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                                                                   EXHIBIT 10.42

                  AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
           STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE -- NET
               (DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)

1.   Basic Provisions ("Basic Provisions").

     1.1    PARTIES: This Lease ("LEASE"), dated for reference purposes only,
January 30, 2001, is made by and between Abronson, Cole & Eisele, a California
General Partnership ("LESSOR") and Luminent, Inc., a Delaware Corporation
("LESSEE"), (collectively the "PARTIES," or individually a "PARTY").

     1.2    PREMISES: That certain real property, including all improvements
therein or to be provided by Lessor under the terms of this Lease, and commonly
known as 950 Lawrence Drive, Newbury Park, located in the County of Ventura,
State of California, and generally described as (describe briefly the nature of
the property and, if applicable, the "PROJECT", if the property is located
within a Project) an industrial building consisting of approximately 46,266
square feet on approximately 111,470 square feet of M1 zoned land, which is
more particularly described in EXHIBIT A attached hereto and incorporated
herein by reference ("PREMISES"). (See also Paragraph 2)

     1.3    TERM: seven (7) years and 0 months ("ORIGINAL TERM") commencing
September 1, 2001 ("COMMENCEMENT DATE:) and ending August 31, 2008 ("EXPIRATION
DATE"). (See also Paragraph 3 and Addendum Paragraph 53)

     1.4    EARLY POSSESSION: March 1, 2001 -- See Addendum ("EARLY POSSESSION
DATE"). (See also Paragraphs 3.2 and 3.3)

     1.5    BASE RENT: $40,714.00 per month ("BASE RENT"), payable on the first
(1st) day of each month commencing September 1, 2001. (See also Paragraph 4)
[X] If this box is checked, there are provisions in this Lease for the Base
Rent to be adjusted.

     1.6    BASE RENT PAID UPON EXECUTION: $40,714.00 as Base Rent for the
period September 1-30, 2001.

     1.7    SECURITY DEPOSIT: $40,714.00 ("SECURITY DEPOSIT"). (See also
Paragraph 5)

     1.8    AGREED USE: Corporate offices, engineering, manufacturing, storage
and distribution of electrical products, semi-conductor processing and related
matters (See also Paragraph 6)

     1.9    INSURING PARTY: Lessor is the "INSURING PARTY" unless otherwise
stated herein. (See also Paragraph 8)

     1.10   REAL ESTATE BROKERS: (See also Paragraph 15)
            (a) REPRESENTATION: The following real estate brokers
(collectively, the "BROKERS") and brokerage relationships exist in this
transaction (check applicable boxes):
[X]  CB Richard Ellis, Inc. represents Lessor exclusively ("LESSOR'S BROKER");
[X]  Delphi Business Properties represents Lessee exclusively ("LESSEE'S
     BROKER"); or
[ ]  ______________________________________ represents both Lessor and Lessee
     ("DUAL AGENCY").

            (b) PAYMENT TO BROKERS: Upon execution and delivery of this Lease
by both Parties, Lessor shall pay to the Broker the fee agreed to in their
separate written agreement.

     1.12   ADDENDA AND EXHIBITS. Attached hereto is an Addendum or Addenda
consisting of Paragraphs 50 through 66 and Exhibits A, B, C, D and E, all of
which constitute a part of this Lease.

2.   PREMISES.

     2.1    LETTING. Lessor hereby leases to Lessee, and Lessee hereby leases
from Lessor, the Premises, for the term, at the rental, and upon all of the
terms, covenants and conditions set forth in this Lease. Unless otherwise
provided herein, any statement of size set forth in this Lease, or that may
have been used in calculating rental, is an approximation which the Parties
agree is reasonable and the rental based thereon is not subject to revision
whether or not the actual size is more or less.

     2.2    SEE ADDENDUM PARAGRAPH 50.

     2.3    CAPITAL EXPENDITURES.

            (a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures
are required as a result of the specific and unique use of the Premises

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by Lessee as compared with uses by tenants in general, Lessee shall be fully
responsible for the cost thereof.

          (b)  If such Capital Expenditure is not the result of the specific
and unique use of the Premises by Lessee (such as, governmentally mandated
seismic modifications), then Lessor and Lessee shall allocate the obligation to
pay for such costs pursuant to the provisions of Paragraph 7.1(c); provided,
however, that if such Capital Expenditure is required during the last two years
of this Lease or if Lessor reasonably determines that it is not economically
feasible to pay its share thereof, Lessor shall have the option to terminate
this Lease upon ninety (90) days prior written notice to Lessee, unless Lessee
notifies Lessor, in writing, within ten (10) days after receipt of Lessor's
termination notice that Lessee will pay for such Capital Expenditure. If Lessor
does not elect to terminate, and fails to tender its share of any such Capital
Expenditure, Lessee may advance such funds and deduct same, with interest, from
Rent until Lessor's share of such costs have been fully paid. If Lessee is
unable to finance Lessor's share, or if the balance of the Rent due and payable
for the remainder of this Lease is not sufficient to fully reimburse Lessee on
an offset basis, Lessee shall have the right to terminate this Lease upon
thirty (30) days written notice to Lessor. See Addendum Paragraph 54.

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

        2.4     ACKNOWLEDGEMENTS. Subject to Lessor's obligations under
Paragraphs 54, 56, 66 and the Exhibits, Lessee acknowledges that: (a) it has
been advised by Lessor and/or Brokers to satisfy itself with respect to the
condition of the Premises (including but not limited to the electrical, HVAC and
fire sprinkler systems, security, environmental aspects, and compliance with
Applicable Requirements), and their suitability for Lessee's intended use; (b)
Lessee has made such investigation as it deems necessary with reference to such
matters and assumes all responsibility therefor as the same relate to its
occupancy of the Premises; and (c) neither Lessor, Lessor's agents, nor any
Broker has made any oral or written representations or warranties with respect
to said matters. In addition, Lessor acknowledges that: (a) Broker has made no
representations, promises or warranties concerning Lessee's ability to honor the
Lease or suitability to occupy the Premises; and (b) it is Lessor's sole
responsibility to investigate the financial capability and/or suitability of all
proposed tenants.

3.      TERM.

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

        3.2     EARLY POSSESSION. If Lessee totally or partially occupies the
Premises prior to the Commencement Date, the obligation to pay Base Rent shall
be abated for the period of such early possession. All other terms of this
Lease (including, but not limited to, the obligations to pay Real Property
Taxes and insurance premiums and to maintain the Premises) shall, however, be
in effect during such period except that commencing as of the date of such
early possession and continuing until August 31, 2001, Lessee shall only be
required to pay for fifty percent (50%) of the Real Property Taxes and fifty
percent (50%) of the cost of the insurance premiums for the Insurance described
in Paragraphs 8.2(b) and 8.3. Any such early possession shall not affect the
Expiration Date. See Addendum Paragraph 55.

        3.3     DELAY IN POSSESSION. Lessor agrees to use its best commercially
reasonable efforts to deliver possession of the Premises to Lessee by the
Commencement Date. If, despite said efforts, Lessor is unable to deliver
possession as agreed, Lessor shall not be subject to any liability therefor, no
shall such failure affect the validity of this Lease. Lessee shall not,
however, be obligated to pay Rent or perform its other obligations until it
receives possession of the Premises. If possession is not delivered within
sixty (60) days after the Commencement Date, Lessee may, at its option, by
notice in writing within ten (10) days after the end of such sixty (60) day
period, cancel this Lease, in which event the Parties shall be discharged from
all obligations hereunder. If such written notice is not received by Lessor
within said ten (10) day period, Lessee's right to cancel shall terminate.
Except as otherwise provided, if possession is not tendered to Lessee by the
Start Date and Lessee does not terminate this Lease, as aforesaid, any period
of rent abatement that Lessee would otherwise have enjoyed shall run from the
date of delivery of possession and continue for a period equal to what Lessee
would otherwise have enjoyed under the terms hereof, but minus any days of
delay caused by the acts or omissions of Lessee. If possession of the Premises
is not delivered within four (4) months after the Commencement Date, this Lease
shall terminate unless other agreements are reached between Lessor and Lessee,
in writing. See Addendum Paragraphs 54 and 55.

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

4.      RENT.

        4.1     RENT DEFINED. All monetary obligations of Lessee to Lessor
under the terms of this Lease (except for the Security Deposit) are deemed to
be rent ("RENT").

        4.2     PAYMENT. Lessee shall cause payment of Rent to be received by
Lessor in lawful money of the United States, without offset or deduction
(except as specifically permitted in this Lease), on or before the day on which
it is due. Rent for any period during the term hereof which is for less than
one (1) full calendar month shall be prorated based upon the actual number of
days of said month. Payment of Rent shall be made to Lessor at its address
stated herein or to such other persons or place as Lessor may from time to time
designate in writing. Acceptance of a payment which is less than the amount
then due shall not be a waiver of Lessor's rights to the balance of such Rent,
regardless of Lessor's endorsement of any check so stating.

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

6.      USE.

        6.1     USE. Lessee shall use and occupy the Premises only for the
Agreed Use, or any other legal use which is reasonably comparable thereto, and
for no other purpose. Lessee shall not use or permit the use of the Premises in
a manner that is unlawful, creates damage, waste or a nuisance, or that disturbs
owners and/or occupants of, or causes damage to neighboring properties. Lessor
shall not unreasonably withhold or delay its consent to any written

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request for a modification of the Agreed Use, so long as the same will not
impair the structural integrity of the improvements on the Premises or the
mechanical or electrical systems therein, is not significantly more burdensome
to the Premises. If Lessor elects to withhold consent, Lessor shall within five
(5) business days after such request give written notification of same, which
notice shall include an explanation of Lessor's objections to the change in use.

     6.2  HAZARDOUS SUBSTANCES.

          (a) REPORTABLE USES REQUIRE CONSENT. The term "HAZARDOUS SUBSTANCE" as
used in this Lease shall mean any product, substance, or waste whose presence,
use, manufacture, disposal, transportation, or release, either by itself or in
combination with other materials expected to be on the Premises, is either: (i)
potentially injurious to the public health, safety or welfare, the environment
or the Premises, (ii) regulated or monitored by any governmental authority, or
(iii) a basis for potential liability of Lessor to any governmental agency or
third party under any applicable statute or common law theory. Hazardous
Substances shall include, but not be limited to, hydrocarbons, petroleum,
gasoline, and/or crude oil or any products, by-products or fractions thereof.
Lessee shall not engage in any activity in or on the Premises which constitutes
a Reportable Use of Hazardous Substances without the express prior written
consent of Lessor and timely compliance (at Lessee's expense) with all
Applicable Requirements. "REPORTABLE USE" shall mean (i) the installation or use
of any above or below ground storage tank, (ii) the generation, possession,
storage, use, transportation, or disposal of a Hazardous Substance that requires
a permit from, or with respect to which a report, notice, registration or
business plan is required to be filed with, any governmental authority, and/or
(iii) the presence at the Premises of a Hazardous Substance with respect to
which any Applicable Requirements requires that a notice be given to persons
entering or occupying the Premises or neighboring properties. Notwithstanding
the foregoing, Lessee may use any ordinary and customary materials reasonably
required to be used in the normal course of the Agreed Use, so long as such use
is in compliance with all Applicable Requirements, is not a Reportable Use, and
does not expose the Premises or neighboring property to any meaningful risk of
contamination or damage or expose Lessor to any liability therefor. In addition,
Lessor may condition its consent to any Reportable Use upon receiving such
additional assurances as Lessor reasonably deems necessary to protect itself,
the public, the Premises and/or the environment against damage, contamination,
injury and/or liability, including, but not limited to, the installation (and
removal on or before Lease expiration or termination) of protective
modifications (such as concrete encasements) and/or increasing the Security
Deposit. See Addendum Paragraph 56.

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

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

          (d) LESSEE INDEMNIFICATION. Lessee shall indemnify, defend and hold
Lessor, its agents, employees, lenders and ground lessor, if any, harmless from
and against any and all loss of rents and/or damages, liabilities, judgments,
claims, expenses, penalties, and attorneys' and consultants' fees arising out of
or involving any Hazardous Substance brought onto the Premises by or for Lessee,
or any third party (provided, however, that Lessee shall have no liability under
this Lease with respect to underground migration of any Hazardous Substance
under the Premises from adjacent properties). Lessee's obligations shall
include, but not be limited to, the effects of any contamination or injury to
person, property or the environment created or suffered by Lessee, and the cost
of investigation, removal, remediation, restoration and/or abatement, and shall
survive the expiration or termination of this Lease. NO TERMINATION,
CANCELLATION OR RELEASE AGREEMENT ENTERED INTO BY LESSOR AND LESSEE SHALL
RELEASE LESSEE FROM ITS OBLIGATIONS UNDER THIS LEASE WITH RESPECT TO HAZARDOUS
SUBSTANCES, UNLESS SPECIFICALLY SO AGREED BY LESSOR IN WRITING AT THE TIME OF
SUCH AGREEMENT.

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

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

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

          (h) SEE ADDENDUM PARAGRAPH 56.

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

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

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

     7.1  LESSEE'S OBLIGATIONS.

          (a) IN GENERAL. Subject to the provisions of the Addendum 6.3
(Lessee's Compliance with Applicable Requirements), 7.2 (Lessor's Obligations),
9 (Damage or Destruction), and 14 (Condemnation), Lessee shall, at Lessee's sole
expense, keep the Premises, Utility Installations, and Alterations in good
order, condition and repair (whether or not the portion of the Premises
requiring repairs, or the means of repairing the same, are reasonably or readily
accessible to Lessee, and whether or not the need for such repairs occurs as a
result of Lessee's use, any prior use, the elements or the age of such portion
of the Premises), including, but not limited to, all equipment or facilities,
such as plumbing, heating, ventilating, air-conditioning, electrical, lighting
facilities, boilers, pressure vessels, fire protection system, fixtures, walls
(interior), ceilings, roofs, floors, windows, doors, plate glass, skylights,
landscaping, driveways, parking lots, fences, retaining walls, signs, sidewalks
and parkways located in, on, or adjacent to the Premises. Lessee, in keeping the
Premises in good order, condition and repair, shall exercise and perform good

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maintenance practices, specifically including the procurement and maintenance of
the service contracts required by Paragraph 7.1(b) below. Lessee's obligations
shall include restorations, replacements or renewals when necessary to keep the
Premises and all improvements thereon or a part thereof in good order, condition
and state of repair. Lessee shall, during the term of this Lease, keep the
exterior appearance of the Building in a first-class condition consistent with
the exterior appearance of other similar facilities of comparable age and size
in the vicinity, including, Lessee shall have the obligation to repaint the
exterior of the Building at least sixty (60) days prior to the Lease expiration
date.

          (b) SERVICE CONTRACTS. Lessee shall, at Lessee's sole expense, procure
and maintain contracts, with copies to Lessor, in customary form and substance
for, and with contractors specializing and experienced in the maintenance of the
following equipment and improvements, if any, if and when installed on the
Premises: (i) HVAC equipment, (ii) boiler, and pressure vessels, (iii) fire
extinguishing systems, including fire alarm and/or smoke detection, (iv)
landscaping and irrigation systems, (v) roof covering and drains, (vi) driveways
and parking lots, (vii) clarifiers (viii) basic utility feed to the perimeter of
the Building, and (ix) any other equipment, if reasonably required by Lessor.

          (c) REPLACEMENT. Subject to Lessee's indemnification of Lessor as set
forth in Paragraph 8.7 below, and without relieving Lessee of liability
resulting from Lessee's failure to exercise and perform good maintenance
practices, if the Basic Elements described in Paragraph 7.1(b) cannot be
repaired other than at a cost which is in excess of 50% of the cost of replacing
such Basic Elements, then such Basic Elements shall be replaced by Lessor, and
the cost thereof shall be prorated between the Parties and Lessee shall only be
obligated to pay, each month during the remainder of the term of this Lease, on
the date on which Base Rent is due, an amount equal to the product of
multiplying the cost of such replacement by a fraction, the numerator of which
is one, and the denominator of which is the number of months of the useful life
of such replacement as such useful life is specified pursuant to Federal income
tax regulations or guidelines for depreciation thereof (including interest on
the unamortized balance as is then commercially reasonable in the judgment of
Lessor's accountants), with Lessee reserving the right to prepay its obligation
at any time.

     7.2  LESSOR'S OBLIGATIONS. Subject to the provisions of the Addendum, 9
(Damage or Destruction) and 14 (Condemnation), it is intended by the Parties
hereto that Lessor have no obligation, in any manner whatsoever, to repair and
maintain the Premises other than the foundations, the structural components of
the roof and exterior walls, or the equipment therein, all of which obligations
are intended to be that of the Lessee. It is the intention of the Parties that
the terms of this Lease govern the respective obligations of the Parties as to
maintenance and repair of the Premises, and they expressly waive the benefit of
any statute now or hereafter in effect to the extent it is inconsistent with the
terms of this Lease.

