Document:

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                                                                   Exhibit 10.33

                                INDUSTRIAL LEASE

     THIS LEASE is made as of October 15, 2000 by and between MiniMed Inc., a
Delaware corporation, hereafter called "Landlord," and Advanced Bionics
Corporation, Delaware corporation, hereinafter called "Tenant."

                       ARTICLE I. BASIC LEASE PROVISIONS

     Each reference in this Lease to the "Basic Lease Provisions" shall mean and
refer to the following collective terms, the application of which shall be
governed by the provisions in the remaining Articles of this Lease.

1.   Premises: The Premises are more particularly described in Section 2.1.

     Address of Building: 12744 San Fernando Road, Sylmar, CA 91342

2.   Use of Premises: General office

3.   Estimated Commencement Date:  November 1, 2000

4.   Lease Term: Eight (8) months commencing on the Commencement Date and ending
on June 30, 2001 (Expiration Date). Unless either party shall deliver written
notice at least thirty (30) days prior to the Expiration Date, the lease shall
continue thereafter on a month-to-month basis subject to the terms and
conditions of this Lease. This Lease may be terminated by either party on or
after the Expiration Date upon thirty days' prior written notice.

5.   Basic Rent: $6,523.00 per month, based on $1.10 per rentable square foot.

6.   Floor Area of Premises:  Approximately 5,930 rentable square feet.

7.   Security Deposit:  $6,523.00

8.   Broker(s): None

9.   Address for Payments and Notices:

           LANDLORD                                  TENANT

            18000 Devonshire Street                     12740 San Fernando Road
            Northridge, CA  91325                       Sylmar, CA 91342

10.  Tenant's Minimum Liability Insurance Requirement: $2,000,000.00

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11.  Vehicle Parking Spaces: To be determined by Tenant and Landlord, and agreed
to in writing by December 15, 2000. The parties anticipate allocating parking on
a basis consistent with actual proportionate use of the total facility, relative
to other tenants.

                              ARTICLE II. PREMISES

     SECTION 2.1 LEASED PREMISES. Landlord leases to Tenant and Tenant leases
from Landlord the premises shown in Exhibit A (the "Premises".) Landlord shall
make available for Tenant certain furniture (the "Furniture") identified in
Exhibit B hereto, which shall be used by Tenant at no additional cost but in the
sole discretion of Landlord. At Landlord's request, Tenant shall return the
Furniture to Landlord, or, at the election of Landlord, remove the Furniture at
the end of the term hereof and properly dispose of such Furniture. The Premises
consist of all the rentable square footage of and are located within the
interior of, the building identified in Item 1 of the Basic Lease Provisions
(which together with the underlying real property, is called the "Building").
Tenant understands that the floor area set forth in Item 6 of the Basic Lease
Provisions may include, at Landlord's option, a factor approximating the total
square footage of any common lobby or internal common features of the Building
times the ratio of the actual square footage of the Premises to the total square
footage of the Building.

     SECTION 2.2 ACCEPTANCE OF PREMISES. Except as expressly provided in this
Lease, Tenant acknowledges that neither Landlord nor any representative of
Landlord has made any representation or warranty with respect to the Premises or
the Building or the suitability or fitness of either for any purpose, including
without limitation any representations or warranties regarding zoning or other
land use matters, and that neither Landlord nor any representative of Landlord
has made any representations or warranties regarding (i) what other tenants or
occupants or uses may be permitted or intended in the Building, or (ii) any
exclusivity of use by Tenant with respect to its permitted use of the Premises
as set forth in Item 2 of the Basic Lease Provisions. Tenant further
acknowledges that neither Landlord nor any representative of Landlord has agreed
to undertake any alterations or additions or construct any improvements to the
Premises. The taking of possession or use of the Premises by Tenant for any
purpose shall conclusively establish that the Premises and the Building were in
satisfactory condition and in conformity with the provisions of this Lease in
all respects.

     SECTION 2.3 BUILDING NAME AND ADDRESS. Tenant shall not utilize any name
selected by Landlord from time to time for the Building as any part of Tenant's
corporate or trade name. Landlord shall have the right to change the name,
address, number or designation of the Building, in its sole discretion, without
liability or Notice to Tenant.

     SECTION 2.4 LANDLORD'S RESPONSIBILITIES. Notwithstanding anything to the
contrary contained in this Lease, Landlord agrees that the Premises shall be in
good and clean operating condition and repair as of the Commencement Date, and
that the plumbing, electrical and mechanical systems serving the Building,
including, without

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limitation, the HVAC systems, shall be in good operating condition as of the
Commencement Date.

                                ARTICLE III. TERM

     SECTION 3.1 GENERAL. The Term shall be for the period shown in Item 4 of
the Basic Lease Provisions. Subject to the provisions of Section 3.2 below, the
Term shall commence on the date Tenant takes possession (which shall be
confirmed in writing by Tenant) ("Commencement Date") and end on June 30, 2001
("Expiration Date"). Following the Expiration Date, Tenant may continue to
occupy and lease the Premises on a month-to-month basis on or after the
Expiration Date subject to the terms and conditions of this Lease. Either party
may terminate this Lease upon thirty (30) days' written notice to the other
party.

                     ARTICLE IV. RENT AND OPERATING EXPENSES

     SECTION 4.1 BASIC RENT. From and after the Commencement Date, Tenant shall
pay to Landlord without deduction or offset, Basic Rent for the Premises in the
total amount shown (including subsequent adjustments, if any) in Item 5 of the
Basic Lease Provisions. The rent shall be due and payable in advance commencing
on the Commencement Date (as prorated for any partial month) and continuing
thereafter on the first day of each successive calendar month of the Term. No
demand, notice or invoice shall be required for the payment of Basic Rent. An
installment of rent in the amount of thirty days' Basic Rent at the initial rate
specified in Item 5 of the Basic Lease Provisions shall be delivered to Landlord
concurrently with Tenant's execution of this Lease and shall be applied against
the Basic Rent first due hereunder.

     SECTION 4.2 OPERATING EXPENSES.

          (a) Landlord shall be solely responsible for "Operating Expenses", as
defined below, incurred by Landlord in the operation of the Building. Tenant
shall not be responsible for any portion of the Operating Expenses.

          (b) The term "Operating Expenses" shall mean and include all expenses
of operation and maintenance of the Building together with all appurtenant
Common Areas (as defined in Section 6.2), and shall include the following
charges by way of illustration but not limitation: water and sewer charges;
permit and inspection fees; heat; light; power; janitorial services; security
services; air conditioning; and Property Taxes. The term "Property Taxes" as
used herein shall include the following: (i) all real estate taxes or personal
property taxes, as such property taxes may be reassessed from time to time; and
(ii) other taxes, charges and assessments which are levied with respect to this
Lease or to the Building and any improvements, fixtures and equipment and other
property of Landlord located in the Building.

     SECTION 4.3 SECURITY DEPOSIT. Concurrently with Tenant's delivery of this
Lease, Tenant shall deposit with Landlord the sum, if any, stated in Item 7 of
the Basic

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Lease Provisions, to be held by Landlord as security for the full and faithful
performance of Tenant's obligations under this Lease (the "Security Deposit").
Upon any Default by Tenant, the Security Deposit shall be deemed to be
automatically and immediately applied, without waiver of any rights Landlord may
have under this Lease or at law or in equity as a result of the Default, as a
setoff for full or partial compensation for that Default. If any portion of the
Security Deposit is applied after a Default by Tenant, Tenant shall within five
(5) days after written demand by Landlord deposit cash with Landlord in an
amount sufficient to restore the Security Deposit to its original amount.
Landlord shall not be required to keep this Security Deposit separate from its
general funds, and Tenant shall not be entitled to interest on the Security
Deposit. The Security Deposit shall be returned to Tenant within sixty (60) days
after the expiration of the Term, provided that Landlord may, in its reasonable
discretion, retain all or a portion of the Security Deposit to the extent and
until such time as all amounts due from Tenant in accordance with this Lease
have been determined and paid in full, with any balance of the Security Deposit
being returned to Tenant within sixty (60) days after the expiration of the
Term.

                                 ARTICLE V. USES

     SECTION 5.1 USE. Tenant shall use the Premises only for the purposes stated
in Item 3 of the Basic Lease Provisions, all in accordance with applicable laws
and restrictions and pursuant to approvals to be obtained by Tenant from all
relevant and required governmental agencies and authorities. The parties agree
that any contrary use shall be deemed to cause material and irreparable harm to
Landlord and shall entitle Landlord to injunctive relief in addition to any
other available remedy. Tenant, at its expense, shall procure, maintain and make
available for Landlord's inspection throughout the Term, all governmental
approvals, licenses and permits, if any, required for the proper and lawful
conduct of Tenant's business in the Premises. Tenant shall not do or permit
anything to be done in or about the Premises which will in any way interfere
with the rights of other occupants of the Building, or use or allow the Premises
to be used for any unlawful purpose, nor shall Tenant permit any nuisance or
commit any waste in the Premises. Tenant shall not do or permit to be done
anything which will invalidate or increase the cost of any insurance policy(ies)
covering the Building, and/or their contents (unless Tenant agrees to pay for
such increases), and shall comply with all applicable insurance underwriters
rules. Tenant shall comply at its expense with all present and future laws,
ordinances, restrictions, regulations, orders, rules and requirements of all
governmental authorities that pertain to Tenant or its use of the Premises,
including without limitation all federal and state occupational health and
safety requirements, whether or not Tenant's compliance will necessitate
expenditures or interfere with its use and enjoyment of the Premises.

     SECTION 5.2 SIGNS. Tenant shall have the no right to install any signs on
the exterior of the Building.

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                        SECTION 5.3 HAZARDOUS MATERIALS.

          (a) For purposes of this Lease, the term "Hazardous Materials"
includes (i) any "hazardous materials" as defined in Section 25501(n) of the
California Health and Safety Code, (ii) any other substance or matter which
results in liability to any person or entity from exposure to such substance or
matter under any statutory or common law theory, and (iii) any substance or
matter which is in excess of permitted levels set forth in any federal,
California or local law or regulation pertaining to any hazardous or toxic
substance, material or waste.

          (b) Tenant shall not cause or permit any Hazardous Materials to be
brought upon, stored, used, generated, released or disposed of on, under, from
or about the Premises (including without limitation the soil and groundwater
thereunder) without the prior written consent of Landlord. Notwithstanding the
foregoing, Tenant shall have the right, without obtaining prior written consent
of Landlord, to utilize within the Premises standard office products that may
contain Hazardous Materials (such as photocopy toner, "White Out", and the
like), provided however, that (i) Tenant shall maintain such products in their
original retail packaging, shall follow all instructions on such packaging with
respect to the storage, use and disposal of such products, and shall otherwise
comply with all applicable laws with respect to such products, and (ii) all of
the other terms and provisions of this Section 5.3 shall apply with respect to
Tenant's storage, use and disposal of all such products. Landlord may, in its
sole discretion, place such commercially reasonable conditions as Landlord deems
appropriate with respect to any such Hazardous Materials, and may further
require that Tenant demonstrate that any such Hazardous Materials are necessary
or useful to Tenant's business and will be generated, stored, used and disposed
of in a manner that complies with all applicable laws and regulations pertaining
thereto and with good business practices. Tenant understands that Landlord may
utilize an environmental consultant to assist in determining conditions of
approval in connection with the storage, generation, release, disposal or use of
Hazardous Materials by Tenant on or about the Premises, and/or to conduct
periodic inspections of the storage, generation, use, release and/or disposal of
such Hazardous Materials by Tenant on and from the Premises, and Tenant agrees
that any costs incurred by Landlord in connection therewith shall be reimbursed
by Tenant to Landlord as additional rent hereunder upon demand.

          (c) Landlord and its agents shall have the right, but not the
obligation, to inspect, sample and/or monitor the Premises and/or the soil or
groundwater thereunder at any time to determine whether Tenant is complying with
the terms of this Section 5.3, and in connection therewith Tenant shall provide
Landlord with full access to all relevant facilities, records and personnel. If
Tenant is not in compliance with any of the provisions of this Section 5.3, or
in the event of a release of any Hazardous Material on, under or about the
Premises caused or permitted by Tenant, its agents, employees, contractors,
licensees or invitees, Landlord and its agents shall have the right, but not the
obligation, without limitation upon any of Landlord's other rights and remedies
under this Lease, to immediately enter upon the Premises without notice and to
discharge Tenant's obligations

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under this Section 5.3 at Tenant's expense, including without limitation the
taking of emergency or long-term remedial action. Landlord and its agents shall
endeavor to minimize interference with Tenant's business in connection
therewith, but shall not be liable for any such interference. In addition,
Landlord, at Tenant's expense, shall have the right, but not the obligation, to
join and participate in any legal proceedings or actions initiated in connection
with any claims arising out of the storage, generation, use, release and/or
disposal by Tenant or its agents, employees, contractors, licensees or invitees
of Hazardous Materials on, under, from or about the Premises.

          (d) If the presence of any Hazardous Materials on, under, from or
about the Premises caused or permitted by Tenant or its agents, employees,
contractors, licensees or invitees results in (i) injury to any person, (d)
injury to or any contamination of the Premises, or (iii) injury to or
contamination of any real or personal property wherever situated, Tenant, at its
expense, shall promptly take all actions necessary to return the Premises and
any other affected real or personal property owned by Landlord to the condition
existing prior to the introduction of such Hazardous Materials and to remedy or
repair any such injury or contamination, including without limitation, any
cleanup, remediation, removal, disposal, neutralization or other treatment of
any such Hazardous Materials. Notwithstanding the foregoing, Tenant shall not,
without Landlord's prior written consent, take any remedial action in response
to the presence of any Hazardous Materials on, under or about the Premises or
any other affected real or personal property owned by Landlord or enter into any
similar agreement, consent, decree or other compromise with any governmental
agency with respect to any Hazardous Materials claims; provided however,
Landlord's prior written consent shall not be necessary in the event that the
presence of Hazardous Materials on, under or about the Premises or any other
affected real or personal property owned by Landlord (i) imposes an immediate
threat to the health, safety or welfare of any individual or (ii) is of such a
nature that an immediate remedial response is necessary and it is not possible
to obtain Landlord's consent before taking such action. To the fullest extent
permitted by law, Tenant shall indemnify, hold harmless, protect and defend
(with attorneys acceptable to Landlord) Landlord and any successors to all or
any portion of Landlord's interest in the Premises and any other real or
personal property owned by Landlord from and against any and all liabilities,
losses, damages, diminution in value, judgments, fines, demands, claims,
recoveries, deficiencies, costs and expenses (including without limitation
attorneys' fees, court costs and other professional expenses), whether
foreseeable or unforeseeable, arising directly or indirectly out of the use,
generation, storage, treatment, release, on- or off-site disposal or
transportation of Hazardous Materials on, into, from, under or about the
Premises, the Building and any other real or personal property owned by Landlord
caused or permitted by Tenant, its agents, employees, contractors, licensees or
invitees, specifically including without limitation the cost of any required or
necessary repair, restoration, cleanup or detoxification of the Premises, the
Building and any other real or personal property owned by Landlord, and the
preparation of any closure or other required plans, whether or not such action
is required or necessary during the Term or after the expiration of this Lease.
If Landlord at any time discovers that Tenant or its agents, employees,
contractors, licensees or invitees may have caused or permitted the release of a
Hazardous Material on, under, from or about the Premises or any other real or

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personal property owned by Landlord, Tenant shall, at Landlord's request,
immediately prepare and submit to Landlord a comprehensive plan, subject to
Landlord's approval, specifying the actions to be taken by Tenant to return the
Premises, the Building or any other real or personal property owned by Landlord
to the condition existing prior to the introduction of such Hazardous Materials.
Upon Landlord's approval of such cleanup plan, Tenant shall, at its expense, and
without limitation of any rights and remedies of Landlord under this Lease or at
law or in equity, immediately implement such plan and proceed to cleanup such
Hazardous Materials in accordance with all applicable laws and as required by
such plan and this Lease. The provisions of this subsection (d) shall expressly
survive the expiration or sooner termination of this Lease.

          (f) The rights, obligations and duties of the parties contained in
this Section 5.3 shall supersede any contrary provisions contained in this
Lease.

                       ARTICLE VI. COMMON AREAS; SERVICES

     SECTION 6.1 UTILITIES AND SERVICES. Landlord shall provide, at its cost and
expense, water, gas, electricity, sewer, heat, light, power, refuse pickup,
janitorial service, interior landscape maintenance and all other utilities,
materials and services reasonably necessary for Tenant to utilize the Premises
hereunder. Landlord shall not be responsible for telephone service. Landlord
shall not be liable for damages or otherwise for any failure or interruption of
any utility or other service furnished to the Premises, and no such failure or
interruption shall be deemed an eviction or entitle Tenant to terminate this
Lease or withhold or abate any rent due hereunder. Landlord shall at all
reasonable times have free access to all electrical and mechanical installations
of Landlord, provided that Landlord shall interfere as little as reasonably
practicable with the conduct of Tenant's business in the Premises.

