVISIONS

<PAGE>

                                   EXHIBIT "A"
                                LEGAL DESCRIPTION

BEING approximately  13,430 square feet out of an approximate 45,405 square foot
facility,  commonly  known as  Northgate  Phase II,  Building  24  located on 24
Markison in Dallas, Texas, and situated on a tract of land described as follows:

BEING 5.798 acres of land in the H. HUSTEAD SURVEY, Abstract No. 587, being part
of City  Block  8088,  also  being  known as part of Block  B/8088 of  NORTHGATE
BUSINESS PARK -- PHASE II, an addition to the City of Dallas,  Texas,  according
to the  Revised  Map thereof  recorded  in Volume  84171,  Page 3124 of the Deed
Records of Dallas  County,  Texas,  and being  more  particularly  described  as
follows:

BEGINNING  at the  intersection  of the  Northeast  line of  Markison  Road (56'
R.O.W.),  and the  Southeast  R.O.W.  line of Vista Park Road (56'  R.O.W.) said
point also being the  beginning of a curve to the right,  having a central angle
of 50(degree)26'54", a radius of 202.00 feet, and tangent of 95.16 feet;

THENCE,  Northeasterly  along said curve to the right, an arc distance of 177.86
feet to a point of tangency,  said point being in the Southeast  R.O.W.  line of
Vista Park Road (56' R.O.W.);

THENCE, N 89(degree)34'00" E, along said South R.O.W. line of Vista Park Road, a
distance of 532.38 feet,  said point also being the  beginning of a curve to the
right, having a central angle of 90(degree)02'05", a radius of 20.00 feet, and a
tangent of 20.01 feet;

THENCE,  Southeasterly  along said Southwest  R.O.W. of Vista Park Road and said
curve to the right, an arc distance of 31.43 feet to a point of tangency;

THENCE, S 00(degree)23'55"  E, along said West R.O.W. line of Vista Park Road, a
distance of 471.24  feet to a point,  said point also being the  beginning  of a
curve to the  right,  having a central  angle of  39(degree)31'0l",  a radius of
202.00 feet, and a tangent of 72.56 feet;

THENCE,  Southwesterly  along said Southwest R.O.W.  line of Vista Park Road and
said curve to the right an arc  distance of 139.32 feet to a  non-tangent  point
for a corner;

THENCE, N 50(degree)52'54" W, along said Northeast R.O.W. line of Markison Road,
a distance of 858.05 feet to the POINT OF BEGINNING  and  CONTAINING  252,572.84
Square Feet or 5.798 Acres of Land.

<PAGE>

                          SUPPLEMENTAL LEASE AGREEMENT
                                    (RENEWAL)

This Supplemental  Lease Agreement made and entered into this 22nd day of April,
1993 by and between:

                     CROW-MARKISON 22-27 LIMITED PARTNERSHIP
                        2707 Stemmons Freeway, Suite 100
                               Dallas, Texas 75207
            W/ Copy to: 9696 Skillman, Suite 250, Dallas, Texas 75243

                                       and

                              WEB TECHNOLOGY, INC.
                               10501 Markison Road
                               Dallas, Texas 75238
                              (27,830 Square Feet)

This  Supplemental  Lease  Agreement  shall modify the original lease  agreement
(which,  together with any  amendments or  modifications,  shall be known as the
"Lease")  between  CROW-MARKISON  22-27  (Landlord)  and  WEB  TECHNOLOGY,  INC.
(Tenant)  dated  December  19, 1987;  in which  certain real estate and premises
therein  described and situated in the County of Dallas,  and the State of Texas
were demised and leased by Landlord to Tenant.

It is the sole intent of this  Supplemental  Lease Agreement to modify the Lease
by the following terms and conditions:

1.   SIZE:

     The demised  premises is hereby  increased in size 14,400  rentable  square
     feet,  from 13,430  rentable  square feet to 27,830 rentable square feet as
     cross  hatched  on  Exhibit  "A-1" to this  Supplemental  Lease  Agreement.
     Therefore the demised  premises shall be changed to 27,830 square feet (see
     Exhibit "A" attached).

