Document:

Prepared by MERRILL CORPORATION www.edgaradvantage.com

THE
STANLEY WORKS

1000 Stanley Drive

New Britain, CT 06053 

September 20,
2000 

Mr. Matthew
Jore

Jore Corporation

45000 Highway 93 South

Ronan, MT 59864 

	Re:
	License
Agreement dated April 28, 1999 (the "License Agreement") 

Dear
Matt: 

The
purpose of this letter is to set forth our mutual understanding regarding the License Agreement and to amend certain provisions of the License Agreement. Defined terms used herein and not
otherwise defined shall have the meaning assigned to them in the License Agreement. In consideration of the mutual promises set forth herein, the parties agree as follows: 

	1.
	(a)  Attached
hereto is a list of all Licensed Articles for which Jore has submitted all products samples, packaging, labeling, point of sale
materials, trade show displays, sales materials and advertising to Stanley for approval (collectively, the "Approved Licensed Articles"). Stanley and Jore hereby agree that no further approvals are
required for such Approved Licensed Articles pursuant to Article 5 and paragraph 8.1 of the License Agreement and Stanley hereby agrees that the Approved Licensed Articles meet the
standards referred to in the second sentence of paragraph 3.11. 

    (b) Jore
shall not make any changes to any of the Approved Licensed Articles. In the event that Stanley determines that changes have been made to the Approved Licensed
Articles, Stanley shall notify Jore in writing. Jore shall have thirty (30) days to correct the changes made to the Approved Licensed Articles. If at the end of such thirty (30) day
period Jore has not corrected the unauthorized changes or has not made reasonable efforts to correct the unauthorized changes to Stanley's satisfaction, Stanley shall have the right to immediately
terminate the License Agreement with respect to that Approved Licensed Article and Jore shall have no further right to manufacture, advertise, distribute, sell or otherwise deal in such Approved
Licensed Article. 

    (c) The
parties hereby agree and acknowledge that there will not be any additional Stanley® branded product introductions that are not Approved Licensed
Articles subsequent to the date of this Letter. 

	2.
	Paragraph 3.10
of the License Agreement is hereby deleted in its entirety and replaced as follows: 

3.10  [Intentionally
Deleted] 

	3.
	Paragraph 6.2
of the License Agreement is hereby deleted in its entirety and replaced as follows:

	6.2
	SECONDS
AND DISPOSAL. If during the manufacture of the LICENSED ARTICLES, any SECONDS are produced, LICENSEE shall destroy such SECONDS. All products, packaging, labeling, point of
sale, sales materials and advertising bearing trademarks, artwork and/or designs of OWNER produced by LICENSEE which are not suitable for use or sale pursuant to this Agreement shall be promptly
destroyed. 

	4.
	The
last sentence of paragraph 15 is hereby amended as follows: 

"In
the event OWNER advises LICENSEE that a special promotional effort is to take place in one individual store or chain, LICENSEE may elect to supply LICENSED ARTICLES to said store or chain in its
sole discretion." 

*

	5.
	Except
to the extent amended by this letter amendment, the License Agreement remains in full force and effect. 

If
the foregoing meets with your approval, please indicate in the space provided below. 

Very
truly yours, 

/s/ KENNETH O. LEWIS   

Kenneth O. Lewis 

Agreed
to and accepted,

this 22nd day of September, 2000. 

JORE
CORPORATION 

By:                      

Name:
Matthew Jore 

Title:
President 

*Exhibit 1
is revised in its entirety to read as attached hereto. 

Exhibit 1 

	Licensed Articles	 	Launch Year

**
Confidential treatment requested pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. **<PAGE>

                              BROADWAY PLACE LEASE

                        LEXINGTON-BROADWAY PLACE, L.L.C.,
                      a Delaware limited liability company
                                  as Landlord,
                                       and

                                 MOSSIMO, INC.,
                             a Delaware corporation,
                                   as Tenant.

<PAGE>

                                 BROADWAY PLACE

                       SUMMARY OF BASIC LEASE INFORMATION

         The undersigned hereby agree to the following terms of this Summary of
Basic Lease Information (the "Summary"). This Summary is hereby incorporated
into and made a part of the attached Lease (this Summary and the Lease to be
known collectively as the "Lease") which pertains to the certain premises
located at 2016 Broadway, Santa Monica, California (the "Premises") which are
part of that certain project commonly known as Broadway Place in Santa Monica,
California (the "Project"). Each reference in the Lease to any term of this
Summary shall have the meaning as set forth in this Summary for such term. In
the event of a conflict between the terms of this Summary and the Lease, the
terms of the Lease shall prevail. Any capitalized terms used herein and not
otherwise defined herein shall have the meaning as set forth in the Lease.

<TABLE>
<CAPTION>

               TERMS OF LEASE                    DESCRIPTION
         -----------------------------           -----------
         (References are to the Lease)
<S>     <C>                                      <C>
1.      Date:                                    June 29, 2000.
2.      Landlord:                                LEXINGTON-BROADWAY PLACE, L.L.C., a Delaware
                                                 limited liability company
3.      Address of Landlord
        (SECTION 29.14):                         9350 Wilshire Boulevard
                                                 Suite 400
                                                 Beverly Hills, California 90012
                                                 Attention: Legal Notices
4.      Tenant:                                  Mossimo, Inc., a Delaware corporation.
5.      Address of Tenant                        Mossimo, Inc.
        (SECTION 29.14):                         2016 Broadway
                                                 Santa Monica, CA 90404
6.      Premises (ARTICLE 1):                    Approximately 3,080 rentable square feet of space located
                                                 at 2016 Broadway, Santa Monica, California, 90404, as set
                                                 forth on EXHIBIT A attached hereto.
7.      Term (ARTICLE 2).

        7.1     Lease Term:                      Three (3) years.
        7.2     Lease Commencement Date:         The date Landlord delivers the Premises to Tenant, which
                                                 is anticipated to occur as of August 1, 2000.
        7.3     Lease Expiration Date:           The last day of the month in which the third (3rd)
                                                 anniversary of the Lease Commencement Date occurs.
        7.4     Option Tern:                     One (1) three (3) year option, subject to and in accordance
                                                 with the terms of Section 2.2 of this Lease.
</TABLE>

<TABLE>
<CAPTION>
8.      Base Rent (ARTICLE 3):
           Lease Year                     Monthly Installment                 Monthly Base Rent
           ----------                        of Base Rent                       per Rentable
                                             ------------                        Square Foot
                                                                                 -----------
        <S>                               <C>                                 <C>
                1                              $8,624.00                            $2.80
                2                              $8,882.72                            $2.88
                3                              $9,149.20                            $2.97
</TABLE>

<TABLE>
<S>     <C>                                       <C>
9.      Tenants Share of Direct Expenses
        (ARTICLE 4).                              4.54%
10.     Use (ARTICLE 5):                          Entertainment related general office use.
11.     Security Deposit (ARTICLE 21):            $36,596.80
12.     Parking (ARTICLE 28):                     Three (3) tandem parking spaces (accommodating 6 cars).
13.     Brokers (SECTION 29.21):                  Lee & Associates - West Los Angeles and Beitler
                                                  Commercial.
14.     Tenant Improvements:                      None - Premises are taken "As Is."

</TABLE>

<PAGE>

                                            TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                   Page
<C>     <S>                                                                                        <C>
1       PROJECT AND PREMISES .........................................................................1
2.      INITIAL LEASE TERM; OPTION TERM ............................................................. 1
3.      BASE RENT; BONUS RENT ........................................................................1
4.      ADDITIONAL RENT ..............................................................................1
5.      USE OF PREMISES ..............................................................................3
6.      SERVICES AND UTILITIES; PERSONAL PROPERTY ....................................................3
7.      REPAIRS ......................................................................................4
8.      ADDITIONS AND ALTERATIONS ....................................................................4
9.      COVENANT AGAINST LIENS .......................................................................5
10.     INSURANCE ....................................................................................5
11.     DAMAGE AND DESTRUCTION .......................................................................6
12.     NONWAIVER ....................................................................................7
13.     CONDEMNATION .................................................................................7
14.     ASSIGNMENT AND SUBLETTING ....................................................................7
15.     OWNERSHIP AND REMOVAL OF TRADE FIXTURES ......................................................8
16.     HOLDING OVER .................................................................................9
17.     ESTOPPEL CERTIFICATES ........................................................................9
18.     SUBORDINATION ................................................................................9
19.     DEFAULTS; REMEDIES ...........................................................................9
20.     FORCE MAJEURE ...............................................................................10
21.     SECURITY DEPOSIT ............................................................................10
22.     SUBSTITUTION OF OTHER PREMISES ..............................................................10
23.     SIGNS .......................................................................................11
24.     COMPLIANCE WITH LAW .........................................................................11
25.     LATE CHARGES ................................................................................11
26.     LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT ........................................11
27.     ENTRY BY LANDLORD ...........................................................................11
28.     TENANT PARKING ..............................................................................12
29.     MISCELLANEOUS PROVISIONS ....................................................................12

</TABLE>

EXHIBITS
A       OUTLINE OF PREMISES
B       [INTENTIONALLY OMITTED]
C       NOTICE OF LEASE TERM DATES
D       RULES AND REGULATIONS
E       ESTOPPEL CERTIFICATE

<PAGE>

                                      INDEX
<TABLE>
<CAPTION>
                                                                                                   Page(s)
<S>                                                                                                <C>
Additional Rent ......................................................................................2
Additional Spaces ...................................................................................12
Adjacent Buildings ...................................................................................1
Alterations ..........................................................................................4
Base Rent ............................................................................................1
Brokers .............................................................................................13
Building .............................................................................................1
Common Areas .........................................................................................1
Direct Expenses ......................................................................................2
Estimate Statement ...................................................................................3
Estimated Expenses ...................................................................................3
Expense Year .........................................................................................2
Force Majeure .......................................................................................10
Hazardous Material ..................................................................................14
Landlord .............................................................................................1
Landlord Parties .....................................................................................5
Lease ................................................................................................1
Lease Commencement Date ..............................................................................1
Lease Expiration Date ................................................................................1
Lease Term ...........................................................................................1
Lease Year ...........................................................................................1
Notices .............................................................................................13
Operating Expenses ...................................................................................2
Original Tenant.......................................................................................1
Parking Area .........................................................................................1
Permitted Use ........................................................................................3
Premises .............................................................................................1
Proposition 13 .......................................................................................2
Security Deposit ....................................................................................10
Statement ............................................................................................3
Summary ..............................................................................................1
Tax Expenses .........................................................................................2
Tenant ...............................................................................................1
Tenant's Share .......................................................................................3
Transfer Notice ......................................................................................7
Transfer Premium .....................................................................................8
Transferee ...........................................................................................7
Transfers ............................................................................................7
Utility Services......................................................................................4

</TABLE>

<PAGE>

                                      LEASE

         This Lease, which includes the preceding Summary of Basic Lease
Information (the "Summary") attached hereto and incorporated herein by this
reference (the Lease and Summary to be known sometimes collectively hereafter as
the "Lease"), dated as of the date set forth in SECTION 1 of the Summary, is
made by and between LEXINGTON-BROADWAY PLACE, L.L.C., a Delaware limited
liability company ("Landlord"), and Mossimo, Inc., a Delaware corporation
("Tenant").

1.       PROJECT AND PREMISES

         Upon and subject to the terms, covenants and conditions hereinafter set
forth in this Lease, Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord the premises set forth in SECTION 6 of the Summary (the
"Premises"). The Premises are a part of the Project, which Project includes (i)
the building in which the Premises are located (the "Building"), (ii) two (2)
buildings located adjacent to or across from the Building (the "Adjacent
Buildings"), (iii) the "Common Areas," as that term is defined below, (iv) the
land (which is improved with landscaping and other improvements) upon which the
Building, the Adjacent Buildings, and the Common Areas are located, and (v) at
Landlord's discretion, any additional real property, areas, land, buildings or
other improvements added thereto outside of the Project. Tenant shall have the
non-exclusive right to use and enjoy in common with other tenants in the Project
those portions of the Project which are provided for use in common by Tenant and
any other tenants of the Project, including, but not limited to, the parking
area (the "Parking Area") which services the Project (collectively, the "Common
Areas"). Tenant hereby agrees that Tenant shall accept the Premises in then
existing, "as-is" condition on the Lease Commencement Date, and that, Landlord
shall not be obligated to provide or pay for any improvement work or services
related to the improvement of the Premises. Tenant also acknowledges that
Landlord has made no representation or warranty regarding the condition of the
"Personal Property," as that term is defined in Section 6.3, below, the Premises
or the Building or the Project, or the suitability of the same for Tenants use.

2.       INITIAL LEASE TERM; OPTION TERM

         2.1     INITIAL LEASE TERM. The terms and provisions of this Lease
shall be effective as of the date of this Lease except for the provisions of
this Lease relating to the payment of "Rent," as that term is defined in
Section 4.1, below. The term of this Lease (the "Lease Term") shall be as set
forth in SECTION 7.1 of the Summary and shall commence on the date (the
"Lease Commencement Date") set forth in SECTION 7.2 of the Summary and shall
terminate on the date (the "Lease Expiration Date") set forth in SECTION 7.3
of the Summary, unless sooner terminated or extended as hereinafter provided.
For purposes of this Lease, the term "Lease Year" shall mean each consecutive
twelve (12) month period during the Lease Term. At any time during the Lease
Term, provided that the last Lease Year shall end on the Lease Expiration
Date, Landlord may deliver to Tenant a notice of Lease Term dates in the form
as set forth in Exhibit C, attached hereto, which notice Tenant shall execute
and return to Landlord within five (5) days of receipt thereof.