     SECTION 6.2 OPERATION AND MAINTENANCE OF COMMON AREAS. During the Term,
Landlord shall operate all Common Areas within the Building . The term "Common
Areas" shall mean all areas within the exterior boundaries of the Building which
are not held for exclusive use by persons entitled to occupy space, and all
other appurtenant areas and improvements provided by Landlord for the common use
of Landlord and tenants and their respective employees and invitees, including
without limitation parking areas and structures, driveways, sidewalks,
landscaped and planted areas, hallways and interior stairwells not located
within the premises of any tenant, common electrical rooms and roof access
entries, common entrances and lobbies, elevators, and restrooms not located
within the premises of any tenant.

     SECTION 6.3 USE OF COMMON AREAS. The occupancy by Tenant of the Premises
shall include the use of the Common Areas in common with Landlord and with all
others for whose convenience and use the Common Areas may be provided by
Landlord, subject, however, to compliance with all rules and regulations as are
prescribed from time to time by Landlord. Landlord shall operate and maintain
the Common Areas in the manner Landlord may determine to be appropriate.
Landlord shall at all times during the Term have exclusive control of the Common
Areas, and may restrain any use

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or occupancy, except as authorized by Landlord's rules and regulations. Tenant
shall keep the Common Areas clear of any obstruction or unauthorized use related
to Tenant's operations. Nothing in this Lease shall be deemed to impose
liability upon Landlord for any damage to or loss of the property of, or for any
injury to, Tenant, its invitees or employees. Landlord may temporarily close any
portion of the Common Areas for repairs, remodeling and/or alterations, to
prevent a public dedication or the accrual of prescriptive rights, or for any
other reason deemed reasonably sufficient by Landlord, without liability to
Tenant.

     SECTION 6.4 PARKING. Tenant shall be entitled to the number of vehicle
parking spaces set forth in Item 12 of the Basic Lease Provisions, which spaces
shall be unreserved and unassigned, on those portions of the Common Areas
designated by Landlord for parking. Tenant shall not use more parking spaces
than such number. All parking spaces shall be used only for parking by vehicles
no larger than full size passenger automobiles, vans or pickup trucks. Tenant
shall not permit or allow any vehicles that belong to or are controlled by
Tenant or Tenant's employees, suppliers, shippers, customers or invitees to be
loaded, unloaded or parked in areas other than those designated by Landlord for
such activities. If Tenant permits or allows any of the prohibited activities
described above, then Landlord shall have the right, without notice, in addition
to such other rights and remedies that Landlord may have, to remove or tow away
the vehicle involved and charge the costs to Tenant. Parking within the Common
Areas shall be limited to striped parking stalls, and no parking shall be
permitted in any driveways, access ways or in any area which would prohibit or
impede the free flow of traffic within the Common Areas. There shall be no
overnight parking of any vehicles of any kind unless otherwise authorized by
Landlord, and vehicles which have been abandoned or parked in violation of the
terms hereof may be towed away at the owner's expense. Landlord shall have the
right to establish, and from time to time amend, and to enforce against all
users all reasonable rules and regulations (including the designation of areas
for employee parking) that Landlord may deem necessary and advisable for the
proper and efficient operation and maintenance of parking within the Common
Areas. Landlord shall have the right to construct, maintain and operate lighting
facilities within the parking areas; to change the area, level, location and
arrangement of the parking areas and improvements therein; to restrict parking
by tenants, their officers, agents and employees to employee parking areas; and
to do and perform such other acts in and to the parking areas and improvements
therein as, in the use of good business judgment, Landlord shall determine to be
advisable. Any person using the parking area shall observe all directional signs
and arrows and any posted speed limits. In no event shall Tenant interfere with
the use and enjoyment of the parking area by other occupants of the Building or
their employees or invitees. Parking areas shall be used only for parking
vehicles. Washing, waxing, cleaning or servicing of vehicles, or the storage of
vehicles for 24-hour periods, is prohibited unless otherwise authorized by
Landlord. Tenant shall be liable for any damage to the parking areas caused by
Tenant or Tenant's employees, suppliers, shippers, customers or invitees,
including without limitation damage from excess oil leakage. Tenant shall have
no right to install any fixtures, equipment or personal property in the parking
areas.

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     SECTION 6.5 CHANGES AND ADDITIONS BY LANDLORD. Landlord reserves the right
to make alterations or additions to the Building, or to the attendant fixtures,
equipment and Common Areas. Landlord may at any time relocate or remove any of
the various buildings, parking areas, and other Common Areas, and may add areas
to the Building from time to time. No change shall entitle Tenant to any
abatement of rent or other claim against Landlord, provided that the change does
not deprive Tenant of reasonable access to or use of the Premises.
Notwithstanding anything to the contrary in this Section 6.5, Landlord shall not
make any modifications to or use of the Common Areas if such modifications or
use would unreasonably interfere with Tenant's business operations on the
Premises or materially increase the obligations or materially decrease the
rights of Tenant under the Lease. Landlord shall use its reasonable diligence to
minimize any disruption to Tenant's business operations in connection with any
such modifications to the Common Areas.

                      ARTICLE VII. MAINTAINING THE PREMISES

     SECTION 7.1 TENANT'S MAINTENANCE AND REPAIR. Tenant at its sole expense
shall make all repairs necessary to keep the Premises and the Furniture in the
condition as existed on the Commencement Date excepting ordinary wear and tear,
including without limitation all glass, windows, doors, door closures, hardware,
fixtures and fire extinguisher equipment. Any damage or deterioration of the
Premises or the furniture shall not be deemed ordinary wear and tear if the same
could have been prevented by good maintenance practices by Tenant. All repairs
shall be at least equal in quality to the original work, shall be made only by a
licensed contractor approved in writing in advance by Landlord. Any contractor
utilized by Tenant shall be subject to Landlord's reasonable requirements for
contractors, as modified from time to time. Landlord may impose reasonable
restrictions and requirements with respect to repairs, as provided in Section
7.3, and the provisions of Section 7.4 shall apply to all repairs. If Tenant
fails to properly maintain and/or repair the Premises or the furniture as herein
provided following Landlord's notice and the expiration of the applicable cure
period, then Landlord may elect to make any repair or maintenance required
hereunder on behalf of Tenant and at Tenant's expense, and Tenant shall promptly
reimburse Landlord for all reasonable costs incurred within ten (10) days
following submission of an invoice.

     SECTION 7.2 LANDLORD'S MAINTENANCE AND REPAIR. Landlord shall provide
service, maintenance and repair with respect to any air conditioning,
ventilating or heating equipment which serve the Premises and shall maintain in
good repair the roof, foundations, footings, the exterior surfaces of the
exterior walls of the Building, and the structural, electrical, plumbing and
mechanical systems, except that Tenant at its expense shall make all repairs
which Landlord deems reasonably necessary as a result of the act or negligence
of Tenant, its agents, employees, invitees, subtenants or contractors. Landlord
shall have the right to employ or designate any reputable person or firm,
including any employee or agent of Landlord or any of Landlord's affiliates or
divisions, to perform any service, repair or maintenance function. Landlord need
not make any other improvements or repairs except as specifically required under
this Lease, and nothing contained in this Section shall limit Landlord's right
to reimbursement from Tenant for maintenance, repair

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costs and replacement costs as provided elsewhere in this Lease. Except as
expressly provided in Section 7.6 of this Lease, Tenant understands that it
shall not make repairs at Landlord's expense or by rental offset. Tenant further
understands that Landlord shall not be required to make any repairs to the roof,
foundations, footings, structural, electrical or mechanical systems unless and
until Tenant has notified Landlord in writing of the need for such repair and
Landlord shall have a reasonable period of time thereafter to commence and
complete said repair, if warranted.

     SECTION 7.3 ALTERATIONS. Tenant shall make no alterations, additions or
improvements to the Premises or the Furniture without the prior written consent
of Landlord.

     SECTION 7.4 ENTRY AND INSPECTION. Landlord shall at all reasonable times,
upon at least twenty-four (24) hours' written or oral notice (except in
emergencies, when no notice shall be required) have the right to enter the
Premises to inspect them, to supply services in accordance with this Lease, to
protect the interests of Landlord in the Premises, and to submit the Premises to
prospective or actual purchasers, lessors or encumbrance holders, all without
being deemed to have caused an eviction of Tenant and without abatement of rent
except as provided elsewhere in this Lease. Landlord shall have the right to
retain a key which unlocks all of the doors in the Premises, excluding Tenant's
vaults and safes, and Landlord shall have the right to use any and all means
which Landlord may deem proper to open the doors in an emergency in order to
obtain entry to the Premises, and any entry to the Premises obtained by Landlord
shall not under any circumstances be deemed to be a forcible or unlawful entry
into, or a detainer of, the Premises, or any eviction of Tenant from the
Premises. Landlord and its licensees and agents shall have the right to enter
the premises at any time in carrying out the terms of this Lease and fulfilling
the obligations and exercising the rights of Landlord hereunder.

            ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANT'S PROPERTY

     Tenant shall be liable for and shall pay, at least ten (10) days before
delinquency, all taxes and assessments levied against all personal property of
Tenant located in the Premises.

                      ARTICLE IX. ASSIGNMENT AND SUBLETTING

     SECTION 9.1 RIGHTS OF PARTIES.

          (a) Notwithstanding any provision of this Lease to the contrary,
Tenant will not, either voluntarily or by operation of law, assign, sublet,
encumber, or otherwise transfer all or any part of Tenant's interest in this
lease, or permit the Premises to be occupied by anyone other than Tenant,
without Landlord's prior written consent, which consent may be withheld in the
sole and absolute discretion of Landlord. No assignment (whether voluntary,
involuntary or by operation of law) and no subletting shall be valid or
effective without Landlord's prior written consent and, at Landlord's election,
any such assignment or subletting shall constitute a material Default of this
Lease. Landlord shall not be

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deemed to have given its consent to any assignment or subletting by any other
course of action. To the extent not prohibited by provisions of the Bankruptcy
Code, 11 U.S.C. Section 101 et seq. (the "Bankruptcy Code"), including Section
365(f)(1), Tenant on behalf of itself and its creditors, administrators and
assigns waives the applicability of Section 365(e) of the Bankruptcy Code unless
the proposed assignee of the Trustee for the estate of the bankrupt meets
Landlord's standard for consent as set forth in Section 9.1(b) of this Lease. If
this Lease is assigned to any person or entity pursuant to the provisions of the
Bankruptcy Code, any and all monies or other considerations to be delivered in
connection with the assignment shall be 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
person or entity to which this Lease is assigned pursuant to the provisions of
the Bankruptcy Code shall be deemed to have assumed all of the obligations
arising under this Lease on and after the date of the assignment, and shall upon
demand execute and deliver to Landlord an instrument confirming that assumption.

                       ARTICLE X. INSURANCE AND INDEMNITY

     SECTION 10.1 TENANT'S INSURANCE. Tenant, at its sole cost and expense,
shall provide and maintain in effect the insurance described in Exhibit C.
Evidence of that insurance must be delivered to Landlord prior to the
Commencement Date.

     SECTION 10.3 JOINT INDEMNITY.

          (a) Tenant's Indemnity. To the fullest extent permitted by law, Tenant
shall defend (with attorneys reasonably acceptable to Landlord), indemnify,
protect, save and hold harmless Landlord, its agents, and any and all affiliates
of Landlord, including, without limitation, any corporations or other entities
controlling, controlled by or under common control with Landlord, from and
against any and all claims, liabilities, costs or expenses arising from Tenant's
use or occupancy of the Premises or the Building, or from the conduct of its
business, or from any activity, work, or thing done, permitted or suffered by
Tenant or its agents, employees, invitees or licensees in or about the Premises
or the Building, or from any Default in the performance of any obligation on
Tenant's part to be performed under this Lease, or from any act or negligence of
Tenant or its agents, employees, visitors, patrons, guests, invitees or
licensees; provided Tenant shall have no obligation to indemnify, save or hold
harmless Landlord for any claims, liabilities, costs or expenses to the extent
the same is caused by the negligence or willful misconduct on the part of
Landlord, or its authorized agents, contractors or employees, or for which
Tenant is otherwise indemnified hereunder. In cases of alleged negligence
asserted by third parties against Landlord which arise out of, are occasioned
by, or in any way attributable to Tenant's, its agents, employees, contractors,
licensees or invitees use and occupancy of the Premises or the Building, or from
the conduct of its business or from any activity, work or thing done, permitted
or suffered by Tenant or its agents, employees, invitees or licensees on
Tenant's part to be performed under this Lease, or from any act of negligence of
Tenant, its agents, employees, licensees or invitees, Tenant shall accept any
tender of defense for Landlord and shall, notwithstanding any allegation

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<PAGE>   12

of negligence or willful misconduct on the part of the Landlord, defend Landlord
and protect and hold Landlord harmless and pay all costs expenses and attorneys'
fees incurred in connection with such litigation, provided that Tenant shall not
be liable for any such injury or damage, and Landlord shall reimburse Tenant for
the reasonable attorney's fees and costs for the attorney representing both
parties, all to the extent and in the proportion that such injury or damage is
ultimately determined by a court of competent jurisdiction (or in connection
with any negotiated settlement agreed to by Landlord) to be attributable to the
negligence or willful misconduct of Landlord. Upon Landlord's request, Tenant
shall at Tenant's sole cost and expense, retain a separate attorney selected by
Landlord to represent Landlord in any such suit if Landlord determines that the
representation of both Tenant and Landlord by the same attorney would cause a
conflict of interest; provided, however, that to the extent and in the
proportion that the injury or damage which is the subject of the suit is
ultimately determined by a court of competent jurisdiction (or in connection
with any negotiated settlement agreed to by Landlord) to be attributable to the
negligence or willful misconduct of Landlord, Landlord shall reimburse Tenant
for the reasonable legal fees and costs of the separate attorney retained by
Tenant. The provisions of this SubSection 10.3(a) shall expressly survive the
expiration or sooner termination of this Lease.

          (b) Landlord's Indemnity. To the fullest extent permitted by law, but
subject to the express limitations on liability contained in this Lease
(including, without limitation, the provisions of Sections 10.4, 10.5 and 14.8
of this Lease), Landlord shall defend (with attorneys reasonably acceptable to
Tenant), indemnify, protect, save and hold harmless Tenant, its agents and any
and all affiliates of Tenant, including, without limitation, any corporations,
or other entities controlling, controlled by or under common control with
Tenant, from and against any and all claims, liabilities, costs or expenses
arising from the maintenance or repair of the Common Areas, the Project and/or
the Building by Landlord or its employees, authorized agents or contractors;
provided that Landlord shall have no obligation to indemnify, save or hold
harmless Tenant for any claims, liabilities, costs or expenses to the extent the
same is caused by the negligence or willful misconduct on the part of Tenant, or
its agents, employees, licensees or invitees, or for which Landlord is otherwise
indemnified hereunder. In cases of alleged negligence asserted by third parties
against Tenant which arise out of, are occasioned by, or in any way attributable
to the maintenance or repair of the Common Areas, or the Building by Landlord or
its contractors, authorized agents or employees, Landlord shall accept any
tender defense for Tenant and shall, notwithstanding any allegation of
negligence or willful misconduct on the part of Tenant, defend Tenant and
protect and hold Tenant harmless and pay all cost, expense and attorneys' fees
incurred in connection with such litigation, provided that Landlord shall not be
liable for any such injury or damage, and Tenant shall reimburse Landlord for
the reasonable attorney's fees and costs for the attorney representing both
parties, all to the extent and in the proportion that such injury or damage is
ultimately determined by a court of competent jurisdiction (or in connection
with any negotiated settlement agreed to by Tenant) to be attributable to the
negligence or willful misconduct of Tenant. Upon Tenant's request, Landlord
shall at Landlord's sole cost and expense, retain a separate attorney selected
by Tenant to represent Tenant in any such suit if Tenant determines that the
representation of both Tenant and Landlord by the same

                                       12
<PAGE>   13

attorney would cause conflict of interest; provided, however, that to the extent
and the proportion that the injury or damage which is the subject of the suit is
ultimately determined by a court of competent jurisdiction (or in connection
with any negotiated settlement agreed to by Tenant) to be attributable to the
negligence or willful misconduct of Tenant, Tenant shall reimburse Landlord for
the reasonable legal fees and costs of the separate attorney retained by
Landlord. The provisions of this Subsection 10.3(b) shall expressly survive the
expiration or sooner termination of this Lease.