2.   TERM:

     The term of the original  Lease shall be renewed and extended for a further
     term commencing on March 1, 1993 and ending April 30, 1997.

3.   BASE RENTAL:

     The base monthly rental as described in Paragraph  2C(1) shall be $5,260.08
     per month until the commencement of the additional  14,400 square feet. The
     additional  14,400  square  feet  space  shall  commence  on May 17,  1993.
     Therefore,  the base monthly  rental  shall be  increased to $9,760.08  per
     month on May 17, 1993 and continue through April 30, 1997.

<PAGE>

4.   INTERIOR IMPROVEMENTS:

     Tenant accepts the Premises in its "As-Is"  condition  except that Landlord
     at  Landlord's  expense shall  re-carpet the offices  referenced on Exhibit
     "A-2", and repaint the office area also referenced on Exhibit "A-2". Tenant
     at Tenant's  expense will merge the electrical and gas services and pay for
     any other  improvements made on the Premises.  All improvements shall be by
     and in  accordance  with  Trammell  Crow Company  standard  specifications.
     Landlord  shall further give Tenant an allowance of $3,000.00 to go towards
     Tenant's  improvements.  This  will be paid  direct to  Landlord's  general
     contractor upon completion.

5.   RIGHT OF FIRST REFUSAL:

     If,  during  the  renewal  term of this  Lease,  the  space  consisting  of
     approximately  17,575 square feet which is outlined in red on Exhibit "A-3"
     to this Lease (the  "Additional  Space") shall become  available for lease,
     after  the  current  lease and  renewals  thereof  of such  space to Direct
     Technology Corporation,  and provided the Tenant has not been in default of
     any of the terms,  provisions and covenants of any Lease with Landlord, and
     has not assigned this Lease or sublet the premises (or a part hereof),  and
     Tenant, in Landlord's opinion,  demonstrates  sufficient  creditworthiness,
     Tenant  shall  have the right of first  refusal  to lease  the  "Additional
     Space".  Such right shall  operate as follows.  When a third party  becomes
     seriously  interested in the "Additional  Space" Landlord shall first offer
     in writing  (all and not part of) such  "Additional  Space" to Tenant.  If,
     within  five (5) days after  Landlord  gives  Tenant such  written  notice,
     Landlord  does not receive  notice in writing  that Tenant  elects to lease
     (all and not part of) the  "Additional  Space"  within five (5) days,  then
     Tenant's right to lease the "Additional  Space" shall terminate and expire,
     and Tenant shall have no further rights pursuant to this  paragraph.  It is
     agreed and understood that the rental rate for the "Additional Space" shall
     be no more than $4.70 per square foot excluding taxes, insurance and common
     area maintenance, and leased on an "as-is" basis.

6.   BROKER:

     Tenant  requested  and agrees that this  renewal and  expansion is a direct
     transaction and that no outside brokers fee is earned or due.

7.   This   Supplemental   Lease  Agreement  is  contingent  on  the  successful
     termination  of Direct  Technology  Corporation  on the 14,400  square foot
     space.

<PAGE>

All  other  terms  and  conditions  of the Lease  shall  remain  in  effect  and
unchanged.

CROW MARKISON 22-27, LIMITED PARTNERSHIP
By: Trammell Crow Dallas Industrial, Inc. Agent

By:_____________________________________      Witness:__________________________

Title:__________________________________      Title:____________________________

WEB TECHNOLOGY, INC.