         2.2     OPTION TERM.

                 2.2.1     OPTION RIGHT . Landlord hereby grants the Tenant
named in the Summary (the "Original Tenant") one (1) option to extend the
Lease Term for a period of three (3) years (the "Option Term"), which option
shall be exercisable only by written notice delivered by Tenant to Landlord
as provided below, provided that, as of the date of delivery of such notice,
Tenant is not in default under this Lease and Tenant has not previously been
in default under this Lease more than once. Upon the proper exercise of such
option to extend, and provided that, at Landlord's option, as of the end of
the initial Lease Term, Tenant is not in default under this Lease and Tenant
has not previously been in default under this Lease more than once, the Lease
Term, as it applies to the Premises, shall be extended for a period of three
(3) years. The rights contained in this SECTION 2.2 shall be personal to the
Original Tenant and may only be exercised by the Original Tenant (and not any
assignee, sublessee or other transferee of the Original Tenants interest in
this Lease) if the Original Tenant occupies the entire Premises.

                 2.2.2     OPTION RENT . The Base Rent payable by Tenant
during each Option Term (the "Option Rent") shall be equal to the greater of
(i) the Base Rent being payable by Tenant under this Lease at the expiration
of the then current Lease Term, and (ii) the face or stated rent, including
all escalations, being quoted by Landlord for space comparable in size,
location and quality to the Premises in the Project. Tenant shall pay
Tenant's Share of Direct Expenses during the Option Term in accordance with
the terms of this Lease.

                 2.2.3     EXERCISE OF OPTION. The option contained in this
SECTION 2.2 shall be exercised by Tenant, if at all, only by Tenant's
delivery of irrevocable notice of Tenant's election to lease the Premises
during the Option Term on or before the date occurring nine (9) months prior
to the expiration of the initial Lease Term.

3.       BASE RENT. Tenant shall pay, without notice or demand, except as
otherwise set forth in this Lease, to Landlord at its address shown in
SECTION 3 of the Summary, by check or lawful money of the United States of
America, base rent ("Base Rent") as set forth in SECTION 8 of the Summary,
payable in equal monthly installments as set forth in SECTION 8 of the
Summary in advance on or before the first day of each month during the Lease
Term, without any setoff or deduction whatsoever, except as otherwise set
forth in this Lease. The Base Rent for the first full month of the Lease
Term, which occurs after the expiration of any free rent period, shall be
paid at the time of Tenant's execution of this Lease. If any rental payment
date (including the Lease Commencement Date) falls on a day of the month
other than the first day of such month or if any rental payment is for a
period which is shorter than one month, then the rental for any such
fractional month shall be a proportionate amount of a full calendar month's
rental. All other payments or adjustments required to be made under the terms
of this Lease that require proration on a time basis shall be prorated on the
same basis.

4.       ADDITIONAL RENT

         4.1     ADDITIONAL RENT. In addition to paying the Base Rent
specified in ARTICLE 3 of this Lease, Tenant shall pay, as additional rent,
Tenant's Share of the annual "Direct Expenses," as that term is defined in
SECTION 4.2.1 of this Lease. Such additional rent, together with any and all
other amounts payable by Tenant to Landlord pursuant to the terms of this
Lease, shall be hereinafter collectively referred to as the "Additional
Rent." The Base Rent and Additional Rent are herein collectively referred to
as the "Rent." Without limitation on other obligations of Tenant which shall
survive the expiration of the Lease Term, the obligations of Tenant to pay
the Additional Rent provided for in this ARTICLE 4 shall survive the
expiration of the Lease Term.

         4.2     DEFINITIONS.  As used in this ARTICLE 4, the following terms
shall have the meanings hereinafter set forth:

                 4.2.1     "Direct Expenses" shall mean "Operating Expenses"
and "Tax Expenses."

<PAGE>

                 4.2.2     "Expense Year" shall mean each calendar year in
which any portion of the Lease Term falls, through and including the calendar
year in which the Lease Term expires, provided that Landlord, upon notice to
Tenant, may change the Expense Year from time to time to any other twelve
(12) consecutive month period, and in the event of any such change, Tenant's
Share of Direct Expenses shall be equitably adjusted for any Expense Year
involved in any such change.

                 4.2.3     "Operating Expenses" shall mean all expenses,
costs and amounts of every kind and nature which Landlord shall pay during
any Expense Year because of or in connection with the ownership, management,
maintenance, repair, replacement, restoration or operation of the Project,
including, without limitation, any amounts paid for (i) the cost of supplying
all utilities (except that electricity consumed in space occupied by tenants
shall not be included), the cost of operating, maintaining, repairing,
renovating and managing the utility systems, mechanical systems, sanitary and
storm drainage systems, and the cost of supplies and equipment and
maintenance and service contracts in connection therewith; (ii) the cost of
licenses, certificates, permits and inspections and the cost of contesting
the validity or applicability of any governmental enactments which may affect
Operating Expenses, and the costs incurred in connection with the
implementation and operation of a transportation system management program or
similar program; (iii) the cost of insurance carried by Landlord, in such
amounts as Landlord may reasonably determine or as may be required by any
mortgagees or the lessor of any underlying or ground lease affecting the
Project and/or the Building; (iv) the cost of landscaping, relamping, and all
supplies, tools, equipment and materials used in the operation, repair and
maintenance of the Project; (v) the cost of Parking Area repair, restoration,
and maintenance, including, but not limited to, resurfacing, repainting,
restriping, and cleaning; (vi) fees, charges and other costs, including
Consulting fees, legal fees and accounting fees, of all contractors engaged
by Landlord or otherwise reasonably incurred by Landlord in connection with
the management, operation, maintenance and repair of the Building and
Project; (vii) an administrative fee for accounting, bookkeeping and
collection of expenses in an amount equal to fifteen percent of the total
Operating Expenses for the applicable Expense Year; (viii) any equipment
rental agreements or management agreements (including the cost of any
management fee and the fair rental value of any space provided thereunder);
(ix) wages, salaries and other compensation and benefits of all persons
engaged in the operation, management, maintenance or security of the Project,
and employer's Social Security taxes, unemployment taxes or insurance, and
any other taxes which may be levied on such wages, salaries, compensation and
benefits; provided, that if any employees of Landlord provide services for
more than one project of Landlord, then a prorated portion of such employees'
wages, benefits and taxes shall be included in Operating Expenses based on
the portion of their working time devoted to the Building; (x) payments under
any easement, license, operating agreement, declaration, restrictive
covenant, underlying or ground lease (excluding rent), or instrument
pertaining to the sharing of costs by the Project; (xi) operation, repair,
maintenance and replacement of all "systems and equipment servicing the
Project, and components thereof; (xii) the cost of janitorial service to the
Common Area, alarm and security service, window cleaning, trash removal,
maintenance and replacement of curbs and walkways, repair to roofs and
re-roofing; (xiii) amortization (including interest on the unamortized cost)
of the cost of acquiring or the rental expense of personal property used in
the maintenance, operation and repair of the Building and Project; and (xiv)
the cost of any capital improvements or other costs (I) which are intended as
a laborsaving device or to effect other economies in the operation or
maintenance of the Building or Project, (II) made to the Building or Project
that are required under any governmental law or regulation, or (111) which
are reasonably determined by Landlord to be in the best interest of the
Building and/or Project; provided, however, that if any such cost described
in (I), (II) or (iii), above, is a capital expenditure, such cost shall be
amortized (including interest on the unamortized cost) over its useful life
as Landlord shall reasonably determine. If Landlord is not furnishing any
particular work or service (the cost of which, if performed by Landlord,
would be included in Operating Expenses) to a tenant who has undertaken to
perform such work or service in lieu of the performance thereof by Landlord,
Operating Expenses shall be deemed to be increased by an amount equal to the
additional Operating Expenses which would reasonably have been incurred
during such period by Landlord if it had at its own expense furnished such
work or service to such tenant. If the Project is not fully occupied during
all or a portion of any Expense Year, Landlord shall make an appropriate
adjustment to the variable components of Operating Expenses for such year or
applicable portion thereof, employing sound accounting and management
principles, to determine the amount of Operating Expenses that would have
been paid had the Project been fully occupied, and the amount so determined
shall be deemed to have been the amount of Operating Expenses for such year,
or applicable portion thereof.

                 4.2.4     "Tax Expenses" shall mean all federal, state,
county, or local governmental or municipal taxes, fees, charges or other
impositions of every kind and nature, whether general, special, ordinary or
extraordinary (including, without limitation, real estate taxes, general and
special assessments, special assessment district payments, transit taxes,
leasehold taxes or taxes based upon the receipt of rent, including gross
receipts or sales taxes applicable to the receipt of rent, unless required to
be paid by Tenant, personal property taxes imposed upon the fixtures,
machinery, equipment, apparatus, systems and equipment, appurtenances,
furniture and other personal property used in connection with the Project),
which Landlord shall pay because of or in connection with the ownership,
leasing and operation of the Project or Landlord's interest therein. Tax
Expenses shall include, without limitation: (i) any tax on Landlord's rent,
right to rent or other income from the Project or as against Landlord's
business of leasing any of the Project; (ii) any assessment, tax, fee, levy
or charge in addition to, or in substitution, partially or totally, of any
assessment, tax, fee, levy or charge previously included within the
definition of real property tax, it being acknowledged by Tenant and Landlord
that Proposition 13 was adopted by the voters of the State of California in
the June 1978 election ("Proposition 13") and that assessments, taxes, fees,
levies and charges may be imposed by governmental agencies for such services
as fire protection, street, sidewalk and road maintenance, refuse removal and
for other governmental services formerly provided without charge to property
owners or occupants. It is the intention of Tenant and Landlord that all such
new and increased assessments, taxes, fees, levies, and charges and all
similar assessments, taxes, fees, levies and charges be included within the
definition of Tax Expenses for purposes of this Lease; (iii) any assessment,
tax, fee, levy, or charge allocable to or measured by the area of the
Premises or the rent payable hereunder, including, without limitation, any
gross income tax with respect to the receipt of such rent, or upon or with
respect to the possession, leasing, operating, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Premises, or any
portion thereof; and (iv) Any assessment, tax, fee, levy or charge, upon this
transaction or any document to which Tenant is a party, creating or
transferring an interest or an estate in the Premises.

                 4.2.5     "Tenants Share" shall mean the percentage set
forth in SECTION 9.2 of the Summary.

         4.3     CALCULATION AND PAYMENT OF ADDITIONAL RENT.

                 4.3.1     CALCULATION OF ADDITIONAL RENT. Tenant shall pay
to Landlord, in the manner set forth in SECTION 4.3.2, below, and as
Additional Rent, an amount equal to Tenant's Share of Direct Expenses.

                 4.3.2     STATEMENT OF ACTUAL DIRECT EXPENSE AND PAYMENT BY
TENANT. Following the end of each Expense Year, Landlord shall give to Tenant
a statement (the "Statement") which Statement shall state the actual Direct
Expenses incurred or accrued for such preceding Expense Year. Upon receipt of
the Statement for each Expense Year ending during the Lease Term, Tenant
shall pay, with its next installment of Base Rent, the amount of Tenants
Share of Direct Expenses, as shown on the Statement, less the amounts, if
any, paid during such Expense Year as "Estimated Expenses," as that term is
defined in SECTION 4.3.3 below. Even though the Lease Term has expired and
Tenant has vacated the Premises, when the

<PAGE>

final determination is made of Tenant's Share of the Direct Expenses for the
Expense Year in which this Lease terminates, Tenant shall, within thirty (30)
days of receipt of a Statement setting forth such Direct Expenses, pay to
Landlord an amount as calculated pursuant to the provisions of SECTION 4.3.1
of this Lease. The provisions of this SECTION 4.3.2 shall survive the
expiration or earlier termination of the Lease Term.

                 4.3.3     STATEMENT OF ESTIMATED DIRECT EXPENSES. Landlord,
at Landlord's option, may elect to give Tenant a yearly expense estimate
statement (the "Estimate Statement") which Estimate Statement shall set forth
Landlord's reasonable estimate (the "Estimated Expenses") of what the total
amount of Tenants Share of Direct Expenses for the then-current Expense Year
shall be. The failure of Landlord to timely furnish the Estimate Statement
for any Expense Year shall not preclude Landlord from enforcing its rights to
collect any Estimated Expenses under this ARTICLE 4. Tenant shall pay, with
its next installment of Base Rent, a fraction of the Estimated Expenses for
the then current Expense Year (reduced by any amounts paid pursuant to the
last sentence of this SECTION 4.3.3). Such fraction shall have as its
numerator the number of months which have elapsed in such current Expense
Year to the month of such payment, both months inclusive, and shall have
twelve (12) as its denominator. Until a new Estimate Statement is furnished,
Tenant shall pay monthly, with the monthly Base Rent installments, an amount
equal to one-twelfth (1/12) of the total Estimated Expenses set forth in the
previous Estimate Statement delivered by Landlord to Tenant.

         4.4     TAXES AND OTHER CHARGES FOR WHICH TENANT IS DIRECTLY
RESPONSIBLE. Tenant shall reimburse Landlord upon demand for any and all
taxes or assessments required to be paid by Landlord (except to the extent
included in Tax Expenses by Landlord), excluding state, local and federal
personal or corporate income taxes measured by the net income of Landlord
from all sources and estate and inheritance taxes, whether or not now
customary or within the contemplation of the parties hereto, when:

                 4.4.1     Said taxes are measured by or reasonably
attributable to the cost or value of Tenant's equipment, furniture, fixtures
and other personal property located in the Premises, or by the cost or value
of any leasehold improvements made in or to the Premises by or for Tenant, to
the extent the cost or value of such leasehold improvements exceeds the cost
or value of a building standard build-out as determined by Landlord
regardless of whether title to such improvements shall be vested in Tenant or
Landlord;

                 4.4.2     Said taxes are assessed upon or with respect to
the possession, leasing, operation, management, maintenance, alteration,
repair, use or occupancy by Tenant of the Premises or any portion of the
Project (including the Building Parking Area);

                 4.4.3     Said taxes are assessed upon this transaction or
any document to which Tenant is a party creating or transferring an interest
or an estate in the Premises; or

                 4.4.4     Said assessments are levied or assessed upon the
Project or any part thereof or upon Landlord and/or by any governmental
authority or entity, and relate to the construction, operation, management,
use, alteration or repair of mass transit improvements.

