Document:

EXHIBIT 10.2

                                FACILITIES LEASE

                                     BETWEEN

                          CEDARS-SINAI MEDICAL CENTER,

                       A CALIFORNIA NONPROFIT CORPORATION

                                       AND

                ARBIOS TECHNOLOGIES, INC., A DELAWARE CORPORATION

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ARTICLE I        BASIC LEASE PROVISIONS....................................................................................1

ARTICLE II       DESCRIPTION OF PREMISES...................................................................................2

ARTICLE III      TERM; COMMENCEMENT DATE...................................................................................2

ARTICLE IV       RENT......................................................................................................2

           4.1.  Basic Annual Rent.........................................................................................2
           4.2.  Basic Annual Rent Increase................................................................................3
           4.3.  Additional Rent...........................................................................................4
                 4.3.1         Payment.....................................................................................4
                 4.3.2         Taxes and Capital Improvements..............................................................4
                               (a)     Definitions.........................................................................4
                               (b)     Adjustments to Rent - Operating Expenses and Real Property Taxes....................5
                               (c)     Adjustments to Rent for Capital Improvements........................................6
                               (d)     Additional Taxes and/or Improvements................................................6
                               (e)     Landlord's Statement................................................................7
                 4.3.3         Charges for Use of Specialized Research Cores...............................................8
           4.4.  Definitions...............................................................................................8
                 4.4.1         Lease Years: Calendar Years.................................................................8
                 4.4.2         Lease Rate..................................................................................8
           4.5.  Miscellaneous Rent Provisions.............................................................................8
                 4.5.1         Prorations..................................................................................8
                 4.5.2         Place and Manner of Payment.................................................................9
                 4.5.3         Conditional Payment.........................................................................9
           4.6.  Security Deposit..........................................................................................9

ARTICLE V        TAXES ON TENANT'S PROPERTY................................................................................9

ARTICLE VI       USE OF PREMISES..........................................................................................10

           6.1.  Limitation of Use........................................................................................10
           6.2.  Compliance with Governmental and Insurance Regulations...................................................11
           6.3.  Assumption of Risk of Noncompliance......................................................................11
           6.4.  Safety Training Program..................................................................................12
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           6.5.  Use of Common Services Space.............................................................................12
           6.6.  Animal Research..........................................................................................12

ARTICLE VII      CONSTRUCTION AND MAINTENANCE OF PREMISES AFTER INITIAL CONSTRUCTION......................................12

           7.1.  Maintenance of Premises..................................................................................12
           7.2.  Tenant Construction......................................................................................12
                 7.2.1         Landlord's Consent.........................................................................12
                 7.2.2         Licensed Contractors.......................................................................13
                 7.2.3         Construction Requirements..................................................................13
           7.3.  Condition of Premises....................................................................................14
           7.4.  Landlord Repairs and Maintenance After Commencement Date.................................................14

ARTICLE VIII     MECHANICS' LIENS.........................................................................................15

ARTICLE IX       COMMON AREAS AND SPECIALIZED RESEARCH CORES..............................................................15

           9.1.  Common Areas.............................................................................................15
           9.2.  Specialized Research Cores...............................................................................16

ARTICLE X        LANDLORD'S RIGHT OF ACCESS...............................................................................16

ARTICLE XI       PROPERTY DAMAGE AND PERSONAL INJURY CLAIMS...............................................................17

           11.1. Indemnification..........................................................................................17
           11.2. Assumption of Liability and Waiver of Claims.............................................................17

ARTICLE XII      INSURANCE................................................................................................18

           12.1. Tenant's Insurance Obligations...........................................................................18
                 12.1.1        Liability Insurance........................................................................18
                 12.1.2        Property Insurance.........................................................................18
                 12.1.3        Workers' Compensation Insurance............................................................18
                 12.1.4        Other Insurance............................................................................19
                 12.1.5        Policy Provisions..........................................................................19
           12.2. Landlord's Insurance Obligations.........................................................................19
           12.3. Waivers of Subrogation...................................................................................19
           12.4. Increases................................................................................................20
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ARTICLE XIII     DAMAGE OR DESTRUCTION OF BUILDING OR PREMISES............................................................20

           13.1. Repair; Termination......................................................................................20
           13.2. Abatement of Rent........................................................................................20
           13.3. Waiver...................................................................................................20

ARTICLE XIV      EMINENT DOMAIN...........................................................................................21

ARTICLE XV       ASSIGNING MORTGAGING SUBLETTING CHANGE IN OWNERSHIP......................................................21

           15.1. No Unauthorized Transfer.................................................................................21
           15.2. Procedures for Requesting Authorization..................................................................22
           15.3. Landlord's Option........................................................................................22
           15.4. Conditions to Consent....................................................................................22
                 15.4.1        Standards of Reasonableness................................................................22
                 15.4.2        Further Transfers..........................................................................23
                 15.4.3        Rent or Other Premiums.....................................................................23
                 15.4.4        Processing Costs and Fees..................................................................23
                 15.4.5        No Waiver..................................................................................23
                 15.4.6        Nature of Tenant...........................................................................23

ARTICLE XVI      SUBORDINATION; ATTORNMENT................................................................................24

           16.1. Subordination............................................................................................24
           16.2. Attornment...............................................................................................24
           16.3. Attorney-in-Fact.........................................................................................24
           16.4. Non-Disturbance..........................................................................................24

ARTICLE XVII     DEFAULT..................................................................................................25

           17.1. Default by Tenant........................................................................................25

ARTICLE XVIII    REMEDIES.................................................................................................26

           18.1. Termination of Lease and Removal of Tenant...............................................................26
           18.2. Damages..................................................................................................26
           18.3. No Effect on Indemnification.............................................................................27
           18.4. No Acceptance of Surrender...............................................................................27
           18.5. Action for Rent..........................................................................................27
           18.6. Definition of Rent.......................................................................................27
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           18.7. Reletting................................................................................................27
           18.8. Cumulative Remedies......................................................................................28
           18.9. Assignment of Subrents...................................................................................28
           18.10.Storage of Personal Property.............................................................................29
           18.11.Waiver...................................................................................................29
           18.12.Landlord's Cure of Tenant's Default......................................................................29
           18.13.Interest and Charges on Past Due Obligations.............................................................29

ARTICLE XIX      RULES AND REGULATIONS....................................................................................29

ARTICLE XX       SURRENDER OF PREMISES....................................................................................30

           20.1. Surrender................................................................................................30
           20.2. No Merger................................................................................................30

ARTICLE XXI      HOLDING OVER.............................................................................................30

ARTICLE XXII     NOTICES..................................................................................................31

ARTICLE XXIII    QUIET ENJOYMENT..........................................................................................32

ARTICLE XXIV     ESTOPPEL CERTIFICATE.....................................................................................32

ARTICLE XXV      LIABILITY OF LANDLORD....................................................................................32

ARTICLE XXVI     LANDLORD'S INABILITY TO PERFORM..........................................................................33

ARTICLE XXVII    ATTORNEYS' FEES..........................................................................................33

ARTICLE XXVIII   SERVICES.................................................................................................33

           28.1. Provision of Services....................................................................................33
           28.2. Interruption of Services.................................................................................33
           28.3. Compliance with Service Related Regulations..............................................................34
           28.4. Additional Building Service Demands......................................................................34
           28.5. Modification of Services.................................................................................34
           28.6. Special Services.........................................................................................35

ARTICLE XXIX     GENERAL PROVISIONS.......................................................................................35

           29.1. Headings.................................................................................................35
           29.2. Plurals and Genders......................................................................................35
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           29.3. "Persons" Defined........................................................................................35
           29.4. Covenants and Agreements: Time of the Essence............................................................35
           29.5. Successors and Assigns...................................................................................35
           29.6. Interpretation...........................................................................................35
           29.7. Waiver and Default.......................................................................................35
           29.8. Entire Agreement; Amendments.............................................................................36
           29.9. Landlord's Consent or Approval...........................................................................36
           29.10.Counterparts.............................................................................................36
           29.11.Applicable Law and Venue.................................................................................36
           29.12.Incorporation of Exhibits................................................................................37
           29.13.Reserved Area............................................................................................37
           29.14.Brokers..................................................................................................37
           29.15.No Option................................................................................................37
           29.16.Authority................................................................................................37
           29.17.Recordation of Lease.....................................................................................37
           29.18.Multiple Parties.........................................................................................38
           29.19.No Violation of Other Agreements.........................................................................38
           29.20.Adjacent Land............................................................................................38
           29.21.Building Directory.......................................................................................38
           29.22.Parking..................................................................................................38
           29.23.Subdivision; Mutual Cooperation..........................................................................39
           29.24.Name of Building.........................................................................................39
           29.25.Rental Abatement.........................................................................................39
           29.26.Guarantees...............................................................................................39
           29.27.Severability.............................................................................................39
           29.28.Waiver of Rights of Redemption...........................................................................39
           29.29.Light and Air............................................................................................39
           29.30.No Joint Venture.........................................................................................39

ARTICLE XXX      HAZARDOUS MATERIALS......................................................................................40

           30.1. Compliance Costs.........................................................................................40
           30.2. Definition...............................................................................................40
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EXHIBITS

Exhibit A            Building Site Plan
Exhibit B            Floor Plan
Exhibit C            Monthly Rent Calculation
Exhibit D            Permitted Uses
Exhibit E            Rules and Regulations
Exhibit F            Trade Fixtures
Exhibit G            Special Services

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                                FACILITIES LEASE

      THIS  FACILITIES  LEASE  ("Lease") is made and entered into as of June 30,
2001,  by and  between  CEDARS-SINAI  MEDICAL  CENTER,  a  California  nonprofit
corporation  ("Landlord"),  and  ARBIOS  TECHNOLOGIES,   INC.  ("Tenant"),  with
reference to the following facts and circumstances:

      A. Landlord is the owner of a building  ("Building") located at 110 George
Burns Road, Los Angeles, California. The land upon which the Building is located
is  hereinafter  referred  to as the  "Property."  A  site  plan  depicting  the
Building, related improvements and the Property (collectively, the "Project") is
attached hereto as EXHIBIT A.

      B.  Landlord  desires to lease certain space within the Building to Tenant
and Tenant  wishes to lease such space within the  Building  from  Landlord,  in
accordance with the terms and conditions stated herein.

      C. Tenant is leasing  certain space within the Building for the purpose of
conducting Biomedical Activities.

      NOW, THEREFORE,  for mutual consideration,  the receipt and sufficiency of
which are hereby acknowledged, Landlord and Tenant hereby agree as follows:

                                   ARTICLE I

                             BASIC LEASE PROVISIONS

      Wherever  referred  to in this  Lease,  and  subject  to  modification  or
revision by particular  terms and conditions of this Lease and Addenda  thereto,
these certain basic lease provisions are defined as follows:

      1.1 Tenant: ARBIOS TECHNOLOGIES, INC.

      1.2 Building: 110 George Burns Road.

      1.3 Premises Area: 1,008 total rentable square feet, consisting of:

            1.3.1 Suite *  ("Premises"),  consisting of ** rentable square feet;
                  and * 4094-G, 4089, 4087 **794 sq.ft.

            1.3.2  Tenant's  share of the gross  square  feet  contained  in the
Common  Services  Space and the Common Areas of the Building,  which shall be an
additional  twenty-seven  percent (27%) of the total rentable square feet of the
"Premises" described in Section 1.3.1 above.

      1.4 Commencement Date:            July 1, 2001

      1.5 Termination Date:             June 30, 2004

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      1.6 Permitted Uses: Biomedical Activities, as set forth in Section 6.1 and
more particularly described in EXHIBIT D.

      1.7 Basic Annual Rent:  $42,336.00,  payable in twelve (12) equal  monthly
installments of $3,528.00 , beginning on the Commencement Date and continuing on
the first day of each subsequent calendar month.

      1.8 Basic Annual Rent Increase: Effective on each and every anniversary of
the Commencement Date, pursuant to Section 4.2.

      1.9 Additional Rent: As set forth in Section 4.3.

      1.10 Security Deposit: $7,056.00 .

      1.11 Parking Allotment: See Section 29.22 hereof

                                   ARTICLE II

                             DESCRIPTION OF PREMISES

      Subject to the terms and conditions stated herein,  Landlord hereby leases
to Tenant, and Tenant hereby leases from Landlord certain premises consisting of
the space  ("Premises")  designated  as Suite * . The  "Premises  Area" for such
Premises  shall mean and consist of 1,008 rentable  square feet,  consisting of:
(a) the total  rentable  square feet within the  Premises  described  in Section
1.3.1  hereof,  plus  (b)  Tenant's  share of the  space  described  in,  and as
determined  pursuant to,  Section  1.3.2 hereof A floor plan for the Premises is
attached hereto as EXHIBIT B. Tenant  acknowledges  that it has investigated the
Premises  prior to the  execution  hereof and agrees  that the  rentable  square
footage of  Premises  Area for  purposes of this Lease is not less than that set
forth above and that Tenant shall be  irrevocably  bound by the  designation  of
rentable  square  footage of the Premises Area set forth above.  For purposes of
this  Agreement,  the "Common  Services  Space" shall mean those portions of the
floor on which the  Premises  is  located  which are marked as such on EXHIBIT B
attached hereto.

*4094-G, 4087, 4089

                                  ARTICLE III

                             TERM; COMMENCEMENT DATE

      The term of this  Lease  shall  commence  on July 1,  2001  ("Commencement
Date"). The term of this Lease ("Term") shall be three (3) years commencing with
the  Commencement  Date,  unless sooner  terminated  pursuant to the  provisions
hereof.

                                   ARTICLE IV

                                      RENT

      4.1 Basic Annual Rent. Tenant shall pay to Landlord during the Term hereof
basic annual rent in twelve equal monthly installments, each monthly installment
equal to the product of (a) the total  rentable  square  footage of the Premises
Area,  multiplied  by (b) Three  Dollars And Fifty Cents Only ($3.50) per square
foot per month,  as adjusted  from time to time  pursuant to

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Section 4.2 hereof. The basic annual rent as adjusted from time to time pursuant
to Section 4.2 hereof is referred to  hereinafter  as the "Basic  Annual  Rent".
Concurrently with the execution of this Lease,  Tenant shall pay to Landlord the
first  monthly  installment  of Basic  Annual  Rent.  Thereafter,  each  monthly
installment  of Basic Annual  Rent,  as adjusted  from time to time  pursuant to
Section 4.2 hereof,  shall be due and payable by Tenant to Landlord on the first
day of each calendar month during the Term of the Lease.

      4.2 Basic Annual Rent Increase.

            4.2.1 On each  anniversary  ("Adjustment  Date") of the Commencement
Date,  commencing with the first anniversary of the Commencement Date, the Basic
Annual Rent shall be increased  by  multiplying  such Basic  Annual  Rent,  by a
fraction,  the numerator of which shall be the CPI (as hereinafter  defined) for
the calendar month in which the Adjustment  Date falls,  and the  denominator of
which shall be (a) the CPI for the calendar  month of the  Commencement  Date in
the case of the first  adjustment on the first  anniversary of the  Commencement
Date,  and (b) in the case of all other  adjustments,  the CPI for the  calendar
month one year prior to the Adjustment  Date for which the rental  adjustment is
then being calculated.  (Such fraction shall never be less than one.) The sum so
calculated or set shall constitute the new Basic Annual Rent hereunder,  but, in
no event,  shall such new Basic  Annual Rent be less than the Basic  Annual Rent
payable for the annual period  immediately  receding the  Adjustment  Date.  For
purposes hereof,  "CPI" shall mean the United States Department of Labor Revised
Consumer Price Index,  Not  Seasonally  Adjusted,  Los  Angeles-Riverside-Orange
County,  CA  metropolitan  area for  Medical  Care (Base  Period  1982/84 = 100)
established monthly by the Bureau of Labor Statistics.

            4.2.2 In the event the  compilation  and/or  publication  of the CPI
shall be transferred to any other governmental department or bureau or agency or
shall be  discontinued,  then the index most nearly the same as the CPI shall be
used to make such  calculations.  In the event that  Landlord and Tenant  cannot
agree on such alternative index, then the matter shall be submitted for decision
to the American  Arbitration  Association  in accordance  with the then rules of
such  association and the decision of the arbitrators  shall be binding upon the
parties.

            4.2.3 Tenant shall continue to pay the Basic Annual Rent at the rate
previously in effect until the increase, if any, is determined.  Within five (5)
days  following the date on which an increase is  determined,  Tenant shall make
such payment to Landlord as will bring the increased rental current,  commencing
with  the  effective  date of  such  increase  through  the  date of any  rental
installments  then due,  plus accrued  interest at the rate of ten percent (10%)
per annum from the applicable Adjustment Date. Thereafter, the Basic Annual Rent
shall be paid at the increased rate.

            4.2.4 At such time as the amount of any change in Basic  Annual Rent
required by this Lease is known or determined, Landlord and Tenant shall execute
a statement setting forth such change, but the enforceability of both this Lease
and the increase in Basic Annual Rent shall not be affected  should either party
fail or refuse to execute such statement.

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      4.3 Additional Rent.

            4.3.1  Payment.  In addition to the Basic Annual Rent,  Tenant shall
pay such  additional rent and all other amounts or charges as may be required in
this Lease.  The Basic Annual Rent and said  additional  rent and other payments
are  sometimes  collectively  referred to herein as the "rent" The rent shall be
payable to Landlord,  without demand,  deduction or offset of any kind in lawful
money of the United  States of America at the address for  Landlord set forth in
this Lease or to such other  person or at such other place as Landlord  may from
time to time  designate  in writing.  If Tenant  shall pay any rent with a check
which is not a  cashier's  check,  the check  shall be drawn  against an account
maintained in a bank or other  financial  institution  which has a branch office
located in Los Angeles, California.

            4.3.2 Taxes and Capital Improvements.

            (a) Definitions. For purposes of this Section 4.3.2 and this Lease:

                  (i)  "Operating  Expenses"  shall mean the total of all actual
costs,  expenses,  and  disbursements  for or in connection  with the operation,
management,  maintenance,  protection,  remediation,  servicing or repair of the
Project (or any portion thereof). Operating Expenses shall include: (1) the cost
of providing,  managing, operating,  maintaining and repairing air-conditioning,
electricity,  steam, heating,  mechanical,  ventilation,  escalator and elevator
systems and all other utilities  generally  supplied to all Tenants and the cost
of supplies and equipment and  maintenance  and service  contracts in connection
therewith;  (2) the  cost  of  repairs,  general  maintenance,  cleaning,  trash
removal,  telephone service, security service and janitorial service, light bulb
and tube  replacement  and supplies;  (3) the cost of fire,  extended  coverage,
boiler,  sprinkler,   apparatus,   public  liability,   property  damage,  rent,
earthquake  and other  insurance;  (4) wages,  salaries  and other  labor  costs
including taxes, insurance, retirement, medical and other employee benefits; (5)
fees, charges and other costs, including management fees, consulting fees, legal
fees and accounting fees, of all independent  contractors engaged by Landlord or
charged by Landlord if Landlord  performs such  services in connection  with the
Project;  (6) the fair market rental value of any offices in the Building (or in
other  buildings on the  Landlord's  campus) used for management of the Project;
(7) the cost of business  licenses  and similar  taxes;  (8) fees imposed by any
federal, state or local government for fire and police protection, trash removal
or other similar service; (9) any charges which are payable by Landlord pursuant
to any type of service agreement or a functional equivalent with the City of Los
Angeles or for other services supplied to the Project by the City of Los Angeles
under  any type of a  special  assessment  district,  and not  included  as Real
Property Taxes; and (10) any other expenses of any kind whatsoever  incurred for
managing,  operating,  protecting,  remediating,  maintaining  and repairing the
Project.  Operating  Expenses shall be adjusted to reflect  ninety-five  percent
(95%)  occupancy  of the  Project  during any period in which the Project is not
fully  occupied.  Operating  Expenses  which are incurred for the benefit of the
Project and other properties owned by Landlord shall be reasonably  allocated by
Landlord between the Project and such other properties.

                  (ii) "Real Property  Taxes" shall mean all taxes,  assessments
(special or  otherwise)  and charges  levied upon or with respect to the Project
(or any portion thereof) and ad valorem taxes on personal property owned or used
by Landlord in connection

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therewith, but excluding taxes on personal property owned or used by Landlord to
the extent that such personal property is used by Landlord in its capacity as an
occupant of the Building. Real Property Taxes shall include, without limitation,
any tax, fee or excise on the act of entering into this Lease,  on the occupancy
of Tenant, or the rent hereunder which are now or hereafter levied,  assessed or
imposed  against  Landlord  by the  United  States  of  America,  the  State  of
California or any political subdivision,  public corporation,  district or other
political  subdivision,  or public entity, and shall also include any other tax,
assessment,  fee or excise,  however  described  (whether  general  or  special,
ordinary  or  extraordinary,  foreseen  or  unforeseen),  which  may be  levied,
assessed or imposed in lieu of, as a substitute,  in whole or in part, for or as
an  addition  to, any other Real  Property  Taxes.  Landlord  shall pay any such
special  assessments  in  installments  when  allowed by law, in which case Real
Property  Taxes shall  include any  interest  charged  thereon,  or, if Landlord
chooses to pay such Real Property  Taxes in a lump sum payment,  Landlord  shall
allocate such Real Property Taxes  (together with a factor for interest  thereon
at the rate such  interest  would have accrued had Landlord  elected to pay such
special  assessments on an installment  basis) to Tenant as if Landlord had paid
such Real Property Taxes on an installment  basis. Real Property Taxes shall not
include income, franchise, transfer, gift, inheritance,  estate or capital stock
taxes, unless, due to a change in the method of taxation,  any of such taxes are
levied,  assessed or imposed  against  Landlord in lieu of, as a substitute,  in
whole or in part,  for any,  other tax which would  otherwise  constitute a Real
Property Tax, but then only to the extent  thereof.  Real  Property  Taxes shall
also include legal fees,  costs and  disbursements  incurred in connection  with
proceedings to contest, determine or reduce Real Property Taxes.

                  (iii)  "Cost  Saving  Capital  Improvement(s)"  shall mean any
equipment,  device or other improvement  incorporated into the Building or other
portion  of  the  Project,  which  capital  improvement  achieves  economies  in
Operating Expenses,  taking into account all applicable costs, in the operation,
maintenance and repair of the Building or such relevant  portion of the Project.
-

                  (iv) "Government Mandated Capital  Improvement(s)"  shall mean
any  equipment,  device  or other  improvement  acquired  and  installed  in the
Building  or other  portion  of the  Project,  to comply  with any  governmental
requirement  with  respect  to the  Building  or  any  portion  of the  Project,
including without limitation, fire, health, safety or construction requirements,
if the cost thereof should be capitalized in accordance with generally  accepted
accounting  principles.  Government  Mandated  Capital  Improvement(s)  and Cost
Saving  Capital  Improvement(s)  are  sometimes  herein  referred to as "Capital
Improvement(s)."

                  (v) "Capital  Improvement  Amortization" shall mean the amount
determined by multiplying the actual cost,  including financing costs if any, of
each Capital Improvement acquired, installed or placed in service by Landlord by
the constant  annual  percentage  required to fully  amortize such cost over the
useful life of the Capital  Improvement (as reasonably  estimated by Landlord at
the time of  acquisition,  installation,  or placement in service).  The Capital
Improvement  Amortization  shall be allocated and charged to Tenant as an amount
per square foot of rentable area consistently applied.

            (b)  Adjustments  to Rent -  Operating  Expenses  and Real  Property
Taxes.  Operating Expenses shall be charged monthly to Tenant as additional rent
as follows:  (i) at an amount ("Premises Operating Expenses") equal to (A) total
rentable  square  footage of the

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Premises Area,  multiplied by (B) two dollars ($2.00) ("Base Operating Expense")
per square foot per month (described in EXHIBIT C hereto), as adjusted from time
to time as follows: on each anniversary  ("Adjustment Date") of the Commencement
Date,  the Base Operating  Expense shall be increased by  multiplying  such Base
Operating  Expense,  by a fraction,  the numerator of which shall be the CPI (as
defined in Section 4.2.1 hereof) for the calendar  month in which the Adjustment
Date falls,  and the  denominator of which shall be (a) the CPI for the calendar
month of the Commencement  Date in the case of the first adjustment on the first
anniversary  of  the  Commencement  Date,  and  (b)  in the  case  of all  other
adjustments,  the CPI for the  calendar  month one year prior to the  Adjustment
Date for which the rental  adjustment is then being  calculated  (such  fraction
shall never be less than one);  the adjusted  amount so  calculated or set shall
constitute the new Base Operating  Expense  hereunder,  but, in no event,  shall
such new Base Operating  Expense be less than the Base Operating Expense payable
for the annual period immediately preceding the Adjustment Date. In any calendar
year, the sum of the Premises  Operating  Expenses,  Tenant's Pro Rata Share (as
defined below) of all costs and other expenses  described in Article XXX for the
Project,  and Tenant's  share of Real Property Taxes and other property taxes as
determined in accordance with Section  4.2.3(d) hereof and the other  provisions
of this Lease,  shall equal the combined  expenses for all twelve months of such
calendar year  ("Combined  Expenses").  In each calendar year during the Term of
this Lease  (including the partial year commencing on the  Commencement  Date of
this  Lease),  the rent  payable  by  Tenant  for such  calendar  year  shall be
increased  over the Basic Annual Rent,  as adjusted in  accordance  with Section
4.2, by the amount of the. Combined Expenses for such calendar year. In addition
to the  foregoing,  any costs or expenses for services or utilities in excess of
those  required  by  this  Lease  to be  supplied  by  Landlord  and  which  are
attributable directly to Tenant's use or occupancy of the Premises shall be paid
in full by  Tenant as  additional  rent when  such  costs are  incurred,  or, if
Landlord  makes such  payments,  within  fifteen  (15) days after  being  billed
therefor by Landlord.  As used in this Lease,  the terms "square  feet," "square
foot" and "square  footage" shall be based on rentable square feet as determined
using the  Building  Owners  and  Managers  Association's  Standard  Method  For
Measuring  Floor  Area  In  Office  Buildings   (ANSI/BOMA   265.1-1996)  ("BOMA
Standards"), unless otherwise specifically provided herein. For purposes hereof,
"Tenant's  Pro Rata Share" shall mean a fraction,  the numerator of which is the
rentable  square feet of the Premises Area and the  denominator  of which is the
rentable square feet of space within the Building.

            (c) Adjustments to Rent for Capital Improvements. In any Lease Year,
or  portion  thereof,  during the Term of this Lease  which is  included  in the
useful life of a Capital Improvement,  the rent payable by Tenant for such year,
or portion  thereof,  shall be increased over the Basic Annual Rent, as adjusted
in  accordance  with  Section  4.2 and  Section  4.3.2(b),  by the amount of the
Capital  Improvement  Amortization  per  square  foot  of  rentable  area of the
Building, multiplied by the Premises Area.

            (d) Additional Taxes and/or Improvements.  Notwithstanding  anything
contained in this Lease to the contrary, any Real Property Taxes, other property
taxes, and/or Government Mandated Capital Improvements which are attributable to
Tenant's use or  occupancy  of the  Premises  shall be paid in full by Tenant as
additional rent. The parties hereto acknowledge that the portion of the Building
occupied or used by Landlord has been  determined  to be tax exempt and that the
portion of the Building occupied by Tenant and other tenants or occupants may be
found to be subject to Real  Property  Taxes and other  property  taxes  because

                                       6
<PAGE>

Tenant  and  other   tenants  and   occupants  do  not   constitute   tax-exempt
organizations  under Section 503(c) of the Internal Revenue Code, as amended, or
because the premises area used by such tenants and occupants are found not to be
used for tax exempt  purposes or for other  reasons.  Consequently,  the parties
hereto  agree that Real  Property  Taxes  assessed  against  the Project (or any
portion  thereof)  or  Building  (or any portion  thereof)  shall be  attributed
entirely to the premises area occupied or used by such taxable organizations and
by  organizations  using  their  premises  area for  purposes  which are not tax
exempt. Landlord shall have the right to allocate such Real Property Taxes among
Tenant and the other tenants and occupants in a reasonably equitable manner. For
these  purposes,  allocating  such Real Property  Taxes in the following  manner
shall be deemed  reasonably  equitable:  multiply the Real  Property  Taxes by a
fraction,  the  numerator of which is the Premises  Area of the Tenant,  and the
denominator  of which is the  rentable  square  feet of  premises  area  used or
occupied by tenants and other occupants for purposes which are not tax exempt or
which are not tax exempt for any other reason.