     SECTION 10.4 LANDLORD'S NONLIABILITY. Except as expressly provided by the
indemnity obligations contained in Section 10.3(b) of this Lease, Landlord shall
not be liable to Tenant, its employees, agents and invitees, and Tenant hereby
waives all claims against Landlord, for loss of or damage to any property, or
any injury to any person, or any other loss, cost, damage, injury or liability
whatsoever resulting from fire, explosion, failing plaster, steam, gas,
electricity, water or rain which may leak or flow from or into any part of the
Building or from the breakage, leakage, obstruction or other defects of the
pipes, sprinklers, wires, appliances, plumbing, air conditioning, electrical
works or other fixtures in the Building, whether the damage or injury results
from conditions arising in the Premises or in other portions of the Building.
Notwithstanding any provision of this Lease to the contrary, including, without
limitation, the provisions of Section 10.3(b) of this Lease, Landlord shall in
no event be liable to Tenant, its employees, agents, and invitees, and Tenant
hereby waives all claims against Landlord, for loss or interruption of Tenant's
business or income (including, without limitation, any consequential damages and
lost profit or opportunity costs), or any other loss, cost, damage, injury or
liability resulting from, but not limited to, Acts of God, acts of civil
disobedience or insurrection, acts of omissions (criminal or otherwise) of any
third parties, including without limitation, any other tenants within the
Building or their agents, employees, contractors, guests or invitees. It is
understood that any such condition may require the temporary evacuation or
closure of all or a portion of the Building. Except as expressly provided in
this Lease, there shall be no abatement of rent and no liability of Landlord by
reason of any injury to or interference with Tenant's business (including
without limitation consequential damages and lost profit or opportunity costs)
arising from the making of any repairs, alterations or improvements to any
portion of the Building, including repairs to the premises, nor shall any
related activity by Landlord constitute an actual or constructive eviction,
provided, however, that in making repairs, alterations or improvements, Landlord
shall interfere as little as reasonably practicable with the conduct of Tenant's
business in the Premises. Neither Landlord nor its agents shall be liable for
interference with light or other similar intangible interests. Tenant shall
immediately notify Landlord in case of fire or accident in the Premises, the
Building and of defects in any improvements or equipment.

     SECTION 10.5 WAIVER OF SUBROGATION. Notwithstanding anything to the
contrary contained in this Lease, Landlord and Tenant each hereby waives all
rights of recovery against the other and the other's agents on account of loss
and damage occasioned to the property of such waiving party to the extent only
that such loss or damage is required to be insured against under Article X;
provided however, that the foregoing waiver shall not apply to the extent of
Tenant's obligations to pay deductibles

                                       13
<PAGE>   14

under any such policies and this Lease. By this waiver it is the intent of the
parties that neither Landlord nor Tenant shall be liable to any insurance
company (by way of subrogation or otherwise) insuring the other party for any
loss or damage insured against under any "all-risk" property insurance policies
required by this Article, even though such loss or damage might be occasioned by
the negligence of such party, its agents, employees, contractors, guests or
invitees. All of the parties' repair and maintenance and indemnity obligations
under this Lease shall be subject to the waiver of subrogation contained in this
Section 10.5. The parties hereto shall cause each property insurance policy it
obtains to include a waiver of subrogation regarding the liabilities released
hereby.

                        ARTICLE XI. DAMAGE OR DESTRUCTION

     SECTION 11.1 RESTORATION.

          (a) If the Building of which the Premises are a part is damaged,
Landlord shall repair that damage as soon as reasonably practicable, at its
expense, unless: (i) Landlord reasonably determines that the cost of repair is
greater than Fifty Thousand Dollars ($50,000.00) and is not covered by
Landlord's coverages, plus such additional amounts Tenant elects, at its option,
to contribute, excluding however the deductible (for which Tenant shall be
responsible for tenant's share); (ii) Landlord reasonably determines that the
Premises cannot, with reasonable diligence, be fully repaired by Landlord (or
cannot be safely repaired because of the presence of hazardous factors,
including without limitation Hazardous Materials, earthquake faults, and other
similar dangers) within thirty (30) days after the date of the damage; or (iii)
a Default by Tenant has occurred at the time of such damage, should Landlord
elect not to repair the damage for one of the preceding reasons, Landlord shall
so notify Tenant in writing within fifteen (15) days after the damage occurs and
this Lease shall terminate as of the date of that notice.

          (b) Unless Landlord elects to terminate this Lease in accordance with
subsection (a) above, this Lease shall continue in effect for the remainder of
the Term; provided that so long as Tenant is not in Default under this Lease, if
the damage is so extensive that Landlord reasonably determines that the Premises
cannot, with reasonable diligence, be repaired by Landlord (or cannot be safely
repaired because of the presence of hazardous factors, earthquake faults, and
other similar dangers) so as to allow Tenant's substantial use and enjoyment of
the Premises, or are not in fact repaired by Landlord, within two fifteen (15)
days after the date of damage, then Tenant may elect to terminate this Lease by
written notice to Landlord either within the fifteen (15) day period stated in
subsection (a), or within fifteen (15) days following Landlord's failure to so
repair the Premises within thirty (30) days after the date of damage.

          (c)  Commencing on the date of any damage to the Building, and ending
on the sooner of the date the damage is repaired or the date this Lease is
terminated, the rental to be paid under this Lease shall be abated in the same
proportion that the floor area of the Premises that is rendered unusable by the
damage from time to time bears to

                                       14
<PAGE>   15

the total floor area of the Premises, provided that Tenant is then carrying the
business interruption insurance required in Exhibit C.

          (d) Tenant shall fully cooperate with Landlord in removing Tenant's
personal property and any debris from the Premises to facilitate all inspections
of the Premises and the making of any repairs. Notwithstanding anything to the
contrary contained in this Lease, if Landlord in good faith believes there is a
risk of injury to persons or damage to property from entry into the Building or
Premises following any damage or destruction thereto, Landlord may restrict
entry into the Building or the Premises by Tenant, its employees, agents and
contractors in a non-discriminatory manner, without being deemed to have
violated Tenant's rights of quiet enjoyment to, or made an unlawful detainer of,
or evicted Tenant from, the Premises. Upon request, Landlord shall consult with
Tenant to determine if there are safe methods of entry into the Building or the
Premises solely in order to allow Tenant to retrieve files, data in computers,
and necessary inventory, subject however to all indemnities and waivers of
liability from Tenant to Landlord contained in this Lease and any additional
indemnities and waivers of liability which Landlord may reasonably require.

     SECTION 11.2 LEASE GOVERNS. Tenant agrees that the provisions of this
Lease, including without limitation Section 11.1, shall govern any damage or
destruction and shall accordingly supersede any contrary statute or rule of law.

                           ARTICLE XII. EMINENT DOMAIN

     SECTION 12.1 TOTAL OR PARTIAL TAKING. If all or a material portion of the
Premises is taken, whether such taking is permanent or temporary, by any lawful
authority by exercise of the right of eminent domain, or sold to prevent a
taking, either Tenant or Landlord may terminate this Lease effective as of the
date possession is required to be surrendered to the authority. In the event of
a taking, Landlord shall be entitled to the entire amount of the condemnation
award without deduction for any estate or interest of Tenant; provided that
nothing in this Section shall be deemed to give Landlord any interest in, or
prevent Tenant from seeking any award against the taking authority for, the
taking of personal property and fixtures belonging to Tenant or for relocation
or business interruption expenses or loss of good will recoverable from the
taking authority.

     SECTION 12.2 TAKING OF PARKING AREA . In the event there shall be a taking
of the parking area such that Landlord can no longer provide sufficient parking
to comply with this Lease, Landlord shall have no obligation to locate or
provide substitute or additional parking. If the taking materially impairs
Tenant's use and enjoyment of the Premises, Tenant may, at its option, terminate
this Lease by written notice to Landlord. If this Lease is not so terminated by
Tenant, there shall be no abatement of rent and this Lease shall continue in
effect.

                                       15
<PAGE>   16

                ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE

     SECTION 13.1 SUBORDINATION. At the option of Landlord, this Lease shall be
either superior or subordinate to all ground or underlying leases, mortgages and
deeds of trust, if any, which may hereafter affect the Building, and to all
renewals, modifications, consolidations, replacements and extensions thereof;
provided, that so long as Tenant is not in Default under this Lease, this Lease
shall not be terminated or Tenant's quiet enjoyment of the Premises disturbed in
the event of termination of any such ground or underlying lease, or the
foreclosure of any such mortgage or deed of trust. In the event of a termination
or foreclosure, Tenant shall become a tenant of and attorn to the successor-in-
interest to Landlord upon the same terms and conditions as are contained in this
Lease, and shall execute any instrument reasonably required by Landlord's
successor for that purpose. Tenant shall also, upon written request of Landlord,
execute and deliver all instruments as may be required from time to time to
subordinate the rights of Tenant under this Lease to any ground or underlying
lease or to the lien of any mortgage or deed of trust (provided that such
instruments include the nondisturbance and attornment provisions set forth
above), or, if requested by Landlord, to subordinate, in whole or in part, any
ground or underlying lease or the lien of any mortgage or deed of trust to this
Lease.

     SECTION 13.2   ESTOPPEL CERTIFICATE.

          (a) Tenant shall, at any time upon not less than fifteen (15) days'
prior written notice from Landlord, execute, acknowledge and deliver to
Landlord, in any form that Landlord may reasonably require, a statement in
writing (i) certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of the modification and certifying
that this Lease, as modified, is in full force and effect) and the dates to
which the rental, additional rent and other charges have been paid in advance,
if any, and (ii) acknowledging that, to Tenant's knowledge, there are no uncured
defaults on the part of Landlord, or specifying each default if any are claimed,
and (iii) setting forth all further information that Landlord may reasonably
require. Tenant's statement may be relied upon by any prospective purchaser or
encumbrancer of all or any portion of the Building.

          (b) Notwithstanding any other rights and remedies of Landlord,
Tenant's failure to deliver any estoppel statement within the provided time
shall be conclusive upon Tenant that (i) this Lease is in full force and effect,
without modification except as may be represented by Landlord, (ii) there are no
uncured defaults in Landlord's performance, and (iii) not more than one month's
rental has been paid in advance.

                       ARTICLE XIV. DEFAULTS AND REMEDIES

     SECTION 14.1 TENANT'S DEFAULTS. The occurrence of any one or more of the
following events, following notice by Landlord and the expiration of the
applicable cure period, if any, without cure by Tenant, shall constitute a
default by Tenant (a "Default" as used in this Lease):

                                       16
<PAGE>   17

          (a) The failure by Tenant to make any payment of rent or additional
rent required to be made by Tenant, as and when due, where the failure continues
for a period of five (5) days after written notice from Landlord to Tenant;
provided, however, that any such notice shall be in lieu of, and not in addition
to, any notice required under California Code of Civil Procedure Section 1161
and 1161(a) as amended, provided such notice is served in the manner required
under Code of Civil Procedure Section 1162. For purposes of these default and
remedies provisions, the term "additional rent" shall be deemed to include all
amounts of any type whatsoever other than Basic Rent to be paid by Tenant
pursuant to the terms of this Lease.

          (b) Assignment, sublease, encumbrance or other transfer of the Lease
by Tenant, either voluntarily or by operation of law, whether by judgment,
execution, transfer by intestacy or testacy, or other means, without the prior
written consent of Landlord.

          (c) The failure of Tenant to timely and fully provide any
subordination agreement, or estoppel certificate in accordance with the
requirements of Article XIII, where the failure continues for a period of ten
(10) days after written notice from Landlord to Tenant; provided, however, that
any such notice shall be in lieu of, and not in addition to, any notice required
under California Code of Civil Procedure Section 1161 and 1161(a) as amended,
provided such notice is served in the manner required under Code of Civil
Procedure Section 1162.

          (e) The failure or inability by Tenant to observe or perform any of
the express or implied covenants or provisions of this Lease to be observed or
performed by Tenant, other than as specified in any other subsection of this
Section, where the failure continues for a period of thirty (30) days after
written notice from Landlord to Tenant or such shorter period as is specified in
any other provision of this Lease; provided, however, that any such notice shall
be in lieu of, and not in addition to, any notice required under California Code
of Civil Procedure Section 1161 and 1161(a) as amended, provided such notice is
served in the manner required under Code of Civil Procedure Section 1162.

          (d) (i) The making by Tenant of any general assignment for the benefit
of creditors; (ii) the filing by or against Tenant of a petition to have Tenant
adjudged a Chapter 7 debtor under the Bankruptcy Code or to have debts
discharged or a petition for reorganization or arrangement under any law
relating to bankruptcy (unless, in the case of a petition filed against Tenant,
the same is dismissed within thirty (30) days); (iii) the appointment of a
trustee or receiver to take possession of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease, if possession is
not restored to Tenant within thirty (30) days; or (iv) the attachment,
execution or other judicial seizure of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease, where the seizure
is not discharged within thirty (30) days. Landlord shall not be deemed to have
knowledge of any event described in this subsection unless notification in
writing is received by Landlord, nor shall there be any presumption attributable
to Landlord of Tenant's insolvency. In the event that any

                                       17
<PAGE>   18

provision of this subsection is contrary to applicable law, the provision shall
be of no force or effect.

     SECTION 14.2 LANDLORD'S REMEDIES.

          (a) In the event of any Default by Tenant, or in the event of the
abandonment of the Premises by Tenant, then in addition to any other remedies
available to Landlord, Landlord may exercise the following remedies:

               (i) Landlord may terminate Tenant's right to possession of the
Premises by any lawful means, in which case this Lease shall terminate and
Tenant shall immediately surrender possession of the Premises to Landlord. Such
termination shall not affect any accrued obligations of Tenant under this Lease.
Upon termination, Landlord shall have the right to reenter the Premises and
remove all persons and property. Landlord shall also be entitled to recover from
Tenant:

                    (1) The worth at the time of award of the unpaid rent and
additional rent which had been earned at the time of termination;

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

                    (3) The worth at the time of award of the amount by which
the unpaid rent and additional rent for the balance of the Term after the time
of award exceeds the amount of such loss that Tenant proves could be reasonably
avoided;

                    (4) Any other amount necessary to compensate Landlord for
all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result from Tenant's Default, including, but not limited to, the cost
of recovering possession of the Premises, refurbishment of the Premises,
marketing costs, commissions and other expenses of reletting, including
necessary repair and, reasonable attorneys' fees, and any other reasonable
costs; and

                    (5) At Landlord's election, all other amounts in addition to
or in lieu of the foregoing as may be permitted by law. The term "rent" as used
in this Lease shall be deemed to mean the Basic Rent and all other sums required
to be paid by Tenant to Landlord pursuant to the terms of this Lease. Any sum,
other than Basic Rent, shall be computed on the basis of the average monthly
amount accruing during the twenty-four (24) month period immediately prior to
Default, except that if it becomes necessary to compute such rental before the
twenty-four (24) month period has occurred, then the computation shall be on the
basis of the average monthly amount during the shorter period. As used in
subparagraphs (1) and (2) above, the "worth at the time of award"

                                       18
<PAGE>   19

shall be computed by allowing interest at the rate of ten percent (10%) per
annum. As used in subparagraph (3) above, the "worth at the time of award" shall
be computed by discounting the amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus one percent (1%).

               (ii) Landlord may elect not to terminate Tenant's right to
possession of the Premises, in which event Landlord may continue to enforce all
of its rights and remedies under this Lease, including the right to collect all
rent as it becomes due. Efforts by the Landlord to maintain, preserve or relet
the Premises, or the appointment of a receiver to protect the Landlord's
interests under this Lease, shall not constitute a termination of the Tenant's
right to possession of the Premises.

          (b) The various rights and remedies reserved to Landlord in this Lease
or otherwise shall be cumulative and, except as otherwise provided by California
law, Landlord may pursue any or all of its rights and remedies at the same time.

          (c) No delay or omission of Landlord to exercise any right or remedy
shall be construed as a waiver of the right or remedy or of any Default by
Tenant. The acceptance by Landlord of rent shall not be a (i) waiver of any
preceding breach or Default by Tenant of any provision of this Lease, other than
the failure of Tenant to pay the particular rent accepted, regardless of
Landlord's knowledge of the preceding breach or default at the time of
acceptance of rent, or (ii) a waiver of Landlord's right to exercise any remedy
available to Landlord by virtue of the breach or default. The acceptance of any
payment from a debtor in possession, a trustee, a receiver or any other person
acting on behalf of Tenant or Tenant's estate shall not waive or cure a default
under Section 14.1. No payment by Tenant or receipt by Landlord of a lesser
amount than the rent required by this Lease shall be deemed to be other than a
partial payment on account of the earliest due stipulated rent, nor shall any
endorsement or statement on any check or letter be deemed an accord and
satisfaction and Landlord shall accept the check or payment without prejudice to
Landlord's right to recover the balance of the rent or pursue any other remedy
available to it. No act or thing done by Landlord or Landlord's agents during
the Term shall be deemed an acceptance of a surrender of the Premises, and no
agreement to accept a surrender shall be valid unless in writing and signed by
Landlord. No employee of Landlord or of Landlord's agents shall have any power
to accept the keys to the Premises prior to the termination of this Lease, and
the delivery of the keys to any employee shall not operate as a termination of
the Lease or a surrender of the Premises.

     SECTION 14.3 LATE PAYMENTS. Any rent due under this Lease that is not
received by Landlord within five (5) days of the date when due shall bear
interest at the maximum rate permitted by law from the date due until fully
paid. The payment of interest shall not cure any Default by Tenant under this
Lease. In addition, Tenant acknowledges that the late payment by Tenant to
Landlord of rent will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult and impracticable
to ascertain. Those costs may include, but are not limited to, administrative,
processing and accounting charges, and late charges which may be imposed on
Landlord by the terms of any ground lease, mortgage or trust deed covering

                                       19
<PAGE>   20

the Premises. Accordingly, if any rent due from Tenant shall not be received by
Landlord or Landlord's designee within five (5) days after the date due, then
Tenant shall pay to Landlord, in addition to the interest provided above, a late
charge in a sum equal to the greater of five percent (5%) of the amount overdue
or Two Hundred Fifty Dollars ($250.00) for each delinquent payment. The
foregoing late charge shall not be charged, however, in connection with the
initial payment of rent not paid by Tenant within five (5) days after the date
due. Acceptance of a late charge by Landlord shall not constitute a waiver of
Tenant's Default with respect to the overdue amount, nor shall it prevent
Landlord from exercising any of its other rights and remedies.