5.       USE OF PREMISES. Tenant shall use the premises only for the purpose
as set forth in SECTION 10 of the Summary (the "Permitted Use") and for no
other use or purpose, unless first approved in writing by Landlord, which
approval Landlord may withhold in its sole discretion. Tenant agrees that it
shall not use, or permit any person to use, the Premises or any part
thereof for any use or purpose contrary to the provisions of the Rules and
Regulations set forth in EXHIBIT D, attached hereto, or in violation of the
laws of the United States of America, the State of California, or the
ordinances, regulations or requirements of any local, municipal or county
governing body or other lawful authorities having jurisdiction over the
Building or Project. Tenant shall comply with all recorded covenants,
conditions, and restrictions, and the provisions of all ground or underlying
leases, now or hereafter affecting the Project. Tenant shall not use or allow
another person or entity to use any part of the Premises for the storage,
use, treatment, manufacture or sale of hazardous materials or hazardous
substances (as defined under applicable laws).

6.       SERVICES AND UTILITIES; PERSONAL PROPERTY

         6.1     STANDARD TENANT SERVICES Landlord shall at all times provide
electricity to the Premises (including adequate electrical wiring and
facilities for connection to Tenant's lighting fixtures and other equipment)
for lighting and power reasonably suitable for the Permitted Use. Landlord
shall also provide city water for use in connection with any plumbing
fixtures now or hereafter installed in the Premises and the Building in
accordance with this Lease. Notwithstanding the foregoing, (i) the
electricity used in the Promises shall be separately metered and Tenant shall
pay all charges therefor directly to the service provider, and (ii) the cost
of all water or other utilities utilized at the project shall be included in
Operating Expenses, which shall be payable by Tenant pursuant to the terms of
Article 4 of this Lease. In the event that Tenant shall use electricity,
water, heating and air conditioning or any other utilities supplied to the
Premises (collectively, the "Utility Services") in excess of the capacity
supplied to the Premises or otherwise use Utility Services in a manner which
generates excessive wear and tear on the systems and equipment providing the
Utility Services, Tenant shall pay to Landlord, within ten (10) days after
billing, the cost of the installation, operation, and maintenance of
equipment which is installed in order to supply such excess consumption, and
the cost of the increased wear and tear on existing equipment caused by such
excess consumption.

         6.2     INTERRUPTION OF USE. Tenant agrees that Landlord shall not
be liable for damages, by abatement of rent or otherwise, for failure to
furnish or delay in furnishing any service (including telephone and
telecommunication services), or for any diminution in the quality or quantity
thereof, when such failure or delay or diminution is occasioned, in whole or
in part, by repairs, replacements, or improvements, by any strike, lockout or
other labor trouble, by inability to secure electricity, gas, water, or other
fuel at the Building after reasonable effort to do so, by any accident or
casualty whatsoever, by act or default of Tenant or other parties, Or by any
other cause; and such failures or delays or diminution shall never be deemed
to constitute an eviction or disturbance of Tenant's use and possession of
the Premises or relieve Tenant from paying rent or performing any of its
obligations under this Lease. Furthermore, Landlord shall not be liable under
any circumstances for a loss of, or injury to, property or for injury to, or
interference with, Tenant's business, including, without limitation, loss of
profits, however occurring, through or in connection with or incidental to a
failure to furnish any services or utilities.

         6.3     PERSONAL PROPERTY. Landlord hereby leases to Tenant, for the
Lease Term, and with the rental obligation included in the Rent specifically
payable pursuant to the terms of this Lease, on an "as-is" basis, the
personal property, furniture, fixtures and equipment which shall be located
in the Premises and owned by Landlord as of the Lease Commencement Date (the
"Personal Property"), which Personal Property shall include, but not be
limited to, those items set forth on EXHIBIT B. attached hereto.

<PAGE>

         6.3.1   MAINTENANCE OF PERSONAL PROPERTY. Tenant shall, at Tenant's
sole cost and expense, repair and maintain the Personal Property in a
first-class manner and In good order, condition and repair throughout the
Lease Term and shall leave the Personal Property In the Premises upon the
expiration Or sooner termination of the Lease Term in the same order and
condition as when received, reasonable ordinary wear and tear excepted. In
the event of unrepairable damage to any Personal Property, Tenant shall
replace such damaged item at Tenants sole cost and expense, Without limiting
the foregoing, Tenant, at its sole cost and expense, shall cause the Personal
Property to be maintained, repaired and serviced in accordance with all
applicable manufacturer's standards and specifications (or, if such
specifications or standards are not provided or available, then in a
reasonable manner). Landlord shall have the right, on reasonable prior notice
to Tenant, and during regular business hours, to inspect the Personal
Property to ensure Tenant's compliance with the terms of this SECTION 6.3. In
connection with such inspections, Landlord shall use commercially reasonable
efforts to minimize interference with Tenant's operations.

         6.3.2   INSURANCE OF PERSONAL PROPERTY. Tenant, at Its sole cost and
expense, shall insure the Personal Property in accordance with the terms of
Article 10 of the Lease. Landlord shall be named as an additional insured on
Tenant's insurance maintained on the Personal Property.

7.       REPAIRS. Tenant shall, at Tenant's own expense, pursuant to the
terms of this Lease, including Article 8 hereof, keep the Premises, and all
improvements, fixtures, equipment and furnishings therein (including the
heating, ventilation and air conditioning facilities and equipment), in good
order, repair and condition at all times during the Lease Term. Tenant hereby
acknowledges that Landlord shall not provide janitorial services to the
Premises and that Tenant shall, at its sole cost and expense, cause
janitorial services to be supplied to the Premises at all times during the
Lease Term in order that the Premises shall be maintained in a clean, neat
and orderly condition reasonably satisfactory to Landlord. In addition,
Tenant shall, at Tenant's own expense but under the supervision and subject
to the prior approval of Landlord, and within any reasonable period of time
specified by Landlord, pursuant to the terms of this Lease, including Article
8 hereof, promptly and adequately repair all damage to the Premises arid
replace or repair all damaged or broken fixtures and appurtenances; provided
however, that, al Landlord's option, or if Tenant falls to make such repairs,
Landlord may, but need not, make such repairs and replacements, and Tenant
shall pay Landlord the cost thereof, including a percentage of the cost
thereof (to be uniformly established for the Project) sufficient to reimburse
Landlord for all overhead, general conditions, fees and other costs or
expenses arising from Landlord's involvement with such repairs and
replacements forthwith upon being billed for same. Landlord may. but shall
not be required to, enter the Premises at all reasonable times to make such
repairs, alterations, improvements and additions to the Premises or to the
Building or to any equipment located in the Building as Landlord shall desire
or deem necessary or as Landlord may be required to do by governmental or
quasi-governmental authority or court order or decree, Tenant hereby waives
and releases its right to make repairs at Landlord's expense under Sections
1941 and 1942 of the California Civil Code, or under any similar law,
statute, or ordinance now or hereafter in effect.

8.       ADDITIONS AND ALTERATIONS

         8.1     LANDLORD'S CONSENT TO ALTERATIONS. Tenant may not make any
improvements, alterations, additions or changes to the Premises
(collectively, the "Alterations") without first procuring the prior written
consent of Landlord to such Alterations, which consent shall be requested by
Tenant not less than thirty (30) days prior to the commencement theref, and
which consent shall not be unreasonably withheld by Landlord, Tenant may
replace window front at Tenant's sole cost and expense with a new window
matching the other front windows in the Building.

         8.2     MANNER OF CONSTRUCTION. Tenant shall use its own
contractors. Landlord may impose, as a condition of its consent to all
Alterations or repairs of the Premises or about the Premises, such
requirements as Landlord in its sole discretion may deem desirable,
including, but not limited to, the requirement that upon Landlord's request,
Tenant shall, at Tenant's expense, remove such Alterations upon the
expiration or any early termination of the Lease Term, and/or the requirement
that Tenant utilize for such purposes only contractors, materials, mechanics
and materialmen selected by Landlord. Landlord's approval of the plans,
specifications and working drawings for Tenant's Alterations shall create no
responsibility or liability on the part of Landlord for their completeness,
design sufficiency, or compliance with all laws, rules and regulations of
governmental agencies or authorities. All work with respect to any
Alterations must be done in a good and workmanlike manner in compliance with
all applicable laws and with Landlord's construction rules and regulations,
and diligently prosecuted to completion to the end that the Promises shall at
all times be a complete unit except during the period of work. In performing
the work of any such Alterations, Tenant shall have the work performed in
such manner as not to obstruct access to the Project, any other portion of
the Building, or the Common Areas, and as not to obstruct the business of
Landlord or other tenants of the Project, or interfere with the labor force
working in the Project. In the event that Tenant makes any Alterations,
Tenant agrees to carry "Builders All Risk" insurance in an amount approved by
Landlord covering the construction of such Alterations, and such other
insurance as Landlord may require, it being understood and agreed that all of
such Alterations shall be insured by Tenant pursuant to Article 10 of this
Lease immediately upon completion thereof. In addition, Landlord may, in its
discretion, require Tenant to obtain a lien and completion bond or some
alternate form of security satisfactory to Landlord in an amount sufficient
to ensure the lien-free completion of such Alterations and naming Landlord as
a co-obligee. Upon completion of any Alterations, Tenant agrees to cause a
Notice of Completion to be recorded in the office of the Recorder of the
county In which the Building is located in accordance with Section 3093 of
the Civil Code of the State of California or any successor statute, and
Tenant shall deliver to the Landlord a reproducible copy of the "as built"
drawings of the Alterations.

         8.3     PAYMENT FOR IMPROVEMENTS. In the event Tenant orders any
Alteration or repair work directly from Landlord, or from the contractor
selected by Landlord, the charges for such work shall be deemed Additional
Rent under this Lease, payable upon billing therefor, either periodically
during construction or upon the substantial completion of such work, at
Landlord's option. Upon completion Of Such work, Tenant shall deliver to
Landlord, if payment is made directly to contractors, evidence of payment,
contractors' affidavits and full and final waivers of all liens for labor
services or materials. Whether or not Tenant orders any work directly from
Landlord, Tenant shall pay to Landlord a percentage of the cost of such work
(such percentage, which shall vary depending upon whether or not Tenant
orders the work directly from Landlord, to be established on a uniform basis
for the Project) sufficient to compensate Landlord for all Overhead, general
conditions, fees and other costs and expenses arising from Landlord's
involvement with such work.

         8.4     LANDLORD'S PROPERTY. All Alterations, improvements, fixtures
and/or permanently affixed equipment which may be installed or placed in or
about the Premises, and all signs installed In, on or about the Premises,
from time to time, shall be at the sole cost of Tenant and shall be and
become the property of Landlord. Furthermore, Landlord may, by written notice
to Tenant prior to the and of the Lease Term, or given upon any earlier
termination of this Lease, require Tenant at Tenant's expense to remove such
Alterations and to repair any damage to the Premises, Building and Project
caused by such removal. If Tenant fails to complete such removal and/or to
repair any damage caused by the removal of any Alterations, Landlord may do
so and may charge the cost thereof to Tenant, Tenant hereby indemnifies and
holds Landlord harmless from any liability, cost, obligation, expense or
claim of lien in any manner relating to the installation, placement, removal
or financing of any such Alterations, improvements, fixtures and/or equipment
in, on or about the Premises.

<PAGE>

9.       COVENANT AGAINST LIENS. Tenant has no authority or power to cause or
permit any lien or encumbrance of any kind whatsoever, whether created by act
of Tenant, operation of law or otherwise, to attach to or be placed upon the
Project, Building or Premises, and any and all liens and encumbrances created
by Tenant shall attach to Tenant's interest only. Landlord shall have the
right at all times to post and keep posted on the Premises any notice which
it deems necessary for protection from such liens. Tenant covenants and
agrees not to suffer or permit any lien of mechanics or materialmen or others
to be placed against the Project, the Building or the Premises with respect
to work or services claimed to have been performed for or materials claimed
to have been furnished to Tenant or the Premises, and, in case of any such
lien attaching or notice of any lien, Tenant covenants and agrees to cause it
to be immediately released and removed of record, Notwithstanding anything to
the contrary set forth in this Lease, in the event that such lien is not
released and removed on or before the date notice of such lien is delivered
by Landlord to Tenant, Landlord, at its sole option, may immediately take all
action necessary to release and remove such lien, without any duty to
investigate the validity thereof, and all sums, costs and expenses, including
reasonable attorneys' fees and costs, incurred by Landlord in connection with
such lien shall be deemed Additional Rent under this Lease and shall
immediately be due and payable by Tenant.

10.      INSURANCE

         10.1    INDEMNIFICATION AND WAIVER. To the extent not prohibited by
law, Landlord, its partners and their respective officers, agents, servants,
employees, and independent contractors (collectively, "Landlord Parties")
shall not be liable for any damage either to person or property or resulting
from the loss of use thereof, which damage Is sustained by Tenant or by other
persons claiming through Tenant, Tenant shall indemnify, defend, protect, and
hold harmless Landlord Parties from any and all loss, cost, damage, expense
and liability (including without limitation court costs and reasonable
attorneys fees) Incurred in connection with or arising from any cause in, on
or about the Premises, any acts, omissions or negligence of Tenant or of any
person claiming by, through or under Tenant, or of the contractors, agents,
servants, employees, invitees, guests or licensees of Tenant or any such
person, in, on or about the Project, or any breach of the terms of this
Lease, either prior to, during, or after the expiration of the Lease Term,
provided that the terms of the foregoing indemnity shall not apply to the
gross negligence or willful misconduct of Landlord. The provisions of this
SECTION 10.1 shall survive the expiration or sooner termination of this Lease
with respect to any claims or liability occurring prior to such expiration or
termination.