            (e) Landlord's Statement. Prior to the commencement of each calendar
year  (including the partial year  commencing on the  Commencement  Date of this
Lease),  or as soon  thereafter as possible,  Landlord shall furnish to Tenant a
statement  ("Landlord's  Statement") of Landlord's estimate of the Real Property
Taxes and Capital  Improvement  Amortization  expected to be incurred during the
calendar  year,  based on the  amount of such Real  Property  Taxes and  Capital
Improvement Amortization in the prior calendar year (if any), adjusted for known
changes which have or will occur in the Project, the rates charged by suppliers,
or other  circumstances  affecting  the  amount of such Real  Property  Taxes or
Capital  Improvement  Amortization  during the calendar  year in  question,  and
showing  the  amount,  if any,  payable  by Tenant as  additional  rent for such
calendar  year, or portion  thereof,  pursuant to Sections  4.3.2(b),  4.3.2(c),
4.3.2(d) and any other applicable provisions of this Lease, on the basis of such
estimate.  Commencing as of January 1st of each calendar year,  Tenant shall pay
to Landlord  one-twelfth  (1/12) of the amount of the additional  rent estimated
for Real Property  Taxes and Capital  Improvement  Amortization,  along with the
monthly  charge for Premises  Operating  Expenses,  on each monthly rent payment
date until further adjustment pursuant to this Section 4.3.2. If the Term of the
Lease with respect to any space  commences or  terminates at any time other than
the first day of the  calendar  year,  then during such partial  calendar  year,
Tenant shall pay to Landlord,  on each of the monthly  payment dates during said
partial calendar year, the amount of said estimated additional rent with respect
to such space,  attributable solely to such partial calendar year divided by the
number of months in said  partial  calendar  year.  If  Landlord's  Statement is
furnished  after  January 1st of a calendar  year,  Tenant  shall pay the entire
portion  of the  estimated  additional  rent  attributable  to  portions  of the
calendar year prior to Tenant's receipt of Landlord's  Statement on the later of
fifteen  (15) days,  or the first  monthly  rent payment  date,  after  Tenant's
receipt of Landlord's  Statement.  Landlord shall have the right,  in Landlord's
discretion,  to revise Landlord's  estimates during the calendar year to reflect
the then current Real Property Taxes and Capital Improvement  Amortization,  and
Landlord  shall issue a revised  Landlord's  Statement.  Tenant's  monthly  rent
payments  shall be further  adjusted in accordance  with the revised  Landlord's
Statement  commencing on the first monthly rent payment date following  Tenant's
receipt  from  Landlord of the revised  Landlord's  Statement.  With  reasonable
promptness  after the  expiration of each calendar year, but in any event within
one  hundred  twenty  (120) days after the  expiration  of such  calendar  year,
Landlord shall furnish to Tenant a year-end  statement  showing:  (i) the actual
Real Property  Taxes and Capital  Improvement  Amortization  during the previous
calendar  year,  which  such  amounts  in each  such

                                       7
<PAGE>

category and the proper allocation  thereof to the Project shall be certified by
Landlord and the allocation  thereof to Tenant shall be certified by Landlord to
be proper  and in  accordance  with this  Lease;  (ii) the  difference,  if any,
between  Landlord's  Statement and the actual  amounts;  and (iii) the aggregate
amount of any charge or credit to Tenant  necessary  to adjust  rent  previously
paid by  Tenant to the  actual  Real  Property  Taxes  and  Capital  Improvement
Amortization.  Promptly  after the receipt of said  statement by Tenant,  Tenant
shall,  in case of any  underpayment,  pay Landlord in  accordance  with Section
4.3.1, or in case of an overpayment, Tenant shall receive a credit against rents
subsequently payable to Landlord.

            4.3.3 Charges for Use of Specialized  Research Cores. In addition to
Basic Annual Rent,  Tenant shall be charged for any use by Tenant of Specialized
Research Cores (as defined in Section 9.2 hereof) or any services  rendered from
such Specialized  Research Cores (or both) at rates established by Landlord,  in
its sole  discretion,  from  time to time.  Tenant  understands  that the  rates
charged  for such use or  services  (or both) are subject to change from time to
time.  Services  rendered by or through  Landlord from the Specialized  Research
Cores are more specifically described in Section 28.6 hereof.

      4.4 Definitions. As used in this Lease, the following terms shall have the
following meanings:

            4.4.1 Lease  Years:  Calendar  Years.  "Lease  Years" shall mean the
consecutive  twelve (12) month periods commencing with the Commencement Date or,
if the Commencement  Date falls other than on the first day of a calendar month,
then  commencing  the  first  day of the  first  calendar  month  following  the
Commencement Date. The fraction of the month (if any) following the Commencement
Date and prior to the commencement of the first Lease Year shall be deemed to be
part of the first Lease Year. If Landlord  employs fiscal years not constituting
calendar  years,  the term  "calendar  years"  shall be  deemed,  at  Landlord's
election,   to  mean  the  consecutive  twelve  (12)  month  periods  comprising
Landlord's fiscal years.

            4.4.2 Lease Rate.  "Lease Rate" shall mean an annual  interest  rate
which is the lesser of: (a) the maximum rate permitted by law, if applicable; or
(b) the rate of  interest  from  time to time  announced  by  Union  Bank at its
corporate  headquarters  in Los  Angeles,  California,  as  its  prime  rate  of
interest, plus two (2) percentage points, or, should Union Bank cease or fail to
announce  a prime  rate,  then the rate  announced  from time to time by Bank of
America NT & SA at its corporate headquarters in San Francisco,  California,  as
its reference rate, plus two (2) percentage  points.  Should both Union Bank and
Bank of America NT & SA cease or fail to announce such rates,  the rate shall be
agreed  upon by the  parties  or,  if they  cannot  agree,  the  rate  shall  be
determined by arbitration  pursuant to the American  Arbitration  Association in
accordance  with the then  rules of such  association  and the  decision  of the
arbitrator shall be binding upon the parties.

      4.5 Miscellaneous Rent Provisions.

            4.5.1 Prorations.  If the Term of this Lease commences,  or the date
of expiration of this Lease occurs, other than on the first day or last day of a
calendar  month,  the Basic  Annual Rent for such month shall be prorated on the
basis of a thirty (30) day month.

                                       8
<PAGE>

            4.5.2  Place and  Manner of  Payment.  Basic  Annual  Rent  shall be
payable in advance in twelve  (12) equal  monthly  installments,  with the first
such monthly payment of Basic Annual Rent due on the Commencement Date (prorated
if such date  occurs on other  than the first day of the  month),  and all other
monthly  payments to be due on the first day of each  calendar  month during the
Term  hereof.  All such  payments are to be forwarded by Tenant to the office of
the  Building,  or to such other person or at such other place as directed  from
time to time by written  notice  from  Landlord,  in lawful  money of the United
States of America, without demand, deduction, offset or abatement, except as may
otherwise be specifically provided in this Lease.

            4.5.3  Conditional  Payment.  No  payment  by Tenant or  receipt  by
Landlord of a lesser  amount than the total of all sums due  hereunder  shall be
deemed  other than on account of the  earliest  stipulated  rent,  nor shall any
endorsement or statement on any check, or any letter  accompanying  any check or
payment as rent,  be deemed an accord or  satisfaction,  and Landlord may accept
such cash and/or negotiate such check or payment without prejudice to Landlord's
right to recover  the balance of such rent,  or  Landlord  may pursue any of its
other  remedies  provided  in this  Lease or  otherwise,  regardless  of whether
Landlord makes any notation on such instrument of payment or otherwise  notifies
Tenant that such  acceptance,  cashing or  negotiation  is without  prejudice to
Landlord's rights.

      4.6 Security Deposit. Concurrently with the execution and delivery of this
Lease,  Tenant has deposited  with Landlord Seven Thousand and Fifty Six Dollars
Dollars  ($7,056.00) as security for the full and faithful  performance of every
provision  of this Lease to be  performed  by Tenant.  If Tenant  defaults  with
respect to any  provision  of this  Lease,  including,  but not  limited to, the
provisions relating to the payment of rent set forth in this Lease, Landlord may
use, apply or retain all or any part of the Security  Deposit for the payment of
such rent,  fees or any other sum in  default,  or for the  payment of any other
amount  which  Landlord  may  reasonably  spend or become  obligated to spend by
reason of Tenant's  default,  or to  compensate  Landlord  for any other loss or
damage which Landlord may reasonably  suffer by reason of Tenant's breach of the
terms  of  this  Lease,  or to  pay  Landlord  for  any  amount  due  under  any
indemnification  provision  contained  in  this  Lease.  If any  portion  of the
Security  Deposit is so used or applied,  Tenant  shall  within five (5) days of
receipt of notice thereof from Landlord, 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 material breach of this Lease. Landlord shall not be
required to keep the  Security  Deposit  separate  from its general  funds,  and
Tenant shall not be entitled to interest on such deposit.

                                   ARTICLE V

                           TAXES ON TENANT'S PROPERTY

      With respect to all of Tenant's  trade  fixtures,  equipment  and personal
property  (collectively,  "Tenant's Property") located within the Premises:  (i)
Tenant  shall pay prior to  delinquency  all taxes  assessed  against  or levied
thereon; and (ii) when reasonably possible,  Tenant shall cause such property to
be assessed and billed separately from the property of Landlord; but if Tenant's
Property shall be assessed and taxed with the property of Landlord, Tenant shall
pay to Landlord  its share of such taxes  within ten (10) days after  receipt by
Tenant  of a  statement  in  writing  setting  forth the  amount  of such  taxes
applicable  to Tenant's  Property,  which  statement  shall include the basis on
which such share of taxes was  allocated to Tenant.

                                       9
<PAGE>

Tenant  shall have the right to contest,  in good faith and by  appropriate  and
timely legal proceedings,  the legality, assessed valuation or amount of any tax
or  assessment  which Tenant is required to pay pursuant to the Lease.  Landlord
shall  reasonably  cooperate with the Tenant in the prosecution of such contest,
provided that all expenses  incurred by Landlord for or in connection  with such
cooperation (including,  without limitation, all attorney's fees, appeals board,
court and other costs) are paid solely by Tenant. If Landlord is required to pay
the taxing  authority  any tax or  assessment  which Tenant  desires to contest,
Tenant shall, pending resolution of the contest by the taxing authority and as a
condition of its right to contest the tax assessment,  pay the tax or assessment
under protest, but otherwise as provided in the Lease.

                                   ARTICLE VI

                                 USE OF PREMISES

      6.1  Limitation of Use.  Tenant shall use and occupy the premises only for
activities ("Biomedical Activities") arising from, or relating to, biomedical or
biochemical   processes  and  methods,   including  research,   development  and
production  of  biomedical  reagents,  agents,  devices,  cell lines,  and other
biomedical  or  biochemical  products  or devices  ("Permitted  Uses"),  as more
particularly  described  in EXHIBIT D attached  hereto.  Tenant shall not use or
occupy the  Premises or permit the same to be used or occupied  for patient care
activities  or for any other  purposes  without  the prior  written  approval of
Landlord,  which approval shall be in Landlord's  sole and absolute  discretion.
Tenant shall control  access to the Premises,  and to any  Specialized  Research
Core used by Tenant, by issuing  identification  badges and access cards to each
of Tenant's employees, who shall be required to carry such identification badges
and access cards at all times that they are present in the Premises or any other
part of the  Building.  Tenant shall not do or permit  anything to be done which
will in any way  obstruct  or  interfere  with the  rights of other  tenants  or
occupants of the Building or injure or annoy them, nor use or allow the Premises
to be used for any improper,  immoral,  or unlawful or reasonably  objectionable
purpose,  nor shall Tenant cause or maintain or permit any nuisance in, or about
the  Premises,  nor shall Tenant  cause or permit any  hazardous or toxic waste,
substance or material to be brought to the Premises or used, handled,  stored or
disposed of in or about the Premises,  except as otherwise  permitted by law and
typically used in the conduct of the Biomedical  Activities  which are conducted
from the Premises in accordance with this Lease and then only in accordance with
the provisions of any rules and regulations established by Landlord from time to
time concerning such use. Tenant shall provide the Director of Radiation  Safety
of Landlord  (or such other  person as Landlord  shall direct from time to time)
with a list of all Hazardous  Materials (as defined in Article XXX hereof) which
it is  using  or  which  it  intends  or  expects  to use in  the  Premises,  an
explanation  of the purpose for each listed item,  and the means and methods for
each listed item's disposal in compliance with all applicable laws. Tenant shall
promptly  revise  and supply  Landlord  with a new list of  Hazardous  Materials
whenever  the  existing  list on file is no longer  complete and accurate in all
respects.  Tenant shall not conduct  business or other  activity in, on or about
the Premises of such a nature as to place an unreasonable  and excessive  burden
upon the public  and Common  Areas of the  Project.  Tenant  shall not commit or
suffer the  commission of any waste in, on or about the Premises.  In connection
with all of the foregoing,  Tenant,  at its sole cost and expense and subject to
compliance  with all  applicable  provisions  of this Lease,  shall  install and
maintain:  (i) such improvements and equipment as shall be reasonably  necessary
to prevent the use or  operation  of  equipment  located in the  Premises or the
conduct of  Tenant's  practice  in the  Premises  from  affecting  others in the
Building or their

                                       10
<PAGE>

equipment;  and (ii) such  additional  floor load support as shall be reasonably
necessary  to  accommodate  equipment  to be  located in the  Premises.  Nothing
contained in this Lease shall limit  Landlord's  right to use, or to lease other
portions of, the Project for any purpose or use that Landlord deems appropriate,
and  nothing  contained  herein  shall be deemed to grant to Tenant any right to
prevent Landlord, or to require Landlord to preclude others in the Project, from
using space anywhere in the Project for the same or similar uses or purposes for
which Tenant uses the Premises.

      6.2 Compliance with Governmental and Insurance  Regulations.  Tenant shall
not use or occupy the Premises in violation of the  Certificate  of Occupancy of
the Building or the Premises or of any law,  ordinance  or  regulation  or other
directive of any governmental  authority having or exercising  jurisdiction over
the Building or Project,  whether now in effect or becoming effective subsequent
to the date hereof (collectively, "Applicable Laws"). Tenant may, in good faith,
contest the validity or application of any law, statute, ordinance, governmental
rule or regulation,  provided  Landlord is not thereby  subject to any liability
and provided  Landlord shall not anticipate  suffering  adverse  consequences or
monetary  or other  damage  as a result  of such  contest  or as a result of the
outcome of such  contest.  Upon five (5) days'  written  notice  from  Landlord,
Tenant  shall  discontinue  any use of the  Premises  which is  declared  by any
governmental  authority  having or exercising  jurisdiction to be a violation of
the  Certificate  of Occupancy of the Building or the Premises or any Applicable
Laws. Tenant shall not do or permit to be done anything which will invalidate or
cause  termination of or increase the cost of any fire and extended  coverage or
other  insurance  policy  covering the  Building,  the Project or the  Property.
Within five (5) days of its receipt of written  notice,  Tenant shall  reimburse
Landlord for any additional  premium  charges for such policy or policies caused
by reason of Tenant's  failure to comply with the  provisions  of this  Section.
Tenant shall keep the Premises, and every part thereof, in a clean, sanitary and
wholesome  condition,  free from any objectionable  noises,  odors or nuisances,
public or private, and Tenant shall comply, at its own expense,  with all health
and policy  regulations.  Tenant  shall  comply  with all laws,  rules,  orders,
ordinances,  directions,  regulations and requirements of federal, state, county
and municipal authorities  pertaining to Tenant's use of the Premises,  and with
any direction of any public  officer or officers,  pursuant to law,  which shall
impose any duty upon Landlord or Tenant with respect to the use or occupation of
the Premises.

      6.3 Assumption of Risk of  Noncompliance.  Tenant hereby warrants that, as
of the execution of this Lease, it has investigated  whether its proposed use of
the  Premises  and its  proposed  manner  of  operation  will  comply  with  all
Applicable  Laws,  and  Tenant  assumes  the risk that its  proposed  use of the
Premises and its proposed  manner of  operation  are and will  continue to be in
compliance with all Applicable Laws, including,  without limitation,  all zoning
laws regulating the use and enjoyment of the Premises.  Tenant agrees that under
no circumstances  will Tenant be released,  in whole or in part, from any of its
obligations  under  this  Lease  as  a  result  of  any  governmental  authority
disallowing or limiting  Tenant's  proposed use of the Premises or its manner of
operation.  Additionally, subject to Article VII below, Tenant shall install, at
its own  expense,  any  improvements,  changes or  alterations  in the  Premises
authorized  in  writing  by  Landlord  which are  required  by any  governmental
authority as a result of Tenant's  specific use of the Premises or its manner of
operation thereunder.  If Landlord performs such alterations because of Tenant's
failure to perform the same,  Tenant shall promptly  reimburse  Landlord for the
actual costs of such alterations.

                                       11
<PAGE>

      6.4  Safety  Training  Program.  Prior  to  participating  in  any  of the
Biomedical  Activities  permitted under this Lease,  each of Tenant's  employees
shall be required to participate in an orientation and safety  training  program
established  by Landlord,  which  program  shall  address  environmental  safety
issues,  including,  but not  limited to, the proper  handling  of  radioactive,
chemical and other Hazardous Materials.

      6.5 Use of Common Services  Space.  Tenant shall have the right to use the
Common  Services  Space  in  connection  with  and  ancillary  to its use of the
Premises, in common with other tenants and occupants of the Building, subject to
such rules and  regulations as Landlord may impose from time to time. The Common
Services Space as of the date of this Lease is graphically depicted on EXHIBIT B
hereto.

      6.6 Animal  Research.  If Tenant uses  animals for or in  connection  with
research on or about the Premises or the Building, such animals must be acquired
or obtained solely through Landlord.  Tenant  acknowledges that a breach of this
Section 6.6 could result in irreparable harm to Landlord and will cause Landlord
to incur substantially damages. Therefore, notwithstanding anything contained in
this Lease to the contrary, any breach of this Section 6.6 shall be deemed to be
an incurable breach which shall automatically  entitle the Landlord, in addition
to all other  remedies to which Landlord is or may be entitled under this Lease,
or at law, or in equity, to terminate this Lease.

                                  ARTICLE VII

                    CONSTRUCTION AND MAINTENANCE OF PREMISES
                           AFTER INITIAL CONSTRUCTION

      7.1 Maintenance of Premises. Following the Commencement Date and except as
otherwise  provided  in Section  7.4 below,  Tenant  shall,  at its own cost and
expense,  keep and maintain,  in good,  sanitary,  and tenantable  condition and
repair, the Premises and every part thereof, including,  without limitation, the
floor  covering,  all  interior  walls,  ceilings,   doors,  decorations  (e.g.,
carpeting,  painting,  wall  covering and  refinishing),  fixtures and equipment
therein.  Landlord may -make any reasonable repairs which are not made by Tenant
with  reasonable  diligence after notice from Landlord and charge Tenant for the
actual cost thereof.  Tenant shall take  precautions to prevent,  shall prevent,
and shall  promptly  eradicate  from the  Premises  or any other  portion of the
Building  or Project  any  infestations  which  arise from  Tenant's  use of the
Premises, including, without limitation, rodents and insects.

      7.2 Tenant Construction.

            7.2.1  Landlord's  Consent.  Tenant shall not make any  alterations,
additions,  modifications or improvements  (collectively,  "Alterations") to the
Premises,  the Building or any part thereof without  Landlord's  advance written
consent,  nor, in any event,  Alterations  which interfere with or disrupt other
tenants or occupants in the Building or with Landlord's work, if any, then being
carried out therein. Landlord shall nor unreasonably withhold its consent to any
alterations, additions or improvements to the Premises or any part thereof which
do not involve  structural  changes to the Building,  do not affect the external
appearance  of the  Building,  and do not  affect or  involve  modifications  to
Building  systems  such as HVAC,  electrical  systems,  floor  load  capacities,
plumbing  and  other  utility  systems.  Landlord  will  grant its  approval  or

                                       12
<PAGE>

disapproval of any proposed  alteration,  addition or improvements within thirty
(30)  business  days  after  receipt  from  Tenant  of the  necessary  plans and
specifications  and other  information  reasonably  necessary to make a decision
with respect  thereto or reasonably  relevant to such Landlord's  decision,  and
failure  by  Landlord  to  disapprove  such  proposed  alteration,  addition  or
improvement  within  such  thirty (30)  business  days shall be deemed  approval
thereof.  To the extent  permitted or consented to hereunder,  any  construction
undertaken by Tenant in or to the Premises or the Building shall comply with all
the terms and provisions of Sections 7.2.2 and 7.2.3 below.

            7.2.2  Licensed  Contractors.  Tenant shall  utilize  only  bondable
licensed contractors for any proposed Alterations.  Tenant shall prepare, obtain
and promptly provide Landlord with copies of bid solicitations and bids received
for all such work.

            7.2.3  Construction  Requirements.  Subject to the other  provisions
hereof,  any  Alterations  installed by Tenant,  its contractor or agents at any
time subsequent to the Commencement Date, and including, without limitation, any
construction  performed  by Tenant,  shall be done only in  compliance  with the
following:

                  (a) No  such  work  shall  proceed  without  Landlord's  prior
written  approval of: (i) Tenant's  contractor  and Tenant's  architect or space
planner; (ii) certificates of insurance; (iii) detailed plans and specifications
for such work; (iv)  performance and labor and materials  payment bonds; and (v)
all governmental permits.

                  (b) Any work not acceptable to any  governmental  authority or
agency having or exercising  jurisdiction over such work, or not satisfactory to
Landlord,  shall be promptly replaced at Tenant's expense.  Notwithstanding  any
failure  by  Landlord  to  object  to any  such  work,  Landlord  shall  have no
responsibility therefor.

                  (c) All work by Tenant or its  contractors  shall be scheduled
through Landlord.

                  (d) Tenant  shall  promptly  reimburse  Landlord for any extra
expense  incurred  by  Landlord  by reason of faulty  work done by Tenant or its
contractors, or by reason of inadequate cleanup.

                  (e) Tenant or any contractor of Tenant shall not use non-union
labor if such use would result in any unreasonable or unusual  interference with
or disturbance of the operations of Landlord or Landlord's labor  relationships.
Neither  Tenant nor any  contractor of Tenant shall use non-union  labor if such
use would  constitute  a  violation  of any  applicable  master  or other  labor
agreement  which is or becomes  binding or  applicable to Landlord now or in the
future.  Tenant  shall  assume  the risk of any  strikes  or labor  disturbances
arising out of the use of non-union  labor,  and any delays  arising out of such
strikes  or  disturbances  shall  not  excuse  or  postpone  the  time  for  any
performance  or  obligation  of Tenant  under this Lease or related  agreements,
notwithstanding the applicability of any force majeure clause or other provision
contained in this Lease or related agreements.

                                       13
<PAGE>

                  (f)  If   required   for   Building   safety   in   Landlord's
discretionary  judgment,  all  x-ray,  laser,  other  medical  equipment,   data
processing,  photocopying, copying, and other special electrical equipment shall
have a separate  duplex outlet and shall be installed only under the supervision
of Landlord or its electrical contractor.  Tenant shall pay any additional costs
on account of any increased support to the floor load necessary  therefor or for
any other equipment or improvements  which Landlord  reasonably  deems necessary
for the proper and safe installation of any such equipment.

                  (g) Before the  commencement of any construction by Tenant in,
on or around the Premises or the Building,  Tenant or its contractors shall give
advance  written  notice  thereof  to  Landlord  or  its  agent  sufficient  for
Landlord's  preparation,  posting and  recordation of an  appropriate  notice of
non-responsibility as provided in California Civil Code ss. 3094 or any related,
successor or similar  provision of law. Within ten (10) days after completion of
any work in, to or about the Premises or the Building,  Tenant or its contractor
shall file for record in the Office of the Los Angeles County  Recorder a notice
of completion as permitted by law.

                  (h) Tenant  acknowledges that Landlord's  approval of Tenant's
plans and  specifications  for any work to be  performed  in or to the  Premises
(including,  without limitation,  any mechanical,  electrical,  architectural or
structural  Alterations)  shall not constitute a  representation  or warranty by
Landlord as to the adequacy of such plans and specifications respecting Tenant's
intended use of the Premises (including,  without limitation,  electrical energy
conservation) or as to the compliance of such plans and  specifications  (or the
work performed  pursuant  thereto) with the laws,  regulations and ordinances of
any governmental authority or agency having or exercising jurisdiction over such
work.  Landlord  expressly  disclaims any liability or  responsibility  for such
plans and  specifications  and the work  performed  pursuant  thereto and Tenant
expressly  agrees that Landlord  shall not be responsible  therefor,  and Tenant
shall  indemnify  and  hold  Landlord  harmless  from  any  damage  or  injuries
(including,  without  limitation,  reasonable  attorneys'  fees)  resulting from
errors or omissions in such plans and specifications.

                  (i) Upon  completion  of such work,  Tenant  shall  deliver to
Landlord a set of as-built drawings and all CADD work (on disks) relating to the
work.

      7.3 Condition of Premises.  Tenant  acknowledges that neither Landlord nor
any agent of Landlord has made any  representation  or warranty  with respect to
the Building or the Premises or with  respect to the  suitability  of either for
the conduct of Tenant's  business.  The taking of  possession of the Premises by
Tenant shall  conclusively  establish that the Premises and the Building were at
such time in good and sanitary order, condition and repair.

      7.4 Landlord Repairs and Maintenance After  Commencement  Date. Subject to
the  provisions  of Section 7.1 above and  performance  of Tenant's  obligations
under this Lease, including,  without limitation, those set forth in Section 4.3
hereof, following the Commencement Date, Landlord shall: (i) keep in good order,
condition and repair the foundations,  exterior walls,  downspouts,  gutters and
roof of the Building and the plumbing and sewage  system  outside the  Building;
(ii) make structural repairs to the Premises necessitated by defective,  faulty,
or negligent  design or  construction;  (iii) repair and maintain the mechanical
systems  necessary  to provide  those  utilities  and  Building  services to the
Premises which Landlord has  specifically  agreed to provide pursuant to Article
XXVIII below, and maintain the light fixtures and unexposed electrical, plumbing
and  sewage  systems  in the  Premises  and  the  heating,  ventilating

                                       14
<PAGE>

and air  conditioning  systems in the Premises.  Notwithstanding  the foregoing,
Landlord  shall not be  obligated  to repair any damage to the  Building  or the
Premises  caused by any act or  negligence of Tenant or its  employees,  agents,
invitees, permittees, licensees or contractors.  Landlord shall not be obligated
to make any such  repairs  until  after the  expiration  of  fifteen  (15) days'
written  notice from Tenant to  Landlord,  stating the need for such  repairs or
maintenance.  Landlord  shall not be called upon or required at any time to make
any repairs, maintenance, improvements, alterations, changes, additions, repairs
or replacements  of any nature  whatsoever in or to the Premises or the Building
except as specifically  provided in this Lease. To the maximum extent  permitted
by law,  Tenant hereby waives the  provisions of any statute or law permitting a
tenant to make  repairs at the expense of a landlord or to  terminate a lease by
reason of the condition of the Premises,  including the provisions of California
Civil  Code  Sections  1941 and  1942  and any  similar,  successor  or  related
provision of law.

                                  ARTICLE VIII

                                MECHANICS' LIENS

      Tenant agrees to pay promptly for all costs and charges for all labor done
or  materials  furnished  for any  work  of  repair,  maintenance,  improvement,
alteration or addition, including, without limitation, installation of fixtures,
done or caused to be done by Tenant in connection with the Premises,  and Tenant
hereby  indemnifies and agrees to hold Landlord and the Premises free, clear and
harmless  from and  against  all  liens  and  claims  of  liens,  and all  other
liabilities,  claims and  demands  (including,  without  limitation,  reasonable
attorneys'  fees),  that arise by reason of such work. If any such lien shall at
any time be filed against the Premises,  or any portion of the Building,  Tenant
shall either cause the same to be  discharged  of record within twenty (20) days
after the date upon which the same is filed or, if Tenant in its  discretion and
in good  faith  determines  that such lien  should be  contested,  Tenant  shall
record,  in the  office of the county  recorder  in which such claim of lien was
recorded,  a bond executed by a corporation  authorized to issue surety bonds in
the State of California,  in a penal sum equal to one and one-half (1 1/2) times
the amount of the claim or one and  one-half (1 1/2) times the amount  allocated
to the Premises (and/or to other portions of the Building, Project, or Property)
to prevent any  foreclosure  proceedings  against  the  Premises  (and/or  other
portions of the  Building,  Project,  or  Property)  during the pendency of such
contest.  Such bond shall be  conditioned  for the  payment of any sum which the
claimant may recover on the claim together with the claimant's  costs of suit in
the action,  if the claimant  recovers  therein.  Nothing contained herein shall
imply any consent or  agreement  on the part of  Landlord to subject  Landlord's
interest in the real  property  of which the  Premises  are a part to  liability
under any  mechanics'  or other lien law.  Should Tenant  receive  notice that a
claim  of lien  has been or is about  to be  filed  against  the  Premises,  the
Building,  Property  or Project or that any action  affecting  the title to such
property  has  commenced  or is  about to  commence,  Tenant  shall  immediately
transmit such notice and information to Landlord.

                                   ARTICLE IX

                   COMMON AREAS AND SPECIALIZED RESEARCH CORES

      9.1 Common Areas. The term "Common Areas" as used in this Lease shall mean
all areas and facilities around the Premises and within the exterior  boundaries
of the Property which are provided and designated  from time to time by Landlord
for the general use and  convenience

                                       15
<PAGE>

of Tenant and other  tenants or occupants  of the Building and their  respective
employees, invitees or other visitors. Common Areas include, without limitation,
the  Common  Services  Space,  the lobby  area,  walkways,  parking  facilities,
landscaped areas, sidewalks,  service quarters, hallways, restrooms (if not part
of the  Premises),  stairways,  elevators,  walls,  fire stairs,  telephone  and
electric closets, truck docks, plazas, service areas, lobbies, darkroom, pantry,
small conference room, glass wash room,  equipment corridor,  walk-in cold room,
and all other common and service areas of the Property and Building or any other
area of the Project intended for such use, other than Specialized Research Cores
(defined in Section 9.2 hereof). Floors wholly occupied by Tenant shall not have
any facilities which would be used in common with other tenants, except for fire
stairs,  shafts and similar  installations.  Tenant,  its employees and invitees
shall have the  nonexclusive  right to use the Common  Areas  along with  others
entitled to use the same, subject to Landlord's rights and duties as hereinafter
set forth. Without advance notice to Tenant or consent of Tenant and without any
liability to Tenant in any respect, Landlord shall have the right to:

            (a)  establish  and  enforce   reasonable   rules  and   regulations
concerning the maintenance, management, use and operation of the Common Areas;

            (b) close off any of the Common Areas to whatever extent required in
the  reasonable  opinion of Landlord and its counsel to prevent a dedication  of
any of the Common Areas or the accrual of any rights by any person or the public
to the Common Areas;

            (c)  temporarily  close any of the  Common  Areas  for  maintenance,
alteration or improvement purposes;

            (d) select,  appoint and/or contract with any person for the purpose
of operating and maintaining the Common Areas; and

            (e)  change  the size,  use,  shape or  nature of any of the  Common
Areas.

      Landlord shall use its reasonable  efforts to minimize  interference  with
Tenant's use of and access to the Premises  when  exercising  Landlord's  rights
with respect to the Common Areas set forth in this Article IX.

      9.2 Specialized  Research Cores. The term "Specialized  Research Cores" as
used in this Lease shall mean all areas and  facilities  around the Premises and
within the exterior boundaries of the Property which are provided and designated
from time to time by Landlord  for  special  use by Tenant and other  tenants or
occupants of the Building and their respective  employees.  Specialized Research
Cores include,  without limitation,  animal housing facilities,  animal surgical
core, confocal microscopy facility, sequencing core, and cell sorter core.