By:_____________________________________      Witness:__________________________

Title:__________________________________      Title:____________________________

<PAGE>

                                   EXHIBIT "A"
                                LEGAL DESCRIPTION

BEING approximately  27,830 square feet out of an approximate 45,405 square foot
facility,  commonly known as Northgate Phase II, Building 24 located on Markison
in Dallas, Texas, and situated on a tract of land described as follows:

BEING 5.798 acres of land in the H. HUSTEAD SURVEY, Abstract No. 587, being part
of City  Block  8088,  also  being  known as part of Block  B/8088 of  NORTHGATE
BUSINESS PARK - PHASE II, an addition to the City of Dallas, Texas, according to
the Revised Map thereof recorded in Volume 84171,  Page 3124 of the Deed Records
of Dallas County, Texas, and being more particularly described as follows:

BEGINNING  at the  intersection  of the  Northeast  line of  Markison  Road (56'
R.O.W.),  and the  Southeast  R.O.W.  line of Vista Park Road (56'  R.O.W.) said
point also being the  beginning of a curve to the right,  having a central angle
of 50(degree)26'54", a radius of 202.00 feet, and tangent of 95.16 feet;

THENCE,  Northeasterly  along said curve to the right, an arc distance of 177.86
feet to a point of tangency,  said point being in the Southeast  R.O.W.  line of
Vista Park Road (56' R.O.W.);

THENCE, N 89(degree)  34'00" E, along said South R.O.W. line of Vista Park Road,
a distance of 532.38 feet, said point also being the beginning of a curve to the
right, having a central angle of 90(degree)02'05", a radius of 20.00 feet, and a
tangent of 20.01 feet;

THENCE,  Southeasterly  along said Southwest  R.O.W. of Vista Park Road and said
curve to the right, an arc distance of 31.43 feet to a point of tangency;

THENCE, S 00(degree) 23'55" E, along said West R.O.W. line of Vista Park Road, a
distance of 471.24  feet to a point,  said point also being the  beginning  of a
curve to the  right,  having a central  angle of  39(degree)31'0l",  a radius of
202.00 feet, and a tangent of 72.56 feet;

THENCE,  Southwesterly  along said Southwest R.O.W.  line of Vista Park Road and
said curve to the right an arc  distance of 139.32 feet to a  non-tangent  point
for a corner;

THENCE,  N 500 52'54" W, along said  Northeast  R.O.W.  line of Markison Road, a
distance  of 858.05 feet to the POINT OF  BEGINNING  and  CONTAINING  252,572.84
Square Feet or 5.798 Acres of Land.

<PAGE>

                            THIRD AMENDMENT TO LEASE

*STATE OF TEXAS

                                                 *KNOW ALL MEN BY THESE PRESENTS

*COUNTY OF DALLAS

     THIS THIRD  AMENDMENT  TO LEASE  AGREEMENT  is made and entered into by and
between MARKISON VISTA JOINT VENTURE ("LANDLORD") and. AETRIUM - WEB TECHNOLOGY,
LP ("TENANT").

                               W I T N E S S E T H

     WHEREAS,  on or about  December  19,  1987,  Crow-Markison  22-27,  Limited
Partnership and Web Technology,  Inc.  entered into that certain Lease Agreement
(the  "Lease")  pertaining  to  approximately  13,430  square feet of space (the
"Leased  Premises")  the Leased  Premises  being located at 10501 Markison Road,
Dallas, Texas; and

     WHEREAS, on or about April 22, 1993 Crow-Markison 22-27 Limited Partnership
and Web  Technology,  Inc.  entered into that First Amendment to Lease Agreement
whereby among other things,  the Lease Term was extended and the Leased Premises
were increased to 27,830 square feet of space; and

     WHEREAS,  all rights,  title,  and  interest in the property and said Lease
have been assigned to Markison Vista Joint Venture; and

     WHEREAS,  on or about  December 5, 1996 Landlord and Web  Technology,  Inc.
entered  into that  Second  Amendment  to lease  agreement  whereby  among other
things, the Lease Term was extended; and

     WHEREAS, on or about April 1, 1998 Web Technology,  Inc. assigned the Lease
to Aetrium - Web Technology, LP; and

     WHEREAS,  the parties  hereto  desire to amend the Lease upon the terms and
conditions set forth below:

     NOW THEREFORE, For Ten and no/100 dollars ($10.00) in hand paid to each and
other good and valuable  consideration,  the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree to amend the Lease as follows:

1.   The Lease term shall be extended so that the  expiration  date of the Lease
     will be April 30, 2003.

2.   The Base  Rent as  described  in  Paragraph  2C(1)  shall be  increased  to
     $12,756.00 per month. The rental increase to begin on May 1, 2000.