         10.2    TENANT COMPLIANCE WITH LANDLORD'S FIRE AND CASUALTY
INSURANCE. Tenant shall, at Tenant's expense, comply as to the Premises with
all insurance company requirements pertaining to the use of the Premises. If
Tenant's conduct or use of the Premises causes any increase in the premium
for such insurance policies, then Tenant shall reimburse Landlord for any
such Increase. Tenant, at Tenant's expense, shall comply with all rules,
orders, regulations or requirements of the American Insurance Association
(formerly the National Board of Fire Underwriters) and with any similar body.

         10.3    TENANT'S INSURANCE. Tenant shall maintain Commercial General
Liability Insurance covering the insured against claims of bodily injury,
personal injury and property damage arising out of Tenant's operations,
assumed liabilities or use of the Premises, including a Broad Form Commercial
General Liability endorsement covering the insuring provisions of this Lease
and the performance by Tenant of the indemnity agreements set forth in
SECTION 10.1 of this Lease, for limits of liability not less than
$5,000,000,00 for each occurrence and S5,000,000.00 annual aggregate, with 0%
Insured's participation. In addition, Tenant shall carry Physical Damage
Insurance covering (i) the Personal Property and all furniture, trade
fixtures, equipment, merchandise and all other items of Tenant's property on
the Premises installed by, for, or at the expense of Tenant, and (ii) all
existing and future improvements, alterations and additions to the Premises,
including any improvements, alterations or additions installed at Tenant's
request above the ceiling of the Premises or below the floor of the Premises
(collectively, the "Tenant Improvements"). Such insurance shall be written on
an "all risks" of physical loss or damage basis, for the full replacement
cost value new without deduction for depreciation of the covered items and in
amounts that meet any co-insurance clauses of the policies of insurance and
shall include a vandalism and malicious mischief endorsement, sprinkler
leakage coverage and earthquake sprinkler leakage coverage.

         10.4    FORM OF POLICIES. The minimum limits of policies of
insurance required of Tenant under this Lease shall in no event limit the
liability of Tenant under this Lease. Such insurance shall (i) name Landlord,
and any other party it so specifies, as an additional insured; (ii)
specifically cover the liability assumed by Tenant under this Lease,
including, but not limited to, Tenant's obligations under SECTION 10.1 of
this Lease, (iii) be issued by an insurance company having a rating of not
less than A-X in Best's Insurance Guide or which is otherwise acceptable to
Landlord and licensed to do business in the state in which the Building is
located; (iv) be primary insurance as to all claims thereunder and provide
that any insurance carried by Landlord is excess and is non-contributing with
any insurance requirement of Tenant; (v) provide that said insurance shall
not be canceled or coverage changed unless thirty (30) days' prior written
notice shall have been given to Landlord and any mortgagee or ground or
underlying lessor of Landlord. Tenant shall deliver said policy or policies
or certificates thereof to Landlord on or before the Lease Commencement Date
and at least thirty (30) days before the expiration dates thereof. In the
event Tenant shall fall to procure such insurance, or to deliver such
policies or certificate, Landlord may, at its option, procure such policies
for the account of Tenant, and the cost thereof shall be paid to Landlord as
Additional Rent within five (5) days after delivery to Tenant of bills
therefor.

         10.5    SUBROGATION. Landlord and Tenant agree to have their
respective insurance companies issuing property damage insurance waive any
rights of subrogation that such companies may have against Landlord or
Tenant, as the case may be, so long as the insurance carried by Landlord and
Tenant, respectively, is not invalidated thereby. As long as such waivers of
subrogation are contained in their respective insurance policies, Landlord
and Tenant hereby waive any right that either may have against the other on
account of any loss or damage to their respective property to the extent such
loss or damage is insurable under policies of insurance for fire and all risk
coverage, theft, public liability, or other similar insurance.

         10.6    ADDITIONAL INSURANCE OBLIGATIONS. Tenant shall carry and
maintain during the entire Lease Term, at Tenant's sole cost and expense,
increased amounts of the insurance required to be carried by Tenant pursuant
to this Article 10, and such other reasonable types of insurance coverage and
in such reasonable amounts covering the Premises and Tenant's operations
therein, as may be reasonably requested by Landlord.

11.      DAMAGE AND DESTRUCTION

         11.1    REPAIR OF DAMAGE TO PREMISES BY LANDLORD. If the Premises or
any Common Areas providing access to the Premises shall be damaged by fire or
other casualty, Landlord shall promptly and diligently, subject to reasonable
delays for insurance adjustment or other matters beyond Landlord's reasonable
control, and subject to all other terms of this ARTICLE 11, restore the base,
shell and core of the Premises and such Common Areas. Such restoration shall
be to substantially the same condition of the base, shell and core of the
Premises and Common Areas prior to the casualty, except for modifications
required by zoning and building codes and other laws or by the holder of a
mortgage on the Building, or the lessor of a ground or underlying lease with
respect to the Project and/or the Building, or any other modifications to the
Common Areas deemed desirable by

<PAGE>

Landlord, provided access to the Premises shall not be materially impaired.
Notwithstanding any other provision of this Lease, upon the occurrence of any
damage to the Premises, upon notice (the "Landlord Repair Notice") to Tenant
from Landlord, Tenant shall assign to Landlord (or to any party designated by
Landlord) all insurance proceeds payable to Tenant under Tenant's insurance
carried under Section 10.3 of this Lease, and Landlord shall repair any
Injury or damage to the Tenant Improvements Installed in the Premises and
shall return such Tenant Improvements to their original condition; provided
that if the cost of such repair by Landlord exceeds the amount of insurance
proceeds received by Landlord from Tenant's insurance carrier, as assigned by
Tenant, the cost of such repairs shall be paid by Tenant to Landlord prior to
Landlord's repair of the damage. In the event that Landlord does not deliver
the Landlord Repair Notice within sixty (60) days following the date the
casualty becomes known to Landlord, Tenant shall, at its sole cost and
expense, repair any injury or damage to the Tenant Improvements installed in
the Premises and shall return such Tenant Improvements to their original
condition. Whether or not Landlord delivers a Landlord Repair Notice, Tenant
shall, prior to the commencement of construction, submit to Landlord, for
Landlord's review arid approval, all plans, specifications and working
drawings relating thereto, and Landlord shall select the contractors to
perform such improvement work, Landlord shall not be liable for any
inconvenience or annoyance to Tenant or its visitors, or injury to Tenant's
business resulting in any way from such damage or the repair thereof;
provided however, that if such fire or other casualty shall have damaged the
Premises or common areas necessary to Tenant's occupancy, and if such damage
is not the result of the willful misconduct of Tenant or Tenant's employees,
contractors, licensees, or invitees, Landlord shall allow Tenant a
proportionate abatement of Rent, during the time and to the extent the
Promises are unfit for occupancy for the purposes permitted under this Lease,
and not occupied by Tenant as a result thereof. In the event that Landlord
shall not deliver the Landlord Repair Notice, Tenant's right to rent
abatement pursuant to the preceding sentence shall terminate as of the date
which is reasonably determined by Landlord to be the date Tenant should have
completed repairs to the Premises assuming Tenant used reasonable due
diligence in connection therewith.

         11.2    LANDLORD'S OPTION TO REPAIR. Notwithstanding the terms of
SECTION 11.1 of this Lease, Landlord may elect not to rebuild and/or restore
the Premises and/or Building and instead terminate this Lease by notifying
Tenant in writing of such termination within sixty (60) days after the date
of discovery of such damage, such notice to include a termination date giving
Tenant ninety (90) days to vacate the Premises, but Landlord may so elect
only if the Building or Project shall be damaged by fire or other casualty or
cause, whether or not the Premises are affected, and one or more of the
following conditions is present: (i) repairs cannot reasonably be completed
within one hundred eighty (180) days of the date of discovery of damage (when
such repairs are made without the payment of overtime or other premiums);
(ii) the holder of any mortgage on the Building or Project or ground or
underlying lessor with respect to the Project and/or the Building shall
require that the insurance proceeds or any portion thereof be used to retire
the mortgage debt, or shall terminate the ground or underlying lease, as the
case may be: or (iii) the damage is not fully covered, except for deductible
amounts, by Landlord's insurance policies. in addition, in the event that the
Premises, the Building or the Project is destroyed or damaged to any
substantial extent during the last twelve (12) months of the Lease Term. then
notwithstanding anything contained in this ARTICLE 11, Landlord shall have
the option to terminate this Lease by giving written notice to Tenant of the
exercise of such option within thirty (30) days after the date of such damage
or destruction, in which event this Lease shall cease and terminate as of the
date of such notice. Upon any such termination of this Lease pursuant to this
SECTION 11.2, Tenant shall pay the Base Rent and Additional Rent, properly
apportioned up to such date of termination, and both parties hereto shall
thereafter be freed and discharged of all further obligations hereunder,
except as provided for in provisions of this Lease which by their terms
survive the expiration or earlier termination of the Lease Term, In the event
that Landlord shall not deliver the Landlord Repair Notice, Tenant's right to
rent abatement pursuant to the preceding sentence shall terminate as of the
date which is reasonably determined by Landlord to be the date Tenant should
have completed repairs to the Premises assuming Tenant used reasonable due
diligence in connection therewith.

         11.3    WAIVER OF STATUTORY PROVISIONS. The provisions of this
Lease, including this ARTICLE 11, constitute an express agreement between
Landlord and Tenant with respect to any and all damage to, or destruction of,
all or any part of the Premises, the Building or any other portion of the
Project, and any statute or regulation of the state in which the Building is
located, including, without limitation, Sections 1932(2) and 1933(4) of the
California Civil Code, with respect to any rights or obligations concerning
damage or destruction in the absence of an express agreement between the
parties, and any other statute or regulation, now or hereafter in effect,
shall have no application to this Lease or any damage or destruction to all
or any part of the Premises, the Building or any other portion of the Project.

12.      NONWAIVER. No waiver of any provision of this Lease shall be implied
by (i) any failure of either party to insist in any instance on the strict
keeping, observance or performance of any covenant or agreement contained in
this Lease or exercise any election contained in this Lease, or (ii) any
failure of either party to enforce any remedy on account of the violation of
such provision, even if such violation shall continue or be repeated
subsequently. Any waiver by either party of any provision of this Lease may
only be in writing, and no express waiver shall affect any provision other
than the one specified in such waiver and that one only for the time and in
the manner specifically stated.

13.      CONDEMNATION. If the whole or any part of the Premises, Building or
Project shall be taken by power of eminent domain or condemned by any
competent authority for any public or quasi-public use or purpose, or if any
adjacent property or street shall be so taken or condemned, or reconfigured
or vacated by such authority in such manner as to require the use,
reconstruction or remodeling of any part of the Premises Building, or Project
or if Landlord shall grant a deed or other instrument in lieu of such taking
by eminent domain or condemnation, Landlord shall have the option to
terminate this Lease upon ninety (90) days' notice, provided such notice is
given no later than one hundred eighty (180) days after the date of such
taking, condemnation, reconfiguration, vacation, deed or other instrument- If
more than twenty-five percent (25%) of the rentable square feet of the
Promises is taken, or if access to the Premises is substantially impaired,
Tenant shall have the option to terminate this Lease upon ninety (90) days'
notice, provided such notice is given no later than one hundred eighty (180)
days after the date of such taking. Landlord shall be entitled to receive the
entire award or payment in connection therewith, except that Tenant shall
have the right to file any separate claim available to Tenant for any taking
of Tenant's personal property and fixtures belonging to Tenant and removable
by Tenant upon expiration of the Lease Term pursuant to the terms of this
Lease, and for moving expenses, so long as such claim does not diminish the
award available to Landlord, its ground lessor with respect to the Project or
its mortgagee, and such claim is payable separately to Tenant. All Rent shall
be apportioned as of the date of such termination, or the date of such
taking, whichever shall first occur. If any part of the Premises shall be
taken, and this Lease shall not be so terminated, the Rent shall be
proportionately abated. Tenant hereby waives any and all rights it might
otherwise have pursuant to Section 1265.130 of the California Code of Civil
Procedure.

14.      ASSIGNMENT AND SUBLETTING

         14.1    TRANSFERS. Tenant shall not, without the prior written
consent of Landlord, assign, mortgage,' pledge, encumber or otherwise
transfer, this Lease or any interest hereunder, permit any assignment or
other such foregoing transfer of this Lease or any interest hereunder by
operation of law, or sublet the Premises or any part thereof (all of the
foregoing are hereinafter sometimes referred to collectively as "Transfers"
and any person to whom any Transfer is made or sought to be made is
hereinafter sometimes referred to as a "Transferee"). To request Landlord's
consent to any Transfer, Tenant shall notify Landlord in writing, which
notice (the "Transfer Notice") shall include (i) the proposed effective date
of the Transfer, which shall not be less than forty-five (45) days after the
date of delivery of the Transfer Notice, (ii) a description of the portion of
the Premises to be transferred

<PAGE>

(the "Subject Space"), (iii) all of the terms of the proposed Transfer and the
consideration therefor, including a calculation of the "Transfer Premium," as
that term is defined in SECTION 14.3 below, in connection with such Transfer,
the name and address of the proposed Transferee, and a copy of all existing
and/or proposed documentation pertaining to the proposed Transfer, including
all existing operative documents to be executed to evidence such Transfer or
the agreements incidental or related to such Transfer. (iv) current financial
statements of the proposed Transferee certified by an officer, partner or
owner thereof, and any other information required by Landlord, which will
enable Landlord to determine the financial responsibility, character, and
reputation of the proposed Transferee, nature of such Transferee's business
and proposed use of the Subject Space, (v) an executed estoppel certificate
from Tenant in the form attached hereto as Exhibit E and (vi) such other
information as Landlord may reasonably require. Any Transfer made without
Landlord's prior written consent shall, at Landlord's option, be null, void
and of no effect, and shall, at Landlord's option, constitute a default by
Tenant under this Lease. Whether or not Landlord shall grant consent, Tenant
shall pay Landlord's review and processing fees, as well as any reasonable
legal fees incurred by Landlord, within thirty (30) days after written
request by Landlord.