                                   ARTICLE X

                           LANDLORD'S RIGHT OF ACCESS

      Landlord  reserves  for  itself  and its  agents  the  right to enter  the
Premises  (after  advance  notice  except in  emergencies  and except to perform
janitorial  services) for purposes reasonably related to Landlord's operation of
the Building,  including,  without limitation:  (i) examining or inspecting, the
same; (ii) providing janitorial and any other service to be provided by Landlord
to

                                       16
<PAGE>

Tenant hereunder;  (iii) showing the same to prospective tenants,  purchasers
or lenders (or to others who may have a financial interest in the Building) in a
reasonable  manner;  (iv) emergency entry; (v) making such changes or repairs to
the  Premises  or to any other  portion of the  Building  as  Landlord  may deem
necessary or desirable;  and (vi) showing the Premises to  prospective  tenants,
during the last one hundred eighty (180) day period before the expiration of the
term or before an earlier termination of this Lease; all without being deemed to
constitute or cause any eviction of Tenant and without abatement of rent. Tenant
hereby  waives  any claim for  damages  for any  injury or  inconvenience  to or
interference with Tenant's business, any loss of occupancy or quiet enjoyment of
the Premises,  and any other loss occasioned thereby.  For each of the aforesaid
purposes, Landlord shall at all times have and retain a key with which to unlock
all of the doors in, upon and about the Premises,  excluding Tenant's vaults and
safes, and Landlord shall have the right to use any and all means which Landlord
may reasonably deem proper to open said doors in an emergency in order to obtain
entry to the Premises, and any entry to the Premises obtained by Landlord by any
of said means shall not under any  circumstances  be construed or deemed to be a
forcible or unlawful entry into or a detainer of the Premises, or an eviction of
Tenant from the Premises or any portion thereof. Whenever Landlord exercises its
right of entry  pursuant to this Article X,  Landlord  shall use its  reasonable
efforts to maintain the confidentiality of Tenant's biomedical research records,
as required by law. No provision of this Lease shall be construed as  obligating
Landlord to perform any repairs, alterations or decorations, except as otherwise
expressly provided herein. Landlord shall have the right to run utility or other
services and facilities through the Premises, whether to service the Premises or
other  portions of the  Building.  If, during the last month of the Term hereof,
Tenant shall have removed substantially all of its property therefrom,  Landlord
may immediately  enter and alter,  renovate and redecorate the Premises  without
eliminating  or abating any rent hereunder or incurring any liability to Tenant.
Tenant's  property  remaining  within the  Premises at the time of such entry by
Landlord may be warehoused by Landlord at Tenant's sole cost, expense and risk.

                                   ARTICLE XI

                   PROPERTY DAMAGE AND PERSONAL INJURY CLAIMS

      11.1  Indemnification.  Tenant shall indemnify and hold harmless  Landlord
against and from any and all claims of damage or injury  arising  from  Tenant's
use of the Premises or the conduct of its business or from any activity, work or
thing done,  permitted  or  suffered  by Tenant in or about the  Premises or the
Building,  and shall further  indemnify and hold harmless  Landlord  against and
from any and all claims arising from any breach or default in the performance of
any  obligation  of Tenant  hereunder,  or arising  from any act or  omission of
Tenant, or any of its agents, employees,  invitees or licensees, and against and
from all costs,  attorneys' fees,  consultants'  fees,  expenses and liabilities
incurred  in  connection  with or as a result of any such claim or any action or
proceeding  brought  thereon  (including,   without  limitation,   any  and  all
judgments,  fines and costs of appeal and costs of settlement),  and in case any
action or  proceeding is brought  against  Landlord by reason of any such claim,
Landlord may require  Tenant,  upon notice from Landlord,  to defend the same at
Tenant's expense with counsel selected by Landlord.

      11.2 Assumption of Liability and Waiver of Claims.  Tenant,  as a material
part of the consideration to Landlord for this Lease, hereby assumes all risk of
damage to property  or injury to persons in, upon or about the Project  from any
cause whatsoever, and Tenant hereby waives

                                       17
<PAGE>

all  claims in respect  thereof  against  Landlord  and  acknowledges  that this
assumption  and waiver by Tenant has been  reflected  as a reduction of the rent
which  Landlord  would  otherwise  charge.  Landlord  shall  not be  liable  for
interference  with light, air or other similar  benefits,  nor shall Landlord be
liable for any latent or patent defect in the Project.  Tenant shall give prompt
notice  to  Landlord  in case of fire or  accidents  in the  Premises  or in the
Building  or defects  therein  or in the  fixtures  or  equipment  thereof,  but
Landlord's  receipt of such  notice  shall not impose  upon  Landlord  any duty,
liability or obligation  which it has not assumed or which it has  disclaimed in
this Lease. Landlord shall not be liable for any damage to property entrusted to
employees  of the  Building,  nor for the loss of, or damage to, any property by
theft or  otherwise,  nor for any  injury  or  damage to  persons,  property  or
Tenant's  business (or loss of income)  resulting from  construction,  repair or
alteration of premises-adjoining the Premises, the Premises or any other portion
of the Building,  or from the pipes,  appliances or plumbing works  therein,  or
from the roof, street or subsurface,  or from any other place, or resulting from
dampness or any other  cause  whatsoever,  nor shall  Landlord be liable for any
damage  caused by acts or omissions of other  tenants,  occupants or visitors of
the Project.

                                  ARTICLE XII

                                    INSURANCE

      12.1 Tenant's Insurance  Obligations.  From and after the date of delivery
of the Premises from Landlord to Tenant, Tenant shall carry and maintain, at its
own expense, the following types, amounts and forms of insurance:

            12.1.1 Liability Insurance. Tenant shall carry and maintain a policy
of comprehensive general liability insurance with a combined single limit of not
less than Five Million Dollars ($5,000,000) per occurrence in the name of Tenant
(with Landlord and, if requested by Landlord, any mortgagee,  trust deed holder,
ground lessor or secured  party with an interest in this Lease,  the Building or
the Project  named as  additional  insured(s)).  Such policy shall  specifically
include,  without  limitation,  personal injury,  broad form property damage and
contractual  liability  coverage,  the last of which  shall  cover the  insuring
provisions  of this  Lease  and  the  performance  by  Tenant  of the  indemnity
agreements in Article XI above. The amount of such insurance  required hereunder
shall be subject to  adjustment  from time to time as  reasonably  requested  by
Landlord.

            12.1.2 Property Insurance.  Tenant shall carry and maintain a policy
or policies of property  insurance in the name of Tenant (with  Landlord and, if
requested by  Landlord,  any  mortgagee,  trust deed  holder,  ground  lessor or
secured party with an interest in this Lease,  the Building or the Project named
as additional  insured(s))  covering any tenant improvements in the Premises and
Alterations and any property of Tenant at the Premises and providing  protection
against  all  perils  included  within  the  classification  of  fire,  extended
coverage,  vandalism,  malicious mischief, special extended peril (all risk) and
sprinkler leakage,  in an amount equal to at least one hundred percent (100%) of
the replacement cost thereof from time to time (including,  without  limitation,
cost of debris removal).

            12.1.3  Workers'  Compensation  Insurance.  Tenant  shall  carry and
maintain a policy of workers'  compensation  insurance  in  compliance  with all
applicable laws.

                                       18
<PAGE>

            12.1.4 Other  Insurance.  Tenant shall carry and maintain such other
policies of insurance  (including,  without  limitation,  business  interruption
insurance)  in  connection  with the  Premises as Landlord may from time to time
require.

            12.1.5  Policy  Provisions.  All  of  the  policies  required  to be
obtained by Tenant  pursuant to the  provisions  of this  Section  12.1 shall be
issued by companies, and shall be, in form and content, reasonably acceptable to
Landlord.  Without  limiting the  generality of the  foregoing,  any  deductible
amounts under said policies shall be subject to Landlord's approval. Each policy
shall designate  Landlord as an additional  named insured and shall provide full
coverage in the amounts set forth herein. Although named as an insured, Landlord
shall be entitled to recover  under said  policies  for any loss  occasioned  to
Landlord,  its servants,  agents and  employees,  by reason of the negligence of
Tenant.  Tenant shall,  prior to delivery of the Premises by Landlord to Tenant,
provide Landlord with copies of and certificates for all insurance policies. All
insurance  policies shall provide that they may not be altered or canceled until
after  thirty (30) days written  notice to Landlord  (by any means  described in
Article  XXII  below).  Tenant  shall,  at least  thirty  (30) days prior to the
expiration of any of such  policies,  furnish  Landlord with a renewal or binder
therefor.  Tenant  may  carry  insurance  under a  so-called  "blanket"  policy,
provided  that  such  policy  provides  that the  amount of  insurance  required
hereunder shall not be prejudiced by other losses covered thereby. All insurance
policies   carried  by  Tenant   shall  be   primary   with   respect   to,  and
non-contributory  with,  any other  insurance  available  to Landlord  and shall
contain cross-liability  coverage. If Tenant fails to carry any insurance policy
required  hereunder  or to furnish  copies  thereof  and  certificates  therefor
pursuant hereto, Landlord may obtain such insurance,  and Tenant shall reimburse
Landlord  for the  costs  thereof  with  the  next  monthly  rent  payments  due
hereunder.

      12.2  Landlord's  Insurance  Obligations.  During the Term of this  Lease,
Landlord  shall keep and maintain  fire and  extended  coverage  insurance  with
vandalism  and  malicious  mischief  endorsement  for the  Building  and  public
liability  insurance or an equivalent  funded program of  self-insurance in such
reasonable  amounts with such  reasonable  deductibles  as would be carried by a
prudent owner of a similar building in Southern California.  Landlord may obtain
insurance  for the Building  and the rents from the Building  against such other
perils as Landlord may reasonably consider appropriate. Tenant acknowledges that
it will  not be a named  insured  in such  policies  and that it has no right to
receive any  proceeds  from any such  insurance  policies  carried by  Landlord.
Landlord  shall  not be  required  to  carry  insurance  covering  the  property
described in Section 12.1.2 above.

      12.3 Waivers of Subrogation. Each of the parties hereto waives any and all
rights of recovery  against the other or against any other tenant or occupant of
the  Building,  or against the  officers,  employees,  agents,  representatives,
patients or visitors of such other party or of such other  tenant or occupant of
the Building, for loss of or damage to such waiving party or its property or the
property of others under its control and arising from any cause insured  against
under any  insurance  required to be carried by such waiving  party  pursuant to
this Lease or arising from any cause insured  against under any standard form of
first insurance  policy with all  permissible  extension  endorsements  covering
additional  perils  carried by such  waiving  party or under any other policy of
insurance carried by such waiving party in lieu thereof, to the extent such loss
or damage is insured against .by such policy.

                                       19
<PAGE>

      12.4  Increases.  Tenant shall pay any  increases  in  insurance  premiums
relating to property in the Project  other than the  Premises to the extent that
any such  increase is  specified  by the  insurance  carrier as being  caused by
Tenant's acts or omissions or use or occupancy of the Premises.

                                  ARTICLE XIII

                  DAMAGE OR DESTRUCTION OF BUILDING OR PREMISES

      13.1 Repair; Termination. If the Premises or the Building is damaged by an
insured  casualty  occurring more than six (6) months prior to the expiration of
the Term hereof,  Landlord shall forthwith repair the same, or cause the same to
be  repaired,  to the extent  that  insurance  proceeds  are made  available  to
Landlord therefor and provided that such repairs can, in Landlord's  opinion, be
made within  ninety (90) days from the date of such damage  (without  payment of
overtime or other premiums) under the laws and regulations of the federal, state
and local governmental  authorities having jurisdiction  thereof. If Landlord is
not so required to repair such  damage,  Landlord  shall have the option  within
sixty (60) days from the date of such  damage  either  to: (i) notify  Tenant of
Landlord's  election  to repair  such  damage,  in which  event  Landlord  shall
thereafter use its reasonable  efforts to repair the same; or (ii) notify Tenant
of Landlord's election to immediately  terminate this Lease, in which event this
Lease shall be so terminated. Notwithstanding any contrary provision herein: (a)
Landlord shall not be required to repair any damage to the property of Tenant or
to repair or replace  any  paneling,  decorations,  railings,  floor  coverings,
alterations,  additions,  fixtures,  equipment or improvements  installed in the
Premises  by or at the  expense  of  Tenant;  and  (b)any  damage  caused by the
negligent,  reckless  or  intentional  act or  omission  of Tenant or any of its
agents, contractors, employees or invitees shall be promptly repaired by Tenant,
at its sole cost and expense, to the reasonable satisfaction of Landlord.

      13.2  Abatement  of Rent.  If  Landlord  repairs  damage  to the  Premises
pursuant to the  provisions  of Section  13.1 above,  Basic  Annual Rent payable
hereunder shall be abated,  until such repairs are completed,  in the proportion
that the  square  footage  of the  portion,  if any,  of the  Premises  rendered
unusable by Tenant bears to the Premises  Area;  provided,  however,  that there
shall be no such abatement:  (i) except to the extent Landlord receives proceeds
covering the amount of such abatement  under any rental value  insurance  policy
maintained  by  Landlord;  (ii) to the  extent  that any  business  interruption
insurance  policy  required  pursuant to Section 12.1.4 above insures payment of
Basic Annual Rent;  (iii) unless a material  portion of the Premises is rendered
unusable for more than fifteen (15)  consecutive  business  days; or (iv) if the
damage so repaired is caused by the negligent,  reckless or  intentional  act or
omission of Tenant or any of its agents,  contractors,  employees  or  invitees.
Except for  abatement of Basic Annual Rent,  if any,  Tenant shall have no claim
against  Landlord  for any damage  suffered  by reason of: (1) any damage to the
Premises; (2) such repairs; or (3) any inconvenience,  interruption or annoyance
caused by such damage or repairs.

      13.3  Waiver.  In respect of any  partial or total  damage or  destruction
which  Landlord is obligated or agrees to restore under any of the provisions of
this Lease, Tenant hereby waives the provisions of Sections 1932 and 1933 of the
California Civil Code and any related, similar or successor provision of law, to
the extent applicable hereto, if at all.

                                       20
<PAGE>

                                  ARTICLE XIV

                                 EMINENT DOMAIN

      If the whole of the  Premises or so much  thereof as to render the balance
unusable by Tenant shall be taken by right of eminent domain or by condemnation,
or shall be conveyed in lieu of any such taking,  then this Lease, at the option
of either Landlord or Tenant  exercised by either party giving written notice to
the other of such  termination  within  thirty  (30) days after  such  taking or
conveyance,  shall forthwith cease and terminate and the rent and all other sums
payable  hereunder  shall be duly  apportioned  as of the date of such taking or
conveyance.  Tenant  thereupon  shall surrender to Landlord the Premises and all
interest  therein under this Lease, and Landlord may reenter and take possession
of the Premises and remove Tenant  therefrom.  If any portion of the Premises or
any portion of the  Building  which shall not render the  Premises  untenantable
shall be taken or conveyed as described above, then this Lease, at the option of
Landlord  exercised  by  Landlord  giving  written  notice  to  Tenant  of  such
termination  within  thirty  (30) days after such  taking or  conveyance,  shall
forthwith cease and terminate and the rent and all other sums payable  hereunder
shall be duly  apportioned as of the date of such taking or  conveyance.  Tenant
thereupon  shall  surrender to Landlord  the  Premises and all interest  therein
under this Lease,  and Landlord may reenter and take  possession of the Premises
and remove Tenant therefrom.  No award for any partial or entire taking shall be
apportioned  and Tenant hereby releases any claim to and assigns to Landlord any
award which may be made in such taking or  condemnation,  together  with any and
all  rights of Tenant  now or  hereafter  arising  in or to the same or any part
thereof,  including,  but not  limited  to, any award for the  "bonus  value" of
Tenant's interest under this Lease. In the event of a partial taking, or a sale,
transfer or conveyance  in lieu thereof,  which does not result in a termination
of this Lease pursuant to the foregoing, the rent shall be apportioned according
to the ratio that the part of the Premises  remaining  usable by Tenant bears to
the total area of the Premises. To the extent it is inconsistent with the above,
each party waives the provisions of Section  1265.130 of the California  Code of
Civil  Procedure  allowing  either  party  to  petition  the  superior  court to
terminate this Lease in the event of a partial taking of the Premises.

                                   ARTICLE XV

             ASSIGNING - MORTGAGING- SUBLETTING- CHANGE IN OWNERSHIP

      15.1 No Unauthorized Transfer. Tenant shall not voluntarily,  by operation
of law  or  otherwise,  assign,  sublet,  enter  into a  license  or  concession
agreement for, hypothecate, encumber, pledge or otherwise transfer this Lease or
Tenant's  interest in the Premises (or any portion  thereof) or permit any third
party or parties other than Tenant, its authorized agents,  employees,  invitees
and visitors,  to occupy the Premises or any portion thereof without  Landlord's
advance written  consent in each instance,  which consent may be withheld in the
sole and absolute  discretion of Landlord.  Tenant  acknowledges and agrees that
Landlord is entering into this Lease because Landlord has permitted Tenant to be
present in the Building on the basis of both  tangible and  intangible  factors,
many of which are not susceptible of rational  articulation  or  prioritization,
and that the Premises represents scarce space in the Building which is owned and
primarily occupied by Landlord.  Any attempted  assignment,  subletting or other
transfer without  Landlord's  advance written consent shall constitute a default
hereunder  and, at  Landlord's  election,  shall be void so as not to confer any
rights upon any third person.

                                       21
<PAGE>

      15.2  Procedures  for Requesting  Authorization.  If Tenant desires at any
time to assign or otherwise transfer this Lease or to sublet the Premises or any
portion thereof,  it must first notify Landlord of its desire to do so and shall
submit  in  writing  to  Landlord:  (i) the name of the  proposed  subtenant  or
assignee;  (ii) the nature of the proposed subtenant's or assignee's business to
be carried on in the  Premises;  (iii) the terms and  provisions of the proposed
sublease  or  assignment;  and  (iv)  such  financial,  professional  and  other
background information as Landlord may request concerning the proposed subtenant
or assignee.

      15.3  Landlord's  Option.  At any  time  within  thirty  (30)  days  after
Landlord's receipt of the information  specified in Section 15.2 above, Landlord
may by written notice to Tenant elect,  in the exercise of its sole and absolute
discretion,  to: (i) consent to the subletting or assignment  upon the terms and
to the subtenant or assignee  proposed;  (ii) refuse to give  consent;  or (iii)
sublease  the  Premises or the portion so proposed to be  subleased by Tenant or
take an assignment of Tenant's  leasehold  estate hereunder or such part thereof
as shall be  specified  in said  notice  upon the same  terms  (excluding  terms
relating to the use of Tenant's name or the  continuation of Tenant's  business)
as those  offered to the proposed  subtenant  or  assignee,  as the case may be.
Tenant agrees that  Landlord may consent to a proposed  subletting or assignment
subject to such conditions as Landlord deems  appropriate in the exercise of its
sole and  absolute  discretion,  including,  but not limited to, the  conditions
specified in Sections  15.4.1,  15.4.2 and 15.4.3 below.  Tenant  further agrees
that no  assignment  or  subletting  consented  to by Landlord  shall  impair or
diminish any covenant, condition or obligation imposed upon Tenant by this Lease
or any right,  remedy or benefit  afforded  Landlord by this Lease.  If Landlord
consents to such  assignment or subletting,  Tenant may, within ninety (90) days
after the date of Landlord's consent,  enter into a valid assignment or sublease
of the Premises or portion  thereof upon the terms and  conditions  described in
the  information  required to be  furnished  by Tenant to  Landlord  pursuant to
Section 15.2 above, or upon other terms not more favorable to Tenant;  provided,
however,  that any material  change in such terms shall be subject to Landlord's
consent as provided  in this  Article  XV.  Failure of Landlord to exercise  any
option set forth in clauses (i) through  (iii) above within such thirty (30) day
period shall be deemed refusal of Landlord to consent to the proposed subletting
or assignment.

      15.4 Conditions to Consent.

            15.4.1  Standards  of  Reasonableness.  Landlord  may  withhold  its
consent to any assignment or subletting,  encumbrance,  hypothecation, pledge or
other  transfer in the  exercise of  Landlord's  sole and  absolute  discretion.
Landlord hereby advises Tenant in advance and Tenant hereby agrees that Landlord
will withhold such consent for any of the following  reasons,  among others,  if
the proposed  assignee,  sublessee or  transferee:  (i) is not  satisfactory  to
Landlord as to credit or character or business or professional reputation;  (ii)
intends to occupy the Premises for purposes  other than  specified in this Lease
or for purposes  which are  inconsistent  with  Landlord's  commitments to other
tenants in the Building or in other  buildings or facilities  owned and operated
by Landlord, or for purposes which are unlawful or reasonably undesirable; (iii)
is unable  to  fulfill  the terms of this  Lease;  (iv) is not  satisfactory  to
Landlord as to the quality of services provided or research to be conducted;  or
(v) will be occupying the Premises to supply  services which are  duplicative of
services already available to patients or the professional staff of Cedars-Sinai
Medical Center or to occupants in the Building.

                                       22
<PAGE>

            15.4.2 Further  Transfers.  In no event shall Landlord's  consent to
any  assignment,  transfer or subletting  relieve Tenant from the obligations to
obtain Landlord's express written consent to any further  assignment,  transfer,
subletting or  sub-subletting or release Tenant from any liability or obligation
hereunder  (whether or not then accrued) and Tenant shall  continue to be fully,
jointly and severally liable  hereunder  notwithstanding  Landlord's  consent to
such assignment, transfer or subletting.

            15.4.3 Rent or Other Premiums.  As a further condition to Landlord's
consent to any subletting,  assignment or other transfer referred to in Sections
15.3 and 15.4.1 or any other part of Article XV,  Landlord  shall be entitled to
receive any rent or other premium  otherwise  payable to Tenant in consideration
of the sublease, assignment or other transfer (i.e., if the sublease, assignment
or other  transfer  provides that the  sublessee,  assignee or other  transferee
thereunder  is to pay any  amount in excess  of the rent and other  charges  due
under this Lease, whether such premium be in the form of an increased monthly or
annual rent, a lump sum payment in consideration of the sublease,  assignment or
transfer  or   consideration   of  the  sublease,   assignment  or  transfer  or
consideration  of any other form,  such  premium over and above the rent and the
other sums due hereunder shall, at Landlord's election, inure only to Landlord's
benefit),  and any such sublease,  assignment or transfer and Landlord's consent
shall be effected on forms  supplied or approved by Landlord and its  attorneys.
In addition,  the Basic Annual Rent, after the transfer,  shall not be less than
the Basic Annual Rent, as adjusted pursuant to Section 4.2,  immediately  before
the transfer, plus the total compensation paid for the annual period immediately
preceding the transfer, pursuant to Section 4.3.2 hereof.

            15.4.4  Processing  Costs  and  Fees.  Tenant  agrees  to  reimburse
Landlord  for  Landlord's  reasonable  costs and  attorneys'  fees  incurred  in
connection  with  the  processing  and   documentation  of  any  such  requested
assignment, subletting, transfer, change of ownership,  hypothecation, pledge or
encumbrance of this Lease or Tenant's interest in and to the Premises.

            15.4.5 No Waiver. No subletting,  assignment or other transfer, even
with the consent of Landlord,  shall relieve Tenant of its obligation to pay the
rent and to  perform  all of the other  obligations  to be  performed  by Tenant
hereunder.  Landlord's  consent  to any one  transfer  shall  apply  only to the
specific  transaction thereby authorized and such consent shall not be construed
as a waiver of the duty of Tenant or any transferee to obtain Landlord's consent
to any other or  subsequent  transfer or as  modifying  or  limiting  Landlord's
rights  hereunder in any way.  Landlord's  acceptance  of rent  directly for any
subtenant, assignee or any other transferee shall not be construed as Landlord's
approval or consent thereto nor Landlord's agreement to accept the attornment of
any subtenant in the event of any  termination of this Lease.  In no event shall
Landlord's  enforcement of any provision of this Lease against any transferee be
deemed a waiver of  Landlord's  right to enforce any term of this Lease  against
Tenant or any other person.

            15.4.6 Nature of Tenant. If Tenant is a corporation which, under the
then current  guidelines  published by the  Commissioner  of Corporations of the
State of California, is not deemed a public corporation, or is an unincorporated
association  or  partnership  or  company,  the  following  shall be  deemed  an
assignment  within the  meaning of this  Article XV: the  transfer,  assignment,
hypothecation,  or other disposition,  whether in one transaction or a series of
transactions,  of any stock or  interest  in such  corporation,  association  or
partnership,  which results in a transfer,  assignment,  hypothecation,  change,
addition, or other disposition of twenty-five

                                       23
<PAGE>

percent  (25%)  or more of any  class  of  stock  in  Tenant  or in a  transfer,
assignment,  hypothecation,  or other  disposition  of a 25% interest or more in
Tenant (including,  without limitation,  an interest in profits,  net profits or
cash  flow).  Tenant  shall  notify  Landlord of any  transfer  of an  ownership
interest  in Tenant to any person not later than  thirty (30) days prior to such
transfer  together  with a summary of the  material  terms of such  transaction,
whether or not consent of Landlord is required pursuant to this Article XV.

                                  ARTICLE XVI

                            SUBORDINATION; ATTORNMENT

      16.1 Subordination. With respect to all ground leases, mortgages, deeds of
trust  or  other  recorded   evidences  of  financing   obligations   ("Superior
Interests")  now or  hereafter  covering  the  Premises  and/or all or any other
portion of the Project, Building or the Property, and with respect to the ground
lessors,  mortgagees or beneficiaries  thereunder ("Superior Interest Holders"),
Tenant agrees as follows:

            (a) Unless  otherwise  requested by any Superior  Interest Holder in
writing,  this Lease is and shall remain  subordinate to all Superior  Interests
existing  as of the  date of this  Lease,  and to all  renewals,  modifications,
consolidations, replacements, extensions and amendments thereof.

            (b) If requested by any future Superior  Interest Holder in writing,
this Lease shall  automatically  become  subordinate to any such future Superior
Interest and all extensions or amendments thereof.

      The above-referenced subordinations shall be automatic and self-executing,
but  additionally  Tenant agrees,  within ten (10) days after receipt of written
request  therefor from  Landlord or any Superior  Interest  Holder,  to execute,
acknowledge  and deliver  any and all  documents  or  instruments  requested  to
confirm and assure such subordination under the above-referenced terms.

      16.2  Attornment.  Tenant shall attorn to any person,  firm or corporation
purchasing or otherwise acquiring the Premises,  Building or Project at any sale
or other  proceeding,  or  pursuant to the  exercise  of any  rights,  powers or
remedies under any Superior  Interests,  as if such person,  firm or corporation
had been named as Landlord  herein.  Tenant  shall  confirm such  attornment  in
writing if so requested.

      16.3  Attorney-in-Fact.  If Tenant fails to execute any document  required
from  Tenant  under this  Article  within ten (10) days  after  written  request
therefor,  Tenant  hereby  constitutes  and  appoints  Landlord  as its  special
attorney-in-fact  to execute and deliver any such  document or  documents in the
name of Tenant. Such power, being coupled with an interest, is irrevocable.

      16.4 Non-Disturbance.  With respect to any ground leases, mortgages, deeds
of trust, or other liens entered into by Landlord and any such mortgagee or deed
of trust beneficiary,  and in consideration of Tenant's agreement to be bound by
the provisions of this Article XVI, Landlord shall use its reasonable efforts to
cause, upon the request of Tenant;  any and all future Superior Interest Holders
to enter into and deliver to Tenant  non-disturbance  and attornment  agreements
which  are  customarily  entered  into  by such  Superior  Interest  Holders  in
consideration of the  subordination  of pre-existing  tenant leases such as this
Lease.

                                       24
<PAGE>

                                  ARTICLE XVII

                                     DEFAULT

      17.1  Default by Tenant.  The  occurrence  of any of the  following  shall
constitute a breach of and default under this Lease by Tenant:

            (a)  Failure  by  Tenant  to  pay  any  amount,   including  without
limitation,  monthly  installments of Basic Annual Rent and any additional rent,
when and as the same becomes  payable in accordance  with the provisions of this
Lease,  and the  continuation of such failure for a period of three (3) business
days after written notice thereof from Landlord to Tenant.

            (b) Failure by Tenant in the due,  prompt and  complete  performance
and  observance of any express or implied  covenant,  agreement or obligation of
Tenant  contained in this Lease,  other than the breaches  described of Sections
17.1(a),  (g), and (h) hereof, and the continuation of such failure for a period
of fifteen  (15) days after  written  notice  thereof  from  Landlord  to Tenant
specifying  the  nature of such  failure;  provided,  however,  that if any such
failure  involves a hazardous  condition or involves  interference  with,  or an
adverse effect upon, Landlord's operations in the Building or those of any other
tenant or occupant of the Building,  Landlord shall have the right,  in addition
to its other  rights  under  this  Lease,  to cure such  condition  or to obtain
injunctive  relief  against  Tenant if the  condition  is not cured  within said
fifteen  (15) day period or such  shorter  period of time as may be  required by
applicable laws or as may be required by Landlord.

            (c)  Tenant's  vacating  or  abandoning  of the  Premises,  as  such
abandonment  is established  pursuant to Section 1951.3 of the California  Civil
Code, as such code section is amended or replaced from time to time.

            (d) Any financial statement or any representation  given to Landlord
by Tenant, or any assignee, sublessee or successor of Tenant or any guarantor of
this Lease, proves to be materially false.

            (e) The insolvency of Tenant; the making by Tenant of any assignment
for the benefit of creditors;  the filing by or against  Tenant of a petition to
have Tenant adjudged bankrupt or of a petition for reorganization or arrangement
under any law relating to bankruptcy, insolvency or creditors' rights in general
(unless in the case of a petition  filed against  Tenant,  the same is dismissed
within  sixty (60)  days);  the  appointment  of a trustee or  receiver  to take
possession  of all or a  substantial  part of  Tenant's  assets  or of  Tenant's
interest under this Lease,  where such seizure is not  discharged  within thirty
(30)  days.  The  occurrence  of any of the acts or events  referred  to in this
subparagraph  with respect to any  guarantor of this Lease,  if any,  shall also
constitute a default hereunder.