     SECTION 14.4 RIGHT OF LANDLORD TO PERFORM. All covenants and agreements to
be performed by Tenant under this Lease shall be performed at Tenant's sole cost
and expense and without any abatement of rent or right of set-off except as
specifically set forth in this Lease. If Tenant fails to pay any sum of money,
other than rent, or fails to perform any other act on its part to be performed
under this Lease, and the failure continues beyond any applicable grace period
set forth in Section 14.1, then in addition to any other available remedies,
Landlord may, at its election make the payment or perform the other act on
Tenant's part. Landlord's election to make the payment or perform the act on
Tenant's part shall not give rise to any responsibility of Landlord to continue
making the same or similar payments or performing the same or similar acts.
Tenant shall, promptly upon demand by Landlord, reimburse Landlord for all sums
paid by Landlord and all necessary incidental costs, together with interest at
the maximum rate permitted by law from the date of the payment by Landlord.
Landlord shall have the same rights and remedies if Tenant fails to pay those
amounts as Landlord would have in the event of a Default by Tenant in the
payment of rent.

     SECTION 14.5 DEFAULT BY LANDLORD. Landlord shall not be deemed to be in
default in the performance of any obligation under this Lease unless and until
it has failed to perform the obligation within thirty (30) days after written
notice by Tenant to Landlord specifying in reasonable detail the nature and
extent of the failure; provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days are required for its
performance, then Landlord shall not be deemed to be in default if it commences
performance within the thirty (30) day period and thereafter diligently pursues
the cure to completion. Except as expressly provided in this Lease, no delay or
omission of Tenant to exercise any right or remedy shall be construed as a
waiver of the right or remedy or of any default by Landlord.

     SECTION 14.6 EXPENSES AND LEGAL FEES. All sums reasonably incurred by
Landlord in connection with any Default by Tenant under this Lease including
without limitation all costs, expenses and actual accountants, appraisers,
attorneys and other professional fees, and any collection agency or other
collection charges, shall be due and payable by Tenant to Landlord on demand,
and shall bear interest at the rate of ten percent (10%) per annum. Should
either Landlord or Tenant bring any action in connection with this Lease, the
prevailing party shall be entitled to recover as a part of the action its
reasonable attorneys' fees, and all other costs. The prevailing party for the
purpose of this paragraph shall be determined by the trier of the facts.

                                       20
<PAGE>   21

     SECTION 14.7 WAIVER OF JURY TRIAL. LANDLORD AND TENANT EACH ACKNOWLEDGES
THAT IT IS AWARE OF AND HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT
TO ITS RIGHTS TO TRIAL BY JURY, AND EACH PARTY DOES HEREBY EXPRESSLY AND
KNOWINGLY WAIVE AND RELEASE ALL SUCH RIGHTS TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO AGAINST THE OTHER
(AND/OR AGAINST ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR SUBSIDIARY OR
AFFILIATED ENTITIES) ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS LEASE, TENANT'S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY
CLAIM OF INJURY OR DAMAGE.

     SECTION 14.8 SATISFACTION OF JUDGMENT. The obligations of Landlord and
Tenant under this Lease do not constitute the personal obligations of the
individual partners, trustees, directors, officers or shareholders of Landlord
or Tenant, or their respective constituent partners. Should Tenant recover a
money judgment against Landlord, such judgment shall be satisfied only out of
the proceeds of sale received upon execution of such judgment and levied thereon
against the right, title and interest of Landlord in the Building and out of the
rent or other income from such property receivable by Landlord or out of
consideration received by Landlord from the sale or other disposition of all or
any part of Landlord's right, title or interest in the Building and no action
for any deficiency may be sought or obtained by Tenant.

     SECTION 14.9 LIMITATION OF ACTIONS AGAINST LANDLORD. Any claim or demand
arising in tort or in contract against Landlord based upon or arising in
connection with this Lease (except those arising in connection with Sections
10.3(b) of this Lease) shall be barred unless Tenant commences an action thereon
within twelve (12) months after the date that the occurrence of the act,
omission, event or default upon which the claim, demand or right arises is
discovered by Tenant. Nothing contained in this Section 14.9, however, shall
extend the operation of any applicable statute of limitations binding on Tenant.

                            ARTICLE XV. END OF TERM

     SECTION 15.1 SURRENDER OF PREMISES; REMOVAL OF PROPERTY. Upon the
Expiration Date or upon any earlier termination of this Lease, Tenant shall quit
and surrender possession of the Premises to Landlord in as good order, condition
and repair as when received or as hereafter may be improved by Landlord or
Tenant, reasonable wear and tear, casualty, Hazardous Materials (except to the
extent Tenant is responsible therefor as provided in Section 5.3 of this Lease)
and repairs which are Landlord's obligation excepted, and shall, without expense
to Landlord, remove or cause to be removed from the Premises all personal
property and debris, except for any items that Landlord may by written
authorization allow to remain. Tenant shall repair all damage to the Premises
resulting from the removal, which repair shall include the patching and filling
of holes and repair of structural damage, provided that Landlord may instead
elect

                                       21
<PAGE>   22

to repair any structural damage at Tenant's expense. If Tenant shall fail to
comply with the provisions of this Section, Landlord may effect the removal
and/or make any repairs, and the cost to Landlord shall be additional rent
payable by Tenant upon demand. If Tenant fails to remove Tenant's personal
property from the Premises upon the expiration of the Term, Landlord may remove,
store, dispose of and/or retain such personal property, at Landlord's option, in
accordance with then applicable laws, all at the expense of Tenant. Upon the
expiration of the Term, if requested by Landlord, Tenant shall execute,
acknowledge and deliver to Landlord an instrument in writing releasing and
quitclaiming to Landlord all right, title and interest of Tenant in the
Premises.

                        ARTICLE XVI. PAYMENTS AND NOTICES

     All sums payable by Tenant to Landlord shall be paid, without deduction or
offset, in lawful money of the United States to Landlord at its address set
forth in Item 10 of the Basic Lease Provisions, or at any other place as
Landlord may designate in writing. Unless this Lease expressly provides
otherwise, as for example in the payment of rent pursuant to Section 4.1, all
payments shall be due and payable within twenty (20) days after demand. All
payments requiring proration shall be prorated on the basis of a thirty (30) day
month and a three hundred sixty (360) day year. Any notice, election, demand,
consent, approval or other communication to be given or other document to be
delivered by either party to the other may be delivered in person or by courier
or overnight delivery service to the other party, or may be deposited in the
United States mail, duly registered or certified, postage prepaid, return
receipt requested, and addressed to the other party at the address set forth in
Item 10 of the Basic Lease Provisions, or if to Tenant, at that address or, from
and after the Commencement Date, at the Premises (whether or not Tenant has
departed from, abandoned or vacated the Premises). Either party may, by written
notice to the other, served in the manner provided in this Article, designate a
different address. If any notice or other document is sent by mail, it shall be
deemed served or delivered three (3) business days after mailing. If more than
one person or entity is named as Tenant under this Lease, service of any notice
upon any one of them shall be deemed as service upon all of them.

                       ARTICLE XVII. RULES AND REGULATIONS

     Tenant agrees to observe faithfully and comply strictly with the Rules and
Regulations, attached as Exhibit D, and any reasonable and nondiscriminatory
amendments, modifications and/or additions as may be adopted and published by
written notice to tenants by Landlord for the safety, care, security, good
order, or cleanliness of the Premises, Building, Project and Common Areas.
Landlord shall not be liable to Tenant for any violation of the Rules and
Regulations or the breach of any covenant or condition in any lease by any other
tenant or such tenant's agents, employees, contractors, guests or invitees. One
or more waivers by Landlord of any breach of the Rules and Regulations by Tenant
or by any other tenant(s) shall not be a waiver of any subsequent breach of that
rule or any other. Tenant's failure to keep and observe the Rules and
Regulations following notice from Landlord and the expiration of the applicable

                                       22
<PAGE>   23

cure period, shall constitute a Default under this Lease. In the case of any
conflict between the Rules and Regulations and this Lease, this Lease shall be
controlling. Notwithstanding anything to the contrary in this Article XVII,
Tenant shall not be required to comply with any rule or regulation unless the
same applies non-discriminatorily to all occupants of the Project.

                       ARTICLE XVIII. BROKER'S COMMISSION

     Tenant warrants that it has had no dealings with any other real estate
broker or agent in connection with the negotiation of this Lease, and Tenant
agrees to indemnify and hold Landlord harmless from any cost, expense or
liability (including reasonable attorneys' fees) for any compensation,
commissions or charges claimed by any other real estate broker or agent employed
or claiming to represent or to have been employed by Tenant in connection with
the negotiation of this Lease. The foregoing agreement shall survive the
termination of this Lease.

                  ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST

     In the event of any transfer of Landlord's interest in the Premises, the
transferor shall be automatically relieved of all obligations on the part of
Landlord accruing under this Lease from and after the date of the transfer,
provided that the transferee assumes in writing all of such obligations and any
funds held by the transferor in which Tenant has an interest shall be turned
over, subject to that interest, to the transferee and Tenant is notified of the
transfer as required by law. No holder of a mortgage and/or deed of trust to
which this Lease is or may be subordinate, and no landlord under a so-called
sale-leaseback, shall be responsible in connection with the Security Deposit,
unless the mortgagee or holder of the deed of trust or the landlord actually
receives the Security Deposit. It is intended that the covenants and obligations
contained in this Lease on the part of Landlord shall, subject to the foregoing,
be binding on Landlord, its successors and assigns, only during and in respect
to their respective successive periods of ownership.

                           ARTICLE XX. INTERPRETATION

     SECTION 20.1 GENDER AND NUMBER. Whenever the context of this Lease
requires, the words "Landlord" and "Tenant" shall include the plural as well as
the singular, and words used in neuter, masculine or feminine genders shall
include the others.

     SECTION 20.2 HEADINGS. The captions and headings of the articles and
sections of this Lease are for convenience only, are not a part of this Lease
and shall have no effect upon its construction or interpretation.

     SECTION 20.3 JOINT AND SEVERAL LIABILITY. If more than one person or entity
is named as Tenant, the obligations imposed upon each shall be joint and several
and the act of or notice from, or notice or refund to, or the signature of, any
one or more

                                       23
<PAGE>   24

of them shall be binding on all of them with respect to the tenancy of this
Lease, including, but not limited to, any renewal, extension, termination or
modification of this Lease.

     SECTION 20.4 SUCCESSORS. Subject to Articles IX and XIX, all rights and
liabilities given to or imposed upon Landlord and Tenant shall extend to and
bind their respective heirs, executors, administrators, successors and assigns.
Nothing contained in this Section is intended, or shall be construed, to grant
to any person other than Landlord and Tenant and their successors and assigns
any rights or remedies under this Lease.

     SECTION 20.5 TIME OF ESSENCE. Time is of the essence with respect to the
performance of every provision of this Lease.

     SECTION 20.6 CONTROLLING LAW. This Lease shall be governed by and
interpreted in accordance with the laws of the State of California.

     SECTION 20.7 SEVERABILITY. If any term or provision of this Lease, the
deletion of which would not adversely affect the receipt of any material benefit
by either party or the deletion of which is consented to by the party adversely
affected, shall be held invalid or unenforceable to any extent, the remainder of
this Lease shall not be affected and each term and provision of this Lease shall
be valid and enforceable to the fullest extent permitted by law.

     SECTION 20.8 WAIVER AND CUMULATIVE REMEDIES. One or more waivers by
Landlord or Tenant of any breach of any term, covenant or condition contained in
this Lease shall not be a waiver of any subsequent breach of the same or any
other term, covenant or condition. Consent to any act by one of the parties
shall not be deemed to render unnecessary the obtaining of that party's consent
to any subsequent act. No breach by Tenant of this Lease shall be deemed to have
been waived by Landlord unless the waiver is in a writing signed by Landlord.
The rights and remedies of Landlord under this Lease shall be cumulative and in
addition to any and all other rights and remedies which Landlord may have.

     SECTION 20.9 INABILITY TO PERFORM. In the event that either party shall be
delayed or hindered in or prevented from the performance of any work or in
performing any act required under this Lease by reason of any cause beyond the
reasonable control of that party, then the performance of the work or the doing
of the act shall be excused for the period of the delay and the time for
performance shall be extended for a period equivalent to the period of the
delay. The provisions of this Section shall not operate to excuse Tenant from
the prompt payment of rent.

     SECTION 20.10 ENTIRE AGREEMENT. This Lease and its exhibits and other
attachments cover in full each and every agreement of every kind between the
parties concerning the Premises, the Building, and the Project, and all
preliminary negotiations, oral agreements, understandings and/or practices,
except those contained in this Lease, are superseded and of no further effect.
Tenant waives its rights to rely on any

                                       24
<PAGE>   25

representations or promises made by Landlord or others which are not contained
in this Lease. No verbal agreement or implied covenant shall be held to modify
the provisions of this Lease, any statute, law, or custom to the contrary
notwithstanding.

     SECTION 20.11 QUIET ENJOYMENT. Upon the observance and performance of all
the covenants, terms and conditions on Tenant's part to be observed and
performed, and subject to the other provisions of this Lease, Tenant shall
peaceably and quietly hold and enjoy the Premises for the Term without hindrance
or interruption by Landlord or any other person claiming by or through Landlord.

     SECTION 20.12 SURVIVAL. All covenants of Landlord or Tenant which
reasonably would be intended to survive the expiration or sooner termination of
this Lease, including without limitation any warranty or indemnity hereunder,
shall so survive and continue to be binding upon and inure to the benefit of the
respective parties and their successors and assigns.

                      ARTICLE XXI. EXECUTION AND RECORDING

     SECTION 21.1 COUNTERPARTS. This Lease may be executed in one or more
counterparts, each of which shall constitute an original and all of which shall
be one and the same agreement.

     SECTION 21.2 CORPORATE AND PARTNERSHIP AUTHORITY. If a corporation or
partnership is executing this Lease, each individual executing this Lease on
behalf of the corporation or partnership represents and warrants that he is duly
authorized to execute and deliver this Lease on behalf of the corporation or
partnership, and that this Lease is binding upon the corporation or partnership
in accordance with its terms. Tenant shall, at Landlord's request, deliver a
certified copy of its board of directors' resolution or partnership agreement or
certificate authorizing or evidencing the execution of this Lease.

     SECTION 21.3 EXECUTION OF LEASE; NO OPTION OR OFFER. The submission of this
Lease to Tenant shall be for examination purposes only, and shall not constitute
an offer to or option for Tenant to lease the Premises. Execution of this Lease
by Tenant and its return to Landlord shall not be binding upon Landlord,
notwithstanding any time interval, until Landlord has in fact executed and
delivered this Lease to Tenant, it being intended that this Lease shall only
become effective upon execution by Landlord and delivery of a fully executed
counterpart to Tenant.

     SECTION 21.4 RECORDING. Tenant shall not record this Lease without the
prior written consent of Landlord.

     SECTION 21.5 AMENDMENTS. No amendment or termination of this Lease shall be
effective unless in writing signed by authorized signatories of Tenant and
Landlord, or by their respective successors in interest. No actions, policies,
oral or informal

                                       25
<PAGE>   26

arrangements, business dealings or other course of conduct by or between the
parties shall be deemed to modify this Lease in any respect.

     SECTION 21.6 EXECUTED COPY. Any fully executed photocopy or similar
reproduction of this Lease shall be deemed an original for all purposes.

     SECTION 21.7 ATTACHMENTS. All exhibits, amendments, riders and addenda
attached to this Lease are hereby incorporated into and made a part of this
Lease.

                           ARTICLE XXII. MISCELLANEOUS

     SECTION 22.1 NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and agrees
that the terms of this Lease are confidential and constitute proprietary
information of Landlord. Disclosure of the terms could adversely affect the
ability of Landlord to negotiate other leases and impair Landlord's relationship
with other tenants. Accordingly, Tenant agrees that it, and its partners,
officers, directors, employees and attorneys, shall not intentionally and
voluntarily disclose the terms and conditions of this Lease to any other tenant
or apparent prospective tenant of the Building or Project, either directly or
indirectly, without the prior written consent of Landlord, provided, however,
that Tenant may disclose the terms to prospective subtenants or assignees under
this Lease, and as required for any security filings, financings or sales,
reorganizations or consolidations of Tenant's business.

     SECTION 22.3 APPROVALS. Subject to Landlord's rights to consent or approve
in its "discretion" or "sole discretion" as provided in this Lease, whenever the
Lease requires an approval, consent, designation, determination, discretion or
judgment by either Landlord or Tenant, such approval, consent, designation,
determination, discretion or judgment (including, without limiting the
generality of the foregoing, those required in connection with assignment and
subletting) shall not be unreasonable or unreasonably withheld or delayed and in
exercising any right or remedy hereunder, each party shall at all times act
reasonably and in good faith.