         14.2    LANDLORD'S CONSENT. Landlord shall not unreasonably withhold
its consent to any proposed Transfer of the Subject Space to the Transferee
on the terms specified in the Transfer Notice. The parties hereby agree that
it shall be reasonable under this Lease and under any applicable law for
Landlord to withhold consent to any proposed Transfer where one or more of
the following apply, without limitation as to other reasonable grounds for
withholding consent:

                 14.2.1 The Transferee is of a character or reputation or
engaged in a business which is not consistent with the quality of the Project,
or would be a significantly less prestigious occupant of the Project than
Tenant;

                  14.2.2 The Transferee intends to use the Subject Space for
purposes which are not permitted under this Lease;

                  14.2.3 The Transferee is either a governmental agency or
instrumentality thereof;

                  14.2.4 The Transferee is not a party of reasonable financial
worth and/or financial stability in light of the responsibilities involved under
the Lease on the date consent is requested;

                  14.2.5 The proposed Transfer would cause Landlord to be in
violation of another lease or agreement to which Landlord is a party, or would
give an occupant of the Project a right to cancel its lease;

                  14.2.6 The terms of the proposed Transfer will allow the
Transferee to exercise a right of renewal, right of expansion, right of first
offer, or other similar right held by Tenant (or will allow the Transferee to
occupy space leased by Tenant pursuant to any such right); or

                  14.2.7 Either the proposed Transferee, or any person or entity
which directly or indirectly, controls, is controlled by, or is under common
control with, the proposed Transferee, (i) occupies space in the Project at the
time of the request for consent, (ii) is negotiating with Landlord to lease
space in the Project at such time, or, (iii) has negotiated with Landlord during
the twelve (12) month period immediately preceding the Transfer Notice.

         If Landlord consents to any Transfer pursuant to the terms of this
SECTION 14.2 (and does not exercise any recapture rights Landlord may have under
SECTION 14.4 of this Lease), Tenant may within six (6) months after Landlord's
consent, but not later than the expiration of said six-month period, enter into
such Transfer of the Premises or portion thereof, upon substantially the same
terms and conditions as are set forth in the Transfer Notice furnished by Tenant
to Landlord pursuant to SECTION 14.1 of this Lease.

         14.3    TRANSFER PREMIUM. If Landlord consents to a Transfer, as a
condition thereto which the parties hereby agree is reasonable, Tenant shall
pay to Landlord any "Transfer Premium," as that term is defined in this
SECTION 14.3, received by Tenant from such Transferee. "Transfer Premium"
shall mean all rent, additional rent or other consideration payable by such
Transferee in excess of the Rent and Additional Rent payable by Tenant under
this Lease on a per rentable square foot basis if less than all of the
Premises Is transferred. "Transfer Premium" shall also include, but not be
limited to, key money and bonus money paid by Transferee to Tenant In
connection with such Transfer, and any payment in excess of fair market value
for services rendered by Tenant to Transferee or for assets, fixtures,
inventory, equipment, or furniture transferred by Tenant to Transferee in
connection with such Transfer.

         14.4    LANDLORD'S OPTION AS TO SUBJECT SPACE. Notwithstanding
anything to the contrary contained in this Article 14, Landlord shall have
the option, by giving written notice to Tenant within thirty (30) days after
receipt of any Transfer Notice, to recapture the Subject Space. Such
recapture notice shall cancel and terminate this Lease with respect to the
Subject Space as of the effective date of the proposed Transfer until the
last day of the term of the Transfer as set forth in the Transfer Notice. In
the event of a recapture by Landlord, If this Lease shall be canceled with
respect to less than the entire Premises, the Rent reserved herein shall be
prorated on the basis of the number of rentable square feet retained by
Tenant in proportion to the number of rentable square feet contained in the
Premises, and this Lease as so amended shall continue thereafter in full
force and effect, and upon request of either party, the parties shall execute
written confirmation of the same.

         14.5    EFFECT OF TRANSFER. If Landlord consents to a Transfer, (i)
the terms and conditions of this Lease shall in no way be deemed to have been
waived or modified, (ii) such consent shall not be deemed consent to any
further Transfer by either Tenant or a Transferee, (iii) Tenant shall deliver
to Landlord, promptly after execution, an original executed copy of all
documentation pertaining to the Transfer in form reasonably acceptable to
Landlord, (iv) Tenant shall furnish upon Landlord's request a complete
statement, certified by an Independent certified public accountant, or
Tenant's chief financial officer, setting forth in detail the computation of
any Transfer Premium Tenant has derived and shall derive from such Transfer,
and (v) no Transfer relating to this Lease or agreement entered into with
respect thereto. whether with or without Landlord's consent, shall relieve
Tenant or any guarantor of this Lease from liability under this Lease.
Landlord or its authorized representatives shall have the right at all
reasonable times to audit the books, records and papers of Tenant relating to
any Transfer, and shall have the fight to make copies thereof. If the
Transfer Premium respecting any Transfer shall be found understated, Tenant
shall, within thirty (30) days after demand, pay the deficiency and
Landlord's costs of such audit, and if understated by more than ten percent
(10%), Landlord shall have the right to cancel this Lease upon thirty (30)
days' notice to Tenant.

         14.6    ADDITIONAL TRANSFERS. For purposes of this Lease, the term
"Transfer" shall also include (i) if Tenant is a partnership, the withdrawal
or change, voluntary, involuntary or by operation of law. of twenty-five
percent (25%) or more of the partners, or transfer of twenty-five percent or
more of partnership interests, within a twelve (12)-month period, or the
dissolution of the partnership without immediate reconstitution thereof, and
(ii) if Tenant is a closely held corporation (i.e., whose stock is not
publicly held and not traded through an exchange or over the counter), (A)
the dissolution, merger, consolidation or other reorganization of Tenant, the
sale or other transfer of more than an aggregate of twenty-five percent (25%)
of the voting shares of

                                       7
<PAGE>

Tenant (other than to immediate family members by reason of gift or death),
within a twelve (12)-month period, or (C) the sale, mortgage, hypothecation
or pledge of more than an aggregate of twenty-five percent (25%) of the value
of the unencumbered assets of Tenant within a twelve (12) month period.

15.      OWNERSHIP AND REMOVAL OF TRADE FIXTURES

         15.1    SURRENDER OF PREMISES. No act or thing done by Landlord or
any agent or employee of Landlord during the Lease Term shall be deemed to
constitute an acceptance by Landlord of a surrender of the Premises unless
such intent is specifically acknowledged in a writing signed by Landlord, The
delivery of keys to the Premises to Landlord or any agent or employee of
Landlord shall not constitute a surrender of the Premises or effect a
termination of this Lease, whether or not the keys are thereafter retained by
Landlord, and notwithstanding such delivery Tenant shall be entitled to the
return of such keys at any reasonable time upon request until this Lease
shall have been properly terminated.

         15.2    REMOVAL OF TENANT PROPERTY BY TENANT. Upon the expiration of
the Lease Term, or upon any earlier termination of this Lease, Tenant shall,
subject to the provisions of this ARTICLE 15, quit and surrender possession
of the Premises to Landlord in as good order and condition as when Tenant
took possession and as thereafter improved by Landlord and/or Tenant,
reasonable wear and tear excepted. Upon such expiration or termination,
Tenant shall, without expense to Landlord, remove or cause to be removed from
the Premises all debris and rubbish, and such items of furniture, equipment,
free-standing cabinet work, and other articles of personal property owned by
Tenant or installed or placed by Tenant at its expense in the Premises, and
such similar articles of any other persons claiming under Tenant, as Landlord
may, in its sole discretion, require to be removed, and Tenant shall repair
at its own expense all damage to the Premises, Building and Project resulting
from such removal.

16.      HOLDING OVER. If Tenant holds over after the expiration of the Lease
Term hereof, with or without the express or implied consent of Landlord, such
tenancy shall be from month-to-month only, and shall not constitute a renewal
hereof or an extension for any further term, and in such case Base Rent shall
be payable at a monthly rate equal to twice the Base Rent applicable during
the last rental period of the Lease Term under this Lease. Such
month-to-month tenancy shall be subject to every other term, covenant and
agreement contained herein. Nothing contained in this ARTICLE 16 shall be
construed as consent by Landlord to any holding over by Tenant, and Landlord
expressly reserves the right to require Tenant to surrender possession of the
Premises to Landlord as provided in this Lease upon the expiration or other
termination of this Lease. The provisions of this ARTICLE 16 shall not be
deemed to limit or constitute a waiver of any other rights or remedies of
Landlord provided herein or at law. If Tenant fails to surrender the Premises
upon the termination or expiration of this Lease, in addition to any other
liabilities to Landlord accruing therefrom, Tenant shall protect, defend,
indemnify and hold Landlord harmless from all loss, costs (including
reasonable attorneys' fees) and liability resulting from such failure,
including, without limiting the generality of the foregoing, any claims made
by any succeeding tenant founded upon such failure to surrender, and any lost
profits to Landlord resulting therefrom.

17.      ESTOPPEL CERTIFICATES. Within ten (10) days following a request in
writing by Landlord, Tenant shall execute and deliver to Landlord an estoppel
certificate, which, as submitted by Landlord, shall be substantially in the
form of EXHIBIT E, attached hereto, (or such other form as may be required by
any prospective mortgagee or purchaser of the Project, or any portion
thereof), indicating therein any exceptions thereto that may exist at that
time, and shall also contain any other information reasonably requested by
Landlord or Landlord's mortgagee or prospective mortgagee. Tenant shall
execute and deliver whatever other instruments may be reasonably required for
such purposes. Failure of Tenant to timely execute and deliver such estoppel
certificate or other instruments shall constitute an acceptance of the
Premises and an acknowledgment by Tenant that statements included in the
estoppel certificate are true and correct, without exception.

18.      SUBORDINATION. This Lease is subject and subordinate to all present
and future ground or underlying leases of the Project and to the lien of any
mortgages or trust deeds, now or hereafter in force against the Project and
the Building, if any, and to all renewals, extensions, modifications,
consolidations and replacements thereof, and to all advances made or
hereafter to be made upon the security of such mortgages or trust deeds,
unless the holders of such mortgages or trust deeds, or the lessors under
such ground lease or underlying leases, require in writing that this Lease be
superior thereto. Tenant covenants and agrees in the event any proceedings
are brought for the foreclosure of any such mortgage, or if any ground or
underlying lease is terminated, to attorn, without any deductions or set-offs
whatsoever, to the purchaser upon any such foreclosure sale, or to the lessor
of such ground or underlying lease, as the case may be, if so requested to do
so by such purchaser or lessor, and to recognize such purchaser or lessor as
the lessor under this Lease. Tenant shall, within five (5) days of request by
Landlord, execute such further instruments or assurances as Landlord may
reasonably deem necessary to evidence or confirm the subordination or
superiority of this Lease to any such mortgages, trust deeds, ground leases
or underlying leases. Tenant hereby irrevocably authorizes Landlord to
execute and deliver in the name of Tenant any such instrument or instruments
if Tenant fails to do so, provided that such authorization shall in no way
relieve Tenant from the obligation of executing such In8fruments of
subordination or superiority. Tenant waives the provisions of any current or
future statute, rule or law which may give or purport to give Tenant any
right or election to terminate or otherwise adversely affect this Lease and
the obligations of the Tenant hereunder in the event of any foreclosure
proceeding or sale.

19.      DEFAULTS; REMEDIES

         19.1    EVENTS OF DEFAULT. The occurrence of any of the following
shall constitute a default of this Lease by Tenant:

                 19.1.1 Any failure by Tenant to pay any Rent or any other
charge required to be paid under this Lease, or any part thereof, when due;

                 19.1.2 Any failure by Tenant to respond to Landlord's  request
under ARTICLE 17 OR 18 within the time permitted therein for such response; or

                 19.1.3 Any failure by Tenant to observe or perform any other
provision, covenant or condition of this Lease to be observed or performed by
Tenant where such failure continues for fifteen (15) days after written notice
thereof 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 or any similar or successor law; and provided
further that if the nature of such default is such that the same cannot
reasonably be cured within a fifteen (15) day period, Tenant shall not be deemed
to be in default If it diligently commences such cure within such period and
thereafter diligently proceeds to rectify and cure said default as soon as
possible; or

                 19.1.4 Abandonment, vacation or surrender of the Premises by
Tenant.

         19.2    REMEDIES UPON DEFAULT Upon the occurrence of any event of
default by Tenant, Landlord shall have, in addition to any other

<PAGE>

remedies available to Landlord at law or In equity, the option to pursue any
one or more of the following remedies, each and all of which shall be
cumulative and nonexclusive, without any notice or demand whatsoever.

