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                                                                 EXHIBIT 10.1(b)

               [LOGO] 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
November 28, 2001 is made by and between NORTHPARK INDUSTRIAL ("LESSOR") and
INTERNATIONAL REMOTE IMAGING SYSTEMS, 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 9172 Eton Avenue, located in the County of Los Angeles, 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) a concrete tilt-up industrial building consisting of approximately
20,338 square feet of area, aka Lot #7, Tract No. 33398, City of Los Angeles, in
an MR-2 zone ("PREMISES"). (See also Paragraph 2)

        1.3     TERM: Five (5) years and -0- months ("ORIGINAL TERM") commencing
January 1, 2002 ("COMMENCEMENT DATE") and ending December 31, 2006 ("EXPIRATION
DATE"). (See also Paragraph 3).

        1.4     EARLY POSSESSION: ______________________________________________
("EARLY POSSESSION DATE"). (See also Paragraphs 3.2 and 3.3)

        1.5     BASE RENT: $11,999.00 per month ("BASE RENT"), payable on the
First (1st) day  of each month commencing _____________________________________.
(See also Paragraph 4)

[X] If this box is checked, there are provisions in this Lease for the Base Rent
    to be adjusted. -- See Paragraph 50

        1.6     BASE RENT PAID UPON EXECUTION: $11,999.00 as Base Rent for the
period January 1, 2002 through January 31, 2002.

        1.7     SECURITY DEPOSIT: $13,505.00 ("SECURITY DEPOSIT"). (See also
Paragraph 5)

        1.8     AGREED USE: research, development and manufacturing of medical
and electronic equipment and related activity. (See also Paragraph 6)

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

        1.11    GUARANTOR. The obligations of the Lessee under this Lease are to
be guaranteed by _______________________________________________________________
_________________________________________ ("GUARANTOR"). (See also Paragraph 37)

        1.12    ADDENDA AND EXHIBITS. Attached hereto is an Addendum or Addenda
consisting of Paragraphs 50 through 63, 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     CONDITION. Lessor shall deliver the Premises to Lessee broom
clean and free of debris on the Commencement Date or the Early Possession Date,
whichever first occurs ("START DATE"), and, so long as the required service
contracts described in Paragraph 7.1(b) below are obtained by Lessee within
thirty (30) days following the Start Date, warrants that the existing
electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air
conditioning systems ("HVAC"), loading doors, if any, and all other such
elements in the Premises, other than those constructed by Lessee, shall be in
good operating condition on said date and that the structural elements of the
roof, bearing walls and foundation of any buildings on the Premises (the
"BUILDING") shall be free of material defects. If a non-compliance with said
warranty exists as of the Start Date, Lessor shall, as Lessor's sole obligation
with respect to such matter, except as otherwise provided in this Lease,
promptly after receipt of written notice from Lessee setting forth with
specificity the nature and extent of such non-compliance, rectify same at
Lessor's expense. If, after the Start Date, Lessee does not give Lessor written
notice of any non-compliance with this warranty within: (i) one year as to the
surface of the roof and the structural portions of the roof, foundations and
bearing walls, (ii) six (6) months as to the HVAC systems, (iii) thirty (30)
days as to the remaining systems and other elements of the Building, correction
of such non-compliance shall be the obligation of Lessee at Lessee's sole cost
and expense.

        2.3     COMPLIANCE. Lessor warrants that the improvements on the
Premises comply with all applicable laws, covenants or restrictions of record,
building codes, regulations and ordinances ("APPLICABLE REQUIREMENTS") in effect
on the Start Date. Said warranty does not apply to the use to which Lessee will
put the Premises or to any Alterations or Utility Installations (as defined in
Paragraph 7.3(a)) made or to be made by Lessee. NOTE: Lessee is responsible for
determining whether or not the zoning is appropriate for Lessee's intended use,
and acknowledges that past uses of the Premises may no longer be allowed. If the
Premises do not comply with said warranty, Lessor shall, except as otherwise
provided, promptly after receipt of written notice from Lessee setting forth
with specificity the nature and extent of such non-compliance, rectify the same
at Lessor's expense. If Lessee does not give Lessor written notice of a
non-compliance with this warranty within six (6) months following the Start
Date, correction of that non-compliance shall be the obligation of Lessee at
Lessee's sole cost and expense. If the Applicable Requirements are hereafter
changed (as opposed to being in existence at the Start Date, which is addressed
in Paragraph 6.2(e) below) so as to require during the term of this Lease the
construction of 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 ("CAPITAL EXPENDITURE"), Lessor and Lessee shall allocate the
cost of such work as follows:

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

               (b) If such Capital Expenditure is not the result of the specific
and unique use of the Premises by Lessee (such as governmentally mandated
seismic modifications), then Lessor and Lessee shall allocate the 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.

               (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. 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 other than as set forth in this Lease. 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.

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

3.      TERM.

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

        3.2     EARLY POSSESSION. If Lessee totally or partially occupies the
Premises prior to the Commencement Date, the obligation to pay Base Rent shall
be abated for the period of such early possession. All other terms of this Lease
(including but not limited to the obligations to pay Real Property Taxes and
insurance premiums and to maintain the Premises) shall, however, be in effect
during such period. Any such early possession shall not affect the Expiration
Date.

