Document:

STANDARD INDUSTRIAL LEASE
                                      (NET)

                                7415 CARROLL ROAD

                              H. G. FENTON COMPANY,
                            a California corporation
                                   "Landlord"
                                       and

                               PENLEY SPORTS, LLC
                     a California limited liability company

                                    "Tenant"

The parties acknowledge that shaded text and lined through text are intentional
changes in language and incorporated as a part of this Lease.

<PAGE>

                                     SECTION

                                    EXHIBITS

                    A Site Plan

                    B Premises and Improvements to Premises

                    C Rules and Regulations

                    D Signage Criteria

                    E Environmental Questionnaire

                    F Guaranty Agreement

                    E Declaration of Covenants, Conditions and Restrictions

<PAGE>

                          STANDARD INDUSTRIAL LEASE-NET

THIS STANDARD INDUSTRIAL LEASE-NET ("Lease"), dated for reference purposes only
February 17, 2000, is made at San Diego, California, between H. G. FENTON
COMPANY, a California corporation ("Landlord"), and PENLEY SPORTS, LLC, a
California limited liability company ("Tenant").

1.   BASIC LEASE  PROVISIONS.  The words and figures set forth in this Section 1
     are used as defined terms in this Lease.

      1.1 Premises: The real property and improvements which are the subject of
this Lease. The Premises consist of approximately 38,025 rentable square feet
(rsf) as depicted on Exhibit A. Pursuant' to the provisions 'of. Exhibit B 1 1W
j and subject to the provisions of Section 8.6, Tenant intends to add an-area of
mezzanine above the. offices which currently exist within the premises; for
purposes of monthly' Base Rent, such, area of mezzanine shall not be, calculated
as Premises as such Term is herein defined. The address for the Premises is 7415
Carroll Road, Suites B, C and D, San Diego, California.

     1.2 Building:  The single  warehouse/industrial  building addressed at 7415
Carroll Road, San Diego, California.

      1.3 Project: The single warehouse/industrial building addressed at 7415
Carroll Road consisting of approximately 50,475 rsf, including all appurtenances
thereto.

     1.4 Term: One hundred twenty (120) months 1.5  Commencement  and Expiration
Dates:

             (a)     Commencement Date:         April 1, 2000

             (b)     Expiration Date:            March 31, 2010

             (c)     Delivery of the Premises:   April 1, 2000 (subject to the
                                                 provisions of Section 4.5)

1.6    Extension Option Period:   Subject to the provisions of Sections 24 & 25
1.7    Initial Monthly Base Rent:                         $18,252.00
1.8    Prepaid Base Rent:                                 $18,252.00
1.9    Periodic Increase In Base Rent:
                                   Lease Year
                                  2 $18,799.56
                                  3 $19,363.55
                                  4 $19,944.45
                                  5 $20,542.78
                                 6-10 Subject to the provision of Section 5.4

1.10 Security Deposit Amount:                             $18,252.00
1.11 Tenant Improvement Allowance:   Subject to the provisions of Exhibit B 1.12
Tenant's Share of Operating Expenses:
       (a)     Real Property Taxes:                       75.334%
       (b)     Other Operating Expenses:                  75.334%

1.13 Permitted Use:General office and manufacturing of composite golf shafts and
     other composite products, or any other legal use permitted under applicable
     law and zoning ordinances.

1.14 Tenant's Guarantor(s): Sports Arenas, Inc.

1.15      Broker(s):

                    Landlord: Voit Commercial Brokerage

                    Tenant: Ocean West, Inc.

1.16 Parking:                                  Thirty eight (38) vehicle spaces

1.17 Landlord's Address for Notice: H. G. Fenton Company
                                    7588 Metropolitan Drive (92108)
                                    Post Office Box 120064
                                    San Diego, California 92112-0064
                                    Tel: (619) 400-0120 Fax: (610) 400-0110
                                    Attention: Property Manager

1.18 Tenant's Address for Notice: Penley Sports, LLC
                                  7415 Carroll Road, Suite B
                                  San Diego, California 92121 Tel:
                                  (858)____________________________________
                                                 Fax: (858)_______________
                                                 Attention:_______________

1.19 Addendum:                          Sections 24 through 27

2.   DEFINITIONS.  The captions  appearing in this Section 2 are used as defined
     terms in this Lease.

      2.1 Additional Rent. All sums payable by Tenant hereunder other than Base
Rent, including without limitation: Tenant's Share of Operating Expenses; late
charges; interest on past due amounts; attorneys' fees; and reimbursements to
Landlord of sums advanced by Landlord to cure any default or discharge any
obligation of Tenant hereunder.

     2.2 Base Rent.  The basic  monthly  rent  payable by Tenant for the use and
occupancy of the Premises, in accordance with Section 5 of this Lease.

     2.3 Business Park. The overall planned industrial  development of which the
Project is a part. . For  purposes of this lease,  the term  "Business  Park" as
used herein;  shall have the same,  meaning and may be used  interchangeably  as
"Project;" as such term is defined in Section 1.3, above.

     2.4  Commencement  Date.  The  first  day of the  Term,  as  determined  in
accordance with Section 4.1 below.

      2.5 Common Areas. All areas and facilities outside the Premises and within
the Building and Project that Tenant is permitted to use, as provided and
designated by the Landlord from time to time for the general nonexclusive use of
Landlord, Tenant and other tenants of the Building and Project and their
respective employees, suppliers, shippers, customers, invitees, licensees or
other visitors, including without limitation hallways, entryways, common rest
rooms on multi-tenant floors, elevators, stairways, common pipes, conduits,
wires and appurtenant equipment serving the Premises, parking areas, loading and
unloading areas, trash areas, roadways, sidewalks, walkways, parkways, driveways
and landscaped areas.

      2.6 Declaration. The recorded Declaration of Covenants, Conditions and
Restrictions for the Business Park, as the same may be amended from time to
time.

      2.7 Delivery of the Premises. The date of the inspection and acceptance
(or deemed acceptance) of the Premises by Tenant, following Landlord's notice
that Landlord's Delivery Work has been substantially completed in accordance
with Section 3.3.

      2.8 Hazardous Materials. Any and all materials or substances which have
been determined to be nuisance or dangerous, toxic or hazardous or a pollutant
or contaminant, including but not limited to any hydrocarbon material, flammable
explosives, asbestos, urea formaldehyde, radioactive materials or waste, or
other hazardous, toxic, contaminating or polluting materials, substances or
wastes, including, without limitation, any "hazardous substances", "hazardous
wastes", "hazardous materials" or "toxic substances" under any Hazardous
Materials Laws.

     2.9 Hazardous Materials Laws. All federal, state and local laws, ordinances
and  regulations,  including,  but not limited to, the Federal  Water  Pollution
Control Act (33 U.S.C.ss.1251,  et seq.),  Resource  Conservation & Recovery Act
(42  U.S.C.ss.6901,  et seq.),  Safe Drinking Water Act (42  U.S.C.ss.3000f,  et
seq.), Toxic Substances  Control Act (15 U.S.C.ss.2601,  et seq.), the Clean Air
Act  (42  U.S.C.ss.7401,   et  seq.),   Comprehensive   Environmental  Response,
Compensation and Liability Act (42 U.S.C.ss.9601,  et seq.), California HEALTH &
SAFETY CODE  (ss.25100,  et  seq.,ss.39000,  et seq.),  California Safe Drinking
Water  &  Toxic   Enforcement   Act  of  1986   (California   HEALTH   &  SAFETY
CODEss.25249.5,  et seq.),  California WATER CODE (ss.13000, et seq.), and other
comparable federal,  state or local law,  regulation or interpretation  thereof,
whether currently in force or enacted in the future, together with any licenses,
permits,  plans or  approvals  generated  pursuant to or as a result of any such
law,  which  regulates  or  proscribes  the  use,  storage,  disposal,  cleanup,
transportation,  release or threatened  release into the environment or presence
of Hazardous Materials.

     2.10 Lease Year. A period of twelve consecutive full calendar months. The
first Lease Year shall begin on the Commencement Date if the Commencement Date
is the first day of a calendar month; otherwise, the first Lease Year shall
begin on the first day of the first full calendar month after the month in which
the Commencement Date occurs. Each succeeding Lease Year shall begin on the
anniversary of the beginning of the first Lease Year. If Tenant should extend
the Term pursuant to any extension option granted herein, the first day of the
Extension Term shall also be deemed to be the first day of a Lease Year for all
purposes of this Lease.

     2.11  Tenant's  Work.  The  improvements  and  other  work,  if any,  to be
accomplished by Tenant in accordance with Exhibit B.

      2.12 Landlord's Delivery Work. All items of Landlord's Work except those
which Landlord reasonably cannot complete prior to the Commencement Date, e.g.,
Landlord's Work that cannot be performed by Landlord until Tenant (i) provides
Landlord with plans and specifications therefor, or (ii) obtains a building
permit, or (iii) completes those items of Tenant's Work that are necessarily
completed prior to a particular item of Landlord's Work.

     2.13  Landlord's  Work.  The  improvements  and other  work,  if any, to be
accomplished by Landlord in accordance with Section 3.3.

      2.14 Mortgage. Any mortgage, trust deed or other encumbrance, and all
renewals, extensions or replacements thereof, now or hereafter imposed by
Landlord upon the real property which includes the Premises.

      2.15 Mortgagee. The holder of a Mortgage.

     2.16 Operating Expenses. All costs incurred by Landlord, if any, for any of
the following:

             (a) The operation, repair and maintenance, in neat, clean and good
order and condition of (i) the Common Areas of the Project, including without
limitation all parking areas, loading and unloading areas, trash areas,
roadways, sidewalks, walkways, parkways, driveways, landscaped areas, striping,
bumpers, and irrigation systems, common area lighting facilities, and fences and
gates; (ii) fire detection in the Project, including sprinkler system
maintenance and repair; and (iii) unless allocated directly to Tenant pursuant
to Section 8.1(b), the Building's heating, ventilation and air conditioning
("HVAC") systems.

             (b) Trash disposal for the Common-Areas of the Project (Tenant to
pay for trash disposal specific to its Permitted Use of the Premises) and to the
extent any such services are provided, janitorial service, security services,
gardening, painting, plumbing, electrical, carpentry, window washing, signage
and equipment rental expenses, and any other service to be provided by Landlord
that is elsewhere in the Lease stated to be an item of Operating Expenses.

          (c) Any  deductible  portion of an insured loss  concerning any of the
     items or matters described in this Section.

          (d)  Premiums  for  any  insurance  policies  maintained  by  Landlord
     pursuant to Section 11 below.

          (e) Real Property Taxes to be paid by Landlord.

          (f) Utilities not separately metered to Tenant or other tenants of the
     Project.

          (g)   Independent   contractors   for  services   (excluding   capital
     improvements),  and  compensation  (including  employment  taxes and fringe
     benefits) of all persons who perform regular and recurring duties connected
     with day-to-day operation,  maintenance and repair of the Project, provided
     such compensation is commercially reasonable.

          (h) Maintenance and repair of roofs, building walls, foundations,  and
     all sewer and water facilities.

          (i) A property  management fee in the amount of fifteen  percent (15%)
     of the preceding items of Operating Expenses.

          (j) Dues and  assessments  payable  to the  Business  Park's  property
     owners association (if any). The inclusion of the improvements,  facilities
     and  services  set forth in the  foregoing  definition  shall not be deemed
     Landlord's  representation  that such improvements or facilities exist, nor
     shall  it  impose  on  Landlord  any   obligation   either  to  have  those
     improvements  or  facilities  or to  provide  those  services,  unless  the
     improvements or facilities already exist in the Project or Landlord already
     provides the services as of the  Commencement  Date, or unless Landlord has
     agreed to do so elsewhere in the Lease.

      2.17 Real Property Taxes. All general property and improvement taxes and
all forms of assessment, special assessment or reassessment, license fee,
license tax, business license tax, commercial rental tax, in lieu tax, levy,
charge, penalty (to the extent not imposed as a result of Landlord's negligence)
or similar imposition, imposed by any authority having the direct power to tax,
including any city, county, state or federal government, or any school,
agricultural, lighting, drainage or other improvement or special assessment
district thereof, or any agency or public body, as against any legal or
equitable interest of Landlord in the Premises and all improvements thereon and
thereto as they presently exist or as they may be expanded, developed,
constructed or altered from time to time, including but not limited to: (a) any
tax on Landlord's rent, right to rent or other income from the Premises or all
or any portion of the Project or as against Landlord's business of leasing the
Premises, but specifically excluding Landlord's federal, state or city income,
franchise, corporate, personal property, stock transfer, revenues, inheritance
or estate taxes; (b) any assessments, taxes, fees, levies or charges in addition
to, or in substitution, partially or totally, for any assessment, tax, fee, levy
or charge previously included within the definition of real property tax before
adoption of Proposition 13 by the voters of the State of California in the June
1978 election, it being acknowledged by Tenant and Landlord that assessments,
taxes, fees, levies and charges may be imposed by governmental agencies for such
services as fire protection, street, sidewalk and road maintenance, refuse
removal and for other governmental services that were before Proposition 13
provided without charge to property owners or occupants; and (c) any assessment,
tax, fee, levy or charge upon this transaction or any document to which Tenant
is a party which is imposed on the creation or transfer of an interest or an
estate in the Premises. It is the intention of Tenant and Landlord that all new
and increased assessments, taxes, fees, levies and charges, and all similar
assessments, taxes, fees, levies and charges be included within the definition
of Real Property Taxes for the purposes of this Lease. Real Property Taxes for
the first year of the Term shall be calculated as if the Premises and related
improvements were fully assessed. If at any time during the Term the laws
concerning the methods of real property taxation prevailing at the commencement
of the Lease Term are changed so that a tax or excise on rents or any other tax,
however described, is levied or assessed against Landlord as a substitution in
whole or in part for any real property taxes, then Real Property Taxes shall
include, but not be limited to, any such assessment, tax, fee, levy or charge
allocable to or measured by the area of the Premises or the rent payable
hereunder, including, without limitation, any gross income tax with respect to
the receipt of such rent, or upon or with respect to the possession, leasing,
operating, management, maintenance, alteration, repair, use or occupancy by
Tenant of the Premises, or any portion thereof. With respect to any assessments
that may be levied against or upon the Premises, the Building or all or any
portion of the Project and that under the laws then in force may be evidenced by
improvement or other bonds, or may be paid in annual installments, there shall
be included within the definition of Real Property Taxes with respect to any tax
fiscal year only the amount currently payable on such tax, bond or assessment,
including interest, for such tax fiscal year or the current annual installment
for such tax fiscal year.

 3. PREMISES.

      3.1 Lease of Premises. In consideration of the rent and covenants set
forth below, Landlord hereby leases the Premises to Tenant, and Tenant hires the
Premises from Landlord, for the term, at the rental, and upon all of the
conditions set forth herein. Except as otherwise provided herein, this Lease is
subject to: (i) all covenants, conditions, restrictions, easements, mortgages,
deeds of trust, leases, ground or underlying leases, rights of way, reciprocal
easement agreements to which Landlord is a party which affect the Project and
all other matters now or hereafter affecting the Project or the Premises; and
(ii) all zoning laws, ordinances and building codes now or hereafter affecting
the Project or the Premises.

      3.2 Landlord's Reserved Rights. Landlord reserves to itself the absolute
rights: (i) to use the roof, exterior walls and area beneath the Premises, and
(ii) to install, use, maintain and replace equipment, machinery, pipes, conduits
and wiring located within the Premises which serve other parts of the Project,
in a manner and in locations that do not unreasonably interfere with Tenant's
use of the Premises.

      3.3 Condition of Premises. Tenant acknowledges that except to the extent
expressly set forth in this Lease or in a written addendum or amendment hereto,
neither Landlord nor its agents have made (i) any promise to alter, remodel or
otherwise improve, or (ii) any representation or warranty with respect to the
condition of, the Premises, the Building or any part of the Project or
improvements thereon or therein. Tenant's taking possession of the Premises
shall be deemed acceptance of the Premises by Tenant, and shall be deemed
conclusively to establish that the Premises are in good and satisfactory
condition as of the date Tenant takes possession. Subject to the completion of
any Landlord's Work, Tenant accepts possession of the Premises in their current,
"as is", condition, and acknowledges that it has inspected the Premises before
signing this Lease and is fully aware of the condition of the Premises.
Notwithstanding the foregoing, and prior to Landlord's Delivery of the Premises,
Landlord shall inspect any existing HVAC system (consisting of any air
distribution duct work, compressors and any other related components or
equipment); electrical system (consisting of wall and floor outlets, fluorescent
lighting and distribution, panels);and plumbing system (consisting of water
supply; sinks, drains, restroom facilities and water heater[s]) collectively (
Existing Utility Systems"), located in or on the Premises to ensure that each
Existing Utility System. and any related component is in proper working order
and condition. In addition Landlord shall ensure that the Premises is thoroughly
cleaned.

      3.4 Rights in Common Areas. Landlord grants to Tenant and to Tenant's
 employees, invitees and licensees a non-exclusive license during the Term to
 use the Common Areas, subject to the terms and conditions of this Lease. Tenant
 acknowledges that others, including without limitation Landlord and other
 tenants of the Building and Project, and their respective employees, invitees
 and visitors, and other persons authorized by Landlord, will also be entitled
 to use the Common Areas. Without advance notice to 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 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,  provided such closure does not deprive  Tenant of the
     substantial benefit and enjoyment of the Premises.

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

          (d)  Select,  appoint or  contract  with any person for the purpose of
     operating and  maintaining  the Common Areas,  subject to such terms and at
     such rates as Landlord deems reasonable and proper.

          (e)  Change  the size,  use,  shape or nature of any  portions  of the
     Common  Areas,  provided  such  change  does  not  deprive  Tenant  of  the
     reasonable benefit and enjoyment of the Premises.  So long as Tenant is not
     thus deprived of the reasonable  use and benefit of the Premises,  Landlord
     will also have the right at any time to change the  arrangement or location
     of, or both, or to regulate or eliminate the use of, any concourse, parking
     spaces,  garage,  or  any  elevators,   stairs,  toilets  or  other  public
     conveniences in the Project,  without  incurring any liability to Tenant or
     entitling  Tenant  to any  abatement  of  rent,  and such  action  will not
     constitute an actual or constructive eviction of Tenant.

          (f) Erect one or more additional buildings on the Common Areas, expand
     the existing  buildings or other buildings to cover a portion of the Common
     Areas,  convert  Common  Areas  to a  portion  of  the  Building  or  other
     buildings,  or convert any portion of such other buildings to Common Areas.
     Upon  erection of any  additional  buildings or change in the Common Areas,
     the portion of the Project  upon which  buildings or  structures  have been
     erected will no longer be deemed to be a part of the Common  Areas.  In the
     event of any such  changes  in the size or use of the  Common  Areas of the
     Project,  Landlord may make an appropriate  adjustment in the Building's or
     any other buildings' pro rata share of exterior Common Areas of the Project
     as  appropriate,  and a  corresponding  adjustment  to  Tenant's  Share  of
     Operating Expenses.

4. TERM; DELIVERY OF PREMISES.

      4.1 Term. The Term shall be for the number of months set forth at Section
1.4 above, beginning on the Commencement Date and ending on the Expiration Date.
Notwithstanding the foregoing, if Delivery of the Premises has not occurred by
the Commencement Date, then the Commencement Date shall be the actual date of
Delivery of the Premises, as advanced day-for-day for each day's delay therein
that is Tenant Delay. Landlord shall not be liable for any damage incurred by
Tenant as a result of any delay in Delivery of the Premises, and this Lease
shall not thereby become void or voidable. "Tenant Delay" means delay in the
Delivery of the Premises caused by any of the following: (i) non-compliance by
Tenant with matters to be performed by Tenant or Tenant's agents as specified in
Exhibit B; (ii) Tenant's failure to respond within a reasonable time during the
design or construction periods to requests for approval, consent, explanation or
interpretation of anything relating to the construction of Landlord's Work;
(iii) the effect of any change orders or other revisions of any items of
Landlord's Work initiated or necessitated by Tenant or its agents; or (iv) any
other cause within Tenant's exclusive control that adversely affects the date of
Delivery of the Premises.

      4.2 Delivery of the Premises. Upon completion of Landlord's Delivery Work,
the parties shall jointly inspect the Premises. If any defects in Landlord's
Delivery Work exist at the time of such inspection, Tenant shall notify Landlord
thereof in writing upon its inspection of the Premises and Landlord shall
correct such defects; provided, however, that Delivery of the Premises to Tenant
shall be delayed only if the existence of any such defects would materially
adversely affect Tenant's occupancy of the Premises, in which case the date of
Delivery of the Premises shall be the date upon which Landlord notifies Tenant
that such defects have been substantially corrected. Upon inspection and
Delivery of the Premises to Tenant, Tenant shall at Landlord's request sign a
written statement acknowledging Tenant's inspection and acceptance of the
Premises. If Tenant shall fail to contact Landlord and inspect the Premises
within five (5) days after notice from Landlord that Landlord's Delivery Work
has been substantially completed, Landlord's notice shall be conclusive and
binding and Delivery of the Premises shall be deemed to have occurred on the
last day of the five-day period. If a dispute shall arise between Landlord and
Tenant as to the completion of any of Landlord's Work, the certificate of
Landlord's architect shall be binding and conclusive upon all parties.
Notwithstanding the foregoing, unless otherwise agreed to, if Tenant shall begin
Tenant's Work or shall otherwise occupy the Premises prior to substantial
completion of Landlord's Delivery Work, Delivery of the Premises shall be deemed
to have been the date of such commencement of Tenant's Work or other occupancy
of the Premises.

4.3 Termination for Non-Commencement. Notwithstanding the foregoing, in the
event that Delivery of the Premises has not occurred within six months after the
Commencement Date set forth in Section 1.5(a), then for a period of ten (10)
days after the expiration of such six-month period either party not in default
hereunder may cancel and terminate this Lease, without any liability to the
other party, upon written notice to the other party; and provided further,
however, that if such written notice of termination is not delivered by either
party within the ten-day period, the foregoing right to terminate this Lease
shall itself terminate and be of no further force or effect.

     4.4 Memorandum of Commencement Date. Following the Delivery of the
Premises, Landlord shall prepare and forward to Tenant two copies of a written
Memorandum of Commencement Date, signed by Landlord, confirming the Commencement
Date and the date on which the Term will expire. Within ten (10) days after
receipt thereof, Tenant shall sign and return one copy of the Memorandum of
Commencement Date, indicating either Tenant's agreement with the matters set
forth therein or any areas of disagreement. Tenant's failure to return a copy of
the Memorandum of Commencement Date within such ten-day period shall be
conclusively deemed Tenant's agreement with all matters set forth therein. Any
dispute or disagreement on Tenant's part as to the Commencement Date set forth
in such memorandum shall, at the election of either party, be submitted to
final, binding arbitration in San Diego, California under the Commercial
Arbitration Rules of the American Arbitration Association.

      4.5 Early Possession. Landlord herein agrees to grant Tenant early
occupancy of the Premises (estimated to be on or about February 22, 2000). In
this event, the Delivery of the premises would occur prior to the estimated
Delivery of the Premises specified in Section 1.5(c) above, and such occupancy
shall be subject to all provisions of this Lease including excluding payment of
monthly Base Rent ford the. period from Delivery of the Premises to the actual'
Commencement Date.

5. RENT.

      5.1 General. From and after the Commencement Date, Tenant agrees to pay
Landlord, in advance, on the first day of each and every calendar month during
the Term, Base Rent and Additional Rent as specified in this Section. Payment of
all such rent shall be without offset or demand, shall be in lawful money of the
United States of America and shall be made at the address set forth for Landlord
herein or at such other place as Landlord may direct.

     5.2 Base  Rent.  Base Rent shall  initially  be in the amount per month set
forth in Section 1.7.

      5.3 Annual Adjustment to Base Rent. During Lease Years 1-5, Base Rent
shall be increased during the Term in accordance with the schedule set forth in
Section 1.9. During Lease Years 6-10, Base Rent shall be increased (however by
not more than, six-percent (6%) in any: Lease Year) by the percentage change in
the Consumer Price Index-for the Los Angeles-Riverside-Orange County all Urban
Consumers. The Base Index. shall be the Index in effect during April 2004.

      5.4 Operating Expenses. The parties intend that, subject only to the
specific exceptions set forth herein, this Lease be absolutely net to Landlord.
Accordingly, in addition to Base Rent and subject to the provisions of this
Section, Tenant shall pay, as Additional Rent, Tenant's Share of Operating
Expenses incurred by Landlord during each calendar year of the Term, pursuant to
the following terms and conditions:

             (a) Landlord shall provide to Tenant, at or before the Commencement
Date, a good faith estimate of Tenant's Share of Operating Expenses that
Landlord anticipates will actually be incurred for the calendar year in which
the Commencement Date occurs. Landlord shall also provide to Tenant, as soon as
possible following the first day of each succeeding calendar year, a good faith
estimate of Tenant's Share of Operating Expenses with respect to such succeeding
calendar year of the Term.

             (b) Each annual estimate of Tenant's Share of Operating Expenses
determined by Landlord pursuant to this Section shall be divided into twelve
(12) equal monthly installments. Tenant shall pay to Landlord such monthly
installment of Tenant's Share of Operating Expenses with each monthly payment of
Base Rent. In the event the estimated amount of Tenant's Share of Operating
Expenses has not yet been determined for any calendar year, Tenant shall pay the
monthly installment in the estimated amount determined for the preceding
calendar year until the estimate for the current calendar year has been provided
to Tenant, at which time Tenant shall pay any shortfall for the preceding months
of the calendar year and shall thereafter make the monthly installment payment
in accordance with the current estimate.