                 19.2.1 Terminate this Lease, in which event Tenant shall
immediately surrender the Premises to Landlord, and If Tenant fails to do so,
Landlord may, without prejudice to any other remedy which it may have for
possession or arrearages In rent, enter upon and take possession of the Premises
and expel or remove Tenant and any other person who may be occupying the
Premises or any part thereof, without being liable for prosecution or any claim
or damages therefor: and Landlord may recover from Tenant the following: (i) the
worth at the time of award of any unpaid rent which has been earned at the time
of such termination; plus (ii) the worth at the time of award of the amount by
which the unpaid rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss that Tenant proves could
have been reasonably avoided: plus (iii) the worth at the time of award of the
amount by Which the unpaid rent for the balance of the Lease Term after the time
of award exceeds the amount of such rental loss that Tenant proves could have
been reasonably avoided, plus (iv) 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 therefrom, specifically including but not limited to,
brokerage commissions and advertising expenses incurred, expenses of remodeling
the Premises or any portion thereof for a new tenant, whether for the same or a
different use, and any special concessions made to obtain a now tenant; and (v)
at Landlord's election, such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by applicable law.

         The term "rent" as used In this SECTION 19.2 shall be deemed to be and
to mean all sums of every nature required to be paid by Tenant pursuant to the
terms of this Lease, whether to Landlord or to others. As used in PARAGRAPHS
19.2.1(i) AND(ii), above, the "worth at the time of award" shall be computed by
allowing interest at the rate set forth in ARTICLE 25 of this Lease, but in no
case greater than the maximum amount of such interest permitted by law. As used
in PARAGRAPH 19.2.1(iii) above, the "worth at the time of award" shall be
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent (1%).

                 19.2.2 Landlord shall have the remedy described in California
Civil Code Section 1951.4 (lessor may continue lease in effect after lessee's
breach and abandonment and recover rent as it becomes due, if lessee has the
right to sublet or assign, subject only to reasonable limitations). Accordingly,
if Landlord does not elect to terminate this Lease on account of any default by
Tenant, Landlord may, from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease, including the right to recover
all rent as it becomes due.

         19.3    SUBLESSEES OF TENANT. Whether or not Landlord elects to
terminate this Lease on account of any default by Tenant, as set forth in
this ARTICLE 19, Landlord shall have the right to terminate any and all
subleases, licenses, concessions or other consensual arrangements for
possession entered into by Tenant and affecting the Premises or may, in
Landlord's sole discretion, succeed to Tenant's interest in such subleases,
licenses, concessions or arrangements. In the event of Landlord's election to
succeed to Tenant's interest in any such subleases, licenses, concessions or
arrangements, Tenant shall, as of the date of notice by Landlord of such
election, have no further right to or Interest in the rent or other
consideration receivable thereunder.

         19.4    WAIVER OF DEFAULT. No waiver by Landlord or Tenant of any
violation or breach of any of the terms, provisions and covenants herein
contained shall be deemed or construed to constitute a waiver of any other or
later violation or breach of the same or any other of the terms, provisions, and
covenants herein contained. Forbearance by Landlord in enforcement of one or
more of the remedies herein provided upon an event of default shall not be
deemed or construed to constitute a waiver of such default. The acceptance of
any Rent hereunder by Landlord following the occurrence of any default, whether
or not known to Landlord, shall not be deemed a waiver of any such default
except only a default in the payment of the Rent so accepted.

20.      FORCE MAJEURE. Any prevention, delay or stoppage due to strikes,
lockouts, labor disputes, acts of God, inability to obtain services, labor,
or materials or reasonable substitutes therefor, governmental actions, civil
commotions, fire or other casualty, and other causes beyond the reasonable
control of the party obligated to perform, except with respect to the
obligations imposed with regard to Rent and other charges to be paid by
Tenant pursuant to this Lease, except as to Tenant's obligations under
Articles 5 and 24 of this Lease (collectively, the "Force Majeure"),
notwithstanding anything to the contrary contained in this Lease, shall
excuse the performance of such party for a period equal to any such
prevention, delay or stoppage and, therefore, if this Lease specifies a time
pe6od for performance of an obligation of either party, that time period
shall be extended by the period of any delay in such party's performance
caused by a Force Majeure.

21.      SECURITY DEPOSIT. Concurrent with Tenant's execution of this Lease,
Tenant shall deposit with Landlord a security deposit (the "Security
Deposit") in the amount set forth in SECTION 11 of the Summary, The Security
Deposit shall be held by Landlord as security for the faithful performance by
Tenant of all the terms, covenants, and conditions of this Lease to be kept
and performed by Tenant during the Lease Term. If Tenant defaults with
respect to any provisions of this Lease, including, but not limited to, the
provisions relating to the payment of Rent, Landlord may, but shall not be
required to, use, apply or retain all or any part of the Security Deposit for
the payment of any Rent or any other sum in default, or for the payment of
any amount that Landlord may spend or become obligated to spend by reason of
Tenant's default, or to compensate Landlord for any other loss or damage that
Landlord may suffer by reason of Tenant's default- If any portion of the
Security Deposit is so used or applied, Tenant shall, within five (5) days
after written demand therefor, deposit cash with Landlord in an amount
sufficient to restore the Security deposit to its original amount, and
Tenant's failure to do so shall be a default under this Lease. If Tenant
shall fully and faithfully perform every provision of this Lease to be
performed by it, the Security Deposit, or any balance thereof, shall be
returned to Tenant, or, at Landlord's option, to the last assignee of
Tenant's interest hereunder, within sixty (60) days following the expiration
of the Lease Term. Tenant shall not be entitled to any interest on the
Security Deposit.

22.      SUBSTITUTION OF OTHER PREMISES. Landlord shall have the right, on
thirty (30) days' prior notice, to relocate Tenant to another space in the
Project, and all terms hereof shall apply to the new space with equal force.
In such event, Landlord shall give Tenant prior notice of Landlord's election
to so relocate Tenant, and shall move Tenant's effects to the new space at
Landlord's sole cost and expense at such time and in such manner as to
inconvenience Tenant as little as reasonably practicable, Simultaneously with
such relocation of the Premises, the parties shall immediately execute an
amendment to this Lease stating the relocation of the Premises, Should Tenant
refuse to permit Landlord to move Tenant to such new space, Landlord shall
have the right to cancel and terminate this Lease effective sixty (60) days
from the date of Landlord's election to relocate Tenant.

23.      SIGNS

         23.1    IN GENERAL. Tenant shall be entitled, at its sole cost and
expense, to identification signage outside of Tenant's Premises, The
location, quality, design, style, lighting and size of such signage shall
comply with all applicable laws, shall be consistent with the Landlord's
Project standard signage program, and shall be subject to Landlord's prior
written approval, in its reasonable discretion. Upon the expiration or
earlier

<PAGE>

termination of this Lease, Tenant shall be responsible, at its sole cost and
expense, for the removal of such signage and the repair of all damage to the
Building caused by such removal.

         23.2     PROHIBITED SIGNAGE AND OTHER ITEMS. Any signs, notices,
logos, pictures, names or advertisements which are installed and that have
not been individually approved by Landlord may be removed without notice by
Landlord at the sole expense of Tenant. Tenant may not install any signs on
the exterior or roof of the Building, Project or Common Areas. Any signs,
window coverings, or blinds (even if the same are located behind the Landlord
approved window coverings for the Building), or other items visible from the
exterior of the Premises, Building or Project are subject to the prior
approval of Landlord, in its sole discretion.

         24.      COMPLIANCE WITH LAW. Tenant shall not do anything or suffer
anything to be done in or about the Premises which will in any way conflict
with any law, statute, ordinance or other governmental rule. regulation or
requirement now in force or which may hereafter be enacted or promulgated. At
its sole cost and expense. Tenant shall promptly comply with all such
governmental measures. Tenant hereby acknowledges and agrees that it shall be
the sole and exclusive responsibility of Tenant, at Tenant's sole cost and
expense, to assure that Tenant's use of the Premises, as permitted pursuant
to the terms of this Lease, complies with all applicable laws, including,
without limitation, any zoning and/or land use restrictions applicable to the
Premises or Project. Should any standard or regulation now or hereafter be
imposed on Landlord or Tenant by a state, federal or local governmental body
charged with the establishment, regulation and enforcement of occupational,
health or safety standards for employers, employees, landlords or tenants,
then Tenant agrees, at its sole cost and expense, to comply promptly with
such standards or regulations. Tenant shall be responsible, at its sole cost
and expense, to make all improvements and alterations to the Premises as are
required to comply with the governmental rules, regulations, requirements or
standards described in this ARTICLE 24. The judgment of any court of
competent jurisdiction or the admission of Tenant in any judicial action,
regardless of whether Landlord is a party thereto, that Tenant has violated
any of said governmental measures, shall be conclusive of that fact as
between Landlord and Tenant.

         25.      LATE CHARGES. If any installment of Rent or any other sum
due from Tenant shall not be received by Landlord or Landlord's designee
within five (5) days after said amount is due, or if any check delivered to
Landlord by Tenant shall be returned for insufficient funds, then Tenant
shall pay to Landlord a late charge equal to ten percent (10%) of the amount
due. In addition to the late charge, in the event any check is returned for
insufficient funds, Tenant shall pay to Landlord, as additional rent, the sum
of $25.00. The late charge shall be deemed Additional Rent and the right to
require it shall be in addition to all of Landlord's other rights and
remedies hereunder or at law and shall not be construed as liquidated damages
or as limiting Landlord's remedies in any manner. In addition to the late
charge described above, any Rent or other amounts owing hereunder which are
not paid when due shall thereafter bear interest until paid at a rate equal
to ten percent (10%) per annum, provided that in no case shall such rate be
higher than the highest rate permitted by applicable law. In the event that
more than one (1) check of Tenant is returned for insufficient funds In any
twelve (12) month period, Landlord shall have the right to require that any
or all subsequent payments by Tenant to Landlord be in the form of cash,
money order, cashier's or certified check drawn on an institution acceptable
to Landlord, notwithstanding any prior practice of accepting payments in any
different form.

26.      LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT

         26.1     LANDLORD'S CURE. All covenants and agreements to be kept or
performed by Tenant under this Lease shall be performed by Tenant at Tenant's
sole cost and expense and without any reduction of Rent. If Tenant shall fail
to perform any of its obligations under this Lease, within a reasonable time
after such performance is required by the terms of this Lease, Landlord may,
but shall not be obligated to, after reasonable prior notice to Tenant, make
any such payment or perform any such act on Tenant's part without waiving its
right based upon any default of Tenant and without releasing Tenant from any
obligations hereunder.

         26.2    TENANT'S REIMBURSEMENT. Except as may be specifically
provided to the contrary in this Lease, Tenant shall pay to Landlord, within
fifteen (15) days after delivery by Landlord to Tenant of statements
therefor: (i) sums equal to expenditures reasonably made and obligations
incurred by Landlord in connection with the remedying by Landlord of Tenant's
defaults pursuant to the provisions of SECTION 26.1; (ii) sums equal to all
losses, costs, liabilities, damages and expenses referred to in ARTICLE 10 of
this Lease; and (iii) sums equal to all expenditures made and obligations
incurred by Landlord in collecting or attempting to collect the Rent or in
enforcing or attempting to enforce any rights of Landlord under this Lease or
pursuant to law, including, without limitation, all legal fees and other
amounts so expended. Tenant's obligations under this SECTION 26.2 shall
survive the expiration or sooner termination of the Lease Term.

27.      ENTRY BY LANDLORD. Landlord reserves the right at all reasonable
times and upon reasonable notice to the Tenant to enter the Premises to (i)
inspect them; (ii) show the Premises to prospective purchasers, mortgagees or
tenants, or to the ground or underlying lessors; (iii) post notices of
nonresponsibility; or (iv) alter, improve or repair the Premises or the
Building if necessary to comply with current building codes or other
applicable laws, or for structural alterations, repairs or improvements to
the Building. Notwithstanding anything to the contrary contained in this
ARTICLE 27, Landlord may enter the Premises at any time to (A) perform
services required of Landlord; (B) take possession due to any breach of this
Lease in the manner provided herein; and (C) perform any covenants of Tenant
which Tenant fails to perform. Any such entries shall be without the
abatement of Rent and shall include the right to take such reasonable steps
as required to accomplish the stated purposes. Tenant hereby waives any
claims for damages or for any injuries or inconvenience to or interference
with Tenant's business, lost profits, any loss of occupancy or quiet
enjoyment of the Premises, and any other loss occasioned thereby. For each of
the above purposes, Landlord shall at all times have a key with which to
unlock all the doors in the Premises. In an emergency, Landlord shall have
the right to use any means that Landlord may deem proper to open the doors in
and to the Premises. Any entry into the Premises in the manner hereinbefore
described shall not be deemed to be a forcible or unlawful entry into, or a
detainer of, the Premises, or an actual or constructive eviction of Tenant
from any portion of the Premises.