        3.3     DELAY IN POSSESSION. Lessor agrees to use its best commercially
reasonable efforts to deliver possession of the Premises to Lessee by the
Commencement Date. If, despite said efforts, Lessor is unable to deliver
possession as agreed, Lessor shall not be subject to any liability therefor, nor
shall such failure affect the validity of this Lease. Lessee shall not, however,
be obligated to pay Rent or perform its other obligations until 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.

        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 Start Date, the Start Date shall
occur but Lessor may elect to withhold possession until such conditions are
satisfied.

4.      RENT.

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

        4.2     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
general accounts. Within fourteen (14) days after the expiration or termination
of this Lease, if Lessor elects to apply the Security Deposit only to unpaid
Rent, and otherwise within 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 or applied by Lessor. No part of the Security Deposit
shall be considered to be held in trust, to bear interest or to be prepayment
for any monies to be paid by Lessee under this Lease.

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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 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.

               (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.

        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.

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

        7.1     LESSEE'S OBLIGATIONS.
                (a) IN GENERAL. Subject to the provisions of Paragraph 2.2
(Condition), 2.3 (Compliance), 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 and
exterior), foundations, 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 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, when necessary, the exterior
repainting of the Building.

               (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 Paragraphs
2.2 (Condition), 2.3 (Compliance), 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, 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 systems, 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 $50,000 in
the aggregate or $10,000 in any one year.

               (b) CONSENT. Any Alterations or Utility Installations that Lessee
shall desire to make and which require the consent of the Lessor shall be
presented to Lessor in written form with detailed plans. Consent shall be deemed
conditioned upon Lessee's: (i) acquiring all applicable governmental permits,
(ii) furnishing Lessor with copies of both the permits and the plans and
specifications prior to commencement of the work, and (iii) compliance with all
conditions of said permits and other Applicable Requirements in a prompt and
expeditious manner. Any Alterations or Utility Installations shall be performed
in a workmanlike manner with good and sufficient materials. Lessee shall
promptly upon completion furnish Lessor with as-built plans and specifications.
For work which costs an amount equal to the greater of one month's Base Rent, or
$10,000, 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 earlier than ninety (90) and not later than thirty (30) days prior to the
end of the term of this Lease, Lessor may require that any or all Lessee Owned
Alterations or Utility Installations be removed by the expiration or termination
of this Lease. Lessor may require the removal at any time of all or any part of
any Lessee Owned Alterations or Utility Installations made without the required
consent.

               (c) SURRENDER/RESTORATION. Lessee shall surrender the Premises by
the Expiration Date or any earlier termination date, with all of the
improvements, parts and surfaces thereof 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.

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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 carried 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.

                (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 contain the "AMENDMENT OF THE POLLUTION EXCLUSION ENDORSEMENT"
for damage caused by heat, smoke or fumes from a hostile fire. The Policy shall
not contain any intra-insured exclusions as between insured persons or
organizations, but shall include coverage for liability assumed under this Lease
as an "insured contract" for the performance of Lessee's indemnity obligations
under this Lease. The limits of said insurance shall not, however, limit the
liability of Lessee nor relieve Lessee of any obligation hereunder. All
insurance carried by Lessee shall be primary to and not contributory with any
similar insurance carried by Lessor, whose insurance shall be considered excess
insurance only.

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

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

                (a) BUILDING AND IMPROVEMENTS. The Insuring Party shall obtain
and keep in force a policy or policies in the name of Lessor, with loss payable
to Lessor, any ground lessor, 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 of subrogation, and
inflation guard protection causing an increase in the annual property insurance
coverage amount by a factor of not less than the adjusted U.S. Department of
Labor Consumer Price Index for All Urban Consumers for the city nearest to where
the Premises are located. If such insurance coverage has a deductible clause,
the deductible amount shall not exceed $1,000 per occurrence, 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 of 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 deductible of not to exceed $1,000 per occurrence. The
proceeds from any such insurance shall be used by Lessee for the replacement of
personal property, Trade Fixtures and Lessee Owned Alterations and Utility
Installations. Lessee shall provide Lessor with written evidence that such
insurance is in force.

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

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

        8.5     INSURANCE POLICIES. Insurance required herein shall be by
companies duly licensed or admitted to transact business in the state where the
Premises are located, and maintaining during the policy term a "General
Policyholders Rating" of at least B+, V, as set forth in the most current issue
of "Best's Insurance Guide", or such other rating as may be required by a
Lender. Lessee shall not do or permit to be done anything which invalidates the
required insurance policies. Lessee shall, prior to the Start Date, deliver to
Lessor certified copies of policies of such insurance or certificates evidencing
the existence and amounts of the required insurance. No such policy shall be
cancelable or subject to modification except after 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.

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.

                                     PAGE 5
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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
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 obligations of Lessee hereunder shall be performed by
Lessee, and Lessor shall have no liability for any such damage, destruction,
remediation, repair or restoration except as provided herein.

                (b) REMEDIES. If Lessor shall be obligated to repair or restore
the Premises and does not commence, in a substantial and meaningful way, such
repair or restoration within 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

                                     PAGE 6
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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.

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

        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. See Paragraph 62.