             (c) Within sixty (60) days following the end of each calendar year
of the Term, Landlord shall determine and provide to Tenant a statement setting
forth the amount of Operating Expenses actually incurred with respect to such
calendar year. In the event that Tenant's Share of such actual Operating
Expenses exceeds the sum of the monthly installments actually paid by Tenant for
such calendar year, Tenant shall pay the difference to Landlord, within thirty
(30) days following receipt of such statement. In the event the sum of such
installments exceeds Tenant's Share of such Operating Expenses actually
incurred, the difference shall be applied as a credit to future installments of
Tenant's Share of Operating Expenses or paid by Landlord to Tenant within thirty
(30) days following expiration of the Term.

             (d) Upon written request of Tenant, Landlord shall provide an
 accounting of the Operating Expenses for the preceding calendar year. Landlord
 shall keep at its home office full, accurate and separate books of account with
 backup documentation of Operating Expenses for a period of three full years
 after the end of each calendar year, which Tenant shall have the right to
 examine and copy at no expense to Landlord, at reasonable times and upon
 reasonable notice. Tenant shall have the right, upon twenty (20) days' prior
 notice to Landlord, not more frequently than annually and at Tenant's sole cost
 and expense, to conduct an audit of Landlord's books and records regarding such
 Operating Expenses to confirm the accuracy of Landlord's accounting; provided,
 however, that such audit shall not unreasonably interfere with the conduct of
 Landlord's business.

      5.5 Late Charges. Tenant acknowledges that late payment by Tenant to
Landlord of Base Rent or Additional Rent due hereunder will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which is
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed upon
Landlord by the terms of any mortgage or deed of trust covering the Premises.
Therefore, if any payment of Base Rent or Additional Rent is not paid within
five (5) days after the date due, Tenant shall pay to Landlord five percent
(5%)(degree) of the amount due or Two Hundred Fifty Dollars ($250.00), whichever
is greater. The parties agree that such late charge represents a fair and
reasonable estimate of the costs that Landlord will incur by reason of the late
payment by Tenant. The late charge shall be deemed Additional Rent and the right
to require it shall be in addition to all of Landlord's other rights and
remedies hereunder or at law and shall not be construed as limiting Landlord's
remedies in any manner.

6. SECURITY DEPOSIT. Tenant shall pay to Landlord, immediately upon execution of
this Lease, a security deposit in the amount set forth at Section 1.10
("Security Deposit"). The Security Deposit shall be held by Landlord as security
for the faithful performance by Tenant of all of the terms, covenants and
conditions of this Lease to be kept and 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, Landlord may (but shall not be
required to) use, apply or retain all or any part of the Security Deposit for
the payment of any rent or any other sum in default, or for the payment of any
other amount which Landlord may 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 suffer by reason of Tenant's default. If any portion of the
Security Deposit is so used or applied, Tenant shall, upon demand therefor,
deliver cash to 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
thereon. If Tenant shall fully and faithfully perform every provision of this
Lease to be performed by it, the Security Deposit or any balance thereof shall
be returned to Tenant (or at Landlord's option, to the last assignee of Tenant's
interests hereunder) at the expiration of the Term, provided that Landlord may
retain the Security Deposit until such time as any amount due from Tenant under
this Lease has been determined and paid in full.

 7.   USE.

      7.1 Permitted Use. The Premises shall be used and occupied only for the
purposes and activities set forth in Section 1.13 above, and for no other uses
or purposes whatsoever. If any governmental license or permit shall be required
for the proper and lawful conduct of Tenant's business or other activity carried
on in the Premises, or if a failure to procure such a license or permit might or
would in any way affect Landlord or the Business Park, then Tenant, at Tenant's
expense, shall (i) duly procure and thereafter maintain such license or permit
and submit the same for inspection by Landlord, (ii) install and pay for any
improvements, changes or alterations in the Premises, required by any
governmental authority, as a result of its proposed use of the Premises or its
manner of operation, and (iii) at all times, comply with the requirements of
each such license or permit. Tenant warrants that it has investigated whether
its proposed use of the Premises and its proposed manner of operation will
comply with, 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 land use approvals, laws and regulations, including without
limitation all zoning laws regulating the use of and enjoyment of the Premises.
Tenant agrees that under no circumstances shall Tenant be released in whole or
in part from any of its obligations under this Lease as a result of any
governmental authority's disallowing or limiting Tenant's proposed use of the
Premises or its manner of operation.

      7.2 Condition of Premises. Landlord warrants to Tenant, but without regard
either to any Tenant's Work or to the use for which Tenant will use the
Premises, that as of the date of Delivery of the Premises, the Premises do not
violate the Declaration or any other covenants or restrictions of record or any
applicable building code, regulation or ordinance in effect on the date of this
Lease. In the event it should be determined that this warranty has been
violated, then after written notice from Tenant, Landlord shall promptly, at its
sole cost and expense, rectify any such violation. In the event Tenant does not
give Landlord any such written notice of violation within three (3) months after
the Commencement Date, the correction of such violation shall thereafter be
Tenant's obligation, to be performed at Tenant's sole cost and expense. The
foregoing warranty shall be of no force or effect if, prior to the date of this
Lease, Tenant was the owner or occupant of the Premises, in which event Tenant
shall correct any such violation, whenever determined to exist, at Tenant's sole
cost and expense.

      7.3 Compliance With Requirements. Subject to Section 7.2 above, Tenant
 shall, at Tenant's expense, promptly comply with all applicable statutes,
 ordinances, rules, regulations, applicable covenants and restrictions of
 record, and requirements of any fire insurance underwriters or rating bureaus,
 now in effect or which may hereafter come into effect during the Term, whether
 or not they reflect a change in policy from that now existing, relating in any
 manner to the Premises and the occupation and use by Tenant of the Premises.
 Tenant shall not use or permit the use of the Premises in any manner that will
 tend to create waste or a nuisance or shall tend to disturb other occupants of
 the Business Park. Without limiting the generality of the foregoing, Tenant
 shall, at its sole cost and expense, comply promptly with all Hazardous
 Materials Laws and with all environmental laws and ordinances applicable to the
 conduct of Tenant's business, including all air quality and air pollution
 regulations of the regional air pollution control district. If at anytime
 Tenant is not fulfilling its obligations under this Section, Landlord may cause
 to be performed, at Tenant's sole 'reasonable cost, an audit or inspection of
 the Premises to evaluate Tenant's compliance herewith.

      7.4 Compliance With Americans With Disabilities Act. The parties
acknowledge that the design and construction of certain areas of the Building
and/or the Common Areas and Premises may not presently, be in compliance with
Title III of the Americans With Disabilities Act ("ADA") and other applicable
laws and regulations that relate to access by the disabled or handicapped. For
any non-compliance that exists prior to the Commencement Date, Landlord shall be
responsible, at its sole expense for any necessary alterations or improvements
to the Building or the Common Areas to the extent necessary to correct any such
non-compliance. Landlord agrees that no cost or expense related: to such
alterations or improvements required as of result of accessibility requirements
imposed by the ADA that are in effect on the Commencement- Date shall be
included. in Operating; Expenses. After the, Commencement Date, Tenant shall be
responsible for compliance with the ADA and related statutes with respect to any
subsequent alterations or improvements to the Premises made by Tenant and the
operation of any businesses conducted from the Premises; Landlord shall have no
responsibility or liability with respect thereto. In the event of any changes to
the ADA or other applicable statutes, or any rules or regulations promulgated
pursuant thereto, that become effective after the Commencement Date of this
Lease, Tenant shall be responsible, at its sole expense, for any necessary
alterations or improvements to the Premises, and Landlord shall be responsible
for any necessary alterations or improvements to the Building or any Common
Areas; provided, however, that Landlord's costs and expenses incurred in
connection with any such alterations or improvements shall be conclusively
deemed to be capital items and such costs and. expenses shall be amortized in
accordance with generally accepted accounting practice, provided however, that
Landlord shall not include in Operating Expenses amortization of any ADA cost
incurred solely for improvements to the leased Premises or another tenant in the
Business Park and not part of a more general program of compliance with,
amendments to or subsequent regulations issued under the ADA.

      7.5 Rules and Regulations. Tenant shall at all times comply with the
Declaration and with the rules and regulations for the Business Park. A copy of
the rules and regulations in existence on the date of this Lease is attached
hereto as Exhibit C, but Landlord reserves the right to amend the rules and
regulations at any time by giving notice of amendment to Tenant, if Landlord
determines such amendments to be to the best interests of the Building and its
tenants. Tenant shall not be bound by any such amended rules and regulations
until Tenant has received a written copy thereof. Landlord agrees that the rules
and regulations shall be enforced in a uniform and non-discriminatory manner;
provided, however, that Landlord shall not be liable to Tenant for Landlord's
failure to enforce the rules and regulations against any other tenants of the
Project. Landlord shall not change any rules so as to authorize other tenants;
to violate applicable laws, ordinances, or regulations or to engage in
activities that would constitute a nuisance:

8. MAINTENANCE, REPAIRS AND ALTERATIONS. 8.1
      Tenant's Obligations.
             (a) Except as provided for in Section 8.4, Tenant shall keep and
 maintain in good, sanitary order, condition, and repair (including replacement
 of parts and equipment if necessary) the Premises and every part thereof and
 any and all appurtenances thereto wherever located, including, without
 limitation, the interior surfaces of the exterior wall, the exterior and
 interior portion of all doors, door frames, door checks, windows (including
 window sashes, casements and frames), plate glass, storefront, Tenant's signs,
 all plumbing and sewage facilities within the Premises (including free flow up
 to the main sewer line), fixtures, heating and air conditioning and electrical
 systems (whether or not located in the Premises), sprinkler system, walls,
 floor and ceilings, and all other repairs, replacements, renewals and
 restorations, interior and exterior, ordinary and extraordinary, foreseen and
 unforeseen, and all other work performed, and additions, alterations, and
 improvements installed by or on behalf of Tenant. Any glass broken shall
 promptly be replaced by Tenant with glass of the same quality, size and kind.
 If Tenant shall fail to replace same within seventy-two (72) hours after such
 glass is broken, Landlord shall have the right, but shall not be obligated, to
 replace such glass, in which event Tenant shall, promptly upon demand therefor
 by Landlord, reimburse Landlord for reasonable expenses incurred by Landlord in
 connection therewith.

             (b) Tenant shall procure and maintain, at Tenant's expense, an HVAC
 system maintenance contract on any HVAC systems which serve only the Premises;
 provided, however, that Landlord may at its election procure and maintain the
 HVAC system maintenance contract, in which event Tenant shall reimburse
 Landlord, upon demand and as Additional Rent, for Landlord's costs thereof. If
 Tenant procures the HVAC maintenance contract, then Tenant shall submit a copy
 of such maintenance contract at the Commencement Date, and thereafter as
 reasonably required by Landlord.

             (c) Tenant shall, at Tenant's sole cost and expense, comply with
 all laws, rules, orders, ordinances, directions, regulations and legal
 requirements of federal, state, county or municipal governmental authorities
 now or hereafter affecting or applying to the Premises, including, without
 limitation, the Americans With Disabilities Act.

      8.2 Condition on Termination. Subject to the provisions of Section 86, the
 last day of the Term, or on any sooner termination, Tenant shall surrender the
 Premises to Landlord in the same condition as received, ordinary wear and tear
 excepted, clean and free of debris. Any damage or deterioration of the Premises
 shall not be deemed ordinary wear and tear if the same could have been
 prevented by good maintenance practices. Tenant shall repair any damage to the
 Premises occasioned by the installation or removal of Tenant's trade fixtures,
 alterations, furnishings and equipment, and shall leave all air lines, power
 panels, electrical distribution systems, lighting fixtures, HVAC systems,
 plumbing and fencing in good operating condition.

     8.3 Landlord's Rights. If Tenant fails to perform Tenant's obligations
under Section 8.1 or 8.2 or under any other provision of this Lease, Landlord
may enter the Premises after three (3) days' prior written notice to Tenant
(except in the case of emergency, in which case no notice shall be required) and
perform such obligations on Tenant's behalf and put the Premises in good order,
condition and repair, and the cost thereof together with interest thereon from
the date incurred at the maximum rate then allowed by law shall be due and
payable as Additional Rent to Landlord together with Tenant's next Base Rent
installment.

      8.4 Landlord's Obligations. Except for any Landlord's Work as set forth in
Exhibit B, and Sections 13 and 14 relating to damage and condemnation, and the
provisions in this Section 8.4 below which relate solely to multi-tenant
buildings, the parties intend that Landlord shall have no obligation whatsoever
to repair and maintain the Premises or the equipment therein, whether structural
or non-structural, all of which the parties intend to be obligations of Tenant
pursuant to this Section 8. Notwithstanding the foregoing, if the parties
acknowledge that the Building is a multi-tenant facility, and Landlord shall
keep in good condition and repair the foundations, exterior walls, structural
condition of interior bearing walls, and roof of the Building, as well as the
Common Areas, and all costs and expenses incurred by Landlord in connection
therewith shall be included within Operating Expenses. Landlord shall have no
obligation to make repairs under this Section until a reasonable time after
receipt of written notice from Tenant of the need for such repairs.

      8.5 Waiver. Tenant expressly waives all rights to make repairs at the
expense of Landlord or deduct any amounts from rent as provided in any statute
or law in effect during the Term of this Lease, including its rights under the
provisions of ss. 1941 and ss. 1942 of the CIVIL CODE of the State of
California. Nothing herein shall limit or affect any rights Tenant may. have
under the express provisions' of this Lease, e.g.; to make emergency repairs at.
Landlord's expense subject to compliance- with the, conditions of Section 8.4.

      8.6    Alterations and Additions.

             (a) Tenant shall not, without Landlord's prior written consent
which shall not be unreasonably withheld, make any alterations, improvements,
additions, or Utility Installations in, to or about the Premises. Tenant shall
make no change or alteration to the exterior of the Building without Landlord's
prior written consent, which consent may be withheld for any reason in
Landlord's sole discretion and which may at Landlord's discretion be conditioned
upon Tenant's providing Landlord, at Tenant's sole cost and expense, a lien and
completion bond in an amount equal to one and one-half (1 %z) times the cost of
the work. As used in this Section, the term "Utility Installations" shall mean
carpeting, window coverings, air lines, power panels, electrical distribution
systems, lighting fixtures, space heaters, air conditioning, plumbing and
fencing. Landlord may require that Tenant remove at the expiration of the Term
any or all alterations, improvements, additions or Utility Installations which
were not part of the original Tenant Improvements, and' restore the Premises and
the Common Areas to their prior condition provided, however that Tenant shall
not be, obligated to remove any such alterations, improvements; additions or
Utility Installations that were affirmatively approved in advance by Landlord
unless Landlord so advised Tenant at the time of approval. Should Tenant make
any alterations, improvements, additions or Utility Installations without the
prior approval of Landlord, for which Landlord's approval or, consent was
required hereunder, Landlord may, at any time during the Term of this lease,
require that Tenant remove any or all of the same.

             (b) Except for improvements to be accomplished by Landlord at its
expense, if any, Tenant shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for Tenant at or for use in
the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Building or any interest therein. Tenant shall
give Landlord not less than ten days' notice prior to the commencement of any
work in the Premises, and Landlord shall have the right to post notices of
non-responsibility in or on the Premises or the Building as provided by law. If
Tenant shall, in good faith, contest the validity of any such lien, claim or
demand, then Tenant shall, at its sole expense, defend itself and Landlord
against the same and shall pay and satisfy any adverse judgment that may be
rendered thereon before the enforcement thereof against the Landlord or the
Building, upon the condition that if Landlord shall require, Tenant shall
furnish to Landlord a surety bond satisfactory to Landlord in an amount equal to
one and one-half (1 Y2) times the amount of such contested lien claim or demand,
indemnifying Landlord against liability for such claim or lien and for all costs
of defense thereof, of obtaining the release of any lien, and of making the
Building free from the effect of such lien or claim. In addition, Landlord may
require Tenant to pay Landlord's attorneys' fees and costs in participating in
such action if Landlord shall decide it is in Landlord's best interest to do so.
In any event, Landlord may pay the lien claim prior to the enforcement thereof,
in which event Tenant shall reimburse Landlord in full, including attorneys'
fees for any such expense, as Additional Rent, with the next due rents.

             (c) All alterations, improvements, additions and Utility
 Installations (exclusive of all trade fixtures of Tenant) which may be made on
 the Premises, shall be the property of Landlord and shall remain upon and be
 surrendered with the Premises at the expiration of the Lease term, unless
 Landlord requires their removal. Notwithstanding the provisions of this Section
 8.6, Tenant's machinery and equipment (other than Utility Installations), other
 than that which is affixed to the Premises so that it cannot be removed without
 material damage to the Premises or the Building, shall remain the property of
 Tenant and may be removed by Tenant subject to the provisions of Section 8.2.

9. TAXES.

     9.1 Real Property Taxes. Landlord shall pay all Real Property Taxes with
respect to the Building and the Project, which shall be included in Operating
Expenses. If the Premises are separately assessed, or included within an
assessor's parcel that does not encompass the entire Project, Landlord shall
adjust Tenant's Share of Operating Expenses as it relates to Real Property
Taxes, to reflect the proportion between the area of the Premises and the total
area of the assessor's parcel encompassing the Premises.

     9.2 Personal Property Taxes. Tenant shall pay prior to delinquency all
taxes assessed against and levied upon trade fixtures, furnishings, equipment
and all other personal property of Tenant contained in the Premises or
elsewhere. When possible, Tenant shall cause said trade fixtures, furnishings,
equipment and all other personal property to be assessed and billed separately
from the real property of Landlord. If any of Tenant's said personal property
shall be assessed with Landlord's real property, Tenant shall pay to Landlord
the taxes attributable to Tenant within ten days after a receipt of a written
statement setting forth the taxes applicable to Tenant's property.

10. UTILITIES. Tenant shall be solely responsible for, shall arrange for, and
shall promptly pay all charges, including meter and connection fees, for water,
gas, electricity, sewer, and any other utility used upon or furnished to the
Premises. In the event any such utility is not separately metered, Tenant shall
pay its share of the cost thereof, as equitably determined by Landlord, as
Additional Rent, as part of Operating Expenses. In this regard, Tenant
acknowledges and agrees that if Tenant's use of the Premises results in a
disproportionately heavy use of water or other commonly metered utilities, then
Landlord, at Landlord's discretion, and in a reasonable and equitable manner,
may adjust Tenant's Share of Operating Expenses to reflect such
disproportionately heavy use. Landlord does not warrant that any services
Landlord supplies will not be interrupted, e.g., because of accidents, repairs,
alterations, improvements or any reason beyond the reasonable control of
Landlord. No such interruption shall: (i) be considered an eviction or
disturbance of Tenant's use and possession of the Premises; (ii) entitle Tenant
to terminate this Lease; (iii) make Landlord liable to Tenant for damages; (iv)
abate Base Rent, Additional Rent or any other sums due hereunder; or (v) relieve
Tenant from performing its obligations hereunder.

11. INSURANCE.

      11.1 Liability Insurance-Tenant. Prior to the earlier of the Commencement
Date or Tenant's occupancy of the Premises, Tenant, at its own expense, shall
obtain from and shall thereafter keep in force with companies reasonably
acceptable to Landlord, commercial general liability insurance applying to the
use and occupancy of the Premises, or any areas adjacent thereto, and the
business operated by Tenant or any other occupant on the Premises. Such
insurance shall: include broad form contractual liability insurance coverage
specifically insuring all of Tenant's indemnity obligations under this Lease;
have a minimum combined single limit liability of at least $2,000,000; be
written to apply to all bodily injury, property damage, personal injury and
other covered loss, however occasioned, occurring during the policy term;
contain endorsements deleting any employee exclusion on personal injury
coverage; include products and completed operations coverage; provide for
severability of interests or a cross-liability provision or endorsement; and
afford coverage for all claims based on acts, omissions, injury and damage,
which claims occurred or arose (or the onset of which occurred or arose) in
whole or in part during the policy period. The foregoing policy of insurance
shall name Landlord and any parties designated by Landlord as additional
insureds, and shall include a per-location endorsement, Form C62504 or
equivalent. In addition, Tenant shall maintain non-owned automobile liability
insurance. The policy limits herein specified shall be increased from time to
time upon written demand from Landlord, if circumstances reasonably justify such
increases. Tenant shall furnish Landlord with a certificate of such insurance
within thirty days after the Commencement Date and whenever requested shall
satisfy Landlord that such policy is in full force and effect. The policy shall
be endorsed to provide that its coverage shall be primary and noncontributing
with any insurance carried by Landlord, and shall be further endorsed to provide
that it shall not be canceled or altered without thirty days' prior written
notice to Landlord.

      11.2 Liability Insurance-Landlord. Landlord shall obtain and keep in force
during the Term commercial general liability insurance, insuring against
liability for injury to or death of persons and loss of or damage to property
occurring in or on the Common Areas. Landlord's liability insurance shall be in
amount of not less than $2,000,000 combined single limit per occurrence for
bodily and personal injury and property damage.

      11.3    Property Insurance-Landlord.

             (a) Landlord shall maintain in full force and effect at all times a
standard policy or policies insuring against "all risk" perils (also known as
"special perils") covering the Building and other improvements owned by Landlord
in the Business Park in an amount at least sufficient to avoid the effects of
coinsurance provisions of the policy or policies (i.e., not less than ninety
percent [90%] of the actual replacement cost of the Building and other
improvements, without deduction for depreciation and excluding foundations,
excavation costs and the cost of underground flues, pipes and drains, if such
costs are properly excludable under coinsurance requirements). Such insurance
shall include (i) a standard form of lender's loss payable endorsement, issued
to the holder or holders of a mortgage or deed of trust secured in whole or in
part by the Building and the other property on which the insured improvements
are located; (ii) at Landlord's sole option, coverage for flood or earthquake or
both; and (iii) rental income insurance equal to Base Rent and Operating
Expenses for up to one year. In addition, Landlord shall obtain and keep in
force during the Term such other insurance as Landlord deems advisable.

            (b) Tenant shall pay for any increase in the property insurance of
the Building or such other building or buildings if the increase is caused by
Tenant's acts, omissions, use or occupancy of the Premises. Tenant shall not do
or permit to be done anything which shall invalidate the insurance policies
referred to in this Section 11.3. If Tenant does or permits to be done anything
which shall increase the cost of the insurance policies referred to in this
Section 11.3, then Tenant shall within thirty (30) days after demand therefor by
Landlord reimburse Landlord for any additional premiums attributable to any act
or omission or operation of Tenant causing such increase in the cost of
insurance. Landlord shall deliver to Tenant a written statement setting forth
the amount of any such insurance cost increase and showing in reasonable detail
the manner in which it has been computed.

      11.4 Property Insurance-Tenant. Tenant shall pay for and shall maintain in
full force and effect at all times, a standard policy insuring against "all
risk" perils (also known as "special perils"), covering all exterior glass,
whether plate or otherwise, and all interior glass, stock in trade, merchandise,
trade fixtures, equipment and other personal property located in the Premises
and used by Tenant in connection with its business. Tenant shall furnish
Landlord with a duly executed certificate evidencing such coverage at the
commencement of the Term and not less than thirty (30) days before the
expiration of the term of such coverage.

      11.5 Insurance Policies. Each policy of insurance required to be
maintained by Tenant hereunder shall name Landlord, and any other parties in
interest designated by Landlord, as additional insureds and shall contain a
clause that the insurer will not cancel or change such insurance without first
giving Landlord thirty (30) days' prior written notice. Such insurance may be
furnished by Tenant under any blanket policy carried by it or under a separate
policy therefor; provided that such blanket policy shall contain an endorsement
that names Landlord (and any other parties in interest designated by Landlord)
as an additional insured, references the Premises and guarantees that a minimum
limit equal to the insurance amounts required in this Lease will be available
specifically for the Premises. All insurance shall be with a good and solvent
insurance company authorized to do business in the State in which the Business
Park is located, having a minimum rating of A and X in Best's Insurance Guide. A
copy of the paid-up policy or other evidence reasonably satisfactory to Landlord
shall be delivered to Landlord prior to the Term Commencement Date and not less
than thirty (30) days prior to each renewal or extension of such policy of
insurance. In the event that Tenant shall deliver a certificate of insurance in
lieu of a copy of the paid-off insurance policy at any time during the Term of
this Lease, a copy of such insurance policy shall be provided to Landlord as
soon thereafter as practicable. No policy of insurance under this Section shall
provide for a deductible in excess of Ten Thousand Dollars ($10,000), provided
that Tenant shall remain obligated for the insurance deductible. All public
liability, property damage or casualty policies and the coverage evidenced
thereby shall be primary with respect to any policies carried by Landlord and
any coverage carried by Landlord shall pay only amounts in excess of the limits
in said policies of Tenant. In addition to the foregoing, in the event Tenant
fails to provide or keep in force any of the insurance required pursuant to this
Section 11 , then Landlord, in its discretion and without waiving any of its
rights under this Lease, may provide such insurance, in which event the cost
thereof shall be payable by Tenant to Landlord as Additional Rent on the first
day of the calendar month immediately following demand therefor from Landlord.