28.      TENANT PARKING. Tenant shall have the right to use the amount of
reserved and/or tandem/reserved parking spaces ("Parking Spaces") set forth
in Section 12 of the Summary to park in the Parking Area. The location of
Tenant's parking spaces shall be as set forth on Exhibit A, attached hereto.
Subject to availability (as determined by Landlord in Landlord's reasonable
discretion), following request by Tenant, Landlord shall provide up to a
total of four (4) additional parking spaces at the Project (the "Additional
Spaces"). The Additional Spaces shall be rented by Tenant on a month-to-month
basis. As of the Lease Commencement Date, Tenant shall not be charged for the
use of the Parking Spaces (but, as set forth below, Tenant shall be charged
for Additional Spaces utilized by Tenant). Notwithstanding the foregoing, (i)
Landlord may, at its sole option upon not less than thirty (30) days notice
to Tenant, at any time during the Lease Term, charge Tenant for the use of
the Parking Spaces, provided that in no event shall the amount charged by
Landlord for the Parking Spaces exceed that amount charged by landlords of
buildings comparable to and in the vicinity of the Project, and (ii) Tenant
shall pay to Landlord, at all times during which Tenant shall rent Additional
Spaces, the standard rate established by Landlord with respect to the
Additional Spaces. Tenant's continued right to use the Parking Spaces is
conditioned upon Tenant abiding by all rules and regulations which are

<PAGE>

prescribed from time to time for the orderly operation and use of the Parking
Area and upon Tenant's cooperation in seeing that Tenant's employees and
visitors also comply with such rules and regulations. Landlord specifically
reserves the right to change the size, configuration, design, layout,
location and all other aspects of the Parking Area and Tenant acknowledges
and agrees that Landlord may, without incurring any liability to Tenant and
without any abatement of Rent under this Lease, from time to time, close-off
or restrict access to the Parking Area, or relocate Tenant's Parking Spaces
to other parking structures and/or surface parking areas within a reasonable
distance of the Premises, for purposes of permitting or facilitating any such
construction, alteration or improvements with respect to the Parking Area or
to accommodate or facilitate renovation, alteration, construction or other
modification of other improvements or structures located on the Project.
Landlord may delegate its responsibilities hereunder to a parking operator in
which case such parking operator shall have all the rights of control
attributed hereby to the Landlord and such owner.

29.      MISCELLANEOUS PROVISIONS

         29.1    BINDING EFFECT. Each of the provisions of this Lease shall
extend to and shall, as the case may require, bind or inure to the benefit
not only of Landlord and of Tenant, but also of their respective successors
or assigns, provided this clause shall not permit any assignment by Tenant
contrary to the provisions of ARTICLE 14 of this Lease.

         29.2    NO AIR RIGHTS. No rights to any view or to light or air over
any property, whether belonging to Landlord or any other person, are granted
to Tenant by this Lease. If at any time any windows of the Premises are
temporarily darkened or the light or view therefrom is obstructed by reason
of any repairs, improvements, maintenance or cleaning in or about the
Project, the same shall be without liability to Landlord and without any
reduction or diminution of Tenant's obligations under this Lease.

         29.3    MODIFICATION OF LEASE. Should any current or prospective
mortgagee or ground lessor for the Building or Project require a modification
or modifications of this Lease, which modification or modifications will not
cause an increased cost or expense to Tenant or in any other way materially
and adversely change the rights and obligations of Tenant hereunder, then and
in such event, Tenant agrees that this Lease may be so modified and agrees to
execute whatever documents are required therefor and deliver the same to
Landlord within ten (10) days following the request therefor. Should Landlord
or any such current or prospective mortgagee or ground lessor require
execution of a short form of Lease for recording, containing, among other
customary provisions, the names of the parties, a description of the Premises
and the Lease Term, Tenant agrees to execute such short form of Lease and to
deliver the same to Landlord within ten (10) days following the request
therefor.

         29.4    TRANSFER OF LANDLORD'S INTEREST. Tenant acknowledges that
Landlord has the right to transfer all or any portion of its interest in the
Project and Building and in this Lease, and Tenant agrees that in the event
of any such transfer, Landlord shall automatically be released from all
liability under this Lease and Tenant agrees to look solely to such
transferee for the performance of Landlord's obligations hereunder after the
date of transfer. The liability of any transferee of Landlord shall be
limited to the interest of such transferee in the Project and Building and
such transferee shall be without personal liability under this Lease, and
Tenant hereby expressly waives and releases such personal liability on behalf
of itself and all persons claiming by, through or under Tenant. Tenant
further acknowledges that Landlord may assign its interest in this Lease to a
mortgage lender as additional security and agrees that such an assignment
shall not release Landlord from its obligations hereunder and that Tenant
shall continue to look to Landlord for the performance of its obligations
hereunder.

         29.5    PROHIBITION AGAINST RECORDING. Except as provided in SECTION
29.3 of this Lease, neither this Lease, nor any memorandum, affidavit or
other writing with respect thereto, shall be recorded by Tenant or by anyone
acting through, under or on behalf of Tenant, and the recording thereof in
violation of this provision shall make this Lease null and void at Landlord's
election.

         29.6    RELATIONSHIP OF PARTIES. Nothing contained in this Lease
shall be deemed or construed by the parties hereto or by any third party to
create the relationship of principal and agent, partnership, joint venturer
or any association between Landlord and Tenant, it being expressly understood
and agreed that neither the method of computation of Rent nor any act of the
parties hereto shall be deemed to create any relationship between Landlord
and Tenant other than the relationship of landlord and tenant.

         29.7    APPLICATION OF PAYMENTS. Landlord shall have the right to
apply payments received from Tenant pursuant to this Lease, regardless of
Tenant's designation of such payments, to satisfy any obligations of Tenant
hereunder, in such order and amounts as Landlord, in its sole discretion, may
elect.

         29.8    TIME OF ESSENCE.  Time is of the essence of this Lease and
each of its provisions.

         29.9    PARTIAL INVALIDITY. If any term, provision or condition
contained in this Lease shall, to any extent, be invalid or unenforceable,
the remainder of this Lease, or the application of such term, provision or
condition to persons or circumstances other than those with respect to which
it is invalid or unenforceable, shall not be affected thereby, and each and
every other term, provision and condition of this Lease shall be valid and
enforceable to the fullest extent possible permitted by law.

         29.10   NO WARRANTY. In executing and delivering this Lease, Tenant
has not relied on any representation, including, but not limited to, any
representation whatsoever as to the amount of any item comprising Additional
Rent or the amount of the Additional Rent in the aggregate or that Landlord
is furnishing the same services to other tenants, at all, on the same level
or on the same basis, or any warranty or any statement of Landlord which is
not set forth herein or in one or more of the exhibits attached hereto.

         29.11   ENTIRE AGREEMENT. It is understood and acknowledged that there
are no oral agreements between the parties hereto affecting this Lease and this
Lease supersedes and cancels any and all previous negotiations, arrangements,
brochures, agreements and understandings, if any, between the parties hereto or
displayed by Landlord to Tenant with respect to the subject matter thereof, and
none thereof shall be used to interpret or construe this Lease.

         29.12   RIGHT TO LEASE. Landlord reserves the absolute right to
effect such other tenancies in the Project as Landlord in the exercise of its
sole business judgment shall determine to best promote the interests of the
Project. Tenant does not rely on the fact, nor does Landlord represent, that
any specific tenant or type or number of tenants shall, during the Lease
Term, occupy any space in the Project.

         29.13   WAIVER OF REDEMPTION BY TENANT. Tenant hereby waives for
Tenant and for all those claiming under Tenant all right now or hereafter
existing to redeem by order or judgment of any court or by any legal process
or writ, Tenant's right of occupancy of the Premises after any termination of

<PAGE>

this Lease.

         29.14   NOTICES. All notices, demands, statements or
communications (collectively, "Notices") given or required to be given by
either party to the other hereunder shall be in writing, shall be sent by
United States certified or registered mail, postage prepaid, return receipt
requested, or delivered personally (i) to Tenant at the appropriate address
set forth in SECTION 5 of the Summary, or to such other place as Tenant may
from time to time designate in a Notice to Landlord; or (ii) to Landlord at
the addresses set forth in SECTION 3 of the Summary, or to such other firm or
to such other place as Landlord may from time to time designate in a Notice
to Tenant. Any Notice will be deemed given on the date ii is' mailed as
provided in this SECTION 29.14 or upon the date personal delivery is made. If
Tenant is notified of the identity and address of Landlord's mortgagee or
ground or underlying lessor, Tenant shall give to such mortgagee or ground or
underlying lessor written notice of any default by Landlord under the terms
of this Lease by registered or certified mail, and such mortgagee or ground
or underlying lessor shall be given a reasonable opportunity to cure such
default prior to Tenant's exercising any remedy available to Tenant.

         29.15   LANDLORD EXCULPATION. It is expressly understood and agreed
that notwithstanding anything in this Lease to the contrary, and
notwithstanding any applicable law to the contrary, the liability of Landlord
and the Landlord Parties hereunder (including any successor landlord) and
any recourse by Tenant against Landlord or the Landlord Parties shall be
limited solely and exclusively to an amount which is equal to the interest of
Landlord in the Building, and neither Landlord, nor any of the Landlord
Parties shall have any personal liability therefor, and Tenant hereby
expressly waives and releases such personal liability on behalf of itself and
all persons claiming by, through or under Tenant. The limitations of
liability contained in this Section 29.15 shall inure to the benefit of
Landlord's and the Landlord Parties' present and future partners,
beneficiaries, officers, directors, trustees, shareholders, agents and
employees, and their respective partners, heirs, successors and assigns.
Under no circumstances shall any present or future partner of Landlord (if
Landlord is a partnership), or trustee or beneficiary (if Landlord or any
partner of Landlord is a trust), have any liability for the performance of
Landlord's obligations under this Lease. Notwithstanding any contrary
provision herein, neither Landlord nor the Landlord Parties shall be liable
under any circumstances for injury or damage to, or interference with,
Tenant's business, including but not limited to, loss of profits, loss of
rents or other revenues, loss of business opportunity, loss of goodwill or
loss of use, in each case, however occurring.

         29.16   JOINT AND SEVERAL. If there is more than one Tenant, the
obligations imposed upon Tenant under this Lease shall be joint and several.

         29.17   AUTHORITY. If Tenant is a corporation or partnership, each
individual executing this Lease on behalf of Tenant hereby represents and
warrants that Tenant is a duty formed and existing entity qualified to do
business in the state in which the Building is located and that Tenant has
full right and authority to execute and deliver this Lease and that each
person signing on behalf of Tenant is authorized to do so.

         29.18   ATTORNEYS' FEES. If either party commences litigation
against the other for the specific performance of this Lease, for damages for
the breach hereof or otherwise for enforcement of any remedy hereunder, the
parties hereto agree to and hereby do waive any right to a trial by jury and,
in the event of any such commencement of litigation, the prevailing party
shall be entitled to recover from the other party such costs and reasonable
attorneys' fees as may have been incurred, including any and all costs
incurred in enforcing, perfecting and executing such judgment.

         29.19   GOVERNING  LAW.  This Lease shall be  construed  and
enforced in accordance with the laws of the State of California.

         29.20   SUBMISSION OF LEASE. Submission of this instrument for
examination or signature by Tenant does not constitute a reservation of or an
option for lease, and it is not effective as a lease or otherwise until
execution and delivery by both Landlord and Tenant.

         29.21   BROKERS. Landlord and Tenant hereby warrant to each other
that they have had no dealings with any real estate broker or agent in
connection with the negotiation of this Lease, and that they know of no other
real estate broker or agent who is entitled to a commission in connection
with this Lease, excepting only the real estate brokers or agents specified
in Section 13 of the Summary (the "Brokers"). Each party agrees to indemnify
and defend the other party against and hold the other party harmless from any
and all claims, demands, losses, liabilities, lawsuits, judgments, and costs
and expenses (including without limitation reasonable attorneys' fees) with
respect to any leasing commission or equivalent compensation alleged to be
owing on account of the indemnifying party's dealings with any real estate
broker or agent, other than the Brokers.

         29.22   INDEPENDENT COVENANTS. This Lease shall be construed as
though the covenants herein between Landlord and Tenant are independent and
not dependent and Tenant hereby expressly waives the benefit of any statute
to the contrary and agrees that if Landlord falls to perform its obligations
set forth herein, Tenant shall not be entitled to make any repairs or perform
any acts hereunder at Landlord's expense or to any setoff of the Rent or
other amounts owing hereunder against Landlord.

         29.23   PROJECT NAME AND SIGNAGE. Landlord shall have the right at
any time to change the name of the Building and/or Project and to install,
affix and maintain any and all signs on the exterior of the Building or
Project as Landlord may, in Landlord's sole discretion, desire. Tenant shall
not use the name of the Project or use pictures or illustrations of the
Project or Building in advertising or other publicity, without the prior
written consent of Landlord.

         29.24   TRANSPORTATION MANAGEMENT. Tenant shall fully comply with
all present or future programs intended to manage parking, transportation or
traffic in and around the Building, and in connection therewith, Tenant shall
take responsible action for the transportation planning and management of all
employees located at the Premises by working directly with Landlord, any
governmental transportation management organization or any other
transportation-related committees or entities.

         29.25   HAZARDOUS MATERIAL. As used herein, the term "Hazardous
Material" means any hazardous or toxic substance, material or waste which is
or becomes regulated by any local governmental authority, the state in which
the Building is located or the United States Government. Tenant acknowledges
that Landlord may incur costs (A) for complying with laws, codes, regulations
or ordinances relating to Hazardous Material, or (B) otherwise in connection
with Hazardous Material. Tenant agrees that the costs incurred by Landlord
with respect to, or in connection with, complying with laws, codes,
regulations or ordinances relating to Hazardous Material shall be an
Operating Expense, unless the cost of such compliance, as between Landlord
and Tenant, is made the responsibility of Tenant under this Lease.

         29.26   CONFIDENTIALITY. Tenant acknowledges that the content of
this Lease and any related documents are confidential information. Tenant
shall keep such confidential information strictly confidential and shall not
disclose such confidential information to any person or entity other than
Tenant's financial, legal, and space planning consultants.