                                       25
<PAGE>

            (f)  The  attachment,  execution  or  other  judicial  seizure  of a
substantial  portion of Tenant's  assets  located at the Premises or of Tenant's
interest in this Lease,  where such seizure is not discharged within thirty (30)
days.

            (g) The breach of the  provisions of Section 6.6  concerning  animal
research.

            (h) The breach of any obligation of Tenant under this Agreement with
respect to the use, disposal, handling, or storage of Hazardous Materials.

      The notices  referred to in clauses (a) and (b) above shall be in lieu of,
and not in addition to, any notice  required  under  Section 1161 et seq. of the
California Code of Civil Procedure.

                                 ARTICLE XVIII

                                    REMEDIES

      18.1 Termination of Lease and Removal of Tenant.  In the event of Tenant's
breach of or default  under  this Lease as  provided  in  Article  XVII  hereof,
Landlord,  at Landlord's opinion,  and without limiting Landlord in the exercise
of any other right or remedy  Landlord may have on account of such default,  and
without any further demand or notice,  may terminate  this Lease and/or,  to the
extent  permitted  by law,  remove all persons and property  from the  Premises,
which  property  shall be stored by Landlord at a warehouse  or elsewhere at the
risk, expense and for the account of Tenant.

      18.2 Damages.  If Landlord  elects to terminate  this Lease as provided in
Section  18.1  above,  Landlord  shall be  entitled  to recover  from Tenant the
aggregate of:

            (a) The worth at the time of award of the  unpaid  rent and  charges
equivalent to rent earned as of the date of the termination hereof;

            (b) The worth at the time of award of the amount by which the unpaid
rent and charges  equivalent to rent which would have been earned after the date
of termination  hereof until the time of award exceeds the amount of such rental
loss that Tenant proves could have been reasonably avoided;

            (c) The worth at the time of award of the amount by which the unpaid
rent and charges equivalent to rent for the balance of the Term hereof after the
time of award  exceeds the amount of such rental loss that Tenant  proves  could
have been reasonably avoided;

            (d) Any  other  amount  necessary  to  compensate  Landlord  for 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; and

            (e) Any other amount which  Landlord may  hereafter be permitted to.
recover from Tenant to compensate  Landlord for the detriment caused by Tenant's
default.  For the purposes of this  Section,  the "time of award" shall mean the
date upon which the judgment in any action brought by Landlord against Tenant by
reason  of such  default  is  entered  or such  earlier  date as the  court  may
determine;  the  "worth  at the time of  award" of the  amounts  referred  to in
Sections  18.2(a)  and 18.2(b)  shall be  computed  by allowing  interest at the
lesser of the

                                       26
<PAGE>

Lease Rate plus three (3)  percentage  points or the maximum  rate  permitted by
law;  and the "worth at the time of award" of the amount  referred to in Section
18.2(c) 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%)
per annum.  Tenant  agrees that such charges  shall be  recoverable  by Landlord
under  California  Code of  Civil  Procedure  Section  1174(b)  or any  similar,
successor  or  related  provision  of law.  Further,  Tenant  hereby  waives the
provisions of California Code of Civil Procedure  Section 1174(c) and California
Civil Code Section 1951.7 or any other similar,  successor or related  provision
of law providing for Tenant's  right to satisfy any judgment in order to prevent
a forfeiture of this Lease or requiring  Landlord to deliver  written  notice to
Tenant of any  reletting  of the  Premises.  No acts or efforts of  Landlord  to
mitigate  damages  caused by Tenant's  breach or default  shall be  construed or
operate to waive or reduce any  damages or other sums  recoverable  by  Landlord
hereunder  (provided,  however,  that Landlord shall under no  circumstances  be
obligated to so mitigate any such damages).

      18.3 No Effect on Indemnification. Nothing in this Article shall be deemed
to affect  Landlord's  right to  indemnification  for  liability or  liabilities
arising prior to the termination of this Lease under the indemnification  clause
or clauses contained in this Lease.

      18.4 No Acceptance of Surrender.  Notwithstanding anything to the contrary
set  forth  herein,  Landlord's  reentry  to  perform  acts  of  maintenance  or
preservation  of, or in  connection  with efforts to relet,  the Premises or any
portion thereof, or the appointment of a receiver upon Landlord's  initiative to
protect Landlord's interest under this Lease, shall not terminate Tenant's right
to possession of the Premises or any portion  thereof and,  until  Landlord does
elect to  terminate  this  Lease,  this Lease  shall  continue in full force and
Landlord may pursue all its remedies hereunder,  including,  without limitation,
the right to recover from Tenant as they become due hereunder all rent and other
charges required to be paid by Tenant under the terms of this Lease.

      18.5  Action for Rent.  In the event of any default by Tenant as set forth
above, then in addition to any other remedies available to Landlord at law or in
equity or under this Lease,  Landlord shall have the right to bring an action or
actions  from  time  to  time  against   Tenant,   in  any  court  of  competent
jurisdiction,  for all rent and other sums due or becoming due under this Lease,
including  all damages and costs  proximately  caused  thereby,  notwithstanding
Tenant's  abandonment  or vacation of the  Premises or other acts of Tenant,  as
permitted  by Section  1951.4 of the  California  Civil  Code or any  successor,
related or similar  provision  of law.  Such remedy may be exercised by Landlord
without prejudice to its right to thereafter  terminate this Lease in accordance
with the other provisions contained in this Article.

      18.6  Definition of Rent.  The terms "rent" and "rental",  as used in this
Article  and in any and all other  provisions  of this  Lease,  shall mean Basic
Annual  Rent and any and all other  amounts  payable by Tenant  pursuant  to the
provisions of this Lease.

      18.7 Reletting. In the event of Tenant's abandonment of the Premises or if
Landlord  shall  elect to  reenter  or shall  take  possession  of the  Premises
pursuant to any legal  proceeding or pursuant to any notice provided by law, and
until Landlord elects to terminate this Lease,  Landlord may, from time to time,
without terminating this Lease, recover all rent as it becomes due under Section
18.5 above  and/or relet the Premises or any part thereof for the account of and

                                       27
<PAGE>

on behalf of Tenant,  on any terms, for any term (whether or not longer than the
Term of this Lease) and at any rent as Landlord in its reasonable discretion may
deem  advisable,  and  Landlord  may make any  alterations  and  repairs  to the
Premises in connection  therewith.  Tenant hereby  irrevocably  constitutes  and
appoints Landlord as its special attorney-in-fact,  irrevocable and coupled with
an interest,  for purposes of reletting the Premises pursuant to the immediately
preceding  sentence.  In the event  that  Landlord  shall  elect to so relet the
Premises on behalf of Tenant, then rent received by Landlord from such reletting
shall be applied:

            (a) First, to reimburse  Landlord for the costs and expenses of such
reletting  (including,  without  limitation,  costs and  expenses of retaking or
repossessing the Premises, removing persons and property therefrom, securing new
tenants,  and, if Landlord  shall  maintain and operate the Premises,  the costs
thereof) and necessary or reasonable alterations.

            (b) Second, to the payment of any indebtedness of Tenant to Landlord
other than Basic Annual Rent and other sums due and unpaid hereunder.

            (c) Third, to the payment of rent,  Basic Annual Rent and other sums
due and unpaid hereunder, and the residue, if any, shall be held by Landlord and
applied in payment of other or future  obligations  of Tenant to Landlord as the
same may become due and payable.

      Should the rent received from such  reletting,  when applied in the manner
and order indicated  above, at any time be less than the total amount owing from
Tenant  pursuant  to this  Lease,  then  Tenant  shall  pay such  deficiency  to
Landlord, and if Tenant does not pay such deficiency within five (5) days of its
receipt of  written  notice,  Landlord  may bring an action  against  Tenant for
recovery of such deficiency or may pursue its other remedies  hereunder or under
California Civil Code Section 1951.8, California Code of Civil Procedure Section
1161 et seq., or any similar, successor or related provision of law.

      18.8  Cumulative  Remedies.  All rights,  powers and  remedies of Landlord
hereunder  and under any  other  agreement  now or  hereafter  in force  between
Landlord  and Tenant shall be  cumulative  and not  alternative  and shall be in
addition  to all  rights,  powers and  remedies  given to  Landlord at law or in
equity.  The  exercise of any one or more of such  rights or remedies  shall not
impair  Landlord's  right to  exercise  any other  right or  remedy,  including,
without limitation, any and all rights and remedies of Landlord under California
Civil  Code  Section 1951.8,   California  Code of Civil Procedure  Section 1161
et~., or any similar, successor or related provision of law.

      18.9  Assignment  of Subrents.  As security for Tenant's  performance  and
satisfaction  of each and every one of its  duties  and  obligations  under this
Lease, Tenant does hereby assign and grant to Landlord a security interest under
the California  Commercial Code in and to Tenant's  right,  power and authority,
during the continuance of this Lease, to receive the rents,  issues,  profits or
other  payments  received under any sublease or other transfer of part or all of
Tenant's interest in the Premises,  reserving unto Tenant the right prior to any
default  hereunder to collect and retain said rents,  issues and profits as they
become due and payable,  except that nothing contained herein shall be construed
to alter the  provisions of Article XV above.  Upon any such  default,  Landlord
shall have the right at any time  thereafter,  without  notice (except as may be
provided for herein),  either in person, by agent or receiver to be appointed by
a court,  to enter

                                       28
<PAGE>

and take possession of said Premises mid collect such rents, issues,  profits or
other payments,  including,  without limitation,  those past due and unpaid, and
apply the same,  less  costs and  expenses  of  collection,  including,  without
limitation, reasonable attorneys' fees, upon any indebtedness secured hereby and
in such order as Landlord may determine.

      18.10 Storage of Personal Property.  If, after Tenant's abandonment of the
Premises,  Tenant  leaves behind any items of personal  property,  then Landlord
shall  store such  property at a  warehouse  or any other  location at the risk,
expense and for the account of Tenant,  and such property shall be released only
upon  Tenant's  payment of such  charges,  together  with all sums due and owing
under this Lease.  If Tenant does not reclaim  such  property  within the period
permitted by law,  Landlord may sell such  property in  accordance  with law and
apply the proceeds of such sale to any sums due and owing  hereunder,  or retain
said property,  granting  Tenant credit against sums due and owing hereunder for
the reasonable value of such property.

      18.11 Waiver. To the maximum extent permitted by law, Tenant hereby waives
all  .provisions  of, or  protection  under,  any  decisions,  statutes,  rules,
regulations  or other laws of the State of California to the extent the same are
inconsistent  with the terms and  provisions  hereof,  including  all rights and
remedies of Landlord provided under this Article.

      18.12 Landlord's Cure of Tenant's Default.  If at any time during the Term
hereof Tenant fails, refuses or neglects to do any of the things herein provided
to be done by Tenant,  Landlord shall have the right, upon five (5) days written
notification  to  Tenant,  but not the  obligation,  to do the same,  but at the
expense  and for the  account of Tenant.  The amount of any money so expended or
obligations so incurred by Landlord, together with interest thereon at the Lease
Rate,  shall be repaid to Landlord  within five (5) days of Tenant's  receipt of
written  notice,  and  unless so paid  shall be added to the next  monthly  rent
payment coming due hereunder.

      18.13  Interest and Charges on Past Due  Obligations.  Any amount due from
Tenant to Landlord  hereunder  which is not paid when due shall bear interest at
the Lease  Rate from the due date  until  paid,  unless  otherwise  specifically
provided  herein,  but the payment of such interest shall not excuse or cure any
such default by Tenant under this Lease.  In addition to such  interest,  if any
monthly  installment  of Basic Annual Rent is not paid within three (3) business
days  after the same is due, a late  charge  equal to six  percent  (6%) of such
monthly installment shall be assessed, which late charge Tenant hereby agrees is
a  reasonable  estimate  of the  damages  Landlord  shall  suffer as a result of
Tenant's   late   payment,   which   damages   include   Landlord's   additional
administrative  and other costs  associated with such late payment.  The parties
agree that it would be impracticable  and extremely  difficult to fix Landlord's
actual  damages in such event.  Such  interest  and late payment  penalties  are
separate  and  cumulative  and are in  addition  to and  shall not  diminish  or
represent a substitute for any or all of Landlord's rights or remedies under any
other provision of this Lease.

                                       29
<PAGE>

                                  ARTICLE XIX

                              RULES AND REGULATIONS

      Tenant shall  observe  faithfully  and comply  strictly with the rules and
regulations ("Rules and Regulations") contained in EXHIBIT E attached hereto, as
amended or  supplemented  by Landlord from time to time.  Landlord  shall not be
liable to Tenant for violation by any other tenant in the Building of any of the
Rules and  Regulations,  or for the breach of any  covenant or  condition in any
lease.  Landlord has not and is not hereby  representing that all tenants in the
Building are or shall be bound to any part or all of the Rules and Regulations.

                                   ARTICLE XX

                              SURRENDER OF PREMISES

      20.1 Surrender.  Upon the expiration or sooner  termination of the Term of
this Lease,  Tenant shall surrender the Premises in good  condition,  reasonable
wear and tear excepted, broom clean and free of trash and rubbish. If Tenant has
not been in default  beyond any  applicable  cure period under any  provision of
this Lease and is not then in default, upon the expiration or sooner termination
of the Term of this Lease,  then Tenant may remove the trade  fixtures set forth
on EXHIBIT F attached  hereto and Tenant's  Alterations,  provided  that, in the
case of Tenant's  Alterations,  such  alterations  shall be removed  only to the
extent they have not become a part of the Premises. Tenant shall promptly repair
any  damage to the  Premises  occasioned  by the  removal of such  fixtures  and
alterations.  In any event,  Landlord may require that Tenant  remove all or any
portion of such  fixtures  and  Tenant's  Alterations  upon such  expiration  or
termination,  in which event  Tenant  shall cause such  removal to occur and all
damage arising out of such removal  repaired.  All other Tenant's Property shall
be removed by Tenant upon such expiration or  termination.  Tenant shall repair,
at its own cost,  any and all damage to the Premises and the Building  resulting
from or caused by any removal hereunder.

      20.2 No Merger.  The voluntary or other surrender of this Lease by Tenant,
or termination hereof,  shall not constitute a merger, and shall operate, at the
option of  Landlord,  as an  assignment  to Landlord of any or all  subleases or
subtenancies affecting the Premises.

                                  ARTICLE XXI

                                  HOLDING OVER

      Should Tenant, with or without Landlord's written consent, hold over after
the  expiration  or earlier  termination  of this Lease,  Tenant  shall become a
tenant from  month-to-month  only upon each and all of the terms herein provided
as may reasonably  and logically be construed as applicable to a  month-to-month
tenancy,  and any such  holding over shall not  constitute  an extension of this
Lease. During such holding over without Landlord's written consent, Tenant shall
pay, in advance,  monthly rent at the highest  monthly rate  provided for herein
(including  any and all prior  adjustments)  plus an amount equal to one hundred
and fifty percent  (150%)  thereof.  Nothing  contained in the  foregoing  shall
relieve  Tenant from,  and Tenant shall remain liable for,  damages  incurred by
Landlord as a result of any such hold over.

                                       30
<PAGE>

                                  ARTICLE XXII

                                     NOTICES

      Any notice,  consent or  communication  to Landlord or Tenant  required or
permitted  to be given  under this Lease shall be  effectively  given only if in
writing and: (a) personally  served;  (b) mailed by United States  registered or
certified mail,  postage  prepaid,  return receipt  requested;  or (c) sent by a
nationally  recognized  courier  service  (e.g.,  Federal  Express) for next day
delivery, to be confirmed in writing by such courier, addressed as follows:

           If to Tenant, as follows:

                                        Kristin P.  Demetriou, Secretary
                                        Arbios Technologies, Inc.
                                        9899 Santa Monica Boulevard, #252
                                        Beverly Hills, CA 90212
                                        Fax: (310) 471-0765

           If to Landlord, as follows:

                                          Cedars-Sinai Medical Center
                                          8700 Beverly Boulevard
                                          North Tower - 2010
                                          Los Angeles, CA 90048-1869
                                          Attention: Dan Oshiro
                                                     Vice President of Research
                                                     Administration

           With copy to:

                                          Cedars-Sinai Medical Center
                                          8700 Beverly Boulevard
                                          TBS 290
                                          Los Angeles, CA 90048-1869
                                          Attention: Peter Braveman, Esq.
                                                     Senior Vice President of
                                                     Legal Affairs and General
                                                     Counsel

And with a copy to any and all Superior Interest Holders, but only as previously
requested in writing by Landlord.

      Either  party shall have the right to change the address or  addresses  to
which  notices  shall  thereafter be sent by giving notice to the other party as
aforesaid.  Notices given in the manner aforesaid shall be deemed delivered when
actually  received  or refused by the party to whom sent,  unless such notice is
mailed as aforesaid,  in which event such notice shall be deemed complete on the
day of actual  delivery as shown by the return  receipt or at the  expiration of
the third (3rd) business day after the date of mailing, whichever first occurs.

                                       31
<PAGE>

                                 ARTICLE XXIII

                                 QUIET ENJOYMENT

      So long  as  Tenant  performs  and  observes  all of its  obligations  and
covenants hereunder and is not in default hereunder, Tenant shall have the right
to the quiet and peaceful  enjoyment and  possession of the Premises  during the
Term of this Lease  without  hindrance or ejection by anyone  lawfully  making a
claim by,  through,  or under  Landlord,  subject to the terms and conditions of
this Lease and of any ground leases,  underlying  leases,  mortgages or deeds of
trust affecting all or any portion of the Project.

                                  ARTICLE XXIV

                              ESTOPPEL CERTIFICATE

      Tenant  shall,  at any time and from  time to time,  within  ten (10) days
after written notice from Landlord, execute, acknowledge and deliver to Landlord
a statement in writing,  in a form  provided by Landlord to Tenant,  certifying,
among other things,  that this Lease is unmodified  and in full force and effect
(or, if modified,  stating the nature of such  modification  and certifying that
this Lease, as so modified, is in full force and effect), the dates to which the
rent and other  charges,  if any, are paid in advance and the amount of Tenant's
security  deposit,  if any,  and  acknowledging  that there are not, to Tenant's
knowledge,  any uncured  defaults on the part of  Landlord  hereunder,  and that
there are no events or conditions then in existence  which,  with the passage of
time or notice or both,  would  constitute  a  default  on the part of  Landlord
hereunder  (or  specifying  such  defaults,  events  or  conditions,  if any are
claimed).  It is expressly  understood and agreed that any such statement may be
relied upon by any prospective  purchaser or encumbrancer of all or a portion of
the Project. Tenant's failure to deliver such statement shall, at the Landlord's
election,  be conclusive upon Tenant that this Lease is in full force and effect
without modification (except as may be represented by Landlord),  that there are
no uncured defaults in Landlord's performance, and that no more than one month's
rent has been  paid in  advance.  Tenant  shall be liable  to  Landlord  for any
consequential damages suffered by Landlord and occasioned by Tenant's failure to
deliver such certificates in the manner described above.

                                  ARTICLE XXV

                              LIABILITY OF LANDLORD

      In the event of any transfer or transfers  of  Landlord's  interest in the
Premises,  other  than a transfer  for  security  purposes  only,  Landlord  (or
Landlord's   successor-in-interest  as  a  transferor)  shall  be  automatically
relieved  of any and all  obligations  and  liabilities  on the part of Landlord
accruing hereunder from and after the date of such transfer,  including, without
limitation,  the payment of the leasing commission,  if any, due with respect to
this Lease.  Tenant agrees to look solely to Landlord's  interest in the Project
(or the proceeds  thereof) for the  satisfaction of any remedy of Tenant for the
collection of a judgment (or other  judicial  process)  requiring the payment of
money by  Landlord in the event of any  default by  Landlord  hereunder,  and no
other  property or assets of  Landlord  shall be subject to levy,  execution  or
other  enforcement  procedure for the satisfaction of Tenant's remedies under or
with respect to this Lease.

                                       32
<PAGE>

                                  ARTICLE XXVI

                         LANDLORD'S INABILITY TO PERFORM

      This Lease and the  obligations of Tenant  hereunder shall not be affected
or  impaired  because  Landlord  is unable  to  fulfill  any of its  obligations
hereunder  or is  delayed in doing so, if such  inability  or delay is caused by
reason of the inability of Landlord to obtain the necessary building permits and
other  governmental  approvals  required to construct  any  improvements  to the
Building,  the  unavailability of materials,  strikes or other labor troubles or
any other  cause  beyond the control of  Landlord,  except as may  otherwise  be
specifically  set  forth in this  Lease.  Landlord  shall not be deemed to be in
default in ~the  performance  of any  obligation  required to be performed by it
hereunder  unless and until Landlord or any beneficiary  under any deed of trust
or any  mortgage,  ground lessor or other  lienholder  with rights in all or any
portion of the Project has failed to perform such obligation  within thirty (30)
days after written notice by Tenant to Landlord  specifying wherein Landlord has
failed to perform  such  obligation;  provided,  however,  that if the nature of
Landlord's  obligation  is such that more than thirty (30) days are required for
its performance,  then Landlord shall not be deemed to be in default if Landlord
or any of such other parties shall commence such performance  within such thirty
(30) day period and thereafter diligently prosecutes the same to completion.

                                 ARTICLE XXVII

                                 ATTORNEYS' FEES

      In the event of any litigation  between Tenant and Landlord to enforce any
provision of this Lease or otherwise  with respect to the subject matter hereof,
the unsuccessful  party in such litigation shall pay to the successful party all
costs and expenses,  including  reasonable  attorneys' fees, incurred therein by
the  successful  party.  If either party hereto without fault is made a party to
any  litigation  instituted  by or against the other  party to this Lease,  such
other party shall indemnify the party who without fault has been made a party to
such  litigation  and save it harmless  from all costs and  expenses,  including
reasonable attorneys' fees, incurred by it in connection therewith.

                                 ARTICLE XXVIII

                                    SERVICES

      28.1 Provision of Services. So long as Tenant is not in default hereunder,
Landlord  agrees to provide to the Premises the following  Building  services on
the  same  basis  as such  services  are  provided  from  time to time to  other
occupants of the Building: elevator, electrical, water, heating, ventilating and
air conditioning,  janitorial and security  services.  Landlord shall provide to
the Premises heating,  ventilation,  and air conditioning twenty-four (24) hours
daily. With respect to security  services,  Tenant may: (a) subject to the other
provisions of this Lease,  cause a separate  security system to be installed for
the Premises,  provided that the same shall not limit Landlord's right of access
to the Premises;  or (b) if practicable,  tie into any central Building security
system, provided that Tenant shall, upon demand by Landlord, pay to Landlord all
incremental costs incurred by Landlord from time to time in connection with such
tie-in.

      28.2  Interruption  of  Services.  Landlord  shall not be  liable  for any
failure to  furnish,  stoppage  of, or  interruption  in  furnishing  any of the
services or  utilities  described  in this  Article

                                       33
<PAGE>

XXVIII when such  failure is caused by  accident,  breakage,  repairs,  strikes,
lockouts,  labor disputes, labor disturbances,  governmental  regulation,  civil
disturbances, acts of war, moratorium or other governmental action, or any other
cause beyond Landlord's reasonable control, and, in such event, Tenant shall not
be  entitled  to any  damages  nor shall any  failure or  interruption  abate or
suspend Tenant's  obligation to pay rent required under this Lease or constitute
or be construed as a constructive or other eviction of Tenant.  Further,  in the
event any  governmental  authority or public utility  promulgates or revises any
law,  ordinance,  rule or regulation,  or issues mandatory controls or voluntary
controls  relating to the use or  conservation of energy,  water,  gas, light or
electricity, the reduction of automobile or other emissions, or the provision of
any other  utility or  service,  Landlord  may take any  reasonably  appropriate
action to comply with such law, ordinance,  rule, regulation,  mandatory control
or voluntary guideline and Tenant's obligations  hereunder shall not be affected
by any such action of Landlord. The parties acknowledge that safety and security
devices,  services and programs provided by Landlord,  if any, while intended to
deter crime and ensure safety, may not in given instances prevent theft or other
criminal acts, or ensure safety of persons or property. The risk that any safety
or security device, service or program may not be effective, or may malfunction,
or be circumvented by a criminal,  is assumed by Tenant with respect to Tenant's
property and interests, and Tenant shall obtain insurance coverage to the extent
Tenant  desires  protection  against such  criminal  acts and other  losses,  as
further  described in this Lease.  Tenant agrees to cooperate in any  reasonable
safety or security program developed by Landlord or required by Law.

      28.3 Compliance with Service Related Regulations. Tenant shall comply with
all rules and regulations which Landlord may reasonably establish for the proper
functioning  and  protection  of the  heating,  ventilating,  air  conditioning,
plumbing and other mechanical systems, and Tenant shall in no event use the same
in any manner vocative of any governmental law or regulation.

      28.4 Additional  Building Service  Demands.  Tenant shall not use, without
the prior written  consent of Landlord,  any apparatus or device in the Premises
(including, but not limited to, electronic data processing machines and machines
using  current in excess of 110 volts) which will in any way increase the amount
of  electricity,  water or  compressed  air (if  compressed  air is furnished by
Landlord)  normally  furnished  or supplied for use of the Premises as space for
Biomedical  Activities,  nor shall Tenant connect with electric  current (except
through  existing  electrical  outlets in the  Premises,  or water  pipes or air
pipes,  if there are any) any  apparatus  or  device  for the  purpose  of using
electric  current  or water or air.  Tenant  shall  cause a water  meter  and an
electric  current meter to be installed so as to measure the amount of water and
electric  current  consumed  for its use of the  Premises.  The cost of any such
meters and of installation,  maintenance and repair thereof shall be paid for by
Tenant, and,  notwithstanding  anything contained in this Lease to the contrary,
Tenant  agrees to pay  Landlord,  promptly  upon demand,  for all such water and
electric  current consumed as shown by said meters at the rates charged for such
services by the  jurisdiction  in which the  Building is located or by the local
public  utility  furnishing  the  same,  whichever  the  case  may be,  plus any
additional expense incurred in keeping account of the water and electric current
so consumed.

      28.5  Modification of Services.  Notwithstanding  anything herein above to
the contrary,  Landlord  reserves the right from time to time to make reasonable
and  nondiscriminatory  modifications  to the above  standards for utilities and
services.

                                       34
<PAGE>

      28.6 Special Services.  At any time during the Term of this Lease, Tenant,
at its sole  option,  may elect to  purchase  from  Landlord  any of the special
services  identified  in EXHIBIT C attached  hereto.  The rates for such special
services shall be established  by Landlord in its sole  discretion  from time to
time and are subject to change.

                                  ARTICLE XXIX

                               GENERAL PROVISIONS

      29.1 Headings. The section and subsection headings contained in this Lease
are for  convenience  only and do not in any way  limit or  amplify  any term or
provision hereof.

      29.2 Plurals and Genders. The terms "Landlord" and "Tenant" as used herein
shall include the plural as well as the  singular,  and the neuter shall include
the masculine and feminine genders.

      29.3  "Persons"  Defined.  The words  "person" or "persons" as used herein
shall include individuals, firms, associations and corporations.

      29.4 Covenants and Agreements:  Time of the Essence. All of the provisions
of this Lease are to be  construed  as covenants  and  agreements  as though the
words  importing  such  covenants  and  agreements  were  used in each  separate
provision hereof. Each of Tenant's covenants and agreements herein contained are
conditions,  the time of which is of the essence,  and the strict performance of
each shall be a condition precedent to Landlord's  obligations hereunder and the
right of Tenant to remain in  possession  of the Premises and to have this Lease
continue in effect.

      29.5  Successors  and  Assigns.  All  of  the  covenants,  conditions  and
provisions of this Lease shall be binding upon and shall inure to the benefit of
the  parties  hereto  and  their  respective  heirs,  personal  representatives,
successors  and assigns,  subject at all times,  however,  to all agreements and
restrictions contained in Article XV hereof.

      29.6  Interpretation.  The language in all parts of this Lease shall be in
all cases construed simply  according to its fair meaning,  and not strictly for
or against  Landlord or Tenant.  Any  reference  to any Article  herein shall be
deemed  to  include  all  subsections  thereof  unless  otherwise  specified  or
reasonably required from the context. Any reference to "days" or "months" herein
shall  refer to  calendar  days or  months,  respectively,  unless  specifically
provided to the contrary.  The terms "herein,"  "hereunder" and "hereof' as used
in this  Lease  shall  mean "in this  Lease,"  "under  this  Lease" and "of this
Lease," respectively, except as otherwise specifically set forth in this Lease.

      29.7 Waiver and  Default.  No waiver by Landlord of any  provision of this
Lease  shall be deemed to be a waiver  of any other  provision  hereof or of any
subsequent breach by Tenant of the same or any other provision.  No delay on the
part of Landlord in exercising  any of its rights  hereunder  shall operate as a
waiver of such  rights or of any other right of  Landlord,  nor shall any delay,
omission  or waiver on any one  occasion be deemed a bar to, or a waiver of, the
same or any other right on any other  occasion.  Neither  Landlord's  failure to
bill Tenant for any rent as it becomes due hereunder,  nor  Landlord's  error in
such  billing  or  failure  to provide  any other  documentation  in  connection
therewith,  shall  operate as a waiver of  Landlord's  right to collect

                                       35
<PAGE>

any such rent which may have at any time become due hereunder in the full amount
to which Landlord is entitled pursuant to the terms hereof,  except as otherwise
may be specifically set forth in this Lease.  Landlord's  consent to or approval
of any act by Tenant  requiring  Landlord's  consent  or  approval  shall not be
deemed. to render unnecessary the obtaining of Landlord's consent to or approval
of any  subsequent  act of Tenant whether or not similar to the act so consented
to or approved. No act or thing done by Landlord or Landlord's agents during the
Term of this Lease shall be deemed an acceptance of a surrender of the Premises,
and no agreement to accept such surrender shall be valid,  unless in writing and
signed by Landlord.  No employee of Landlord or Landlord's agents shall have any
power to accept the keys to the Premises prior to the  termination of this Lease
and the  delivery  of the keys to any  such  employee  shall  not  operate  as a
termination  of this  Lease  or a  surrender  or  Landlord's  acceptance  of the
Premises.  If Tenant at any time desires to have  Landlord  sublet or attempt to
sublet the Premises  for Tenant's  account,  Landlord or  Landlord's  agents are
authorized to receive said keys for such purposes without  releasing Tenant from
any of its obligations under this Lease.