      11.6 Waiver of Subrogation. Each party hereby waives any and all rights of
recovery against the other party hereto and its officers, agents, employees, or
representatives, and Tenant hereby waives any rights it may have against any
trust deed holder, for the loss, damage, or injury to property arising from any
event which is covered by insurance against fire, vandalism, malicious mischief,
and extended coverage, and such other perils as are from time to time included
in the "all risk" insurance policy(ies) carried by Landlord and Tenant pursuant
to this Section 11, provided that such waiver shall apply only to the extent of
any recovery by the injured party under such insurance. In the event the other
party is a self-insurer (as may be permitted herein), such waiver shall be to
the limit of that insurance required to be carried hereunder. Each party hereto,
on behalf of its respective insurance companies hereby waives, to the extent of
any recovery under any such insurance policies, any right of subrogation that
one may have against the other, and Tenant, on behalf of its insurance
companies, hereby waives any right of subrogation which such insurer may have
against any trust deed holder. Each party hereto shall cause its respective
insurance policies to contain endorsements evidencing such waivers of
subrogation. The foregoing releases and waivers of subrogation shall be
operative only so long as same shall neither preclude the obtaining of insurance
nor diminish, reduce or impair the liability of any insurer. In the event that a
waiver of subrogation cannot be obtained, the other party is relieved of the
obligation to obtain a waiver of subrogation rights with respect to the
particular insurance involved.

 12. WAIVER AND INDEMNITY.

      12.1 Waiver and Exemption of Landlord From Liability. Tenant hereby agrees
that except for damage or injury resulting from Landlord's sole active
negligence or willful misconduct, Landlord shall not be liable for injury to
Tenant's business or any loss of income, including damage to the goods, wares,
merchandise or other property of Tenant or of Tenant's employees, invitees,
customers, or any other person in or about the Premises, or the Common Areas.
Landlord shall not be liable, except when the damage or injury is a result of
Landlord's sole active negligence or willful misconduct, for injury to the
person of Tenant, Tenant's employees, agents or contractors, 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,
sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures
or from any other cause, whether said damage or injury results from conditions
arising upon the Premises, or the Common Areas or from other sources or places
and regardless of whether the cause of such damage or injury or the means of
repairing the same is inaccessible to Tenant. Except for Landlord's active
negligence or willful misconduct; Landlord shall not be liable for any damages
arising from any act or neglect of any other tenant, occupant or use of the
Business Park or from the failure of Landlord to enforce the provisions of any
other lease in the Business Park. Except for Landlord's active negligence or
willful misconduct, Tenant, as a material part of the consideration to Landlord,
hereby assumes all risk of damage to property of Tenant or injury to persons,
in, upon or about the Premises and elsewhere arising from the above or any other
causes, and Tenant hereby waives all claims in respect thereof against Landlord.

      12.2 Tenant's Indemnity. Tenant shall indemnify, protect, defend, and hold
Landlord and Landlord's officers, directors, employees and agents (collectively,
"representatives") harmless from and against any and all claims, actions,
demands, proceedings, losses, damages, costs of any kind or character (including
reasonable attorneys' fees and court costs), expenses, liabilities, judgments,
fines, penalties, or interest (collectively, "Losses"), arising from or out of
Tenant's use of the Premises, or from the conduct of Tenant's business or from
any activity, work or things done, permitted or suffered by Tenant in or about
the Premises or elsewhere. Tenant shall also indemnify, protect, defend, and
hold Landlord and Landlord's representatives harmless from and against any and
all Losses arising from any breach or default in the performance of any
obligation on Tenant's part to be performed under the terms of this Lease, or
arising from any act or omission of Tenant, or any of Tenant's agents,
contractors, or employees, and from and against all costs, attorneys' fees,
expenses and liabilities reasonably incurred in the defense of any such claim or
any action or proceeding brought thereon; and in case any action or proceeding
be brought against Landlord or any of Landlord's representatives by reason of
any such claim, Tenant upon notice from Landlord shall defend the same at
Tenant's expense by counsel reasonably satisfactory to Landlord and Landlord
shall cooperate with Tenant in such defense. Neither termination of this Lease
nor completion of the acts to be performed under this Lease shall release Tenant
from its obligations to defend or indemnify Landlord as required hereunder so
long as the event upon which any such Loss is predicated shall have occurred
prior to the effective date of any such termination or completion.

      12.3 Landlord's Indemnity. Landlord shall defend, indemnify and hold
Tenant and Tenant's representatives harmless from and against any and all Losses
arising in any way from (i) the sole active negligence or willful misconduct of
Landlord; or (ii) any breach or default in the performance of any obligation on
Landlord's part to be performed under this Lease. Landlord shall defend any such
action or proceeding brought against Tenant or its representatives at Landlord's
expense with counsel reasonably satisfactory to Tenant. Neither termination of
this Lease nor completion of the acts to be performed under this Lease shall
release Landlord from its obligations to defend or indemnify Tenant as required
hereunder so long as the event upon which any such Loss is predicated shall have
occurred prior to the effective date of any such termination or completion.

 13. DAMAGE AND DESTRUCTION. 13.1   Definitions.
     -----------------------

          (a)  "Partial  Damage"  shall  mean if the  Premises  are  damaged  or
     destroyed to the extent that the cost of repair is less than fifty  percent
     (50%) of the then replacement cost of the Premises.

          (b) "Total  Destruction"  shall mean if the  Premises  are  damaged or
     destroyed to the extent that the cost of repair is fifty  percent  (50%) or
     more of the then  replacement  cost of the Premises" or if so, much of the.
     Project:  is  damaged  or  destroyed  -(regardless  of  the  damage  to the
     Premises))  so  that  Tenant's,  use  and  enjoyment  of  the  Premises  is
     substantially and adversely affected.

          (c) "Insured Loss" shall mean damage or destruction  which was covered
     by an event  required to be covered by the  insurance  described in Section
     11.3. The fact that an Insured Loss has a deductible  amount shall not make
     the loss an uninsured loss.

          (d) "Replacement  Cost" shall mean the amount of money necessary to be
     spent in order to repair or rebuild the damaged area to the condition  that
     existed   immediately  prior  to  the  damage   occurring,   excluding  all
     improvements made by tenants.

       13.2 Partial Damage.

             (a) Insured Loss: Subject to the provisions of Sections 13.4 and
 13.5, if at any time during the Term there is damage which is an Insured Loss
 and which falls into the classification of Partial Damage, then Landlord shall,
 at Landlord's expense, repair such damage to the Premises, but not Tenant's
 fixtures or equipment, as soon as reasonably possible and this Lease shall
 continue in full force and effect. In no event, however, shall Landlord be
 obligated to spend for such repairs more than the amount of available insurance
 proceeds, plus the amount of any deductible elected by Landlord.

             (b) Uninsured Loss: Subject to the provisions of Sections 13.4 and
 13.5, if at any time during the Term there is damage which is not an Insured
 Loss and which falls within the classification of Partial Damage, unless caused
 by a negligent or willful act of Tenant (in which event Tenant shall make the
 repairs at Tenant's expense), which damage causes substantial interference with
 the normal conduct of Tenant's business, Landlord may at Landlord's option
 either (i) repair such damage as soon as reasonably possible at Landlord's
 expense, in which event this Lease shall continue in full force and effect, or
 (ii) give written notice to Tenant within thirty days after the date of the
 occurrence of such damage of Landlord's intention to cancel and terminate this
 Lease as of the date of the occurrence of such damage. In the event Landlord
 elects to give such notice of Landlord's intention to cancel and terminate this
 Lease, Tenant shall have the right within ten days after the receipt of such
 notice to give written notice to Landlord of Tenant's intention to repair such
 damage at Tenant's expense, without reimbursement from Landlord (except, as
 otherwise expressly provided below), in which event this Lease shall continue
 in full force and effect, and Tenant shall proceed to make such repairs as soon
 as reasonably possible. If Tenant timely gives such notice and effects such
 repairs, landlord shall, within a reasonable time after Tenant's written
 request therefor, reimburse Tenant up to a maximum of $10,0.00 toward Tenants
 out-of-pocket-expenses incurred in repairing such damage, provided-that (a)
 Tenant; is not then in Default hereunder, and (b) the reimbursement request is
 accompanied by copies of receipts or invoices evidencing prior payment of the
 expense items covered by the reimbursement request. If Tenant does not give
 such notice within such ten-day period this Lease shall be canceled and
 terminated as of the date of the occurrence of such damage.

      13.3 Total Destruction. Subject to the provisions of Sections 13.4 and
13.5, if at any time during the Term there is damage, whether or not it is an
Insured Loss, which falls into the classification of Total Destruction, then
Landlord may at Landlord's option either (i) repair such damage or destruction,
but not Tenant's fixtures, equipment or tenant improvements (except for tenant
improvements initially constructed at the commencement of the Term), as soon as
reasonably possible at Landlord's expense, and this Lease shall continue in full
force and effect, or (ii) give written notice to Tenant within thirty days after
the date of occurrence of such damage of Landlord's intention to cancel and
terminate this Lease, in which case this Lease shall be canceled and terminated
as of the date of the occurrence of such damage.

      13.4 Damage Near End of Term. Subject to the following sentence, if at any
time during the last year of the Term of this Lease as extended from time to
time there is substantial damage, whether or not an Insured Loss, which falls
within the classification of Partial Damage, either party may at its option
cancel and terminate this Lease as of the date of occurrence of such damage by
giving written notice to the other party, within thirty days after the date of
occurrence of such damage, of the: first party's election to terminate.
Notwithstanding the foregoing, in the event that Tenant has an option to extend
or renew this Lease, and the time within which said option may be exercised has
not yet expired, Tenant shall exercise such option, if it is to be exercised at
all, no later than thirty days after the occurrence of an Insured Loss falling
within the classification of Partial Damage during the last year of the Term. If
Tenant duly exercises such option during the thirty day period, Landlord shall,
at Landlord's expense, repair such damage, but not Tenant's fixtures, equipment
or tenant improvements, as soon as reasonably possible and this Lease shall
continue in full force and effect; provided, however, that if Landlord has
maintained the required insurance coverages as set forth in Section 11.3, in no
event shall Landlord be obligated to spend for such repairs more than the amount
of available insurance proceeds, plus the amount of any deductible elected by
Landlord. If Tenant fails to exercise such option during the thirty day period,
then Landlord may at Landlord's option terminate and cancel this Lease as of the
date of the occurrence of such damage.

      13.5 Abatement of Rent. In the event Landlord repairs or restores the
Premises pursuant to the provisions of this Section 13, the rent payable
hereunder for the period during which such damage, repair or restoration
continues shall be abated in proportion to the degree to which Tenant's use of
the Premises is impaired. Except for abatement of rent, if any, Tenant shall
have no claim against Landlord for any damage suffered by reason of any such
damage, destruction, repair or restoration (without prejudice to any claims
Tenant may have against Landlord for Landlord's breach of any of its obligations
to effect such, repairs or restoration pursuant to the provisions of this.,
Section 13).

      13.6 Waiver. Landlord and Tenant waive the provisions of any statutes
which relate to termination of leases when leased property is destroyed and
agree that such event shall be governed by the terms of this Lease.

 14. CONDEMNATION.
     -------------

      14.1 Total Condemnation of Premises. If the whole of the Premises shall be
 taken by any public authority under condemnation, the power of eminent domain,
 or by a sale in lieu thereof under threat of condemnation (collectively
 "taking" or "taken" as the case may be), then the Term shall cease as of the
 day of possession pursuant to such taking, and the Rent shall be paid up to
 that day. Landlord shall refund such rent as may have been paid in advance for
 the period subsequent to the date of such possession.

      14.2 Partial Condemnation.

             (a) If less than the whole but more than fifteen percent (15%) of
 the Premises shall be taken, Tenant shall have the right to terminate this
 Lease or, subject to Landlord's right of termination as set forth in Section
 14.2(b), to continue in possession of the remainder of the Premises and shall
 notify Landlord in writing within ten (10) days after notice of such taking of
 Tenant's intention. If twenty percent (20%) or less of the Premises shall be so
 taken, the Term shall cease with respect to the part so taken as of the day
 possession shall be taken, and Tenant shall pay rent up to that day for the
 part so taken.

             (b) If more than twenty percent (20%) of the Building or more than
 twenty percent (20%) of the Premises shall be taken, Landlord may, by notice to
 Tenant delivered on or before the date surrendering possession, terminate this
 Lease.

             (c) In the event this Lease is not so terminated, Tenant shall
 remain in the portion of the Premises not so taken, and all of the terms,
 provisions, covenants, conditions, and agreements contained herein shall
 continue in effect with respect to the portion not so taken, except that Base
 Rent shall be reduced in proportion to the amount of the Premises taken, and
 Landlord shall, to the extent of severance damages received by Landlord in
 connection with such condemnation, repair any damage to the Premises caused by
 such condemnation except to the extent that Tenant has been reimbursed therefor
 by the condemning authority. Tenant shall pay any amount in excess of such
 severance damages required to complete such repair.

      14.3 Landlord's and Tenant's Damages. Any award for the taking of all or
any part of the Premises under the power of eminent domain or any payment made
under threat of the exercise of such power shall be the property of Landlord,
whether such award shall be made as compensation for diminution in value of the
leasehold or for the taking of the fee, or as severance damages; provided,
however, that Tenant shall be entitled to any award for loss of or damage to
Tenant's trade fixtures, moving costs and removable personal property to the
extent separately awarded. Without limiting the foregoing, provided the same are
the subject of a separate award to Tenant, Tenant shall have the right to any
award which compensates Tenant for any (i) Tenant's own personal property,
tenant fixtures or tenant improvements so taken or acquired, (ii) Tenant's
status as a "displaced person" pursuant to California GOVERNMENT CODE ss.7262,
and (iii) any loss of goodwill as the owner of a business pursuant to California
CODE OF CIVIL PROCEDURE ss.1263.510. Tenant shall have the right to negotiate
its award separately with the condemning authority.

      14.4 Waiver. This Article 14 is in lieu of, and Tenant hereby expressly
waives any rights it may have under, any statute governing the condemnation of
the Premises, including ss. 1932 and ss. 1933 of the California CIVIL CODE and
ss. 1265.130 of the California CODE OF CIVIL PROCEDURE, and agrees; that
Landlord's and Tenant's rights with respect to such event shall be governed; by
the provisions of` this Lease:;

 15. ASSIGNMENT AND SUBLETTING.
     --------------------------

      15.1 Landlord's Consent Required. Tenant shall not voluntarily or by
operation of law assign, transfer, mortgage, sublet, or otherwise transfer or
encumber all or any part of Tenant's interest in the Lease or in the Premises,
without Landlord's prior written consent, which shall not be unreasonably
withheld. Any attempted assignment, transfer, mortgage, encumbrance or sublease
without such consent shall be void, and shall constitute a breach of this Lease
without the need for notice to Tenant.

      15.2 Procedure. In the event Tenant wishes to sublet or assign the
Premises, or any portion thereof, Tenant shall submit in writing to Landlord (i)
the name of the proposed sublessee or assignee, (ii) a statement describing the
nature of the business to be carried on in the Premises, (iii) a copy of the
proposed sublease or assignment, including all terms and conditions thereof,
(iv) Landlord's lease application form, completed by the proposed assignee or
sublessee, (v) financial statements for the proposed assignee or sublessee,
which shall include, at a minimum, prior year and year to date (current to
within six months) balance sheets, income and expense statements and sources and
uses of cash statements, and (vi) such other financial information regarding
such sublessee or assignee as Landlord shall reasonably request.

      15.3 Provisions Applicable to Both Assignment and Subletting.

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

             (b) The consent by Landlord to any assignment or sublease shall not
constitute a consent to any subsequent assignment or sublease by Tenant or to
any assignment or sublease by the sublessee. However, Landlord may consent to
subsequent subleases and assignments of the sublease or any amendments or
modifications thereto, provided Landlord notifies Tenant or anyone else liable
on the Lease or sublease and Landlord shall obtain their consent thereto.

             (c) If Tenant subleases the Premises or any part of it or assigns
any of its rights under this Lease in and to the Premises, all rents paid by the
sublessee or assignee which are in excess of the amount of Base Rent and
Additional Rent then payable by Tenant under this Lease shall be the property of
and shall be paid to Landlord. Any attempt on the part of Tenant to enter into a
sublease or assignment which does not provide for the payment of such excess
rent to Landlord shall be deemed to be a material breach of this Lease. As used
herein, "excess" rent shall mean the positive difference, if any in any given
month, resulting from the subtraction of (X) the sum of the Base Rent and
Additional Rent paid by Tenant under the Lease, from-(Y) the effective rental
rate paid by the sublessee over the entire term of the assignment or sublease,
reduced by the costs to Tenant of applicable leasing commissions and tenant
improvement expenses incurred by Tenant in connection therewith. The parties
acknowledge that the provisions of this Section are a material inducement for
Landlord's execution of this Lease and that Tenant has represented and warranted
that its sole purpose for entering into this Lease is to obtain possession of
the Premises and not to generate revenues from the leasing or subleasing of any
portion of the Premises.

             (d) In the event of any default under this Lease, Landlord may
proceed directly against Tenant, any guarantors or any one else responsible for
the performance of this Lease, including the sublessee, without first exhausting
Landlord's remedies against any other person or entity responsible therefor to
Landlord, or any security held by Landlord or Tenant.

     15.4 Provisions Applicable to Subletting. Regardless of Landlord's consent,
the following terms and conditions  shall apply to any sublease by Tenant of all
or any part of the Premises and shall be included in subleases.

          (a) Tenant  hereby  assigns and  transfers to Landlord all of Tenant's
     interest  in all  rentals  and income  arising  from any  sublease  made by
     Tenant,  and  Landlord  may collect such rent and income and apply the same
     toward Tenant's obligations under this Lease; provided, however, that until
     a default shall occur in the performance of Tenant's obligations under this
     Lease, Tenant may receive,  collect and enjoy the rents accruing under such
     sublease.  Landlord shall not, by reason of any assignment of such sublease
     to Landlord or by reason of the  collection  of the rents from a sublessee,
     be deemed  liable to the sublessee for any failure of Tenant to perform and
     comply  with any of  Tenant's  obligations  to such  sublessee  under  such
     sublease.  Tenant  hereby  irrevocably  authorizes  and  directs  any  such
     sublessee,  upon receipt of a written  notice from Landlord  stating that a
     default exists in the performance of Tenant's obligations under this Lease,
     to pay to  Landlord  the rents due and to  become  due under the  sublease.
     Tenant  agrees  that such  sublessee  shall have the right to rely upon any
     such statement and request from Landlord, and that such sublessee shall pay
     such rents to  Landlord  without any  obligation  or right to inquire as to
     whether such default  exists and  notwithstanding  any notice from or claim
     from Tenant to the  contrary.  Tenant shall have no right or claim  against
     such  sublessee or Landlord for any such rents so paid by said sublessee to
     Landlord.

          (b) No sublease  entered into by Tenant shall be effective  unless and
     until it has been  approved  in writing by  Landlord.  By  entering  into a
     sublease,  any sublessee shall be deemed,  for the benefit of Landlord,  to
     have  assumed  and  agreed  to  comply  with  all  of  Tenant's  obligation
     hereunder,  except  to the  extent  such  obligations  are  contrary  to or
     inconsistent with provisions  contained in a sublease to which Landlord has
     expressly consented in writing.

          (c)  Landlord's  written  consent to any  sublease of the  Premises by
     Tenant shall not constitute an  acknowledgment  that no default then exists
     under this Lease of the  obligations  to be  performed  by Tenant nor shall
     such consent be deemed a waiver of any then existing default, except as may
     be otherwise stated by Landlord at the time in writing.

          (d) With  respect to any  sublease to which  Landlord  has  consented,
     Landlord agrees to deliver a copy of any notice of default by Tenant to the
     sublessee.  Such sublessee shall have the right to cure a default of Tenant
     within  ten  days  after  service  of said  notice  of  default  upon  such
     sublessee, and the sublessee shall have a right of reimbursement and offset
     from and against Tenant for any such defaults cured by the sublessee.

          (e) If Tenant's  obligations  under this Lease have been guaranteed by
     third parties, then a sublease,  and Landlord's consent thereto,  shall not
     be effective  unless said  guarantors  give their  written  consent to such
     sublease and the terms thereof.

          (f) Unless expressly agreed to in writing by Landlord,  the consent by
     Landlord to any sublease shall not release  Tenant from its  obligations or
     alter the  primary  liability  of Tenant  to pay the rent and  perform  and
     comply with all of the  obligations  of Tenant to be  performed  under this
     Lease.

          (g) In the  event  Tenant  shall  default  in the  performance  of its
     obligations  under this  Lease,  Landlord,  at its option and  without  any
     obligation  to do so, may require any  sublessee to attorn to Landlord,  in
     which event Landlord shall  undertake the  obligations of Tenant under such
     sublease from the time of the exercise of said option to the termination of
     such  sublease;  provided,  however,  Landlord  shall not be liable for any
     prepaid rents or security  deposit paid by such  sublessee to Tenant or for
     any other prior defaults of Tenant under such sublease.

          (h) Each and every consent  required of Tenant under a sublease  shall
     also require the consent of Landlord.

      15.5 Attorneys' Fees. In the event Tenant shall assign or sublet the
Premises or request the consent of Landlord to any assignment or sublease or if
Tenant shall request the consent of Landlord for any act Tenant proposes to do,
then Tenant shall pay Landlord's reasonable attorneys' fees incurred in
connection therewith, such attorneys' fees not to exceed $500.00 for each such
request.

      15.6 Continuing Liability of Tenant. Unless expressly, agreed to in
writing by Landlord no transfer permitted by this Section shall release Tenant
or change Tenant's primary liability to pay the rent and to perform all other
obligations of Tenant under this Lease. Landlord's acceptance of rent from any
other person is not a waiver of any provision of this Section. Consent to one
transfer is not a consent to any subsequent transfer. If Tenant's transferee
defaults under this Lease, Landlord may proceed directly against Tenant without
pursuing remedies against the transferee. Landlord may consent to subsequent
assignments or modifications of this Lease by Tenant's transferee, without
notifying Tenant or obtaining its consent. Such action shall not relieve Tenant
of its liability under this Lease.

      15.7 Effect of Termination. In the event of Tenant's surrender of this
Lease or the termination of this Lease in any other manner, Landlord may, at its
option, either terminate any or all subtenancies or succeed to the interest of
Tenant as sublessor thereunder. No merger shall result from Tenant's sublease of
the Premises under this Section, Tenant's surrender of this Lease or the
termination of this Lease in any other manner.

16. DEFAULT BY TENANT: REMEDIES.
    ----------------------------

      16.1 Events of Default. The occurrence of any of the following (each, a
"Default") shall constitute a material breach or default by Tenant of its
obligations hereunder:

             (a) Failure by Tenant to pay rent when due if the failure continues
for three (3) days after notice has been given to Tenant that the rent is
delinquent.

             (b) Failure by Tenant to perform any provision of this Lease
required of it other than clause (a) above if the failure is not cured within
thirty (30) days after notice has been given to Tenant (unless a shorter cure
period is specifically provided elsewhere in this Lease for such cure, in which
case the shorter cure period shall apply). If, however, the failure cannot
reasonably be cured within the cure period, Tenant shall not be in default of
this Lease if Tenant commences to cure the failure within the cure period and
diligently and in good faith continues to cure the failure.

             (c) To the extent permitted by law, a general assignment by Tenant
or any Guarantor of the Lease for the benefit of creditors, or the filing by or
against Tenant or any Guarantor of any proceeding under any insolvency or
bankruptcy law, unless in the case of a proceeding filed against Tenant or any
Guarantor the same is dismissed within sixty (60) days, or the appointment of a
trustee or receiver to take possession of all or substantially all of the assets
of Tenant or any Guarantor, unless possession is restored to Tenant or such
Guarantor within thirty (30) days, or any execution or other judicially
authorized seizure of all or substantially all of Tenant's assets located upon
the Premises or of Tenant's interest in this Lease, unless such seizure is
discharged within thirty days (each, an "Insolvency Event").

      16.2 Default Notices. Notices given under this Section will specify the
alleged failure or breach and the applicable Lease provisions; and shall demand
that Tenant perform the provisions of this Lease or pay the rent that is
delinquent, as the case may be, within the applicable period of time or quit the
Premises. No such notice shall be deemed a forfeiture or a termination of this
Lease unless Landlord so elects in the notice. The purpose of the notice
requirements in this Section is to extend the notice requirements of the
unlawful detainer statutes. Such notice shall, however, be in lieu of and not in
addition to any notice required under the unlawful detainer statutes.

     16.3 Landlord's Remedies.  Landlord shall have the below listed remedies if
Tenant commits a default. These remedies are not exclusive;  they are cumulative
to any remedies now or later allowed by law.

             (a) Landlord may terminate Tenant's right to possession of the
Premises at any time. No act by Landlord other than giving notice of termination
to Tenant shall terminate this Lease. Acts of maintenance, efforts to relet the
Premises or the appointment of a receiver on Landlord's initiative to protect
Landlord's interest under this Lease shall not constitute a termination of
Tenant's right to possession. On termination, Landlord shall have the right to
recover from Tenant:

          (i) The  worth at the time of the  award of the  unpaid  rent that had
     been earned at the time of termination of this Lease;

          (ii) The  worth at the time of the  award of the  amount  by which the
     unpaid rent that would have been earned  after the date of  termination  of
     this Lease  until the time of award  exceeds the amount of the loss of rent
     that Tenant proves could have been reasonably avoided;

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

          (iv) Any other amount,  including reasonable attorneys' fees and court
     costs,  necessary  to  compensate  Landlord for all  detriment  proximately
     caused by Tenant's  default or which in the ordinary course of things would
     be likely to result therefrom.