                (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) alter 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. 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

                                     PAGE 7
<PAGE>

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 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 by 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
the time of termination; (ii) the worth at the time of award of the amount by
which the unpaid rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss that the Lessee proves
could have been reasonably avoided; (iii) the worth at the time of award of the
amount by which the unpaid rent for the balance of the term after the time of
award exceeds the amount of such rental loss that the Lessee proves could be
reasonably avoided; and (iv) any other amount necessary to compensate Lessor for
all the detriment proximately caused by the Lessee's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including but not limited to the cost of recovering
possession of the Premises, expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable attorneys' fees, and that
portion of any leasing commission paid by Lessor in connection with this Lease
applicable to the unexpired term of this Lease. The worth at the time of award
of the amount referred to in provision (iii) of the immediately preceding
sentence shall be computed by discounting such amount at the discount rate of
the Federal Reserve Bank of the District within which the Premises are located
at the time of award plus one percent (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 unlawful detainer statute shall also constitute the notice
required by Paragraph 13.1. In such case, the applicable grace period required
by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and
the failure of Lessee to cure the Default within the greater of the two such
grace periods shall constitute both an unlawful detainer and a Breach of this
Lease entitling Lessor to the remedies provided for in this Lease and/or by said
statute.

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

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

                                     PAGE 8
<PAGE>

Lessee's occupancy of the Premises.

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

        13.4    LATE CHARGES. Lessee hereby acknowledges that late payment by
Lessee of Rent will cause Lessor to incur costs not contemplated by this Lease,
the exact amount of which will be extremely difficult to ascertain. Such costs
include, but are not limited to, processing and accounting charges, and late
charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent
shall not be received by Lessor within 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 charge is payable hereunder, whether or not 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) day period and thereafter diligently
pursued to completion.

                (b) PERFORMANCE BY LESSEE ON BEHALF OF LESSOR. In the event that
neither Lessor nor Lender cures said breach within 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 the 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 any 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 any compensation for Lessee's
relocation expenses, loss of business goodwill and/or Trade Fixtures, without
regard to whether or not this Lease is terminated pursuant to the provisions of
this Paragraph. All Alterations and Utility Installations made to the Premises
by Lessee, for purposes of Condemnation only, shall be considered the property
of the Lessee and Lessee shall be entitled to any and all compensation which is
payable therefor. In the event that this Lease is not terminated by reason of
the Condemnation, Lessor shall repair any damage to the Premises caused by such
Condemnation.

15.     BROKERS' FEE.

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,
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.

                                     PAGE 9
<PAGE>
                (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 United 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, which such statements and/or conditions shall be of no
force or effect whatsoever unless specifically agreed to in writing by Lessor at
or before the time of deposit of such payment.

25.     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 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 Lease shall not be construed as if prepared by one of the
Parties, but rather according to its fair meaning as a whole, as if both parties
had prepared it.

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

30.     SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.

        30.1    SUBORDINATION. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "SECURITY DEVICE"), now or
hereafter placed upon the Premises, to any and all advances made on the security
thereof, and to all renewals, modifications, and extensions thereof. Lessee
agrees that the holders of any such Security Devices (in this Lease together
referred to as "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,

                                    PAGE 10

<PAGE>

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 writings as may be reasonably required to separately document any
subordination, attornment and/or Non-Disturbance Agreement provided for herein.

31.     ATTORNEYS' FEES. If any Party or Broker brings an action or proceeding
involving the Premises 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 be
deemed a waiver of any then existing Default or Breach, except as may be
otherwise specifically stated in writing by Lessor at the time of such consent.
The failure to specify herein any particular condition to Lessor's consent shall
not preclude the imposition by Lessor at the time of consent of such further or
other conditions as are then reasonable with reference to the particular matter
for which consent is being given. In the event that either Party disagrees with
any determination made by the other hereunder and reasonably requests the
reasons for such determination, the determining party shall furnish its reasons
in writing and in reasonable detail within 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 full possession of the Premises and, if requested by
Lessor, with Lessee certifying that Lessee has no intention of thereafter
assigning or subletting.

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

        39.4    EFFECT OF DEFAULT ON OPTIONS.

                (a) Lessee shall have no right to exercise an Option: (i) during
the period commencing with the giving of any notice of Default and continuing
until said Default is cured, (ii) during the period of time any Rent is unpaid
(without regard to whether notice thereof is given Lessee), (iii) during the
time Lessee is in Breach of this Lease, or (iv) in the event that Lessee has
been given 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 provisions of Paragraph 39.4(a).

                (c) An Option shall terminate and be of no further force or
effect, notwithstanding Lessee's due and timely exercise of the Option, if,
after such exercise and prior to the commencement of the extended term, (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 of 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

                                    PAGE 11

<PAGE>

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 [ ] IS  [X] 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 PRESENCE 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.