      29.8 Entire  Agreement;  Amendments.  This Lease and the  Exhibits and any
Riders  attached  hereto  constitute  the entire  agreement  between the parties
hereto with  respect to the subject  matter  hereof,  and no prior  agreement or
understanding  pertaining to any such matter shall be effective for any purpose.
No provision of this Lease may be amended or supplemented except by an agreement
in writing signed by the party or parties to be bound thereby.  Tenant  warrants
and  represents  that there have been no  representations  or statements of fact
with respect to the Premises,  the Building,  the surrounding area or otherwise,
whether by  Landlord,  its agents or  representatives,  any lease  broker or any
other person, which representations or statements have in any way induced Tenant
to enter  this Lease or which  have  served as the basis in anyway for  Tenant's
decision to execute this Lease, except as contained in this Lease. Tenant agrees
and  acknowledges  that no lease  broker,  agent or other person has had or does
have the  authority to bind  Landlord to any  statement,  covenant,  warranty or
representation  except as contained in this Lease, and that no person purporting
to hold such authority  shall bind  Landlord,  and that it is not reasonable for
Tenant to have  assumed  that any  person  had or has such  authority.  Further,
neither  Landlord's  execution  of this Lease nor any other of its acts shall be
construed in any way to indicate Landlord's ratification, consent or approval of
any act,  statement or representation of any third person except as specifically
set forth in this Lease.

      29.9 Landlord's Consent or Approval.  Except as may otherwise be expressly
provided herein, Landlord may, in its sole and absolute discretion, withhold any
consent or approval required hereunder.

      29.10  Counterparts.   This  Lease  may  be  executed  in  any  number  of
counterparts, each of which shall be an original and all of which together shall
constitute and be construed as one and the same instrument.

      29.11  Applicable  Law and Venue.  This  Lease  shall be  governed  by and
construed in  accordance  with the laws of the State of  California.  Except for
tire matters required to be arbitrated  pursuant to specific  provisions of this
Lease,  any action to declare or enforce  any rights or  obligations  under this
Lease may be  commenced  by any party in the  Superior  Court or other  Court of
competent  jurisdiction  of the County in which the Building is located.  Tenant
and Landlord hereby consent to the  jurisdiction of such Court for such purposes
and agree that any notice,  complaint or other legal process delivered to Tenant
or Landlord in  accordance  with the  provisions  of Article  XXII of this Lease
shall  constitute  adequate  notice and service of process for all  purposes and
shall subject Tenant and Landlord to the jurisdiction 9f such Court for purposes
of adjudicating any matter related to this Lease. The provisions of this Section
shall also apply to all guarantors of this Lease.

                                       36
<PAGE>

      29.12 Incorporation of Exhibits. All Exhibits or Riders referenced in this
Lease,  if any, are  incorporated  herein by reference as though fully set forth
herein.

      29.13  Reserved  Area.  Tenant  hereby  acknowledges  and agrees  that the
exterior walls of the Building and the area between the finished ceilings of the
Premises  and the slab of the floor of the  Building  there  above have not been
demised  hereby,  and that the use thereof,  together with the right to install,
maintain,  use,  repair and replace  pipes,  ducts,  conduits and wires  leading
through,  under or above the  Premises,  is hereby  excepted and  reserved  unto
Landlord.

      29.14  Brokers.  Tenant and Landlord  each warrant and  represent  that no
person  is, or may be,  entitled  to a  commission,  finder's  fee or other like
payment in connection  herewith.  Landlord and Tenant hereby  indemnify and hold
each other  harmless  from and  against  any and all loss,  liability,  cost and
expense,  including,  without limitation,  reasonable  attorneys' fees, that the
other  party may incur as a result of the  incorrectness  of such  warranty  and
representation.

      29.15 No Option.  The submission of this Lease by Landlord or its agent or
representative  for  examination  or execution by Tenant does not  constitute an
option or offer to lease the Premises  upon the terms and  conditions  contained
herein or a reservation  of the Premises in favor of Tenant;  it being  intended
hereby that this Lease shall become  effective only upon the execution hereof by
Landlord and delivery of a fully executed counterpart hereof to Tenant.

      29.16  Authority.  In the  event  Tenant  is a  corporation,  the  parties
executing this Lease on behalf of Tenant hereby covenant,  represent and warrant
that:  (i) they are duly  authorized to execute and deliver this Lease on behalf
of Tenant;  (ii) Tenant is a duly organized  corporation in good standing,  with
full  right,  power and  authority  to enter into this Lease and to perform  its
obligations  hereunder;  (iii) all necessary  steps have been taken prior to the
date hereof to qualify Tenant to do business in  California;  (iv) all franchise
and  corporate  taxes have been paid as of the date  hereof;  and (v) all future
forms,  reports,  fees. and other documents  necessary to comply with applicable
laws will be filed when due. In the event Tenant is a  partnership,  the parties
executing  this Lease on behalf of Tenant hereby  covenant and warrant that: (i)
they are duly  authorized to execute and deliver this Lease on behalf of Tenant;
and (ii)  Tenant is a duly  organized  partnership  with full  right,  power and
authority  to enter into this Lease and to perform  its  obligations  hereunder.
Tenant shall  deliver to Landlord such evidence of the foregoing as Landlord may
request.

      29.17  Recordation  of Lease.  At the  request  of any  Superior  Interest
Holder,  or in its own  discretion,  Landlord  shall record a memorandum of this
Lease.  Tenant  shall  not  record,  or cause to be  recorded,  this  Lease or a
memorandum of this Lease without Landlord's prior written consent.

                                       37
<PAGE>

      29.18  Multiple  Parties.  If  there  is  more  than  one  person,   firm,
corporation,  partnership or other entity comprising Tenant,  then: (i) the term
"Tenant" as used herein  shall  include  all of the  undersigned;  (ii) each and
every  provision  in this  Lease  shall be  binding on each and every one of the
undersigned; (iii) each of the undersigned shall be jointly and severally liable
hereunder;  (iv)  Landlord  shall  have  the  right  to  join  one or all of the
undersigned  in any  proceeding  or to proceed  against  them in any order;  (v)
Landlord  shall  have the right to  release  any one or more of the  undersigned
without in any way prejudicing its right to proceed against the others; and (vi)
the act of or notice from,  or notice or refund to, or the signature of, any one
or more of them, with respect to the tenancy of this Lease,  including,  but not
limited to, any renewal,  extension,  expiration or  modification of this Lease,
shall be binding upon each and all of the persons executing this Lease as Tenant
with the same  force  and  effect  as if each and all of them had so acted or so
given or received such notice or refund or so signed.

      29.19 No  Violation  of  Other  Agreements.  Tenant  hereby  warrants  and
represents that neither its execution of nor performance  under this Lease shall
cause Tenant to be in violation of any  agreement,  instrument,  contract,  law,
rule or  regulation  by which  Tenant is bound,  and Tenant  agrees to indemnify
Landlord  against  any loss,  cost,  damage  or  liability,  including,  without
limitation,  reasonable  attorneys' fees, arising out of Tenant's breach of this
warranty and representation.

      29.20 Adjacent Land. If an excavation  shall be made upon land adjacent to
the  Building,  or shall be  authorized  to be made,  Tenant shall afford to the
person causing or authorized to cause such excavation  license to enter upon the
Premises at reasonable  times, for the purpose of doing such work as said person
shall deem  necessary to preserve the wall of the Building of which the Premises
form a part from injury or damage, and to support the same by proper foundations
without any claim for damages or indemnity  against  Landlord or  diminution  or
abatement of rent.

      29.21 Building Directory.

            (a) Tenant may not place any sign  inside or  outside  the  Building
without the  consent of  Landlord,  except an  entrance  door sign in a size and
style  approved by Landlord and subject to all  applicable  laws and  covenants,
conditions or restrictions affecting the Project.

            (b) Landlord shall provide a directory (which, at Landlord's option,
may be  computerized)  in the main  lobby of the  Building  listing  the name of
Tenant.

      29.22 Parking.  Landlord shall use its good faith efforts to assist Tenant
so that,  concurrently  with the  execution  of this  Lease,  Tenant  may obtain
parking rights for unreserved parking spaces at the Cedars-Sinai  Medical Office
Building (located at the corner of Alden Drive and George Burns Road) at current
prevailing  parking  rates  available to  employees  of Landlord for  unreserved
parking spaces.  Tenant  acknowledges  that Landlord does not own or operate the
Cedars-Sinai  Medical Office Building and further  acknowledges that Landlord is
not  agreeing  to supply  parking to Tenant  pursuant to this Lease and that the
issuance of parking rights is not a condition to Tenant's obligations under this
Lease.

                                       38
<PAGE>

      29.23 Subdivision;  Mutual  Cooperation.  Landlord shall have the right to
subdivide  the  Property  and/or  the  Building  at any  time  for  any  purpose
whatsoever,   including,   without  limitation:  (a)  the  purpose  of  creating
condominium  ownership of the Property and the Building;  and (b) the purpose of
constructing,  or financing the construction of, other buildings or improvements
on the  Property.  Tenant agrees to cooperate  with Landlord in completing  such
subdivision and in obtaining any governmental authorization or permits necessary
to  facilitate  the  construction  of any such  additional  improvements  on the
Property,  and to  execute  all  such  documents  and  amendments  to the  Lease
reasonably necessary to effectuate the same. Tenant agrees that upon subdivision
of the Property and/or the Building,  Landlord may sell,  transfer or convey one
or more  portions of the Building  and/or the  Property,  and that title to such
portions may be held in other than the name of Landlord.

      29.24 Name of Building.  Neither Tenant nor any shareholders of Tenant nor
any of their  employees may use the name  "Cedars-Sinai  Medical Center" for any
purpose,  including,  without  limitation,  any advertising or the naming of any
medical group or professional corporation.

      29.25  Rental  Abatement.  Any and all  references  herein to abatement of
Basic  Annual  Rent shall  apply to only those  amounts  which  would  otherwise
thereafter  accrue.  If any dispute  relating to such abatement  occurs,  Tenant
shall pay the rent  demanded by Landlord  pending the final  resolution  of such
dispute.

      29.26 Guarantees.  If any guarantee of this Lease is required by Landlord,
such  guarantee  shall be in a form  provided by Landlord to Tenant and Landlord
may  terminate  this Lease at any time until it receives  such  guarantee  fully
executed by the required guarantors.

      29.27  Severability.  Any  provision of this Lease which shall prove to be
invalid,  void or illegal shall in no way affect, impair or invalidate any other
provision  hereof,  and such  other  provisions  shall  remain in full force and
effect.

      29.28 Waiver of Rights of Redemption.  Tenant hereby  expressly waives any
and all rights of  redemption  granted by or under any present or future laws in
the event that Tenant is evicted or  dispossessed  for any cause or in the event
that Landlord  obtains  possession of the Premises by reason of the violation by
Tenant of any of the  covenants and  conditions of this Lease or otherwise.  The
rights given to Landlord  herein are in addition to any rights that may be given
to Landlord by any statute or otherwise.

      29.29 Light and Air. Any diminution or shutting off of light,  air or view
by any  structure  that may be erected on lands  adjacent to the Building or any
other  portion of the  Project  shall in no manner  affect  this Lease or impose
liability upon Landlord.

      29.30 No Joint  Venture.  The Parties  hereto  acknowledge  and agree that
nothing  contained  in this  Lease  shall be  deemed  or  construed  to create a
partnership or joint venture between Landlord and Tenant or between Landlord and
any other party or causing  Landlord to be  responsible in any way for the debts
or obligations of Tenant or any other party.

                                       39
<PAGE>

                                   ARTICLE XXX

                               HAZARDOUS MATERIALS

      30.1 Compliance  Costs.  Tenant  acknowledges  that Landlord may incur, as
Operating  Expenses,  costs for  complying  with  laws,  codes,  regulations  or
ordinances  relating to Hazardous  Materials  (as defined in Section 30.2) on or
about the Project,  including,  without limitation, the following: (i) Hazardous
Materials  present in the soil or ground water on the Project;  (ii) a change in
laws, codes,  regulations or ordinances which relate to Hazardous  Materials and
which makes any  substance  or material  which is present on, in, under or about
the Project as of the date  hereof,  a violation of such  changed  laws,  codes,
regulations  or  ordinances;  (iii)  Hazardous  Materials  that  migrate,  flow,
percolate,  diffuse or in any way move onto or under the Project; (iv) Hazardous
Materials present on or under the Project as a result of any discharge,  dumping
or spilling (whether accidental or otherwise) on the Project by other tenants of
the Project or their agents,  employees,  contractors or invitees, or by others.
Each  item  of cost  incurred  by  Landlord  for  complying  with  laws,  codes,
regulations  or ordinances  relating to Hazardous  Materials with respect to the
Project  (or any portion  thereof)  and which  exceeds  Fifty  Thousand  Dollars
($50,000)  shall  be  amortized  over a five (5)  year  period  from the date of
installation as "Capital Improvement  Amortization" as provided in Section 4.3.2
herein  and  treated  as a  "Capital  Improvement".  To the extent any such cost
relating to Hazardous Materials is subsequently  recovered or reimbursed through
insurance,  or recovery from responsible third parties, or other action,  Tenant
shall be entitled to  proportionate  reimbursement to the extent it has paid its
share of such cost to which such recovery or reimbursement  relates  (regardless
of  whether  such  costs  were  paid  as  Operating  Expenses  or  as a  Capital
Improvement).  Nothing  contained  herein shall be construed to modify  Tenant's
obligation to make full payment for Hazardous  Materials or compliance with laws
pertaining   to  Hazardous   Materials  if  the  cost  of  compliance  or  other
responsibility for such Hazardous Materials is made the responsibility of Tenant
pursuant to any other provision of this Lease or applicable law.

      30.2 Definition.  As used herein, the term "Hazardous Materials" means any
hazardous or toxic substance, material or waste which is or becomes regulated by
any local governmental  authority,  the State of California or the United States
government.  The term "Hazardous  Materials" includes,  without limitation,  any
material or substance which is: (i) defined as a "hazardous  waste,"  "extremely
hazardous waste," or "restricted  hazardous waste" under Section 25115, or 25117
or 25122.7,  or listed  pursuant to Section 25140 of the  California  Health and
Safety Code,  Division 20,  Chapter 6.5  (Hazardous  Waste Control Law); or (ii)
defined as a "hazardous substance," under Section 25316 of the California Health
and Safety Code,  Division 20, Chapter 6.8  (Carpenter-Presley-Tanner  Hazardous
Substance  Account  Act);  (iii) defined as a "hazardous  material,"  "hazardous
substance," or "hazardous  waste" under Section 25501 of the  California  Health
and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response
Plans and  Inventory);  (iv) defined as a "hazardous  substance"  under  Section
25281 of the  California  Health and  Safety  Code,  Division  20,  Chapter  6.7
(Underground  Storage of Hazardous  Substances);  (v) petroleum;  (vi) asbestos;
(vii)  listed under  Article 9 or defined as  hazardous  or extremely  hazardous
pursuant  to  Article  11 of Title  22 of the  California  Administrative  Code,
Division 4, Chapter 30; (viii) designated as a "hazardous substance" pursuant to
Section 311 of the Federal Water  Pollution  Control Act, 33 U.S.C.  1317;  (ix)
defined as a "hazardous  waste" pursuant to Section 1004 of the Federal Resource
Conservation and Recovery Act, 42 U.S.C.  6901 et seq. (42 U.S.C.  6903); or (x)
defined as "hazardous  substance"  pursuant to Section 101 of the  Comprehensive
Environmental  Response  Compensation and Liability Act, 42 U.S.C.  9601 et seq.
(42 U.S.C. 9601).

                                       40
<PAGE>

      IN WITNESS  WHEREOF,  Landlord and Tenant have duly executed this Lease as
of the day and year first written above.

LANDLORD                                        TENANT

CEDARS-SINAI MEDICAL CENTER                     ARBIOS TECHNOLOGIES, INC.

By:  /s/ Daniel M.  Oshiro                      By:  /s/ Kristin P.  Demetriou
     ---------------------------                     ---------------------------
Its:  Vice President                            Its:  Secretary
      for Research Administration

                                       41EXHIBIT 10.3

                   STANDARD MULTI-TENANT OFFICE LEASE - GROSS

                   AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

1.    BASIC PROVISIONS ("BASIC PROVISIONS").

      1.1 PARTIES: This Lease ("LEASE"), dated for reference purposes only
February 13, 2004 , is made by and between Beverly Robertson Design Plaza, a
California General Partnership__________________________________________________
________________________________________________________________________________
______________________________________________________________________("LESSOR")
and Arbios System, Inc., a California Corporation_______________________________
________________________________________________________________________________
_____________________________________________________________________("LESSEE"),
(collectively the `PARTIES", or individually a "PARTY").

      1.2(a) PREMISES: That certain portion of the Project (as defined below),
known as Suite Numbers(s)__#206___floor(s), consisting of a approximately
__(1,750)__rentable square feet and approximately_________useable square feet
("PREMISES"). The Premises are located at:__8797 Beverly Blvd.,__ in the City of
__Los Angeles,__ County of __Los Angeles,__State of__California__ with zip code
90048. In addition to Lessee's rights to use and occupy the Premises as
hereinafter specified, Lessee shall have non-exclusive rights to the Common
Areas (as defined in Paragraph 2.7 below) as hereinafter specified, but shall
not have any rights to the roof, the exterior walls, the area above the dropped
ceilings, or the utility raceways of the building containing the Premises
("BUILDING") or to any other buildings in the Project. The Premises, the
Building, the Common Areas, the land upon which they are located, along with all
other buildings and improvements thereon, are herein collectively referred to as
the "PROJECT." The Project consists of approximately __24,000__ rentable square
feet. (See also Paragraph 2)

      1.2(b) PARKING:__4__ unreserved and __0__ reserved vehicle parking spaces
at a monthly cost of __$83.00__ per unreserved space and $__________per reserved
space. (See Paragraph 2.6) Tenant shall be entitled to one (1) Parking Space at
no charge.

      1.3 TERM:__2__ years and __0__months ("ORIGINAL TERM") commencing April 1,
2004 ("COMMENCEMENT DATE") and ending __March 31, 2006__ ("EXPIRATION DATE").
(See also Paragraph 3)

      1.4 EARLY POSSESSION: __N/A__ ("EARLY POSSESSION DATE"). (See also
Paragraphs 3.2 and 3.3)

      1.5 BASE RENT: __$4,987.00__per month ("BASE RENT)", payable on the__1st__
day of each month commencing April 2004 . (See also Paragraph 4) |X| If this box
is checked, there are provisions in this Lease for the Base Rent to be adjusted.

      1.6 LESSEE'S SHARE OF OPERATING EXPENSE INCREASE: __7.3__ percent (7.3%)
("LESSEE'S SHARE"). Lessee's Share has been calculated by dividing the
approximate rentable square footage of the Premises by the total approximate
square footage of the rentable space contained in the Project and shall not be
subject to revision except in connection with an actual change in the size of
the Premises or a change in the space available for lease in the Project.

      1.7 BASE RENT AND OTHER MONIES PAID UPON EXECUTION:

      (a)   BASE RENT: __$4,987.00__ for the period__ April 2004.__

      (b)   SECURITY DEPOSIT: __$4,987.00__ ("SECURITY DEPOSIT"). (See also
            Paragraph 5)

      (c)   PARKING: $__________for the period _________.

      (d)   OTHER: $____________for___________

      (e)   TOTAL DUE UPON EXECUTION OF THIS LEASE: __$9,974.00.__

      1.8 AGREED USE: Office:__Use______________________________________________
________________________________________________________________________________
_________________________________________________________(See also Paragraph 6).

      1.9 BASE YEAR; INSURING PARTY. The Base Year is __2004.__ Lessor is the
"INSURING PARTY". (See also Paragraphs 4.2 and 8)

      1.10 REAL ESTATE BROKERS: (See also Paragraph 15)

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

|_|  __None__ represents Lessor exclusively ("LESSOR'S BROKER");
|_|  __None__ represents Lessee exclusively ("LESSEE'S Broker"); or

|_|  ________ represents both Lessor and Lessee ("DUAL AGENCY").

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

      1.11 GUARANTOR. The obligations of the Lessee under this Lease shall be
guaranteed by __N/A__ ("GUARANTOR"). (See also Paragraph 37)

      1.12 BUSINESS HOURS FOR THE BUILDING:: __8:00__a.m. to __6:00__p.m.,
Mondays through Fridays (except Building Holidays) and __9:00__a.m. to __1:00__
p.m. on Saturdays (except Building Holidays). "BUILDING HOLIDAYS" shall mean the
dates of observation of New Year's Day, President's Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, Christmas Day, and ___________.

__________                                                            __________
__________                                                            __________
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      1.13 LESSOR SUPPLIED SERVICES. Notwithstanding the provisions of Paragraph
11.1, Lessor is NOT obligated to provide the following:

|_| Janitorial services
|_| Electricity
|_| Other (specify):____________________________________________________________

      1.14 ATTACHMENTS. Attached hereto are the following, all of which
constitute a part of this Lease:

|_| an Addendum consisting of Paragraphs _______________through_________________
|_| a plot plan depicting the Premises;
|_| a current set of the Rules and Regulations;
|_| a Work Letter;
|_| a janitorial schedule;
|_| other (specify):____________________________________________________________
________________________________________________________________________________

2. PREMISES.

      2.1 LETTING. Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor, the Premises, for the term, at the rental, and upon all of the terms,
covenants and conditions set forth in this Lease. Unless otherwise provided
herein, any statement of size set forth in this Lease, or that may have been
used in calculating Rent, is an approximation which the Parties agree is
reasonable and any payments based thereon are not subject to revision whether or
not the actual size is more or less. NOTE: LESSEE IS ADVISED TO VERIFY THE
ACTUAL SIZE PRIOR TO EXECUTING THIS LEASE.

      2.2 CONDITION. Lessor shall deliver the Premises to Lessee in a clean
condition on the Commencement Date or the Early Possession Date, whichever first
occurs ("START DATE"), and warrants that the existing electrical, plumbing, fire
sprinkler, lighting, heating, ventilating and air conditioning systems ("HVAC"),
and all other items which the Lessor is obligated to construct pursuant to the
Work Letter attached hereto, if any, other than those constructed by Lessee,
shall be in good operating condition on said date.

      2.3 COMPLIANCE. Lessor warrants that the improvements comprising the
Premises and the Common Areas comply with the building codes that were in effect
at the time that each such improvement, or portion thereof, was constructed, and
also with all applicable laws, covenants or restrictions of record, regulations,
and ordinances ("APPLICABLE Requirements") in effect on the Start Date. Said
warranty does not apply to the use to which Lessee will put the Premises,
modifications which may be required by the Americans with Disabilities Act or
any similar laws as a result of Lessee's use (see Paragraph 50), or to any
Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made or to
be made by Lessee. NOTE: LESSEE IS RESPONSIBLE FOR DETERMINING WHETHER OR NOT
THE ZONING AND OTHER APPLICABLE REQUIREMENTS ARE APPROPRIATE FOR LESSEE'S
INTENDED USE, AND ACKNOWLEDGES THAT PAST USES OF THE PREMISES MAY NO LONGER BE
ALLOWED. If the Premises do not comply with said warranty, Lessor shall, except
as otherwise provided, promptly after receipt of written notice from Lessee
setting forth with specificity the nature and extent of such non-compliance,
rectify the same. If the Applicable Requirements are hereafter changed so as to
require during the term of this Lease the construction of an addition to or an
alteration of the Premises, the remediation of any Hazardous Substance, or the
reinforcement or other physical modification of the Premises ("CAPITAL
EXPENDITURE"), Lessor and Lessee shall allocate the cost of such work as
follows:

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

            (b)If such Capital Expenditure is not the result of the specific and
unique use of the Premises by Lessee (such as, governmentally mandated seismic
modifications), then Lessor and Lessee shall allocate the cost of such Capital
Expenditure as follows: Lessor shall advance the funds necessary for such
Capital Expenditure but Lessee shall be obligated to pay, each month during the
remainder of the term of this Lease, on the date on which Base Rent is due, an
amount equal to the product of multiplying Lessee's share of the cost of such
Capital Expenditure (the percentage specified in Paragraph 1.6 by a fraction,
the numerator of which is one, and the denominator of which is 144 (ie. 1/144th
of the cost per month). Lessee shall pay interest on the unamortized balance of
Lessee's share at a rate that is commercially reasonable in the judgment of
Lessor's accountants. Lessee may, however, prepay its obligation at any time.
Provided, however, that if such Capital Expenditure is required during the last
2 years of this Lease or if Lessor reasonably determines that it is not
economically feasible to pay its share thereof, Lessor shall have the option to
terminate this Lease upon 90 days prior written notice to Lessee unless Lessee
notifies Lessor, in writing, within 10 days after receipt of Lessor's
termination notice that Lessee will pay for such Capital Expenditure. If Lessor
does not elect to terminate, and fails to tender its share of any such Capital
Expenditure, Lessee may advance such funds and deduct same, with Interest, from
Rent until Lessor's share of such costs have been fully paid. If Lessee is
unable to finance Lessor's share, or if the balance of the Rent due and payable
for the remainder of this Lease is not sufficient to fully reimburse Lessee on
an offset basis, Lessee shall have the right to terminate this Lease upon 30
days written notice to Lessor.

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

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

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

      2.6 VEHICLE PARKING. So long as Lessee is not in default, and subject to
the Rules and Regulations attached hereto, and as established by Lessor from
time to time, Lessee shall be entitled to rent and use the number of parking
spaces specified in Paragraph 1.2(b) at the rental rate applicable from time to
time for monthly parking as set by Lessor and/or its licensee.

            (a)If Lessee commits, permits or allows any of the prohibited
activities described in the Lease or the rules then in effect, then Lessor shall
have the right, without notice, in addition to such other rights and remedies
that it may have, to remove or tow away the vehicle involved and charge the cost
to Lessee, which cost shall be immediately payable upon demand by Lessor.

__________                                                            __________
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            (b)The monthly rent per parking space specified in Paragraph 1.2(b)
is subject to change upon 30 days prior written notice to Lessee. The rent for
the parking is payable one month in advance prior to the first day of each
calendar month.

      2.7 COMMON AREAS - DEFINITION. The term "COMMON AREAS" is defined as all
areas and facilities outside the Premises and within the exterior boundary line
of the Project and interior utility raceways and installations within the
Premises that are provided and designated by the Lessor from time to time for
the general nonexclusive use of Lessor, Lessee and other tenants of the Project
and their respective employees, suppliers, shippers, customers, contractors and
invitees, including, but not limited to, common entrances, lobbies, corridors,
stairwells, public restrooms, elevators, parking areas, loading and unloading
areas, trash areas, roadways, walkways, driveways and landscaped areas.

      2.8 COMMON AREAS - LESSEE'S RIGHTS. Lessor grants to Lessee, for the
benefit of Lessee and its employees, suppliers, shippers, contractors, customers
and invitees, during the term of this Lease, the nonexclusive right to use, in
common with others entitled to such use, the Common Areas as they exist from
time to time, subject to any rights, powers, and privileges reserved by Lessor
under the terms hereof or under the terms of any rules and regulations or
restrictions governing the use of the Project. Under no circumstances shall the
right herein granted to use the Common Areas be deemed to include the right to
store any property, temporarily or permanently, in the Common Areas. Any such
storage shall be permitted only by the prior written consent of Lessor or
Lessor's designated agent, which consent may be revoked at any time. In the
event that any unauthorized storage shall occur then Lessor shall have the
right, without notice, in addition to such other rights and remedies that it may
have, to remove the property and charge the cost to Lessee, which cost shall be
immediately payable upon demand by Lessor.

      2.9 COMMON AREAS - RULES AND REGULATIONS. Lessor or such other person(s)
as Lessor may appoint shall have the exclusive control and management of the
Common Areas and shall have the right, from time to time, to adopt, modify,
amend and enforce reasonable rules and regulations ("RULES AND REGULATIONS") for
the management, safety, care, and cleanliness of the grounds, the parking and
unloading of vehicles and the preservation of good order, as well as for the
convenience of other occupants or tenants of the Building and the Project and
their invitees. The Lessee agrees to abide by and conform to all such Rules and
Regulations, and to cause its employees, suppliers, shippers, customers,
contractors and invitees to so abide and conform. Lessor shall not be
responsible to Lessee for the noncompliance with said Rules and Regulations by
other tenants of the Project.

      2.10 COMMON AREAS - CHANGES. Lessor shall have the right, in Lessor's sole
discretion, from time to time:

            (a) To make changes to the Common Areas, including, without
limitation, changes in the location, size, shape and number of the lobbies,
windows, stairways, air shafts, elevators, escalators, restrooms, driveways,
entrances, parking spaces, parking areas, loading and unloading areas, ingress,
egress, direction of traffic, landscaped areas, walkways and utility raceways;

            (b) To close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available; (c) To
designate other land outside the boundaries of the Project to be a part of the
Common Areas; (d) To add additional buildings and improvements to the Common
Areas; (e) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Project, or any portion thereof; and
(f) To do and perform such other acts and make such other changes in, to or with
respect to the Common Areas and Project as Lessor may, in the exercise of sound
business judgment, deem to be appropriate.

3. TERM.

      3.1 TERM. The Commencement Date, Expiration Date and Original Term of this
Lease are as specified in Paragraph 1.3.

      3.2 EARLY POSSESSION. If Lessee totally or partially occupies the Premises
prior to the Commencement Date, the obligation to pay Base Rent shall be abated
for the period of such early possession. All other terms of this Lease
(including but not limited to the obligations to pay Lessee's Share of the
Operating Expense Increase) shall, however, be in effect during such period. Any
such early possession shall not affect the Expiration Date.