     7.3  UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS.

          (a) DEFINITIONS; CONSENT REQUIRED. The term "UTILITY INSTALLATIONS"
refers to all floor and window coverings, air lines, power panels, electrical
distribution, security and fire protection systems, communication cabling,
lighting fixtures, HVAC equipment, plumbing, and fencing in or on the Premises.
The term "TRADE FIXTURES" shall mean Lessee's machinery and equipment that can
be removed without doing material damage to the Premises. The term "ALTERATIONS"
shall mean any modification of the improvements, other than Utility
Installations or Trade Fixtures, whether by addition or deletion. "LESSEE OWNED
ALTERATIONS AND/OR UTILITY INSTALLATIONS" are defined as Alterations and/or
Utility Installations made by Lessee that are not yet owned by Lessor pursuant
to Paragraph 7.4(a). Lessee shall not make any Alterations or Utility
Installations to the Premises without Lessor's prior written consent. Lessee
may, however, make non-structural Utility Installations to the interior of the
Premises (excluding the roof) without such consent but upon notice to Lessor, as
long as they are not visible from the outside, do not involve puncturing,
relocating or removing the roof or any existing walls, and the cumulative cost
thereof during this Lease as extended does not exceed $100,000 in the aggregate
or $50,000 in any one year.

          (b) CONSENT. Any Alterations or Utility Installations that Lessee
shall desire to make shall be presented to Lessor in written form with detailed
plans. Consent shall be deemed conditioned upon Lessee's: (i) acquiring all
applicable governmental permits, (ii) furnishing Lessor with copies of both the
permits and the plans and specifications prior to commencement of the work, and
(iii) compliance with all conditions of said permits and other Applicable
Requirements in a prompt and expeditious manner. Any Alterations or Utility
Installations shall be performed in a workmanlike manner with good and
sufficient materials. Lessee shall promptly upon completion furnish Lessor with
as-built plans and specifications. For work which costs an amount equal to the
greater of one month's Base Rent, or $20,000, Lessor may condition its consent
upon Lessee providing a lien and completion bond in an amount equal to one and
one-half times the estimated cost of such Alteration or Utility Installation
and/or upon Lessee's posting an additional Security Deposit with Lessor.

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

     7.4  OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION.

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

          (b) REMOVAL. By delivery to Lessee of written notice from Lessor not
later than ninety (90) days prior to the end of the term of this Lease, Lessor
may require that any or all Lessee Owned Alterations or Utility Installations be
removed by the expiration or termination of this Lease. Lessor may require the
removal at any time of all or any part of any Lessee Owned Alterations or
Utility Installations made without the required consent. See Addendum Paragraph
57.

          (c) SURRENDER/RESTORATION. Lessee shall surrender the Premises by the
Expiration Date or any earlier termination date, with all of the improvements,
parts and surfaces thereof broom clean and free of debris, and in good operating
order, condition and state of repair, ordinary wear and tear excepted. "Ordinary
wear and tear" shall not include any damage or deterioration that would have
been prevented by good maintenance practice. Lessee shall repair any damage
occasioned by the installation, maintenance or removal of Trade Fixtures. Lessee
Owned Alterations and/or Utility Installations, furnishings, and equipment as
well as the removal of any storage tank installed by or for Lessee, and the
removal, replacement, or remediation of any soil, material or groundwater
contaminated by Lessee. Trade Fixtures shall remain the property of Lessee and
shall be removed by Lessee. The failure by Lessee to timely vacate the Premises
pursuant to this Paragraph 7.4(c) without the express written consent of Lessor
shall constitute a holdover under the provisions of Paragraph 26 below.

8. INSURANCE; INDEMNITY.

     8.1  PAYMENT FOR INSURANCE. Lessee shall pay for all insurance required
under Paragraph 8 except to the extent of the cost attributable to liability
insurance carrier by Lessor under Paragraph 8.2(b) in excess of $2,000,000 per
occurrence. Premiums for policy periods commencing prior to or extending beyond
the Lease term shall be prorated to correspond to the Lease term. Payment shall
be made by Lessee to Lessor within ten (10) days following receipt of an
invoice.

     8.2  LIABILITY INSURANCE. SEE ADDENDUM PARAGRAPHS 63 AND 64.

          (a) CARRIED BY LESSEE. Lessee shall obtain and keep in force a
Commercial General Liability Policy of Insurance protecting Lessee and Lessor
against claims for bodily injury, personal injury and property damage based upon
or arising out of the ownership, use, occupancy or maintenance of the Premises
and all areas appurtenant thereto. Such insurance shall be on an occurrence
basis providing single limit coverage in an amount not less than $2,000,000 per
occurrence with an "ADDITIONAL INSURED-MANAGERS OR LESSORS OF PREMISES
ENDORSEMENT" and obtain the "AMENDMENT OF THE POLLUTION EXCLUSION ENDORSEMENT"
for damage caused by heat, smoke or fumes from a hostile fire. The Policy shall
not contain any intra-insured exclusions as between insured persons or
organizations, but shall include coverage for liability assumed under this Lease
as an 'insured contract' for the performance of Lessee's indemnity obligations
under this Lease. The limits of said insurance shall not, however, limit the
liability of Lessee nor relieve Lessee of any obligation hereunder. All
insurance carried by Lessee shall be primary to and not contributory with any
similar insurance carried by Lessor, whose insurance

                                  PAGE 4 OF 12

<PAGE>   5
shall be considered excess insurance only.

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

     8.3  PROPERTY INSURANCE -- BUILDING, IMPROVEMENTS AND RENTAL VALUE.

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

          (b) RENTAL VALUE. The Insuring Party shall obtain and keep in force a
policy or policies in the name of Lessor with loss payable to Lessor and any
Lender, insuring the loss of the full Rent for one (1) year. Said insurance
shall provide that in the event the Lease is terminated by reason of an insured
loss, the period of indemnity for such coverage shall be extended beyond the
date of the completion of repairs or replacement of the Premises, to provide for
one full year's loss of Rent from the date of any such loss. Said insurance
shall contain an agreed valuation provision in lieu of any coinsurance clause,
and the amount of coverage shall be adjusted annually to reflect the projected
Rent otherwise payable by Lessee, for the next twelve (12) month period. Lessee
shall be liable for any deductible amount in the event of such loss.

          (c) ADJACENT PREMISES. If the Premises are part of a larger building,
or a group of buildings owned by Lessor which are adjacent to the Premises, the
Lessee shall pay for any increase in the premiums for the property insurance of
such building or buildings if said increase is caused by Lessee's acts,
omissions, use or occupancy of the Premises.

     8.4  LESSEE'S PROPERTY/BUSINESS INTERRUPTION INSURANCE.

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

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

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

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

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

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

     8.8  EXEMPTION OF LESSOR FROM LIABILITY. Lessor shall not be liable for
injury or damage to the person or goods, wares, merchandise or other property of
Lessee, Lessee's employees, contractors, invitees, customers, or any other
person in or about the Premises, whether such damage or injury is caused by or
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, fire sprinklers, wires,
appliances, plumbing, HVAC or lighting fixtures, or from any other cause,
whether the said injury or damage results from conditions arising upon the
Premises or upon other portions of the Building of which the Premises are a
part, or from other sources or places. Lessor shall not be liable for any
damages arising from any act or neglect of any other tenant of Lessor.
Notwithstanding Lessor's negligence or breach of this Lease, Lessor shall under
no circumstances be liable for injury to Lessee's business or for any loss of
income or profit therefrom. See Addendum Paragraph 64.

9.   DAMAGE OR DESTRUCTION.

     9.1  DEFINITIONS.

          (a) "PREMISES PARTIAL DAMAGE" shall mean damage or destruction to the
improvements on the Premises, other than Lessee Owned Alterations and Utility
Installations, which can reasonably be repaired in six (6) months or less from
the date of the damage or destruction. Lessor shall notify Lessee in writing
within thirty (30) days from the date of the damage or destruction as to
whether or not the damage is Partial or Total.

          (b) "PREMISES TOTAL DESTRUCTION" shall mean damage or destruction to
the Premises, other than Lessee Owned Alterations and Utility Installations and
Trade Fixtures, which cannot reasonably be repaired in six (6) months or less
from the date of the damage or destruction. Lessor shall notify Lessee in
writing within thirty (30) days from the date of the damage or destruction as to
whether or not the damage is Partial or Total.

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

          (d) "REPLACEMENT COST" shall mean the cost to repair or rebuild the
improvements owned by Lessor at the time of the occurrence to their condition
existing immediately prior thereto, including demolition, debris removal and
upgrading required by the operation of Applicable Requirements, and without
deduction for depreciation.

          (e) "HAZARDOUS SUBSTANCE CONDITION" shall mean the occurrence or
discovery of a condition involving the presence of, or a contamination by, a
Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the
Premises.

     9.2  PARTIAL DAMAGE -- INSURED LOSS. If a Premises Partial Damage that is
an Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such
damage (but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect; provided, however, that Lessee shall, at Lessor's
election, make the repair of any damage or destruction the total cost to repair
of which is $10,000 or less, and, in such event, Lessor shall make any
applicable insurance proceeds available to Lessee on a reasonable basis for
that purpose. Notwithstanding the foregoing, if the required insurance was not
in force or the insurance proceeds are not sufficient to effect such repair,
the Insuring Party shall promptly contribute the shortage in proceeds (except
as to the deductible which is Lessee's responsibility) as and when required to

                                  Page 5 of 12
<PAGE>   6
complete said repairs. In the event, however, such shortage was due to the fact
that, by reason of the unique nature of the improvements, full replacement cost
insurance coverage was not commercially reasonable and available, Lessor shall
have no obligation to pay for the shortage in insurance proceeds or to fully
restore the unique aspects of the Premises unless Lessee provides Lessor with
the funds to cover same, or adequate assurance thereof, within ten (10) days
following receipt of written notice of such shortage and request therefor. If
Lessor receives said funds or adequate assurance thereof within said ten (10)
day period, the party responsible for making the repairs shall complete them as
soon as reasonably possible and this Lease shall remain in full force and
effect. If such funds or assurance are not received, Lessor may nevertheless
elect by written notice to Lessee within ten (10) days thereafter to: (i) make
such restoration and repair as is commercially reasonable with Lessor paying any
shortage in proceeds, in which case this Lease shall remain in full force and
effect, or have this Lease terminate thirty (30) days thereafter. Lessee shall
not be entitled to reimbursement of any funds contributed by Lessee to repair
any such damage or destruction. Premises Partial Damage due to flood or
earthquake shall be subject to Paragraph 9.3, notwithstanding that there may be
some insurance coverage, but the net proceeds of any such insurance shall be
made available for the repairs if made by either Party.

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

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

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

     9.6    ABATEMENT OF RENT; LESSEE'S REMEDIES.

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

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

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

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

10.  REAL PROPERTY TAXES.

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

     10.2

            (a) PAYMENT OF TAXES. Lessee shall pay the Real Property Taxes
applicable to the Premises during the term of this Lease. Subject to paragraph
10.2(b), all such payments shall be made at least ten (10) days prior to any
delinquency date. Lessee shall promptly furnish Lessor with satisfactory
evidence that such taxes have been paid. If any such taxes shall cover any
period of time prior to or after the expiration or termination of this Lease,
Lessee's share of such taxes shall be prorated to cover only that portion of the
tax bill applicable to the period that this Lease is in effect, and Lessor shall
reimburse Lessee for any overpayment. If Lessee shall fail to pay any required
Real Property Taxes, Lessor shall have the right to pay the same, and Lessee
shall reimburse Lessor therefor upon demand.

            (b) ADVANCE PAYMENT. In the event Lessee incurs a late charge on
any Rent payment, Lessor may, at Lessor's option, estimate the current Real
Property Taxes, and require that such taxes be paid in advance to Lessor by
Lessee, either: (i) in a lump sum amount equal to the installment due, at least
twenty (20) days prior to the applicable delinquency date, or (ii) monthly in
advance with the payment of the Base Rent. If Lessor elects to require payment
monthly in advance, the monthly payment shall be an amount equal to the amount
of the estimated installment of taxes divided by the number of months remaining
before the month in which said installment becomes delinquent. When the actual
amount of the applicable tax bill is known, the amount of such equal monthly
advance payments shall be adjusted as required to provide the funds needed to
pay the applicable taxes. If the amount collected by Lessor is insufficient to
pay such Real Property Taxes when due, Lessee shall pay Lessor, upon demand,
such additional sums as are necessary to pay such obligations. All monies paid
to Lessor under this Paragraph may be intermingled with other monies of Lessor
and shall not bear interest. In the event of a Breach by Lessee in the
performance of its obligations under this Lease, then any balance of funds paid
to Lessor under the provisions of this Paragraph may, at the option of Lessor,
be treated as an additional Security Deposit.

     10.3   JOINT ASSESSMENT. If the Premises are not separately assessed,
Lessee's liability shall be an equitable proportion of the Real Property Taxes
for all of the land and improvements included within the tax parcel assessed,
such proportion to be conclusively determined by Lessor from the respective
valuations assigned in the assessor's work sheets or such other information as
may be reasonably available.

     10.4   PERSONAL PROPERTY TAXES. Lessee shall pay, prior to delinquency,
all taxes assessed against and levied upon Lessee Owned Alterations, Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Lessee. When possible, Lessee shall cause such property to be assessed and
billed separately from the real property of Lessor. If any of Lessee's said
personal property shall be assessed with Lessor's real property, Lessee shall
pay Lessor the taxes attributable to Lessee's property within ten (10) days
after receipt of a written statement.

     10.5   SEE ADDENDUM.

11.  UTILITIES. Lessee shall pay for all water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to the
Premises,

                                  Page 6 of 12

<PAGE>   7
together with any taxes thereon. If any such services are not separately
metered to Lessee, Lessee shall pay a reasonable proportion, to be determined
by Lessor, of all charges jointly metered.

12.   ASSIGNMENT AND SUBLETTING. SEE ADDENDUM PARAGRAPH 62.

      12.1  LESSOR'S CONSENT REQUIRED.

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

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

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

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

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

      12.2  TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.

            (a)   Regardless of Lessor's consent, any assignment or subletting
shall not: (i) be effective without the express written assumption by such
assignee or sublessee of the obligations of Lessee under this Lease; (ii)
release Lessee of any obligations hereunder; or (iii) after the primary
liability of Lessee for the payment of Rent or for the performance of any other
obligations to be performed by Lessee.

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

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

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

            (e)   Each request for consent to an assignment or subletting shall
be in writing, accompanied by information relevant to Lessor's determination as
to the financial and operational responsibility and appropriateness of the
proposed assignee or sublessee, including but not limited to the intended use
and/or required modification of the Premises, if any, together with a fee not to
exceed $1,000, as consideration for Lessor's considering and processing said
request. Lessee agrees to provide Lessor with such other or additional
information and/or documentation as may be reasonably requested.

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

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

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

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

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

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

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

13.   DEFAULT; BREACH; REMEDIES.

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

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

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

            (c)   The failure by Lessee to provide (i) reasonable written
evidence of compliance with Applicable Requirements, (ii) the service
contracts, (iii) the rescission of an unauthorized assignment or subletting,
(iv) a Tenancy Statement, (v) a requested subordination, (vi) evidence
concerning any guaranty and/or Guarantor, (vii) any document requested under
Paragraph 42 (easements), or (viii) any other documentation or information
which Lessor may reasonably require of Lessee under the terms of this Lease,
where any such failure continues for a period of ten (10) days following
written notice to Lessee.

            (d)   A Default by Lessee as to the terms, covenants, conditions or
provisions of this Lease, or of the rules adopted under Paragraph 40 hereof,
other than those described in subparagraphs 13.1(a), (b) or (c) above, where
such Default continues for a period of thirty (30) days after written notice;
provided, however, that if the nature of Lessee's Default is such that more
than thirty (30) days are reasonably required for its cure, then it shall not
be deemed to be a Breach if Lessee commences such cure within said thirty (30)
day period and thereafter diligently prosecutes such cure to completion.

            (e)   The occurrence of any of the following events: (i) the making
of any general arrangement or assignment for the benefit of creditors; (ii)
becoming a "debtor" as defined in 11 U.S.C. section 101 or any successor
statute thereto (unless, in the case of a petition filed against Lessee, the
same is dismissed within sixty (60) days); (iii) the appointment of a trustee
or receiver to take possession of substantially all of Lessee's assets located
at the Premises or of Lessee's interest in this Lease, where possession is not
restored to Lessee within thirty (30) days; or (iv) the attachment, execution
or other

                                  Page 7 of 12
<PAGE>   8

judicial seizure of substantially all of Lessee's assets located at the Premises
or of Lessee's interest in this Lease, where such seizure is not discharged
within thirty (30) days; provided, however, in the event that any provision of
this subparagraph 13.1(e) is contrary to any applicable law, such provision
shall be of no force or effect, and not affect the validity of the remaining
provisions.