     The phrase "worth at the time of the award" as used in clauses (i) and (ii)
     above is to be computed by allowing  interest at the rate of twelve percent
     (12%) per annum,  but not to exceed the then  legal rate of  interest.  The
     same phrase as used in clause (iii) above is to be computed by  discounting
     the  amount  at the  discount  rate  of the  Federal  Reserve  Bank  of San
     Francisco at the time of the award, plus one percent (1 %).

            (b) Landlord may exercise the remedy provided in California CIVIL
CODE ss. 1951.4, that is, Landlord may continue this Lease in full force and
effect, and collect Base Rent and Operating Expenses as they become due, so long
as Landlord does not terminate Tenant's right to possession pursuant to Section
16.3(a) above. During the period that Tenant is in default, Landlord may enter
the Premises and relet them or any part of them, to third parties for Tenant's
account, for a shorter or longer term than the Term of this Lease, and for such
rental and on such other terms as Landlord, in its sole discretion, shall deem
advisable and Tenant shall be immediately liable to Landlord for all costs which
Landlord incurs in reletting the Premises, including, without limitation,
broker's commissions, advertising expenses, the cost of remodeling the Premises
which may be required for reletting, and all such similar costs. No act by
Landlord pursuant to this Section shall terminate this Lease unless Landlord
shall notify Tenant that it elects to terminate this Lease. After Tenant's
default and for as long as Landlord does not terminate Tenant's right to
possession of the Premises, Tenant shall have the right to assign its interest
in the Lease upon the reasonable prior consent of Landlord; provided, however,
that Tenant shall not be released from any liability under this Lease as a
result of such assignment.

             (c) Landlord may, after expiration of any applicable cure period,
unless there is an emergency (in which case Landlord need not wait), correct or
remedy any failure of Tenant not timely cured. The reasonable cost paid by
Landlord to correct or remedy any such default will immediately become due and
payable to Landlord as additional rent.

             (d) Nothing contained in this Lease shall limit Landlord to the
remedies specifically set forth in this Section 16.3. Upon Tenant's default or
breach, Landlord shall be entitled to exercise any right or remedy then provided
by law, including without limitation the right to obtain injunctive relief and
the right to recover all damages caused by Tenant's default or breach in the
performance of any of its obligations under this Lease.

      16.4 Interest. Any amount owed to Landlord under the terms and provisions
of this Lease which is not paid when due shall bear interest at the highest rate
allowed by applicable law from the date the same becomes due and payable by the
terms and provisions of this Lease until paid, unless otherwise specifically
provided in this Lease.

      16.5 Mitigation. Efforts by Landlord to mitigate damages caused by
Tenant's breach shall not be construed as a waiver of Landlord's right to
recover damages.

      16.6 Right of Landlord to Re-Enter. In the event of any termination of
this Lease, Landlord shall have the immediate right to enter upon and repossess
the Premises, and any personal property of Tenant may be removed from the
Premises and stored in any public warehouse at the risk and expense of Tenant.

      16.7 Recapturable Expenses. Tenant acknowledges that Landlord has
undertaken or may undertake certain expenses in connection with the Lease,
including payment of some or all of the following: brokerage commissions, the
costs of any Landlord's Work, moving expenses or other categories of cost or
expense ("Recapturable Expenses"). Notwithstanding any provision or implication
to the contrary in this Lease, in the event of premature termination of the Term
of this Lease pursuant to Section 16.3(a) following Tenant's default, there
shall be immediately due and payable from Tenant, as Additional Rent which has
been fully earned at the time of termination, the unamortized portion of the
Recapturable Expenses actually incurred by Landlord. For purposes of this
Section, the unamortized portion of the Recapturable Expenses shall be
determined by multiplying the total Recapturable Expenses actually incurred by
Landlord by a fraction, the numerator of which is the number of months remaining
in the Term following premature termination in which unabated Base Rent would
have been payable to Landlord pursuant to the Lease, and the denominator of
which is the total number of months in the Term, both before and after the
premature termination, in which unabated Base Rent was paid or would have been
payable to Landlord had the Lease not been terminated. Any Recapturable Expenses
due to Landlord in accordance with this Section shall be in addition to any sums
otherwise recoverable pursuant to Section 16.3(a) of this Lease.

 17. TENANT'S INSOLVENCY.
     --------------------

      17.1 Applicability of Section. In addition to any rights or remedies of
Landlord under the terms of this Lease, the following provisions shall
specifically apply upon the occurrence of an Insolvency Event (as defined in
Section 16.1(c) above).

      17.2 Assumption Or Rejection Of Lease.

             (a) Notwithstanding anything to the contrary contained herein,
Tenant as debtor in possession and any receiver or trustee in bankruptcy for
Tenant (collectively, "Tenant's Trustee") shall either assume or reject this
Lease within sixty (60) days following the entry of an order for relief or
within such earlier time as may be provided by applicable law.

             (b) Notwithstanding anything to the contrary contained herein, in
the event that this Lease is attempted to be assumed under the Bankruptcy Code
by Tenant's Trustee during the existence of any Default by Tenant, no such
attempted assumption shall be effective unless and until Tenant's Trustee: (i)
cures, or provides adequate assurance that it will promptly cure, such Default;
and (ii) compensates, or provides adequate assurance that it will promptly
compensate, Landlord for any actual pecuniary loss to Landlord resulting from
such Default; and (iii) provides adequate assurance of future performance of
Tenant's obligations and covenants under this Lease. Landlord shall be entitled
to reimbursement from the estate of Tenant for all actual costs incurred by
Landlord in considering any proposed assignee of the Lease pursuant to this
Section 17.

             (c) Tenant's Trustee may assign this Lease pursuant to the
provisions of the Bankruptcy Code only if: (A) Tenant's Trustee assumes the
Lease in accordance with the above provisions of this Section 17.2; and (B) the
assignee of Tenant's Trustee assumes all of the obligations arising under this
Lease and provides adequate assurance of its future performance of Tenant's
obligations and covenants under this Lease (whether or not a Default has
occurred under the Lease). Any such assignee shall, upon demand, execute and
deliver to Landlord, an instrument confirming such assumption.

             (d) For purposes of Section 17.2(b) and (c), the term "adequate
 assurance of future performance" shall include, without limitation, at least
 the following:

                    (i) Any proposed assignee must have, as demonstrated to
     Landlord's satisfaction, a net worth (as defined in accordance with
     generally accepted accounting principles consistently applied) in an amount
     sufficient to assure that the proposed assignee will have the resources to
     meet the financial responsibilities under this Lease, including the payment
     of all rent. The financial condition and resources of Tenant and any
     Guarantor(s) are material inducements to Landlord entering into this Lease.

                    (ii) Any proposed assignee must have engaged in the
      permitted use described in Section 1.13 for at least five (5) years prior
      to any such proposed assignment.

                    (iii) In entering into this Lease, Landlord considered
     extensively Tenant's permitted use and determined that such permitted
     business would add substantially to the tenant balance in the Business
     Park, and were it not for Tenant's agreement to operate only Tenant's
     permitted business on the Premises, Landlord would not have entered into
     this Lease. Landlord's anticipated benefits from the lease of the Premises
     will be materially impaired if a trustee in bankruptcy or any assignee of
     this Lease operates any business other than Tenant's permitted business.

                    (iv) Any assumption of this Lease by a proposed assignee
      shall not adversely affect Landlord's relationship with any of the
      remaining tenants in the Premises, taking into consideration any and all
      other "use" clauses and/or "exclusivity" clauses which may then exist
      under their leases with Landlord.

                    (v) Any proposed assignee must not be engaged in any
      business or activity which it will conduct on the Premises and which will
      subject the Premises to contamination by any Hazardous Materials.

                    (vi) The percentage rent, if any, due under this Lease shall
not decline substantially.

                    (vii) Any assumption or assignment of this Lease shall not
      breach substantially any provision in any other lease, financing
      agreement, or master agreement relating to the Business Park;

                    (viii) Any assumption or assignment of this Lease shall not
      alter or affect materially any other obligation or duty of Tenant nor be
      used to circumvent the remainder of the provisions of this Lease.

18. DEFAULT BY LANDLORD.
    --------------------

      18.1 Landlord's Default. Landlord shall be in default if Landlord fails to
perform any provision of this Lease required of it and the failure is not cured
within thirty (30) days after notice has been given to Landlord. If, however,
the failure cannot reasonably be cured within the cure period, Landlord shall
not be in default of this Lease if Landlord commences to cure the failure within
the cure period and diligently and in good faith continues to cure the failure.
Notices given under this Section shall specify the alleged breach and the
applicable Lease provisions. If Landlord shall at any time default beyond the
applicable notice and cure period, Tenant shall have the right to cure such
default on Landlord's behalf. Any sums expended by Tenant in doing so, and all
reasonably necessary incidental costs and expenses incurred in connection
therewith, shall be payable by Landlord to Tenant within thirty days following
demand therefor by Tenant; provided, however, that Tenant shall not be entitled
to any deduction or setoff against any rent otherwise payable to Landlord under
this Lease.

      18.2 Notice to Mortgagee(s). Whenever Tenant serves notice on Landlord of
Landlord's default, written notice shall also be served at the same time upon
the Mortgagee under any first- or second-priority Mortgage; provided, however,
that Tenant shall have no obligation to provide such notice unless and until
Tenant has received written notice of the Mortgagee's existence and address.
Such Mortgagee shall have the periods of time within which to cure Landlord's
defaults as are provided in Section 18.1, which periods shall commence to run
thirty (30) days after the commencement of the periods within which Landlord
must cure its defaults under Section 18.1. In this connection, any
representative of the Mortgagee shall have the right to enter upon the Premises
for the purpose of curing Landlord's default. Such Mortgagee shall notify
Landlord and Tenant of the address of such Mortgagee to which such notice shall
be sent, and the agreements of Tenant under this Section are subject to prior
receipt of such notice. If the nature of the default is such that the
Mortgagee's possession is required to cure the default, then Tenant will not
terminate the Lease so long as such Mortgagee commences proceedings to obtain
possession of the Premises within the period of time afforded to the Mortgagee
to cure such default, and once the Mortgagee has obtained possession, diligently
proceeds to cure the default. Nothing contained in this Lease shall be construed
to impose any obligation on any Mortgagee to cure any default by Landlord under
the Lease.

 19. SUBORDINATION AND ESTOPPEL.
     ---------------------------

      19.1 Subordination. Subject to the provisions of this Section 19, at the
option and upon written declaration of Landlord, this Lease and the leasehold
estate created hereby shall be subject, subordinate and inferior to the lien and
charge of any Mortgage; provided, however, that this Lease shall not be
subordinate to any Mortgage arising after the date of this Lease, or any
renewal, extension or replacement thereof, unless and until Landlord provides
Tenant with an agreement from the Mortgagee of the type normally provided by
commercial lenders in southern California ("Non-Disturbance Agreement"), setting
forth that so long as Tenant is not in default hereunder, Landlord's and
Tenant's rights and obligations hereunder shall remain in force and Tenant's
right to possession shall be upheld. Subject to the foregoing condition, (i)
Landlord hereby expressly reserves the right, at its option and declaration, to
place Mortgages upon and against the Premises and/or any part thereof, superior
in lien and effect to this Lease and the estate created hereby, and (ii)
Landlord shall be entitled to sign, acknowledge and record in the Office of the
County Recorder of the County in which the Premises are situated, a declaration
that this Lease and leasehold estate are subject, subordinate and inferior to
any Mortgage placed or to be placed by Landlord upon or against the Premises
and/or any part thereof (in favor of any Mortgagee, trustee or title insurance
company insuring the interest of any such Mortgagee), recordation of which
shall, of and by itself and without further notice to or act or agreement of
Tenant, make this Lease and the estate created hereby subject, subordinate and
inferior thereto. Notwithstanding the foregoing, Tenant shall, promptly
following a request by Landlord and after receipt of the Non-Disturbance
Agreement, execute and acknowledge any subordination agreement or other
documents required to establish of record the priority of any such Mortgage over
this Lease, so long as such agreement does not otherwise increase Tenant's
obligations or diminish Tenant's rights hereunder. Landlord shall reasonably
cooperate with Tenant's efforts to obtain a Non-Disturbance-Agreement from the
Mortgagee under any Mortgage existing as of the date of this Lease,-provided-
that; (i) such Agreement is in form and substance satisfactory to Landlord, and
(ii) Landlord shall incur no out-of-pocket costs in connection therewith. Tenant
acknowledges and agrees that Tenant's obtaining any such Non-Disturbance
Agreement is not a condition-to the effectiveness or enforceability of this
Lease, and Tenant's failure to so do shall not in any, way effect this Lease or
any of its provisions.

      19.2 Attornment. In the event of foreclosure of any Mortgage, whether
superior or subordinate to this Lease, then (a) this Lease shall continue in
force; (b) Tenant's quiet possession shall not be disturbed if Tenant is not in
default hereunder; (c) Tenant shall attorn to and recognize the Mortgagee or
purchaser at foreclosure sale ("New Owner") as Tenant's landlord for the
remaining term of this Lease; and (d) the New Owner shall not be bound by (i)
any payment of rent for more than one month in advance, (ii) any amendment,
modification or ending of this Lease without the New Owner's consent after the
New Owner's name is given to Tenant, unless the amendment, modification or
ending is specifically authorized by the original Lease and does not require
Landlord's prior agreement or consent, or (iii) any liability for any act or
omission of a prior Landlord. At the request of the New Owner, Tenant shall
execute a new lease for the Premises, setting forth all of the provisions of
this Lease except that the term of the new lease shall be for the balance of the
Term.

      19.3 Estoppel Certificate. Tenant shall execute and deliver to Landlord,
within ten days after receipt of Landlord's request, any estoppel certificate or
other statement to be furnished to any prospective purchaser of or any lender
against the Premises. Such estoppel certificate shall acknowledge and certify
each of the following matters, to the extent each may be true: that the Lease is
in effect and not subject to any rental offsets, claims or defenses to its
enforcement; the commencement and termination dates of the Term; that Tenant is
paying rent on a current basis; that any Landlord's Work required to be
furnished under the Lease has been completed in all respects; that the Lease
constitutes the entire agreement between Tenant and Landlord relating to the
Premises; that Tenant has accepted the Premises and is in possession thereof;
that the Lease has not been modified, altered or amended except in specified
respects by specified instruments; and that Tenant has no notice of any prior
assignment, hypothecation or pledge of rents or the Lease. Tenant shall also,
upon request of Landlord, certify and agree for the benefit of any Mortgagee
against the Premises or the Building that Tenant will not look to such
Mortgagee: as being liable for any act or omission of Landlord; as being
obligated to cure any defaults of Landlord under the Lease which occurred prior
to the time Mortgagee, its successors or assigns, acquired Landlord's interest
in the Premises by foreclosure or otherwise; as being bound by any payment of
Base Rent or Additional Rent by Tenant to Landlord for more than one month in
advance; or as being bound by Landlord to any amendment or modification of the
Lease without Mortgagee's written consent.

      19.4 Remedies. Failure of the Tenant to sign any statement or instrument
delivered by Landlord or Mortgagee to effectuate the provisions of this Section
19 within ten (10) days after request to do so by Landlord shall constitute a
material breach of this Lease, and Landlord shall have the right, by not less
than ten (10) days' notice to Tenant, to declare this Lease terminated and the
Term ended; in which event, this Lease shall cease and terminate on the date
specified in such notice with the same force and effect as though the date set
forth in such notice were the date originally set forth herein and fixed as the
Expiration Date, and Tenant shall vacate and surrender the Premises but shall
remain liable as hereinafter provided. The foregoing shall be in addition to,
rather than in lieu of, any remedies or rights Landlord may now or hereafter
have hereunder or at law or in equity.

 20. HAZARDOUS MATERIALS.
     --------------------

      20.1 Tenant's Environmental Questionnaire. Tenant warrants and represents,
and acknowledges that this Lease was entered into by Landlord in material
reliance upon, the information set forth in the environmental questionnaire, in
the form attached as Exhibit E, that was previously delivered by Tenant to
Landlord.

      20.2 Tenant's Obligations.

             (a) Tenant shall at all times and in all respects comply with all
Hazardous Materials Laws, and shall, at its own expense, procure, maintain in
effect and comply with all conditions of any and all permits, licenses, and
other governmental and regulatory approvals required for Tenant's use of the
Premises, including, without limitation, discharge of (appropriately treated)
materials or wastes into or through any sanitary sewer serving the Premises.
Except as discharged into the sanitary sewer in strict accordance and conformity
with all applicable Hazardous Materials Laws, Tenant shall cause any and all
Hazardous Materials removed from the Premises to be removed and transported
solely by duly licensed haulers to duly licensed facilities for final disposal
of such materials and wastes. Tenant shall in all respects handle, treat, deal
with and manage any and all Hazardous Materials in, on, under or about the
Premises in total conformity with all applicable Hazardous Materials Laws and
prudent industry practices regarding management of such Hazardous Materials.

             (b) Upon expiration or earlier termination of the Term, Tenant
shall cause all Hazardous Materials to be removed from the Premises and
transported for use, storage or disposal in accordance with and compliance with
all applicable Hazardous Materials Laws.

             (c) Except in the event of an emergency, Tenant shall not take any
remedial action in response to the presence of any Hazardous Materials in or
about the Premises, nor enter into any settlement agreement, consent decree or
other compromise in respect to any claims relating to any Hazardous Materials in
any way connected with the Premises, without first notifying Landlord of
Tenant's intention to do so and affording Landlord ample opportunity to appear,
intervene or otherwise appropriately assert and protect Landlord's interest with
respect thereto.

             (d) Tenant shall immediately notify Landlord in writing of: (i) any
enforcement, cleanup, removal or other governmental or regulatory action
instituted, completed or threatened pursuant to any Hazardous Materials Laws;
(ii) any claim made or threatened by any person against Tenant or the Premises
relating to damage, contribution, cost recovery compensation, loss or injury
resulting from or claimed to result from any Hazardous Materials; and (iii) any
reports made to any environmental agency arising out of or in connection with
any Hazardous Materials in or removed from the Premises, including any
complaints, notices, warnings or asserted violations in connection therewith.
Tenant shall also supply to Landlord as promptly as possible, and in any event
within five business days after Tenant first receives or sends the same, copies
of all claims, reports, complaints, notices, warnings or asserted violations,
relating in any way to the Premises or Tenant's use thereof. Tenant shall
promptly deliver to Landlord copies of hazardous waste manifests reflecting the
legal and proper disposal of all Hazardous Materials removed from the Premises.

      20.3 Indemnity. With respect to Tenant's use and occupancy of the Premises
and Common Areas, Tenant shall indemnify, defend (by counsel reasonably
acceptable to Landlord), protect, and hold Landlord and each of Landlord's
officers, directors, shareholders, employees, agents, attorneys, successors and
assigns, free and harmless from and against any and all claims, liabilities,
penalties, forfeitures, losses or expenses (including attorneys' fees), or death
of or injury to any person or damage to any property whatsoever, arising from or
caused in whole or in part, directly or indirectly, by (a) the presence in, on,
under or about the Premises, or discharge in or from the Premises, of any
Hazardous Materials that arose or occurred during Tenant's occupancy thereof
(other than for Hazardous Materials used, released or discharged by (i) the
preceding or any previous tenant of the Premises, (ii) any other Tenant of the
Project or (iii) any owners or tenant's of surrounding properties); (b) Tenant's
use, analysis, storage, transportation, disposal, release, threatened release,
discharge or generation of Hazardous Materials to, in, on, under, about or from
the Premises; or (c) Tenant's failure to comply with any Hazardous Materials
Law. Tenant's obligations hereunder shall include, without limitation, and
whether foreseeable or unforeseeable, all costs of any required or necessary
repair, cleanup or detoxification or decontamination of the Premises, or the
preparation and implementation of any closure, remedial action or other required
plans in connection therewith, and shall survive the expiration or earlier
termination of the Term. For purposes of the release and indemnity provisions
hereof, any acts or omissions of Tenant, or by employees, agents, assignees,
subtenants, contractors or subcontractors of Tenant or others acting for or on
behalf of Tenant (whether or not they are negligent, intentional, willful or
unlawful) shall be strictly attributable to Tenant.

21. NOTICE. All notices, demands or requests from one party to the other shall
be in writing. Notices may be personally delivered, sent by Federal Express or
other reputable express delivery service, sent by telecopier with first-class
mail backup, or sent by certified mail, postage prepaid, to the addresses set
forth at Section 1.17 or 1.18, as applicable. Notices shall be deemed received
upon actual delivery to the addressee with respect to personal or express
delivery service or telecopier, and three (3) days after deposit in the mails
with respect to mailing. Each party shall have the right, from time to time, to
designate a different address by notice given in conformity with this Section to
the other party.

 22. OTHER TERMS AND CONDITIONS.
     ---------------------------

      22.1 Signage. Tenant shall not place or permit to be placed, any sign,
advertisement, notice or other similar matter on the doors, windows, exterior
walls, roof or other areas of the Premises which are open to the view of persons
outside the Premises.

      22.2 Parking. In connection with its use and occupancy of the Premises,
Tenant shall have the right to park in the parking area of the Project, at no
additional charge and on a non-reserved basis and on terms and conditions to be
established by the Landlord from time to time during the Term, no more than the
number of vehicles set forth in Section 1 .16. The parking authorized by this
Section shall be for personal transportation to and from the Premises, and not
for long-term storage of automobiles or for short- or long-term storage of
boats, trailers or recreational vehicles. Landlord reserves the right to
designate certain parking areas in the Project as being for the exclusive use of
other tenants of the Project.

      22.3 Site Plan. The purpose of the site plan attached hereto as Exhibit A
is to show the intended development of the Project, the approximate locations of
building areas, traffic lanes, sidewalks, parking areas, curb cuts and abutting
thoroughfares, and of the Premises, and those intended to be leased to other
tenants, whether named thereon or not. All such information is subject to change
at Landlord's option without notice, and no rights are granted to Tenant by the
inclusion of said plot plan as a part of this Lease. No representations or
warranties are made by Landlord that the Project or the Business Park will be
developed as shown. The foregoing is in addition to, not in substitution of, all
rights reserved to Landlord pursuant to Section 3 above.

     22.4 Easements. Landlord reserves to itself the right, from time to time,
to grant such easements, rights and dedications as Landlord deems necessary or
desirable, and to cause the recordation of parcel maps and restrictions, so long
as such easements, rights, dedications, maps and restrictions do not
unreasonably interfere with Tenant's normal conduct of its business on the
Premises. Tenant shall sign any of the aforementioned documents upon request of
Landlord and failure to do so shall constitute a material default of this Lease
by Tenant without the need for further notice to Tenant.

      22.5 No Light, Air or View Easements. No diminution or shutting off of
light, air or view by any structure which may be erected on lands adjacent to
the Building shall in any way affect this Lease or impose any liability on
Landlord.

      22.6 Security Measures. Tenant acknowledges that Landlord does not intend
to provide guard service or other security measures for the benefit of the
Premises. Tenant assumes all responsibility for the protection of Tenant, its
agents, and invitees and the property of Tenant and of Tenant's agents and
invitees from acts of third parties, and assumes all risk in connection with any
failure to provide or lack of such security measures. Tenant hereby waives any
and all claims for damages to persons or property sustained by Tenant, or by any
other person or entity, arising from, out of or in connection with, or alleged
to arise from, out of or in connection with, Landlord's not providing any
security measure for the Premises or Project. Nothing herein contained shall
prevent Landlord, at Landlord's sole option, from providing security protection
for the Premises, in which event the costs thereof shall be included within
Operating Expenses.

      22.7 Holding Over By Tenant. Tenant agrees upon the expiration or
termination of this Lease, immediately and peaceably to yield up and surrender
the Premises; notice to quit or vacate is hereby expressly waived. Tenant shall
be liable to Landlord for any and all damages incurred by Landlord as the result
of any failure by Tenant to timely surrender possession of the Premises as
required herein. If Tenant shall hold over after the expiration of this Lease
for any cause, such holding over shall be deemed a tenancy at sufferance or, at
the sole discretion of Landlord, a tenancy from month-to-month, in which event
such month-to-month tenancy shall be upon the same terms, conditions and
provisions set forth in this Lease, at one and one half (I 3~ ~ one-quarter (1
Y4) times the Base Rent that was in effect immediately prior to the termination.

      22.8 Landlord's Right of Entry. Landlord and Landlord's agents may enter
upon the Premises at any reasonable time and upon reasonable notice (except no
notice shall be required in an emergency) to make such repairs, additions or
improvements as Landlord shall deem necessary; to post such notices as Landlord
may deem necessary to exempt Landlord and Landlord's interest in the Building
and Premises from responsibility on account of any work or repairs done by
Tenant upon or in connection with the Premises; to inspect and examine the
Premises and see that the covenants hereof are being kept and performed; or to
exhibit the Premises to prospective tenants or purchasers; provided however
Tenant may request that any prospective tenants or purchasers sign a
confidentiality agreement pertaining to Tenant's Permitted Use.
                                                                       .
      22.10 Furnishing of Financial Statements. Tenant acknowledges that
Landlord entered into this Lease in reliance upon receiving current and periodic
financial reports documenting the progress of Tenant's business operations.
Accordingly, if so requested by Landlord's lender or prospective lender for
purposes of financing the Project, Tenant shall deliver to Landlord, within ten
(10) days after request therefor financial statements reflecting Tenant's
current financial condition and financial statements for each of the two (2)
years prior to the then-current fiscal statement year. Such statements shall be
prepared in accordance with generally accepted accounting principles and, if
such is the normal practice of Tenant, shall be audited by an independent
certified public accountant.