      3.3 DELAY IN POSSESSION. Lessor agrees to use its best commercially
reasonable efforts to deliver possession of the Premises to Lessee by the
Commencement Date, If, despite said efforts, Lessor is unable to deliver
possession by such date, Lessor shall not be subject to any liability therefor,
nor shall such failure affect the validity of this Lease. Lessee shall not,
however, be obligated to pay Rent or perform its other obligations until Lessor
delivers possession of the Premises and any period of rent abatement that Lessee
would otherwise have enjoyed shall run from the date of delivery of possession
and continue for a period equal to what Lessee would otherwise have enjoyed
under the terms hereof, but minus any days of delay caused by the acts or
omissions of Lessee. If possession is not delivered within 60 days after the
Commencement Date, as the same may be extended under the terms of any Work
Letter executed by Parties, Lessee may, at its option, by notice in writing
within 10 days after the end of such 60 day period, cancel this Lease, in which
event the Parties shall be discharged from all obligations hereunder, If such
written notice is not received by Lessor within said 10 day period, Lessee's
right to cancel shall terminate, If possession of the Premises is not delivered
within 120 days after the Commencement Date, this Lease shall terminate unless
other agreements are reached between Lessor and Lessee, in writing.

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

4. RENT.

      4.1. RENT DEFINED. All monetary obligations of Lessee to Lessor under the
terms of this Lease (except for the Security Deposit) are deemed to be rent
("Rent"). 4.2 OPERATING EXPENSE INCREASE. Lessee shall pay to Lessor during the
term hereof, in addition to the Base Rent, Lessee's Share of the amount by which
all Operating Expenses for each Comparison Year exceeds the amount of all
Operating Expenses for the Base Year, such excess being hereinafter referred to
as the "OPERATING EXPENSE INCREASE", in accordance with the following
provisions:

            (a) "BASE YEAR" is as specified in Paragraph 1.9.

            (b) "COMPARISON YEAR" is defined as each calendar year during the
term of this Lease subsequent to the Base Year; provided, however, Lessee shall
have no obligation to pay a share of the Operating Expense Increase applicable
to the first 12 months of the Lease Term (other than such as are mandated by a
governmental authority, as to which government mandated expenses Lessee shall
pay Lessee's Share, notwithstanding they occur during the first twelve (12)
months). Lessee's Share of the Operating Expense Increase for the first and last
Comparison Years of the Lease Term shall be prorated according to that portion
of such Comparison Year as to which Lessee is responsible for a share of such
increase.

            (c) "OPERATING EXPENSES" include all costs incurred by Lessor
relating to the ownership and operation of the Project, calculated as if the
Project was at least 95% occupied, including, but not limited to, the following:

                  (i) The operation, repair, and maintenance in neat, clean,
safe, good order and condition, but not the replacement (see subparagraph (g)),
of the following:

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             (aa) The Common Areas, including their surfaces, coverings,
decorative items, carpets, drapes and window coverings, and including parking
areas, loading and unloading areas, trash areas, roadways, sidewalks,  walkways,
stairways, parkways, driveways,  landscaped areas, striping, bumpers, irrigation
systems,  Common Area lighting facilities,  building exteriors and roofs, fences
and gates;

             (bb) All heating, air conditioning, plumbing, electrical systems,
life safety equipment, communication systems and other equipment used in common
by, or for the benefit of, lessees or occupants of the Project, including
elevators and escalators, tenant directories, fire detection systems including
sprinkler system maintenance and repair.

                  (ii) Trash disposal, janitorial and security services, pest
control services, and the costs of any environmental inspections; (iii) Any
other service to be provided by Lessor that is elsewhere in this Lease stated to
be an "Operating Expense"; (iv) The cost of the premiums for the insurance
policies maintained by Lessor pursuant to paragraph 8 and any deductible portion
of an insured loss concerning the Building or the Common Areas;

                  (v) The amount of the Real Property Taxes payable by Lessor
pursuant to paragraph 10;

                  (vi) The cost of water, sewer, gas, electricity, and other
publicly mandated services not separately metered;

                  (vii) Labor, salaries, and applicable fringe benefits and
costs, materials, supplies and tools, used in maintaining and/or cleaning the
Project and accounting and management fees attributable to the operation of the
Project;

                  (viii) The cost of any Capital Expenditure to the Building or
the Project not covered under the provisions of Paragraph 2.3 provided; however,
that essor shall allocate the cost of any such Capital Expenditure over a 12
year period and Lessee shall not be required to pay more than Lessee's Share of
1/144th of the cost of such Capital Expenditure in any given month;

                  (ix) Replacement of equipment or improvements that have a
useful life for accounting purposes of 5 years or less.

             (d) Any item of Operating Expense that is specifically attributable
to the Premises, the Building or to any other building in the Project or to the
operation, repair and maintenance thereof, shall be allocated entirely to such
Premises, Building, or other building. However, any such item that is not
specifically attributable to the Building or to any other building or to the
operation, repair and maintenance thereof, shall be equitably allocated by
Lessor to all buildings in the Project.

            (e) The inclusion of the improvements, facilities and services set
forth in Subparagraph 4.2(c) shall not be deemed to impose an obligation upon
Lessor to either have said improvements or facilities or to provide those
services unless the Project already has the same, Lessor already provides the
services, or Lessor has agreed elsewhere in this Lease to provide the same or
some of them.

            (f) Lessee's Share of Operating Expense Increase shall be payable by
Lessee within 10 days after a reasonably detailed statement of actual expenses
is presented to Lessee by Lessor. At Lessor's option, however, an amount may be
estimated by Lessor from time to time in advance of Lessee's Share of the
Operating Expense Increase for any Comparison Year, and the same shall be
payable monthly during each Comparison Year of the Lease term, on the same day
as the Base Rent is due hereunder. In the event that Lessee pays Lessor's
estimate of Lessee's Share of Operating Expense Increase as aforesaid, Lessor
shall deliver to Lessee within 60 days after the expiration of each Comparison
Year a reasonably detailed statement showing Lessee's Share of the actual
Operating Expense Increase incurred during such year. If Lessee's payments under
this paragraph (f) during said Comparison Year exceed Lessee's Share as
indicated on said statement, Lessee shall be entitled to credit the amount of
such overpayment against Lessee's Share of Operating Expense Increase next
falling due. If Lessee's payments under this paragraph during said Comparison
Year were less than Lessee's Share as indicated on said statement, Lessee shall
pay to Lessor the amount of the deficiency within 10 days after delivery by
Lessor to Lessee of said statement. Lessor and Lessee shall forthwith adjust
between them by cash payment any balance determined to exist with respect to
that portion of the last Comparison Year for which Lessee is responsible as to
Operating Expense Increases, notwithstanding that the Lease term may have
terminated before the end of such Comparison Year.

            (g) Operating Expenses shall not include the costs of replacement
for equipment or capital components such as the roof, foundations, exterior
walls or a Common Area capital improvement, such as the parking lot paving,
elevators, fences that have a useful life for accounting purposes of 5 years or
more unless it is of the type described in paragraph 4.2(c) (viii), in which
case their cost shall be included as above provided.

            (h) Operating Expenses shall not include any expenses paid by any
tenant directly to third parties, or as to which Lessor is otherwise reimbursed
by any third party, other tenant, or by insurance proceeds.

      4.3 PAYMENT. Lessee shall cause payment of Rent to be received by Lessor
in lawful money of the United States on or before the day on which it is due,
without offset or deduction (except as specifically permitted in this Lease).
Rent for any period during the term hereof which is for less than one full
calendar month shall be prorated based upon the actual number of days of said
month. Payment of Rent shall be made to Lessor at its address stated herein or
to such other persons or place as Lessor may from time to time designate in
writing. Acceptance of a payment which is less than the amount then due shall
not be a waiver of Lessor's rights to the balance of such Rent, regardless of
Lessor's endorsement of any check so stating. In the event that any check,
draft, or other instrument of payment given by Lessee to Lessor is dishonored
for any reason, Lessee agrees to pay to Lessor the sum of $25 in addition to any
Late Charge. Payments will be applied first to accrued late charges and
attorney's fees, second to accrued interest, then to Base Rent and Operating
Expense Increase, and any remaining amount to any other outstanding charges or
costs.

5. SECURITY DEPOSIT.  Lessee shall deposit with Lessor upon execution hereof the
Security  Deposit  as  security  for  Lessee's   faithful   performance  of  its
obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults
under this  Lease,  Lessor may use,  apply or retain all or any  portion of said
Security  Deposit  for the payment of any amount due Lessor or to  reimburse  or
compensate  Lessor for any liability,  expense,  loss or damage which Lessor may
suffer or incur by reason thereof,  If Lessor uses or applies all or any portion
of the  Security  Deposit,  Lessee shall  within 10 days after  written  request
therefor, deposit monies with Lessor sufficient to restore said Security Deposit
to the full amount required by this Lease. If the Base Rent increases during the
term of this Lease,  Lessee  shall,  upon written  request from Lessor,  deposit
additional  moneys with Lessor so that the total amount of the Security  Deposit
shall at all times bear the same  proportion to the  increased  Base Rent as the
initial Security Deposit bore to the initial Base Rent. Should the Agreed Use be
amended  to  accommodate  a  material  change  in the  business  of Lessee or to
accommodate a sublessee or assignee, Lessor shall have the right to increase the
Security Deposit to the extent necessary,  in Lessor's reasonable  judgment,  to
account for any increased wear and tear that the Premises may suffer as a result
thereof. If a change in control of Lessee occurs during this Lease and following
such  change  the  financial  condition  of Lessee  is, in  Lessor's  reasonable
judgment,  significantly  reduced,  Lessee shall deposit such additional  monies
with  Lessor as shall be  sufficient  to cause the  Security  Deposit to be at a
commercially  reasonable  level  based on such  change in  financial  condition.
Lessor  shall not be required to keep the  Security  Deposit  separate  from its
general  accounts,  Within 14 days after the  expiration or  termination of this
Lease,  if Lessor elects to apply the Security  Deposit only to unpaid Rent, and
otherwise  within 30 days  after the  Premises  have been  vacated  pursuant  to
Paragraph 7.4(c) below, Lessor shall return that portion of the Security Deposit
not  used or  applied  by  Lessor,  No part of the  Security  Deposit  shall  be
considered to be held in trust,  to bear  interest or to be  prepayment  for any
monies to be paid by Lessee under this Lease.

6. USE.

      6.1 USE. Lessee shall use and occupy the Premises only for the Agreed Use,
or any other legal use which is reasonably comparable thereto, and for no other
purpose. Lessee shall not use or permit the use of the Premises in a manner that
is unlawful, creates damage, waste or a nuisance, or that disturbs occupants of
or causes damage to neighboring premises or properties. Lessor shall not
unreasonably withhold or delay its consent to any written request for a
modification of the Agreed Use, so long as the same will not impair the
structural integrity of the improvements of the Building, will not adversely
affect the mechanical, electrical, HVAC, and other systems of the Building,
and/or will not affect the exterior appearance of the Building. If Lessor elects
to withhold consent, Lessor shall within 7 days after such request give written
notification of same, which notice shall include an explanation of Lessor's
objections to the change in the Agreed Use.

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      6.2 HAZARDOUS SUBSTANCES.

            (a)REPORTABLE USES REQUIRE CONSENT. The term "HAZARDOUS SUBSTANCE"
as used in this Lease shall mean any product, substance, or waste whose
presence, use, manufacture, disposal, transportation, or release, either by
itself or in combination with other materials expected to be on the Premises, is
either: (i) potentially injurious to the public health, safety or welfare, the
environment or the Premises, (ii) regulated or monitored by any governmental
authority, or (iii) a basis for potential liability of Lessor to any
governmental agency or third party under any applicable statute or common law
theory. Hazardous Substances shall include, but not be limited to, hydrocarbons,
petroleum, gasoline, and/or crude oil or any products, byproducts or fractions
thereof. Lessee shall not engage in any activity in or on the Premises which
constitutes a Reportable Use of Hazardous Substances without the express prior
written consent of Lessor and timely compliance (at Lessee's expense) with all
Applicable Requirements. "REPORTABLE USE" shall mean (I) the installation or use
of any above or below ground storage tank, (ii) the generation, possession,
storage, use, transportation, or disposal of a Hazardous Substance that requires
a permit from, or with respect to which a report, notice, registration or
business plan is required to be filed with, any governmental authority, and/or
(iii) the presence at the Premises of a Hazardous Substance with respect to
which any Applicable Requirements requires that a notice be given to persons
entering or occupying the Premises or neighboring properties. Notwithstanding
the foregoing, Lessee may use any ordinary and customary materials reasonably
required to be used in the normal course of the Agreed Use such as ordinary
office supplies (copier toner, liquid paper, glue, etc.) and common household
cleaning materials, so long as such use is in compliance with all Applicable
Requirements, is not a Reportable Use, and does not expose the Premises or
neighboring property to any meaningful risk of contamination or damage or expose
Lessor to any liability therefor. In addition, Lessor may condition its consent
to any Reportable Use upon receiving such additional assurances as Lessor
reasonably deems necessary to protect itself, the public, the Premises and/or
the environment against damage, contamination, injury and/or liability,
including, but not limited to, the installation (and removal on or before Lease
expiration or termination) of protective modifications (such as concrete
encasements) and/or increasing the Security Deposit.

            (b)DUTY TO INFORM LESSOR. If Lessee knows, or has reasonable cause
to believe, that a Hazardous Substance has come to be located in, on, under or
about the Premises, other than as previously consented to by Lessor, Lessee
shall immediately give written notice of such fact to Lessor, and provide Lessor
with a copy of any report, notice, claim or other documentation which it has
concerning the presence of such Hazardous Substance.

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

            (d)LESSEE INDEMNIFICATION. Lessee shall indemnify, defend and hold
Lessor, its agents, employees, lenders and ground lessor, if any, harmless from
and against any and all loss of rents and/or damages, liabilities, judgments,
claims, expenses, penalties, and attorneys' and consultants' fees arising out of
or involving any Hazardous Substance brought onto the Premises by or for Lessee,
or any third party (provided, however, that Lessee shall have no liability under
this Lease with respect to underground migration of any Hazardous Substance
under the Premises from areas outside of the Project not caused or contributed
to by Lessee). Lessee's obligations shall include, but not be limited to, the
effects of any contamination or injury to person, property or the environment
created or suffered by Lessee, and the cost of investigation, removal,
remediation, restoration and/or abatement, and shall survive the expiration or
termination of this Lease. No termination, cancellation or release agreement
entered into by Lessor and Lessee shall release Lessee from its obligations
under this Lease with respect to Hazardous Substances, unless specifically so
agreed by Lessor in writing at the time of such agreement.

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

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

            (g)LESSOR TERMINATION OPTION. If a Hazardous Substance Condition
(see Paragraph 9.1(e)) occurs during the term of this Lease, unless Lessee is
legally responsible therefor (in which case Lessee shall make the investigation
and remediation thereof required by the Applicable Requirements and this Lease
shall continue in full force and effect, but subject to Lessor's rights under
Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessor's option, either (i)
investigate and remediate such Hazardous Substance Condition, if required, as
soon as reasonably possible at Lessor's expense, in which event this Lease shall
continue in full force and effect, or (ii) if the estimated cost to remediate
such condition exceeds 12 times the then monthly Base Rent or $100,000,
whichever is greater, give written notice to Lessee, within 30 days after
receipt by Lessor of knowledge of the occurrence of such Hazardous Substance
Condition, of Lessor's desire to terminate this Lease as of the date 60 days
following the date of such notice. In the event Lessor elects to give a
termination notice, Lessee may, within 10 days thereafter, give written notice
to Lessor of Lessee's commitment to pay the amount by which the cost of the
remediation of such Hazardous Substance Condition exceeds an amount equal to 12
times the then monthly Base Rent or $100,000, whichever is greater. Lessee shall
provide Lessor with said funds or satisfactory assurance thereof within 30 days
following such commitment. In such event, this Lease shall continue in full
force and effect, and Lessor shall proceed to make such remediation as soon as
reasonably possible after the required funds are available, If Lessee does not
give such notice and provide the required funds or assurance thereof within the
time provided, this Lease shall terminate as of the date specified in Lessor's
notice of termination.

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

      6.4 INSPECTION; COMPLIANCE. Lessor and Lessor's "LENDER" (as defined in
Paragraph 30) and consultants shall have the right to enter into Premises at any
time, in the case of an emergency, and otherwise at reasonable times, for the
purpose of inspecting the condition of the Premises and for verifying compliance
by Lessee with this Lease. The cost of any such inspections shall be paid by
Lessor, unless a violation of Applicable Requirements, or a Hazardous Substance
Condition (see paragraph 9.1e) is found to exist or be imminent, or the
inspection is requested or ordered by a governmental authority. In such case,
Lessee shall upon request reimburse Lessor for the cost of such inspection, so
long as such inspection is reasonably related to the violation or contamination.

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

      7.1 LESSEE'S OBLIGATIONS. Notwithstanding Lessor's obligation to keep the
Premises in good condition and repair, Lessee shall be responsible for payment
of the cost thereof to Lessor as additional rent for that portion of the cost of
any maintenance and repair of the Premises, or any equipment (wherever located)
that serves only Lessee or the Premises, to the extent such cost is attributable
to causes beyond normal wear and tear. Lessee shall be responsible for the cost
of painting, repairing or replacing wall coverings, and to repair or replace any
improvements with the Premises. Lessor may, at its option, upon reasonable
notice, elect to have Lessee perform any particular such maintenance or repairs
the cost of which is otherwise Lessee's responsibility hereunder,

      7.2 LESSOR'S OBLIGATIONS. Subject to the provisions of Paragraphs 2,2
(Condition), 2.3 (Compliance), 4.2 (Operating Expenses), 6 (Use), 7.1 (Lessee's
Obligations), 9 (Damage or Destruction) and 14 (Condemnation), Lessor, subject
to reimbursement pursuant to Paragraph 4.2, shall keep in good order, condition
and repair the foundations, exterior walls, structural condition of interior
bearing walls, exterior roof, fire sprinkler system, fire alarm and/or smoke
detection systems, fire hydrants, and the Common Areas. Lessee expressly waives
the benefit of any statute now or hereafter in effect to the extent it is
inconsistent with the terms of this Lease.

      7.3 UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS.

            (a)DEFINITIONS. The term "UTILITY INSTALLATIONS" refers to all floor
and window coverings, air lines, vacuum lines, power panels, electrical
distribution, security and fire protection systems, communication cabling,
lighting fixtures, HVAC equipment, and plumbing in or on the Premises. The term
"TRADE FIXTURES" shall mean Lessee's machinery and equipment that can be removed
without doing material damage to the Premises. The term "ALTERATIONS" shall mean
any modification of the improvements, other than Utility Installations or Trade
Fixtures, whether by addition or deletion. "LESSEE OWNED ALTERATIONS AND/OR
UTILITY INSTALLATIONS" are defined as Alterations and/or Utility Installations
made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a).

            (b)CONSENT. Lessee shall not make any Alterations or Utility
Installations to the Premises without Lessor's prior written consent. Lessee
may, however, make non-structural Utility Installations to the interior of the
Premises (excluding the roof) without such consent but upon notice to Lessor, as
long as they are not visible from the outside, do not involve puncturing,
relocating or removing the roof, ceilings, floors or any existing walls, will
not affect the electrical, plumbing, HVAC, and/or life safety systems, and the
cumulative cost thereof during this Lease as extended does not exceed $2000.
Notwithstanding the foregoing, Lessee shall not make or permit any roof
penetrations and/or install anything on the roof without the prior written
approval of Lessor. Lessor may, as a precondition to granting such approval,
require Lessee to utilize a contractor chosen and/or approved by Lessor. Any
Alterations or Utility Installations that Lessee shall desire to make and which
require the consent of the Lessor shall be presented to Lessor in written form
with detailed plans. Consent shall be deemed conditioned upon Lessee's: (i)
acquiring all applicable governmental permits, (ii) furnishing Lessor with
copies of both the permits and the plans and specifications prior to
commencement of the work, and (iii) compliance with all conditions of said
permits and other Applicable Requirements in a prompt and expeditious manner.
Any Alterations or Utility Installations shall be performed in a workmanlike
manner with good and sufficient materials. Lessee shall promptly upon completion
furnish Lessor with asbuilt plans and specifications. For work which costs an
amount in excess of one month's Base Rent, Lessor may condition its consent upon
Lessee providing a lien and completion bond in an amount equal to 150% of the
estimated cost of such Alteration or Utility Installation and/or upon Lessee's
posting an additional Security Deposit with Lessor.

            (c)LIENS; BONDS. Lessee shall pay, when due, all claims for labor or
materials furnished or alleged to have been furnished to or for Lessee at or for
use on the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises or any interest therein. Lessee shall
give Lessor not less than 10 days notice prior to the commencement of any work
in, on or about the Premises, and Lessor shall have the right to post notices of
non-responsibility. If Lessee shall contest the validity of any such lien, claim
or demand, then Lessee shall, at its sole expense defend and protect itself,
Lessor and the Premises against the same and shall pay and satisfy any such
adverse judgment that may be rendered thereon before the enforcement thereof. If
Lessor shall require, Lessee shall furnish a surety bond in an amount equal to
150% of the amount of such contested lien, claim or demand, indemnifying Lessor
against liability for the same. If Lessor elects to participate in any such
action, Lessee shall pay Lessor's attorneys' fees and costs.

      7.4 OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION.

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

            (b)REMOVAL. By delivery to Lessee of written notice from Lessor not
earlier than 90 and not later than 30 days prior to the end of the term of this
Lease, Lessor may require that any or all Lessee Owned Alterations or Utility
Installations be removed by the expiration or termination of this Lease. Lessor
may require the removal at any time of all or any part of any Lessee Owned
Alterations or Utility Installations made without the required consent.

            (c)SURRENDER; RESTORATION. Lessee shall surrender the Premises by
the Expiration Date or any earlier termination date, with all of the
improvements, parts and surfaces thereof clean and free of debris, and in good
operating order, condition and state of repair, ordinary wear and tear excepted.
"Ordinary wear and tear" shall not include any damage or deterioration that
would have been prevented by good maintenance practice. Notwithstanding the
foregoing, if this Lease is for 12 months or less, then Lessee shall surrender
the Premises in the same condition as delivered to Lessee on the Start Date with
NO allowance for ordinary wear and tear. Lessee shall repair any damage
occasioned by the installation, maintenance or removal of Trade Fixtures, Lessee
owned Alterations and/or Utility Installations, furnishings, and equipment as
well as the removal of any storage tank installed by or for Lessee. Lessee shall
also completely remove from the Premises any and all Hazardous Substances
brought onto the Premises by or for Lessee, or any third party (except Hazardous
Substances which were deposited via underground migration from areas outside of
the Project) even if such removal would require Lessee to perform or pay for
work that exceeds statutory requirements. Trade Fixtures shall remain the
property of Lessee and shall be removed by Lessee. The failure by Lessee to
timely vacate the Premises pursuant to this Paragraph 7.4(c) without the express
written consent of Lessor shall constitute a holdover under the provisions of
Paragraph 26 below.

8. INSURANCE; INDEMNITY.

      8.1 INSURANCE PREMIUMS. The cost of the premiums for the insurance
policies maintained by Lessor pursuant to paragraph 8 are included as Operating
Expenses (see paragraph 4.2 (c)(iv)). Said costs shall include increases in the
premiums resulting from additional coverage related to requirements of the
holder of a mortgage or deed of trust covering the Premises, Building and/or
Project, increased valuation of the Premises, Building and/or Project, and/or a
general premium rate increase. Said costs shall not, however, include any
premium increases resulting from the nature of the occupancy of any other tenant
of the Building. If the Project was not insured for the entirety of the Base
Year, then the base premium shall be the lowest annual premium reasonably
obtainable for the required insurance as of the Start Date, assuming the most
nominal use possible of the Building and/or Project. In no event, however, shall
Lessee be responsible for any portion of the premium cost attributable to
liability insurance coverage in excess of $2,000,000 procured under Paragraph
8.2(b).

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      8.2 LIABILITY INSURANCE.

            (a)CARRIED BY LESSEE. Lessee shall obtain and keep in force a
Commercial General Liability policy of insurance protecting Lessee and Lessor as
an additional insured against claims for bodily injury, personal injury and
property damage based upon or arising out of the ownership, use, occupancy or
maintenance of the Premises and all areas appurtenant thereto. Such insurance
shall be on an occurrence basis providing single limit coverage in an amount not
less than $1,000,000 per occurrence with an annual aggregate of not less than
$2,000,000, an "Additional Insured-Managers or Lessors of Premises Endorsement"
and contain the "Amendment of the Pollution Exclusion Endorsement" for damage
caused by heat, smoke or fumes from a hostile fire. The policy shall not contain
any intra-insured exclusions as between insured persons or organizations, but
shall include coverage for liability assumed under this Lease as an "INSURED
CONTRACT" for the performance of Lessee's indemnity obligations under this
Lease. The limits of said insurance shall not, however, limit the liability of
Lessee nor relieve Lessee of any obligation hereunder. All insurance carried by
Lessee shall be primary to and not contributory with any similar insurance
carried by Lessor, whose insurance shall be considered excess insurance only.

            (b)CARRIED BY LESSOR. Lessor shall maintain liability insurance as
described in Paragraph 8.2(a), in addition to, and not in lieu of, the insurance
required to be maintained by Lessee. Lessee shall not be named as an additional
insured therein,

      8.3 PROPERTY INSURANCE - BUILDING, IMPROVEMENTS AND RENTAL VALUE.

            (a)BUILDING AND IMPROVEMENTS. Lessor shall obtain and keep in force
a policy or policies of insurance in the name of Lessor, with loss payable to
Lessor, any ground-lessor, and to any Lender insuring loss or damage to the
Building and/or Project. The amount of such insurance shall be equal to the full
replacement cost of the Building and/or Project, as the same shall exist from
time to time, or the amount required by any Lender, but in no event more than
the commercially reasonable and available insurable value thereof, Lessee Owned
Alterations and Utility Installations, Trade Fixtures, and Lessee's personal
property shall be insured by Lessee under Paragraph 8.4. If the coverage is
available and commercially appropriate, such policy or policies shall insure
against all risks of direct physical loss or damage (except the perils of flood
and/or earthquake unless required by a Lender), including coverage for debris
removal and the enforcement of any Applicable Requirements requiring the
upgrading, demolition, reconstruction or replacement of any portion of the
Premises as the result of a covered loss. Said policy or policies shall also
contain an agreed valuation provision in lieu of any coinsurance clause, waiver
of subrogation, and inflation guard protection causing an increase in the annual
property insurance coverage amount by a factor of not less than the adjusted
U.S. Department of Labor Consumer Price Index for All Urban Consumers for the
city nearest to where the Premises are located. If such insurance coverage has a
deductible clause, the deductible amount shall not exceed $1,000 per occurrence.

            (b)RENTAL VALUE. Lessor shall also obtain and keep in force a policy
or policies in the name of Lessor with loss payable to Lessor and any Lender,
insuring the loss of the full Rent for one year with an extended period of
indemnity for an additional 180 days ("RENTAL VALUE INSURANCE"). Said insurance
shall contain an agreed valuation provision in lieu of any coinsurance clause,
and the amount of coverage shall be adjusted annually to reflect the projected
Rent otherwise payable by Lessee, for the next 12 month period.

            (c)ADJACENT PREMISES. Lessee shall pay for any increase in the
premiums for the property insurance of the Building and for the Common Areas or
other buildings in the Project if said increase is caused by Lessee's acts,
omissions, use or occupancy of the Premises. (d)LESSEE'S IMPROVEMENTS. Since
Lessor is the Insuring Party, Lessor shall not be required to insure Lessee
Owned Alterations and Utility Installations unless the item in question has
become the property of Lessor under the terms of this Lease.

      8.4 LESSEE'S PROPERTY; BUSINESS INTERRUPTION INSURANCE.

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

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

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

      8.5 INSURANCE POLICIES. Insurance required herein shall be by companies
duly licensed or admitted to transact business in the state where the Premises
are located, and maintaining during the policy term a "General Policyholders
Rating" of at least B+, V, as set forth in the most current issue of "Best's
Insurance Guide", or such other rating as may be required by a Lender. Lessee
shall not do or permit to be done anything which invalidates the required
insurance policies. Lessee shall, prior to the Start Date, deliver to Lessor
certified copies of policies of such insurance or certificates evidencing the
existence and amounts of the required insurance. No such policy shall be
cancelable or subject to modification except after 30 days prior written notice
to Lessor. Lessee shall, at least 30 days prior to the expiration of such
policies, furnish Lessor with evidence of renewals or "insurance binders"
evidencing renewal thereof, or Lessor may order such insurance and charge the
cost thereof to Lessee, which amount shall be payable by Lessee to Lessor upon
demand. Such policies shall be for a term of at least one year, or the length of
the remaining term of this Lease, whichever is less, If either Party shall fail
to procure and maintain the insurance required to be carried by it, the other
Party may, but shall not be required to, procure and maintain the same.

      8.6 WAIVER OF SUBROGATION. Without affecting any other rights or remedies,
Lessee and Lessor each hereby release and relieve the other, and waive their
entire right to recover damages against the other, for loss of or damage to its
property arising out of or incident to the perils required to be insured against
herein. The effect of such releases and waivers is not limited by the amount of
insurance carried or required, or by any deductibles applicable hereto. The
Parties agree to have their respective property damage insurance carriers waive
any right to subrogation that such companies may have against Lessor or Lessee,
as the case may be, so long as the insurance is not invalidated thereby.

      8.7 INDEMNITY. Except for Lessor's gross negligence or willful misconduct,
Lessee shall indemnify, protect, defend and hold harmless the Premises, Lessor
and its agents, Lessor's master or ground lessor, partners and Lenders, from and
against any and all claims, loss of rents and/or damages, liens, judgments,
penalties, attorneys' and consultants' fees, expenses and/or liabilities arising
out of, involving, or in connection with, the use and/or occupancy of the
Premises by Lessee. If any action or proceeding is brought against Lessor by
reason of any of the foregoing matters, Lessee shall upon notice defend the same
at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor
shall cooperate with Lessee in such defense. Lessor need not have first paid any
such claim in order to be defended or indemnified.