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

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

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

          (a)  Terminate Lessee's right to possession of the Premises by any
lawful means, in which case this Lease shall terminate and Lessee shall
immediately surrender possession to Lessor. In such event Lessor shall be
entitled to recover from Lessee: (i) the unpaid Rent which had been earned at
time of termination; (ii) the worth at the time of award of the amount by which
the unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that the Lessee proves could have
been reasonably avoided; (iii) the worth at the time of award of the amount by
which the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss that the Lessee proves could be
reasonably avoided; and (iv) any other amount necessary to compensate Lessor for
all the detriment proximately caused by the Lessee's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including but not limited to the cost of recovering
possession of the Premises, expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable attorneys' fees, and that
portion of any leasing commission paid by Lessor in connection with this Lease
applicable to the unexpired term of this Lease. The worth at the time of award
of the amount referred to in provision (iii) of the immediately preceding
sentence shall be computed by discounting such amount at the discount rate of
the Federal Reserve Bank of the District within which the Premises are located
at the time of award plus one percent (1%). Efforts by Lessor to mitigate
damages caused by Lessee's Breach of this Lease shall not waive Lessor's right
to recover damages under Paragraph 12. If termination of this Lease is obtained
through the provisional remedy of unlawful detainer, Lessor shall have the right
to recover in such proceeding any unpaid Rent and damages as are recoverable
therein, or Lessor may reserve the right to recover all or any part thereof in a
separate suit. If a notice and grace period required under Paragraph 13.1 was
not previously given, a notice to pay rent or quit, or to perform or quit given
to Lessee under the lawful detainer statute shall also constitute the notice
required by Paragraph 13.1. In such case, the applicable grace period required
by Paragraph 13.1 and the unlawful detainer statute shall run concurrently and
the failure of Lessee to cure the Default within the greater of the two such
grace periods shall constitute both an unlawful detainer and a Breach of this
Lease entitling Lessor to the remedies provided for in this Lease and/or by said
statute.

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

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

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

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

     13.5 INTEREST. Any monetary payment due Lessor hereunder, other than late
charges, not received by Lessor, when due as to scheduled payments (such as Base
Rent) or within thirty (30) days following the date on which it was due for
non-scheduled payment, shall bear interest from the date when due, as to
scheduled payments, or the thirty-first (31st) day after it was due as to
non-scheduled payments. The interest ("INTEREST") charged shall be equal to the
prime rate reported in the Wall Street Journal as published closest prior to the
date when due plus four percent (4%), but shall not exceed the maximum rate
allowed by law. Interest is payable in addition to the potential late charge
provided for in Paragraph 13.4.

     13.6 BREACH BY LESSOR.

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

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

14.  CONDEMNATION.  If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said power
(collectively "CONDEMNATION"), this Lease shall terminate as to the part taken
as of the date of condemning authority takes title or possession, whichever
first occurs. If more than ten percent (10%) of any building portion of the
Premises, or more than twenty-five percent (25%) of the land area portion of the
Premises not occupied by and building, is taken by Condemnation, Lessee may, at
Lessee's option, to be exercised in writing within ten (10) days after Lessor
shall have given Lessee written notice of such taking (or in the absence of such
notice, within ten (10) days after the condemning authority shall have taken
possession) terminate this Lease as of the date the condemning authority takes
such possession. If Lessee does not terminate this Lease in accordance with the
foregoing, this Lease shall remain in full force and effect as to the portion of
the Premises remaining, except that the Base Rent shall be reduced in proportion
to the reduction in utility of the Premises caused by such Condemnation.
Condemnation awards and/or payments shall be the property of Lessor, whether
such award shall be made as compensation for diminution in value of the
leasehold, the value of the part taken, or for severance damages; provided,
however, that Lessee shall be entitled to file a separate claim for any
compensation for Lessee's relocation expenses, loss of

                                  PAGE 8 OF 12

<PAGE>   9
business goodwill, the Clean Room and/or Trade Fixtures, without regard to
whether or not this Lease is terminated pursuant to the provisions of this
Paragraph. All Alterations and Utility Installations made to the Premises by
Lessee, for purposes of Condemnation only, shall be considered the property of
the Lessee and Lessee shall be entitled to any and all compensation which is
payable therefor. In the event that this Lease is not terminated by reason of
the Condemnation, Lessor shall repair any damage to the Premises caused by such
Condemnation.

15.  BROKERS' FEE.

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

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

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

16.  ESTOPPEL CERTIFICATES.

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

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

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

17.  DEFINITION OF LESSOR. The term "LESSOR" as used herein shall mean the owner
or owners at the time in question of the fee title to the Premises, or, if this
is a sublease, of the Lessee's interest in the prior lease. In the event of a
transfer of Lessor's title or interest in the Premises or this Lease, Lessor
shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor. Except as provided in Paragraph 15, upon such
transfer or assignment and delivery of the Security Deposit, as aforesaid, the
prior Lessor shall be relieved of all liability with respect to the obligations
and/or covenants under this Lease thereafter to be performed by the Lessor.
Subject to the foregoing, the obligations and/or covenants in this Lease to be
performed by the Lessor shall be binding only upon the Lessor as hereinabove
defined. Notwithstanding the above, and subject to the provisions of Paragraph
20 below, the original Lessor under this Lease, and all subsequent holders of
the Lessor's interest in this Lease shall remain liable and responsible with
regard to the potential duties and liabilities of Lessor pertaining to Hazardous
Substances as outlined in Paragraph 6 above.

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

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

20.  LIMITATION ON LIABILITY. Subject to the provisions of Paragraph 17 above,
the obligations of Lessor under this Lease shall not constitute personal
obligations of Lessor, the individual partners of Lessor or its or their
individual partners, directors, officers or shareholders, and Lessee shall look
to the Premises, and to no other assets of Lessor, for the satisfaction of any
liability of Lessor with respect to this Lease, and shall not seek recourse
against the individual partners of Lessor, or its or their individual partners,
directors, officers or shareholders, or any of their personal assets for such
satisfaction.

21.  TIME OF ESSENCE. Time is of the essence with respect to the performance of
all obligations to be performed or observed by the Parties under this Lease.

22.  NO PRIOR OR OTHER AGREEMENTS; BROKER DISCLAIMER. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each represents and warrants to the Brokers that it has made,
and is relying solely upon, its own investigation as to the nature, quality,
character and financial responsibility of the other Party to this Lease and as
to the nature, quality and character of the Premises. Brokers have no
responsibility with respect thereto or with respect to any default or breach
hereof by either Party. The liability (including court costs and Attorneys'
fees), of any Broker with respect to negotiation, execution, delivery or
performance by either Lessor or Lessee under this Lease or any amendment or
modification hereto shall be limited to an amount up to the fee received by such
Broker pursuant to this Lease; provided, however, that the foregoing limitation
on each Broker's liability shall not be applicable to any gross negligence or
willful misconduct of such Broker.

23.  NOTICES.

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

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

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

25.  RECORDING. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a short form memorandum of this
Lease for recording purposes. The Party requesting recordation shall be
responsible for payment of any fees applicable thereto.

26.  NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or termination of this Lease.
In the event that Lessee holds over, then the Base Rent shall be increased to
one hundred fifty percent (150%) of the Base Rent applicable during the

                                  Page 9 of 12
<PAGE>   10
month immediately preceding the expiration or termination. Nothing contained
herein shall be construed as consent by Lessor to any holding over by Lessee.

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

28.  COVENANTS AND CONDITIONS; CONSTRUCTION OF AGREEMENT.  All provisions of
this Lease to be observed or performed by Lessee are both covenants and
conditions. In construing this Lease, all headings and titles are for the
convenience of the Parties only and shall not be considered a part of this
Lease. Whenever required by the context, the singular shall include the plural
and vice versa. This Lese shall not be construed as if prepared by one of the
Parties, but rather according to its fair meaning as a whole, as if both Parties
had prepared it.

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

30.  SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.

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

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

     30.3  NON-DISTURBANCE.  With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee's subordination of this Lease
shall be subject to receiving a commercially reasonable non-disturbance
agreement (a "Non-Disturbance Agreement") from the Lender which Non-Disturbance
Agreement provides that Lessee's possession of the Premises, and this Lease,
including any options to extend the term hereof, will not be disturbed so long
as Lessee is not in Breach hereof and attorns to the record owner of the
Premises. Further, within sixty (60) days after the execution of this Lease,
Lessor shall use its commercially reasonable efforts to obtain a Non-Disturbance
Agreement from the holder of any pre-existing Security Device which is secured
by the Premises. In the event that Lessor is unable to provide the
Non-Disturbance Agreement within said sixty (60) days, then Lessee may, at
Lessee's option, directly contact Lessor's lender and attempt to negotiate for
the execution and delivery of a Non-Disturbance Agreement.

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

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

32.  LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Lessor's agents
shall have the right to enter the Premises at any time, in the case of an
emergency, and otherwise at reasonable times for the purpose of showing the same
to prospective purchasers, lenders, or lessees, and making such alterations,
repairs, improvements or additions to the Premises as Lessor may deem necessary.
All such activities shall be without abatement of rent or liability to Lessee.
Lessor may at any time place on the Premises any ordinary "FOR SALE" signs and
Lessor may during the last six (6) months of the term hereof place on the
Premises any ordinary "FOR LEASE" signs. Lessee may at any time place on or
about the Premises any ordinary "FOR SUBLEASE" SIGN.

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

34.  SIGNS.  Except for ordinary "For Sublease" signs, Lessee shall not place
any sign upon the Premises without Lessor's prior written consent. All signs
must comply with all Applicable Requirements.

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

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

37.  GUARANTOR.

     37.1  EXECUTION.  The Guarantors, if any, shall each execute a guaranty in
the form most recently published by the American Industrial Real Estate
Association, and each such Guarantor shall have the same obligations as Lessee
under this Lease.

     37.2  DEFAULT.  It shall constitute a Default of the Lessee if any
Guarantor fails or refuses, upon request to provide: (a) evidence of the
execution of the guaranty, including the authority of the party signing on
Guarantor's behalf to obligate Guarantor, and in the case of a corporate
Guarantor, a certified copy of a resolution of its board of directors
authorizing the making of such guaranty, (b) current financial statements, (c) a
Tenancy Statement, or (d) written confirmation that the guaranty is still in
effect.

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

39.  OPTIONS.

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

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

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

     39.4  EFFECT OF DEFAULT ON OPTIONS.

          (a)  Lessee shall have no right to exercise an Option: (i) during the
period commencing with the giving of any notice of Default and continuing until
said Default is cured, (ii) during the period of time any Rent is unpaid
(without regard to whether notice thereof is given Lessee), (iii) during the

                                 Page 10 or 12

<PAGE>   11
time Lessee is in Breach of this Lease, or (iv) in the event that Lessee has
been given three (3) or more notices of separate Default, whether or not the
Defaults are cured, during the twelve (12) month period immediately preceding
the exercise of the Option.

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

          (c) An Option shall terminate and be of no further force or effect,
notwithstanding Lessees' due and timely exercise of the Option, if, after such
exercise and prior to the commencement of the extended term, (i) Lessee fails to
pay Rent for a period of thirty (30) days after such Rent becomes due (without
any necessity of Lessor to give notice thereof), (ii) Lessor gives to Lessee
three (3) or more notices or separate Default during any twelve (12) month
period, whether or not the Defaults are cured, or (iii) if Lessee commits a
Breach of this Lease.

40.  MULTIPLE BUILDINGS. If the Premises are a part of a group of buildings
controlled by Lessor, Lessee agrees that it will observe all reasonable rules
and regulations which Lessor may make from time to time for the management,
safety, and care of said properties, including the care and cleanliness of the
grounds and including the parking, loading and unloading of vehicles, and that
Lessee will pay its fair share of common expenses incurred in connection
therewith.

41.  SECURITY MEASURES. Lessee hereby acknowledges that the rental payable to
Lessor hereunder does not include the cost of guard service or other security
measures, and that Lessor shall have no obligation whatsoever to provide same.
Lessee assumes all responsibility for the protection of the Premises, Lessee,
its agents and invitees and their property from the acts of third parties.

42.  RESERVATIONS. Lessor reserves to itself the right, from time to time, to
grant, without the consent or joinder of Lessee, such easements, rights and
dedications that Lessor deems necessary, and to cause the recordation of parcel
maps and restrictions, so long as such easements, rights, dedications, maps and
restrictions do not unreasonably interfere with the use of the Premises by
Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to
effectuate any such easement rights, dedication, map or restrictions.

43.  PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one Party to the other under the
provisions hereof, the Party against whom the obligation to pay the money is
asserted shall have the right to make payment "under protest" and such payment
shall not be regarded as a voluntary payment and there shall survive the right
on the part of said Party to institute suit for recovery of such sum. If it
shall be adjudged that there was no legal obligation on the part of said Party
to Pay such sum or any part thereof, said Party shall be entitled to recover
such sum or so much thereof as it was not legally required to pay.

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

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

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

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

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

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

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

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

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

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

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

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

<TABLE>
<S>                                                <C>
Executed at:  Westlake Village, CA                 Executed at:  Chatsworth, CA
on:  April 2, 2001                                 on:  March 26, 2001
By LESSOR:                                         By LESSEE:
Abronson, Cole & Eisele, a California General      Luminent, Inc., a Delaware Corporation
Partnership

By:  /s/ CHARLES ABRONSON                          By:  /s/ WILLIAM R. SPIVEY
     -------------------------------                    -------------------------------
Name Printed:  Charles Abronson                    Name Printed:  William R. Spivey
Title:  General Partner                            Title:  President

By:                                                By:  /s/ ERIC BLACHNO
     -------------------------------                    -------------------------------
Name Printed:  Abronson, Cole & Eisele             Name Printed:  Eric Blachno
Title:  Attn: J. Cole                              Title:  Chief Financial Officer
Address:  P.O. Box 7688                            Address:  20550 Nordhoff St.
          Thousand Oaks, CA 91359                            Chatsworth, CA 91311
Telephone:  (818) 222-7672                         Telephone:  (818) 773-9044
Facsimilie  (___) __________________________       Facsimilie  (818) 349-9258
Federal ID No.  ____________________________       Federal ID No.  95-4798130
</TABLE>

                                 Page 11 of 12

<PAGE>   12
NOTE: These forms are often modified to meet the changing requirements of law
      and industry needs. Always write or call to make sure you are utilizing
      the most current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION,
      700 So. Flower Street, Suite 600, Los Angeles, California 90017.
      (213) 687-8777. Fax No. (213) 687-8616

                                 Page 12 of 12
<PAGE>   13

                                 [COMPANY LOGO]

                             ARBITRATION AGREEMENT

                            STANDARD LEASE ADDENDUM

        DATED  January 30, 2001
              -------------------

        BY AND BETWEEN (LESSOR)  Abronson, Cole & Eisele, a California
                                 --------------------------------------
                                 General Partnership
                                 --------------------------------------

                       (LESSEE)  Luminent, Inc., a Delaware Corporation
                                 --------------------------------------

        ADDRESS OF PREMISES  950 Lawrence Drive, Newbury Park, California
                             --------------------------------------------

                             --------------------------------------------

Paragraph 49

A.   ARBITRATION OF DISPUTES:

Except as provided in Paragraph B below, the Parties agree to resolve any and
all claims, disputes or disagreements arising under this Lease, including, but
not limited to any matter relating to Lessor's failure to approve an assignment,
sublease or other transfer of Lessee's interest in the Lease under Paragraph 12
or this Lease, any other defaults by Lessor, or any defaults by Lessee by and
through arbitration as provided below and irrevocably waive any and all rights
to the contrary. The Parties agree to at all times conduct themselves in strict,
full, complete and timely accordance with the terms hereof and that any attempt
to circumvent the terms of this Arbitration Agreement shall be absolutely null
and void and of no force or effect whatsoever.

B.   DISPUTES EXCLUDED FROM ARBITRATION:

The following claims, disputes or disagreements under this Lease are expressly
excluded from the arbitration procedures set forth herein: 1. Disputes for which
a different resolution determination is specifically set forth in this Lease, 2.
All claims by either party which (a) seek anything other than enforcement or
determination of rights under this Lease, or (b) are primarily founded upon
matters of fraud, willful misconduct, bad faith or any other allegations of
tortious action, and seek the award of punitive or exemplary damages, 3. Claims
relating to (a) Lessor's exercise of any unlawful detainer rights pursuant to
applicable law or (b) rights or remedies used by Lessor to gain possession of
the Premises or terminate Lessee's right of possession to the Premises, all of
which disputes shall be resolved by suit filed in the applicable court of
jurisdiction, the decision of which court shall be subject to appeal pursuant to
applicable law and 4. All claims arising under Paragraph 39 of this Lease, which
disputes shall be resolved by the specific dispute resolution procedure provided
in Paragraph 39 to the extent that such disputes concern solely the
determination of rent.