MiniMed Inc.                               Advanced Bionics Corporation

By:  /s/ ERIC KENTOR                       By:  /s/ MARK CHAMBERLAIN
    -----------------------                    -----------------------
    Eric Kentor                                Mark Chamberlain

Its: Senior Vice President &
     General Counsel

                                       26<PAGE>   1

                                                                   Exhibit 10.34

                                INDUSTRIAL LEASE

     THIS LEASE is made as of October 15, 2000 by and between MiniMed Inc., a
Delaware corporation, hereafter called "Landlord," and AlleCure, a Deleware
corporation, hereinafter called "Tenant."

                        ARTICLE I. BASIC LEASE PROVISIONS

     Each reference in this Lease to the "Basic Lease Provisions" shall mean and
refer to the following collective terms, the application of which shall be
governed by the provisions in the remaining Articles of this Lease.

1.   Premises: The Premises are more particularly described in Section 2.1.

     Address of Building: 12744 San Fernando Road, Sylmar, CA 91342

2.   Use of Premises: General office; laboratories

3.   Estimated Commencement Date:  November 1, 2000

4.   Lease Term: Eight (8) months commencing on the Commencement Date and ending
on June 30, 2001 (Expiration Date). Unless either party shall deliver written
notice at least thirty (30) days prior to the Expiration Date, the lease shall
continue thereafter on a month-to-month basis subject to the terms and
conditions of this Lease. This Lease may be terminated by either party on or
after the Expiration Date upon thirty days' prior written notice.

5.   Basic Rent:  $3,982.00 per month, based on $1.10 per rentable square foot.

6.   Floor Area of Premises:  Approximately 3,620 rentable square feet.

7.   Security Deposit:  $3,982.00

9.   Broker(s): None

10.  Address for Payments and Notices:

           LANDLORD                                TENANT

            18000 Devonshire Street                    9340 DeSoto Avenue
            Northridge, CA  91325                      Chatsworth, CA 91311

11.  Tenant's Liability Insurance Requirement: $ 1,000,000.00

<PAGE>   2

12.  Vehicle Parking Spaces: 10-May be adjusted by Landlord to accommodate other
tenants requirements.

                              ARTICLE II. PREMISES

     SECTION 2.1 LEASED PREMISES. Landlord leases to Tenant and Tenant leases
from Landlord the premises shown in Exhibit A (the "Premises".) The Premises
consist of all the rentable square footage of and are located within the
interior of, the building identified in Item 1 of the Basic Lease Provisions
(which together with the underlying real property, is called the "Building").
Tenant understands that the floor area set forth in Item 6 of the Basic Lease
Provisions may include, at Landlord's option, a factor approximating the total
square footage of any common lobby or internal common features of the Building
times the ratio of the actual square footage of the Premises to the total square
footage of the Building.

     SECTION 2.2 ACCEPTANCE OF PREMISES. Except as expressly provided in this
Lease, Tenant acknowledges that neither Landlord nor any representative of
Landlord has made any representation or warranty with respect to the Premises or
the Building or the suitability or fitness of either for any purpose, including
without limitation any representations or warranties regarding zoning or other
land use matters, and that neither Landlord nor any representative of Landlord
has made any representations or warranties regarding (i) what other tenants or
occupants or uses may be permitted or intended in the Building, or (ii) any
exclusivity of use by Tenant with respect to its permitted use of the Premises
as set forth in Item 2 of the Basic Lease Provisions. Tenant further
acknowledges that neither Landlord nor any representative of Landlord has agreed
to undertake any alterations or additions or construct any improvements to the
Premises. The taking of possession or use of the Premises by Tenant for any
purpose shall conclusively establish that the Premises and the Building were in
satisfactory condition and in conformity with the provisions of this Lease in
all respects.

     SECTION 2.3 BUILDING NAME AND ADDRESS. Tenant shall not utilize any name
selected by Landlord from time to time for the Building as any part of Tenant's
corporate or trade name. Landlord shall have the right to change the name,
address, number or designation of the Building, in its sole discretion, without
liability or Notice to Tenant.

     SECTION 2.4 LANDLORD'S RESPONSIBILITIES. Notwithstanding anything to the
contrary contained in this Lease, Landlord agrees that the Premises shall be in
good and clean operating condition and repair as of the Commencement Date, and
that the plumbing, electrical and mechanical systems serving the Building,
including, without limitation, the HVAC systems, shall be in good operating
condition as of the Commencement Date.

                                ARTICLE III. TERM

                                       2
<PAGE>   3

     SECTION 3.1 GENERAL. The Term shall be for the period shown in Item 4 of
the Basic Lease Provisions. Subject to the provisions of Section 3.2 below, the
Term shall commence on the date Tenant takes possession (which shall be
confirmed in writing by Tenant) ("Commencement Date") and end on June 30, 2001
("Expiration Date"). Following the Expiration Date, Tenant may continue to
occupy and lease the Premises on a month-to-month basis on or after the
Expiration Date subject to the terms and conditions of this Lease. Either party
may terminate this Lease upon thirty (30) days' written notice to the other
party.

                     ARTICLE IV. RENT AND OPERATING EXPENSES

     SECTION 4.1 BASIC RENT. From and after the Commencement Date, Tenant shall
pay to Landlord without deduction or offset, Basic Rent for the Premises in the
total amount shown (including subsequent adjustments, if any) in Item 5 of the
Basic Lease Provisions. The rent shall be due and payable in advance commencing
on the Commencement Date (as prorated for any partial month) and continuing
thereafter on the first day of each successive calendar month of the Term. No
demand, notice or invoice shall be required for the payment of Basic Rent. An
installment of rent in the amount of thirty days' Basic Rent at the initial rate
specified in Item 5 of the Basic Lease Provisions shall be delivered to Landlord
concurrently with Tenant's execution of this Lease and shall be applied against
the Basic Rent first due hereunder.

     SECTION 4.2 OPERATING EXPENSES.

          (a) Landlord shall be solely responsible for "Operating Expenses", as
defined below, incurred by Landlord in the operation of the Building. Tenant
shall not be responsible for any portion of the Operating Expenses.

          (b) The term "Operating Expenses" shall mean and include all expenses
of operation and maintenance of the Building together with all appurtenant
Common Areas (as defined in Section 6.2), and shall include the following
charges by way of illustration but not limitation: water and sewer charges;
permit and inspection fees; heat; light; power; janitorial services; security
services; air conditioning; and Property Taxes. The term "Property Taxes" as
used herein shall include the following: (i) all real estate taxes or personal
property taxes, as such property taxes may be reassessed from time to time; and
(ii) other taxes, charges and assessments which are levied with respect to this
Lease or to the Building and any improvements, fixtures and equipment and other
property of Landlord located in the Building.

     SECTION 4.3 SECURITY DEPOSIT. Concurrently with Tenant's delivery of this
Lease, Tenant shall deposit with Landlord the sum, if any, stated in Item 7 of
the Basic Lease Provisions, to be held by Landlord as security for the full and
faithful performance of Tenant's obligations under this Lease (the "Security
Deposit"). Upon any Default by Tenant, the Security Deposit shall be deemed to
be automatically and immediately applied, without waiver of any rights Landlord
may have under this Lease or at law or in equity as a result of the Default, as
a setoff for full or partial compensation for that

                                       3
<PAGE>   4

Default. If any portion of the Security Deposit is applied after a Default by
Tenant, Tenant shall within five (5) days after written demand by Landlord
deposit cash with Landlord in an amount sufficient to restore the Security
Deposit to its original amount. Landlord shall not be required to keep this
Security Deposit separate from its general funds, and Tenant shall not be
entitled to interest on the Security Deposit. The Security Deposit shall be
returned to Tenant within sixty (60) days after the expiration of the Term,
provided that Landlord may, in its reasonable discretion, retain all or a
portion of the Security Deposit to the extent and until such time as all amounts
due from Tenant in accordance with this Lease have been determined and paid in
full, with any balance of the Security Deposit being returned to Tenant within
sixty (60) days after the expiration of the Term.

                                 ARTICLE V. USES

     SECTION 5.1 USE. Tenant shall use the Premises only for the purposes stated
in Item 3 of the Basic Lease Provisions, all in accordance with applicable laws
and restrictions and pursuant to approvals to be obtained by Tenant from all
relevant and required governmental agencies and authorities. The parties agree
that any contrary use shall be deemed to cause material and irreparable harm to
Landlord and shall entitle Landlord to injunctive relief in addition to any
other available remedy. Tenant, at its expense, shall procure, maintain and make
available for Landlord's inspection throughout the Term, all governmental
approvals, licenses and permits, if any, required for the proper and lawful
conduct of Tenant's business in the Premises. Tenant shall not do or permit
anything to be done in or about the Premises which will in any way interfere
with the rights of other occupants of the Building, or use or allow the Premises
to be used for any unlawful purpose, nor shall Tenant permit any nuisance or
commit any waste in the Premises. Tenant shall not do or permit to be done
anything which will invalidate or increase the cost of any insurance policy(ies)
covering the Building, and/or their contents (unless Tenant agrees to pay for
such increases), and shall comply with all applicable insurance underwriters
rules. Tenant shall comply at its expense with all present and future laws,
ordinances, restrictions, regulations, orders, rules and requirements of all
governmental authorities that pertain to Tenant or its use of the Premises,
including without limitation all federal and state occupational health and
safety requirements, whether or not Tenant's compliance will necessitate
expenditures or interfere with its use and enjoyment of the Premises.

     SECTION 5.2 SIGNS. Tenant shall have the no right to install any signs on
the exterior of the Building.

                        SECTION 5.3 HAZARDOUS MATERIALS.

          (a) For purposes of this Lease, the term "Hazardous Materials"
includes (i) any "hazardous materials" as defined in Section 25501(n) of the
California Health and Safety Code, (ii) any other substance or matter which
results in liability to any person or entity from exposure to such substance or
matter under any statutory or common law theory,

                                       4
<PAGE>   5

and (iii) any substance or matter which is in excess of permitted levels set
forth in any federal, California or local law or regulation pertaining to any
hazardous or toxic substance, material or waste.

          (b) Tenant shall not cause or permit any Hazardous Materials to be
brought upon, stored, used, generated, released or disposed of on, under, from
or about the Premises (including without limitation the soil and groundwater
thereunder) without the prior written consent of Landlord. Notwithstanding the
foregoing, Tenant shall have the right, without obtaining prior written consent
of Landlord, to utilize within the Premises standard office products that may
contain Hazardous Materials (such as photocopy toner, "White Out", and the
like), provided however, that (i) Tenant shall maintain such products in their
original retail packaging, shall follow all instructions on such packaging with
respect to the storage, use and disposal of such products, and shall otherwise
comply with all applicable laws with respect to such products, and (ii) all of
the other terms and provisions of this Section 5.3 shall apply with respect to
Tenant's storage, use and disposal of all such products. Landlord may, in its
sole discretion, place such commercially reasonable conditions as Landlord deems
appropriate with respect to any such Hazardous Materials, and may further
require that Tenant demonstrate that any such Hazardous Materials are necessary
or useful to Tenant's business and will be generated, stored, used and disposed
of in a manner that complies with all applicable laws and regulations pertaining
thereto and with good business practices. Tenant understands that Landlord may
utilize an environmental consultant to assist in determining conditions of
approval in connection with the storage, generation, release, disposal or use of
Hazardous Materials by Tenant on or about the Premises, and/or to conduct
periodic inspections of the storage, generation, use, release and/or disposal of
such Hazardous Materials by Tenant on and from the Premises, and Tenant agrees
that any costs incurred by Landlord in connection therewith shall be reimbursed
by Tenant to Landlord as additional rent hereunder upon demand.

          (c) Landlord and its agents shall have the right, but not the
obligation, to inspect, sample and/or monitor the Premises and/or the soil or
groundwater thereunder at any time to determine whether Tenant is complying with
the terms of this Section 5.3, and in connection therewith Tenant shall provide
Landlord with full access to all relevant facilities, records and personnel. If
Tenant is not in compliance with any of the provisions of this Section 5.3, or
in the event of a release of any Hazardous Material on, under or about the
Premises caused or permitted by Tenant, its agents, employees, contractors,
licensees or invitees, Landlord and its agents shall have the right, but not the
obligation, without limitation upon any of Landlord's other rights and remedies
under this Lease, to immediately enter upon the Premises without notice and to
discharge Tenant's obligations under this Section 5.3 at Tenant's expense,
including without limitation the taking of emergency or long-term remedial
action. Landlord and its agents shall endeavor to minimize interference with
Tenant's business in connection therewith, but shall not be liable for any such
interference. In addition, Landlord, at Tenant's expense, shall have the right,
but not the obligation, to join and participate in any legal proceedings or
actions initiated in connection with any claims arising out of the storage,
generation, use, release

                                       5
<PAGE>   6

and/or disposal by Tenant or its agents, employees, contractors, licensees or
invitees of Hazardous Materials on, under, from or about the Premises.

          (d) If the presence of any Hazardous Materials on, under, from or
about the Premises caused or permitted by Tenant or its agents, employees,
contractors, licensees or invitees results in (i) injury to any person, (d)
injury to or any contamination of the Premises, or (iii) injury to or
contamination of any real or personal property wherever situated, Tenant, at its
expense, shall promptly take all actions necessary to return the Premises and
any other affected real or personal property owned by Landlord to the condition
existing prior to the introduction of such Hazardous Materials and to remedy or
repair any such injury or contamination, including without limitation, any
cleanup, remediation, removal, disposal, neutralization or other treatment of
any such Hazardous Materials. Notwithstanding the foregoing, Tenant shall not,
without Landlord's prior written consent, take any remedial action in response
to the presence of any Hazardous Materials on, under or about the Premises or
any other affected real or personal property owned by Landlord or enter into any
similar agreement, consent, decree or other compromise with any governmental
agency with respect to any Hazardous Materials claims; provided however,
Landlord's prior written consent shall not be necessary in the event that the
presence of Hazardous Materials on, under or about the Premises or any other
affected real or personal property owned by Landlord (i) imposes an immediate
threat to the health, safety or welfare of any individual or (ii) is of such a
nature that an immediate remedial response is necessary and it is not possible
to obtain Landlord's consent before taking such action. To the fullest extent
permitted by law, Tenant shall indemnify, hold harmless, protect and defend
(with attorneys acceptable to Landlord) Landlord and any successors to all or
any portion of Landlord's interest in the Premises and any other real or
personal property owned by Landlord from and against any and all liabilities,
losses, damages, diminution in value, judgments, fines, demands, claims,
recoveries, deficiencies, costs and expenses (including without limitation
attorneys' fees, court costs and other professional expenses), whether
foreseeable or unforeseeable, arising directly or indirectly out of the use,
generation, storage, treatment, release, on- or off-site disposal or
transportation of Hazardous Materials on, into, from, under or about the
Premises, the Building and any other real or personal property owned by Landlord
caused or permitted by Tenant, its agents, employees, contractors, licensees or
invitees, specifically including without limitation the cost of any required or
necessary repair, restoration, cleanup or detoxification of the Premises, the
Building and any other real or personal property owned by Landlord, and the
preparation of any closure or other required plans, whether or not such action
is required or necessary during the Term or after the expiration of this Lease.
If Landlord at any time discovers that Tenant or its agents, employees,
contractors, licensees or invitees may have caused or permitted the release of a
Hazardous Material on, under, from or about the Premises or any other real or
personal property owned by Landlord, Tenant shall, at Landlord's request,
immediately prepare and submit to Landlord a comprehensive plan, subject to
Landlord's approval, specifying the actions to be taken by Tenant to return the
Premises, the Building or any other real or personal property owned by Landlord
to the condition existing prior to the introduction of such Hazardous Materials.
Upon Landlord's approval of such cleanup plan, Tenant shall, at its expense, and
without limitation of any rights and remedies of

                                       6
<PAGE>   7

Landlord under this Lease or at law or in equity, immediately implement such
plan and proceed to cleanup such Hazardous Materials in accordance with all
applicable laws and as required by such plan and this Lease. The provisions of
this subsection (d) shall expressly survive the expiration or sooner termination
of this Lease.

          (f) The rights, obligations and duties of the parties contained in
this Section 5.3 shall supersede any contrary provisions contained in this
Lease.

                       ARTICLE VI. COMMON AREAS; SERVICES

     SECTION 6.1 UTILITIES AND SERVICES. Landlord shall provide, at its cost and
expense, water, gas, electricity, sewer, heat, light, power, refuse pickup,
janitorial service, interior landscape maintenance and all other utilities,
materials and services reasonably necessary for Tenant to utilize the Premises
hereunder. Landlord shall not be responsible for telephone service. Landlord
shall not be liable for damages or otherwise for any failure or interruption of
any utility or other service furnished to the Premises, and no such failure or
interruption shall be deemed an eviction or entitle Tenant to terminate this
Lease or withhold or abate any rent due hereunder. Landlord shall at all
reasonable times have free access to all electrical and mechanical installations
of Landlord, provided that Landlord shall interfere as little as reasonably
practicable with the conduct of Tenant's business in the Premises.

     SECTION 6.2 OPERATION AND MAINTENANCE OF COMMON AREAS. During the Term,
Landlord shall operate all Common Areas within the Building . The term "Common
Areas" shall mean all areas within the exterior boundaries of the Building which
are not held for exclusive use by persons entitled to occupy space, and all
other appurtenant areas and improvements provided by Landlord for the common use
of Landlord and tenants and their respective employees and invitees, including
without limitation parking areas and structures, driveways, sidewalks,
landscaped and planted areas, hallways and interior stairwells not located
within the premises of any tenant, common electrical rooms and roof access
entries, common entrances and lobbies, elevators, and restrooms not located
within the premises of any tenant.