<PAGE>

         29.27   LANDLORD RENOVATIONS. It is specifically understood and
agreed that Landlord has no obligation and has made no promises to alter,
remodel, improve, renovate, repair or decorate the Premises, Building, or
Project, or any part thereof and that no representations respecting the
condition of the Premises, Building or Project, have been made by Landlord to
Tenant, except as specifically set forth herein. However, Tenant acknowledges
that Landlord is currently renovating or may during the Lease Term renovate,
improve, alter, or modify (collectively, the "Renovations") the Building,
Premises, and/or Project, including without limitation the Parking Area,
Common Areas, systems and equipment, roof, and structural portions of the
same. In connection with such Renovations, Landlord may, among other things,
erect scaffolding or other necessary structures in the Project, limit or
eliminate access to portions of the Project, including portions of the Common
Areas, or perform work in the Building or Project, which work may create
noise, dust or debris. Tenant hereby agrees that such Renovations and
Landlord's actions in connection with such Renovations shall in no way
constitute a constructive eviction of Tenant nor entitle Tenant to any
abatement of Rent. Landlord shall have no responsibility or for any reason be
liable to Tenant for any direct or indirect injury to or interference with
Tenant's business arising from the Renovations, nor shall Tenant be entitled
to any compensation or damages from Landlord for loss of the use of the whole
or any part of the Premises or of Tenant' s personal property or improvements
resulting from the Renovations or Landlord's actions in connection with such
Renovations, or for any inconvenience or annoyance occasioned by such
Renovations or Landlord's actions in connection with such Renovations.

<PAGE>

         IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
executed the day and date first above written.

                              "Landlord":

                              LEXINGTON-BROADWAY PLACE, L.L.C.,
                              a Delaware limited liability company

                              By:     Lexington Commercial Holdings, Inc.,
                                      a California corporation,
                                      Its Manager
                                      By:       /s/ Alisa J. Freundlich
                                              -------------------------
                                              Alisa J. Freundlich,
                                              Chief Operating Officer

                              "Tenant":

                              Mossimo, Inc.
                              a Delaware corporation

                              By:        /s/ Mossimo Giannulli
                                         ---------------------
                                Its      President and Chief Executive Officer
                                         -------------------------------------

<PAGE>

                                    EXHIBIT A

                               OUTLINE OF PREMISES
                                    (DIAGRAM)

                                       A-1
<PAGE>

                                    EXHIBIT B

                             [INTENTIONALLY OMITTED]

                                       B-1
<PAGE>

                                    EXHIBIT C

                           NOTICE OF LEASE TERM DATES

To:     Mossimo, Inc.
        2450 White Road
        2nd Floor
        Irvine, CA 92614

                Re:     Lease dated June 29, 2000, between Lexington-Broadway
                        Place, L.L.C., a Delaware limited liability company
                        ("Landlord"), and Mossimo, Inc., a Delaware
                        corporation ("Tenant") concerning certain space
                        located at Broadway Street, Santa Monica, California.

Gentlemen:

        In accordance with the Lease (the "Lease"), we wish to advise you
and/or confirm as follows:

        1.     That the Premises are Ready for Occupancy, and that the Lease
Term shall commence as of August 1, 2000 for a term of three (3) years ending
on July 31, 2003.

        2.     That in accordance with the Lease, Rent commenced to accrue on
August 1, 2000.

        3.     If the Lease Commencement Date is other than the first day of
the month, the first billing will contain a pro rata adjustment. Each billing
thereafter, with the exception of the final billing, shall be for the full
amount of the monthly installment as provided for in the Lease.

        4.     Rent is due and payable in advance on the first day of each
and every month during the Lease Term. Your rent checks should be made
payable to Lexington-Broadway Place, LLC at 9350 Wilshire Boulevard, Suite
310, Beverly Hills, California 90212.

        5.     The exact number of rentable square feet within the Premises
is 3,080 square feet.

        6.     Tenants Share based upon the exact number of rentable square
feet within the Premises is 4.54%.

                                  "Landlord":

                                  LEXINGTON-BROADWAY PLACE, L.L.C.,
                                  a Delaware limited liability company

                                  By:     Lexington Commercial Holdings, Inc.,
                                          a California corporation,
                                          Its Manager

                                          By:      /s/ Alisa J. Freundlich
                                                  ------------------------
                                                  Alisa J. Freundlich,
                                                  Chief Operating Officer

Agreed to and Accepted as
of July 25, 2000.

"Tenant":

Mossimo, Inc.
a Delaware corporation

By:    /s/ Mossimo Giannulli
     -----------------------

   Its:    President and Chief Executive Officer
           -------------------------------------

                                     C-1
<PAGE>

                                    EXHIBIT D

                                 BROADWAY PLACE

                              RULES AND REGULATIONS

         Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the nonperformance
of any of said Rules and Regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Building.

         1. Tenant shall not alter any lock or install any new or additional
locks or bolts on any doors or windows of the Premises without obtaining
Landlord's prior written consent. Tenant shall bear the cost of any lock changes
or repairs required by Tenant. Two keys will be furnished by Landlord for the
Premises, and any additional keys required by Tenant must be obtained from
Landlord at a reasonable cost to be established by Landlord.

         2. In case of invasion, mob, riot, public excitement, or other
commotion, Landlord reserves the right to prevent access to the Project during
the continuance of same by any means it deems appropriate for the safety and
protection of life and property.

         3. Landlord shall have the right to prescribe the weight, size and
position of all safes and other heavy property brought into the Premises. Safes
and other heavy objects shall, if considered necessary by Landlord, stand on
supports of such thickness as is necessary to properly distribute the weight.
Landlord will not be responsible for loss of or damage to any such safe or
property in any case. All damage done to any part of the Building, its contents,
occupants or visitors by moving or maintaining any such safe or other property
shall be the sole responsibility of Tenant and any expense of said damage or
injury shall be borne by Tenant.

         4. Landlord shall have the right to control and operate the public
portions of the Project in suctr manner as is customary for comparable buildings
in the vicinity of the Project.

         5. The requirements of Tenant will be attended to only upon application
at the office location designated by Landlord. Employees of Landlord shall not
perform any work or do anything outside their regular duties unless under
special instructions from Landlord.

         6. Tenant shall not disturb, solicit, or canvass any occupant of the
Project and shall cooperate with Landlord or Landlord's agents to prevent same.

         7. The toilet rooms, urinals, wash bowls and other apparatus shall not
be used for any purpose other than that for which they were constructed, and no
foreign substance of any kind whatsoever shall be thrown therein. The expense of
any breakage, stoppage or damage resulting from the violation of this rule shall
be borne by the tenant who, or whose employees or agents, shall have caused it.

         8. Tenant shall not overload the floor of the Premises, nor mark, drive
nails or screws, or drill into the partitions, woodwork or plaster or in any way
deface the Premises or any part thereof without Landlord's consent first had and
obtained.

         9. Except for vending machines intended for the sole use of Tenant's
employees and invitees, no vending machine or machines of any description other
than fractional horsepower office machines shall be installed, maintained or
operated upon the Premises without the written consent of Landlord.

         10. Tenant shall not use or keep in or on the Premises or the Building
any kerosene, gasoline or other inflammable or combustible fluid or material.

         11. Tenant shall not use any method of heating or air conditioning
other than that which may be supplied by Landlord, without the prior written
consent of Landlord.

         12. Tenant shall not use, keep or permit to be used or kept, any foul
or noxious gas or substance in or on the Premises, or permit or allow the
Premises to be occupied or used in a manner offensive or objectionable to
Landlord or other occupants of the Project by reason of noise, odors, or
vibrations, or interfere in any way with other Tenants or those having business
therein.

         13. Tenant shall not bring into or keep within the Project, Building or
Premises any animals, birds, bicycles or other vehicles.

         14. No cooking shall be done or permitted by any tenant on the
Premises, nor shall the Premises be used for the storage of merchandise, for
lodging or for any improper, objectionable or immoral purposes. Notwithstanding
the foregoing, Underwriters' laboratory-approved equipment and microwave ovens
may be used in the Premises for heating food and brewing coffee, tea, hot
chocolate and similar beverages, provided that such use is in accordance with
all applicable federal, state and city laws, codes, ordinances, rules and
regulations, and does not cause odors which are objectionable to Landlord and
other Tenants.

         15. Landlord will approve where and how telephone and telegraph wires
are to be introduced to the Premises. No boring or cutting for wires shall be
allowed without the consent of Landlord. The location of telephone, call boxes
and other office equipment affixed to the Premises shall be subject to the
approval of Landlord.

         16. Landlord reserves the right to exclude or expel from the Building
or Project any person who, in the judgment of Landlord, is intoxicated or under
the influence of liquor or drugs, or who shall in any manner do any act in
violation of any of these Rules and Regulations.

         17. Tenant shall store all its trash and garbage within the interior of
the Premises and, if applicable, shall place the same in appropriate receptacles
designated by Landlord within the Project. No material shall be placed in the
trash boxes or receptacles if such material is of such nature that it may not be
disposed of in the ordinary and customary manner of removing and disposing of
trash and garbage in the city in which the Building is located without violation
of any law or ordinance governing such disposal.

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

                                     D-1
<PAGE>

agency.

         19. Tenant shall assume any and all responsibility for protecting the
Premises from theft, robbery and pilferage, which includes keeping doors locked
and other means of entry to the Premises closed, when the Premises are not
occupied.

         20. Landlord may waive any one or more of these Rules and Regulations
for the benefit of any particular tenant or tenants, but no such waiver by
Landlord shall be construed as a waiver of such Rules and Regulations in favor
of any other tenant or tenants, nor prevent Landlord from thereafter enforcing
any such Rules or Regulations against any or all tenants of the Building.

         21. No awnings or other projection shall be attached to the outside
walls of the Building without the prior written consent of Landlord. No
curtains, blinds, shades or screens shall be attached to or hung in, or used in
connection with, any window or door of the Premises without the prior written
consent of Landlord.

         22. The sashes, sash doors, skylights, windows, and doors that reflect
or admit light and air into the halls, passageways or other public places in the
Building shall not be covered or obstructed by Tenant, nor shall any bottles,
parcels or other articles be placed on the windowsills.

         23. The washing and/or detailing of or, the installation of
windshields, radios, telephones in or general work on, automobiles shall not be
allowed on the Project.

         24. Food vendors shall be allowed in the Project upon receipt of a
written request from the Tenant. The food vendor shall service only the tenants
that have a written request on file with Landlord. Under no circumstance shall
the food vendor display their products in a public or common area. Any failure
to comply with this rule shall result in immediate permanent withdrawal of the
vendor from the Project.

         25. Tenant must comply with requests by the Landlord concerning the
informing of their employees of items of importance to the Landlord.

         26. Tenant shall comply with any non-smoking ordinance adopted by any
applicable governmental authority.

         27. Landlord reserves the right at any time to change or rescind any
one or more of these Rules and Regulations, or to make such other and further
reasonable Rules and Regulations as in Landlord's judgment may from time to time
be necessary for the management, safety, care and cleanliness of the Premises
and Building, and for the preservation of good order therein, as well as for the
convenience of other occupants and tenants therein. Landlord shall not be
responsible to Tenant or to any other person for the nonobservance of the Rules
and Regulations by another tenant or other person. Tenant shall be deemed to
have read these Rules and Regulations and to have agreed to abide by them as a
condition of its occupancy of the Premises.

                                     D-2
<PAGE>

                                    EXHIBIT E

                                 BROADWAY PLACE

                      FORM OF TENANTS ESTOPPEL CERTIFICATE

         The undersigned as Tenant under that certain Lease (the "Lease") made
and entered into as of _________,200_ and between [INSERT LANDLORD NAME AND
LEGAL ENTITY] as Landlord, and the undersigned as Tenant, for Premises on the
______floor(s) of the Office Building located at

         [INSERT BUILDING ADDRESS] certifies as follows:

         1. Attached hereto as Exhibit A is a true and correct copy of the Lease
and all amendments and modifications thereto. The documents contained in Exhibit
A represent the entire agreement between the parties as to the Premises.

         2. The undersigned has commenced occupancy of the Premises described in
the Lease, currently occupies the Premises, and the Lease Term commenced
on _______________.

         3. The Lease is in full force and effect and has not been modified,
supplemented or amended in any way except as provided in Exhibit A.

         4. Tenant has not transferred, assigned, or sublet any portion of the
Premises nor entered into any license or concession agreements with respect
thereto except as follows:

         5. Tenant shall not modify the documents contained in Exhibit A or
prepay any amounts owing under the Lease to Landlord in excess of thirty (30)
days without the prior written consent of Landlord's mortgagee.

         6. Base Rent became payable on _______________.

         7. The Lease Term expires on ________________.

         8. All conditions of the Lease to be performed by Landlord necessary to
the enforceability of the Lease have been satisfied and Landlord is not in
default thereunder.

         9. No rental has been paid in advance and no security has been
deposited with Landlord except as provided in the Lease.

         10. As of the date hereof, there are no existing defenses or offsets
that the undersigned has, which preclude enforcement of the Lease by Landlord.

         11. All monthly installments of Base Rent, all Additional Rent and all
monthly installments of estimated Additional Rent have been paid when due
through __________. The current monthly installment of Base Rent is
$____________.

         12. The undersigned acknowledges that this Estoppel certificate may be
delivered to Landlord's prospective mortgagee, or a prospective purchaser, and
acknowledges that it recognizes that if same is done, said mortgagee,
prospective mortgagee, or prospective purchaser will be relying upon the
statements contained herein in making the loan or acquiring the property of
which the Premises are a part, and in accepting an assignment of the Lease as
collateral security, and that receipt by it of this certificate is a condition
of making of the loan or acquisition of such property.

         13. If Tenant is a corporation or partnership, each individual
executing this Estoppel Certificate on behalf of Tenant hereby represents and
warrants that Tenant is a duly formed and existing entity qualified to do
business in the state in which the Building is located and that Tenant has full
right and authority to execute and deliver this Estoppel Certificate and that
each person signing on behalf of Tenant is authorized to do so.

         Executed at ___________________ on the _____ day of _______________,
200_.

                                           "Tenant":
                                          ______________________________________
                                          a ____________________________________

                                          By: __________________________________

                                          Its: _________________________________

                                          By: __________________________________

                                          Its: _________________________________

                                     E-1

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