C.   APPOINTMENT OF AN ARBITRATOR.

All disputes subject to this Arbitration Agreement, shall be determined by
binding arbitration before: [ ] a retired judge of the applicable court of
jurisdiction (e.g., the Superior Court of the State of California) affiliated
with Judicial Arbitration & Mediation Services, Inc. ("JAMS"), [X] the American
Arbitration Association ("AAA") under its commercial arbitration rules, [ ]
______________________________________________________________________________ ,
or as may be otherwise mutually agreed by Lessor and Lessee (the "Arbitrator").
Such arbitration shall be initiated by the Parties, or either of them, within
ten (10) days after either party sends written notice (the "Arbitration Notice")
of a demand to arbitrate by registered or certified mail to the other party and
to the Arbitrator. The Arbitration Notice shall contain a description of the
subject matter of the arbitration, the dispute with respect thereto, the amount
involved, if any, and the remedy or determination sought. If the Parties have
agreed to use JAMS they may agree on a retired judge from the JAMS panel. If
they are unable to agree within ten days, JAMS will provide a list of three
available judges and each party may strike one. The remaining judge (or if there
are two, the one selected by JAMS) will serve as the Arbitrator. If the Parties
have elected to utilize AAA or some other organization, the Arbitrator shall be
selected in accordance with said organization's rules. In the event the
Arbitrator is not selected as provided for above for any reason, the party
initiating arbitration shall apply to the appropriate Court for the appointment
of a qualified retired judge to act as the Arbitrator.

D.   ARBITRATION PROCEDURE:

     1.   PRE-HEARING ACTIONS. The Arbitrator shall schedule a pre-hearing
conference to resolve procedural matters, arrange for the exchange of
information, obtain stipulations, and narrow the issues. The Parties will submit
proposed discovery schedules to the Arbitrator at the pre-hearing conference.
The scope and duration of discovery will be within the sole discretion of the
Arbitrator. The Arbitrator shall have the discretion to order a pre-hearing
exchange of information by the Parties, including, without limitation,
production of requested documents, exchange of summaries of testimony of
proposed witnesses, and examination by deposition of parties and third-party
witnesses. This discretion shall be exercised in favor of discovery reasonable
under the circumstances. The Arbitrator shall issue subpoenas and subpoenas
ducas tecum as provided for in the applicable statutory or case law (e.g., in
California Code of Civil Procedure Section 1282.6).

     2.   THE DECISION. The arbitration shall be conducted in the city or county
within which the Premises are located at a reasonably convenient site. Any Party
may be represented by counsel or other authorized representative. In rendering a
decision(s), the Arbitrator shall determine the rights and obligations of the
Parties according to the substantive laws and the terms and provisions of this
Lease. The Arbitrator's decision shall be based on the evidence introduced at
the hearing, including all logical and reasonable inferences therefrom. The
Arbitrator may make any determination and/or grant any remedy or relief that is
just and equitable. The decision must be based on, and accompanied by, a written
statement of decision explaining the factual and legal basis for the decision as
to each of the principal controverted issues. The decision shall be conclusive
and binding, and if may thereafter be confirmed as a judgment by the court of
applicable jurisdiction, subject only to challenge on the grounds set forth in
the applicable statutory or case law (e.g., in California Code of Civil
Procedure Section 1286.2). The validity and enforceability of the Arbitrator's
decision is to be determined exclusively by the court of appropriate
jurisdiction pursuant to the provisions of this Lease. The Arbitrator may award
costs, including without limitation, Arbitrator's fees and costs, attorney's
fees, and expert and witness costs, to the prevailing party, if any, as
determined by the Arbitrator in his discretion.

     Whenever a matter which has been submitted to Arbitration involves a
dispute as to whether or not a particular act or omission (other than a failure
to

                                  PAGE 1 OF 2

<PAGE>   14
pay money) constitutes a Default, the time to commence or cease such action
shall be tolled from the date that the Notice of Arbitration is served through
and until the date the Arbitrator renders his or her decision. Provided,
however, that this provision shall NOT apply in the event that the
Arbitrator determines that the Arbitration Notice was prepared in bad faith.

      Whenever a dispute arises between the Parties concerning whether or not
the failure to make a payment of money constitutes a Default, the service of an
Arbitration Notice shall NOT toll the time period in which to pay the money.
The Party allegedly obligated to pay the money may, however, elect to pay the
money "under protest" by accompanying said payment with a written statement
setting forth the reasons for such protest. If thereafter, the Arbitrator
determines that the Party who received said money was not entitled to such
payment, said money shall be promptly returned to the Party who paid such money
under protest together with interest thereon as defined in Paragraph 13.5. If a
Party makes a payment "under protest" but no Notice of Arbitration is filed
within thirty days, then such protest shall be determined waived. (See also
Paragraph 43.)

NOTICE: These forms are often modified to meet changing requirements of law and
industry needs. Always write or call us to make sure you are utilizing the most
current form: American Industrial Real Estate Association, 700 South Flower
Street, Suite 600, Los Angeles, CA 90017. Telephone No.: (213) 687-8777. Fax
No.: (213) 687-8616.

                                  Page 2 of 2
<PAGE>   15
                               ADDENDUM TO LEASE

      This Addendum to Lease (the "ADDENDUM"), is made by and between ABRONSON,
COLE & EISELE, a California general partnership ("Lessor") and LUMINENT, INC.,
a Delaware corporation ("Lessee"), as of the day and year set forth on the
first page of that certain Standard Industrial/Single Tenant-Lease-Net to which
this Addendum is attached (the "FORM LEASE") relating to the Premises commonly
known as 950 Lawrence Drive, Newbury Park, California. The promises, covenants,
agreements and declarations made and set forth herein are intended to and shall
have the same force and effect as if set forth in the body of the Form Lease.
To the extent that the provisions of this Addendum are inconsistent with the
terms and conditions of the Form Lease, the provisions of this Addendum shall
control. The Form Lease, this Addendum and the Exhibits referenced therein
shall together constitute the "LEASE" for purposes hereof.

      50.   DEFINITIONS. As used in the Lease the following terms have the
meaning given to them below:

            (a)   "APPLICABLE REQUIREMENTS" means all laws, covenants or
restrictions of record, building codes, regulations and ordinances applicable
to the Premises.

            (b)   "BUILDING" means the building or buildings on the Premises.

            (c)   "CAPITAL EXPENDITURE" means the construction of or an
addition to or an alteration of the Building, the remediation of any Hazardous
Substance, or the reinforcement or other physical modification of the Building.

            (d)   "HVAC" means the heating, ventilating and air conditioning
systems at the Premises.

            (e)   "START DATE" means the Commencement Date (as defined below)
or the Early Possession Date (as defined below), whichever first occurs.

      51.   ACCEPTANCE OF PREMISES. Lessee acknowledges that neither Lessor nor
any representative of Lessor has made any representation or warranty with
respect to the Premises or the Building or the suitability or fitness of either
for any purpose, including without limitation any representations or warranties
regarding zoning or other land use matters, and that neither Lessor nor any
representative of Lessor has made any representations or warranties regarding
what other uses may be permitted or intended in the Building. Lessee further
acknowledges that neither Lessor nor any representative of Lessor has agreed to
undertake any alterations or additions or construct any improvements to the
Premises except as expressly provided in the Lease.

      52.   RENT ADJUSTMENTS. Commencing as of the first anniversary of the
Commencement Date and on each anniversary thereafter during the Original Term
of the Lease and on each anniversary of the first day of the Extension Term
(each an "ADJUSTMENT DATE"), the Base Rent then payable under the Lease shall
be increased by an amount equal to the increase, if any, in the CPI (as
hereinafter defined). On each Adjustment Date, the Base Rent then payable under
the Lease shall be equal to the Base Rent payable for the month immediately
preceding the Adjustment Date multiplied by a fraction, the numerator of which
shall be the CPI which is published most immediately preceding the applicable
Adjustment Date and the denominator of which shall be the CPI which is
published most immediately preceding the date which is twelve (12) months prior
to the applicable Adjustment Date; provided, however, in no event shall any
such new monthly rent be less than 103% nor more than 106% of the Base Rent
payable for the month immediately preceding the Adjustment Date. As used
herein, "CPI" shall mean the Consumer Price Index for All Urban Consumers (base
year 1982-84 = 100) for Los Angeles - Riverside - Anaheim, published by the
United States Department of Labor, Bureau of Labor Statistics.

      53.   RIGHT TO EXTEND THE LEASE. Subject to the provisions of Paragraph 39
of the Form Lease, Lessee may extend the Original Term of the Lease for one (1)
additional period of sixty (60) months (the "EXTENSION TERM"). Lessee shall
exercise its right to extend the Original Term, by and only by delivering to
Lessor, not less than nine (9) months or more than eighteen (18) months prior
to the expiration date of the Original Term, Lessee's irrevocable written
notice of its commitment to extend the Original Term (the "COMMITMENT NOTICE").
The monthly Base Rent payable under the Lease during the first year of the
Extension Term shall be increased to the higher of the CPI Adjusted Base Rent
(as defined in subparagraph 53(a) below) and the MRV Adjusted Base Rent (as
defined in subparagraph 53(b) below).

            (a)   The CPI Adjusted Base Rent means an amount calculated in
accordance with Paragraph 53 above if the first day of the Extension Term is
deemed an Adjustment Date.

            (b)   The MRV Adjusted Base Rent means the "market rental value" of
the Premises determined as follows:

                  Lessor and Lessee shall endeavor to agree upon a MRV Adjusted
Base Rent within thirty (30) days after Lessor's receipt of the Commitment
Notice. If Lessor and Lessee are unable to agree, then within the subsequent
ten (10) days, Lessor and Lessee shall attempt to agree on an appraiser to
determine the MRV Adjusted Base Rent.

                  If the parties are unable to agree in that time, then each
party shall designate an appraiser within ten (10) days thereafter. Should
either party fail to so designate an appraiser within that time, then the
appraiser designated by the other party shall determine the MRV Adjusted Base
Rent. Should each of the parties timely designate an appraiser, then the two
appraisers so designated shall appoint a third appraiser who shall, acting
<PAGE>   16
alone, determine the MRV Adjusted Base Rent. Any appraiser designated hereunder
shall have an M.A.I. certification with not less than five (5) years experience
in the valuation of commercial buildings in Ventura County, California.

               Within thirty (30) days following the selection of the appraiser,
such appraiser shall determine the MRV Adjusted Base Rent. In determining such
value, the appraiser shall first consider rental comparables for the Premises,
provided that if adequate comparables do not exist then the appraiser may
consider transactions involving similarly improved space in the Los Angeles
County area with appropriate adjustments for differences in location and quality
of project. The fees of the appraiser(s) shall be shared equally by both
parties.

            As used herein, the "market rental value" of the Premises shall mean
and refer to the rate then being charged or projected to be charged to tenants
on renewal leases for delivery on or about the commencement of the Extension
Term, for comparable non-sublease, non-encumbered, non-equity space in
comparable buildings, similarly improved, taking into account all of the
improvements made to the premises (other than the Clean Room), parking and other
amenities, tenant improvement allowances and other customary concessions being
offered, if any, and the length of the Extension Term.

               Within twenty (20) days after the determination of the MRV
Adjusted Base Rent, Lessor shall prepare a reasonably appropriate amendment to
this Lease for the Extension Term and Lessee shall execute and return same to
Lessor within ten (10) days. Should the MRV Adjusted Base Rent not be
established by the commencement of the Extension Term, then Lessee shall
continue paying rent at the rate in effect during the last month of the Original
Term, and a lump sum adjustment shall be made promptly upon the determination of
such new rental.

               If Lessee fails to timely comply with any of the provisions of
this paragraph, Lessee's right to extend the Original Term shall be extinguished
and the Lease shall automatically terminate as of the expiration date of the
Original Term, without any extension and without any liability to Lessor. Lessee
shall have no other right to extend the Original Term beyond the extensions
created by this paragraph. Unless agreed to in a writing signed by Lessor and
Lessee, any extension of the Original Term, whether created by an amendment to
this Lease or by a holdover of the Premises by Lessee, or otherwise, shall be
deemed a part of, and not in addition to, any duly exercised Extension Term
permitted by this paragraph.

     54.  CONSTRUCTION OF IMPROVEMENTS BY LESSOR.

          54.1 LESSOR'S CONSTRUCTION NOT SUBJECT TO IMPROVEMENT ALLOWANCE.

               (a)  Lessor shall make certain renovations and improvements to
the Premises (the "RENOVATION WORK") as more particularly described in EXHIBIT B
attached hereto and incorporated herein by reference. Execution of the Lease by
Lessor and Lessee shall be deemed to constitute each party's approval of the
matters set forth on EXHIBIT B. Except as otherwise provided herein, Lessor
shall make the Renovation Work at its sole cost and expense.

               (b)  Lessor and Lessee hereby agree to use their respective best
good faith efforts to cause all plans and specifications and working drawings
for the Renovation Work described in EXHIBIT B (the "RENOVATION PLAN") to be
completed by April 30, 2001 and signed by the parties as soon as possible. The
Renovation Plan shall be prepared by J.D.O. and Associates.

               (c)  Lessee acknowledges that Lessor has budgeted $105,000 for
the removal and replacement of the roof and the removal and replacement of all
rooftop equipment associated with the Clean Room (the "Clean Room Roof
Equipment"), including, without limitation, the HVAC system located on the roof
which services the Clean Room (collectively, the "ROOF WORK"). If the actual
costs for the Roof Work exceed $126,000 due to costs attributable to the removal
and replacement of the Clean Room Roof Equipment, then Lessor may, by written
notice to Lessee, elect to terminate the Lease; provided, however, that if
within five (5) business days after Lessor delivers such notice to Lessee,
Lessee notifies Lessor in writing that Lessee agrees to pay that portion of the
Roof Work costs which exceed $126,000 and are attributable to the removal and
replacement of the Clean Room Roof Equipment, then the Lease shall not
terminate. Such additional costs shall be paid by Lessee to Lessor as the
invoices therefor (as delivered by Lessor to Lessee) become due and payable.

          54.2 LESSOR'S CONSTRUCTION OF IMPROVEMENTS SUBJECT TO IMPROVEMENT
ALLOWANCE.

               (a)  Lessor and Lessee acknowledge that Lessor shall also
construct certain improvements to the Building (the "ALLOWANCE WORK") as more
particularly described in EXHIBIT C attached hereto and incorporated herein by
reference (the "ALLOWANCE WORK SUMMARY"). The Allowance Work shall be deemed to
include any work required to cause the restrooms at the Premises to be compliant
with the Americans With Disabilities Act. Execution of the Lease by Lessor and
Lessee shall be deemed to constitute each party's approval of the matters set
forth in the Allowance Work Summary. The understandings and agreements for such
construction and payment of Lessor's costs in connection therewith are set forth
below.

               (b)  Lessor will pay for up to $460,000 ("LESSOR'S SHARE OF
COSTS") of the Costs (as defined below) of constructing the Allowance Work in
accordance with the Allowance Work Plan (as defined below), and Lessee shall be
responsible for the balance of such Costs ("LESSEE'S SHARE OF COSTS"). If the
estimate of the Costs based on the Allowance Work Plan exceeds $506,000, then
Lessee may reduce the scope of the

                                       2

<PAGE>   17

Allowance Work so long as the work described in items A and B of EXHIBIT C is
not affected. The first $46,000 of the Lessee's Share of Costs shall be paid by
Lessee to Lessor by amortizing the Lessee's Share of Costs at ten (10%) per
annum over the Original Term of the Lease and adding the applicable monthly
amortized amount to the monthly Base Rent. If the Lessee's Share of Costs
exceeds $46,000, then that portion of the Lessee's Share of Costs which exceeds
$46,000 shall be paid by Lessee to Lessor no later than ten (10) days after
written demand therefor by Lessor. As used herein, the term "COSTS" shall mean
and refer to all costs expended by Lessor for the construction of the Allowance
Work which shall include, but shall not be limited to, cost of equipment,
material and labor, management and supervision fees, contractor's field overhead
and fee, architectural and engineering fees, governmental agency fees, testing
and inspection costs, the cost of any requirements regarding construction which
are imposed by any federal, state or local government entity or agency which are
not reflected in the plans and specifications, sales and use taxes, permits,
plan check fees, bond and other costs related to the construction of the
Allowance Work.

               (c)  Lessor and Lessee hereby agree to use their respective best
good faith efforts to cause all plans and specifications and working drawings
(the "ALLOWANCE WORK PLAN") with respect to the Allowance Work to be completed
by March 31, 2001 and signed by the parties as soon as possible. The Allowance
Work Plan shall be prepared by J.D.O. and Associates.

               (d)  In the event that Lessee desires Allowance Work other than
or in addition to the Allowance Work described in the Allowance Work Plan for
the Allowance Work, Lessee shall provide notice of such proposed change to
Lessor for Lessor's prior written approval, which approval shall not be
unreasonably withheld. Lessor's approval of such proposed change order shall
include an estimate of any additional or decreased Costs resulting from such a
change, as well as an estimate of the delay or time-saving involved in complying
with such change order. Such additional Costs, to the extent that they are in
excess of the Costs to be paid by Lessor to construct the Allowance Work in
accordance with the Allowance Work Plan as set forth above, shall be deemed part
of Lessee's Share of Costs and shall be paid by Lessee to Lessor as set forth
above. The part of the actual time delay in the Commencement Date caused by such
change shall be considered a "Lessee Delay" hereunder and any time by which the
Commencement Date is accelerated as a result of such change shall be set off
against any other Lessee Delay hereunder. Lessor agrees to use reasonable
efforts to pursue such change orders without delay and to reasonably work with
Lessee's contractor so as to avoid any unreasonable Lessee Delay.