     SECTION 6.3 USE OF COMMON AREAS. The occupancy by Tenant of the Premises
shall include the use of the Common Areas in common with Landlord and with all
others for whose convenience and use the Common Areas may be provided by
Landlord, subject, however, to compliance with all rules and regulations as are
prescribed from time to time by Landlord. Landlord shall operate and maintain
the Common Areas in the manner Landlord may determine to be appropriate.
Landlord shall at all times during the Term have exclusive control of the Common
Areas, and may restrain any use or occupancy, except as authorized by Landlord's
rules and regulations. Tenant shall keep the Common Areas clear of any
obstruction or unauthorized use related to Tenant's operations. Nothing in this
Lease shall be deemed to impose liability upon Landlord for any damage to or
loss of the property of, or for any injury to, Tenant, its invitees or
employees. Landlord may temporarily close any portion of the Common Areas for
repairs, remodeling and/or alterations, to prevent a public dedication or the
accrual of

                                       7
<PAGE>   8

prescriptive rights, or for any other reason deemed reasonably sufficient by
Landlord, without liability to Tenant.

     SECTION 6.4 PARKING. Tenant shall be entitled to the number of vehicle
parking spaces set forth in Item 12 of the Basic Lease Provisions, which spaces
shall be unreserved and unassigned, on those portions of the Common Areas
designated by Landlord for parking. Tenant shall not use more parking spaces
than such number. All parking spaces shall be used only for parking by vehicles
no larger than full size passenger automobiles, vans or pickup trucks. Tenant
shall not permit or allow any vehicles that belong to or are controlled by
Tenant or Tenant's employees, suppliers, shippers, customers or invitees to be
loaded, unloaded or parked in areas other than those designated by Landlord for
such activities. If Tenant permits or allows any of the prohibited activities
described above, then Landlord shall have the right, without notice, in addition
to such other rights and remedies that Landlord may have, to remove or tow away
the vehicle involved and charge the costs to Tenant. Parking within the Common
Areas shall be limited to striped parking stalls, and no parking shall be
permitted in any driveways, access ways or in any area which would prohibit or
impede the free flow of traffic within the Common Areas. There shall be no
overnight parking of any vehicles of any kind unless otherwise authorized by
Landlord, and vehicles which have been abandoned or parked in violation of the
terms hereof may be towed away at the owner's expense. Landlord shall have the
right to establish, and from time to time amend, and to enforce against all
users all reasonable rules and regulations (including the designation of areas
for employee parking) that Landlord may deem necessary and advisable for the
proper and efficient operation and maintenance of parking within the Common
Areas. Landlord shall have the right to construct, maintain and operate lighting
facilities within the parking areas; to change the area, level, location and
arrangement of the parking areas and improvements therein; to restrict parking
by tenants, their officers, agents and employees to employee parking areas; and
to do and perform such other acts in and to the parking areas and improvements
therein as, in the use of good business judgment, Landlord shall determine to be
advisable. Any person using the parking area shall observe all directional signs
and arrows and any posted speed limits. In no event shall Tenant interfere with
the use and enjoyment of the parking area by other occupants of the Building or
their employees or invitees. Parking areas shall be used only for parking
vehicles. Washing, waxing, cleaning or servicing of vehicles, or the storage of
vehicles for 24-hour periods, is prohibited unless otherwise authorized by
Landlord. Tenant shall be liable for any damage to the parking areas caused by
Tenant or Tenant's employees, suppliers, shippers, customers or invitees,
including without limitation damage from excess oil leakage. Tenant shall have
no right to install any fixtures, equipment or personal property in the parking
areas.

     SECTION 6.5 CHANGES AND ADDITIONS BY LANDLORD. Landlord reserves the right
to make alterations or additions to the Building, or to the attendant fixtures,
equipment and Common Areas. Landlord may at any time relocate or remove any of
the various buildings, parking areas, and other Common Areas, and may add areas
to the Building from time to time. No change shall entitle Tenant to any
abatement of rent or other claim against Landlord, provided that the change does
not deprive Tenant of

                                       8
<PAGE>   9

reasonable access to or use of the Premises. Notwithstanding anything to the
contrary in this Section 6.5, Landlord shall not make any modifications to or
use of the Common Areas if such modifications or use would unreasonably
interfere with Tenant's business operations on the Premises or materially
increase the obligations or materially decrease the rights of Tenant under the
Lease. Landlord shall use its reasonable diligence to minimize any disruption to
Tenant's business operations in connection with any such modifications to the
Common Areas.

                      ARTICLE VII. MAINTAINING THE PREMISES

     SECTION 7.1 TENANT'S MAINTENANCE AND REPAIR. Tenant at its sole expense
shall make all repairs necessary to keep the Premises in the condition as
existed on the Commencement Date excepting ordinary wear and tear, including
without limitation all glass, windows, doors, door closures, hardware, fixtures
and fire extinguisher equipment. Any damage or deterioration of the Premises
shall not be deemed ordinary wear and tear if the same could have been prevented
by good maintenance practices by Tenant. All repairs shall be at least equal in
quality to the original work, shall be made only by a licensed contractor
approved in writing in advance by Landlord. Any contractor utilized by Tenant
shall be subject to Landlord's reasonable requirements for contractors, as
modified from time to time. Landlord may impose reasonable restrictions and
requirements with respect to repairs, as provided in Section 7.3, and the
provisions of Section 7.4 shall apply to all repairs. If Tenant fails to
properly maintain and/or repair the Premises as herein provided following
Landlord's notice and the expiration of the applicable cure period, then
Landlord may elect to make any repair or maintenance required hereunder on
behalf of Tenant and at Tenant's expense, and Tenant shall promptly reimburse
Landlord for all reasonable costs incurred within ten (10) days following
submission of an invoice.

     SECTION 7.2 LANDLORD'S MAINTENANCE AND REPAIR. Landlord shall provide
service, maintenance and repair with respect to any air conditioning,
ventilating or heating equipment which serve the Premises and shall maintain in
good repair the roof, foundations, footings, the exterior surfaces of the
exterior walls of the Building, and the structural, electrical, plumbing and
mechanical systems, except that Tenant at its expense shall make all repairs
which Landlord deems reasonably necessary as a result of the act or negligence
of Tenant, its agents, employees, invitees, subtenants or contractors. Landlord
shall have the right to employ or designate any reputable person or firm,
including any employee or agent of Landlord or any of Landlord's affiliates or
divisions, to perform any service, repair or maintenance function. Landlord need
not make any other improvements or repairs except as specifically required under
this Lease, and nothing contained in this Section shall limit Landlord's right
to reimbursement from Tenant for maintenance, repair costs and replacement costs
as provided elsewhere in this Lease. Except as expressly provided in Section 7.6
of this Lease, Tenant understands that it shall not make repairs at Landlord's
expense or by rental offset. Tenant further understands that Landlord shall not
be required to make any repairs to the roof, foundations, footings, structural,
electrical or mechanical systems unless and until Tenant has notified Landlord
in writing of the need

                                       9
<PAGE>   10

for such repair and Landlord shall have a reasonable period of time thereafter
to commence and complete said repair, if warranted.

     SECTION 7.3 ALTERATIONS. Tenant shall make no alterations, additions or
improvements to the Premises without the prior written consent of Landlord.

     SECTION 7.4 ENTRY AND INSPECTION. Landlord shall at all reasonable times,
upon at least twenty-four (24) hours' written or oral notice (except in
emergencies, when no notice shall be required) have the right to enter the
Premises to inspect them, to supply services in accordance with this Lease, to
protect the interests of Landlord in the Premises, and to submit the Premises to
prospective or actual purchasers, lessors or encumbrance holders, all without
being deemed to have caused an eviction of Tenant and without abatement of rent
except as provided elsewhere in this Lease. Landlord shall have the right to
retain a key which unlocks all of the doors in the Premises, excluding Tenant's
vaults and safes, and Landlord shall have the right to use any and all means
which Landlord may deem proper to open the doors in an emergency in order to
obtain entry to the Premises, and any entry to the Premises obtained by Landlord
shall not under any circumstances be deemed to be a forcible or unlawful entry
into, or a detainer of, the Premises, or any eviction of Tenant from the
Premises. Landlord and its licensees and agents shall have the right to enter
the premises at any time in carrying out the terms of this Lease and fulfilling
the obligations and exercising the rights of Landlord hereunder.

            ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANT'S PROPERTY

     Tenant shall be liable for and shall pay, at least ten (10) days before
delinquency, all taxes and assessments levied against all personal property of
Tenant located in the Premises.

                      ARTICLE IX. ASSIGNMENT AND SUBLETTING

     SECTION 9.1 RIGHTS OF PARTIES.

          (a) Notwithstanding any provision of this Lease to the contrary,
Tenant will not, either voluntarily or by operation of law, assign, sublet,
encumber, or otherwise transfer all or any part of Tenant's interest in this
lease, or permit the Premises to be occupied by anyone other than Tenant,
without Landlord's prior written consent, which consent may be withheld in the
sole and absolute discretion of Landlord. No assignment (whether voluntary,
involuntary or by operation of law) and no subletting shall be valid or
effective without Landlord's prior written consent and, at Landlord's election,
any such assignment or subletting shall constitute a material Default of this
Lease. Landlord shall not be deemed to have given its consent to any assignment
or subletting by any other course of action. To the extent not prohibited by
provisions of the Bankruptcy Code, 11 U.S.C. Section 101 et seq. (the
"Bankruptcy Code"), including Section 365(f)(1), Tenant on behalf of itself and
its creditors, administrators and assigns waives the applicability of Section
365(e) of the Bankruptcy Code unless the proposed assignee of the Trustee for
the estate of the bankrupt meets Landlord's standard for consent as set forth in
Section

                                       10
<PAGE>   11

9.1(b) of this Lease. If this Lease is assigned to any person or entity pursuant
to the provisions of the Bankruptcy Code, any and all monies or other
considerations to be delivered in connection with the assignment shall be
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 person or entity to which this Lease is
assigned pursuant to the provisions of the Bankruptcy Code shall be deemed to
have assumed all of the obligations arising under this Lease on and after the
date of the assignment, and shall upon demand execute and deliver to Landlord an
instrument confirming that assumption.

                       ARTICLE X. INSURANCE AND INDEMNITY

     SECTION 10.1 TENANT'S INSURANCE. Tenant, at its sole cost and expense,
shall provide and maintain in effect the insurance described in Exhibit B.
Evidence of that insurance must be delivered to Landlord prior to the
Commencement Date.

     SECTION 10.2 JOINT INDEMNITY.

          (a) Tenant's Indemnity. To the fullest extent permitted by law, Tenant
shall defend (with attorneys reasonably acceptable to Landlord), indemnify,
protect, save and hold harmless Landlord, its agents, and any and all affiliates
of Landlord, including, without limitation, any corporations or other entities
controlling, controlled by or under common control with Landlord, from and
against any and all claims, liabilities, costs or expenses arising from Tenant's
use or occupancy of the Premises or the Building, or from the conduct of its
business, or from any activity, work, or thing done, permitted or suffered by
Tenant or its agents, employees, invitees or licensees in or about the Premises
or the Building, or from any Default in the performance of any obligation on
Tenant's part to be performed under this Lease, or from any act or negligence of
Tenant or its agents, employees, visitors, patrons, guests, invitees or
licensees; provided Tenant shall have no obligation to indemnify, save or hold
harmless Landlord for any claims, liabilities, costs or expenses to the extent
the same is caused by the negligence or willful misconduct on the part of
Landlord, or its authorized agents, contractors or employees, or for which
Tenant is otherwise indemnified hereunder. In cases of alleged negligence
asserted by third parties against Landlord which arise out of, are occasioned
by, or in any way attributable to Tenant's, its agents, employees, contractors,
licensees or invitees use and occupancy of the Premises or the Building, or from
the conduct of its business or from any activity, work or thing done, permitted
or suffered by Tenant or its agents, employees, invitees or licensees on
Tenant's part to be performed under this Lease, or from any act of negligence of
Tenant, its agents, employees, licensees or invitees, Tenant shall accept any
tender of defense for Landlord and shall, notwithstanding any allegation of
negligence or willful misconduct on the part of the Landlord, defend Landlord
and protect and hold Landlord harmless and pay all costs expenses and attorneys'
fees incurred in connection with such litigation, provided that Tenant shall not
be liable for any such injury or damage, and Landlord shall reimburse Tenant for
the reasonable attorney's fees and costs for the attorney representing both
parties, all to the extent and in the proportion that such injury or damage is
ultimately determined by a court of

                                       11
<PAGE>   12

competent jurisdiction (or in connection with any negotiated settlement agreed
to by Landlord) to be attributable to the negligence or willful misconduct of
Landlord. Upon Landlord's request, Tenant shall at Tenant's sole cost and
expense, retain a separate attorney selected by Landlord to represent Landlord
in any such suit if Landlord determines that the representation of both Tenant
and Landlord by the same attorney would cause a conflict of interest; provided,
however, that to the extent and in the proportion that the injury or damage
which is the subject of the suit is ultimately determined by a court of
competent jurisdiction (or in connection with any negotiated settlement agreed
to by Landlord) to be attributable to the negligence or willful misconduct of
Landlord, Landlord shall reimburse Tenant for the reasonable legal fees and
costs of the separate attorney retained by Tenant. The provisions of this
SubSection 10.3(a) shall expressly survive the expiration or sooner termination
of this Lease.

          (b) Landlord's Indemnity. To the fullest extent permitted by law, but
subject to the express limitations on liability contained in this Lease
(including, without limitation, the provisions of Sections 10.4, 10.5 and 14.8
of this Lease), Landlord shall defend (with attorneys reasonably acceptable to
Tenant), indemnify, protect, save and hold harmless Tenant, its agents and any
and all affiliates of Tenant, including, without limitation, any corporations,
or other entities controlling, controlled by or under common control with
Tenant, from and against any and all claims, liabilities, costs or expenses
arising from the maintenance or repair of the Common Areas, the Project and/or
the Building by Landlord or its employees, authorized agents or contractors;
provided that Landlord shall have no obligation to indemnify, save or hold
harmless Tenant for any claims, liabilities, costs or expenses to the extent the
same is caused by the negligence or willful misconduct on the part of Tenant, or
its agents, employees, licensees or invitees, or for which Landlord is otherwise
indemnified hereunder. In cases of alleged negligence asserted by third parties
against Tenant which arise out of, are occasioned by, or in any way attributable
to the maintenance or repair of the Common Areas, or the Building by Landlord or
its contractors, authorized agents or employees, Landlord shall accept any
tender defense for Tenant and shall, notwithstanding any allegation of
negligence or willful misconduct on the part of Tenant, defend Tenant and
protect and hold Tenant harmless and pay all cost, expense and attorneys' fees
incurred in connection with such litigation, provided that Landlord shall not be
liable for any such injury or damage, and Tenant shall reimburse Landlord for
the reasonable attorney's fees and costs for the attorney representing both
parties, all to the extent and in the proportion that such injury or damage is
ultimately determined by a court of competent jurisdiction (or in connection
with any negotiated settlement agreed to by Tenant) to be attributable to the
negligence or willful misconduct of Tenant. Upon Tenant's request, Landlord
shall at Landlord's sole cost and expense, retain a separate attorney selected
by Tenant to represent Tenant in any such suit if Tenant determines that the
representation of both Tenant and Landlord by the same attorney would cause
conflict of interest; provided, however, that to the extent and the proportion
that the injury or damage which is the subject of the suit is ultimately
determined by a court of competent jurisdiction (or in connection with any
negotiated settlement agreed to by Tenant) to be attributable to the negligence
or willful misconduct of Tenant, Tenant shall reimburse Landlord for the
reasonable legal fees and costs of the

                                       12
<PAGE>   13

separate attorney retained by Landlord. The provisions of this Subsection
10.3(b) shall expressly survive the expiration or sooner termination of this
Lease.

     SECTION 10.4 LANDLORD'S NONLIABILITY. Except as expressly provided by the
indemnity obligations contained in Section 10.3(b) of this Lease, Landlord shall
not be liable to Tenant, its employees, agents and invitees, and Tenant hereby
waives all claims against Landlord, for loss of or damage to any property, or
any injury to any person, or any other loss, cost, damage, injury or liability
whatsoever resulting from fire, explosion, failing plaster, steam, gas,
electricity, water or rain which may leak or flow from or into any part of the
Building or from the breakage, leakage, obstruction or other defects of the
pipes, sprinklers, wires, appliances, plumbing, air conditioning, electrical
works or other fixtures in the Building, whether the damage or injury results
from conditions arising in the Premises or in other portions of the Building.
Notwithstanding any provision of this Lease to the contrary, including, without
limitation, the provisions of Section 10.3(b) of this Lease, Landlord shall in
no event be liable to Tenant, its employees, agents, and invitees, and Tenant
hereby waives all claims against Landlord, for loss or interruption of Tenant's
business or income (including, without limitation, any consequential damages and
lost profit or opportunity costs), or any other loss, cost, damage, injury or
liability resulting from, but not limited to, Acts of God, acts of civil
disobedience or insurrection, acts of omissions (criminal or otherwise) of any
third parties, including without limitation, any other tenants within the
Building or their agents, employees, contractors, guests or invitees. It is
understood that any such condition may require the temporary evacuation or
closure of all or a portion of the Building. Except as expressly provided in
this Lease, there shall be no abatement of rent and no liability of Landlord by
reason of any injury to or interference with Tenant's business (including
without limitation consequential damages and lost profit or opportunity costs)
arising from the making of any repairs, alterations or improvements to any
portion of the Building, including repairs to the premises, nor shall any
related activity by Landlord constitute an actual or constructive eviction,
provided, however, that in making repairs, alterations or improvements, Landlord
shall interfere as little as reasonably practicable with the conduct of Tenant's
business in the Premises. Neither Landlord nor its agents shall be liable for
interference with light or other similar intangible interests. Tenant shall
immediately notify Landlord in case of fire or accident in the Premises, the
Building and of defects in any improvements or equipment.