      8.8 EXEMPTION OF LESSOR FROM LIABILITY. Lessor shall not be liable for
injury or damage to the person or goods, wares, merchandise or other property of
Lessee, Lessee's employees, contractors, invitees, customers, or any other
person in or about the Premises, whether such damage or injury is caused by or
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, fire sprinklers, wires,
appliances, plumbing, HVAC or lighting fixtures, or from any other cause,
whether the said injury or damage results from conditions arising upon the
Premises or upon other portions of the Building, or from other sources or
places. Lessor shall not be liable for any damages arising from any act or
neglect of any other tenant of Lessor nor from the failure of Lessor to enforce
the provisions of any other lease in the Project. Notwithstanding Lessor's
negligence or breach of this Lease, Lessor shall under no circumstances be
liable for injury to Lessee's business or for any loss of income or profit
therefrom.

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9. DAMAGE OR DESTRUCTION.

      9.1 DEFINITIONS.

            (a) "PREMISES PARTIAL DAMAGE" shall mean damage or destruction to
the improvements on the Premises, other than Lessee Owned Alterations and
Utility Installations, which can reasonably be repaired in 3 months or less from
the date of `the damage or destruction, and the cost thereof does not exceed a
sum equal to 6 month's Base Rent. Lessor shall notify Lessee in writing within
30 days from the date of the damage or destruction as to whether or not the
damage is Partial or Total.

            (b)"PREMISES TOTAL DESTRUCTION" shall mean damage or destruction to
the improvements on the Premises, other than Lessee Owned Alterations and
Utility Installations and Trade Fixtures, which cannot reasonably be repaired in
3 months or less from the date of the damage or destruction and/or the cost
thereof exceeds a sum equal to 6 month's Base Rent. Lessor shall notify Lessee
in writing within 30 days from the date of the damage or destruction as to
whether or not the damage is Partial or Total.

            (c)"INSURED LOSS" shall mean damage or destruction to improvements
on the Premises, other than Lessee Owned Alterations and Utility Installations
and Trade Fixtures, which was caused by an event required to be covered by the
insurance described in Paragraph 8.3(a), irrespective of any deductible amounts
or coverage limits involved. (d)"REPLACEMENT COST" shall mean the cost to repair
or rebuild the improvements owned by Lessor at the time of the occurrence to
their condition existing immediately prior thereto, including demolition, debris
removal and upgrading required by the operation of Applicable Requirements, and
without deduction for depreciation. (e)"HAZARDOUS SUBSTANCE CONDITION" shall
mean the occurrence or discovery of a condition involving the presence of, or a
contamination by, a Hazardous Substance as defined in Paragraph 6.2(a), in, on,
or under the Premises which requires repair, remediation, or restoration.

      9.2 PARTIAL DAMAGE - INSURED LOSS. If a Premises Partial Damage that is an
Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such damage
(but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect; provided, however, that Lessee shall, at Lessor's
election, make the repair of any damage or destruction the total cost to repair
of which is $5,000 or less, and, in such event, Lessor shall make any applicable
insurance proceeds available to Lessee on a reasonable basis for that purpose.
Notwithstanding the foregoing, if the required insurance was not in force or the
insurance proceeds are not sufficient to effect such repair, the Insuring Party
shall promptly contribute the shortage in proceeds as and when required to
complete said repairs. In the event, however, such shortage was due to the tact
that, by reason of the unique nature of the improvements, full replacement cost
insurance coverage was not commercially reasonable and available, Lessor shall
have no obligation to pay for the shortage in insurance proceeds or to fully
restore the unique aspects of the Premises unless Lessee provides Lessor with
the funds to cover same, or adequate assurance thereof, within 10 days following
receipt of written notice of such shortage and request therefor If Lessor
receives said funds or adequate assurance thereof within said 10 day period the
party responsible for making the repairs shall complete them as soon as
reasonably possible and this Lease shall remain in full force and effect If such
funds or assurance are not received Lessor may nevertheless elect by written
notice to Lessee within 10 days thereafter to (i) make such restoration and
repair as is commercially reasonable with Lessor paying any shortage in
proceeds, in which case this Lease shall remain in full force and effect, or
(ii) have this Lease terminate 30 days thereafter, Lessee shall not be entitled
to reimbursement of any funds contributed by Lessee to repair any such damage or
destruction. Premises Partial Damage due to flood or earthquake shall be subject
to Paragraph 9.3, notwithstanding that there may be some insurance coverage, but
the net proceeds of any such insurance shall be made available for the repairs
if made by either Party.

      9.3 PARTIAL DAMAGE - UNINSURED LOSS. If a Premises Partial Damage that is
not an Insured Loss occurs, unless caused by a negligent or willful act of
Lessee (in which event Lessee shall make the repairs at Lessee's expense),
Lessor may either: (I) repair such damage as soon as reasonably possible at
Lessor's expense, in which event this Lease shall continue in full force and
effect, or (ii) terminate this Lease by giving written notice to Lessee within
30 days after receipt by Lessor of knowledge of the occurrence of such damage.
Such termination shall be effective 60 days following the date of such notice.
In the event Lessor elects to terminate this Lease, Lessee shall have the right
within 10 days after receipt of the termination notice to give written notice to
Lessor of Lessee's commitment to pay for the repair of such damage without
reimbursement from Lessor. Lessee shall provide Lessor with said funds or
satisfactory assurance thereof within 30 days after making such commitment. In
such event this Lease shall continue in full force and effect, and Lessor shall
proceed to make such repairs as soon as reasonably possible after the required
funds are available. If Lessee does not make the required commitment, this Lease
shall terminate as of the date specified in the termination notice.

      9 4 TOTAL DESTRUCTION. Notwithstanding any other provision hereof if a
Premises Total Destruction occurs this Lease shall terminate 60 days following
such Destruction. If the damage or destruction was caused by the gross
negligence or willful misconduct of Lessee Lessor shall have the right to
recover Lessor's damages from Lessee, except as provided in Paragraph 8.6.

      9.5 DAMAGE NEAR END OF TERM. If at any time during the last 6 months of
this Lease there is damage for which the cost to repair exceeds one month's Base
..Rent, whether or not an Insured Loss, Lessor may terminate this Lease effective
60 days following the date of occurrence of such damage by giving a written
termination notice to Lessee within 30 days after the date of occurrence of such
damage. Notwithstanding the foregoing, if Lessee at that time has an exercisable
option to extend this Lease or to purchase the Premises, then Lessee may
preserve this Lease by, (a) exercising such option and (b) providing Lessor with
any shortage in insurance proceeds (or adequate assurance thereof) needed to
make the repairs on or before the earlier of (I) the date which is 10 days after
Lessee's receipt of Lessor's written notice purporting to terminate this Lease,
or (ii) the day prior to the date upon which such option expires. If Lessee duly
exercises such option during such period and provides Lessor with funds (or
adequate assurance thereof) to cover any shortage in insurance proceeds. Lessor
shall, at Lessor's commercially reasonable expense, repair such damage as soon
as reasonably possible and this Lease shall continue in full force and effect.
If Lessee fails to exercise such option and provide such funds or assurance
during such period, then this Lease shall terminate on the date specified in the
termination notice and Lessee's option shall be extinguished.

      9.6 ABATEMENT OF RENT; LESSEE'S REMEDIES.

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

            (b)REMEDIES. If Lessor shall be obligated to repair or restore the
Premises and does not commence, in a substantial and meaningful way, such repair
or restoration within 90 days after such obligation shall accrue, Lessee may, at
any time prior to the commencement of such repair or restoration, give written
notice to Lessor and to any Lenders of which Lessee has actual notice, of
Lessee's election to terminate this Lease on a date not less than 60 days
following the giving of such notice. If Lessee gives such notice and such repair
or restoration is not commenced within 30 days thereafter, this Lease shall
terminate as of the date specified in said notice. If the repair or restoration
is commenced within such 30 days, this Lease shall continue in full force and
effect. "Commence" shall mean either the unconditional authorization of the
preparation of the required plans, or the beginning of the actual work on the
Premises, whichever first occurs.

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

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

10. REAL PROPERTY TAXES.

           10.1  DEFINITIONS.  As used herein,  the term "REAL  PROPERTY  TAXES"
shall include any form of assessment; real estate, general, special, ordinary or
extraordinary, or rental levy or tax (other than inheritance, personal income or
estate  taxes);  improvement  bond;  and/or  license fee imposed  upon or Ievied
against any legal or equitable interest of Lessor in the Project, Lessor's right
to other income therefrom, and/or Lessor's business of leasing, by any authority
having the  direct or  indirect  power to tax and where the funds are  generated
with reference to the Project address and where the proceeds so generated are to
be applied by the city, county or other local taxing authority of a jurisdiction
within which the Project is located.  "REAL  PROPERTY  TAXES" shall also include
any tax, fee, levy,  assessment or charge, or any increase  therein,  imposed by
reason of events  occurring  during the term of this  Lease,  including  but not
limited to, a change in the ownership of the Project or any portion thereof or a
change in the improvements thereon.

           10.2  PAYMENT OF TAXES.  Except as  otherwise  provided in  Paragraph
10.3,  Lessor shall pay the Real Property Taxes  applicable to the Project,  and
said  payments  shall be included in the  calculation  of Operating  Expenses in
accordance with the provisions of Paragraph 4.2.

           10.3 ADDITIONAL  IMPROVEMENTS.  Operating  Expenses shall not include
Real Property Taxes  specified in the tax assessor's  records and work sheets as
being caused by additional improvements placed upon the Project by other lessees
or by Lessor for the exclusive enjoyment of such other lessees.  Notwithstanding
Paragraph  10.2  hereof,  Lessee  shall,  however,  pay to  Lessor  at the  time
Operating Expenses are payable under Paragraph 4.2, the entirety of any increase
in Real  Property  Taxes if  assessed  solely by reason  of  Alterations,  Trade
Fixtures  or Utility  Installations  placed  upon the  Premises  by Lessee or at
Lessee's request.

           10.4 JOINT  ASSESSMENT.  If the Building is not separately  assessed,
Real Property Taxes  allocated to the Building shall be an equitable  proportion
of the Real Property Taxes for all of the land and improvements  included within
the tax parcel  assessed,  such  proportion  to be determined by Lessor from the
respective  valuations  assigned  in the  assessor's  work  sheets or such other
information as may be reasonably  available.  Lessor's reasonable  determination
thereof, in good faith, shall be conclusive.

           10.5 PERSONAL  PROPERTY TAXES.  Lessee shall pay prior to delinquency
all taxes assessed against and levied upon Lessee Owned  Alterations and Utility
Installations,  Trade Fixtures, furnishings, equipment and all personal property
of Lessee  contained  in the  Premises.  When  possible,  Lessee shall cause its
Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings,
equipment and all other personal  property to be assessed and billed  separately
from the real  property of Lessor.  If any of Lessee's  said  property  shall be
assessed  with  Lessor's  real  property,  Lessee  shall  pay  Lessor  the taxes
attributable  to  Lessee's  property  within 10 days after  receipt of a written
statement setting forth the taxes applicable to Lessee's property.

11. UTILITIES AND SERVICES.

      11.1 SERVICES PROVIDED BY LESSOR. Lessor shall provide heating,
ventilation, air conditioning, reasonable amounts of electricity for normal
lighting and office machines, water for reasonable and normal drinking and
lavatory use in connection with an office, and replacement light bulbs and/or
fluorescent tubes and ballasts for standard overhead fixtures. Lessor shall also
provide janitorial services to the Premises and Common Areas 5 times per week,
excluding Building Holidays, or pursuant to the attached janitorial schedule, if
any. Lessor shall not, however, be required to provide janitorial services to
kitchens or storage areas included within the Premises.

      11.2 SERVICES EXCLUSIVE TO LESSEE. Lessee shall pay for all water, gas,
heat, light, power, telephone and other utilities and services specially or
exclusively supplied and/or metered exclusively to the Premises or to Lessee,
together with any taxes thereon, If a service is deleted by Paragraph 1.13 and
such service is not separately metered to the Premises, Lessee shall pay at
Lessor's option, either Lessee's Share or a reasonable proportion to be
determined by Lessor of all charges for such jointly metered service.

      11.3 HOURS OF SERVICE. Said services and utilities shall be provided
during times set forth in Paragraph 1.12. Utilities and services required at
other times shall be subject to advance request and reimbursement by Lessee to
Lessor of the cost thereof.

      11.4 EXCESS USAGE BY LESSEE. Lessee shall not make connection to the
utilities except by or through existing outlets and shall not install or use
machinery or equipment in or about the Premises that uses excess water, lighting
or power, or suffer or permit any act that causes extra burden upon the
utilities or services, including but not limited to security and trash services,
over standard office usage for the Project. Lessor shall require Lessee to
reimburse Lessor for any excess expenses or costs that may arise out of a breach
of this subparagraph by Lessee. Lessor may, in its sole discretion, install at
Lessee's expense supplemental equipment and/or separate metering applicable to
Lessee's excess usage or loading.

      11.5 INTERRUPTIONS. There shall be no abatement of rent and Lessor shall
not be liable in any respect whatsoever for the inadequacy, stoppage,
interruption or discontinuance of any utility or service due to riot, strike,
labor dispute, breakdown, accident, repair or other cause beyond Lessor's
reasonable control or in cooperation with governmental request or directions,

12. ASSIGNMENT AND SUBLETTING.

      12.1 LESSOR'S CONSENT REQUIRED.

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

            (b)Unless Lessee is a corporation and its stock is publicly traded
on a national stock exchange, a change in the control of Lessee shall constitute
an assignment requiring consent. The transfer, on a cumulative basis, of 25% or
more of the voting control of Lessee shall constitute a change in control for
this purpose.

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

            (d)An assignment or subletting without consent shall, at Lessor's
option, be a Default curable after notice per Paragraph 13.1(c), or a noncurable
Breach without the necessity of any notice and grace period. If Lessor elects to
treat such unapproved assignment or subletting as a noncurable Breach, Lessor
may either: (i) terminate this Lease, or (ii) upon 30 days written notice,
increase the monthly Base Rent to 110% of the Base Rent then in effect. Further,
in the event of such Breach and rental adjustment, (i) the purchase price of any
option to purchase the Premises held by Lessee shall be subject to similar
adjustment to 110% of the price previously in effect, and (ii) all fixed and
non-fixed rental adjustments scheduled during the remainder of the Lease term
shall be increased to 110% of the scheduled adjusted rent,

            (e)Lessee's remedy for any breach of Paragraph 12.1 by Lessor shall
be limited to compensatory damages and/or injunctive relief.

      12.2 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.

            (a)Regardless of Lessor's consent, no assignment or subletting
shall: (i) be effective without the express written assumption by such assignee
or sublessee of the obligations of Lessee under this Lease, (ii) release Lessee
of any obligations hereunder, or (iii) alter the primary liability of Lessee or
the payment of Rent or for the performance of any other obligations to be
performed by Lessee.

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

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

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

            (e)Each request for consent to an assignment or subletting shall be
in writing, accompanied by information relevant to Lessor's determination as to
the financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, including but not limited to the intended use and/pr
required modification of the Premises, if any. Lessee agrees to provide Lessor
with such other or additional information and/or documentation as may be
reasonably requested. (See also Paragraph 36)

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

            (g)Lessor's consent to any assignment or subletting shall not
transfer to the assignee or sublessee any Option granted to the original Lessee
by this Lease unless such transfer is specifically consented to by Lessor in
writing. (See Paragraph 39.2)

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

            (a)Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all Rent payable on any sublease, and Lessor may collect such Rent
and apply same toward Lessee's obligations under this Lease: provided, however,
that until a Breach shall occur in the performance of Lessee's obligations,
Lessee may collect said Rent. Lessor shall not, by reason of the foregoing or
any assignment of such sublease, nor by reason of the collection of Rent, be
deemed liable to the sublessee for any failure of Lessee to perform and comply
with any of Lessee's obligations to such sublessee. Lessee hereby irrevocably
authorizes and directs any such sublessee, upon receipt of a written notice from
Lessor stating that a Breach exists in the performance of Lessee's obligations
under this Lease, to pay to Lessor all Rent due and to become due under the
sublease. Sublessee shall rely upon any such notice from Lessor and shall pay
all Rents to Lessor without any obligation or right to inquire as to whether
such Breach exists, notwithstanding any claim from Lessee to the contrary.

            (b)In the event of a Breach by Lessee, Lessor may, at its option,
require sublessee to attorn to Lessor, in which event Lessor shall undertake the
obligations of the sublessor under such sublease from the time of the exercise
of said option to the expiration of such sublease; provided, however, Lessor
shall not be liable for any prepaid rents or security deposit paid by such
sublessee to such sublessor or for any prior Defaults or Breaches of such
sublessor.

            (c)Any matter requiring the consent of the sublessor under a
sublease shall also require the consent of Lessor. (d)No sublessee shall further
assign or sublet all or any part of the Premises without Lessor's prior written
consent.

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

13. DEFAULT; BREACH; REMEDIES.

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

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

            (b)The failure of Lessee to make any payment of Rent or any Security
Deposit required to be made by Lessee hereunder, whether to Lessor or to a third
party, when due, to provide reasonable evidence of insurance or surety bond, or
to fulfill any obligation under this Lease which endangers or threatens life or
property, where such failure continues for a period of 3 business days following
written notice to Lessee.

            (c)The failure by Lessee to provide (i) reasonable written evidence
of compliance with Applicable Requirements, (ii) the service contracts, (iii)
the rescission of an unauthorized assignment or subletting, (iv) an Estoppel
Certificate, (v) a requested subordination, (vi) evidence concerning any
guaranty and/or Guarantor, (vii) any document requested under Paragraph 41
(easements), or (viii) any other documentation or information which Lessor may
reasonably require of Lessee under the terms of this Lease, where any such
failure continues for a period of 10 days following written notice to Lessee.

            (d)A Default by Lessee as to the terms, covenants, conditions or
provisions of this Lease, or of the rules adopted under Paragraph 2.9 hereof,
other than those described in subparagraphs 13.1(a), (b) or (c), above, where
such Default continues for a period of 30 days after written notice; provided,
however, that if the nature of Lessee's Default is such that more than 30 days
are reasonably required for its cure, then it shall not be deemed to be a Breach
if Lessee commences such cure within said 30 day period and thereafter
diligently prosecutes such cure to completion.

            (e)The occurrence of any of the following events: (i) the making of
any general arrangement or assignment for the benefit of creditors; (ii)
becoming a "DEBTOR" as defined in 11 U.S.C. ss. 101 or any successor statute
thereto (unless, in the case of a petition filed against Lessee, the same is
dismissed within 60 days); (iii) the appointment of a trustee or receiver to
take possession of substantially all of Lessee's assets located at the Premises
or of Lessee's interest in this Lease, where possession is not restored to
Lessee within 30 days; or (iv) the attachment, execution or other judicial
seizure of substantially all of Lessee's assets located at the Premises or of
Lessee's interest in this Lease, where such seizure is not discharged within 30
days; provided, however, in the event that any provision of this subparagraph
(e) is contrary to any applicable law, such provision shall be of no force or
effect, and not affect the validity of the remaining provisions.

            (f) The discovery that any financial statement of Lessee or of any
Guarantor given to Lessor was materially false,

            (g) It the performance of Lessee's obligations under this Lease is
guaranteed: (I) the death of a Guarantor, (ii) the termination of a Guarantor's
liability with respect to this Lease other than in accordance with the terms of
such guaranty, (iii) a Guarantor's becoming insolvent or the subject of a
bankruptcy filing, (iv) a Guarantor's refusal to honor the guaranty, or (v) a
Guarantor's breach of its guaranty obligation on an anticipatory basis, and
Lessee's failure, within 60 days following written notice of any such event, to
provide written alternative assurance or security, which, when coupled with the
then existing resources of Lessee, equals or exceeds the combined financial
resources of Lessee and the Guarantors that existed at the time of execution of
this Lease.

      13.2 REMEDIES. If Lessee fails to perform any of its affirmative duties or
obligations, within 10 days after written notice (or in case of an emergency,
without notice), Lessor may. at its option, perform such duty or obligation on
Lessee's behalf, including but not limited to the obtaining of reasonably
required bonds, insurance policies, or governmental licenses, permits or
approvals. The costs and expenses of any such performance by Lessor shall be due
and payable by Lessee upon receipt of invoice therefor. If any check given to
Lessor by Lessee shall not be honored by the bank upon which it is drawn,
Lessor, at its option, may require all future payments to be made by Lessee to
be by cashier's check. In the event of a Breach, Lessor may, with or without
further notice or demand, and without limiting Lessor in the exercise of any
right or remedy which Lessor may have by reason of such Breach:

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            (a)Terminate Lessee's right to possession of the Premises by any
lawful means, in which case this Lease shall terminate and Lessee shall
immediately surrender possession to Lessor. In such event Lessor shall be
entitled to recover from Lessee: (i) the unpaid Rent which had been earned at
the time of termination; (ii) the worth at the time of award of the amount by
which the unpaid rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss that the Lessee proves
could have been reasonably avoided; (iii) the worth at the time of award of the
amount by which the unpaid rent for the balance of the term after the time of
award exceeds the amount of such rental loss that the Lessee proves could be
reasonably avoided; and (iv) any other amount necessary to compensate Lessor for
all the detriment proximately caused by the Lessee's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including but not limited to the cost of recovering
possession of the Premises, expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable attorneys' fees, and that
portion of any leasing commission paid by Lessor in connection with this Lease
applicable to the unexpired term of this Lease. The worth at the time of award
of the amount referred to. in provision (iii) of the immediately preceding
sentence shall be computed by discounting such amount at the discount rate of
the Federal Reserve Bank of the District within which the Premises are located
at the time of award plus one percent. Efforts by Lessor to mitigate damages
caused by Lessee's Breach of this Lease shall not waive Lessor's right to
recover damages under Paragraph 12, If termination of this Lease is obtained
through the provisional remedy of unlawful detainer, Lessor shall have the right
to recover in such proceeding any unpaid Rent and damages as are recoverable
therein, or Lessor may reserve the right to recover all or any part thereof in a
separate suit. If a notice and grace period required under Paragraph 13.1 was
not previously given, a notice to pay rent or quit, or to perform or quit given
to Lessee under the unlawful detainer statute shall also constitute the notice
required by Paragraph 13.1. In such case, the applicable grace period required
by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and
the failure of Lessee to cure the Default within the greater of the two such
grace periods shall constitute both an unlawful detainer and a Breach of this
Lease entitling Lessor to the remedies provided for in this Lease and/or by said
statute.

            (b)Continue the Lease and Lessee's right to possession and recover
the Rent as it becomes due, in which event Lessee may sublet or assign, subject
only to reasonable limitations. Acts of maintenance, efforts to relet, and/or
the appointment of a receiver to protect the Lessor's interests, shall not
constitute a termination of the Lessee's right to possession.

            (c)Pursue any other remedy now or hereafter available under the laws
or judicial decisions of the state wherein the Premises are located. The
expiration or termination of this Lease and/or the termination of Lessee's right
to possession shall not relieve Lessee from liability under any indemnity
provisions of this Lease as to matters occurring or accruing during the term
hereof or by reason of Lessee's occupancy of the Premises.

      13.3 INDUCEMENT RECAPTURE. Any agreement for free or abated rent or other
charges, or for the giving or paying by Lessor to or for Lessee of any cash or
other bonus, inducement or consideration for Lessee's entering into this Lease,
all of which concessions are hereinafter referred to as "INDUCEMENT PROVISIONS",
shall be deemed conditioned upon Lessee's full and faithful performance of all
of the terms, covenants and conditions of this Lease. Upon Breach of this Lease
by Lessee, any such Inducement Provision shall automatically be deemed deleted
from this Lease and of no further force or effect, and any rent, other charge,
bonus, inducement or consideration theretofore abated, given or paid by Lessor
under such an Inducement Provision shall be immediately due and payable by
Lessee to Lessor, notwithstanding any subsequent cure of said Breach by Lessee.
The acceptance by Lessor of rent or the cure of the Breach which initiated the
operation of this paragraph shall not be deemed a waiver by Lessor of the
provisions of this paragraph unless specifically so stated in writing by Lessor
at the time of such acceptance.

      13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by Lessee
of Rent will cause Lessor to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. Such costs
include, but are not limited to, processing and accounting charges, and late
charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent
shall not be received by Lessor within 5 days after such amount shall be due,
then, without any requirement for notice to Lessee, Lessee shall pay to Lessor a
one-time late charge equal to 10% of each such overdue amount or $100, whichever
is greater. The parties hereby agree that such late charge represents a fair and
reasonable estimate of the costs Lessor will incur by reason of such late
payment. Acceptance of such late charge by Lessor shall in no event constitute a
waiver of Lessee's Default or Breach with respect to such overdue amount, nor
prevent the exercise of any of the other rights and remedies granted hereunder.
In the event that a late charge is payable hereunder, whether or not collected,
for 3 consecutive installments of Base Rent, then notwithstanding any provision
of this Lease to the contrary, Base Rent shall, at Lessor's option, become due
and payable quarterly in advance.

      13.5 INTEREST. Any monetary payment due Lessor hereunder, other than late
charges, not received by Lessor, when due as to scheduled payments (such as Base
Rent) or within 30 days following the date on which it was due for nonscheduled
payment, shall bear interest from the date when due, as to scheduled payments,
or the 31st day after it was due as to nonscheduled payments. The interest
("INTEREST") charged shall be computed at the rate of 10% per annum but shall
not exceed the maximum rate allowed by law. Interest is payable in addition to
the potential late charge provided for in Paragraph 13.4.

      13.6 BREACH BY LESSOR.

            (a)NOTICE OF BREACH. Lessor shall not be deemed in breach of this
Lease unless Lessor fails within a reasonable time to perform an obligation
required to be performed by Lessor. For purposes of this Paragraph, a reasonable
time shall in no event be less than 30 days after receipt by Lessor, and any
Lender whose name and address shall have been furnished Lessee in writing for
such purpose, of written notice specifying wherein such obligation of Lessor has
not been performed; provided, however, that if the nature of Lessor's obligation
is such that more than 30 days are reasonably required for its performance, then
Lessor shall not be in breach if performance is commenced within such 30 day
period and thereafter diligently pursued to completion.

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

14. CONDEMNATION. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said power
(collectively "CONDEMNATION"), this Lease shall terminate as to the part taken
as of the date the condemning authority takes title or possession, whichever
first occurs. If more than 10% of the rentable floor area of the Premises, or
more than 25% of Lessee's Reserved Parking Spaces, if any, are taken by
Condemnation, Lessee may, at Lessee's option, to be exercised in writing within
10 days after Lessor shall have given Lessee written notice of such taking (or
in the absence of such notice, within 10 days after the condemning authority
shall have taken possession) terminate this Lease as of the date the condemning
authority takes such possession. If Lessee does not terminate this Lease in
accordance with the foregoing, this Lease shall remain in full force and effect
as to the portion of the Premises remaining, except that the Base Rent shall be
reduced in proportion to the reduction in utility of the Premises caused by such
Condemnation. Condemnation awards and/or payments shall be the property of
Lessor, whether such award shall be made as compensation for diminution in value
of the leasehold, the value of the part taken, or for severance damages;
provided, however, that Lessee shall be entitled to any compensation for
Lessee's relocation expenses, loss of business goodwill and/or Trade Fixtures,
without regard to whether or not this Lease is terminated pursuant to the
provisions of this Paragraph. All Alterations and Utility Installations made to
the Premises by Lessee, for purposes of Condemnation only, shall be considered
the property of the Lessee and Lessee shall be entitled to any and all
compensation which is payable therefor. In the event that this Lease is not
terminated by reason of the Condemnation, Lessor shall repair any damage to the
Premises caused by such Condemnation.

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15. BROKERAGE FEES.

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

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

      15.3 REPRESENTATIONS AND INDEMNITIES OF BROKER RELATIONSHIPS. Lessee and
Lessor each represent and warrant to the other that it has had no dealings with
any person, firm, broker or finder (other than the Brokers, if any) in
connection with this Lease, and that no one other than said named Brokers is
entitled to any commission or finder's fee in connection herewith. Lessee and
Lessor do each hereby agree to indemnify, protect, defend and hold the other
harmless from and against liability for compensation or charges which may be
claimed by any such unnamed broker, finder or other similar party by reason of
any dealings or actions of the indemnifying Party, including any costs,
expenses, attorneys' fees reasonably incurred with respect thereto.

16. ESTOPPEL CERTIFICATES.

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

            (b)If the Responding Party shall fail to execute or deliver the
Estoppel Certificate within such 10 day period, the Requesting Party may execute
an Estoppel Certificate stating that: (i) the Lease is in full force and effect
without modification except as may be represented by the Requesting Party, (ii)
there are no uncured defaults in the Requesting Party's performance, and (iii)
if Lessor is the Requesting Party, not more than one month's rent has been paid
in advance. Prospective purchasers and encumbrancers may rely upon the
Requesting Party's Estoppel Certificate, and the Responding Party shall be
estopped from denying the truth of the facts contained in said Certificate.

            (c)If Lessor desires to finance, refinance, or sell the Premises, or
any part thereof, Lessee and all Guarantors shall deliver to any potential
lender or purchaser designated by Lessor such financial statements as may be
reasonably required by such lender or purchaser, including but not limited to
Lessee's financial statements for the past 3 years. All such financial
statements shall be received by Lessor and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth. 17.
DEFINITION OF LESSOR. The term "LESSOR" as used herein shall mean the owner or
owners at the time in question of the fee title to the Premises, or, if this is
a sublease, of the Lessee's interest in the prior lease. In the event of a
transfer of Lessor's title or interest in the Premises or this Lease, Lessor
shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor. Except as provided in Paragraph 15, upon such
transfer or assignment and delivery of the Security Deposit, as aforesaid, the
prior Lessor shall be relieved of all liability with respect to the obligations
and/or covenants under this Lease thereafter to be performed by the Lessor.
Subject to the foregoing, the obligations and/or covenants in this Lease to be
performed by the Lessor shall be binding only upon the Lessor as hereinabove
defined. 18. SEVERABILITY. The invalidity of any provision of this Lease, as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.