          54.3 "LESSEE DELAY".  As used herein, the term "LESSEE DELAY" shall
mean any delay in the completion of the Renovation Work or the Allowance Work
due to any wrongful or negligent act or failure to act of Lessee, its agents or
contractors. The term Lessee Delays shall include, but shall not be limited to
any: (i) delay in the giving of authorizations or approvals by Lessee; (ii)
delay attributable to the wrongful or negligent acts or failures to act of
Lessee, its agents or contractors; (iii) delay attributable to the interference
of Lessee, its agents or contractors with the completion of the Renovation Work
or the Allowance Work; (iv) delay by Lessee in administering and paying when due
the amounts required to be paid by Lessee hereunder; (v) delay or failure by
Lessee to furnish information and approvals in accordance with this Paragraph
54; (vi) delay attributable to Lessee's request for any special, long lead time
materials or installations, (vii) delay attributable to Lessee's changes in any
drawings, plans or specifications, including the Renovation Plan and/or the
Allowance Work Plan or Lessee's request for additional improvements; (viii)
delay attributable to any changes initiated by reason of Lessee's disapproval of
cost proposals or resulting in the preparation of revised cost proposals; (ix)
delay attributable to field changes to construction work; or (x) delay
attributable to the delivery, installation or completion or any Lessee
improvements (as defined below) performed by Lessee, its agents or contractors.
Notwithstanding anything to the contrary contained in the Lease, if the date
that the Lessor delivers possession of the Premises to Lessee is later than the
Commencement Date because of Lessee Delay(s), then (i) each of the sixty (60)
day period and the four (4) month period referred to in Paragraph 3.3 of the
Form Lease shall be extended by the number of days of Lessee Delays, and (ii) on
the first day of the first full month following the date that Lessee obtains
possession of the Premises, Lessee shall pay to Lessor an additional payment of
a sum calculated by multiplying the per diem fixed Base Rent applicable during
the first (1st) month of the Original Term, as set forth in Paragraph 1.5 of the
Lease, times the number or days of Lessee Delays.

          54.4 SEISMIC UPGRADES. Notwithstanding the provisions of Paragraph
2.3(b) of the Form Lease (i) Lessor shall, at its sole cost and expense, cause
the Building to comply with all seismic upgrade ordinances in effect as of the
date of this Lease to the extent that the requirement to comply with such
seismic upgrade ordinances arises as a result of any work done by Lessor to the
roof of the Building to return it to shell condition prior to the Commencement
Date (excluding the installation of any equipment), and (ii) except as provided
in the preceding subparagraph (i), Lessee shall, at its sole cost and expense
cause the Building to comply with all seismic upgrade ordinances in effect as of
the date of this Lease to the extent that the requirement to comply with such
seismic upgrade ordinances arises as a result of the Roof Work, the Clean Room
Roof Equipment, the Clean Room, the Allowance Work, the Lessee Improvements or
any equipment, installations or improvements relating to any of the foregoing.

     55.  EARLY POSSESSION BY LESSEE; CONSTRUCTION OF IMPROVEMENTS BY LESSEE.
Lessee shall construct certain improvements (the "LESSEE IMPROVEMENTS") to
portions of the Building (the "LESSEE IMPROVEMENTS AREA") as more particularly
described in EXHIBIT D attached hereto and incorporated herein by reference. The
Lessee Improvements Area includes a clean room (the "CLEAN ROOM") which is
located in the area identified as the Clean Room on EXHIBIT D. Execution of the
Lease by Lessor and Lessee shall be deemed each party's approval of the matters
set forth on EXHIBIT D. All of the Lessee Improvements shall be at the sole cost
and expense of Lessee and in accordance with the procedures and requirements set
forth below.

                                       3

<PAGE>   18

      (a)   Lessor shall permit Lessee to enter the Lessee Improvements Area
upon the execution of this Lease ("Early Possession Date") so that Lessee may
construct the Lessee Improvements in accordance with this Paragraph 55;
PROVIDED, HOWEVER, that Lessee acknowledges and agrees that the Renovation Work
and the Allowance Work will not be completed upon the execution of this Lease
and may not be completed by September 30, 2001. Lessor shall use its
commercially reasonable efforts to complete the Roof Work on or before April
15, 2001, but in no event shall Lessor be liable to Lessee or any of its
contractors, agents or employees if Lessor is unable to complete the Roof Work
by such date and Lessee hereby specifically releases and holds Lessor and its
partners, contractors, agents and employees harmless from any and all liability
arising from Lessor's inability to complete the Roof Work by April 15, 2001.

      (b)   Within thirty (30) days after the execution of this Lease by Lessor
and Lessee, Lessee shall provide Lessor with a detailed plan of any Lessee
Improvements to be constructed by Lessee ("Preliminary Plan"). Lessor shall
approve or disapprove of the Preliminary Plan by signing copies of the
appropriate instrument and delivering same to Lessee within ten (10) business
days of its receipt by Lessor. If Lessor disapproves any matter, Lessor shall
specify in detail the reasons for disapproval and Lessee shall attempt to
modify the Preliminary Plan to incorporate Lessor's suggested revisions in a
mutually satisfactory manner.

     (c)    Except as specified in the Preliminary Plan or otherwise authorized
by Lessor, the Lessee Improvements shall incorporate Lessor's building standard
materials and specifications ("STANDARDS"). No deviations from the Standards
shall be permitted, provided that Lessor may, in its sole and absolute
discretion, authorize in writing one or more of such deviations if requested by
Lessee, and Lessee shall be solely responsible for the cost of replacing same
with the applicable Standard item(s) upon the expiration or termination of this
Lease. Lessor shall in no event be required to approve any deviations from the
Standards ("NON-STANDARD IMPROVEMENTS") if Lessor determines that such
improvement (i) is of a lesser quality than the corresponding Standard, (ii)
fails to conform to applicable governmental requirements, (iii) requires
building services beyond the level normally provided to other Lessees, (iv)
would delay construction of the Lessee Improvements beyond the Commencement
Date and Lessee declines to accept such delay in writing as a Lessee Delay, or
(v) would have an adverse aesthetic impact from the exterior of the Premises.

      (d)   Upon Lessor's approval of the Preliminary Plan, Lessee's architect
and engineers shall prepare and deliver to Lessor working drawings and
specifications ("WORKING DRAWINGS AND SPECIFICATIONS"). Lessor shall have seven
(7) days from the receipt thereof to approve or disapprove the Working Drawings
and Specifications. Lessor shall not unreasonably withhold or delay its
approval. Should Lessor disapprove the Working Drawings and Specifications, such
disapproval shall be accompanied by a detailed list of revisions. Any revision
requested by Lessor and accepted by Lessee shall be incorporated into a revised
set of Working Drawings and Specifications. In the event that (i) the Working
Drawings and Specifications significantly deviate from the Lessor approved
Preliminary Plans, and (ii) Lessor has not approved the Working Drawings and
Specification within seven (7) days following the date that Lessor has tendered
possession of the Premises to Lessee, then Lessor may, at its option, elect to
terminate this Lease by written notice to Lessee. In the event Lessor elects to
effect such a termination, Lessee shall, with five (5) days following demand by
Lessor, pay to Lessor any costs incurred by Lessor in connection with the
preparation or review of plans, construction estimates, price quotations,
drawings or specifications under this Work Letter and for all costs incurred in
the preparation and execution of this Lease, including any leasing commissions.

      (e)   Lessor shall permit Lessee and its agents to enter the Premises as
provided in Paragraph 55(a) above in order that Lessee may perform any work to
be performed by Lessee hereunder through its own contractors, subject to
Lessor's prior written approval, and in a manner and upon terms and conditions
and at times satisfactory to Lessor's representative. Lessee right to enter the
Premises prior to the Commencement Date is further conditioned upon the
compliance by Lessee's contractors with all requirements imposed by Lessor on
third party contractors, including without limitation the maintenance by Lessee
and its contractors and subcontractors of workers' compensation and public
liability and property damage insurance in amounts and with companies and on
forms satisfactory to Lessor, with certificates of such insurance being
furnished to Lessor prior to proceeding with any such entry. The entry shall be
deemed to be under all of the provisions of the Lease except as to the
convenants to pay rent (subject to the provisions of Paragraph 54 above).
Lessor shall not be liable in any way for any injury, loss or damage which may
occur to any such work being performed by Lessee, the same being solely at
Lessee's risk. In no event shall the failure of Lessee's contractors to
complete any work in the Premises extend the Commencement Date of this Lease.

      (f)   Lessee hereby designates Kevin Nilsen, Trilogy Group, Inc., as it
representative, agent and attorney-in-fact for the purpose of receiving
notices, approving submittals and issuing requests for changes to the Working
Drawings and Specifications, and Lessor shall be entitled to rely upon
authorizations and directives of such person(s) as given directly by Lessee.
Lessee may amend the designation of its construction representative(s) at any
time upon delivery of written notice to Lessor.

      (g)   Lessee, using its contractor or contractors, shall construct
Lessee's Improvements in a good and workmanlike manner, in accordance with the
approved Working Drawings and Specifications Plans. At all times until Lessee's
Improvements shall be completed, Lessor shall have the right to enter upon the
Premises for the Purpose of inspecting the same, provided that such entry and
inspection does not materially interfere with the performance of Lessee's
Improvements.

      (h)   The entire cost and expense of Lessee's Improvements shall be borne
and paid by Lessee, including, without limitation, architectural and
engineering fees, the actual cost of constructing Lessee's
<PAGE>   19
improvements, building permit fees, exaction fees and any other fees and
expenses related to governmental permits, licenses and approvals. Lessee shall
indemnify, protect, defend and hold harmless the Premises, the Project, the
Lessor and its agents, Lessor's partners and lenders, from and against any and
all claims, less of rents and/or damages, liens, judgments, penalties,
attorneys' and consultants' fees, expenses and/or liabilities arising out of,
involving, or in connection with, the construction of Lessee's Improvements,
including without limitation, the costs and expenses associated with Lessee's
Improvements. Before the commencement of Lessee's Improvements, Lessee shall
give to Lessor written notice thereof specifying the nature and location of the
intended work and the expected dates of commencement thereof. Lessee shall not
suffer or permit any mechanics' liens or any other claims or demands arising
from Lessee's Improvements to be enforced against the Premises and the Project
or any part thereof, and shall hold Lessor free and harmless from any liability
for any such liens, claims or demands, together with all costs and expenses in
connection therewith. Notwithstanding anything to the contrary contained herein,
if Lessee shall, in good faith, contest the validity of any lien, claim or
demand, then Lessee shall, at its expense, defend itself and Lessor against the
same and shall pay and satisfy any final adverse judgment that may be rendered
therein before the enforcement thereof against Lessor, the Premises, the Project
or any part thereof, and Lessee shall name Lessor as additional obligee under a
surety bond in the amount of said lien, claim or demand to be furnished by
Lessee in the contest proceedings.

          (i)  Lessor will not check Lessee drawings for building code
compliance. Approval of the Working Drawings and Specifications by Lessor is
not a representation that the drawings are in compliance with the requirements
of governing authorities, and it shall be Lessee's responsibility to meet and
comply with all Federal, state, and local code requirements. Approval of the
Working Drawings and Specifications does not constitute assumption of
responsibility by Lessor or its architect for their accuracy, sufficiency or
efficiency, and Lessee shall be totally responsible for such matters.

          (j)  Lessee shall commence construction of Lessee's Improvements
within thirty (30) days of the date that the Working Drawings and
Specifications have been approved by Lessor and shall carry such construction
to completion with all due diligence. The failure of Lessee to comply with
procedures and schedules set forth in this Paragraph 55, or to commence or
complete the construction of Lessee's Improvements as required, shall have no
effect on the commencement of Basic Rent and other amount payable under the
Lease. Lessee's general contractor, architects and engineers shall be subject
to Lessor's prior written approval, which approval shall not be unreasonably
withheld.

          (k)  Lessee shall deliver to Lessor, at least ten (10) days prior to
the commencement of construction, the following information:

               (1)  The names and addresses of the general, mechanical and
electrical contractors Lessee intends to engage in the construction of Lessee's
Improvements.

               (2)  The estimated date on which Lessee's construction work will
commence, together with the estimated dates of completion of Lessee's
construction and fixtures work, and the estimated date on which Lessee expects
to be ready to open for business in the Premises.

               (3)  Evidence satisfactory to Lessor of compliance by Lessee
with the insurance requirements set forth in this Lease.

               (4)  Prior to the commencement of Lessee's Improvements, Lessee
shall, at its sole cost and expense, obtain and cause its contractor to obtain
and keep in full force throughout the construction of Lessee's Improvements the
insurance required to be maintained under Paragraph 8.2(a) of the Lease and
workers compensation insurance.

               Lessee shall obtain Lessee's contractors performance and/or
labor and material bonds, or any other bond to be furnished by Lessee as may be
reasonably required by Lessor to insure the faithful performance of the work in
accordance with the approved Working Drawings and Specification.

               All contractors engaged by Lessee shall be bondable, licensed
contractors, possessing good labor relations, capable of performing quality
workmanship and working in harmony with Lessor's general contractor and other
contractors on the job (but Lessee shall not be required to use union labor).
All work shall be coordinated with the general project work.

               Construction shall comply in all respects with applicable
Federal, state, county and city statutes, ordinances, regulations, laws and
codes. All required permits, approvals, licenses, authorizations and other
permits in connection with the construction and completion of Lessee's
Improvements including, without limitation, building permits and conditional
use permits, shall be obtained and all fees (both one-time and recurring)
required in connection with the construction and completion of Lessee's
Improvements, without limitation, all roads fees, building and conditional use
permits fees, transportation corridor fees and all other fees, whether similar
or dissimilar, shall be paid for by Lessee.

               Lessee shall apply and pay for all utility service connections.

               Lessee shall cause its contractor to provide warranties for not
less than one year against defects in workmanship, materials and equipment.
Notwithstanding anything to the contrary contained in this Lease, all such
warranties shall be for Lessee's benefit during the term of the Lease.

                                       5
<PAGE>   20
          (l)       Within thirty (30) days of substantial completion of
Lessee's Improvements, Lessee shall deliver to Lessor the following: (i) a
temporary or permanent certificate of occupancy for the Premises (or reasonable
equivalent), (ii) a certificate from Lessee's architect certifying that
Lessee's Improvements have been completed substantially in accordance with the
Working Drawings and Specifications, (iii) a copy of the recorded Notice of
Completion for Lessee's Improvements, (iv) a copy of all building permits,
including inspections and the approval by the issuer of said permit; (v) copies
of unconditional mechanic's lien releases in compliance with California law
from all contractors and subcontractors performing any work related to the
Lessee's Improvements verifying that such parties have been paid in full or the
period of time allowed for the filing of mechanic's liens has expired, and (vi)
one (1) set of reproducible "as-built" or record set" copy of the approved
Working Drawings and Specifications has been delivered to Lessee.

     56.  HAZARDOUS SUBSTANCES.

          56.1 Notwithstanding anything to the contrary contained in Paragraph
6.2(a) of the Form Lease, Lessee shall have the right to use the substances
listed on the attached Exhibit E provided that (a) such use is compliance with
all Applicable Requirements, (b) such substances are maintained in commercially
reasonable amounts, and (c) the presence of such substances do not expose the
Premises or neighboring property to any meaningful risk of contamination or
damage or expose Lessor to any liability therefor.

          56.2 The following is hereby added as Paragraph 6.2(h) of the Form
     Lease:

               6.2(h) PHASE I REPORTS.  Lessor shall provide to Lessee, at
          Lessor's sole cost and expense, a Phase I Environmental Report (the
          "Lessor Environmental Report") prior to the execution of the Lease.
          Lessee's execution of the Lease shall be deemed Lessee's approval of
          the Lessor Environmental Report. No later than ninety (90) days prior
          to the end of the Lease term, Lessee, at its sole cost and expense,
          shall provide to Lessor a current Phase I Environmental Report which
          shall be dated no earlier than one hundred twenty (120) days prior
          to the end of the Lease term.

     57.  REMOVAL OF CLEAN ROOM.  Notwithstanding any contrary provision of the
Lease, by written notice given by Lessor to Lessee no later than ninety (90)
days prior to the end of the Lease term, Lessor may require Lessee to remove
all or part of the Clean Room and Clean Room Roof Equipment prior to the
expiration of the Lease term, including walls, ceiling, lighting and floor
coverings. If so requested by Lessor, Lessee shall remove all Clean Room HVAC
duct work back to the air handlers, all electrical wiring and panels, and all
plumbing which in such event be capped back to an inconspicuous area.
Notwithstanding anything to the contrary contained in Paragraph 7.4(b) of the
Form Lease, except as otherwise provided in this Paragraph 57, Lessee shall not
be required to remove any of the Lessee Improvements.