     SECTION 10.5 WAIVER OF SUBROGATION. Notwithstanding anything to the
contrary contained in this Lease, Landlord and Tenant each hereby waives all
rights of recovery against the other and the other's agents on account of loss
and damage occasioned to the property of such waiving party to the extent only
that such loss or damage is required to be insured against under Article X;
provided however, that the foregoing waiver shall not apply to the extent of
Tenant's obligations to pay deductibles under any such policies and this Lease.
By this waiver it is the intent of the parties that neither Landlord nor Tenant
shall be liable to any insurance company (by way of subrogation or otherwise)
insuring the other party for any loss or damage insured against under any
"all-risk" property insurance policies required by this Article, even though
such loss or damage might be occasioned by the negligence of such party, its
agents,

                                       13
<PAGE>   14

employees, contractors, guests or invitees. All of the parties' repair and
maintenance and indemnity obligations under this Lease shall be subject to the
waiver of subrogation contained in this Section 10.5. The parties hereto shall
cause each property insurance policy it obtains to include a waiver of
subrogation regarding the liabilities released hereby.

                        ARTICLE XI. DAMAGE OR DESTRUCTION

     SECTION 11.1 RESTORATION.

          (a) If the Building of which the Premises are a part is damaged,
Landlord shall repair that damage as soon as reasonably practicable, at its
expense, unless: (i) Landlord reasonably determines that the cost of repair is
greater than Fifty Thousand Dollars ($50,000.00) and is not covered by
Landlord's coverages, plus such additional amounts Tenant elects, at its option,
to contribute, excluding however the deductible (for which Tenant shall be
responsible for tenant's share); (ii) Landlord reasonably determines that the
Premises cannot, with reasonable diligence, be fully repaired by Landlord (or
cannot be safely repaired because of the presence of hazardous factors,
including without limitation Hazardous Materials, earthquake faults, and other
similar dangers) within thirty (30) days after the date of the damage; or (iii)
a Default by Tenant has occurred at the time of such damage, should Landlord
elect not to repair the damage for one of the preceding reasons, Landlord shall
so notify Tenant in writing within fifteen (15) days after the damage occurs and
this Lease shall terminate as of the date of that notice.

          (b) Unless Landlord elects to terminate this Lease in accordance with
subsection (a) above, this Lease shall continue in effect for the remainder of
the Term; provided that so long as Tenant is not in Default under this Lease, if
the damage is so extensive that Landlord reasonably determines that the Premises
cannot, with reasonable diligence, be repaired by Landlord (or cannot be safely
repaired because of the presence of hazardous factors, earthquake faults, and
other similar dangers) so as to allow Tenant's substantial use and enjoyment of
the Premises, or are not in fact repaired by Landlord, within two fifteen (15)
days after the date of damage, then Tenant may elect to terminate this Lease by
written notice to Landlord either within the fifteen (15) day period stated in
subsection (a), or within fifteen (15) days following Landlord's failure to so
repair the Premises within thirty (30) days after the date of damage.

          (c) Commencing on the date of any damage to the Building, and ending
on the sooner of the date the damage is repaired or the date this Lease is
terminated, the rental to be paid under this Lease shall be abated in the same
proportion that the floor area of the Premises that is rendered unusable by the
damage from time to time bears to the total floor area of the Premises, provided
that Tenant is then carrying the business interruption insurance required in
Exhibit B.

          (d) Tenant shall fully cooperate with Landlord in removing Tenant's
personal property and any debris from the Premises to facilitate all inspections
of the Premises and

                                       14
<PAGE>   15

the making of any repairs. Notwithstanding anything to the contrary contained in
this Lease, if Landlord in good faith believes there is a risk of injury to
persons or damage to property from entry into the Building or Premises following
any damage or destruction thereto, Landlord may restrict entry into the Building
or the Premises by Tenant, its employees, agents and contractors in a
non-discriminatory manner, without being deemed to have violated Tenant's rights
of quiet enjoyment to, or made an unlawful detainer of, or evicted Tenant from,
the Premises. Upon request, Landlord shall consult with Tenant to determine if
there are safe methods of entry into the Building or the Premises solely in
order to allow Tenant to retrieve files, data in computers, and necessary
inventory, subject however to all indemnities and waivers of liability from
Tenant to Landlord contained in this Lease and any additional indemnities and
waivers of liability which Landlord may reasonably require.

     SECTION 11.2 LEASE GOVERNS. Tenant agrees that the provisions of this
Lease, including without limitation Section 11.1, shall govern any damage or
destruction and shall accordingly supersede any contrary statute or rule of law.

                           ARTICLE XII. EMINENT DOMAIN

     SECTION 12.1 TOTAL OR PARTIAL TAKING. If all or a material portion of the
Premises is taken, whether such taking is permanent or temporary, by any lawful
authority by exercise of the right of eminent domain, or sold to prevent a
taking, either Tenant or Landlord may terminate this Lease effective as of the
date possession is required to be surrendered to the authority. In the event of
a taking, Landlord shall be entitled to the entire amount of the condemnation
award without deduction for any estate or interest of Tenant; provided that
nothing in this Section shall be deemed to give Landlord any interest in, or
prevent Tenant from seeking any award against the taking authority for, the
taking of personal property and fixtures belonging to Tenant or for relocation
or business interruption expenses or loss of good will recoverable from the
taking authority.

     SECTION 12.2 TAKING OF PARKING AREA . In the event there shall be a taking
of the parking area such that Landlord can no longer provide sufficient parking
to comply with this Lease, Landlord shall have no obligation to locate or
provide substitute or additional parking. If the taking materially impairs
Tenant's use and enjoyment of the Premises, Tenant may, at its option, terminate
this Lease by written notice to Landlord. If this Lease is not so terminated by
Tenant, there shall be no abatement of rent and this Lease shall continue in
effect.

                ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE

     SECTION 13.1 SUBORDINATION. At the option of Landlord, this Lease shall be
either superior or subordinate to all ground or underlying leases, mortgages and
deeds of trust, if any, which may hereafter affect the Building, and to all
renewals, modifications, consolidations, replacements and extensions thereof;
provided, that so long as Tenant is not in Default under this Lease, this Lease
shall not be terminated or Tenant's quiet

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<PAGE>   16

enjoyment of the Premises disturbed in the event of termination of any such
ground or underlying lease, or the foreclosure of any such mortgage or deed of
trust. In the event of a termination or foreclosure, Tenant shall become a
tenant of and attorn to the successor-in- interest to Landlord upon the same
terms and conditions as are contained in this Lease, and shall execute any
instrument reasonably required by Landlord's successor for that purpose. Tenant
shall also, upon written request of Landlord, execute and deliver all
instruments as may be required from time to time to subordinate the rights of
Tenant under this Lease to any ground or underlying lease or to the lien of any
mortgage or deed of trust (provided that such instruments include the
nondisturbance and attornment provisions set forth above), or, if requested by
Landlord, to subordinate, in whole or in part, any ground or underlying lease or
the lien of any mortgage or deed of trust to this Lease.

     SECTION 13.2 ESTOPPEL CERTIFICATE.

          (a) Tenant shall, at any time upon not less than fifteen (15) days'
prior written notice from Landlord, execute, acknowledge and deliver to
Landlord, in any form that Landlord may reasonably require, a statement in
writing (i) certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of the modification and certifying
that this Lease, as modified, is in full force and effect) and the dates to
which the rental, additional rent and other charges have been paid in advance,
if any, and (ii) acknowledging that, to Tenant's knowledge, there are no uncured
defaults on the part of Landlord, or specifying each default if any are claimed,
and (iii) setting forth all further information that Landlord may reasonably
require. Tenant's statement may be relied upon by any prospective purchaser or
encumbrancer of all or any portion of the Building.

          (b) Notwithstanding any other rights and remedies of Landlord,
Tenant's failure to deliver any estoppel statement within the provided time
shall be conclusive upon Tenant that (i) this Lease is in full force and effect,
without modification except as may be represented by Landlord, (ii) there are no
uncured defaults in Landlord's performance, and (iii) not more than one month's
rental has been paid in advance.

                       ARTICLE XIV. DEFAULTS AND REMEDIES

     SECTION 14.1 TENANT'S DEFAULTS. The occurrence of any one or more of the
following events, following notice by Landlord and the expiration of the
applicable cure period, if any, without cure by Tenant, shall constitute a
default by Tenant (a "Default" as used in this Lease):

          (a) The failure by Tenant to make any payment of rent or additional
rent required to be made by Tenant, as and when due, where the failure continues
for a period of five (5) days after written notice from Landlord to Tenant;
provided, however, that any such notice shall be in lieu of, and not in addition
to, any notice required under California Code of Civil Procedure Section 1161
and 1161(a) as amended, provided such notice is served in the manner required
under Code of Civil Procedure Section 1162. For purposes

                                       16
<PAGE>   17

of these default and remedies provisions, the term "additional rent" shall be
deemed to include all amounts of any type whatsoever other than Basic Rent to be
paid by Tenant pursuant to the terms of this Lease.

          (b) Assignment, sublease, encumbrance or other transfer of the Lease
by Tenant, either voluntarily or by operation of law, whether by judgment,
execution, transfer by intestacy or testacy, or other means, without the prior
written consent of Landlord.

          (c) The failure of Tenant to timely and fully provide any
subordination agreement, or estoppel certificate in accordance with the
requirements of Article XIII, where the failure continues for a period of ten
(10) days after written notice from Landlord to Tenant; provided, however, that
any such notice shall be in lieu of, and not in addition to, any notice required
under California Code of Civil Procedure Section 1161 and 1161(a) as amended,
provided such notice is served in the manner required under Code of Civil
Procedure Section 1162.

          (e) The failure or inability by Tenant to observe or perform any of
the express or implied covenants or provisions of this Lease to be observed or
performed by Tenant, other than as specified in any other subsection of this
Section, where the failure continues for a period of thirty (30) days after
written notice from Landlord to Tenant or such shorter period as is specified in
any other provision of this Lease; provided, however, that any such notice shall
be in lieu of, and not in addition to, any notice required under California Code
of Civil Procedure Section 1161 and 1161(a) as amended, provided such notice is
served in the manner required under Code of Civil Procedure Section 1162.

          (d) (i) The making by Tenant of any general assignment for the benefit
of creditors; (ii) the filing by or against Tenant of a petition to have Tenant
adjudged a Chapter 7 debtor under the Bankruptcy Code or to have debts
discharged or a petition for reorganization or arrangement under any law
relating to bankruptcy (unless, in the case of a petition filed against Tenant,
the same is dismissed within thirty (30) days); (iii) the appointment of a
trustee or receiver to take possession of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease, if possession is
not restored to Tenant within thirty (30) days; or (iv) the attachment,
execution or other judicial seizure of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease, where the seizure
is not discharged within thirty (30) days. Landlord shall not be deemed to have
knowledge of any event described in this subsection unless notification in
writing is received by Landlord, nor shall there be any presumption attributable
to Landlord of Tenant's insolvency. In the event that any provision of this
subsection is contrary to applicable law, the provision shall be of no force or
effect.

     SECTION 14.2 LANDLORD'S REMEDIES.

          (a) In the event of any Default by Tenant, or in the event of the
abandonment of the Premises by Tenant, then in addition to any other remedies
available to Landlord, Landlord may exercise the following remedies:

                                       17
<PAGE>   18

               (i) Landlord may terminate Tenant's right to possession of the
Premises by any lawful means, in which case this Lease shall terminate and
Tenant shall immediately surrender possession of the Premises to Landlord. Such
termination shall not affect any accrued obligations of Tenant under this Lease.
Upon termination, Landlord shall have the right to reenter the Premises and
remove all persons and property. Landlord shall also be entitled to recover from
Tenant:

                    (1) The worth at the time of award of the unpaid rent and
additional rent which had been earned at the time of termination;

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

                    (3) The worth at the time of award of the amount by which
the unpaid rent and additional rent for the balance of the Term after the time
of award exceeds the amount of such loss that Tenant proves could be reasonably
avoided;

                    (4) Any other amount necessary to compensate Landlord for
all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result from Tenant's Default, including, but not limited to, the cost
of recovering possession of the Premises, refurbishment of the Premises,
marketing costs, commissions and other expenses of reletting, including
necessary repair and, reasonable attorneys' fees, and any other reasonable
costs; and

                    (5) At Landlord's election, all other amounts in addition to
or in lieu of the foregoing as may be permitted by law. The term "rent" as used
in this Lease shall be deemed to mean the Basic Rent and all other sums required
to be paid by Tenant to Landlord pursuant to the terms of this Lease. Any sum,
other than Basic Rent, shall be computed on the basis of the average monthly
amount accruing during the twenty-four (24) month period immediately prior to
Default, except that if it becomes necessary to compute such rental before the
twenty-four (24) month period has occurred, then the computation shall be on the
basis of the average monthly amount during the shorter period. As used in
subparagraphs (1) and (2) above, the "worth at the time of award" shall be
computed by allowing interest at the rate of ten percent (10%) per annum. As
used in subparagraph (3) above, the "worth at the time of award" shall be
computed by discounting the amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent (1%).

               (ii) Landlord may elect not to terminate Tenant's right to
possession of the Premises, in which event Landlord may continue to enforce all
of its rights and remedies under this Lease, including the right to collect all
rent as it becomes due. Efforts by the Landlord to maintain, preserve or relet
the Premises, or the appointment of a receiver to

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<PAGE>   19

protect the Landlord's interests under this Lease, shall not constitute a
termination of the Tenant's right to possession of the Premises.

          (b) The various rights and remedies reserved to Landlord in this Lease
or otherwise shall be cumulative and, except as otherwise provided by California
law, Landlord may pursue any or all of its rights and remedies at the same time.

          (c) No delay or omission of Landlord to exercise any right or remedy
shall be construed as a waiver of the right or remedy or of any Default by
Tenant. The acceptance by Landlord of rent shall not be a (i) waiver of any
preceding breach or Default by Tenant of any provision of this Lease, other than
the failure of Tenant to pay the particular rent accepted, regardless of
Landlord's knowledge of the preceding breach or default at the time of
acceptance of rent, or (ii) a waiver of Landlord's right to exercise any remedy
available to Landlord by virtue of the breach or default. The acceptance of any
payment from a debtor in possession, a trustee, a receiver or any other person
acting on behalf of Tenant or Tenant's estate shall not waive or cure a default
under Section 14.1. No payment by Tenant or receipt by Landlord of a lesser
amount than the rent required by this Lease shall be deemed to be other than a
partial payment on account of the earliest due stipulated rent, nor shall any
endorsement or statement on any check or letter be deemed an accord and
satisfaction and Landlord shall accept the check or payment without prejudice to
Landlord's right to recover the balance of the rent or pursue any other remedy
available to it. No act or thing done by Landlord or Landlord's agents during
the Term shall be deemed an acceptance of a surrender of the Premises, and no
agreement to accept a surrender shall be valid unless in writing and signed by
Landlord. No employee of Landlord or of Landlord's agents shall have any power
to accept the keys to the Premises prior to the termination of this Lease, and
the delivery of the keys to any employee shall not operate as a termination of
the Lease or a surrender of the Premises.

     SECTION 14.3 LATE PAYMENTS. Any rent due under this Lease that is not
received by Landlord within five (5) days of the date when due shall bear
interest at the maximum rate permitted by law from the date due until fully
paid. The payment of interest shall not cure any Default by Tenant under this
Lease. In addition, Tenant acknowledges that the late payment by Tenant to
Landlord of rent will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult and impracticable
to ascertain. Those costs may include, but are not limited to, administrative,
processing and accounting charges, and late charges which may be imposed on
Landlord by the terms of any ground lease, mortgage or trust deed covering the
Premises. Accordingly, if any rent due from Tenant shall not be received by
Landlord or Landlord's designee within five (5) days after the date due, then
Tenant shall pay to Landlord, in addition to the interest provided above, a late
charge in a sum equal to the greater of five percent (5%) of the amount overdue
or Two Hundred Fifty Dollars ($250.00) for each delinquent payment. The
foregoing late charge shall not be charged, however, in connection with the
initial payment of rent not paid by Tenant within five (5) days after the date
due. Acceptance of a late charge by Landlord shall not constitute a waiver of
Tenant's Default with respect to the overdue amount, nor shall it prevent
Landlord from exercising any of its other rights and remedies.