Executed at: BEVERLY HILLS, CALIFORNIA   Executed at: CHATSWORTH, CALIFORNIA
            --------------------------               ---------------------------

on:          December 27, 2001           on:          December   , 2001
   -----------------------------------      ------------------------------------

By LESSOR:                               By LESSEE:   INTERNATIONAL REMOTE
             NORTHPARK INDUSTRIAL                     IMAGING SYSTEMS, INC.
--------------------------------------   ---------------------------------------

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

By:          /s/ Gary Siegel             By:          /s/ J.Y. Caloz
   -----------------------------------      ------------------------------------

Name Printed:    GARY SIEGEL             Name Printed:    J.Y. CALOZ
             -------------------------                --------------------------

Title:           PARTNER                 Title:           CFO
      --------------------------------         ---------------------------------

By:          /s/ Thomas L. Horner        By:          /s/ Achille M. Bigliardi
   -----------------------------------      ------------------------------------

Name Printed:    THOMAS L. HORNER        Name Printed:    ACHILLE M. BIGLIARDI
             -------------------------                --------------------------

       West America Construction Corp.
Title: Vice-President                    Title: President, Iris Diagnostics
      --------------------------------         ---------------------------------

Address:     8929 Wilshire Blvd., #400   Address:     9162 Eton Avenue
        ------------------------------           -------------------------------
             Beverly Hills, CA  90211                 Chatsworth, CA  91311
        ------------------------------           -------------------------------

Telephone: (310) 652-8288                Telephone: (818) 709-1244
          ----------------------------             -----------------------------

Facsimile: (310) 652-4972                Facsimile: (818)
          ----------------------------             -----------------------------

Federal ID No.   95-3146812              Federal ID No.
              ------------------------                 -------------------------

NOTE: These forms are often modified to meet 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
<PAGE>
                        STANDARD ADDENDUM TO LEASE - NET

         Lease dated: November 28, 2001
                      ----------------------------------------------------------
         Lessor:      NORTHPARK INDUSTRIAL
                ----------------------------------------------------------------
         Lessee:      INTERNATIONAL REMOTE IMAGING SYSTEMS. INC.
                ----------------------------------------------------------------

        IN THE EVENT OF ANY CONFLICT BETWEEN THE PRINTED PROVISIONS OF THE LEASE
        AND THIS ADDENDUM, THE PROVISIONS OF THIS ADDENDUM SHALL CONTROL

50)     BASE RENT (PARAGRAPH 1.5, CONTINUED): In addition to the base rent that
        Lessee is obligated to pay under Paragraphs 1.5 and 4, Lessee will also
        be obligated to pay Lessor the sum of $1,275.00 per month as Lessor's
        monthly estimate for Lessee's share of Real Property Taxes, insurance,
        landscaping and irrigation system maintenance. The current average
        monthly costs for Real Property Taxes, insurance, landscaping and
        irrigation for the subject Premises are $925.00, $150.00, and $200.00,
        respectively. Every year of this Lease, during the month of July, and
        during the month immediately following the termination of this Lease,
        Lessor will prepare an accounting of all actual Real Property Taxes,
        insurance, landscaping and irrigation system maintenance for the just
        concluded twelve-month period. Any differences between the actual
        expenses and Lessor's estimates shall be either immediately refunded to
        Lessee or immediately due by the Lessee, whichever the case may be.

        Lessee or its authorized agent shall have the right, upon five (5) days
        prior written notice to Lessor, to inspect, at Lessor's main accounting
        offices, Lessor's unaudited books and records regarding these expenses.

        The monthly base rent shall be increased annually and paid in accordance
        with the following rent schedule:

        The rent payable for the period of January 1, 2002 through December 31,
        2002 shall be $11,999.00 per month.

        The rent payable for the period of January 1, 2003 through December 31,
        2003 shall be $12,359.00 per month.

        The rent payable for the period of January 1, 2004 through December 31,
        2004 shall be $12,730.00 per month.

        The rent payable for the period of January 1, 2005 through December 31,
        2005 shall be $13,112.00 per month.

        The rent payable for the period of January 1, 2006 through December 31,
        2006 shall be $13,505.00 per month.

51)     VEHICLE PARKING (PARAGRAPH 2.6, CONTINUED): Lessee shall be entitled to
        forty (40) parking spaces designated by Lessor as parking spaces for the
        leased Premises.

        Lessee or Lessee's employees, visitors, customers, or guests shall not
        park in driveways, alleyways, easement ways or other areas not
        specifically marked as parking spaces.

        No automotive repair, car washing, waxing and detailing, or covered
        parking is permitted at any time.

        Prohibited vehicles are not permitted; examples of prohibited vehicles
        shall include, but shall not be limited to, trailers, campers,
        recreational vehicles, boats, "dead automobiles" or automobiles parked
        longer than 48 hours.

        If Lessee permits or allows parking other than in designated parking
        spaces or permits or allows any of the aforedescribed prohibited
        vehicles to park on any portion of the parking areas or anywhere else
        within the Premises, then Lessor shall have the right, without notice,
        in addition to other rights and remedies it may have, to remove or tow
        away the vehicle involved and charge the cost to Lessee, which cost
        shall be immediately payable by Lessee upon demand by Lessor.

        In addition to, and not in limitation of any of Lessor's rights under
        this Lease, Lessor shall have the right, at any time and from time to
        time, to relocate, modify, adjust, redesign and otherwise change the
        common areas available for parking within the Premises, provided the
        total number of parking spaces is not reduced, notwithstanding that some
        of Lessee's parking space(s) may be used as location for its trash
        containers, and establish, modify, amend and enforce rules, regulations
        and restrictions with respect thereto, including, but not limited to,
        time limits, for example, such as temporary loading zones or areas,
        redesigning parking spaces from diagonal or vertical, or vice versa, and
        changing the traffic patterns within the Premises.