     58.  REAL PROPERTY TAXES.  The following is hereby added as Paragraph 10.5
of the Form Lease:

               10.5 TEMPORARY LIMITATION LESSEE'S OBLIGATION TO PAY CERTAIN
          REAL PROPERTY TAXES. Notwithstanding the provisions of Paragraph
          10.2(a), if there is a change of ownership of the Premises after the
          execution of this Lease and prior to the third anniversary of the
          Commencement Date, then for the period commencing as of the date of
          such change of ownership to the third anniversary date of the
          Commencement Date, Lessee shall not be obligated to pay any increase
          in the Real Property Taxes resulting from such change of ownership of
          the Premises.

     59.  NONDISCLOSURE OF LEASE TERMS.  Lessee acknowledges and agrees that
the terms of the Lease are confidential and constitute proprietary information
of Lessor. Disclosure of the terms could adversely affect the ability of Lessor
to negotiate other leases and impair Lessor's relationship with other tenants.
Accordingly, Lessee agrees that it, and its partners, members, officers,
directors, employees and attorneys, shall not voluntarily disclose the terms
and conditions of the Lease to any other tenant or apparent prospective tenant
of the Project, either directly or indirectly, without the prior written
consent of Lessor, provided, however, that Lessee may disclosure the terms to
prospective subtenants or assignees under the Lease and, so long as Lessee is a
publicly traded company, to the Securities and Exchange Commission.

     50.  CHANGES REQUESTED BY LENDER.  If, in connection with obtaining
financing for the Premises, Lessor's lender shall request reasonable
modifications in the Lease as a condition to the financing, Lessee will not
unreasonably withhold or delay its consent, provided that the modifications do
not materially increase the obligations of Lessee or materially and adversely
affect the leasehold interest created by the Lease.

     61.  LIMITATION ON LESSOR'S LIABILITY.  The obligations of Lessor do not
constitute the personal obligations of the individual partners, members,
trustees, directors, officers or shareholders of Lessor or its constituent
partners. Should Lessee recover a money judgment against Lessor, the sole
recourse of Lessee shall be against Lessor's interest in the Premises(including
any rents and casualty insurance proceeds relating to the Premises then being
held by Lessor), and no attachment, execution, writ or other process shall be
sought or obtained, and no judicial proceeding shall be initiated by or on
behalf of Lessee against Lessor personally or Lessor's assets except with
respect to Lessor's interest in the Premises (including any rents and casualty
insurance proceeds relating to the Premises then being held by Lessor).
Notwithstanding the foregoing, if the sum of value of Lessor's interest in the
Premises (including any rents and casualty insurance proceeds relating to the
Premises then being held by Lessor) is less than $400,000 (the amount of such
deficiency shall hereinafter be referred to as the

                                       6
<PAGE>   21

"Shortfall"), then provided Lessee shall have first exhausted any recourse
against Lessor's interest in the Premises (including any rents and casualty
insurance proceeds relating to the Premises then being held by Lessor), Lessee
shall also have the right to seek recourse for satisfaction of the Shortfall
against any of Lessor's other assets.

     62.  ASSIGNMENT AND SUBLETTING.

          62.1  Notwithstanding any other provision in the Lease to the
contrary, in connection with each request for Lessor's consent to an assignment
or subletting, Lessee hereby agrees to reimburse Lessor, within five (5) days of
Lessor's written demand therefor, for reasonable costs and expenses, including,
without limitation, attorneys' fees, incurred by Lessor in connection with each
such request.

          62.2  So long as Lessee is an entity whose stock is traded on a
nationally recognized stock exchange, the provisions of Paragraphs 12.1(b) and
12.1(c) shall not be applicable to such Lessee.

          62.3  Subject to the terms of the following sentence, any merger or
consolidation involving Lessee shall be deemed to be an assignment requiring the
consent of Lessor. Notwithstanding anything to the contrary contained in this
Lease, Lessee shall have the right, without requiring Lessor's consent, to
assign the Lease or sublet the Premises to any entity (a "Permitted Transferee")
which controls, is controlled by, or is under common control with, Lessee,
including any entity with which Lessee may merge or consolidate with, provided
that (i) such Permitted Transferee assumes all of Lessee's obligations under the
Lease, (ii) Lessee shall continue to be liable for all of its obligations under
the Lease, as such Lease may from time to time be amended, and (iii) the net
worth of the Permitted Transferee is no less than the Net Worth of Lessee as of
the date of this Lease or the date immediately preceding such assignment or
subletting to the Permitted Transferee, whichever is greater.

     63.  LESSEE'S LIABILITY INSURANCE.  Without in any way limiting the
provisions of Paragraph 8 of the Form Lease, the Commercial General Liability
Policy of Insurance referred to in Paragraph 8.2(a) of the Form Lease shall
include coverage for owned and non-owned automobiles.

     64.  INSURANCE.  The following are hereby added to Paragraph 8 of the Form
Lease:

               8.9   WORKERS' COMPENSATION INSURANCE.  Lessee shall obtain and
          maintain worker's compensation insurance as required by law, together
          with employers' liability insurance.

               8.10  BUILDER'S ALL-RISK INSURANCE.  Lessee shall obtain and
          maintain, with respect to improvements, alterations, and the like
          required or permitted to be made by Lessee under this Lease, builder's
          all-risk insurance, in an amount equal to the replacement cost of the
          work.

               8.11  EVIDENCE OF INSURANCE.  So long as Lessor is the Insuring
          Party, Lessor shall deliver to Lessee evidence of the insurance
          required to be maintained by the Insuring Party. No such insurance to
          be maintained by the Insuring Party shall be cancellable or subject to
          modification except after thirty (30) days prior written notice to
          Lessee. Lessor shall, at least thirty (30) days prior to expiration of
          such policies, furnish Lessee with evidence of renewals or "insurance
          binders" evidencing renewal thereof.

     65.  LESSEE'S PERMITS.  Lessee shall have until February 28, 2001 to
satisfy itself that it will be able to obtain a business permit and all
necessary use and other permits required for its intended use of the Premises
and that the Clean Room meets the criteria for an H6 rating. This contingency
shall be deemed waived by Lessee unless Lessee notifies Lessor in writing on or
before 5:00 pm, P.S.T. on February 28, 2001 that Lessee elects to terminate this
Lease because this contingency is not satisfied. Upon Lessor's receipt of such
notice from Lessee, this Lease shall be deemed terminated.

     66.  AMERICANS WITH DISABILITIES ACT.  Notwithstanding anything to the
contrary contained in the Form Lease, with respect to the Renovation Work, the
Allowance Work and the Lessee Improvements, Lessee shall be responsible for
causing the Premises to comply with the American With Disabilities Act, except
as provided in the following sentence. Lessor shall (i) be responsible for
causing all restrooms at the Premises to comply with the Americans With
Disabilities Act, and (ii) to the extent that the performance of any of the
Renovation Work triggers a requirement to cause any portion of the Premises
(excluding the Building) such as the parking lots, driveways and landscaped
areas to be compliant with the Americans With Disabilities Act, then Lessor
shall be responsible for such work. The cost of causing the restrooms to be
compliant with the Americans With Disabilities Act shall be credited against
Lessor's Share of Costs.

                                       7
<PAGE>   22
     IN WITNESS WHEREOF, the parties have executed the Lease as of the day and
year set forth on the first page of the Form Lease.

                                         "LESSOR"

                                         ABRONSON, COLE & EISELE,
                                         A California general partnership

                                         By:    /s/ CHARLES ABRONSON
                                               -----------------------------
                                         Name: Charles Abronson
                                         Its:  General Partner

                                         "LESSEE"

                                         LUMINENT, INC.,
                                         a Delaware corporation

                                         By:    /s/ WILLIAM R. SPIVEY
                                               -----------------------------
                                         Name: William R. Spivey
                                         Its:  President

                                         By:    /s/ ERIC BLACHNO
                                               -----------------------------
                                         Name: Eric Blachno
                                         Its:  Chief Financial Officer

                                       8

<PAGE>   23

                                   EXHIBIT A

                               LEGAL DESCRIPTION

                                [TO BE ATTACHED]

<PAGE>   24
                                   EXHIBIT B

                                  PAGE 1 OF 2

                           SUMMARY OF RENOVATION WORK

A.   Re-work the exterior appearance of the Building substantially as per the
     plan "A-6" provided by J.D.O. and Associates shown on Page 2 of this
     Exhibit B, and which shall be mutually agreed upon by Lessee and Lessor.

B.   Remove a portion of the general office area located in the southwest area
     of the Building.

C.   Renovate the landscape area.

D.   Install a new roof with a minimum of a ten (10) year life including the
     completion of the required seismic upgrades.

E.   Repair and replace driveway and parking lot asphalt as needed, add concrete
     curb stops, and stripe the parking areas. The driveway entry will be graded
     to a mutually acceptable grade.

F.   Complete any handicap access to the Building as required by law.

G.   Remodel the front lobby area and stairway including new carpeting, tile,
     lighting, and the reception area. (In the event that Lessee wants to
     relocate the stairway, change the reception area, move walls, or add any
     over-standard improvements to the lobby area, such work shall be included
     in the Allowance Work per Paragraph 54.2 of the Lease and not in the
     Renovation Work.)

<PAGE>   25
                                   EXHIBIT B

                                  PAGE 2 OF 2

                           [PLAN A6 -- ILLUSTRATION]

<PAGE>   26
                                   EXHIBIT C

                                  PAGE 1 OF 3

                           SUMMARY OF ALLOWANCE WORK

A.   Install new carpet or tile as per plan.

B.   Paint interior of Building as per plan.

C.   Upgrade existing toilet rooms to comply with ADA requirements as per plan.

D.   Demolish and construct new partitions as per plan.

E.   Remove and replace T-bar ceiling as per plan.

F.   Provide new HVAC system as per plan.

G.   Remove and repair or replace existing interior light fixtures.

H.   Complete all work as per J.D.O. and Associates plan, Schedules A3 and A4,
     shown on Pages 2 and 3 of this Exhibit C.

                               BUILDING STANDARDS

Door frames: Western Integrated prefinished.

Doors: 3'-0" x 6'-8" solid-core paint grade.

Door hardware: Schlage lever-type passage.

Carpet: 24 oz. level loop glue-down - Cambridge/Atlas.

Base: 3-1/2 in. rubber top-set.

Walls: Painted drywall.

Suspended Ceiling: Standard T-bar grid with 2 ft. x 4 ft. lay-in tiles.

Light fixtures: 2 ft. x 4 ft. fluorescent with prismatic lens.

Switches and outlets: White Decor style.

Plumbing fixtures: (Kevin will verify)

Vinyl tile: Asrock 12 in. x 12 in.

<PAGE>   27
                                   EXHIBIT C

                                  PAGE 2 OF 3

                  [GROUND FLOOR PROPOSED PLAN -- SHEDULE A-3]
<PAGE>   28
                                   EXHIBIT C

                                  PAGE 3 OF 3

                  [SECOND FLOOR PROPOSED PLAN -- SCHEDULE A-4]

<PAGE>   29
                                   EXHIBIT D

                        "SUMMARY OF LEASE IMPROVEMENTS"

Luminent Inc. will be responsible for interior improvements of Approximately
23,000 Sq. Ft. of the 950 Lawrence building. All of which is on the 1st floor
and oriented toward the rear of the building (see attached plan).

Included in our "Phase 1" improvement is to immediately renovate and upgrade
the existing clean room of approximately 9,000 Sq. Ft. including the following:

Remove the existing ceiling grid, lights, blanks and terminal diffusers. Replace
with new 2" extruded system, lights, blanks and terminal diffusers.

Remove existing flooring and replace with conductive clean room vinyl flooring.

Walls to remain in place will have an aluminum honeycomb wall panel system
attached directly to the gypsum board. Walls to be relocated will be
constructed of the same aluminum wall panel system using an extruded aluminum
framing system.

All wooden doors in the clean room area will be replaced with aluminum and
glass doors or rated steel doors where required.

Supplement the Air Conditioning/Handling system as required.

Install new delivery systems for RODI water, process gasses, compressed air
etc. as required. The originating points of these systems will be located at the
rear of the building and or under the existing exterior equipment cover.

In the MOCVD (H-6) area the interior walls will be removed, the new
architectural treatment will be as stated above.

Duration of this phase of the work is scheduled to be completed by August 2001.

Our "Phase 2" will be to renovate the remaining space to accommodate additional
manufacturing and or assembly and or general office space.

<PAGE>   30

                        [PHASE 1 / PHASE 2 ILLUSTRATION]

<PAGE>   31
                                   EXHIBIT E

                       LUMINENT HAZARDOUS MATERIALS LIST

This is the list of materials used in the OE operation. The quantities listed
are typical quantities on site at any given time.

<TABLE>
<S>                           <C>     <C>
Liquid Nitrogen               1       Bulk storage tank 1,500 gal. in rear of building
Tertiarybutylphosphine        12 Kg
Tertiarybutylarsine           2 Kg
Trimethylindium               .5 Kg
Trimethygallium               .5 Kg
Diethylzinc                   .3 Kg
Isopropanol                   9 Gal
Methonal                      19 Gal
Acetone                       9 Gal
Mercuric Chloride (1%)        5 Gal
Dimethyl Formamide            2 Gal
Sodium Thiosulfate            10 Liters
Hydrobromic (48%)             200 Ml
Bromine                       200 Ml
Liquid Acid Neutralizer(50%)  28 Gal
Phosphoric Acid (85%)         10 Liters
Sulphuric Acid                2 Liters
Acetic Acid (36%)             3 Liters
Hydrochloric Acid (35%)       5 Liters
Nitric Acid (86%)             4 Gal
Hydrofluoric Acid (48%)       Seldom
Buffer HF                     9 Gal
Hydrogen Peroxide (30%)       5 Liters
Ammonium Hydroxide (28%)      2 Liters
Hydrogen                      cylinder trailer
Oxygen                        2 Cylinders
Carbon Tetrafloride           80 Lbs
5% Silane in N2               20 Lbs
 .01% Silane                   10 Lbs
Ethylene Glycol               5 Gal
Nitrogen                      3 Cylinders
Trchloroethylene              2 Gal
Ammonia                       10 Lbs

</TABLE><PAGE>   1

Exhibit 10.31

                     LEASE AGREEMENT FOR A GAMMA KNIFE UNIT

        THIS AGREEMENT FOR A GAMMA KNIFE UNIT on June 3, 1999, (hereinafter,
referred to as the "Agreement") is entered into between GK Financing, LLC, a
California Limited Liability Company, (hereinafter referred to as "GKF"), and
Sunrise Hospital and Medical Center, LLC, d/b/a as Sunrise Hospital and Medical
Center, a Nevada corporation, (hereinafter referred to as "Medical Center").

                                 R E C I T A L S

        WHEREAS, Medical Center wants to lease a Leksell Stereotactic Gamma Unit
Manufactured by Elekta Instruments, Inc., (hereinafter referred to as the
"Equipment"); and

        WHEREAS, GKF is willing to lease the Equipment which GKF has acquired
from Elekta Instruments, Inc., a Georgia corporation (hereinafter referred to as
"Elekta"), to Medical Center, pursuant to the terms and conditions of this
Agreement.

        NOW, therefore, in consideration of the foregoing premises and the
promises contained herein, the parties hereto hereby agree as follows:

        1. Execution of LGK Agreement by and between Medical Center and Elekta.
Medical Center agrees that simultaneously with the execution of this Agreement
it shall execute that certain LGK Agreement with Elekta, (hereinafter referred
to as the "LGK Agreement"), a copy of which is attached hereto as Exhibit A and
incorporated herein by this reference. Medical Center agrees to fulfill all of
its obligations under the LGK Agreement and acknowledges that GKF is a third
party beneficiary of the LGK Agreement. Medical Center shall fully indemnify and
hold harmless GKF in the event that GKF suffers any loss, damage, claim or
expense (including attorneys' fees) solely as a result of Medical Center's
breach or alleged breach of the LGK Agreement.

        2. Delivery of the Equipment and Site preparation. GKF shall arrange to
have the Equipment delivered to Medical Center, at _____________(the "Site") in
coordination with Elekta. GKF shall exert its best faith efforts to expedite the
delivery of the Equipment in accordance with the terms and conditions of the
Purchase Agreement for the Equipment by and between GKF and Elekta.
Notwithstanding the preceding sentence, it is understood and agreed that GKF has
made no representations and warranties to Medical Center concerning actual
delivery dates or schedules for the Equipment at the Site.