<PAGE>

3.   Early Termination Election:  Tenant may at Tenant's election terminate this
     Lease prior to the expiration of the Lease term as set forth in Paragraph 1
     on April 30, 2001 or April 30, 2002,  ("Early  Termination  Date") upon the
     terms and conditions set forth herein.

     (i)  Tenant shall give Landlord written notice of its election to terminate
          this Lease at least six (6) months prior to the Early Termination Date
          upon which termination shall become effective, and

     (ii) No event of  default  by  Tenant or no event  that with  notice or the
          passage  of time,  or both,  would  constitute  an event of default by
          Tenant shall have occurred on or before the Early Termination Date.

     (iii)Concurrent  with the  giving of notice  under  Paragraph  3(i)  above,
          Tenant  shall  pay to  Landlord  in  cash  the  sum of  $12,756.00  if
          termination is April 30, 2001.

     (iv) Concurrent  with the  giving of notice  under  Paragraph  3(i)  above,
          Tenant  shall pay to  Landlord  in cash the amount of the  unamortized
          Tenant  Improvement  Allowance incurred by Landlord in connection with
          this  Lease  using an  interest  factor  of 12% per  annum.  By way of
          example if the amount is $27,830.00  the  unamortized  amount at April
          30,  2001  would  be  $19,637.00  and  at  April  30,  2002  would  be
          $10,404.00.

6.   Landlord  will provide  Tenant with an allowance  of up to  $27,830.00  for
     Tenant  Improvements  to be  installed in the Leased  Premises.  All Tenant
     Improvements  are subject to the prior  written  consent of Landlord  which
     consent shall not be unreasonably withheld. Unless Landlord notifies Tenant
     at the time the Tenant Improvements are submitted to Landlord that they are
     to be removed at the  termination of the Lease and restored to the existing
     condition,  then  Tenant  shall  have no  obligation  to remove  the Tenant
     Improvements  at the  termination  of the  Lease.  Upon  the  receipt  of a
     notarized  Affidavit  stating  that  payment has been made for all work and
     materials and which  includes (1) true and correct  copies of releases from
     all  contractors  and  suppliers  of  work  and  materials  and  (2)  other
     construction  costs,  Landlord will pay to Tenant such amount within thirty
     (30) days.

7.   Right of First Refusal.

I. Landlord and Tenant  acknowledge  that 10515 Markison Road containing  17,575
square feet is immediately adjacent to the Premises  (hereinafter referred to as
"Adjacent Premises").

II. In the event that the Adjacent  Premises  become  available,  Landlord shall
notify Tenant of the availability of the Adjacent Premises.

III. If Tenant within ten (10) business days after receipt of Landlord's  notice
as set forth in Paragraph 7 II above,  indicates,  in writing,  its agreement to
lease the Adjacent Premises, then the Adjacent Premises shall be included within
the  Premises and leased to Tenant at the rent per square foot  currently  being
paid by Tenant and  otherwise  pursuant to the  provisions of this lease without
any  obligations on the part of the Landlord to make any alterations or repairs,
and to  afford  any rent  abatement  and  without  any  contingency  provisions.
However,  the rent  attributable to the Adjacent  Premises shall be added to the
rent  payable  under  this  Lease.  The  parties  shall  immediately  execute an
amendment to this lease stating the addition of the Adjacent Premises.

<PAGE>

IV. If the  Tenant  does not  deliver  a notice,  in  writing,  within  ten (10)
business days of receipt of Landlord's said notice,  as set forth in Paragraph 7
II above,  indicating  its  agreement to lease the Adjacent  Premises,  Landlord
thereafter  shall  have the right to lease the  Adjacent  Premises  to any third
party or parties and there shall be no further  obligation in the future to give
Tenant any notice to lease or Right of First Refusal.