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

      22.12 Keys. Two (2) keys to the Premises will be furnished by Landlord.
Additional keys will be furnished upon Tenant paying Landlord the cost thereof.
No additional lock or locks shall be placed by Tenant on any door in the
Building unless written consent of Landlord shall have been first obtained; and,
should such consent be so obtained, Landlord shall be supplied with keys to each
such lock and no other than the employees of Landlord or those it has authorized
in writing shall work on or modify any lock which is part of the Premises.
Tenant shall not cause or allow the duplication of any keys to be made, and
Tenant shall not cause or allow any keys to be possessed by any person other
than an authorized agent of Tenant. Tenant agrees, at the termination of the
tenancy, to return all keys of all doors. Tenant shall have the right to install
a' security system in the Premises.

      22.13 Other Tenancies. Landlord reserves the absolute right to effect such
other tenancies in the Business Center as Landlord, in the exercise of its sole
business judgment, shall determine to promote the best interest thereof. Tenant
does not rely on the fact, nor does Landlord represent, that any specific
tenants shall, during the Term of this Lease, occupy any space in the Business
Park, notwithstanding the appearance of any names of tenants on the site plan
attached hereto as Exhibit A, or any replacements or substitutions thereof.

      22.14 Brokers' Fees. Landlord has agreed to pay a fee for brokerage
services rendered in this transaction to the broker(s) identified in Section
1.15. Such brokerage commission shall be payable in accordance with the separate
written agreement between Landlord and such broker(s), which alone shall govern
such brokers' entitlement to any commission. Landlord and Tenant each represent
and warrant to the other that no broker, agent or finder, licensed or otherwise
has been engaged by it, respectively, in connection with the transaction
contemplated by this Agreement, other than the broker(s) named above. In the
event of any other claim for broker's, agent's or finder's fee or commission in
connection with this transaction, the party upon whose alleged statement,
representation or agreement such claim or liability arises shall indemnify,
save, hold harmless and defend the other party from and against such claim and
liability.

23. GENERAL PROVISIONS.
    -------------------

      23.1 Exculpation. The obligations of Landlord under this Lease do not
constitute personal obligations of Landlord or its directors, officers or
shareholders, and Tenant shall look solely to the Project and to no other assets
of Landlord for satisfaction of any liability with respect to this Lease, and
agrees not to seek recourse against the directors, officers or shareholders of
Landlord, nor against any of their personal assets, for such satisfaction.

      23.2 Conveyance By Landlord. Landlord shall be free at all times, without
need of consent or approval by Tenant, to assign its interest in this Lease
and/or to convey fee title to the Premises. Each conveyance by Landlord of
Landlord's interest in the Lease or the Premises prior to expiration or
termination hereof shall be subject to this Lease and shall relieve the grantor
of any further obligations or liability as Landlord, and Tenant shall look
solely to Landlord's successor in interest for all future obligations of
Landlord. Tenant hereby agrees to attorn to Landlord's successors in interest,
whether such interest is acquired by sale, transfer, foreclosure, deed in lieu
of foreclosure or otherwise. The term "Landlord" as used in this Lease, so far
as covenants and obligations on the part of Landlord are concerned, shall be
limited to mean and include only the owner at the time in question of the fee
title of the Premises. Without further agreement, the transferee of such title
shall be deemed to have assumed and agreed to observe and perform any and all
obligations of Landlord hereunder during its ownership of the Premises.

      23.3 Quiet Enjoyment. Landlord agrees that so long as Tenant is not in
default hereunder Tenant shall have the quiet enjoyment of the Premises without
hindrance on the part of Landlord. Landlord further agrees that Landlord will
warrant and defend Tenant in the peaceful and quiet enjoyment of the Premises
against the lawful claims of all persons claiming by, through or under Landlord.

      23.4 No Accord and Satisfaction. No payment by Tenant or receipt by
Landlord of a lesser amount than the rent herein stipulated shall be deemed to
be 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 and satisfaction, and Landlord shall accept
such check or payment without prejudice to Landlord's right to recover the
balance of such rent or pursue any other remedy in this Lease provided.

      23.5 Waiver. No delay or omission in the exercise of any right or remedy
of either party for any Default by the other party hereunder shall impair such
right or remedy or be construed as a waiver thereof. One or more waivers of any
covenant or condition by either party shall not be construed as a waiver of a
subsequent breach of the same covenant or condition, and the consent or approval
by Landlord to or of any act by Tenant requiring Landlord's consent or approval
shall not be deemed to render unnecessary Landlord's consent or approval to or
of any subsequent similar act by Tenant. No breach of a covenant or condition of
this Lease shall be deemed to have been waived by either party unless such
waiver is in writing signed by the other party. The acceptance of any rent or
other charges hereunder shall not be deemed a waiver of any breach or Default
hereunder other than the payment of the amount accepted by Landlord.

      23.6 Cumulative Rights. The various rights, options, elections, powers and
remedies contained in this Lease shall be construed as cumulative and no one of
them shall be exclusive of any of the others, or of any other legal or equitable
remedy which either party might otherwise have in the event of breach or default
in the terms hereof, and the exercise of one right or remedy by such party shall
not impair its right to any other right or remedy until all obligations imposed
upon the other party have been fully performed.

      23.7 Independent Covenants. This Lease shall be construed as though the
 covenants herein between Landlord and Tenant are independent and not dependent,
 and Tenant hereby expressly waives the benefit of any statute to the contrary
 and agrees that if Landlord fails to perform its obligations set forth herein,
 Tenant shall not be entitled to make any repairs or perform any acts hereunder
 at Landlord's expense or to any setoff of the rent or other amounts owing
 hereunder against Landlord; provided, however, the foregoing shall in no way
 impair the right of Tenant to commence a separate action against Landlord for
 any violation by Landlord of the provisions hereof so long as notice is first
 given to Landlord and any Mortgagee (of whose address Tenant has theretofore
 been notified) and an opportunity is granted to Landlord and such holder to
 correct such violation as provided above.

      23.8 Relationship of the Parties. Nothing contained herein shall be deemed
or construed by the parties hereto, nor by any third party, as creating the
relationship of principal and agent or of partnership or of joint venture
between the parties hereto, it being understood and agreed that neither the
method of computation of rent, nor any other provision contained herein, nor any
acts of the parties hereto, shall be deemed to create any relationship between
the parties hereto other than the relationship of landlord and tenant.

      23.9 Force Majeure. If either party is delayed in the performance of any
covenant of this Lease because of any of the following causes, then such
performance shall be excused for the period of the delay and the period for such
performance shall be extended for a period equivalent to the period of such
delay: acts of the other party; action of the elements; war, riot or civil
insurrection; building moratoria, trip generation restrictions or other similar
action by the City of San Diego or other governmental agency or entity; labor
disputes; inability to procure or a general shortage of labor or materials in
the normal channels of trade; delay in transportation; delay in inspections; or
any other cause beyond the reasonable control of the party so obligated, whether
similar or dissimilar to the foregoing, financial inability excepted; provided,
however, that except as specifically set forth elsewhere in this Lease, no such
events shall affect Tenant's obligation to pay Base Rent, Additional Rent or any
other amount payable under this Lease, nor shall such events affect the length
of the Term (except to the extent expressly provided herein).

      23.10 Consents. With respect to any provision of this Lease which either
provides or is held to provide that Landlord shall not unreasonably withhold or
unreasonably delay any consent or approval, Tenant shall not be entitled to make
any claim for, and Tenant hereby expressly waives, any claim for damages, it
being understood and agreed that Tenant's sole remedy therefor shall be an
action for specific performance.

      23.11 Counterparts. This Lease may be executed in two or more
counterparts, each of which shall be an original, but all of which shall
constitute one and the same instrument.

      23.12 Authority. 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 behalf of said entity. Upon the request of the other
party, any such party shall, at the time of the execution of this Lease, deliver
to the other party evidence of such authority satisfactory to the other party.

      23.13 Recording. Tenant shall not record this Lease or any short form or
memorandum version hereof without the prior written consent of Landlord, which
may be withheld at Landlord's sole discretion.

      23.14 Interpretation and Use of Pronouns. Wherever herein the singular
number is used, the same shall include the plural, and the masculine gender
shall include the feminine and the neuter genders. All conditions contained
herein shall be deemed covenants. The words "breach" or "default" are used
interchangeably herein and each shall be deemed to include the other.

      23.15 Captions and Interpretations. Section titles or captions contained
in this Lease are inserted as a matter of convenience and for reference and in
no way define, limit, extend or describe the scope of this Lease or any
provision hereof. No provision in this Lease is to be interpreted for or against
either party because that party or its legal representative drafted such
provision.

      23.16 Severability. If any term, covenant, condition or provision of this
Lease is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the provisions shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.

      23.17 Applicable Law. This Lease shall be governed by, and construed in
accordance with, the laws of the State of California, notwithstanding the fact
that Landlord or Tenant may be located in another State or that this Lease may
be executed in another State. If any provision of this Lease or the application
thereof to any person or circumstances shall, to any extent, be invalid or
unenforceable, the remainder of this Lease shall not be affected thereby, and
each provision of this Lease shall be valid and enforceable to the fullest
extent permitted by law. Any action brought to enforce or nullify this Lease or
the provisions hereof shall be brought in San Diego County, California, and in
no other forum.

      23.18 Waiver of Right of Redemption. Tenant hereby waives for Tenant and
for all those claiming under Tenant all right now or hereafter existing to
redeem, by statute or by order or judgment of any court or by any legal process
or writ, Tenant's right of occupancy of the Premises after any termination of
this Lease. Tenant hereby waives its rights under California CODE OF CIVIL
PROCEDURE ss. 1179.

      23.19 Attorneys' Fees. In case suit shall be brought for any unlawful
detainer of the Premises, for the recovery of any rent due under the provisions
of this Lease, or because of the breach or alleged breach of any other covenant
herein contained or other action to enforce or interpret this Lease, the
prevailing party shall recover from the non-prevailing party all costs and
expenses incurred therein, including reasonable attorneys' fees and expenses
incurred in enforcing any judgment. If Landlord, through no fault of its own, is
made a party to any litigation relating to the subject matter covered by this
Lease instituted by or against Tenant, then Tenant shall defend, indemnify and
hold Landlord harmless from and against all costs and expenses, including
reasonable attorneys' fees, incurred by Landlord in connection therewith. In
addition thereto, Tenant agrees to pay Landlord's reasonable costs, expenses and
reasonable attorneys' fees with respect to: (i) each request to Landlord for
permission or consent to assign or sublet the Premises, as provided in Section
15.5 above; (ii) each request made by Tenant to modify, amend or supplement this
Lease; and (iii) any breach or default by Tenant which is cured prior to
litigation. Landlord shall notify Tenant of the amount of such attorneys' fees,
and Tenant shall pay the same (as Additional Rent) within fifteen (15) days
after such notice.

      23.20 Joint and Several Obligations. If there shall be more than one
Tenant, they shall all be bound jointly and severally by the terms, provisions,
covenants, conditions, and agreements herein. No rights, however, shall inure to
the benefit of any assignee of Tenant unless the assignment to such assignee has
been approved by Landlord in writing as required hereunder.

      23.21 Successors and Assigns. The covenants and conditions herein
contained shall, subject to the provisions as to assignments, apply to and bind
the heirs, successors, executors, administrators and assigns of the respective
parties hereof. If this Lease is signed by more than one person as Tenant, their
obligation shall be joint and several.

     23.22 Time of the Essence.  Time is expressly declared to be of the essence
of this Lease, and of all covenants and conditions herein contained.

      23.23 No Third-Party Beneficiaries. The provisions of this Lease are
solely for the benefit of the parties hereto, and no broker or other third party
shall be entitled to any benefits hereof or hereunder.

      23.24 Entire Agreement. This Lease and the exhibits, and the Addendum, if
any, attached hereto and forming a part hereof, set forth all the terms,
provisions, covenants, conditions, promises, agreements and understandings
between Landlord and Tenant concerning the Premises. There are no warranties,
representations, covenants, promises, agreements, conditions or understandings,
either oral or written, between them other than set forth herein. No alteration,
amendment, change or addition to this Lease shall be binding upon Landlord or
Tenant unless reduced to writing and signed by each party.

      23.25 No Option By Landlord. Preparation of this Lease by Landlord or
Landlord's agent and submission of same to Tenant shall not be deemed an option
or offer to lease the Premises on the terms and conditions contained herein or a
reservation of the Premises in favor of Tenant. This Lease shall become binding
upon Landlord only upon Landlord's execution and delivery of this Lease to
Tenant. The receipt (which shall include the cashing, deposit or other
negotiation of checks, money orders and the like) of any moneys by Landlord
which are tendered by Tenant along with a Tenant-executed copy of this Lease, or
at any time prior to Landlord's delivery of a fully executed copy of this Lease
to Tenant, shall not constitute an acceptance of Tenant's offer to lease as
contained herein. Tenant acknowledges that Landlord will not deliver a fully
executed copy of this Lease until Landlord has received both any Guaranties
required hereunder, and such corporate resolutions or other information as
reasonably satisfies Landlord as to the incumbency and authority to sign of each
individual signing this Lease or any Guaranty. Tenant also acknowledges that the
fully executed Lease will not be delivered by Landlord to Tenant unless and
until approved by Landlord's lender, and that in determining whether to approve,
Landlord's lender will consider Tenant's lease application, credit information,
biographical data on Tenant's key officers or principals, and financial
statements relating to Tenant's business. Notwithstanding the foregoing,
delivery of this Lease by Tenant to Landlord after signature by Tenant shall
constitute an option which can be accepted by Landlord at any time until two (2)
weeks after delivery of the signed Lease by Tenant.

      23.26 Exhibits. All exhibits described herein, if any, are part of this
Lease and by this reference are expressly incorporated herein. This Lease
contains the following Exhibits:

             Exhibit A     Project Site Plan
             Exhibit B     Premises and Improvements to Premises
             Exhibit C     Rules and Regulations
             Exhibit D     Signage Criteria
             Exhibit E     Environmental Questionnaire
             Exhibit F     Guaranty Agreement
             Exhibit G     Declaration of Covenants, Conditions and Restrictions

      23.27 Addendum. The attached Addendum, if any is specified in Section 1.19
above, is part of this Lease and by this reference is expressly incorporated
herein.

IN WITNESS WHEREOF, the parties hereto have executed this Lease on the date(s)
set forth by their respective signatures.

Landlord:

Date: February 23, 2000

     H. G. FENTON COMPANY, a California corporation

          By: /S/ Kevin D. Hill
              ------------------------------
               Kevin D. Hill, Leasing Manager

          By: /S/ Michael P. Neal
              ------------------------------
               Michael P Neal, Vice President

Tenant:

PENLEY SPORTS, LLC, a California limited liability company

     By: /S/ Harold S. Elkan
         ---------------------------
        Harold S. Elkan, President

     By: /S/ Steven R. Whitman
        ----------------------------
        Steven R. Whitman, Chief Financial Officer

<PAGE>

                                ADDENDUM TO LEASE

The following additional provisions are a part of, and incorporated in, the
Lease to which this Addendum is attached. In the event of any conflict between
the provisions of this Addendum and the body of the Lease, this Addendum shall
control.

24. FIRST OPTION TO EXTEND. Subject to satisfaction of the conditions precedent
set forth below, Tenant shall have one option to extend the Term ("First
Extension Option") for one (1) additional period of sixty (60) months beginning
the day after the expiration of the initial Term ("First Extension Term"), on
the following terms and conditions:

      24.1 Tenant's First Extension Option shall be subject to satisfaction of
each of the following conditions precedent, which are solely for the benefit of,
and may be waived unilaterally by, Landlord:

             (a) The First Extension Option shall be exercised by written notice
delivered by Tenant to Landlord not later than six (6) months prior to the end
of the Term;

             (b) Tenant shall be in occupancy of at least Suites B & C of the
area of the Premises directly or through a wholly owned subsidiary (at any
tier), and not through an unaffiliated assignee or sublessee;

             (c) The Lease shall be in effect and Tenant shall not be in default
of any material provision thereof both on the day such written notice is
delivered to Landlord and on the last day of the Term; provided, however, if
Tenant is in default but the cure period has not run, this condition shall be
deemed satisfied if Tenant cures the default within the applicable cure period;
and

      24.2 In the event the Term shall be extended following exercise by Tenant
of the First Extension Option, then all of the terms, covenants and conditions
of this Lease shall remain in full force and effect during the First Extension
Term, except that monthly Base Rent during the First Extension Term shall be
adjusted as set forth below;

      24.3 Monthly Base Rent for the first Lease Year of the First Extension
Term shall be determined by adjusting the actual monthly Base Rent in effect
during the last month of the initial Term upward by a fixed five percent (5%).
To illustrate, if the monthly Base Rent in effect during the last month of the
initial Term was $23,121.08, then the monthly Base Rent for the first Lease Year
of the First Extension Term would be $24,277.13;

      24.4 Monthly Base Rent for the second through the fifth Lease Years of the
 First Extension Term shall be determined by adjusting the actual monthly Base
 Rent for the first Lease Year of the Extension Term upward by the percentage
 change in the Consumer Price Index for the Los Angeles-Riverside-Orange County
 all Urban Consumers. The Base Index shall be the Index in effect during April
 2010.

 25. SECOND OPTION TO EXTEND. Subject to satisfaction of the conditions
 precedent set forth below, Tenant shall have one additional option to extend
 the Term ("Second Extension Option") for one (1) additional period of sixty
 (60) months beginning the day after the expiration of the First Extension Term
 ("Second Extension Term"), on the following terms and conditions:

      25.1 Tenant's Second Extension Option shall be subject to satisfaction of
 each of the following conditions precedent, which are solely for the benefit
 of, and may be waived unilaterally by, Landlord:

             (d) The Second Extension Option shall be exercised by written
 notice delivered by Tenant to Landlord not later than six (6) months prior to
 the end of the First Extension Term;

             (e) Tenant shall be in occupancy of at least Suites B & C of the
 area of the Premises directly or through a wholly owned subsidiary (at any
 tier), and not through an unaffiliated assignee or sublessee;

             (f) The Lease shall be in effect and Tenant shall not be in default
 of any material provision thereof both on the day such written notice is
 delivered to Landlord and on the last day of the First Extension Term;
 provided, however, if Tenant is in default but the cure period has not run,
 this condition shall be deemed satisfied if Tenant cures the default within the
 applicable cure period; and

      25.2 In the event the Term shall be extended following exercise by Tenant
 of the Second Extension Option, then all of the terms, covenants and conditions
 of this Lease shall remain in full force and effect during the Second Extension
 Term, except that the initial monthly Base Rent, including annual increases
 during the Second Extension Term shall be adjusted to the then-effective market
 rate as reasonably determined by Landlord for new leases for comparable space
 in the Miramar market area.

26. CONDITIONAL ABATEMENT OF BASE RENT. Subject to the provisions of this
Section, the obligation of Tenant to pay Base Rent pursuant to Section 5.2 shall
be conditionally abated in the amount of $9,126.00 during the second (2"d) full
calendar month of the Term. To illustrate, if the actual Commencement Date is
April 1, 2000, then the conditional abatement of Base Rent would occur in full
during the months of May 2000. In the event that Landlord elects to terminate
this Lease pursuant to Section 16.3(a) following Tenant's default, the Base Rent
so abated shall be deemed an element of Recapturable Expenses for purposes of
Section 16.7.

 27. RIGHT OF FIRST NEGOTIATION.
     ---------------------------

      27.1 Landlord acknowledges that Tenant may be interested in expanding the
Premises within the Project, and to facilitate such possible expansion wishes
notification of the availability of, and an opportunity to negotiate a lease (or
amendment to this Lease) for space within the Building depicted on the site plan
attached as Exhibit A (Suite A) to the Lease ("Adjacent Space"), which is
currently leased to Arizona Tile Company and contains approximately 12,450
rentable square feet with a term that expires on February 28, 2006 ("Adjacent
Space Tenant"). Provided that Tenant is in possession of the Premises pursuant
to this Lease directly or through an Affiliate (but not through an unaffiliated
assignee or subtenant) and is not in material default of its obligations
hereunder (beyond the expiration of any applicable cure period), Tenant shall
have the right to be notified of, and to negotiate for the lease of the Adjacent
Space prior to Landlord initially leasing the Adjacent Space to a third party
tenant, on the following terms and conditions:

             (a) In the event the Adjacent Space is being vacated by the
Adjacent Space Tenant or is otherwise about to become available for re-leasing
by Landlord, Landlord shall notify Tenant of the pending availability no earlier
than one year or later than one month before the Adjacent Space is to become
available and of the fundamental economic terms on which Landlord proposes
leasing the Adjacent Space. Tenant shall notify Landlord within five (5) days
after such notice whether Tenant intends to negotiate a lease for the Adjacent
Space. Tenant's failure to so notify Landlord shall be conclusively deemed to be
Tenant's notification that it does not intend to negotiate, in which case
Landlord may proceed with its efforts to lease the Adjacent Space to third
parties and Tenant shall have no further rights with respect to such Adjacent
Space.

             (b) If Tenant does notify Landlord of its intent to negotiate a
lease, then for a period of two (2) weeks following Tenant's notice of intent,
the parties shall meet in good faith to negotiate and finalize a lease for the
Adjacent Space, at such rental rate and on such terms and conditions as the
parties may agree are the then effective market rates, including subsequent rate
increases, for new leases for comparable space in the Miramar area. Landlord
shall not unconditionally finalize a lease of the Adjacent Space to a third
party unless (i) Tenant has notified Landlord that Tenant does not wish to
negotiate further for the Adjacent Space, or (ii) two weeks have passed from the
date Tenant has received from Landlord a Lease (or amendment to this Lease)
which sets forth the terms and conditions agreed upon by the parties for leasing
the Adjacent Space, without Tenant and Landlord having successfully negotiated
and both executed a Lease therefor.

             (c) The parties intend that Tenant have the right pursuant to this
Section to negotiate a lease for the Adjacent Space only prior to Landlord's
initially leasing it to a third party tenant, and not that Tenant have an
expansion option as to the Adjacent Space. Furthermore, Tenant's rights pursuant
to this Section are not applicable (i) once the Adjacent Space has initially
been leased to a third party by Landlord and the Adjacent Space is subsequently
vacated by such third party during the Term or any Extension Term of Tenant.
Accordingly, nothing in this Section shall preclude Landlord from extending the
term of the current Adjacent Space Tenant. All rights of Tenant pursuant to this
Section 27 shall be subordinate to any rights previously granted to the Adjacent
Space Tenant (if any)

IN WITNESS WHEREOF, the parties hereto have executed this Lease on the date(s)
set forth by their respective signatures.

 Landlord:
Date: February 23, 2000

H. G. FENTON COMPANY, a California corporation

By: /S/ Kevin D. Hill
       Kevin D. Hill, Leasing Manager

By: /S/ Michael P. Neal
Michael P Neal, Vice President

Tenant:

PENLEY SPORT - LLC, a California limited liability company

By: /S/ Harold S. Elkan
        Harold S. Elkan, President

By: /S/ Steven R. Whitman
        Steven R. Whitman, Chief Financial Officer

<PAGE>

                                    EXHIBIT A
                                    SITE PLAN

                                 7415 Carroll Rd

                               Diagram of premises

<PAGE>

                                    EXHIBIT B

                         PREMISES AND IMPROVEMENTS TO PREMISES

Design and Construction of Tenant Improvements ("Work Letter Agreement")
Landlord and Tenant mutually agree that certain improvements to the Premises
shall be constructed by Tenant as follows:
                                   1. DESCRIPTION OF IMPROVEMENTS

      (a) The Premises to be provided by Landlord shall consist of all
improvements currently existing in the Premises which shall include, but not be
limited to, a concrete floor, exterior building walls, and service points from
which electrical and telephone service to the Premises can be made. In addition,
Landlord shall complete the items as set forth in Section 3.3 of the Lease. The
foregoing shall be deemed Landlord's Work for all purposes of this Lease. Tenant
acknowledges that except for Landlord's Delivery Work and except to the extent
expressly set forth in this Lease (including without limitation Sections 4.2
[Delivery of the Premises], 7.4 [ADA] and 8.4 [Landlord's Obligations]) Tenant's
taking possession of the Premises shall be deemed acceptance of the Premises by
Tenant, and shall be deemed conclusively to establish that the Premises are in
good and satisfactory condition as of the date Tenant takes possession. Tenant
accepts possession of the Premises in their current, "as is", condition, and
acknowledges that it has inspected the Premises and is fully aware of the
condition of the Premises.

      (b) After the Effective Date, Tenant intends to make certain additional
improvements ("Tenant Improvements") to the Premises including, but not limited
to, ceilings, partitions, (including potential demising of the Premises for
subleasing pursuant to the provisions of Section 15 of the Lease, and
installation of mezzanine office area [of which Landlord may require removal at
the end of the Term or any Extension Term] as described in Section 1.1 of the
Lease) HVAC units & HVAC distribution and controls and other mechanical and
plumbing systems within the Premises, window coverings, carpet, lighting
fixtures, electrical systems, exhaust systems, fire detection systems,
alterations made to the fire sprinkler system to accommodate the layout of the
Premises, and air conditioning units, all made pursuant to plans and
specifications to be approved in writing by Landlord and Tenant. Tenant The work
to be done and the responsibility for preparation of plans and specifications
for the Tenant Improvements is described in this Work Letter Agreement.