        Medical Center shall provide a safe, convenient and properly prepared
Site, at its own expense, in accordance with all of the Equipment manufacturer's
(Elekta's) guidelines, specifications, technical instruments and Site Planning
Criteria (which Site Planning Criteria are attached hereto as

                                     - 1 -
<PAGE>   2

Exhibit B and incorporated herein by this reference), which criteria shall
include Elekta's estimated delivery schedule when and as received by GKF, on
Medical Center controlled property (The "Site") for the proper performance of
Gamma Knife procedures. Site location shall be acceptable to GKF. Medical Center
shall prepare at its sole cost and expense the requisite site plans and
specifications and shall submit them to Elekta and GKF for approval. Medical
Center shall obtain, in a timely manner, a User License from the Nuclear
Regulatory Commission and/or appropriate state agency authorizing it to take
possession of the Cobalt Supply and shall obtain such other licenses, permits,
approvals, consents and authorizations, which may be required by local
governmental or other regulatory agencies for the Site, its preparation, the
charging of the Equipment with its Cobalt Supply, the conduct of Acceptance
tests, and the use of the Equipment all as more fully set forth in Article 2.1
of the LGK Agreement.

        3. Commencement of Term. The Term (hereinafter defined) of this
Agreement shall commence upon the performance of the first clinical Gamma Knife
procedure at the Site (the "Commencement Date"). Medical Center shall become
liable to GKF for the payments referred to in Paragraph 6 herein below upon the
Commencement Date.

        4. Costs of Site Preparation; Costs of Installation. Medical Center's
obligations shall include preparation of plans and specifications for the
construction and preparation of the Site in such form as will result in the
Site, when constructed in accordance with such plans and specifications, being
in full compliance with Elekta's Site Planning Criteria. Medical Center shall at
its own expense and risk, prepare, construct and make ready the Site as
necessary, for the installation of the Equipment, including, but not limited to,
providing any temporary and/or permanent shielding for the charging of the
equipment and its use, selecting and preparing a proper foundation for the
Equipment and for such shielding and walls, as well as proper alignment of the
Site and wiring. Medical Center shall be financially responsible for the
positioning of the Equipment on its foundation at the Site.

        Medical Center shall also at its own expense select, purchase and
install all radiation monitoring equipment and devices, safety circuits and
radiation warning signs needed for the Equipment at the Site, according to all
applicable federal, state and local laws, regulations, recommendations or
custom.

        Upon completion of the Site, Medical Center shall warrant that the Site
will be safe and suitable for its use of the Equipment. Medical Center shall
fully indemnify and hold harmless GKF from any and all loss, liability, damage,
expense or claim (including attorneys' fees) which GKF may suffer and incur and
which relate to the Site and the Equipment's positioning thereon.

        Medical Center shall be liable to GKF for any damage to the Equipment
caused by (a) defects in construction of the Site or defects in the positioning
of the Equipment at the Site; (b) defects arising out of materials or parts
provided, modified or designed by Medical Center with respect to the Site; or
(c) negligent or intentional acts of omission or commission by Medical Center or
any of its officers, agents, physicians, and employees in connection with the
Site preparation or operation of the Equipment at the Site.

                                     - 2 -
<PAGE>   3

        Medical Center warrants that it shall utilize its best efforts to
fulfill on an expeditious basis its obligations under this Paragraph 4. Medical
Center further warrants that it shall on a regular basis keep GKF informed of
Medical Center's progress in fulfilling its obligations pursuant to this
Paragraph 4. Should Medical Center not have all site preparations completed by
the delivery date specified by a separate agreement plus a sixty (60) day grace
period such that the site is acceptable for positioning and installation of the
equipment, Medical Center shall reimburse GKF at an interest rate of Bank of
America's prime rate plus 2% on GKF's equipment cost until the site is prepared
to allow positioning and installation of the equipment.

        5. Term of the Equipment. GKF agrees to provide to Medical Center the
Equipment pursuant to the terms of this Agreement, for a term of ten (10) years
from the Commencement Date as described in Paragraph 3 herein above (the
"Term"), unless terminated earlier as provided herein.

        6. Per Procedure Payments. Medical Center shall pay to GKF a per
procedure payment as specified in Exhibit B for the use of the Equipment. A
procedure shall be defined as a single patient treatment session that may
include one or more isocenters during that session. Medical Center shall be
billed on the fifteenth (15th) and the last day of each month for the actual
number of procedures performed during the first and second half of the month,
respectively. Medical Center shall pay the procedures invoiced within thirty
(30) days after being invoiced. Interest shall begin to accrue at the rate of
1-1/2% per month on all invoices remaining unpaid after 45 days.

        (a) If the "Reimbursement Rate" in effect on any "Reset Date" is *
greater or less than the "Base Rate," Medical Center shall inform GKF in writing
within thirty (30) days after the applicable Reset Date and shall provide GKF
with the information used in calculating such Reimbursement Rate. Within thirty
(30) days after GKF's receipt of such notice, the parties shall meet to
renegotiate in good faith the per procedure payments payable by Medical Center
under this Agreement.

        (b) In determining the renegotiated per procedure payment any reduction
or increase thereto may or may not be in proportion to the reduction or increase
to the Reimbursement Rate. Furthermore, any reduction to the per procedure
payment will be calculated to provide Medical Center with Operating Income
estimated at a break even level as a result of such reduction; provided that no
per procedure payment shall be imposed if it would result in negative Operating
Income to GKF in accordance with subsection (c) below. Medical Center shall
permit GKF to inspect Medical Center's books and records pertaining to the
Equipment in order to verify such Operating Income.

        (c) If the per procedure payment proposed by Medical Center would result
in negative "Operating Income" (as defined below) to GKF, then, GKF shall have
no recourse to arbitration as provided in this Section 6. In such event, this
Agreement shall remain unchanged and in full force and effect. GKF shall permit
Medical Center to inspect GKF's books and records pertaining to the Equipment in
order to verify such Operating Income.

        (d) If the per procedure payment proposed by Medical Center would not
result in GKF incurring negative Operating Income, but the parties are unable to
agree in good faith on a renegotiated per procedure payment, then, GKF and
Medical Center shall jointly appoint an arbitrator who shall have not less than
ten (10) years experience in medical equipment financing, in

                                     - 3 -
<PAGE>   4

good standing with the American Arbitration Association or other comparable
organization, and who shall have no prior relationship, attorney/client or
otherwise, with any of the parties. Such arbitrator shall review the information
presented by both parties and shall render a decision within thirty (30) days of
his of her appointment. In rendering a decision, the arbitrator shall be bound
by the guidelines set forth in this Section, including, without limitation, the
parameters for renegotiated per procedure payments as set forth in subsection
(a), (b), (c), above and this subsection (d). The arbitrator's decision shall be
binding upon the parties and non-appealable. The fees and expenses of the
arbitrator shall be shared equally between the parties. The foregoing
arbitration procedure shall apply only to disagreements arising from this
subsection (d) and not to any other disputes or disagreements arising from this
Agreement.

        (e) If the parties mutually agree on a renegotiated per procedure
payment or if a renegotiated per procedure payment is determined by the
arbitrator as set forth above, then such renegotiated per procedure payment
shall become effective on the date that is six (6) months following the
applicable Reset Date, and Exhibit B hereto shall be deemed automatically
amended as of such date.

        (f) DEFINITION OF TERMS: As used herein, (i) the "Reimbursement Rate"
shall mean the average technical component reimbursement received by Medical
Center from all payor sources in effect as of any Reset Date; (ii) the "Base
Rate" shall mean the average technical component reimbursement received by
Medical Center from all payor sources in effect on the date which is one year
after the Commencement Date; (iii) the "Reset Date" shall mean the date which is
two (2) years after the Commencement Date and each anniversary date thereafter;
and (iv) "Operating Income" with respect to either party shall mean the revenues
generated by such party from the Equipment less such party's corresponding
direct operating expenses related to the Equipment, including, without
limitation, applicable interest and depreciation expenses on the Equipment and
Site improvements, but excluding physician professional fees and direct or
indirect administrative overhead expenses.

        As a means to permit Medical Center to perform charity care for persons
who require Gamma Knife procedures, who are not covered by Medicare, Medicaid or
private insurance programs (whether indemnity, preferred provider, health
maintenance organization, etc.) and who do not have the means to pay for such
procedures based upon state adopted standards of indigency, GKF shall waive the
per procedure payment described in this paragraph 6 for * Gamma Knife procedure
for each * Gamma Knife procedures performed under this Agreement by Medical
Center for which a per procedure payment is made to GKF in the manner describe
herein. Medical Center shall be solely responsible (and GKF shall not in any
manner be or become responsible) to determine (a) whether any person described
herein requires a Gamma Knife procedure, (b) who shall receive a Gamma Knife
procedure hereunder if more than one (1) person described herein requires a
Gamma Knife procedure, and (c) whether any person meets the standards of
indigency. Medical Center shall provide reasonable written documentation
evidencing satisfaction of the conditions set forth herein to GKF at or prior to
the time of payment in order for GKF to waive the per procedure payment set
forth in this paragraph 6 for each Gamma Knife procedure regardless of the
ability of the patient to pay for such services or the amount of reimbursement
or payment received by Medical Center.

                                     - 4 -
<PAGE>   5

        Prior to entering into or renewing any third party payor contracts for
the provisions of Gamma Knife procedures, Medical Center shall consult with GKF
regarding the terms and provisions thereof.

        7. Use of the Equipment. The Equipment may be used by Medical Center
only at the location stated above and shall not be removed therefrom. Medical
Center shall not assign or sublease the Equipment or its rights hereunder
without the prior written consent of GKF; which consent shall not be
unreasonably withheld. No permitted assignment or sublease shall relieve Medical
Center of any of its obligations hereunder. Medical Center shall not use nor
permit the Equipment to be used in any manner nor for any purpose for which, in
the opinion of Elekta or GKF, the Equipment is not designed or reasonably
suitable. Medical Center shall not permit any liens, whether voluntary or
involuntary, to attach to the Equipment, without the prior written consent of
GKF. Medical Center shall have no interest in the Equipment other than the
rights acquired as a lessee hereunder and the Equipment shall remain the
property of GKF regardless of the manner in which it may be installed or
attached at the Site. Medical Center shall, at GKF's request, affix to the
Equipment tags, decals, or plates furnished by GKF, indicating GKF's ownership
of the Equipment.

        8. Additional Covenants of Medical Center. In addition to the other
covenants made by Medical Center, Medical Center shall at its own cost and
expense:

        (a) Provide properly trained professional, technical and support
personnel and supplies required for the proper performance of medical procedures
utilizing the Equipment.

        (b) Assume all medical and financial responsibility for the overseers'
monitoring of all patients' medical condition and treatment.

        (c) Fully comply with all of its obligations under the LGK Agreement.

        (d) Indemnify GKF as herein provided: (i) Medical Center hereby agrees
to fully indemnify and/or reimburse (including attorneys' fees) GKF on a prompt
basis for any and all damage to the Equipment (including any violations by
Medical Center, its agents, officers, physicians, employees, successors and
assigns of the Service Agreement described in Paragraph 15 hereof) to the extent
such damages are caused by the negligent or wrongful acts or omissions of
Medical Center, its agents, officers, physicians and employees. In the event the
Equipment is destroyed or rendered unusable, this indemnification shall extend
up to (but not exceed) the full replacement value of the Equipment at the time
of its destruction less salvage value, if any. (ii) Medical Center hereby
further agrees to indemnify and hold GKF, its agents, officers, employees,
successors and assigns, harmless from and against any and all claims,
liabilities, obligations, losses, damages, injuries, penalties, actions, costs
and expenses (including attorneys' fees) for all events and/or occurrences
described in Article 7.3 of the LGK Agreement to the same extent that Medical
Center agrees to indemnify Elekta thereunder. Medical Center further agrees to
fully indemnify and hold harmless GKF for any loss, damage, claim, or expense
(including attorneys' fees) GKF may suffer or incur as a result of Medical
Center's breach or breach alleged in litigation with regard to the LGK
Agreement.

                                     - 5 -
<PAGE>   6

        (e) Provide reasonable and customary marketing materials (i.e.
brochures, announcements, etc.) and marketing support from an administrative and
physician (i.e. seminars by neurosurgeons and radiation therapists to referring
physicians, etc.) commitment for this clinical service.

        9. Additional Covenants, Representations and Warranties of GKF. In
addition to the other covenants, representations and warranties, made by GKF in
this Agreement:

        (a) GKF represents and warrants that GKF has full power and authority to
enter into this Agreement, and that this Agreement does not and will not violate
any agreement, contract or instrument binding upon GKF.

        (b) GKF represents and warrants to Medical Center that, upon delivery of
the Equipment to Medical Center, GKF shall use its best faith efforts to require
that Elekta meets its contractual obligations to GKF and in putting the
Equipment, as soon as possible, into good, safe and serviceable condition and
fit for its intended use in accordance with the manufacturer's specifications,
guidelines and field modification instructions.

        (c) GKF represents and warrants that throughout the term of this
Agreement, Medical Center shall enjoy the use of the Equipment, free of the
rights of any other persons except for those rights reserved by GKF or granted
to Elekta under the LGK Agreement or under Elekta's Purchase Agreement with GKF.

        (d) During the entire term of this agreement and subsequent extension
thereof, GKF shall maintain in full force and effect: (i) the Service Agreement
referenced in Paragraph 15 hereof; and (ii) any other service or other
agreements required to fulfill GKF's obligations to Medical Center pursuant to
this Paragraph 9(d). GKF represents and warrants that during the entire term of
this agreement and any subsequent extensions thereof, that it will fully pursue
any and all remedies it may have against Elekta under the Service Agreement to
insure that the Equipment will be in conformity with Elekta's warranties so that
it is free from defects in design, materials, and workmanship which result in
noncompliance with the specifications and/or Elekta's warranties to GKF. In no
event, however, shall the warranty obligations of GKF to Medical Center with
respect to the Equipment be greater or more extensive than Elekta's warranty
obligations to GKF with respect to the Equipment.

        10. Ownership/Title. It is expressly understood that Medical Center
shall acquire no right, title or interest in or to the Equipment, other than the
right to the possession and use of the same in accordance with the terms of this
Agreement.

        GKF may at its sole discretion finance the Equipment. Financing may be
in the form of an installment loan or a capitalized lease or other commercially
available debt instrument. Should GKF finance the Equipment through an
installment loan, GKF shall be required to provide the Equipment as collateral
against the loan. Should GKF finance the Equipment through a capitalized lease
title shall vest with the lessor until GKF exercises its buy-out option. In
addition, should GKF finance the Equipment, said agreement may be used as
collateral against the loan.

                                     - 6 -
<PAGE>   7

        11. Cost of Use of the Equipment. Except as is otherwise provided
herein, Medical Center shall bear the entire cost of using the Equipment during
the Term of this Agreement. This shall include, but not be limited to, providing
trained professionals, technical and support personnel and supplies to properly
operate the Equipment. Medical Center shall be fully responsible and liable for
all acts and/or omissions of such professional, technical and support personnel.

        12. Taxes. GKF shall pay any personal property taxes levied against the
Equipment and any other taxes or governmental fees or assessments, however
denoted, whether of the federal government, any state government or any local
government, levied or based on this Agreement or the use of the Equipment except
for those taxes, if any, pertaining to the gross income or gross receipts of
Medical Center.

        13. Maintenance and Inspections. GKF agrees to exercise due and proper
care in the maintenance of the Equipment and to keep the Equipment in a good
state of repair, reasonable wear and tear excepted. Medical Center shall be
liable to GKF for all damage to the Equipment caused by the misuse, negligence,
improper use or other intentional or negligent acts or omissions of Medical
Center's employees, officers, agents, and physicians.

        GKF (and Elekta) shall have the right of access to the Equipment for the
purpose of inspecting same at all reasonable times and upon reasonable notice
and with a minimum of interference to Medical Center's operations. In the event
the Equipment is improperly used by Medical Center or its employees, agents,
officers, and physicians, GKF may service or repair the same as needed and such
expense shall be paid by Medical Center, unless the repair is covered by the
Service Agreement described in Paragraph 15 hereof.

        Any work so performed by or in the service or maintenance of the
Equipment as a result of Medical Center's failure or neglect to do so shall not
deprive GKF of any of its rights, remedies or actions against Medical Center for
damages caused by such failure or neglect.

        14. Equipment Modifications/Additions/Upgrades. The parties agree that
the necessity and financial responsibility for modifications/additions/upgrades
to the Equipment, including the reloading of the Cobalt-60 source, shall be
discussed and mutually decided by GKF and Medical Center.

        15. Service Agreement. GKF warrants that it shall simultaneously with
the execution of this Agreement enter into a Service Agreement with Elekta.

        16. Termination. If after the initial forty-eight (48) month period of
service and during each subsequent twelve (12) month period of service, Medical
Center does not provide GKF with a reasonable economic justification to continue
providing Gamma Knife services hereunder, then and in that event, on the date
which is forty-eight (48) months after the Commencement Date and on each
anniversary date thereafter during the term of this Agreement, GKF shall have
the option of terminating this Agreement upon the giving of not less than nine
(9) months prior written notice to

                                     - 7 -
<PAGE>   8

Medical Center. Should GKF elect to terminate this Agreement, GKF shall bear the
costs to remove the Equipment from the Medical Center, including the Cobalt-60
sources.