8.   Landlord  hereby agrees to pay a real estate fee in the amount of $6,888.24
     to The Staubach Company,  payable upon Landlord's return delivery to Tenant
     of fully  executed  originals of this Third  Amendment to Lease.  A further
     real estate fee of $6,888.24  shall be payable to The  Staubach  Company on
     April 30,  2001 and April 30,  2002 in the event  Tenant  does not elect to
     terminate as provided for in this  Amendment,  it being the intention  that
     The Staubach  will be paid a real estate fee only for each period that this
     Amendment is in effect.

9.   Except as modified herein, the Lease remains in full force and effect.

     Executed this ___ day of December, 1999.

                    MARKISON VISTA JOINT VENTURE

                    BY:_____________________________________________
                       Roy H. Greenberg, Board Member

                    AETRIUM-WEB TECHNOLOGY, LLP

                    BY:_____________________________________________

                    ITS:____________________________________________

<PAGE>

                            SECOND AMENDMENT TO LEASE

*STATE OF TEXAS

                                                 *KNOW ALL MEN BY THESE PRESENTS

*COUNTY OF DALLAS

     THIS SECOND  AMENDMENT  TO LEASE  AGREEMENT is made and entered into by and
between  MARKISON  VISTA JOINT VENTURE  ("LANDLORD")  and WEB  TECHNOLOGY,  INC.
("TENANT").

                               W I T N E S S E T H

     WHEREAS,  on or about  December  19,  1987,  Crow-Markison  22-27,  Limited
Partnership  and Tenant entered into that certain Lease  Agreement (the "Lease")
pertaining to approximately  13,430 square feet of space (the "Leased Premises")
the Leased Premises being located at 10501 Markison Road, Dallas, Texas; and

     WHEREAS, on or about April 22, 1993 Crow-Markison 22-27 Limited Partnership
and Tenant entered into that First  Amendment to Lease  Agreement  whereby among
other  things,  the  Lease  Term  was  extended  and the  Leased  Premises  were
increased; and

     WHEREAS,  all rights,  title,  and  interest in the property and said Lease
have been assigned to Markison Vista Joint Venture; and

     WHEREAS,  the parties  hereto  desire to amend the Lease upon the terms and
conditions set forth below:

     NOW THEREFORE, For Ten and no/l00 dollars ($10.00) in hand paid to each and
other good and valuable  consideration,  the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree to amend the Lease as follows:

1.   The Lease term shall be extended so that the  expiration  date of the Lease
     will be April 30, 2000.

2.   The Base  Rent as  described  in  Paragraph  2C(1)  shall be  increased  to
     $11,596.00 per month. The rental increase to begin on May 1, 1997.

3.   Early Termination Election:  Tenant may at Tenant's election terminate this
     Lease prior to the expiration of the Lease term as set forth in Paragraph 1
     on April 30, 1999, ("Early Termination Date") upon the terms and conditions
     set forth herein.

     (i)  Tenant shall give Landlord written notice of its election to terminate
          this Lease at least six (6) months prior to the Early Termination Date
          upon which termination shall become effective, and

<PAGE>

     (ii) No event of  default  by  Tenant or no event  that with  notice or the
          passage  of the,  or both,  would  constitute  an event of  default by
          Tenant shall have occurred on or before the Early Termination Date.

4.   Landlord hereby agrees to pay a real estate fee in the amount of $12,523.68
     to The Stauback Company,  payable upon Landlord's return delivery to Tenant
     of fully executed  originals of this Second  Amendment to Lease.  If Tenant
     has not delivered a written notice to terminate the Lease as of October 30,
     1998, then Landlord will pay an additional real estate fee in the amount of
     $6,261.84 to The Staubach Company, payable immediately.

5.   Except as modified herein, the Lease remains in full force and effect.

     Executed this ___ day of December, 1996.

                            MARKISON VISTA JOINT VENTURE

                            BY:________________________________
                               Roy H. Greenberg, Board Member

                            WEB TECHNOLOGY, INC.

                            BY:________________________________

                            ITS:_______________________________

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