52)     SECURITY DEPOSIT (PARAGRAPH 5, CONTINUED) The security deposit shall be
        used and may be refunded only in accordance with Paragraph 5 and in
        connection with this paragraph. Lessee may not use any portion of the
        security deposit to satisfy any of Lessee's rental obligations hereunder
        including the last month's rental payment. Any failure of Lessee to pay
        any of Lessee's rental obligations when due constitutes a material
        breach of this Lease for which Lessor may re-enter and take possession
        of the Premises in accordance with law, notwithstanding the fact that
        Lessor may have possession of a security deposit.

53)     USE (PARAGRAPH 6.1, CONTINUED) Lessee understands that there are no
        restrictions contained in this Lease as to the type of business which
        may be conducted by any other present or future tenant of any building
        located near or adjacent to the building in which the Premises are
        located, and that Lessor may lease space to other tenants whose business
        is the same or competitive with that of Lessee.

        Lessor                              Lessee

        /s/ GS                              /s/ [ILLEGIBLE]
        ---------------                     ---------------
        Initial Here                        Initial Here

<PAGE>

                        STANDARD ADDENDUM TO LEASE - NET
                                   PAGE 2 OF 4

        NO OUTSIDE STORAGE. Under no circumstances shall Lessee be permitted to
        use the exterior areas of the Premises, including driveways, alleyways
        or easement ways or anywhere else outside the building, for the
        temporary or permanent storage of any property, including but not
        limited to inventory, parts, work in process, pallets, or the
        installation of any type of equipment, including but not limited to air
        compressors or any other equipment. In the event that any unauthorized
        storage or installation of equipment or property shall occur, then
        Lessor shall have the right, without notice, in addition to such other
        rights and remedies that it may have, to remove the property and/or
        equipment at Lessee's expense, which shall be paid by Lessee upon demand
        by Lessor. No unauthorized seating areas, lunch areas or compressor
        sheds are permitted anywhere in the driveways, alleyways or easement
        ways, alleys or anywhere else outside the building.

        INGRESS AND EGRESS; LOADING AND UNLOADING. It is understood and agreed
        that the exterior portion of the premises and property are to be used by
        Lessee solely for ingress and egress and for the parking of vehicles as
        authorized by Lessor. The exterior portions of the premises at no time
        will be used by Lessee for loading or unloading, except at the loading
        dock. It is the parties' intention that Lessee will neither cause nor
        permit anything which will detract from keeping the exterior of the
        building and premises in a clean, orderly, and uncluttered condition
        fully in keeping with the highest standards and reflecting an image of
        the highest quality and standards.

        EXTERIOR WATER USE LIMITATIONS. Except for irrigation purposes, Lessee
        shall not use any water either from exterior sources or from sources
        within the building, on or about the exterior area of the Premises for
        any purpose whatsoever without Lessor's prior written consent. Any of
        Lessee's procedures, processes or other work which require the use of
        water shall be done solely within the confines of the building, and no
        water shall be allowed to drain onto the exterior area of the Premises.

54)     MAINTENANCE; REPAIRS, UTILITY INSTALLATIONS; TRADE FIXTURES AND
        ALTERATIONS (PARAGRAPH 7, CONTINUED) Notwithstanding anything to the
        contrary in Paragraph 7.1(b), in order to maintain a cohesive
        landscaping appearance throughout the business park, Lessor shall
        maintain all landscaping and irrigation system contracts, and Lessee
        shall reimburse Lessor for those costs pursuant to Paragraph 50.

        ROOF. Lessee shall inform Lessor of any work anticipated on the roof, in
        conjunction with its operation and obtain permission to do same prior to
        commencement of same. Lessee shall not make any alterations,
        improvements or additions to the Premises, without Lessor's prior
        written consent. Should Lessee make any alterations, etc. without the
        prior written consent of Lessor, Lessor may, at any time during the term
        of this Lease or upon its termination, require that Lessee, at its
        expense, remove any or all of the same and that Lessee pay to Lessor the
        amount of any damage to the roof caused by Lessee, or Lessor may remove
        same at Lessee's expense.

        UNAUTHORIZED ALTERATIONS. Lessee shall obtain Lessor's prior written
        approval for the installation of any interior or exterior window
        coverings, including but not limited to drapes, blinds, sunshades,
        sunscreens, holiday or other decorations or any type of film window
        treatment. No exterior painting is permitted. In the event that any such
        unauthorized installations or alterations occur, then Lessor shall have
        the right, without notice, in addition to such other rights and remedies
        that it may have, to remove all of the same at Lessee's expense, which
        shall be paid by Lessee upon demand by Lessor.

        SECURITY. Security bars or other security measures installed by Lessee
        require prior written consent of Lessor. Such installations, except for
        electronic security systems, shall remain as part of the Premises upon
        termination of the Lease unless Lessor requests removal of such
        installations and restoration of the Premises in accordance with
        Paragraph 7.4.

55)     OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION (PARAGRAPH 7.4,
        CONTINUED) Lessor's right under Paragraph 7.4(b) to require that any or
        all Lessee Owned Alterations or Utility Installations be removed by
        Lessee by the expiration or earlier termination of this Lease applies to
        all tenant improvements, including but not limited to improvements which
        were made to the Premises by Lessor at the request of Lessee and
        improvements the cost of which was amortized over the Lease term or a
        portion thereof in the form of additional rent. If Lessee desires to
        install wallpaper in the Premises, Lessor may require the removal and
        restoration of the walls upon Lessee's vacancy of the Premises, which
        shall be done at Lessee's sole cost and expense.