2. PLANS AND SPECIFICATIONS

      (a) The Tenant Improvements shall be constructed pursuant to plans and
specifications prepared in accordance with this Paragraph 2, by Tenant's
designer/architect using Landlord's Building Standards for Tenant Improvements
(the "Building Standards"),a copy of which will be provided to Tenant upon
execution of this Lease. The plans and specifications shall be complete and
shall address, inter alia, the following architectural features: demolition of
existing improvements, ceiling, lighting, partitions, doors, hardware, floor
finishes, wall finishes.

      (b) Tenant shall prepare and furnish all structural, electrical,
 mechanical, plumbing, engineering and fire and life safety plans and drawings
 (collectively, the "M&E Plans"), and Tenant shall also prepare all other
 architectural plans and drawings ("Architectural Plans") necessary to construct
 the Tenant Improvements. The M&E Plans and the Architectural Drawings
 (collectively, the "Working Drawings") shall consist of complete detailed plans
 and specifications for demolition of existing improvements, partition layout,
 ceiling, heating and air conditioning, electrical outlets, switches and
 telephone outlets. The Working Drawings shall be submitted by Tenant via
 Federal Express or similar overnight delivery service, for Landlord's approval
 no later than the dates in Paragraph 2(d) below.

      (c) Tenant shall prepare and submit to Landlord concurrently upon
 execution of this Lease, a space plan depicting Tenant's preliminary layout of
 the Premises. Landlord shall approve or reasonably disapprove of Tenants space
 plan within five (5) working days after receipt thereof.

      (d) Upon Landlord's approval of the space plan, Tenant shall prepare and
 submit to Landlord, not later than June 1, 2000 the M&E Plans and the Working
 Drawings and other plans and specifications necessary for submission to the
 City of San Diego for permitting of the Tenant Improvements. Landlord shall
 approve or reasonably disapprove of Tenants M&E Plans and Working Drawings
 within ten (10) working days after receipt thereof.

      (e) Following approval by Landlord of Tenant's M&E Plans and the Working
 Drawings and other detailed plans and specifications, Tenant shall neither
 cause nor permit any material deviations therefrom without Landlord's prior
 written consent, which shall not be unreasonably withheld or delayed.

       (f) Following completion of the Tenant Improvements, Tenant shall cause
 to be prepared (i) a set of sepia as-built plans and specifications of Tenant's
 M&E Plans and the Working Drawings for the Tenant Improvements; (ii) a
 close-out book which shall include but not be limited to the items set forth in
 (i) above, operations and maintenance manuals, guarantees and warranties from
 Tenant's contractor (the "Final Project Submittals").

3. CONSTRUCTION OF TENANT IMPROVEMENTS

     (a) Tenant shall be responsible for construction of the Tenant
Improvements, pursuant to this Work Letter Agreement. Prior to the start of
construction, Tenant shall prepare and submit to Landlord a detailed schedule
("Construction Schedule") identifying the major stages and anticipated
completion dates of each phase of construction. Tenant shall during the course
of construction periodically update the Construction Schedule, providing copies
of the updated schedule to Landlord. Construction shall be performed under
Tenant's supervision by Tenant's contractor, whose selection shall be reasonably
approved by Landlord. Landlord has pre-approved Ocean West Builders and Design
Build Tenant Improvement Contractors as the general contractors authorized to
provide Tenant bids for the Tenant Improvements. Selection of all subcontractors
shall also be subject to Landlord's reasonable approval. Tenant shall supervise
the contractor's work to expedite the completion of the Tenant Improvements and
to assure their construction in conformity with the approved plans and
specifications.

      (b) Landlord shall be permitted, during the course of construction, to
inspect the progress of the work and, upon written notice to Tenant, to cause
Tenant to repair any material defects or deficiencies.

     (c)  Landlord  shall  have  no  contractual   relationship   with  Tenant's
contractor or any subcontractors.

      (d) Tenant and Tenant's contractor shall coordinate with Landlord's
property manager regarding delivery and storage of building materials, so as to
minimize disruption of the Project's other tenants.

      (e) The air conditioning portion of the work shall include a control and
monitoring system furnished in accordance with the Building Standards. The air
conditioning subcontractor shall balance the system to provide the designed
volume and temperature of air for each space in the Premises.

      (f) Tenant shall notify Landlord upon substantial completion of the Tenant
Improvements, whereupon the parties shall jointly inspect the Premises and
prepare a punch list of corrective action to be taken by Tenant. Tenant shall
use its best efforts to complete the punch list within sixty (60) days after the
joint inspection.

4. PAYMENT OF COST OF CONSTRUCTION

      (a) Tenant shall fund the cost of all Tenant Improvements made to the
 Premises, including the costs for M&E Plans, and all reasonable costs for
 professional services retained by Landlord (if any) to review plans for code
 compliance.

      (b) Tenant acknowledges that except for the items set forth in Section 3.3
 of the Lease, Landlord shall have no obligation to fund any of the costs for
 Tenant Improvements made to the Premises.

5. INDEMNITY AND WARRANTIES

      (a) Tenant warrants to Landlord that (i) the Tenant Improvements will be
 constructed free from all liens or other claims in connection with such
 construction; (ii) all materials utilized in the Tenant Improvements will be
 new; and (iii) the Tenant Improvements will be completed in a workmanlike and
 first-class manner, be free from defects and deficiencies, and in conformance
 with all plans and specifications.

      (b) Tenant shall endeavor to obtain from each contractor, subcontractor
 and materialman providing labor or materials with respect to the Tenant
 Improvements a written agreement providing (i) that all such labor or materials
 are warranted to be free from faults and defects for a period of not less than
 one year following completion (as evidenced by recordation of a valid Notice of
 Completion) of the Tenant Improvements; and (ii) that Landlord and all
 Landlord's agents, employees, officers, directors, partners and contractors are
 indemnified, for a period of not less than one year following substantial
 completion of the Tenant Improvements, from and against any and all claims,
 damages, losses and expenses, including, but not limited to, attorney's fees,
 arising from or relating to any defects in workmanship or materials with
 respect to such labor and materials.

      (c) Tenant indemnifies and holds harmless Landlord and all of Landlord's
 agents, employees, officers, directors, partners and contractors from and
 against any and all claims, damages, losses and expenses, including, but not
 limited to, attorney's fees, arising from or relating to (i) any mechanic's
 lien or stop notice claims arising from the construction of the Tenant
 Improvements; or (ii) any defects in workmanship or materials with respect to
 the Tenant Improvements for one year following substantial completion thereof.

      (d) In the event any contractor or subcontractor retained by Tenant to
 construct the Tenant Improvements fails to perform as required, Tenant shall be
 obligated to pursue any claims against such contractor to remedy such failure
 or, at the discretion of Landlord, shall assign such claims to Landlord, in
 which event, Landlord may pursue such claims directly against such contractor.

6. ESTIMATED COMPLETION DATE

      (a) The estimated substantial completion date with respect to the Tenant
 Improvements is September 1, 2000 ("Estimated Completion Date"). Each party
 shall use its reasonable best efforts to comply with or improve upon the time
 periods specified herein, so that the Tenant Improvements can be completed by
 such date or as soon thereafter as possible.

      (b) If the Tenant Improvements have not been completed on or before the
Estimated Completion Date, (i) Landlord shall not be liable for any damage
incurred by Tenant as a result thereof, (ii) this Lease shall not thereby become
void or voidable, (iii) Tenant shall not be entitled to any abatement of rent,
and (iv) the Commencement Date shall not be delayed but shall be the date
specified in Section 1.5 (a) of the Lease.

IN WITNESS WHEREOF, the parties hereto have executed this Lease on the date(s)
set forth by their respective signatures.

Landlord:

Date: February 23, 2000

H. G. FENTON COMPANY, a California corporation

By: /S/ Kevin D. Hill
       Kevin D. Hill, Leasing Manager

By: /S/ Michael P. Neal
Michael P Neal, Vice President

Tenant:

PENLEY SPORT - LLC, a California limited liability company

By: /S/ Harold S. Elkan
        Harold S. Elkan, President

By: /S/ Steven R. Whitman
        Steven R. Whitman, Chief Financial Officer

<PAGE>

                                    EXHIBIT C
                              RULES AND REGULATIONS

Tenant and its employees, agents, licensees and visitors will at all times
observe faithfully, and comply strictly with, the Rules and Regulations set
forth on this Exhibit C. Landlord may from time to time reasonably amend, delete
or modify existing rules and regulations, or adopt reasonable new rules and
regulations for the use, safety, cleanliness and care of the Premises, the
Building and the Business Park, and the comfort, quiet and convenience of
occupants of the Business Park. Modifications or additions to the Rules and
Regulations will be effective upon notice to Tenant from Landlord. In the event
of any breach of any rules or regulations or any amendments or additions to such
Rules and Regulations, Landlord will have all remedies which this Lease provides
for default by Tenant, and will, in addition, have any remedies available at law
or in equity, including the right to enjoin any breach of such Rules and
Regulations. Landlord will not be liable to Tenant for violation of such Rules
and Regulations by any other tenant, its employees, agents, visitors or
licensees, or any other person. In the event of any conflict between the
provisions of this Lease and the Rules and Regulations, the provisions of the
Lease will govern. Tenant shall not be in default until written notice of a
violation of one or more of the Rules and Regulations is given to Tenant and any
cure period has expired.

      A. The plumbing facilities shall not be used for any purpose other than
that for which they are constructed, and no foreign substance of any kind shall
be thrown therein, and the expense of any breakage, stoppage or damage resulting
from a violation of this provision shall be borne by Tenant who shall, or whose
employees, agents and invitees shall, have caused it.

      B. Except as to Tenant's customary improvements, Tenant shall not deface
wall, ceilings, glass, partitions, floors, doors, wood, paint, stone or metal
work of the Premises or the Business Park by marking, nailing, drilling or
otherwise defacing.

      C. Tenant shall not use, keep or permit to be used or kept, any foul or
obnoxious gas or substance in the Premises or permit or suffer the Premises to
be used or occupied in any manner offensive or objectionable to Landlord or
other occupants of the Building or Business Park by reason of any noise, odors
and/or vibrations.

     D. Tenant, or its agents,  shall not play any musical instrument or make or
permit any improper noises in the Business Park.

     E. Tenant, or its employees,  shall not loiter in the entrance or corridors
of the Building or Business Park, or in any way obstruct the sidewalks, hallways
and  stairways  and shall use the same only as a means of access to and from the
Premises.

      F. Tenant may limit weight, size and position of all safes, fixtures and
other equipment used in the Premises. In the event Tenant shall require extra
heavy equipment, Tenant shall notify Landlord of such fact and shall pay the
cost of structural bracing to accommodate same. All damage done to the Premises
or the Business Park by putting in, or taking out, or maintaining extra heavy
equipment shall be repaired at the expense of Tenant.

      G. Tenant shall not do anything in the Premises, or bring or keep anything
therein, which will in any way increase or tend to increase the risk of fire or
the rate of fire insurance or which shall conflict with the regulations of the
Fire Department or the law or with any insurance policy on the Premises or any
part thereof, or with any rules or regulations established by any administrative
body or official having jurisdiction, and it shall not use any machinery
therein, even though its installation may have been permitted, which may cause
any unreasonable noise, or jar or tremor to the floor or walls, or which by its
weight might injure the floors of the Premises.

      H. Keys for the Premises shall be provided to Tenant by Landlord and
Tenant shall return to Landlord any such keys upon termination of the Lease.
Tenant shall not change locks or install other locks on doors of the Premises
without receiving prior written approval from Landlord and providing Landlord
with appropriate keys for such locks.

      I. No personnel shall enter or remain in the Business Park while
intoxicated or under the influence of liquor or drugs. Landlord shall have the
right to exclude or expel from the any person ho, in the absolute discretion of
Landlord, is under the influence of liquor or drugs.

      J. Tenant and its agents and employees shall not bring into nor keep
within the premises any animal or bird. Tenant and its agents and employees
shall not throw refuse or other substances or litter of any kind in or about the
Business Park, except in receptacles places therein for such purposes by
Landlord or governmental authorities.

     K. Tenant shall not install any form of window  covering or  ventilators or
similar  devices  visible  from the  outside of the  Premises  without the prior
written consent of Landlord.

     L. All freight  must be moved  into,  within and out of the  premises  only
during such hours and according to such  regulations  as may be posted from time
to time by Landlord.

     M. No aerial shall be erected on the roof or exterior walls of the Premises
or on the grounds, without in each instance the written consent of Landlord. Any
aerial so installed  without such  written  consent  shall be subject to removal
without notice at any time.

     N.  Tenant  shall not burn any trash or garbage at any time in or about the
Business Park.

     0. Tenant shall use, at its cost, such pest extermination at such intervals
as Landlord may require.

     P. No waiver  of any rule or  regulation  by  Landlord  shall be  effective
unless expressed in writing and signed by Landlord or its authorized agent.

     Q. Tenant  shall abide by any  additional  rules or  regulations  which are
ordered or requested by any governmental or military authority.

     R. In the event of any conflict  between these Rules and Regulations or any
further or modified rules and  regulations  from time to time issued by Landlord
and the Lease, the Lease shall govern and control.

     S. All extension signs shall be in accordance with Landlord's sign plan. No
other  signage  shall be used by Tenant except that which is approved in writing
by Landlord.

<PAGE>

                                    EXHIBIT D
                                SIGNAGE CRITERIA

A.    Interior Signs. Tenant shall not affix or maintain upon the glass panes
      and supports of the storefront windows and doors, or within 18" of the
      storefront windows and doors, any signs, advertising placards, names,
      insignia, trademarks, descriptive material or any other such like item or
      items, except such as have first received the written approval of Landlord
      (which shall not be unreasonably withheld or delayed) as to size, type,
      color, location, copy, nature and display qualities.

B.   Exterior Signs. Tenant shall be entitled to  Building-exterior  signage and
     signage on the Project's  monument (if any).  All signage shall be designed
     and  installed,  at Tenant's sole cost and expense,  in locations  mutually
     agreed by Landlord and Tenant.

C.    Tenant shall not erect, place, paint or maintain in or on the Premises any
      sign, exterior advertising medium or any other object of any kind
      whatsoever, whether an advertising device or not, visible or audible from
      outside the Premises. Nor shall Tenant change the color, size, location,
      composition, wording or design of any sign or advertisement on the
      Premises that may have been theretofore approved by Landlord and
      governmental authorities without the prior written approval of Landlord
      and said authorities. Tenant shall, at its own expense, maintain and keep
      in good repair all installations, signs and advertising devices which it
      is permitted by Landlord to maintain, and shall pay all charges required
      to keep them in good repair. Tenant's sign shall be deemed real property
      once installed.

<PAGE>

                                    EXHIBIT F

                               GUARANTY AGREEMENT

      FOR VALUE RECEIVED, and in consideration for H. G. FENTON COMPANY, a
California corporation ("Landlord"), entering into that certain STANDARD
INDUSTRIAL LEASE dated February 9, 2000 ("Lease") between Landlord and PENLEY
SPORTS, LLC, a California limited liability company ("Tenant"), relating to the
leased premises as more particularly described in the Lease ("Premises"), the
undersigned SPORTS ARENAS, INC. ("Guarantor") hereby guarantees to Landlord (i)
the prompt payment in accordance with its terms of all rent due to Landlord
under the Lease, and (ii) strict compliance by Tenant with the terms, covenants
and conditions of the Lease. If more than one person or entity guaranties the
obligations of Tenant under the Lease (whether by signing this Guaranty or
otherwise), the liability of each guarantor (including Guarantor) shall be joint
and several with that of each and every other person or persons guarantying the
obligations of Tenant under the Lease.

      Guarantor hereby waives the benefits and protection of the provisions of
California CIVIL CODE ss.2819, and Guarantor hereby grants to Landlord full
power and authority to: (i) change, alter, cancel, renew or extend the time for
payment of rent due under the Lease or performance by Tenant of any other terms
or conditions of the Lease as Landlord and Tenant may expressly or impliedly
agree upon; or (ii) change, modify, extend or otherwise amend the Lease,
including increasing the rental payable thereunder by Tenant; or (iii) otherwise
deal with Tenant as Landlord may elect, without in any way diminishing,
releasing or discharging the liability hereunder of Guarantor. Such liability
shall be continuing and shall only be terminated by full compliance by Tenant
with all the terms of the Lease.

      Notice of acceptance of this Guaranty as well as all demands,
presentations, notices of protest and notices of every kind or nature, including
those of any action or non-action on the part of Tenant, Landlord or other
party, are hereby fully waived by Guarantor. Upon any default of Tenant under
the Lease, Landlord may, at its option, proceed directly and at once, without
notice of such default, against Guarantor to collect and recover the full amount
of the liability hereunder or any portion thereof without proceeding against
Tenant or any other party or foreclosing upon, selling, or otherwise disposing
of or collecting or applying any property, real or personal, Landlord may then
have as security for the performance by Tenant under the Lease. Guarantor hereby
waives the right to require Landlord to proceed against Tenant or to pursue any
other remedy Landlord may have, waive the right to plead or assert any election
of remedies Landlord may have, waives the pleading of any statute of limitations
as a defense to the obligation hereunder, and waives any other defense arising
by reason of any disability or other defenses of Tenant or by reason of the
cessation from any cause whatsoever of the liability of Tenant.

      If legal action is commenced by Landlord to enforce this Guaranty or any
term or condition hereof, Guarantor agrees to pay to Landlord costs of
collection and, as part of the costs incurred therein, such additional sums as
the Court may adjudge reasonable as attorneys' fees in said suit. No indulgence,
forbearance or extensions of time of payment or performance permitted or granted
to Tenant by Landlord shall in any way release Guarantor from liability or
diminish Guarantor's obligations hereunder.

      In addition to all liens upon, and rights of set-off against the moneys,
securities or other property of Guarantor given to Landlord by law, Landlord
shall have a lien upon and a right of set-off against all moneys, securities and
other property of Guarantor now or hereafter in the possession of Landlord,
whether held in a general or special account, or for safekeeping or otherwise;
and every such lien and right of set-off may be exercised without demand upon or
notice to Guarantor. No lien or right of set-off shall be deemed to have been
waived by any act or conduct on the part of Landlord, or by any neglect to
exercise such right of set-off or to enforce such lien, or by any delay in so
doing; and every right of set-off and lien shall continue in full force and
effect until such right of set-off or lien is specifically waived or released by
an instrument in writing signed by Landlord.

      Any indebtedness of Tenant now or hereafter held by Guarantor is hereby
subordinated to any indebtedness of Tenant to Landlord, and such indebtedness of
Tenant to Guarantor if Tenant so requests shall be collected, enforced and
received by Guarantor as trustee for Tenant and held as security for performance
of the obligation of Tenant to Landlord, but without reducing or affecting in
any manner the liability of Guarantor under the other provisions of this
Guaranty.

      Landlord may without notice assign this Guaranty in whole or in part. No
assignment of the Lease shall diminish, release, discharge or otherwise modify
Guarantor's liability under this Guaranty. Guarantor hereby waives any right it
might otherwise have to require Landlord to apply any security deposit or other
security that it may hold under the Lease to any default. So long as Landlord's
interest in the Lease is subject to a mortgage or deed of trust, no acquisition
by Guarantor of Landlord's interest under the Lease shall affect Guarantor's
obligations under this Guaranty, which shall remain in effect for the benefit of
Landlord's lender.

Notwithstanding anything contained herein to the contrary, this Guaranty shall
terminate and have no further force, or effect upon Guarantor s satisfaction of
all of the following conditions precedent at any time after on and after the
date which is three (3) years after the Commencement Date (as defined therein)
of the Lease:

(a) Guarantor shall have delivered, to Landlord, or caused to be delivered to
Landlord, financial statements for Tenant, covering each of the most recent
three (3) fiscal years of Tenant which demonstrate, to Landlord's reasonable
satisfaction (Landlords approval there of being confirmed in writing, as
described below) that for each of such fiscal years Tenant had (i) positive net
income, and (ii) net worth of not less than $750,000. Such statements shall be
prepared in accordance with generally accepted accounting principles,
consistently applied, and shall include balance sheets, income and expense
statements, and such other financial information for Tenant as Landlord shall
reasonably request for purposes of confirming the satisfaction of such financial
standards.

(b) Guarantor shall not then be in breach or default under any provisions of
this Guaranty, and no event shall have occurred which with notice or the passage
of time, or both, would constitute any such breach or default.

  (c) Tenant shall not then be in breach or default under any of the provisions
  of the Lease and no event shall have occurred which with notice or the passage
  of time or, both, would constitute any such breach or default.

  Promptly following Landlord's approval' of the financial statements described
  in clause (a) above, and satisfaction of the other conditions precedent
  described above, Landlord shall confirm in writing to Guarantor that this
  Guaranty has terminated and is in no further force or effect; provided,
  however, that in no event shall any such termination affect any of Tenant's
  obligations under the Lease, and the Lease shall continue to remain in full
  force and effect in accordance with its terms and conditions.

  Date: February 19, 2000

By: /S/ Harold S. Elkan
        Harold S. Elkan, President

<PAGE>

                             EXHIBIT E (Page 1 of 2)

                           ENVIRONMENTAL QUESTIONNAIRERESCISSION OF ELECTION TO TERMINATE & REINSTATEMENT OF PURCHASE OBLIGATION

        This  RESCISSION  OF ELECTION TO TERMINATE &  REINSTATEMENT  OF PURCHASE
OBLIGATION (the  "Reinstatement")  is entered into to be effective as of October
23, 2000 (the  "Effective  Date") by and between FOSTER  INVESTMENT  CORPORATION
(the "Buyer") and DOWNTOWN PROPERTIES DEVELOPMENT  CORPORATION (the "Seller") as
follows:

1. Recitals

        1.1 Buyer and  Seller  are  parties to that  certain  PURCHASE  AND SALE
AGREEMENT  AND JOINT ESCROW  INSTRUCTIONS  dated  September 27, 2000 and certain
escrow   instructions   implementing   the  transaction   contemplated   therein
(collectively,  the "Purchase  Agreement").  Except as otherwise defined herein,
words and  phrases  having  their  initial  letters  capitalized  shall have the
definitions set forth in the Purchase Agreement.

        1.2 On October  10,  2000,  Buyer  notified  Seller of its  election  to
terminate Buyer's obligation to purchase the Property as permitted under Section
3.2 of the Purchase Agreement (the "Termination Election").

        1.3 Buyer's  Termination  Election  was based the  existence  of certain
issues which have since been resolved by Seller and Buyer.

        1.4 Buyer and  Seller  therefore  desire  that:  (a) Buyer  rescind  its
Termination  Election;  and (b) the rights and  obligations of the parties under
the Purchase  Agreement be  reinstated as if such  Termination  Election had not
been made.

               FOR GOOD AND VALUABLE CONSIDERATION, RECEIPT OF WHICH IS HEREBY
               ACKNOWLEDGED:

2. Rescission & Reinstatement

        2.1 Buyer hereby rescinds its Termination  Election and acknowledges its
right to terminate its obligation to purchase the Property under Section 3.2 has
now expired and forever lapsed.

        2.2 All rights and  obligations  of Buyer and Seller  under the Purchase
Agreement  shall be reinstated as of the Effective  Date as if such  Termination
Election had never been made. IN WITNESS WHEREOF, this Reinstatement is executed
to be effective as of the Effective Date.

Buyer:                      FOSTER INVESTMENT CORPORATION

                                  BY:________________________________________
                            Name:
                                  Title:_______________________

Seller:                      DOWNTOWN PROPERTIES DEVELOPMENT CORPORATION
                                            a California corporation

                                   By:/S/ Harold S. Elkan
                                          Harold S. Elkan, President

<PAGE>

DOWNTOWN PROPERTIES DEVELOPMENT CORPORATION 5230 Carroll Canyon Road, Suite 310
San Diego, CA 92121 (858) 587-1060 Fax (858) 587-0425

September 28, 2000

Charles Tiano
Foster Investment Group 705 12th Avenue San
Diego, CA 92101

Dear Charles:

In connection with the PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
("Agreement") entered into as of the 27th day of September, 2000 by and between
DOWNTOWN PROPERTIES DEVELOPMENT CORPORATION, a California corporation, as
"Seller," and FOSTER INVESTMENT CORPORATION, or its assignee as "Buyer" whereby
Seller agreed to sell and assign and Buyer agreed to purchase the real property
located in San Diego County, California, located at 5230 Carroll Canyon Road,
San Diego, California 92121. The purchase price in the Agreement was not
adjusted to reflect the additional costs estimated to be incurred by Buyer to
maintain a single purpose entity.

By this letter, both Seller and Buyer intend this to be an amendment to the
Agreement and agree that the Purchase Price shall be adjusted from $3,750,000 to
$3,725,000.

If this accurately reflects your understanding, please sign below. Please call
me if you have any questions.
Sincerely,

/S/ STEVEN R. WHITMAN
Steven R. Whitman Chief Financial Officer

AGREED AND ACCEPTED:
FOSTER INVESTMENT CORPORATION

By: /S/ STANLEY FOSTER                           Dated: SEPTEMBER 28, 2000
      President

DOWNTOWN PROPERTIES DEVELOPMENT CORPORATION a California corporation

/S/ STEVEN R. WHITMAN________               Dated: SEPTEMBER 28, 2000
Steven R. Whitman
Chief Financial Officer

<PAGE>

            PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS

        THIS  PURCHASE AND SALE  AGREEMENT AND JOINT ESCROW  INSTRUCTIONS  (this
"Agreement")  is  entered  into as of this  27th day of  September,  2000 by and
between DOWNTOWN PROPERTIES DEVELOPMENT  CORPORATION,  a California corporation,
as "Seller," and FOSTER INVESTMENT CORPORATION, or its assignee as "Buyer."