        If after the initial sixty (60) month period of service and during each
subsequent twelve (12) month period of service, the Gamma Knife program does not
provide Medical Center with a reasonable economic justification to continue
providing Gamma Knife services, hereunder, then and in that event, on the date
which is sixty (60) months after the Commencement Date and on each anniversary
date thereafter during the term of this Agreement, Medical Center shall have the
option of terminating this Agreement upon the giving of not less than nine (9)
months' prior written notice to GKF. Should Medical Center elect to terminate
this Agreement as described in this Section 16, Medical Center shall directly
pay vendor(s) and other third parties selected by GKF for all costs up to but
not to exceed * to remove the Equipment from the Medical Center, including the
unloading of the Cobalt-60 sources, the costs to transport the Equipment to the
new site selected by GKF and the costs to reload the Cobalt-60 sources onto the
Equipment at the new site.

        Reasonable economic justification shall not be deemed to exist if,
during any preceding twelve (12) month period, either party's revenues generated
from the Equipment are lower than the corresponding direct operating expenses
related to the Equipment, exclusive of physician professional fees. Each party
agrees that direct and/or indirect administrative overhead expenses will not be
deemed operating expenses for purposes of determining the existence of
reasonable economic justification. Both parties agree they will utilize their
best efforts to maximize revenues from the Gamma Knife program.

        All of the terms and provisions of this Section 16 (including, without
limitation, the restrictive covenants set forth below) shall survive the
termination of this Agreement.

        (a) Restrictive Covenant Applicable to GKF. During the term of this
Agreement and for a period of two (2) years following the date of any
termination by GKF pursuant to this Section 16 (the "GKF Covenant Period"), GKF
covenants that it shall not either directly as, or indirectly by or through an
entity in which it may be a sole proprietor, partner, member, shareholder,
director, officer, employee, manager, independent contractor, joint venturer or
in any other manner, lease any Equipment to any party other than Medical Center
within Clark County, Nevada; provided that in the event such termination becomes
effective on or after the date which is eight (8) years after the Commencement
Date, the GKF Covenant Period shall be for the number of months remaining from
the date of such termination to the date which is ten (10) years after the
Commencement Date; provided further, that in no event shall the GKF Covenant
Period exceed two (2) years in the aggregate.

        (b) Restrictive Covenant Applicable to Medical Center. During the term
of this Agreement and for a period of two (2) years following the date of any
termination by Medical Center pursuant to this Section 16 (the "Medical Center
Covenant Period"), Medical Center covenants that it shall not either directly
as, or indirectly by or through an entity in which it may be a sole proprietor,
partner, member, shareholder, director, officer, employee, manager, independent
contractor, joint venturer or in any other manner own, purchase, lease, operate
or otherwise acquire any Stereotactic Radiosurgery unit or other similar
equipment performing similar functions as that of

                                     - 8 -
<PAGE>   9

the Equipment for use or operation within Clark County, Nevada; provided that in
the event such termination becomes effective on or after the date which is eight
(8) years after the Commencement Date, the Medical Center Covenant Period shall
be for the number of months remaining from the date of such termination to the
date which is ten (10) years after the Commencement Date; provided further, that
in no event shall the Medical Center Covenant Period exceed two (2) years in the
aggregate.

        (c) Coverage of Covenants. If the duration or territorial limitations
contained in this Section 16 is deemed overly broad or unenforceable by a court
of competent jurisdiction, the covenants shall nevertheless remain in full force
and effect subject to such reduced duration or territorial limitation as such
court shall deem reasonable under the circumstances.

        (d) Injunctive Relief. GKF and Sunrise acknowledge that the covenants
and restrictions set forth in this Section 16, (i) are necessary, fundamental
and required for the protection of GKF and Medical Center, and (ii) related to
matters which are of a unique value to GKF and Medical Center. A breach of any
such covenants and restrictions would result in irreparable harm and damage to
GKF and Medical Center which would not be adequately compensated by monetary
damages. Accordingly, in addition to all other remedies that may be available at
law or in equity, GKF and Medical Center shall be entitled to the immediate
remedy of a temporary restraining order or preliminary injunction and such other
form of temporary or permanent injunctive or equitable relief as may be issued
by a court of competent jurisdiction to restrain or enjoin a breach of all or
any portion of these covenants and restrictions or to specifically enforce the
provisions hereof.

        17. Options to Extend Agreement.

        (a) Medical Center shall have the option at the end of the ten (10) year
initial Term to:

        (i) Renew this agreement for an additional five (5) year Term.

        (ii) Terminate this Agreement. If Medical Center terminates this
Agreement at the end of the initial term, GKF shall remove the Gamma Knife
within an agreed upon period of time after the expiration of the ten (10) year
initial Term.

        Medical Center shall exercise one (1) of the two (2) options referred to
above, by mailing an irrevocable written notice thereof to GKF at Four
Embarcadero Center, Suite 3620, San Francisco, California, 94111, by registered
mail, postmarked on or before the end of the ninth (9th) year of the ten (10)
year initial Term of this Agreement. Any such notice shall be sufficient if it
states in substance that Medical Center elects to exercise its option and states
which of the two (2) options referred to above Medical Center is exercising.

        18. No Warranties by GKF. Medical Center warrants that as of the
Commencement Date, it shall have (a) thoroughly inspected the Equipment; (b)
determined for itself that all items of the Equipment are of a size, design,
capacity and manufacture selected by it; and (c) satisfied itself that to the
best of its knowledge the Equipment is suitable for Medical Center's stated
purposes. GKF SUPPLIES THE EQUIPMENT "AS IS" AND NOT BEING THE MANUFACTURER OF
THE

                                     - 9 -
<PAGE>   10

EQUIPMENT OR THE MANUFACTURER'S AGENT, MAKES NO WARRANTY OR REPRESENTATION,
EITHER EXPRESSED OR IMPLIED, AS TO THE EQUIPMENT'S MERCHANTABILITY, FITNESS FOR
A PARTICULAR PURPOSE, DESIGN, CONDITION, DURABILITY, CAPACITY, MATERIAL OR
WORKMANSHIP OR AS TO PATENT INFRINGEMENT OR THE LIKE, it being agreed that all
such risks as between GKF and Medical Center, shall be borne by Medical Center.
Medical Center agrees to look solely to the manufacturer (Elekta) or to
suppliers of the Equipment (and its software) for any and all warranty claims.
Any and all warranties made by Elekta will be in its good faith best efforts
enforced by GKF on behalf of Medical Center during the ten (10) year initial
Term hereof. Medical Center agrees that GKF shall not be responsible for the
delivery, installation, or operation of the Equipment or for any delay or
inadequacy of any or all of the foregoing. GKF shall not be responsible for any
direct or indirect consequential loss or damage resulting from the installation,
operation or use of the Equipment or otherwise. Medical Center expressly waives
any right to hold GKF liable hereunder for any claims, demands and liabilities
arising out of or in connection with the design, manufacture, possession or
operation of the Equipment.

        19. Events of Default and Remedies. The occurrence of any one of the
following shall constitute an Event of Default hereunder:

        (a) Medical Center fails to pay any installment of semi-monthly
procedure payments when due when such default continues for a period of thirty
(30) days after notice thereof from GKF or its assignee is given to Medical
Center.

        (b) Medical Center attempts to remove, sell, transfer, encumber, sublet
or part with possession of the Equipment or any items thereof, except as
expressly permitted herein;

        (c) Medical Center shall fail to observe or perform any of the other
obligations required to be observed or performed by Medical Center hereunder and
such failure shall continue uncured for twenty (20) days after written notice
thereof to Medical Center by GKF;

        (d) Medical Center ceases doing business as a going concern, makes an
assignment for the benefit of creditors, admits in writing its inability to pay
its debts as they become due, files a voluntary petition in bankruptcy, is
adjudicated a bankrupt or an insolvent, files a petition seeking for itself any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar arrangement under any present or future statute, law or regulation or
files an answer admitting the material allegations of a petition filed against
it in any such proceeding, consents to or acquiesces in the appointment of a
trustee, receiver, or liquidator of it or of all or any substantial part of its
assets or properties, or it or its shareholders shall take any action looking to
its dissolution or liquidation

        (e) Within sixty (60) days after the commencement of any proceedings
against Medical Center seeking reorganization, arrangement, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation, such proceedings shall not have been dismissed, or if within
thirty (30) days after the appointment without Medical Center's consent or

                                     - 10 -
<PAGE>   11

acquiescence of any trustee, receiver or liquidator of it or of all or any
substantial part of its assets and properties, such appointment shall not be
vacated.

        Upon the occurrence of an Event of Default, GKF may at its option do any
or all of the following: (i) by notice to Medical Center, terminate this
Agreement as to the Equipment in default, wherever situated, and for such
purposes, enter upon the Site without liability for so doing or GKF may cause
Medical Center and Medical Center hereby agrees to return the Equipment to GKF
at Medical Center's sole cost and expense; (ii) recover from, as liquidated
damages for the loss of the bargain and not as a penalty, an amount equal to the
present value of the unpaid estimated future lease payments by Medical Center to
GKF through the end of the Agreement term discounted at the rate of nine percent
(9%), which payment shall become immediately due and payable. Unpaid estimated
future lease payments shall be based on the prior 12 months lease payments with
an annual five (5%) percent increase; (iii) sell, dispose of, hold, use or lease
the Equipment in default, as GKF in its sole discretion may determine (and GKF
shall not be obligated to give preference to the sale, lease or other
disposition of the Equipment over the sale, lease or other disposition of
similar Equipment owned or leased by GKF). In any event, Medical Center shall,
without further demand, pay to GKF an amount equal to all sums due and payable
for all periods up to and including the date on which GKF had declared this
Agreement to be in default.

        In the event, that Medical Center shall have paid to GKF the liquidated
damages referred to in (iii) above, GKF hereby agrees to pay to Medical Center
promptly after receipt thereof, all rentals or proceeds received from the
reletting or sale of the Equipment during the balance of the ten (10) year
initial Term (after deduction of all expenses incurred by GKF; said amount never
to exceed the amount of the liquidated damages paid by Medical Center). Medical
Center agrees that GKF shall have no obligation to sell the Equipment. Medical
Center shall in any event remain fully liable for reasonable damages as provided
by law for all costs and expenses incurred by GKF on account of such default,
including but not limited to, all court costs and reasonable attorneys' fees.
Medical Center hereby agrees that, in any event, it shall be liable for any
deficiency after any sale, lease or other disposition of the Equipment by GKF.
The rights afforded GKF hereunder shall not be deemed to be exclusive, but shall
be in addition to any other rights or remedies provided by law.

        20. Insurance.

        (a) During the ten (10) year initial Term of this Agreement (and any
successive terms) GKF shall, at its own cost and expense, keep in effect an all
risk and hazard insurance policy covering the Equipment. The all risk and hazard
insurance policy shall be for an amount not less than the replacement cost of
the Equipment. During the ten (10) year initial Term of this Agreement, Medical
Center shall, at its own cost and expense keep in effect public liability and
professional liability insurance policies concerning the operation of the
Equipment by Medical Center. Said policies shall be in the amounts of not less
than $1,000,000 per occurrence and $5,000,000 in aggregate per year. Medical
Center and GKF, their successors and assigns, shall be named as additional
insureds and/or loss payees on the insurance policies maintained hereunder by
the other party. Evidence of such insurance coverages shall be furnished by both
parties to the other party upon written request, by no later than the
Commencement Date.

                                     - 11 -
<PAGE>   12

        (b) If the Equipment is rendered unusable as a result of any physical
damage to, or destruction of, the Equipment, Medical Center shall give to GKF
immediate notice. GKF shall determine, within thirty (30) days after the date of
occurrence of such damage or destruction, whether the Equipment can be repaired.
In the event GKF determines that the Equipment cannot be repaired, GKF at its
sole cost and expense shall promptly replace the Equipment. This Agreement shall
continue in full force and effect as though such damage or destruction had not
occurred. In the event GKF determines that the Equipment can be repaired, GKF
shall cause the Equipment to be promptly repaired.

        21. Notices. Any notices required under this Agreement shall be sent in
writing and shall be deemed to have been duly given if delivered by hand or
mailed by certified or registered mail to the following addresses:

         To GKF:             Craig K. Tagawa, C.E.O.
                             Four Embarcadero Center, Suite 3620
                             San Francisco, CA 94111

         To Medical Center:  Jerald F. Mitchell, President/CEO
                             3186 South Maryland Parkway
                             Las Vegas, NV 89109

Or to such other addresses as either party may specify for the reception of
notice from time to time in writing to the other party. Any such notice shall be
effective only when actually received by the party to whom addressed.

        22. Integration/Supersedure. This Agreement contains the full and entire
Agreement between the parties hereto, and no oral or written understanding is of
any force or effect whatsoever unless expressly contained in writing executed
subsequent to the date of this Agreement.

        23. Waivers. To the extent that GKF fails or chooses not to pursue any
of its remedies under this Agreement or pursuant to applicable law, such shall
not prejudice GKF's rights to pursue any of those remedies at any future time
and shall not constitute a waiver of GKF's rights.

        24. Assignments. This Agreement is binding upon and shall inure to the
benefit of the permitted successors or assigns of the respective parties hereto,
except that neither party may assign its rights or obligations under this
Agreement without the express written consent of the other (which consent shall
not be unreasonably withheld).

        25. Amendments. This Agreement shall not be amended or altered in any
manner unless such amendment or alteration is in a writing signed by both
parties.

                                     - 12 -
<PAGE>   13

        26. Record-Keeping Requirements. To the extent required by the
regulations promulgated by the Health Care Financing Administration pursuant to
Section 952 of the Omnibus Reconciliation Act of 1980, GKF shall:

        (a) Until the expiration of four (4) years following the furnishing of
services pursuant to this Agreement, GKF agrees to make available upon written
request of the Secretary of Health and Human Services or the U.S. Comptroller
General or any of their duly authorized representatives, this Agreement, any
books, documents and records necessary to verify the nature and extent of costs
incurred by Medical Center by reason of the activities of GKF under this
Agreement; and

        (b) If GKF elects to delegate any of its duties under this Agreement
(which have a cost or value of Ten Thousand Dollars ($10,000.00) or more over a
twelve (12) month period) to a related organization, GKF may do so only through
a subcontractor which is consented to by Medical Center, it being understood
that, inasmuch as Medical Center is entering into this Agreement in reliance on
GKF's reputation and expertise, that Medical Center shall be the sole judge of
the reputation and expertise of the proposed delegee, and only through a
subcontractor which provides that, until the expiration of four (4) years
following the furnishing of services under such subcontract, the related
organization shall make available, on request of the Secretary of Health and
Human Services or the U.S. Comptroller General or any of their authorized
representatives, the subcontract, and books, documents and records of the nature
and extent of costs incurred by Medical Center by reason of activities of such
related organization under such subcontract. No delegation by GKF of its duties
hereunder shall relieve GKF from liability hereunder.

        27. Miscellaneous Provisions.

        (a) The invalidity or unenforceability of any portion or provision of
this Agreement shall not effect the validity or enforceability of any other
portion, nor shall either party's implied or express consent to the breach or
waiver of any provision of this Agreement constitute a waiver of such provision
as to any subsequent breach.

        (b) In the event of any claim or controversy arising hereunder, the
prevailing party in such claim or controversy shall be entitled to a reasonable
attorneys' fee in addition to whatever other relief said party would be
otherwise entitled.

        (c) Force Majeure. Failure to perform by either party will be excused in
the event of any delay or inability to perform its duties under this Agreement
directly or indirectly caused by conditions beyond its reasonable control
including without limitation, fires, floods, earthquakes, snow, ice, disasters,
Acts of God, accidents, riots, wars, operation of law, strikes, governmental
action or regulations, shortages of labor, fuel, power, materials, manufacturer
delays or transportation problems.

                                     - 13 -
<PAGE>   14

        IN WITNESS WHEREOF, the parties have signed this Agreement on the day
and year first above written.

Medical Center                              GK Financing, LLC

By: /s/ Jerald F. Mitchell                  By: /s/ Craig K. Tagawa
   --------------------------------------      ---------------------------------
        Jerald F. Mitchell                     Craig K. Tagawa
        President/Chief Executive Officer      Chief Executive Officer

                                     - 14 -
<PAGE>   15

Exhibit B

                                       GKF

                  COLUMBIA SUNRISE HOSPITAL AND MEDICAL CENTER
                             PER PROCEDURE SCHEDULE

<TABLE>
<CAPTION>
         TERM                              PER PROCEDURE PAYMENT
         ----                              ---------------------
<S>                                        <C>
         Years 1 through 5                                     *
         Years 6 through 10                                    *
</TABLE>

                                     - 15 -

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