56)     REPLACEMENT COST (PARAGRAPH 8.3(a), CONTINUED) With reference to the
        property insurance required by Paragraph 8.3(a), Lessor and Lessee agree
        that the full replacement cost of the Premises will be not less than
        $1,016,900.00 as of the Commencement Date of the term of this Lease.

57)     ASSIGNMENT AND SUBLETTING (PARAGRAPH 12, CONTINUED) Subject to the
        provisions of Paragraph 12, Lessee may sublease the Premises upon
        Lessor's written consent. Within five (5) days of Lessee entering into
        a sublease of the Premises, Lessee shall deliver to Lessor a copy of any
        written sublease.

        Except as provided in Paragraph 12.2(e) in the case of Lessor's consent
        to an assignment or subletting and notwithstanding anything to the
        contrary contained in Paragraph 12, in the event that Lessee requests
        Lessor's signature or consent to any action or on any document,
        including but not limited to loan or security documents relating to loan
        transactions in which Lessee is taking part, Lessor may require Lessee
        to pay to Lessor an initial minimum fee of $350.00 to cover Lessor's
        legal and other fees and costs in reviewing and responding to each such
        request, and Lessee agrees to pay additional legal fees as are actually
        incurred by Lessor in reviewing and responding thereto.

        Lessor                                 Lessee

        /s/ [ILLEGIBLE]                        /s/ [ILLEGIBLE]
        ---------------                        ---------------
        Initial Here                           Initial Here

<PAGE>
                        STANDARD ADDENDUM TO LEASE - NET
                                   PAGE 3 OF 4

58)     HOLDOVER (PARAGRAPH 26, CONTINUED) If Lessee remains in possession of
        the Premises after the expiration of the Lease term, without Lessor's
        written consent, then Lessee's occupancy of the Premises shall be deemed
        to be a holdover tenancy upon all of the provisions of this Lease
        pertaining to obligations of Lessee, but not including any options or
        rights of first refusal, if any, granted to Lessee under this Lease. If
        Lessee's hold-over tenancy exceeds ten (10) days, Lessee may terminate
        the tenancy only by giving sixty (60) days written notice of termination
        to Lessor, whereas Lessor may terminate the tenancy or change the terms
        of the Lease upon giving to Lessee sixty (60) days written notice
        thereof. The termination date shall be the last day of the month in
        which the notice requirement has been met.

        Notwithstanding anything to the contrary contained in Paragraphs 1.3,
        1.5, 3.1, 4 or elsewhere in this Lease, Lessee's obligation to pay rent
        shall continue until (i) Lessee has removed all of its property from the
        Premises, (ii) Lessee has made any repairs required under Paragraph
        7.4(c), (iii) Lessee has removed all Alterations, improvements,
        additions and Utility Installations which Lessor requires Lessee to
        remove pursuant to Paragraph 7.4(b), and (iv) Lessee has notified Lessor
        in writing that all of the items (i) through (iii) of this paragraph, to
        the extent applicable, have been accomplished.

59)     DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR NORTHPARK
        INDUSTRIAL CENTER. Lessee acknowledges receipt of a copy of the
        Declaration of Covenants, Conditions and Restrictions for Northpark
        Industrial Center recorded with the County of Los Angeles as document
        numbers 79-760182 and 85-1324915. Lessee has reviewed and approved said
        documents and agrees to be bound by all the terms and conditions
        therein. Lessee further agrees that said Covenants, Conditions and
        Restrictions shall be binding upon Lessee and any sublessee, successor
        and assigns which they may have.

60)     TENANT IMPROVEMENTS (LESSOR'S COST): Lessor shall, at Lessor's cost, cut
        one (1) opening in the south wall of the office area (and shall cut one
        opening in the northern wall of the office area in the premises located
        at 9162 Eton Avenue) to connect the premises located at 9172 Eton Avenue
        with the premises located at 9162 Eton Avenue . Said openings shall be a
        3'0 x 6'8" cased opening. Upon Lessee's vacancy of either (or both)
        buildings, Lessee shall, at Lessee's cost, close said openings, which
        shall be done so as to create a similar condition to that prior to the
        cut-outs. Lessor shall credit Lessee with $750.00 for ceiling tile
        replacement and filling the interior atriums with concrete.

        Lessee may, at Lessee's cost, build a shed for the air compressor
        outside at the north end of the building on an existing concrete pad and
        build an enclosure at the sound end landing for a de-ionized water
        system.

61)     PARAGRAPH 12.1 B (CONTINUED): For purposes of this Lease, a "change in
        the control of Lessee" means the happening of any of the following
        events:

        (i)     When any "person" as such term is used in Sections 13(d) and
                14(d) of the Securities Exchange Act of 1934 (the "Exchange
                Act") becomes the "beneficial owner" (as defined in Rule 13d-3
                under the Exchange Act), directly or indirectly, of securities
                of the Lessee fifty percent (50%) or more of the combined voting
                power of the Lessee's then outstanding securities entitled to
                vote generally in the election of directors; or

        (ii)    The stockholders of the Lessee approve a merger, consolidation
                or sale of substantially all the assets of the Lessee with or to
                any other corporation, other than a merger, consolidation or
                sale of substantially all the assets which would result in the
                voting securities of the Lessee outstanding immediately prior
                thereto continuing to represent (either by remaining outstanding
                or by being converted into voting securities of the surviving
                entity) more than fifty percent (50%) of the total voting power
                represented by the voting securities of the Lessee or such
                surviving entity outstanding immediately after such merger,
                consolidation or sale of substantially all the assets of the
                Lessee; or