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

20. LIMITATION ON LIABILITY. The obligations of Lessor under this Lease shall
not constitute personal obligations of Lessor or its partners, members,
directors, officers or shareholders, and Lessee shall look to the Project, and
to no other assets of Lessor, for the satisfaction of any liability of Lessor
with respect to this Lease, and shall not seek recourse against Lessor's
partners, members, directors, officers or shareholders, or any of their personal
assets for such satisfaction. 21. TIME OF ESSENCE. Time is of the essence with
respect to the performance of all obligations to be performed or observed by the
Parties under this Lease. 22. NO PRIOR OR OTHER AGREEMENTS; BROKER DISCLAIMER.
This Lease contains all agreements between the Parties with respect to any
matter mentioned herein, and no other prior or contemporaneous agreement or
understanding shall be effective. Lessor and Lessee each represents and warrants
to the Brokers that it has made, and is relying solely upon, its own
investigation as to the nature, quality, character and financial responsibility
of the other Party to this Lease and as to the use, nature, quality and
character of the Premises. Brokers have no responsibility with respect thereto
or with respect to any default or breach hereof by either Party. The liability
(including court costs and attorneys' fees) of any Broker with respect to
negotiation, execution, delivery or performance by either Lessor or Lessee under
this Lease or any amendment or modification hereto shall be limited to an amount
up to the fee received by such Broker pursuant to this Lease; provided, however,
that the foregoing limitation on each Broker's liability shall not be applicable
to any gross negligence or willful misconduct of such Broker, 23. NOTICES.

      23.1 NOTICE REQUIREMENTS. All notices required or permitted by this Lease
or applicable law shall be in writing and may be delivered in person (by hand or
by courier) or may be sent by regular, certified or registered mail or U.S.
Postal Service Express Mail, with postage prepaid, or by facsimile transmission,
and shall be deemed sufficiently given if served in a manner specified in this
Paragraph 23. The addresses noted adjacent to a Party's signature on this Lease
shall be that Party's address for delivery or mailing of notices. Either Party
may by written notice to the other specify a different address for notice,
except that upon Lessee's taking possession of the Premises, the Premises shall
constitute Lessee's address for notice. A copy of all notices to Lessor shall be
concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate in writing.

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

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24. WAIVERS.  No waiver by Lessor of the Default or Breach of any term, covenant
or  condition  hereof by  Lessee,  shall be  deemed a waiver of any other  term,
covenant or condition hereof,  or of any subsequent  Default or Breach by Lessee
of the same or of any other term, covenant or condition hereof. Lessor's consent
to, or  approval  of,  any act shall  not be  deemed to render  unnecessary  the
obtaining of Lessor's  consent to, or approval of, any subsequent or similar act
by Lessee,  or be construed as the basis of an estoppel to enforce the provision
or provisions of this Lease  requiring  such consent.  The acceptance of Rent by
Lessor shall not be a waiver of any Default or Breach by Lessee.  Any payment by
Lessee may be  accepted  by Lessor on account of moneys or damages  due  Lessor,
notwithstanding  any  qualifying  statements  or  conditions  made by  Lessee in
connection  therewith,  which such statements  and/or  conditions shall be of no
force or effect whatsoever unless specifically agreed to in writing by Lessor at
or before the time of deposit of such  payment.  25.  DISCLOSURES  REGARDING THE
NATURE OF A REAL ESTATE AGENCY RELATIONSHIP.

            (a) When entering into a discussion with a real estate agent
regarding a real estate transaction, a Lessor or Lessee should from the outset
understand what type of agency relationship or representation it has with the
agent or agents in the transaction. Lessor and Lessee acknowledge being advised
by the Brokers in this transaction, as follows:

                  (i) Lessor's Agent. A Lessor's agent under a listing agreement
with the Lessor acts as the agent for the Lessor only. A Lessor's agent or
subagent has the following affirmative obligations: To the Lessor: A fiduciary
duty of utmost care, integrity, honesty, and loyalty in dealings with the
Lessor. To the Lessee and the Lessor: a. Diligent exercise of reasonable skills
and care in performance of the agent's duties. b. A duty of honest and fair
dealing and good faith. c. A duty to disclose all facts known to the agent
materially affecting the value or desirability of the property that are not
known to, or within the diligent attention and observation of, the Parties. An
agent is not obligated to reveal to either Party any confidential information
obtained from the other Party which does not involve the affirmative duties set
forth above.

                  (ii) Lessee's Agent. An agent can agree to act as agent for
the Lessee only. In these situations, the agent is not the Lessor's agent, even
if by agreement the agent may receive compensation for services rendered, either
in full or in part from the Lessor. An agent acting only for a Lessee has the
following affirmative obligations. To the Lessee: A fiduciary duty of utmost
care, integrity, honesty, and loyalty in dealings with the Lessee. To the Lessee
and the Lessor: a. Diligent exercise of reasonable skills and care in
performance of the agent's duties. b. A duty of honest and fair dealing and good
faith. c. A duty to disclose all facts known to the agent materially affecting
the value or desirability of the property that are not known to, or within the
diligent attention and observation of, the Parties. An agent is not obligated to
reveal to either Party any confidential information obtained from the other
Party which does not involve the affirmative duties set forth above.

                  (iii) Agent Representing Both Lessor and Lessee. A real estate
agent, either acting directly or through one or more associate licenses, can
legally be the agent of both the Lessor and the Lessee in a transaction, but
only with the knowledge and consent of both the Lessor and the Lessee. In a dual
agency situation, the agent has the following affirmative obligations to both
the Lessor and the Lessee: a. A fiduciary duty of utmost care, integrity,
honesty and loyalty in the dealings with either Lesser or the Lessee, b. Other
duties to the Lessor and the Lessee as stated above in subparagraphs (I) or
(ii). In representing both Lessor and Lessee, the agent may not without the
express permission of the respective Party, disclose to the other Party that the
Lessor will accept rent in an amount less than that indicated in the listing or
that the Lessee is willing to pay a higher rent than that offered. The above
duties of the agent in a real estate transaction do not relieve a Lessor or
Lessee from the responsibility to protect their own interests, Lessor and Lessee
should carefully read all agreements to assure that they adequately express
their understanding of the transaction. A real estate agent is a person
qualified to advise about real estate. If legal or tax advise is desired,
consult a competent professional.

            (b) Brokers have no responsibility with respect to any default or
breach hereof by either Party. The liability (including court costs and
attorneys' fees), of any Broker with respect to any breach of duty, error or
omission relating to this Lease shall not exceed the fee received by such Broker
pursuant to this Lease; provided, however, that the foregoing limitation on each
Broker's liability shall not be applicable to any gross negligence or willful
misconduct of such Broker,

            (c) Buyer and Seller agree to identify to Brokers as "Confidential"
any communication or information given Brokers that is considered by such Party
to be confidential.

26.  NO RIGHT TO  HOLDOVER.  Lessee  has no right to  retain  possession  of the
Premises or any part thereof beyond the expiration or termination of this Lease.
In the event that Lessee  holds over,  then the Base Rent shall be  increased to
150% of the  Base  Rent  applicable  immediately  preceding  the  expiration  or
termination. Nothing contained herein shall be construed as consent by Lessor to
any holding over by Lessee.

27.  CUMULATIVE  REMEDIES.  No  remedy  or  election  hereunder  shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity. 28. COVENANTS AND CONDITIONS;  CONSTRUCTION OF AGREEMENT.  All
provisions  of this  Lease  to be  observed  or  performed  by  Lessee  are both
covenants and conditions.  In construing this Lease, all headings and titles are
for the  convenience  of the Parties only and shall not be  considered a part of
this Lease.  Whenever  required by the context,  the singular  shall include the
plural and vice versa.  This Lease shall not be  construed as if prepared by one
of the Parties,  but rather according to its fair meaning as a whole, as if both
Parties had prepared it.

29. BINDING EFFECT; CHOICE OF LAW. This Lease shall be binding upon the Parties,
their  personal  representatives,  successors and assigns and be governed by the
laws of the State in which the Premises are located.  Any litigation between the
Parties hereto  concerning  this Lease shall be initiated in the county in which
the Premises are located. 30. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.

      30.1 SUBORDINATION. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "SECURITY DEVICE"), now or
hereafter placed upon the Premises, to any and all advances made on the security
thereof, and to all renewals, modifications, and extensions thereof. Lessee
agrees that the holders of any such Security Devices (in this Lease together
referred to as "LENDER") shall have no liability or obligation to perform any of
the obligations of Lessor under this Lease. Any Lender may elect to have this
Lease and/or any Option granted hereby superior to the lien of its Security
Device by giving written notice thereof to Lessee, whereupon this Lease and such
Options shall be deemed prior to such Security Device, notwithstanding the
relative dates of the documentation or recordation thereof.

      30.2 ATTORNMENT. In the event that Lessor transfers title to the Premises,
or the Premises are acquired by another upon the foreclosure or termination of a
Security Device to which this Lease is subordinated (i) Lessee shall, subject to
the nondisturbance provisions of Paragraph 30.3, attorn to such new owner, and
upon request, enter into a new lease, containing all of the terms and provisions
of this Lease, with such new owner for the remainder of the term hereof, or, at
the election of such new owner, this Lease shall automatically become a new
Lease between Lessee and such new owner, upon all of the terms and conditions
hereof, for the remainder of the term hereof, and (ii) Lessor shall thereafter
be relieved of any further obligations hereunder and such new owner shall assume
all of Lessor's obligations hereunder, except that such new owner shall not: (a)
be liable for any act or omission of any prior lessor or with respect to events
occurring prior to acquisition of ownership; (b) be subject to any offsets or
defenses which Lessee might have against any prior lessor, (c) be bound by
prepayment of more than one month's rent, or (d) be liable for the return of any
security deposit paid to any prior lessor.

      30.3 NON-DISTURBANCE. With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee's subordination of this Lease
shall be subject to receiving a commercially reasonable non-disturbance
agreement (a "NON-DISTURBANCE AGREEMENT") from the Lender which Non-Disturbance
Agreement provides that Lessee's possession of the Premises, and this Lease,
including any options to extend the term hereof, will not be disturbed so long
as Lessee is not in Breach hereof and attorns to the record owner of the
Premises. Further, within 60 days after the execution of this Lease, Lessor
shall use its commercially reasonable efforts to obtain a Non-Disturbance
Agreement from the holder of any pre-existing Security Device which is secured
by the Premises. In the event that Lessor is unable to provide the
Non-Disturbance Agreement within said 60 days, then Lessee may, at Lessee's
option, directly contact Lender and attempt to negotiate for the execution and
delivery of a Non-Disturbance Agreement.
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      30.4 Self-Executing. The agreements contained in this Paragraph 30 shall
be effective without the execution of any further documents; provided, however,
that, upon written request from Lessor or a Lender in connection with a sale,
financing or refinancing of the Premises, Lessee and Lessor shall execute such
further writings as may be reasonably required to separately document any
subordination, attornment and/or Non-Disturbance Agreement provided for herein.

31.  ATTORNEYS'  FEES.  If any  Party or Broker  brings an action or  proceeding
involving  the  Premises  whether  founded in tort,  contract  or equity,  or to
declare rights  hereunder,  the Prevailing  Party (as hereafter  defined) in any
such  proceeding,  action,  or appeal  thereon,  shall be entitled to reasonable
attorneys'  fees.  Such fees may be awarded in the same suit or  recovered  in a
separate  suit,  whether or not such action or proceeding is pursued to decision
or judgment. The term, "PREVAILING PARTY" shall include,  without limitation,  a
Party or Broker who  substantially  obtains or defeats the relief sought, as the
case may be, whether by compromise,  settlement, judgment, or the abandonment by
the other Party or Broker of its claim or  defense.  The  attorneys'  fees award
shall not be computed in accordance  with any court fee  schedule,  but shall be
such as to fully reimburse all attorneys' fees reasonably incurred. In addition,
Lessor shall be entitled to attorneys' fees, costs and expenses  incurred in the
preparation  and service of notices of Default and  consultations  in connection
therewith, whether or not a legal action is subsequently commenced in connection
with  such  Default  or  resulting  Breach  ($200 is a  reasonable  minimum  per
occurrence for such services and consultation).

32. LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Lessor's agents shall
have the right to enter the Premises at any time,  in the case of an  emergency,
and  otherwise  at  reasonable  times for the  purpose  of  showing  the same to
prospective  purchasers,  lenders,  or  tenants,  and making  such  alterations,
repairs,  improvements or additions to the Premises as Lessor may deem necessary
or desirable and the erecting,  using and  maintaining  of utilities,  services,
pipes and conduits  through the Premises  and/or other premises as long as there
is no  material  adverse  effect  to  Lessee's  use of the  Premises.  All  such
activities shall be without abatement of rent or liability to Lessee. Lessor may
at any time place on the Premises  any ordinary  "FOR SALE" signs and Lessor may
during the last 6 months of the term hereof  place on the  Premises any ordinary
"FOR LEASE" signs. In addition,  Lessor all have the right to retain keys to the
Premises  and to unlock all doors in or upon the  Premises  other than to files,
vaults and safes;  and in the case of  emergency  to enter the  Premises  by any
reasonably  appropriate means, and any such entry shall not be deemed a forcible
or unlawful entry or detainer of the Premises or an eviction.  Lessee waives any
charges  for  damages or  injuries or  interference  with  Lessee's  property or
business in connection therewith.

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

34. Signs. Lessee shall not place any sign upon the Project without Lessor's
prior written consent.

35.  Termination;  Merger.  Unless  specifically  stated otherwise in writing by
Lessor,  the  voluntary or other  surrender of this Lease by Lessee,  the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee,  shall  automatically  terminate any sublease or lesser estate in the
Premises;  provided,  however,  that Lessor may elect to continue any one or all
existing subtenancies.  Lessor's failure within 10 days following any such event
to elect to the  contrary  by written  notice to the  holder of any such  lesser
interest,  shall constitute  Lessor's election to have such event constitute the
termination of such interest.

36. Consents.  Except as otherwise  provided herein,  wherever in this Lease the
consent of a Party is required to an act by or for the other Party, such consent
shall not be unreasonably withheld or delayed.  Lessor's actual reasonable costs
and expenses (including but not limited to architects',  attorneys',  engineers'
and other consultants' fees) incurred in the consideration of, or response to, a
request by Lessee for any Lessor consent,  including but not limited to consents
to an assignment,  a subletting or the presence or use of a Hazardous Substance,
shall be paid by Lessee upon receipt of an invoice and supporting  documentation
therefor.  Lessor's  consent  to any act,  assignment  or  subletting  shall not
constitute an  acknowledgment  that no Default or Breach by Lessee of this Lease
exists,  nor shall such consent be deemed a waiver of any then existing  Default
or Breach,  except as may be otherwise  specifically stated in writing by Lessor
at the time of such  consent.  The  failure  to specify  herein  any  particular
condition to Lessor's consent shall not preclude the imposition by Lessor at the
time of consent of such further or other  conditions as are then reasonable with
reference to the  particular  matter for which  consent is being  given.  In the
event that  either  Party  disagrees  with any  determination  made by the other
hereunder  and  reasonably  requests  the  reasons for such  determination,  the
determining  party shall furnish its reasons in writing and in reasonable detail
within 10 business days following such request.

37. GUARANTOR.

      37.1 EXECUTION. The Guarantors, if any, shall each execute a guaranty in
the form most recently published by the American Industrial Real Estate
Association. 37.2 DEFAULT. It shall constitute a Default of the Lessee if any
Guarantor fails or refuses, upon request to provide: (a) evidence of the
execution of the guaranty, including the authority of the party signing on
Guarantor's behalf to obligate Guarantor, and in the case of a corporate
Guarantor, a certified copy of a resolution of its board of directors
authorizing the making of such guaranty, (b) current financial statements, (c)
an Estoppel Certificate, or (d) written confirmation that the guaranty is still
in effect.

38. QUIET POSSESSION. Subject to payment by Lessee of the Rent and performance
of all of the covenants, conditions and provisions on Lessee's part to be
observed and performed under this Lease, Lessee shall have quiet possession and
quiet enjoyment of the Premises during the term hereof.

39. OPTIONS. If Lessee is granted an Option, as defined below, then the
following provisions shall apply.

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

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

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

      39.4 EFFECT OF DEFAULT ON OPTIONS.

            (a)Lessee shall have no right to exercise an Option: (i) during the
period commencing with the giving of any notice of Default and continuing until
said Default is cured, (ii) during the period of time any Rent is unpaid
(without regard to whether notice thereof is given Lessee), (iii) during the
time Lessee is in Breach of this Lease, or (iv) in the event that Lessee has
been given 3 or more notices of separate Default, whether or not the Defaults
are cured, during the 12 month period immediately preceding the exercise of the
Option.

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

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            (c)An Option shall terminate and be of no further force or effect,
notwithstanding Lessee's due and timely exercise of the Option, if, after such
exercise and prior to the  commencement  of the extended  term or completion of
the purchase, (i) Lessee fails to pay Rent for a period of 30 days after such
Rent becomes due (without any necessity of Lessor to give notice thereof), or
(ii) if Lessee commits a Breach of this Lease. 40. SECURITY MEASURES. Lessee
hereby acknowledges that the Rent payable to Lessor hereunder does not include
the cost of guard service or other security measures, and that Lessor shall have
no obligation whatsoever to provide same. Lessee assumes all responsibility for
the protection of the Premises, Lessee, its agents and invitees and their
property from the acts of third parties. In the event, however, that Lessor
should elect to provide security services, then the cost thereof shall be an
Operating Expense. 41. RESERVATIONS.

            (a)Lessor reserves the right: (i) to grant, without the consent or
joinder of Lessee, such easements, rights and dedications that Lessor deems
necessary, (ii) to cause the recordation of parcel maps and restrictions, (iii)
to create and/or install new utility raceways, so long as such easements,
rights, dedications, maps, restrictions, and utility raceways do not
unreasonably interfere with the use of the Premises by Lessee. Lessor may also:
change the name, address or title of the Building or Project upon at least 90
days prior written notice; provide and install, at Lessee's expense, Building
standard graphics on the door of the Premises and such portions of the Common
Areas as Lessor shall reasonably deem appropriate; grant to any lessee the
exclusive right to conduct any business as long as such exclusive right does not
conflict with any rights expressly given herein; and to place such signs,
notices or displays as Lessor reasonably deems necessary or advisable upon the
roof, exterior of the Building or the Project or on pole signs in the Common
Areas. Lessee agrees to sign any documents reasonably requested by Lessor to
effectuate such rights. The obstruction of Lessee's view, air, or light by any
structure erected in the vicinity of the Building, whether by Lessor or third
parties, shall in no way affect this Lease or impose any liability upon Lessor.

            (b)Lessor also reserves the right to move Lessee to other space of
comparable size in the Building or Project, Lessor must provide at least 45
prior written notice of such move, and the new space must contain improvements
of comparable quality to those contained within the Premises. Lessor shall pay
the reasonable out of pocket costs that Lessee incurs with regard to such
relocation, including the expenses of moving and necessary stationary revision
costs. In no event, however, shall Lessor be required to pay an amount in excess
of two months Base Rent. Lessee may not be relocated more than once during the
term of this Lease.

            (c)Lessee shall not: (i) use a representation (photographic or
otherwise) of the Building or Project or their name(s) in connection with
Lessee's business; or (ii) suffer or permit anyone, except in emergency, to go
upon the roof of the Building. 42. PERFORMANCE UNDER PROTEST. If at any time a
dispute shall arise as to any amount or sum of money to be paid by one Party to
the other under the provisions hereof, the Party against whom the obligation to
pay the money is asserted shall have the right to make payment "under protest"
and such payment shall not be regarded as a voluntary payment and there shall
survive the right on the part of said Party to institute suit for recovery of
such sum. If it shall be adjudged that there was no legal obligation on the part
of said Party to pay such sum or any part thereof, said Party shall be entitled
cover such sum If it shall be adjudged that there was no legal obligation on the
part of said Party to pay such sum or any part thereof, said Party shall be
entitled to recover such sum or so much thereof as it was not legally required
to pay.

43. AUTHORITY.

            (a)If either Party hereto is a corporation, trust, limited liability
company, partnership, or similar entity, each individual executing this Lease on
behalf of such entity represents and warrants that he or she is duly authorized
to execute and deliver this Lease on its behalf, Each party shall, within 30
days after request, deliver to the other party satisfactory evidence of such
authority.

            (b)If this Lease is executed by more than one person or entity as
"Lessee", each such person or entity shall be jointly and severally liable
hereunder. It is agreed that any one of the named Lessees shall be empowered to
execute any amendment to this Lease, or other document ancillary thereto and
bind all of the named Lessees, and Lessor may rely on the same as if all of the
named Lessees had executed such document. 44. CONFLICT. Any conflict between the
printed provisions of this Lease and the typewritten or handwritten provisions
shall be controlled by the typewritten or handwritten provisions.

45.  OFFER.  Preparation  of this  Lease by  either  party or  their  agent  and
submission  of same to the other  Party shall not be deemed an offer to lease to
the other  Party.  This Lease is not intended to be binding  until  executed and
delivered by all Parties hereto.

46. AMENDMENTS. This Lease may be modified only in writing, signed by the
Parties in interest at the time of the modification. As long as they do not
materially change Lessee's obligations hereunder, Lessee agrees to make such
reasonable nonmonetary modifications to this Lease as may be reasonably required
by a Lender in connection with the obtaining of normal financing or refinancing
of the Premises.

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

48. WAIVER OF JURY TRIAL. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO
TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT
OF THIS AGREEMENT.

49. MEDIATION AND ARBITRATION OF DISPUTES. An Addendum requiring the Mediation
and/or the Arbitration of all disputes between the Parties and/or Brokers
arising out of this Lease 0 is ~ is not attached to this Lease.

50. AMERICANS WITH DISABILITIES ACT. In the event that as a result of Lessee's
use, or intended use, of the Premises the Americans with Disabilities Act or any
similar law requires modifications or the construction or installation of
improvements in or to the Premises, Building, Project and/or Common Areas, the
Parties agree that such modifications, construction or improvements shall be
made at: 0 Lessor's expense 0 Lessee's expense.

1. Lessor to paint entire Premises.

2. Lessor to replace carpet subject to  reimbursement  of half of cost by Lessee
for such replacement.

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

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

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

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

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

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Executed at Los Angeles               Executed at
on:  March 2, 2004                    on:

By LESSOR:                            By LESSEE:
Beverly Robertson Design Plaza, a     Arbios System, Inc., a California
California General Partnership        Corporation

By:        /S/ Moyssa Sharya          By:   /S/ Jacek Rozga
----------------------------          ------------------------------------
Name Printed:  Moyssa Shaaya          Name Printed:  Jacek Rozga
Title:   General Partner              Title:   President

By:    /S/ Houshang Shabani           By:
---------------------------           ------------------------------------
Name Printed:                         Name Printed:_______________________
Title:_____________________           Title: _____________________________
Address:___________________           Address:   110 N. George Burns Road
                                                 Suite D-498
                                                 Los Angeles, California 90048

Telephone / Facsimile                 Telephone / Facsimile  Tel. (310) 423-7702
Federal ID No.                        Federal ID No.

LESSOR'S                              LESSEE'S
BROKER:                               BROKER:

Attn:______________________           Attn: _______________________
Address:___________________           Address:_____________________
___________________________           _____________________________
___________________________           _____________________________
Telephone / Facsimile No.             Telephone / Facsimile No.

THESE FORMS ARE OFTEN MODIFIED TO MEET CHANGING REQUIREMENTS OF LAW AND NEEDS OF
THE INDUSTRY. ALWAYS WRITE OR CALL TO MAKE SURE YOU ARE UTILIZING THE MOST
CURRENT FORM: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 700 SOUTH FLOWER
STREET, SUITE 600, LOS ANGELES, CA 90017.

        (C)COPYRIGHT 1999-BY AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION.

                              ALL RIGHTS RESERVED.

              NO PART OF THESE WORKS MAY BE REPRODUCED IN ANY FORM
                         WITHOUT PERMISSION IN WRITING.
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                   RENT ADJUSTMENT(S)
                   STANDARD LEASE ADDENDUM

                   DATED ___February 13,  2004_______________________________

                   BY AND BETWEEN (LESSOR) __Beverly Robertson design Plaza, a__
                                           __California General Partnership_____

                   (LESSEE) __________Arbios System, a California Corporation___

                   ADDRESS OF PREMISES: 8797 Beverly B1vd. #206, Los Angeles, CA
                                        90048___________________________________

Paragraph _______

A. RENT ADJUSTMENTS:

      The monthly rent for each month of the adjustment period(s) specified
below shall be increased using the method(s) indicated below: (Check Method(s)
to be Used and Fill in Appropriately)

|_| I. COST OF LIVING ADJUSTMENT(S) (COLA)

      a. On (Fill in COLA Dates)________________________________________________
________________________________________________________________________________

the Base Rent shall be adjusted by the change, if any, from the Base Month
specified below, in the Consumer Price Index of the Bureau of Labor Statistics
of the U.S. Department of Labor for (select one): |_| CPI W (Urban Wage Earners
and Clerical Workers) or |_| CPI U (All Urban Consumers), for (Fill in Urban
Area): ,
________________________________________________________________________________

All Items (1982-1984 = 100), herein referred to as "CPI".

      b. The monthly rent payable in accordance with paragraph A.1.a. of this
Addendum shall be calculated as follows: the Base Rent set forth in paragraph
1.5 of the attached Lease, shall be multiplied by a fraction the numerator of
which shall be the CPI of the calendar month 2 months prior to the month(s)
specified in paragraph A.1.a. above during which the adjustment is to take
effect, and the denominator of which shall be the CPI of the calendar month
which is 2 months prior to (select one): |_| the first month of the term of this
Lease as set forth in paragraph 1.3 ("Base Month") or |_| (Fill in Other "Base
Month"): April 2004 . The sum so calculated shall constitute the new monthly
rent hereunder, but in no event, shall any such new monthly rent be less than
the rent payable for the month immediately preceding the rent adjustment.

      c. In the event the compilation and/or publication of the CPI shall be
transferred to any other governmental department or bureau or agency or shall be
discontinued, then the index most nearly the same as the CPI shall be used to
make such calculation. In the event that the Parties cannot agree on such
alternative index, then the matter shall be submitted for decision to the
American Arbitration Association in accordance with the then rules of said
Association and the decision of the arbitrators shall be binding upon the
parties. The cost of said Arbitration shall be paid equally by the Parties.

|_|  II.  MARKET RENTAL VALUE ADJUSTMENT(S) (MRV)

      a. On (Fill in MRV Adjustment Date(s):____________________________________
________________________________________________________________________________

the Base Rent shall be adjusted to the "Market Rental Value" of the property as
follows:

      1) Four months prior to each Market Rental Value Adjustment Date described
above, the Parties shall attempt to agree upon what the new MRV will be on the
adjustment date. If agreement cannot be reached within thirty days, then:

            (a) Lessor and Lessee shall immediately appoint a mutually
acceptable appraiser or broker to establish the new MRV within the next 30 days~
Any associated costs will be split equally between the Parties, or

            (b) Both Lessor and Lessee shall each immediately make a reasonable
determination of the MRV and submit such determination, in writing, to
arbitration in accordance with the following provisions:

                  (i) Within 15 days thereafter, Lessor and Lessee shall each
select an |_| appraiser or |_| broker ("CONSULTANT" - check one) of their choice
to act as an arbitrator. The two arbitrators so appointed shall immediately
select a third mutually acceptable Consultant to act as a third arbitrator.

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                  (ii) The 3 arbitrators shall within 30 days of the appointment
of the third arbitrator reach a decision as to what the actual MRV for the
Premises is, and whether Lessor's or Lessee's submitted MRV is the closest
thereto. The decision of a majority of the arbitrators shall be binding on the
Parties. The submitted MRV which is determined to be the closest to the actual
MRV shall thereafter be used by the Parties.

                  (iii) If either of the Parties fails to appoint an arbitrator
within the specified 15 days, the arbitrator timely appointed by one of them
shall reach a decision on his or her own, and said decision shall be binding on
the Parties.

                  (iv) The entire cost of such arbitration shall be paid by the
party whose submitted MRV is not selected, le. the one that is NOT the closest
to the actual MRV.

      2) Notwithstanding the foregoing, the new MRV shall not be less than the
rent payable for the month immediately preceding the rent adjustment.

   b. Upon the establishment of each New Market Rental Value:

      1) the new MRV will become the new "Base Rent" for the purpose of
calculating any further Adjustments, and
      2) the first month of each Market Rental Value term shall become the new
`Base Month' for the purpose of calculating any further Adjustments.

|_|  III. FIXED RENTAL ADJUSTMENT(S) (FRA)

The Base Rent shall be increased to the following amounts on the dates set forth
below:

      On (Fill in FRA Adjustment Date(s)):         The New Base Rent shall be:

      _____________________________                $___________________________
      _____________________________                $___________________________
      _____________________________                $___________________________
      _____________________________                $___________________________

B. NOTICE:

      Unless specified otherwise herein, notice of any such adjustments, other
than Fixed Rental Adjustments, shall be made as specified in paragraph 23 of the
Lease,

C. BROKER'S FEE:

      The Brokers shall be paid a Brokerage Fee for each adjustment specified
above in accordance with paragraph 15 of the Lease.

NOTE: THESE FORMS ARE OFTEN MODIFIED TO MEET CHANGING REQUIREMENTS OF LAW AND
NEEDS OF THE INDUSTRY. ALWAYS WRITE OR CALL TO MAKE SURE YOU ARE UTILIZING THE
MOST CURRENT FORM: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 700 S. FLOWER
STREET, SUITE 600, LOS ANGELES, CALIF. 90017

__________                                                            __________

Initials                                                               Initials
                                  Page 18 of 18
(C)1999 - American Industrial       REVISED                     FORM OFG-1-9/99E
Real Estate Association
01879/0001 98744.1

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