                                   ARTICLE I.
                              PROPERTY DESCRIPTION

        1.1 THE  PROPERTY.  Seller agrees to sell and assign and Buyer agrees to
purchase the real property located in San Diego County,  California,  located at
5230 Carroll Canyon Road, San Diego, California 92121, containing  approximately
35,943  square  feet of office  space,  the  legal  description  for which  real
property  is more  particularly  set forth in  Exhibit  A  attached  hereto  and
incorporated herein by reference ("the Land"),  together with the following (the
Land and all of the following are  hereinafter  collectively  referred to as the
"Property"):

               a.  The  parking  areas  and  all   buildings,   structures   and
improvements  on  the  real  property  and  including  without  limitation,  all
mechanical systems,  fixtures and equipment;  electrical  systems,  fixtures and
equipment,  heating fixtures,  systems and equipment; air conditioning fixtures,
systems and equipment;  plumbing fixtures, systems and equipment;; and all other
fixtures and equipment of Seller  located upon and used in  connection  with the
real property ("Improvements");

               b. All equipment, appliances, furniture, furnishings and other
tangible personal property owned by Seller and located, placed or installed on
or about the real property or used as part of or in connection with the real
property or the operations thereon ("FF&E");

               c. Subject to Seller's rights to collect rents accruing through
the Closing (as hereinafter defined), all right, title and interest of Seller in
and to all leases and other rental agreements (written or verbal) now or
hereafter in effect, that grant a possessory interest in and to any space
situated in the improvements or that otherwise confer rights with regard to use
of the Property , and in all security deposits and any prepaid rentals, if any,
together with tenant lease files and tenant data sheets ("Tenant Leases");

     d. All right, title and interest of Seller in and to all service and vendor
contracts  relating  to  the  Property  ("Service  Contracts"),  subject  to the
provisions set forth below; and all warranties, guaranties and bonds relating to
the Property ("Warranties and Guaranties");

               e. All right, title and interest of Seller in and to all site
plans, surveys, soil and substrata studies, architectural drawings, plans and
specifications, engineering plans and studies, floor plans, landscape plans,
remodeling plans, and other plans, diagrams and studies of any kind in Seller's
possession or control that relate to the Property or any contemplated future
improvements and all architectural and engineering inspection reports,
environmental impact reports, archaeological reports, structural reports and
soils reports relating to the Property; ("Plans and Reports");

               f. All right, title and interest of Seller in all development
agreements, permits, contracts, indemnities, agreements, utility contracts,
permits, licenses and other rights owned by Seller relating to or used in
connection with the ownership, operation, use, occupancy or enjoyment of all or
any part of the Property ("Permits and Licenses");

               g. All leasing  brochures,  marketing  studies and  brochures and
other materials and data of any kind in Seller's  possession or control relating
to the marketing of the Property ("Marketing Materials");

               h. All goodwill related to the Property ("Goodwill");

               i. All keys to locks on the  Property  which  Seller or  Seller's
agents may have in their possession ("Keys");

               j. All of the  interest  of  Seller  in any  insurance  proceeds,
condemnation awards,  environmental claims related to damages to the Property or
other  claims,  suits,  or causes of action  against  any party  related  to the
Property  (except  claims  against  tenants for rent past due as of the Closing)
("the Claims");

               k. All of Seller's rights,  privileges and easements  appurtenant
to and for the benefit of the Land, including,  without limitation all minerals,
oil, gas and other  hydrocarbon  substance  on and/or  under said real  property
(excluding  therefrom  any  Hazardous  Substances),  as well as all  development
rights,  air rights,  and water  rights  relating to said real  property and any
other  easements,  rights  of  way  or  appurtenances  relating  to or  used  in
connection with the ownership,  operation,  use,  occupancy or enjoyment of said
real property of Seller ("Mineral Rights, Easements and Appurtenances"); and

               1. Any and all other rights,  privileges and appurtenances  owned
by Seller and in any way related to, or used in connection with the operation of
the Property ("Rights and Privileges").

        The Land, Improvements, Tenant Leases, and Mineral Rights, Easements and
Appurtenances are sometimes collectively referred to as the "Real Property".

                                   ARTICLE II.
                                 PURCHASE PRICE

        2.1 PURCHASE  PRICE.  The  purchase  price  ("Purchase  Price") is Three
Million Seven Hundred Fifty  Thousand  Dollars  ($3,750,000),  to be paid as set
forth below.

        2.2 METHOD OF PAYMENT OF PURCHASE PRICE.

               a. On execution of this Agreement by Buyer and Seller, Buyer
shall deposit with United Title Company, 5005 Texas Street, Suite 105, San
Diego, CA 92108 ("Escrow Holder"), the sum of Fifty Thousand Dollars
($50,000.00) (the "Initial Deposit").

               b. On the first business day after expiration of the Feasibility
Period (as defined below), unless Buyer has terminated this Agreement in
accordance with the provisions of Section 3.2 hereof, Buyer shall deposit an
additional Fifty Thousand Dollars ($50,000.00) (the "Second Deposit") with
Escrow Holder.

               c. At the Closing (as defined below), Buyer shall assume the
obligations of Seller under a promissory note ("the Note") in the original
principal amount of One Million Nine Hundred Seventy Five Thousand Dollars
executed by Seller in favor of NATIONAL REALTY FINANCE, L.C., a Missouri limited
liability company, and dated on or about May 11, 1999, the date such Note was
delivered by Seller. The Note is secured by a first deed of trust on the
Property. The approximate balance of the Note as of September 27, 2000 is
$1,954,775.

               d. On or before one business day prior to the Closing, Seller
shall deposit the balance of the Purchase Price, which is the Purchase Price set
forth above, less the sum of (a) the Initial Deposit, (b) the Second Deposit,
and (c) the principal balance of the Note as of the Closing.

        All  deposits  into escrow  shall be placed in an interest  bearing FDIC
insured  money market  account  approved by Buyer,  to bear  interest to Buyer's
credit, except as otherwise set forth herein.

                                  ARTICLE III.
                               FEASIBILITY PERIOD

        3.1 DELIVERY OF  DOCUMENTS.  Within 10 business days after the execution
of this Agreement by Buyer and Seller, Seller shall at Seller's expense, deliver
to Buyer, all of the following:

               a. a  preliminary  title  report for the  Property  ("Preliminary
Report") issued by United Title Company (the "Title  Company"),  together with a
copy of each  document  or  instrument  noted  as an  exception  to title in the
Preliminary Report;

               b. [intentionally deleted]

               c. a Phase I  Environmental  Report for the Property  dated April
19,  1999  ("Phase  I  Report")  and  all  other   reports,   studies,   claims,
correspondence,  data, or notes in Seller's possession or control that relate to
environmental,  toxic,  or  hazardous  wastes or  materials  in  relation to the
Property  or any  other  property  within  2,000  feet of the  Property  (which,
together  with  the  Phase  I  Report,  are  referred  to  collectively  as  the
"Environmental Reports");

               d. true copies of the Tenant Leases;

               e. true copies of the Service Contracts; a list of the FF&E;

               g. the Plans and Reports, and the Permits and Licenses, including
copies of all  certificates  of  occupancy  and other  governmental  licenses or
approvals relating to any portion of the Property;

               h. true copies of the written Warranties and Guaranties;

               i. a list of any current Claims, if any;

               j. a current rent roll for the Property ("Rent Roll"),  certified
by Seller  to be true and  correct  as of the date  thereof,  and  copies of any
commission agreements;

               k.  operating  statements  covering the Property for the calendar
years 1997, 1998, 1999 and 2000  year-to-date,  which statements  accurately set
out the aggregate of all costs and expenses  incurred and all revenue and income
received by Seller in owning and operating the Property during such period; and

               1. copies of the ad valorem property tax statements  covering the
Property for the 2 years prior to the current year in the  possession of Seller,
and, if available, for the current year.

        The date that all of the above  items have been  delivered  by Seller to
Buyer is referred to as the  Document  Delivery  Date.  Seller is  obligated  to
deliver to Buyer the Preliminary  Report, the Phase I Report, and Rent Roll, and
with respect to the balance of the items listed  above,  Seller shall deliver to
Buyer all such items to the extent  Seller has such items in its  possession  or
control.

        3.2 REVIEW  PERIOD;  BUYER'S  OPTION TO TERMINATE.  Buyer shall have ten
(10) days from the  Document  Delivery  Date to  conduct  such  inspections  and
investigations  it desires with  respect to the  Property,  its uses,  financial
viability  and its  feasibility  for  Buyer's  intended  uses (the  "Feasibility
Period"). Buyer, personally or through its authorized agents or representatives,
shall be  entitled to  reasonable  access to the books,  records  and  operating
statements  affecting  the  Property and the right to enter upon and inspect the
Property.  Seller  agrees to make all such records  available  for review at the
Property  and  shall  cooperate,  at  no  cost  to  Seller,  in  providing  such
information and documents regarding the Property and its operations as Buyer may
reasonably  request.  If, within the Feasibility  Period,  Buyer shall,  for any
reason in Buyer's  sole  discretion,  judgment  and  opinion,  disapprove  or be
dissatisfied  with any aspect of the  Property,  then Buyer shall be entitled to
terminate Buyer's obligations to purchase the Real Property and pay the Purchase
Price under this  Agreement  by giving  written  notice  thereof to Seller on or
before the expiration of the Feasibility Period,  whereupon this Agreement shall
automatically   be  rendered  null  and  void,  the  Initial  Deposit  shall  be
immediately returned to Buyer and thereafter neither Seller nor Buyer shall have
any further obligation or liabilities to the other hereunder. In the event Buyer
fails to terminate  this Agreement by providing such written notice to Seller on
or before the  expiration of the  Feasibility  Period,  (i) the Initial  Deposit
shall be non-refundable  (except as provided  hereunder) and (ii) Buyer shall be
deemed to have waived its right to terminate Buyer's obligations to purchase the
Real Property and pay the Purchase Price under this Agreement under this Section
3.2.

        3.3 PRELIMINARY REPORT AND SURVEY. Buyer shall have the right during the
Feasibility  Period to review  and make  objections  to the  Preliminary  Report
and/or  Survey.  In the event Buyer  objects to the  exceptions  to title in the
Preliminary  Report or to the Survey ("Buyer's  Objections"),  then Buyer shall,
prior to the end of the Feasibility  Period,  give Seller written notice of such
fact.  Seller  shall have five (5) days from  receipt of Buyer's  Objections  to
notify  Buyer,  with  specificity,  in  writing,  of  matters  listed in Buyer's
Objections that Seller will cure or cause to be eliminated from the title policy
or  corrected  in the Survey as of the  Closing,  if any  ("Seller's  Correction
Notice").  Seller shall not be required to take any action to address any of the
Buyer's  Objections,   provided,  however,  that  the  elimination  or  cure  or
correction  of any of  Buyer's  Objections  that  Seller  agrees to  address  in
Seller's  Correction  Notice  shall be a condition to Closing in favor of Buyer.
Buyer  shall have two (2) days from  receipt of  Seller's  Correction  Notice to
deliver written notice to Seller  ("Buyer's Title Notice") that (i) Buyer elects
to  terminate  Buyer's  obligations  to purchase  the Real  Property and pay the
Purchase Price under this Agreement or (ii) Buyer elects to accept title subject
to the disapproved exceptions,  other than those that Seller has agreed to cure,
eliminate  or correct in Seller's  Correction  Notice.  Any  supplemental  title
reports  issued by the Title Company shall be subject to the same process as set
forth above.  In the event Buyer elects to terminate this Agreement  pursuant to
the terms of this  section  3.3,  the  Initial  Deposit  made by Buyer  shall be
returned to Buyer and neither Buyer nor Seller shall have any further obligation
under this Agreement.  Exceptions to title shown in the Preliminary Report which
have been  approved  by Buyer or  deemed  approved  by Buyer as set forth  above
(excluding those matters,  if any, that Seller has agreed to eliminate,  cure or
correct) are hereinafter referred to as "Permitted Exceptions".

        3.4  INDEMNITY  BY  BUYER.  Buyer  hereby  agrees  to  protect,  defend,
indemnify  and hold the Real  Property,  Seller and Seller's  agents,  servants,
invitees and their  successors and assigns harmless from and against any and all
loss, cost, expense, liability,  damage, action, cause of action, claim, dispute
or  account,  including  court  costs and  attorney's  fees,  arising  out of or
resulting from any act, omission or negligence of Buyer or Buyer's  contractors,
licensees,  agents,  servants or employees arising from any accident,  injury or
damage  whatsoever  sustained  by Seller,  including,  but not  limited  to, any
mechanic's or  materialmen's  liens arising out of any inspections  conducted by
Buyer or its authorized agents or representatives pursuant to this Article III.

                                   ARTICLE IV.
                                 LOAN ASSUMPTION

        4.1  ASSUMPTION  OF  LOAN.  As soon as  reasonably  possible  after  the
execution  of this  Agreement by Buyer and Seller,  (i) Seller shall  provide to
Buyer copies of the Note,  the deed of trust  securing  the Note,  and all other
loan documents constituting the loan (the "Loan") evidenced by the Note and (ii)
Buyer and Seller shall make  application  to the lender under the Loan for Buyer
to assume the obligations of Seller under the Loan. If for any reason in Buyer's
sole discretion, judgment and opinion, Buyer shall disapprove or be dissatisfied
with  the  Loan or the  loan  documents  or any  conditions,  change  in  terms,
documents,  or other matters required by the Lender in order for Buyer to assume
the Loan,  then Buyer shall be  entitled to  terminate  Buyer's  obligations  to
purchase the Real  Property and pay the Purchase  Price under this  Agreement by
giving written  notice  thereof to Seller.  In the event Buyer shall so elect to
terminate Buyer's obligations to purchase the Real Property and pay the Purchase
Price under this Agreement, or if the lender shall not approve the assumption of
the Loan by Buyer,  then Buyer's  obligations  to purchase the Real Property and
pay the Purchase Price under this Agreement shall automatically be rendered null
and void,  and the Initial  Deposit and, if it has been made, the Second Deposit
shall be immediately returned to Buyer..

                                   ARTICLE V.
              SELLER'S COVENANTS AND REPRESENTATIONS AND WARRANTIES

        5.1 COVENANTS BY SELLER.  Seller hereby  covenants and agrees with Buyer
as follows:

               a.  At all  times  from  the  date of this  Agreement  until  the
Closing,  Seller shall maintain in force insurance coverage upon the Property in
the  amounts  and types  currently  carried by Seller and no  policies  shall be
canceled,  changed or allowed to expire  prior to  Closing,  including  fire and
extended  coverage  and public  liability  insurance  with  respect to damage or
injury to person or property occurring on the Property;

               b.  At all  times  from  the  date of this  Agreement  until  the
Closing, Seller shall keep and perform all of the obligations to be performed by
the  landlord  under  the  Tenant  Leases,   including  without  limitation  any
maintenance  of the Property to be  performed by the landlord  under such Tenant
Leases;

               c.  Prior  to  Closing,  Seller  shall  manage  the  Property  in
accordance with the prudent real estate  operations as being  presently  managed
and no  change  or  modification  will be  made in  rental  policies  or  rental
agreements.  After the expiration of the  Feasibility  Period,  Seller shall not
enter into any  agreements  with respect to the  operation or  management of the
Property that will affect the Property  beyond  Closing,  except in the ordinary
course of  business  or as  approved  by Buyer in  writing  upon a request  from
Seller;  and  Seller  will not  make any  alterations  or  modifications  of the
Property;

               d.  Prior to  Closing,  Seller  shall  maintain,  repair and make
replacements (but the making of replacements  shall be done only after obtaining
Buyer's written consent,  which shall not be unreasonably  withheld),  to and of
the buildings and other  improvements  on the  Property,  in good  condition and
repair at a level at least consistent with the level of maintenance,  repair and
replacement being undertaken by Seller as of the date of this Agreement,  except
for normal wear and tear and any  casualty  or  condemnation  therefrom  without
replacing them with  substantially  similar items nor shall Seller in any manner
neglect the Property;

               e. Seller  shall cause all trade  accounts and costs and expenses
of operation and  maintenance  of the Property  incurred  prior to Closing to be
promptly paid when due; and

               f. All  commissions due or to come due with respect to the Tenant
Leases  or any  commission  agreements  shall  be  paid,  assumed  or  otherwise
satisfied in full by Seller at or prior to the Closing,  and the Property  shall
be conveyed to Buyer free and clear of all  commissions  and brokerage  fees and
all commissions or brokerage  agreements with respect to Tenant Leases,  and any
renewals or extensions thereof.

        5.2 REPRESENTATIONS  AND WARRANTIES BY SELLER.  Seller hereby represents
and warrants to Buyer that the following  matters are true and correct as of the
execution of this Agreement and will also be true and correct as of the Closing:

               a. Seller has not been served with any action, suit or proceeding
affecting the Property or any portion  thereof and, to Seller's  current  actual
knowledge,  there is no action,  suit or  proceeding  pending or  threatened  or
asserted against Seller, affecting Seller or any portion of the Property, at law
or in equity  before  any court or by any  federal,  state,  municipal  or other
governmental department,  commission,  board, bureau, agency or instrumentality,
domestic or foreign;

               b. Seller has not received any notices and has no current  actual
knowledge  of  any  condemnation  actions,  special  assessment  or  improvement
districts in formation or contemplated or other  impositions of any nature which
are pending or being  contemplated  with  respect to the Property or any portion
thereof;

               c. Seller has not received and has no current actual knowledge of
any notice of any violation of any  ordinance,  regulation,  law or statute from
any  governmental  agency  pertaining  to the  Property or any portion  thereof.
Seller has not  received  any  notice of any  governmental  regulation  or order
restricting the operation of the Property in the manner in which the Property is
being  operated  on the  date of this  Agreement.  To  Seller's  current  actual
knowledge  the use of the Property  conforms to  applicable  building and zoning
codes  without  the  necessity  for a variance or  reliance  upon a  preexisting
nonconforming use of the Property;

               d. Except with respect to the Loan, there are no liens against or
security  interests  in the  Property.  Prior to the  Closing,  Seller shall not
create or  voluntarily  permit  to be  created  any  liens,  easements  or other
condition  affecting  any  portion of the  Property  without  the prior  written
consent of Buyer.  No work has been  performed or is in progress by or on behalf
of Seller and no  materials  have been  furnished to the Property or any portion
thereof,  which  might give rise to  mechanic's,  materialmen's  or other  liens
against  the  Property  or any  portion  thereof and which would exist after the
Closing;

               e. To Seller's current actual knowledge,  all water,  sewer, gas,
electric, telephone and drainage and all other utilities required for the normal
use and  operation of the Property  are  installed to the property  lines of the
Property,  are  connected,  and run over,  through,  or under a public street or
alley to the Property  from the location at which such utility are  connected to
the main public utility line;

               f. The documents,  reports,  and  instruments  delivered to Buyer
under  Article III of this  Agreement  are,  to the best of Seller's  knowledge,
true, accurate and complete in every respect;

               g. Seller is the owner of good and marketable fee simple title to
the Property,  free and clear of any liens,  deeds of trust,  pledges,  security
interest,  leases,  charges,  encumbrances or restrictions of any kind except as
may be specifically  permitted herein. Except to the extent Seller's interest in
the lessor's  interest in the Tenant  Leases has been  assigned to the holder of
the Loan, Seller is the sole owner of the lessor's interest in all of the Tenant
Leases and, to Seller's current actual knowledge, all of such leases are in full
force and effect  without  current  default by either  Seller or the  respective
tenants;

               h. To Seller's current actual knowledge, Seller is not in default
under any  indenture,  mortgage,  deed of trust or loan  agreement  or under any
other agreements to which Seller is a part or by which Seller is bound and which
in any way  affects  the  Property.  Seller is not a party to, nor bound by, any
agreement  or any  order or decree of any  court of  governmental  agency  which
might, to a material degree affect any portion of the Property;

               i. To Seller's current actual knowledge,  the execution by Seller
of  this  Agreement  and  the   consummation  by  Seller  of  the   transactions
contemplated hereby do not, and will not, result in a breach of any of the terms
or provisions  of, or  constitute a default or a condition  which upon notice or
lapse of time or both would ripen into a default under any indenture, agreement,
instrument  or obligation to which Seller is a party or by which the Property or
any  portion  thereof  is  bound,  and does  not,  to  Seller's  current  actual
knowledge, constitute a violation of any order, rule or regulation applicable to
Seller of any portion of the Property of any court or of any federal or state or
municipal  regulatory body or administrative  agency or other  governmental body
having jurisdiction over Seller or any portion of the Property;

               j. Seller has the full right,  power and  authority  to carry out
Seller's  obligations  hereunder.  No  consent  of any third  party is  required
therefor,  except the  consent of the lender for  assumption  of the Loan.  This
Agreement  is a valid  obligation  of  Seller  and is  binding  upon  Seller  in
accordance with its terms;

               k. To  Seller's  current  actual  knowledge,  Seller has paid all
taxes,  charges and  assessments  (special or otherwise)  required to be paid or
will prior to Closing, pay to any taxing authority which could in any way now or
hereafter constitute a lien against the Property or any part thereof (except for
taxes and  assessments  for the current  year not  currently  due and  payable).
Seller has not  received any notice from any taxing  authority  or  governmental
agency  asserting that Seller has failed to file or has improperly filed any tax
return or report  required to be filed by it, or that it has not paid all taxes,
charges or assessments now owing by it (except current taxes and assessments not
yet  delinquent)  which  could  in any way now or  hereafter  constitute  a lien
against the Property or any part  thereof;  and no action or  proceeding  is now
pending by a  governmental  agency or authority for the assessment of collection
of such taxes, charged or assessments against Seller;

               1. Except as may be shown in the  Environmental  Reports,  Seller
warrants and  represents to Buyer that to the best of Seller's  knowledge  there
are no Hazardous  Materials  on, in or under the  Property;  that Seller has not
placed any underground storage tanks of any type under the Property; that during
Seller's  ownership of the Property and to the best of Seller's  knowledge prior
thereto,  no cleanup or remediation of Hazardous Materials has ever been ordered
or undertaken on or with respect to the Property;  that the Property complies in
all respects with all Environmental  Laws; except as has been disclosed to Buyer
in writing,  that all plumbing,  electrical,  mechanical and HVAC systems are in
good working order, and, except as has been disclosed to Buyer in writing,  that
there are no hidden or latent physical or mechanical  defects in the Property of
which Seller has current actual  knowledge,  normal wear and tear excepted.  The
term  "Hazardous  Materials",  when  used  in this  Agreement,  shall  mean  any
substance,  material or waste (including petroleum and petroleum products) whish
is  or  becomes  designated,  classified,  or  regulated  as  being  "toxic"  or
"hazardous" or a "pollutant" (or a similar designation) under any federal, state
or local law,  ordinance,  rule or regulation,  including but not limited to the
Federal  Water  Pollution  Control  Act (33  U.S.C.ss.1251,  et seq.),  Resource
Conservation and Recovery Act (42  U.S.C.ss.6901,  et seq.), Safe Drinking Water
Act  (42   U.S.C.ss.3000f,   et  seq.),   Toxic   Substances   Control  Act  (15
U.S.C.ss.2601,  et  seq.),  the  Clean  Air Act  (42  U.S.C.ss.7401,  et  seq.),
Comprehensive  Environmental  Response,   Compensation  and  Liability  Act  (42
U.S.C.ss.9601,  et seq.), the Superfund  Amendments and  Reauthorization  Act of
1986, Pub.L.No.  99-499 ("SARA"), the Hazardous Materials Transportation Act (49
U.S.C.ss.1801,   et  seq.),  California  Health  and  Safety  Codess.25100,   et
seq.;ss.39000, et seq., California Safe Drinking Water and Toxic Enforcement Act
of 1986 (California Health and Safety Codess.25249.5, et seq.), California Water
Code  (ss.13000  et seq.)  (collectively,  "Environmental  Laws"),  and also any
asbestos or asbestos-containing materials, radon gas, and petroleum or petroleum
fractions, whether or not defined as "toxic", "hazardous", or "pollutant" in any
such law, ordinance, rule or regulation;

               m.     [intentionally deleted]; and

               n. The Rent Roll is true and accurate as of the date thereof, and
since the date thereof, there have been no material changes.

        5.3 Knowledge  Standards.  Wherever in this Agreement that a warranty or
representation  is made to Seller's current actual  knowledge,  such warranty or
representation  shall be deemed to be made to the current  actual  knowledge  of
Harold S. Elkan and  Steven R.  Whitman  (Seller's  senior  executive  officers)
without inquiry. Wherever in this Agreement a warranty or representation is made
to the best knowledge of Seller,  such warranty or representation  shall be made
to the current actual knowledge that Harold S. Elkan and Steven R. Whitman would
have after a commercially reasonable inquiry.

        5.4 DISCOVERY OF  INACCURACY.  In the event that Seller should  discover
prior to the Closing  Date that any  representation  or  warranty  made by it is
untrue  or  inaccurate,  it  shall  promptly  inform  Buyer  in  writing  of its
discovery.  All of Seller's  warranties  and  representations  shall survive any
inspection or investigation made by or on behalf of Buyer and the Closing of the
transaction  contemplated  herein,  except that Seller  shall have no  liability
whatsoever for any breach of a warranty or  representation  that is not asserted
by written notice to Seller or is asserted by or on behalf Buyer after the fifth
anniversary of the Closing.