        (iii)   A change in the composition of the Board of Directors of the
                Lessee, as a result of which fewer than a majority of the
                directors are Incumbent Directors. "Incumbent Directors" shall
                mean directors who either (a) are directors of the Lessee as of
                the date of the commencement of this Lease or any applicable
                extension or renewal, or (b) are elected, or nominated for
                election to the Board of Directors of the Lessee with the
                affirmative votes of at least a majority of the Incumbent
                Directors at the time of such election or nomination (but shall
                not include an individual whose election or nomination is in
                connection with an actual or threatened proxy contest relation
                to the election of directors to the Lessee)

62)     PARAGRAPH 12.1 C (CONTINUED): The involvement of Lessee or its assets in
        any merger, bulk sale or leveraged buy-out, whether in a single
        transaction or series of related transactions and whether or not a
        formal assignment or hypothecation of this Lease or Lessee's assets
        occurs, which results or will result in a reduction of the Net Worth of
        Lessee by an amount greater than 25% of such Net Worth as it was
        represented at the time of the execution of this Lease or at the time of
        the most recent assignment to which Lessor has consented, or as it
        exists immediately prior to said transaction or transactions
        constituting such reduction, whichever was or is greater, shall be
        considered an assignment of this Lease requiring Lessor's consent which
        shall be unreasonably withheld. "Net Worth of Lessee" shall mean the net
        worth of Lessee (excluding any guarantors) established under generally
        accepted accounting principles as currently in effect on the date
        hereof.

        Lessor                                 Lessee

        /s/ [ILLEGIBLE]                        /s/ [ILLEGIBLE]
        ---------------                        ---------------
        Initial Here                           Initial Here

<PAGE>
                        STANDARD ADDENDUM TO LEASE - NET
                                   PAGE 4 OF 4

63)     OPTION TO EXTEND

        A. Lessor hereby grants to Lessee the option to extend the term of this
        Lease for a Five (5) year period commencing when the prior term expires
        upon each and all of the following terms and conditions:

               (i) Lessee gives to Lessor and Lessor receives written notice of
        the exercise of the option to extend this Lease for said additional term
        no earlier than nine months and no later than six months prior to the
        time that the option period would commence if the option were exercised,
        time being of the essence. If said notification of the exercise of said
        option is not so given and received, this option shall automatically
        expire;

               (ii) The provisions of paragraph 39, including the provision
        relating to default of Lessee set forth in paragraph 39.4 of this Lease
        are conditions of this Option;

               (iii) All of the terms and conditions of this Lease except where
        specifically modified by this option shall apply;

               (iv) On January 1, 2007 , the monthly rent payable under
        paragraph 1.5 and 4 of the attached Lease shall be adjusted by the
        increase, if any, from the date this Lease commenced in the C.P.I. As
        used herein, the term "C.P.I. shall mean the Consumer Price Index of the
        Bureau of Labor Statistics of the U.S. Department of Labor for All Urban
        Consumers, Los Angeles-Anaheim-Riverside, California (1982/84=100), "All
        Items", herein referred to as "C.P.I."

                      a. The monthly rent payable in accordance with paragraph
        A(iv) of this Addendum shall be calculated as follows: the rent payable
        for the first month of the term of this Lease, as set forth in paragraph
        4 of the attached Lease, shall be multiplied by a fraction the numerator
        of which shall be the C.P.I. of the calendar month immediately preceding
        the effective date of the subject rent escalation, and the denominator
        of which shall be the C.P.I. for the calendar month in which the
        original Lease term commenced. The sum so calculated shall constitute
        the new monthly rent hereunder, but, in no event, shall such new monthly
        rent be less than 103% of the rent payable for the month immediately
        preceding the date for rent adjustment.

                      b. In the event the compilation and/or publication of the
        C.P.I. shall be discontinued, then the index most nearly the same as the
        C.P.I. shall be used to make such calculation. In the event that Lessor
        and Lessee cannot agree on such alternative index, then the matter shall
        be submitted for decision to the American Arbitration Association in
        accordance with the rules of said association and the decision of the
        arbitrators shall be binding upon the parties. The cost of said
        Arbitrators shall be paid equally be Lessor and Lessee.

                      c. Lessor shall notify Lessee of any rental increases
        pursuant to this paragraph as soon as practicable after the relevant
        C.P.I. figures have been released. Until such notification, Lessee shall
        continue to pay the rent in effect during the prior rental period. After
        notification of a rental increase, Lessee shall commence making rental
        payments in the increased amount and shall, within ten (10) days after
        such notification, pay to Lessor the amount of any rental increases due
        for previous months.

        B. If this option to extend is exercised, the option term shall commence
        on January 1, 2007 and shall end on December 31, 2011

        C. On January 1 2008, January 1, 2009, January 1, 2010 and again on
        January 1, 2011 , the monthly rent payable shall be adjusted upward by
        3% over the rent payable for the month immediately preceding each rental
        adjustment.

LESSOR:                                       LESSEE:

NORTHPARK INDUSTRIAL                          INTERNATIONAL REMOTE IMAGING
                                              SYSTEMS INC.