                                       19
<PAGE>   20

     SECTION 14.4 RIGHT OF LANDLORD TO PERFORM. All covenants and agreements to
be performed by Tenant under this Lease shall be performed at Tenant's sole cost
and expense and without any abatement of rent or right of set-off except as
specifically set forth in this Lease. If Tenant fails to pay any sum of money,
other than rent, or fails to perform any other act on its part to be performed
under this Lease, and the failure continues beyond any applicable grace period
set forth in Section 14.1, then in addition to any other available remedies,
Landlord may, at its election make the payment or perform the other act on
Tenant's part. Landlord's election to make the payment or perform the act on
Tenant's part shall not give rise to any responsibility of Landlord to continue
making the same or similar payments or performing the same or similar acts.
Tenant shall, promptly upon demand by Landlord, reimburse Landlord for all sums
paid by Landlord and all necessary incidental costs, together with interest at
the maximum rate permitted by law from the date of the payment by Landlord.
Landlord shall have the same rights and remedies if Tenant fails to pay those
amounts as Landlord would have in the event of a Default by Tenant in the
payment of rent.

     SECTION 14.5 DEFAULT BY LANDLORD. Landlord shall not be deemed to be in
default in the performance of any obligation under this Lease unless and until
it has failed to perform the obligation within thirty (30) days after written
notice by Tenant to Landlord specifying in reasonable detail the nature and
extent of the failure; provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days are required for its
performance, then Landlord shall not be deemed to be in default if it commences
performance within the thirty (30) day period and thereafter diligently pursues
the cure to completion. Except as expressly provided in this Lease, no delay or
omission of Tenant to exercise any right or remedy shall be construed as a
waiver of the right or remedy or of any default by Landlord.

     SECTION 14.6 EXPENSES AND LEGAL FEES. All sums reasonably incurred by
Landlord in connection with any Default by Tenant under this Lease including
without limitation all costs, expenses and actual accountants, appraisers,
attorneys and other professional fees, and any collection agency or other
collection charges, shall be due and payable by Tenant to Landlord on demand,
and shall bear interest at the rate of ten percent (10%) per annum. Should
either Landlord or Tenant bring any action in connection with this Lease, the
prevailing party shall be entitled to recover as a part of the action its
reasonable attorneys' fees, and all other costs. The prevailing party for the
purpose of this paragraph shall be determined by the trier of the facts.

     SECTION 14.7 WAIVER OF JURY TRIAL. LANDLORD AND TENANT EACH ACKNOWLEDGES
THAT IT IS AWARE OF AND HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT
TO ITS RIGHTS TO TRIAL BY JURY, AND EACH PARTY DOES HEREBY EXPRESSLY AND
KNOWINGLY WAIVE AND RELEASE ALL SUCH RIGHTS TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO AGAINST THE OTHER
(AND/OR AGAINST ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR SUBSIDIARY OR
AFFILIATED ENTITIES) ON ANY

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<PAGE>   21

MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE,
TENANT'S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM OF INJURY OR DAMAGE.

     SECTION 14.8 SATISFACTION OF JUDGMENT. The obligations of Landlord and
Tenant under this Lease do not constitute the personal obligations of the
individual partners, trustees, directors, officers or shareholders of Landlord
or Tenant, or their respective constituent partners. Should Tenant recover a
money judgment against Landlord, such judgment shall be satisfied only out of
the proceeds of sale received upon execution of such judgment and levied thereon
against the right, title and interest of Landlord in the Building and out of the
rent or other income from such property receivable by Landlord or out of
consideration received by Landlord from the sale or other disposition of all or
any part of Landlord's right, title or interest in the Building and no action
for any deficiency may be sought or obtained by Tenant.

     SECTION 14.9 LIMITATION OF ACTIONS AGAINST LANDLORD. Any claim or demand
arising in tort or in contract against Landlord based upon or arising in
connection with this Lease (except those arising in connection with Sections
10.3(b) of this Lease) shall be barred unless Tenant commences an action thereon
within twelve (12) months after the date that the occurrence of the act,
omission, event or default upon which the claim, demand or right arises is
discovered by Tenant. Nothing contained in this Section 14.9, however, shall
extend the operation of any applicable statute of limitations binding on Tenant.

                             ARTICLE XV. END OF TERM

     SECTION 15.1 SURRENDER OF PREMISES; REMOVAL OF PROPERTY. Upon the
Expiration Date or upon any earlier termination of this Lease, Tenant shall quit
and surrender possession of the Premises to Landlord in as good order, condition
and repair as when received or as hereafter may be improved by Landlord or
Tenant, reasonable wear and tear, casualty, Hazardous Materials (except to the
extent Tenant is responsible therefor as provided in Section 5.3 of this Lease)
and repairs which are Landlord's obligation excepted, and shall, without expense
to Landlord, remove or cause to be removed from the Premises all personal
property and debris, except for any items that Landlord may by written
authorization allow to remain. Tenant shall repair all damage to the Premises
resulting from the removal, which repair shall include the patching and filling
of holes and repair of structural damage, provided that Landlord may instead
elect to repair any structural damage at Tenant's expense. If Tenant shall fail
to comply with the provisions of this Section, Landlord may effect the removal
and/or make any repairs, and the cost to Landlord shall be additional rent
payable by Tenant upon demand. If Tenant fails to remove Tenant's personal
property from the Premises upon the expiration of the Term, Landlord may remove,
store, dispose of and/or retain such personal property, at Landlord's option, in
accordance with then applicable laws, all at the expense of Tenant. Upon the
expiration of the Term, if requested by Landlord, Tenant shall execute,
acknowledge and deliver to Landlord an instrument in writing releasing and
quitclaiming to Landlord all right, title and interest of Tenant in the
Premises.

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<PAGE>   22

                        ARTICLE XVI. PAYMENTS AND NOTICES

     All sums payable by Tenant to Landlord shall be paid, without deduction or
offset, in lawful money of the United States to Landlord at its address set
forth in Item 10 of the Basic Lease Provisions, or at any other place as
Landlord may designate in writing. Unless this Lease expressly provides
otherwise, as for example in the payment of rent pursuant to Section 4.1, all
payments shall be due and payable within twenty (20) days after demand. All
payments requiring proration shall be prorated on the basis of a thirty (30) day
month and a three hundred sixty (360) day year. Any notice, election, demand,
consent, approval or other communication to be given or other document to be
delivered by either party to the other may be delivered in person or by courier
or overnight delivery service to the other party, or may be deposited in the
United States mail, duly registered or certified, postage prepaid, return
receipt requested, and addressed to the other party at the address set forth in
Item 10 of the Basic Lease Provisions, or if to Tenant, at that address or, from
and after the Commencement Date, at the Premises (whether or not Tenant has
departed from, abandoned or vacated the Premises). Either party may, by written
notice to the other, served in the manner provided in this Article, designate a
different address. If any notice or other document is sent by mail, it shall be
deemed served or delivered three (3) business days after mailing. If more than
one person or entity is named as Tenant under this Lease, service of any notice
upon any one of them shall be deemed as service upon all of them.

                      ARTICLE XVII. RULES AND REGULATIONS

     Tenant agrees to observe faithfully and comply strictly with the Rules and
Regulations, attached as Exhibit D, and any reasonable and nondiscriminatory
amendments, modifications and/or additions as may be adopted and published by
written notice to tenants by Landlord for the safety, care, security, good
order, or cleanliness of the Premises, Building, Project and Common Areas.
Landlord shall not be liable to Tenant for any violation of the Rules and
Regulations or the breach of any covenant or condition in any lease by any other
tenant or such tenant's agents, employees, contractors, guests or invitees. One
or more waivers by Landlord of any breach of the Rules and Regulations by Tenant
or by any other tenant(s) shall not be a waiver of any subsequent breach of that
rule or any other. Tenant's failure to keep and observe the Rules and
Regulations following notice from Landlord and the expiration of the applicable
cure period, shall constitute a Default under this Lease. In the case of any
conflict between the Rules and Regulations and this Lease, this Lease shall be
controlling. Notwithstanding anything to the contrary in this Article XVII,
Tenant shall not be required to comply with any rule or regulation unless the
same applies non-discriminatorily to all occupants of the Project.

                      ARTICLE XVIII. BROKER'S COMMISSION

     Tenant warrants that it has had no dealings with any other real estate
broker or agent in connection with the negotiation of this Lease, and Tenant
agrees to indemnify and hold

                                       22
<PAGE>   23

Landlord harmless from any cost, expense or liability (including reasonable
attorneys' fees) for any compensation, commissions or charges claimed by any
other real estate broker or agent employed or claiming to represent or to have
been employed by Tenant in connection with the negotiation of this Lease. The
foregoing agreement shall survive the termination of this Lease.

                  ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST

     In the event of any transfer of Landlord's interest in the Premises, the
transferor shall be automatically relieved of all obligations on the part of
Landlord accruing under this Lease from and after the date of the transfer,
provided that the transferee assumes in writing all of such obligations and any
funds held by the transferor in which Tenant has an interest shall be turned
over, subject to that interest, to the transferee and Tenant is notified of the
transfer as required by law. No holder of a mortgage and/or deed of trust to
which this Lease is or may be subordinate, and no landlord under a so-called
sale-leaseback, shall be responsible in connection with the Security Deposit,
unless the mortgagee or holder of the deed of trust or the landlord actually
receives the Security Deposit. It is intended that the covenants and obligations
contained in this Lease on the part of Landlord shall, subject to the foregoing,
be binding on Landlord, its successors and assigns, only during and in respect
to their respective successive periods of ownership.

                           ARTICLE XX. INTERPRETATION

     SECTION 20.1 GENDER AND NUMBER. Whenever the context of this Lease
requires, the words "Landlord" and "Tenant" shall include the plural as well as
the singular, and words used in neuter, masculine or feminine genders shall
include the others.

     SECTION 20.2 HEADINGS. The captions and headings of the articles and
sections of this Lease are for convenience only, are not a part of this Lease
and shall have no effect upon its construction or interpretation.

     SECTION 20.3 JOINT AND SEVERAL LIABILITY. If more than one person or entity
is named as Tenant, the obligations imposed upon each shall be joint and several
and the act of or notice from, or notice or refund to, or the signature of, any
one or more of them shall be binding on all of them with respect to the tenancy
of this Lease, including, but not limited to, any renewal, extension,
termination or modification of this Lease.

     SECTION 20.4 SUCCESSORS. Subject to Articles IX and XIX, all rights and
liabilities given to or imposed upon Landlord and Tenant shall extend to and
bind their respective heirs, executors, administrators, successors and assigns.
Nothing contained in this Section is intended, or shall be construed, to grant
to any person other than Landlord and Tenant and their successors and assigns
any rights or remedies under this Lease.

                                       23
<PAGE>   24

     SECTION 20.5 TIME OF ESSENCE. Time is of the essence with respect to the
performance of every provision of this Lease.

     SECTION 20.6 CONTROLLING LAW. This Lease shall be governed by and
interpreted in accordance with the laws of the State of California.

     SECTION 20.7 SEVERABILITY. If any term or provision of this Lease, the
deletion of which would not adversely affect the receipt of any material benefit
by either party or the deletion of which is consented to by the party adversely
affected, shall be held invalid or unenforceable to any extent, the remainder of
this Lease shall not be affected and each term and provision of this Lease shall
be valid and enforceable to the fullest extent permitted by law.

     SECTION 20.8 WAIVER AND CUMULATIVE REMEDIES. One or more waivers by
Landlord or Tenant of any breach of any term, covenant or condition contained in
this Lease shall not be a waiver of any subsequent breach of the same or any
other term, covenant or condition. Consent to any act by one of the parties
shall not be deemed to render unnecessary the obtaining of that party's consent
to any subsequent act. No breach by Tenant of this Lease shall be deemed to have
been waived by Landlord unless the waiver is in a writing signed by Landlord.
The rights and remedies of Landlord under this Lease shall be cumulative and in
addition to any and all other rights and remedies which Landlord may have.

     SECTION 20.9 INABILITY TO PERFORM. In the event that either party shall be
delayed or hindered in or prevented from the performance of any work or in
performing any act required under this Lease by reason of any cause beyond the
reasonable control of that party, then the performance of the work or the doing
of the act shall be excused for the period of the delay and the time for
performance shall be extended for a period equivalent to the period of the
delay. The provisions of this Section shall not operate to excuse Tenant from
the prompt payment of rent.

     SECTION 20.10 ENTIRE AGREEMENT. This Lease and its exhibits and other
attachments cover in full each and every agreement of every kind between the
parties concerning the Premises, the Building, and the Project, and all
preliminary negotiations, oral agreements, understandings and/or practices,
except those contained in this Lease, are superseded and of no further effect.
Tenant waives its rights to rely on any representations or promises made by
Landlord or others which are not contained in this Lease. No verbal agreement or
implied covenant shall be held to modify the provisions of this Lease, any
statute, law, or custom to the contrary notwithstanding.

     SECTION 20.11 QUIET ENJOYMENT. Upon the observance and performance of all
the covenants, terms and conditions on Tenant's part to be observed and
performed, and subject to the other provisions of this Lease, Tenant shall
peaceably and quietly hold and enjoy the Premises for the Term without hindrance
or interruption by Landlord or any other person claiming by or through Landlord.

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<PAGE>   25

     SECTION 20.12 SURVIVAL. All covenants of Landlord or Tenant which
reasonably would be intended to survive the expiration or sooner termination of
this Lease, including without limitation any warranty or indemnity hereunder,
shall so survive and continue to be binding upon and inure to the benefit of the
respective parties and their successors and assigns.

                      ARTICLE XXI. EXECUTION AND RECORDING

     SECTION 21.1 COUNTERPARTS. This Lease may be executed in one or more
counterparts, each of which shall constitute an original and all of which shall
be one and the same agreement.

     SECTION 21.2 CORPORATE AND PARTNERSHIP AUTHORITY. If a corporation or
partnership is executing this Lease, each individual executing this Lease on
behalf of the corporation or partnership represents and warrants that he is duly
authorized to execute and deliver this Lease on behalf of the corporation or
partnership, and that this Lease is binding upon the corporation or partnership
in accordance with its terms. Tenant shall, at Landlord's request, deliver a
certified copy of its board of directors' resolution or partnership agreement or
certificate authorizing or evidencing the execution of this Lease.

     SECTION 21.3 EXECUTION OF LEASE; NO OPTION OR OFFER. The submission of this
Lease to Tenant shall be for examination purposes only, and shall not constitute
an offer to or option for Tenant to lease the Premises. Execution of this Lease
by Tenant and its return to Landlord shall not be binding upon Landlord,
notwithstanding any time interval, until Landlord has in fact executed and
delivered this Lease to Tenant, it being intended that this Lease shall only
become effective upon execution by Landlord and delivery of a fully executed
counterpart to Tenant.

     SECTION 21.4 RECORDING. Tenant shall not record this Lease without the
prior written consent of Landlord.

     SECTION 21.5 AMENDMENTS. No amendment or termination of this Lease shall be
effective unless in writing signed by authorized signatories of Tenant and
Landlord, or by their respective successors in interest. No actions, policies,
oral or informal arrangements, business dealings or other course of conduct by
or between the parties shall be deemed to modify this Lease in any respect.

     SECTION 21.6 EXECUTED COPY. Any fully executed photocopy or similar
reproduction of this Lease shall be deemed an original for all purposes.

     SECTION 21.7 ATTACHMENTS. All exhibits, amendments, riders and addenda
attached to this Lease are hereby incorporated into and made a part of this
Lease.

                           ARTICLE XXII. MISCELLANEOUS

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<PAGE>   26

     SECTION 22.1 NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and agrees
that the terms of this Lease are confidential and constitute proprietary
information of Landlord. Disclosure of the terms could adversely affect the
ability of Landlord to negotiate other leases and impair Landlord's relationship
with other tenants. Accordingly, Tenant agrees that it, and its partners,
officers, directors, employees and attorneys, shall not intentionally and
voluntarily disclose the terms and conditions of this Lease to any other tenant
or apparent prospective tenant of the Building or Project, either directly or
indirectly, without the prior written consent of Landlord, provided, however,
that Tenant may disclose the terms to prospective subtenants or assignees under
this Lease, and as required for any security filings, financings or sales,
reorganizations or consolidations of Tenant's business.

     SECTION 22.3 APPROVALS. Subject to Landlord's rights to consent or
approve in its "discretion" or "sole discretion" as provided in this Lease,
whenever the Lease requires an approval, consent, designation, determination,
discretion or judgment by either Landlord or Tenant, such approval, consent,
designation, determination, discretion or judgment (including, without limiting
the generality of the foregoing, those required in connection with assignment
and subletting) shall not be unreasonable or unreasonably withheld or delayed
and in exercising any right or remedy hereunder, each party shall at all times
act reasonably and in good faith.

MiniMed Inc.                                         Allecure

By:  /s/ KEVIN SAYER                                By: /s/ STEPHEN MCCORMACK
    ----------------------                              ------------------------
    Kevin Sayer                                         Stephen McCormack

Its:  Senior V.P. Finance, CFO                       Its: President & CEO

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