                                   ARTICLE VI.
                     BUYER'S REPRESENTATIONS AND WARRANTIES

        6.1 REPRESENTATIONS AND WARRANTIES BY BUYER. Buyer hereby represents and
warrants  to Seller  that the  following  matters are true and correct as of the
execution of this Agreement and will also be true and correct as of the Closing:

               a. The execution by Buyer of this Agreement and the  consummation
by Buyer of the transactions contemplated hereby do not, and will not, result in
a breach of any of the terms or  provisions  of, or  constitute  a default  or a
condition  which upon notice or lapse of time or both would ripen into a default
under any  indenture,  agreement,  instrument  or obligation to which Buyer is a
party,  and does not, to the  knowledge of Buyer,  constitute a violation of any
order, rule or regulation  applicable to Buyer of any court or of any federal or
state  or  municipal   regulatory  body  or   administrative   agency  or  other
governmental body having jurisdiction over Buyer;

               b. Buyer has the full right,  power and authority to purchase the
Property  as  provided in this  Agreement  and to carry out Buyer's  obligations
hereunder.  No  consent  of any third  party is  required  therefor,  except the
consent of the lender for  assumption  of the Loan.  This  Agreement  is a valid
obligation of Buyer and is binding upon Buyer in accordance with its terms;

                                            ARTICLE VII.
                                 INDEMNIFICATION

        7.1 Seller hereby agrees to protect, defend, indemnify,  defend and hold
Buyer, Buyer's agents, servants,  invitees and their successors and assigns and,
after the Closing, the Real Property harmless from and against any and all loss,
cost, expense,  liability,  damage,  action, cause of action,  claim, dispute or
account,  including court costs and attorney's fees, arising out of or resulting
from the  failure  of any  representation  or  warranty  made by  Seller in this
Agreement  to be  untrue  in any  material  way  or any  breach  or  default  in
performance  by Seller of the  covenants and  agreements  which it is to perform
hereunder, but Seller shall have no such defense or indemnity obligations if the
person entitled to defense or indemnity fails to make demand on Seller therefore
in  writing  or such  demand is made  later  than the fifth  anniversary  of the
Closing.

        Except  as  otherwise  provided,  the  terms of this  ARTICLE  VII shall
survive the Closing Date and the transfer of the Property.

                                           ARTICLE VIII.
                         CONDITIONS PRECEDENT TO CLOSING

        8.1 BUYER'S  CONDITIONS.  The obligations of Buyer hereunder are subject
to the satisfaction, on or prior to the Closing, of all the following conditions
unless waived in writing by Buyer:

               a. All of Seller's  representations  and  warranties set forth in
this Agreement shall be true and correct in all material respects as of the date
of this Agreement and as of the Closing;

               b. As of the  Closing,  Seller  shall have timely  performed  its
obligations  hereunder  and all  deliveries to be made by Seller shall have been
tendered;

               c. Buyer  shall have  approved  the  physical  inspection,  title
documents and Environmental  Reports and other matters affecting the Property as
provided in Article III and the Loan  documents and Loan  assumption as provided
in Article IV;

               d. The  Title  Company  shall be in a  position  to issue a Title
Policy following the Closing in a form previously approved by Buyer subject only
to Permitted Exceptions; and

               e. The Lender under the Loan shall have  approved the  assumption
of the Loan by Buyer without any increase in interest rate.

               f. Buyer, Seller and SPORTS ARENAS, INC. ("SAI") prior to the end
of the Feasibility Period shall have entered into, and the Lender under the Loan
prior to the Closing shall have approved,  a written  agreement (the "SAI Tenant
Lease Agreement"), whereby either:

                    (1) SAT's right to possession  and  occupancy  (collectively
"Possessory Rights") of a portion of the Property (the "SAI Premises") and SAI's
obligation to pay rents and other charges (collectively  "Payment  Obligations")
under its Tenant Lease shall terminate on the 90th day after the Closing (unless
such  parties  mutually  agree to extend  SAT's  Possessory  Rights and  Payment
Obligations on a month-to-month basis), or:

                    (2) SAI's Possessory  Rights and Payment  Obligations  under
its Tenant  Lease shall only  conditionally  terminate  on the 90t day after the
Closing (unless such parties  mutually agree to extend SAT's  Possessory  Rights
and Payment  Obligations on a month-to-month  basis) and such Possessory  Rights
and Payment  Obligations shall be reinstated upon the Lender's  recordation of a
notice of default  under the deed of trust  securing  the Note,  but only to the
extent of that portion of the SAI Premises which is not possessed or occupied by
a subsequent  tenant pursuant to an enforceable  tenant lease complying with the
terms and provisions of the Loan documents pertaining to leases of the Property.

                    (3)  Notwithstanding  any provision of this Agreement to the
contrary, if the Closing fails to occur because the Lender under the Loan failed
to approve  the SAI Tenant  Lease  Agreement,  Seller  shall pay Buyer an amount
equal to the amount Buyer has paid Lender in connection with Buyer's application
to assume the Loan.

        The provisions of this Section 8.1 are for the benefit of Buyer and can
be waived only by Buyer.

        8.2 SELLER'S CONDITIONS. The obligations of Seller hereunder are subject
to the satisfaction, on or prior to Closing, of all of the following conditions,
unless waived in writing by Seller:

               a. All of Buyer's  representations  and  warranties  set forth in
this Agreement shall be true and correct in all material respects as of the date
of this Agreement and as of the Closing;

               b. As of the  Closing,  Buyer  shall have  timely  performed  its
obligations  hereunder  and all  deliveries to be made by Seller shall have been
tendered; and

               c. The Lender under the Loan shall have  approved the  assumption
of the Loan by Buyer.

               d. Lender shall have  approved  the SAI Tenant  Lease  Agreement.
Seller.

 The provisions of this Section 8.2 are for the benefit of Seller and can be
waived only by Seller.

                                   ARTICLE IX.
                                     CLOSING

        9.1 CLOSING DATE. Provided all conditions to Closing have occurred,  the
Closing of the transaction contemplated herein shall occur on or before five (5)
days  after  the  lender's  approval  of the  assumption  of the Loan by  Buyer,
provided  neither Buyer nor Seller has terminated  its  obligations to purchase,
sell or convey the Real Property or pay the Purchase  Price under this Agreement
earlier as herein permitted;  and if such date is a Saturday,  Sunday or banking
holiday, the Closing shall occur on the next business day.

        9.2 TITLE.  At Closing,  Buyer's fee title to the Real Property shall be
insured by a CLTA Owner's policy of title  insurance on the standard form issued
in the State of  California,  issued by the Title Company with  liability in the
amount of the Purchase Price subject only to (i) the Permitted Exceptions,  (ii)
the documents  executed by Buyer and placed of recorded in  accordance  with the
assumption  of the Loan by Buyer,  and (iii) such other  deeds of trust or other
exceptions to title created by or for the benefit of Buyer (the "Title Policy").
Buyer  may,  at  Buyer's  option,  direct  Escrow  Holder to  obtain  additional
endorsements  or an ALTA Owner's or extended  coverage policy of title insurance
provided the Closing shall not be delayed beyond the scheduled date therefore as
a result thereof and provided Buyer shall be responsible  for any added premiums
or other costs of such additional coverage.

        9.3 DELIVERIES BY SELLER.

               a. On or before one  business  day prior to the  Closing,  Seller
shall deliver the following to the Escrow Holder:

                    (1) An  executed  grant  deed  conveying  title  to the Real
Property to Buyer (with the amount of  documentary  transfer  tax set forth in a
separate statement that is not recorded),  in a form to be approved by Buyer and
Seller ("the Grant Deed");

                    (2) An executed  affidavit  certifying  that Seller is not a
"foreign person" within the meaning of Section 1445(0(3) of the Internal Revenue
Code of 1986 as amended (the "FIRPTA Certificate");

                    (3)  An  executed  Withholding   Exemption  Certificate  and
Nonresident  Waiver  Request  for Real Estate  Sales  (California  form  597-W),
indicating  that  Seller is a  resident  of the State of  California  (the "Form
597-W");

                    (4) Two original  assignments  of the written  Tenant Leases
that have been  delivered  to Buyer  (wherein  Buyer  shall  agree to assume all
obligations  of Seller as the landlord  under such Tenant  Leases from and after
the Closing Date), the Warranties and Guaranties,  the Permits and Licenses, the
Goodwill,  the  Claims,  the  Rights  and  Privileges,  and such of the  Service
Contracts  as Buyer  shall have  elected to have  assigned to it in a form to be
approved  by  Buyer  and  Seller,   executed  by  the  Seller  ("the  Assignment
Agreement");

                    (5) An  executed  bill of sale,  transferring  to Buyer  the
ownership of the FF&E, Plans and Reports,  Marketing  Materials,  and Keys, in a
form to be approved by Buyer and Seller; (the "Bill of Sale"); and

                    (6) Such other sums and  documents  as may be  necessary  to
close the escrow.

               b. At the Closing,  outside of escrow,  Seller  shall  deliver to
Buyer the following to the extent in Seller's possession or control:

                    (1)  All  warranty  contracts,   warranty  cards,  operating
instructions  and other  information  and  guaranties,  if any,  concerning  all
fixtures and equipment installed as a part of the Property;

                    (2) All Keys;

                    (3)  Copies  of the  books and  record  and of all  original
documents in the possession of Seller relating to the Property,  including,  but
not limited to, all applications,  correspondence and credit reports relating to
each tenant and all original Tenant Leases;

                    (4)  Current  tax  statements  in  Seller's  possession,  if
available and if not previously  furnished,  and tax  certificates  for previous
years;

                    (5) Such documents as may be reasonably required to withdraw
Seller's right to use the trade name of the Property;

                    (6)  Possession of the Property,  subject only to the Tenant
Leases; and

                    (7) A letter to the  Tenants  to be  executed  by Seller and
Buyer notifying tenants of the sale.

        Effective as of Closing, Seller shall terminate such Service Contracts,
if any, that Buyer has elected not to have assigned to Buyer.

        9.4 DELIVERIES BY BUYER.

               a. On or before  one  business  day prior to the  Closing,  Buyer
shall deliver to Escrow Holder the following:

                    (1) Such  documents  as the lender may require and Buyer has
approved  for  the  assumption  of  the  Loan  by  Buyer  (the  Loan  Assumption
Documents");

                    (2) The balance of the Purchase Price;

                    (3)  Two  original  Assignment  Agreements  executed  by the
Buyer; and

                    (4) Such other sums and  documents  as may be  necessary  to
close the escrow.

        9.5 CLOSE OF ESCROW.  At the  Closing,  the Escrow  Holder  shall do the
following:

               a. Cause the Grant Deed and recordable Loan assumption  documents
to be recorded in the official records of the San Diego County Recorder;

               b.  Deliver  to  Seller  the  Purchase  Price  (plus or minus the
amounts  determined under the prorations  sections of this  Agreement),  a fully
executed original of the Assignment Agreement, and a conformed copy of the Grant
Deed;

               c.  Deliver to Buyer any left over  balance of sums  deposited by
Buyer or  resulting  from the  prorations  section  of this  Agreement,  a fully
executed  original of the  Assignment  Agreement,  the Bill of Sale,  the FIRPTA
Certificate, the Form 597-W, and a conformed copy of the Grant Deed;

               d.  Deliver  to the  lender  under  the Loan the loan  assumption
documents in accordance with the instructions of the lender; and

               e. Cause the Title Company to issue the Title Policy to Buyer.

The date that the Grant Deed is recorded is referred to herein as the "Closing
Date".

                                             ARTICLE X.

                         PRORATIONS, TAXES AND BROKERAGE

        10.1  PRORATION.  Prepaid rent and other rental  income (other than past
due unpaid rentals), real estate and personal property ad valorem taxes, charges
and  assessments  (special or otherwise),  utility  charges,  interest and other
charges under the Note  (including  impounds paid by Seller and held by Lender),
and other operating  expenses shall be prorated at the Closing,  effective as of
the Closing Date,  based upon actual days involved.  All maintenance and service
contract  expenses  (whether or not service is  continued  by Buyer) and utility
charges shall be determined to the date of the Closing and paid by Seller to the
greatest extent  practicable.  To the extent  possible,  utility meters shall be
read at Closing and Seller's obligation to pay changes after

Closing terminated.  If such charges and expenses are unavailable on the Closing
Date,  a  readjustment  shall  be  made  within  ten  (10)  days  following  the
availability  of meter readings and accurate bills and figures,  and at Closing,
the parties shall enter into a letter agreement  setting forth the procedure for
adjustment  of any  such  proration  items  should  the  actual  amounts  of any
proration items differ from the amounts utilized at Closing.  All obligations to
return any security  and/or damage  deposits and other sums held by Seller under
the terms of any Tenant Leases shall be assumed by Buyer to the extent  credited
against the  Purchase  Price as agreed to in writing by Buyer and  Seller.  Such
sums shall be retained by Seller.

        10.2 POST CLOSING RENTAL  COLLECTIONS.  All past due uncollected rentals
as of the date of Closing,  if any, under the Tenant Leases,  collected by Buyer
following  the Closing  shall be paid over to Seller,  provided  however,  Buyer
shall have no obligation to pursue  collection of such amounts.  Notwithstanding
the  foregoing,  all sums  collected by or paid to Seller or Buyer by tenants or
occupants of the Property  under Tenant Leases or otherwise,  shall be deemed to
be payment for and credited  against rent and other  charges  currently  due and
payable by any such tenant or occupant  remitting  same, and any excess shall be
paid over to Seller for application  against delinquent rents and other past due
charges.  Any sums  received by Seller after the Closing  which are deemed to be
applicable  to current rent or other  current  charges  under the Tenant  Leases
shall be turned over to Buyer.

        10.3 CLOSING COSTS.  Seller shall pay the cost of a standard CLTA Policy
of Title Insurance, the full costs of acknowledging and recording the Grant Deed
and the  Documentary  Transfer Tax, and one half of the escrow fee.  Buyer shall
pay the costs payable to the Lender for the Loan Assumption,  any increased cost
over that of a standard CLTA policy for any  endorsements  obtained  thereto and
the  additional  cost of an ALTA policy if Buyer elects to obtain such  coverage
and  one-half  of the escrow  fee.  All other  closing  costs and  expenses  not
otherwise  treated  separately in this Agreement  shall be divided between Buyer
and Seller in accordance with local custom and practice  prevailing in San Diego
County, California.

        10.4  BROKERAGE.  Except  as  herein  set  forth,  each  of the  parties
represent to the other that no brokerage  commission  will be due as a result of
such  party's  acts in  connection  with this  transaction,  and each  agrees to
indemnify and hold  harmless the other from and against any and all  liabilities
or expenses  arising out of claims made for any  additional  commissions or fees
resulting from such party's acts.  John Burnham & Company has  represented  both
Buyer and Seller in this  transaction.  Seller shall be obligated at the Closing
to pay the commission to John Burnham & Company arising out of this purchase and
sale.

                                   ARTICLE XI.
                               LIQUIDATED DAMAGES

        IF BUYER FAILS TO  COMPLETE  THE  PURCHASE  OF THE  PROPERTY AS PROVIDED
HEREIN BY REASON OF ANY DEFAULT OF BUYER,  IT IS AGREED THAT THE INITIAL DEPOSIT
IN THE AMOUNT OF $50,000.00 (AND IF MADE, THE SECOND DEPOSIT IN THE AMOUNT OF AN
ADDITIONAL  $50,000.00)  AND ALL INTEREST  THEREON SHALL BE  NON-REFUNDABLE  AND
SELLER SHALL BE ENTITLED TO SUCH  DEPOSIT(S),  WHICH AMOUNT(S) SHALL BE ACCEPTED
BY SELLER AS  LIQUIDATED  DAMAGES AND NOT AS A PENALTY AND AS SELLER'S  SOLE AND
EXCLUSIVE REMEDY FOR SUCH BREACH. IT IS AGREED THAT SAID AMOUNT(S)  CONSTITUTE A
REASONABLE  ESTIMATE OF THE DAMAGES TO SELLER PURSUANT TO CALIFORNIA  CIVIL CODE
SECTION 1671  ET.SEQ.  BUYER AND SELLER  AGREE THAT IT WOULD BE  IMPRACTICAL  OR
IMPOSSIBLE TO PRESENTLY  PREDICT WHAT MONETARY  DAMAGES SELLER WOULD SUFFER UPON
BUYER'S FAILURE TO COMPLETE ITS PURCHASE OF THE PROPERTY. BUYER DESIRES TO LIMIT
THE MONETARY DAMAGES FOR WHICH IT MIGHT BE LIABLE HEREUNDER AND BUYER AND SELLER
DESIRE TO AVOID  THE  COSTS  AND  DELAYS  THEY  WOULD  INCUR IF A  LAWSUIT  WERE
COMMENCED  TO RECOVER  DAMAGES OR  OTHERWISE  ENFORCE  SELLER'S  RIGHTS FOR SUCH
BREACH. IF FURTHER  INSTRUCTIONS ARE REQUIRED BY ESCROW HOLDER TO EFFECTUATE THE
TERMS OF THIS  PROVISION,  BUYER  AND  SELLER  AGREE TO  EXECUTE  THE  SAME.  IN
CONSIDERATION OF THE PAYMENT OF SUCH LIQUIDATED DAMAGES,  SELLER SHALL BE DEEMED
TO HAVE  WAIVED  ALL  OTHER  CLAIMS  FOR  DAMAGES  OR RELIEF AT LAW OR IN EQUITY
(INCLUDING ANY RIGHTS SELLER MAY HAVE PURSUANT TO CALIFORNIA CIVIL CODE ss. 3389
AND 1680)  RESULTING  FROM  BUYER'S  FAILURE TO  COMPLETE  THE  PURCHASE  OF THE
PROPERTY.  THIS  PROVISION  SHALL  NOT  APPLY TO OR  AFFECT  SELLER'S  RIGHTS OR
REMEDIES  FOR  BUYER'S  BREACH OF ANY OTHER  OBLIGATION  UNDER  THIS  AGREEMENT,
INCLUDING  WITHOUT  LIMITATION  BUYER'S  INDEMNITY   OBLIGATIONS.   THE  PARTIES
ACKNOWLEDGE THIS PROVISION BY PLACING THEIR INITIALS BELOW:

BUYER ______             SELLER _____

                                  ARTICLE XII.
                                     NOTICES

        12.1 NOTICE  PROVISIONS.  Any notice,  request,  demand,  instruction or
other communication to be given to either party hereunder, except those required
to be  delivered  at  Closing,  shall be in  writing,  and shall be deemed to be
delivered,  upon the earlier of receipt or (a) two days after being deposited in
a regularly  maintained official depository of the United States mail located in
the continental United States, and sent by registered or certified mail, postage
prepaid,  return receipt requested,  or (b) one day after being deposited with a
recognized  overnight delivery service which provides receipts for delivery such
as Federal Express or UPS, addressed as follows:

IF TO BUYER:                                           IF TO SELLER:

FOSTER INVESTMENT CORPORATION                  DOWNTOWN PROPERTIES
Attention: Charles Tiano, Vice President       DEVELOPMENT CORPORATION
705 12th Avenue                                5230 Carroll Canyon Road
San Diego, CA 92101                            San Diego, CA 92121
Phone (619) 557-0100                           Attention: Steven R. Whitman
Fax (619) 231-9777                             Phone: (858) 587-1060
                                                Fax (858) 587-0425

WITH COPIES TO:

HIGGS, FLETCHER & MACK                          CRAMER & EGAN, A P.C.
Attention: Timothy D. Waters                    Attention: Tyler W. Cramer
401 West "A" Street, Suite 2600                 401 West "A" Street, Suite 2300
San Diego, CA 92101                             San Diego, CA 92101
Phone (619) 595-4266                            Phone (619) 236-1125
Fax (619) 696-1410                              Fax (619) 232-1042

        The  addresses  and  addressees  for the purpose of this  Article may be
changed by either  party by giving  notice of such  change to the other party in
the manner provided  herein for giving notice.  For the purpose of changing such
addresses or addressees only,  unless and until such written notice is received,
the last  address and  addressee  stated  herein  shall be deemed to continue in
effect for all purposes.

                                           ARTICLE XIII.
                                  MISCELLANEOUS

        13.1 HEADINGS.  The Article headings contained in this Agreement are for
purposes of  identification  only and shall not be considered in construing this
Agreement.

        13.2 TIME IS OF THE ESSENCE.  Time is of the essence with respect to the
performance  of all  obligations  provided  herein and the  consummation  of all
transactions contemplated hereby.

        13.3 GENDER.  Words of any gender used in this  Agreement  shall be held
and construed to include any other gender,  and words of a singular number shall
be held to include  the  plural and vice  versa,  unless  the  context  requires
otherwise.

        13.4  SEVERABILITY.  If  any  one or  more  of the  provisions  of  this
Agreement,  or the applicability of any such provision to a specific  situation,
shall be held to be invalid or  unenforceable,  such provision shall be modified
to the  minimum  extent  necessary  to  make  it or its  application  valid  and
enforceable, and the validity and enforceability of all other provisions of this
Agreement  and all  other  applications  of any  such  provisions  shall  not be
affected thereby.

        13.5  COUNTERPARTS.  This  Agreement  may be  executed  in any number of
counterparts, each of which shall be an original, but such counterparts together
shall constitute one and the same instrument.

        13.6  FURTHER  ASSURANCES.  In  addition  to the  acts  recited  in this
Agreement to be performed by Seller and Buyer, Seller and Buyer agree to perform
or cause to be  performed  at the  Closing  or  after  Closing  any and all such
further  acts and to execute  such further  conveyances,  assignments  and other
instruments  and  documents as may be  reasonably  necessary to  consummate  the
transactions contemplated hereby.

        13.7  EXHIBITS.  All exhibits  described in this  Agreement  are by this
reference fully incorporated  herein and made a part hereof by reference for all
purposes.

        13.8  ASSIGNMENT.  This  Agreement and the terms and  provisions  hereof
shall inure to the benefit of and be binding  upon the parties  hereto and their
respective heirs, executors,  personal representatives,  successors and assigns,
whenever the context so requires or admits.  This  Agreement  may be assigned by
Buyer without the consent of Seller.

        13.9 ENTIRE  AGREEMENT.  This Agreement and the exhibits attached hereto
contain   the  entire   agreement   between   the   parties,   and  no  promise,
representation,  warranty or covenant not included in this Agreement or any such
referenced agreements has been or is relied upon by either party.

        13.10 AMENDMENT. No modification or amendment of this Agreement shall be
of any force or effect  unless  made in writing  and  executed by both Buyer and
Seller.

        13.11 APPLICABLE LAW AND VENUE. In the event that any litigation  arises
hereunder,   it  is  specifically   stipulated  that  this  Agreement  shall  be
interpreted  and  construed  according  to the laws of the State of  California.
Venue for any legal  action  arising  out of this  Agreement  shall be San Diego
County, California.

        13.12 ATTORNEY'S  FEES. The prevailing  party in any litigation  between
the parties shall be entitled to recover, as a part of its judgment,  reasonable
attorneys' fees and costs of suit.

<PAGE>

IN WITNESS  WHEREOF,  the parties  hereto have executed this Agreement as of the
date set forth above.

FOSTER INVESTMENT CORPORATION

/S/ STANLEY FOSTER                                 DATED: SEPTEMBER 29, 2000
     President

DOWNTOWN PROPERTIES DEVELOPMENT CORPORATION a California corporation

By:  /S/ HAROLD S. ELKAN                           Dated: SEPTEMBER 29, 2000
    Its: President

<PAGE>

                                   EXHIBIT "A"
                     LEGAL DESCRIPTION OF THE REAL PROPERTY

LOTS 68 AND 69 OF LUSK  INDUSTRIAL  PARK UNIT NO.  1, IN THE CITY OF SAN  DIEGO,
COUNTY OF SAN DIEGO,  STATE OF  CALIFORNIA,  ACCORDING  TO MAP  THEREOF NO. 9694
FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JUNE 27, 1980.

EXCEPTING THEREFROM ALL COAL, GAS, PETROLEUM AND OTHER HYDROCARBON SUBSTANCES IN
AND-UNDER  SUCH PROPERTY  GRANTOR ITS  SUCCESSORS  AND ASSIGNS,  RETRAINING  THE
EXCLUSIVE TITLE AND RIGHT TO REMOVE SAID SUBSTANCES, TOGETHER WITH SOLE RIGHT TO
NEGOTIATE AND CONCLUDE LEASES AND AGREEMENTS WITH RESPECT TO ALL SUCH SUBSTANCES
UNDER THE PROPERTY AND TO USE THOSE  PORTIONS OF THE PROPERTY  WHICH  UNDERLIE A
PLANE PARALLEL TO AND 500 FEET BELOW THE PRESENT SURFACE OF THE PROPERTY FOR THE
PURPOSE OF PROSPECTING FOR,  DEVELOPING  AND/OR  EXTRACTING SUCH SUBSTANCES FROM
THE  PROPERTY BY MEANS OF WELLS  DRILLED  INTO OR THROUGH  SAID  PORTIONS OF THE
PROPERTY  FROM  DRILL  SITES  LOCATED  ON OTHER  PROPERTY,  IT  BEING  EXPRESSLY
UNDERSTOOD AND AGREED THAT GRANTOR,  ITS  SUCCESSORS AND ASSIGNS,  SHALL HAVE NO
RIGHT TO ENTER UPON THE SURFACE OF THE  PROPERTY  OR TO USE THE  PROPERTY OR ANY
PORTION  THEREOF  ABOVE THE LEVEL OF THE  AFORESAID  PLANE AS RESERVED IN A DEED
FROM LUSK/MIRA  MESA, A LIMITED  PARTNERSHIP  NOVEMBER 26, 1980 AS FILE/PAGE NO.
80398847 OF OFFICIAL RECORDS.

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