By: /s/ [ILLEGIBLE]                           By: /s/ [ILLEGIBLE]
   -----------------------------                 -------------------------------

By: /s/ [ILLEGIBLE]                           By: /s/ [ILLEGIBLE]
   -----------------------------                 -------------------------------

<PAGE>
                                PARKING AGREEMENT

This Parking Agreement, dated November 29, 2001 , for reference purposes only,
is made by and between NORTHPARK INDUSTRIAL (herein called "Lessor") and
INTERNATIONAL REMOTE IMAGING SYSTEMS, INC. (herein called "Lessee"). Lessor
leases to Lessee under a separate written Lease the Premises known as 9162 Eton
Avenue, Chatsworth, California, and the Agreements of the parties in this
Parking Agreement are in addition to the agreements of the parties in said
Lease.

1. Subject to the terms and conditions contained in this Agreement, Lessor
hereby agrees that Lessee and persons designated by Lessee may use 21 parking
spaces in the Parking Garage located at 9151 Eton Ave., Chatsworth, California
(hereinafter the "Garage"). The parking spaces hereunder shall be provided on an
unreserved "first come, first served" basis.

2. The term of this Agreement shall be concurrent with the term of this Lease
Agreement ("Lease").

3. Lessee shall at all times comply with all applicable ordinances, rules,
regulations, codes, laws, statutes and requirements of all federal, state,
county and municipal governmental bodies or their subdivisions respecting the
use of the Garage. Lessee shall extend all of its insurance policies required
under the Lease to include vehicles to be parked in the Garage hereunder and
personal property located therein or thereon. Upon request, Lessee shall provide
Lessor with certificates or other satisfactory evidence of such insurance.
Lessor reserves the right to adopt, modify, and enforce reasonable Rules
governing the use of the Garage from time to time, including any card-key,
sticker or other identification or entrance system, and hours of operation. The
Rules set forth hereinafter are currently in effect. Lessor may refuse to permit
any person who violates such Rules to park in the Garage, and any violation of
the Rules shall subject the car to removal from the Garage.

4. Lessee acknowledges receipt of one card-key for each parking space provided.
Lessee shall be responsible for the return of said card-key upon its vacancy of
the Garage. A replacement fee of $25.00 will be charged for any lost or damaged
card-key.

5. Except for intentional acts of gross negligence by Lessor, Lessor shall have
no liability whatsoever for any damage to property or any other items located in
the Garage, nor for any personal injuries or death arising out of any incident
or matter relating to the Garage. In all events, Lessee agrees to look first to
its insurance carrier for payment of any losses sustained in connection with
Lessee's use of the Garage. Lessee hereby waives on behalf of its insurance
carriers all rights of subrogation against Lessor. Lessor reserves the right to
assign specific spaces and to reserve spaces for visitors, small cars,
handicapped persons and for other lessees, and Lessee and persons designated by
Lessee shall not park in any such assigned or reserved spaces. Lessor also
reserves the right to close all or any portion of the Garage in order to make
repairs or perform maintenance services, or to alter, modify, re-stripe the
Garage, or if required by casualty, strike, condemnation, act of God,
governmental law or other reason beyond Lessor's reasonable control. In such
event, Lessor shall refund any prepaid parking rent hereunder, pro-rated on a
per diem basis.

6. Prior to furnishing any card-keys to any person, Lessee shall provide Lessor
with a list including all names, type of automobile, year of manufacture,
drivers license number and automobile license number for all persons using the
Garage at any time.

7. If Lessee shall default under this Agreement, Lessor shall have the right to
cancel this Agreement on ten (10) days written notice, unless within such ten
(10) day period Lessee cures such default. If Lessee shall default under this
Agreement a second time after receiving prior written notice for the same
offense, Lessor shall have the right to cancel this Agreement on ten (10) days
written notice. Lessor shall have the right to remove from the Garage any
vehicles hereunder which are in breach of this Agreement or Rules contained
herein, without any liability whatsoever. Accordingly, Lessor may then
deactivate the respective card-key(s) with ten (10) days notice as stated above.

8. LESSEE ACKNOWLEDGES RECEIPT OF A COPY OF THE DECLARATION OF COVENANTS,
CONDITIONS AND RESTRICTIONS FOR NORTHPARK INDUSTRIAL CENTER RECORDED WITH THE
COUNTY OF LOS ANGELES AS DOCUMENT NUMBERS 79-760182 AND 85-1324915. LESSEE HAS
REVIEWED AND APPROVED SAID DOCUMENTS AND AGREES TO BE BOUND BY ALL THE TERMS AND
CONDITIONS THEREIN. LESSEE FURTHER AGREES THAT SAID COVENANTS, CONDITIONS AND
RESTRICTIONS SHALL BE BINDING UPON LESSEE AND ANY SUBLESSEE, SUCCESSOR AND
ASSIGNS WHICH THEY MAY HAVE.

                                      RULES

a.      Lessee agrees to acquaint all persons to whom Lessee assigns parking
        space of these Rules.

b.      Garage hours: Twenty-four (24) hours, seven (7) days a week.

c.      Cars must be parked entirely within the stall lines painted on the
        floor, and only small cars may be parked in areas reserved for compacts.
        All cars must be parked head-in only.

d.      All directional signs and arrows must be observed.

e.      Speed limit shall be 5 miles per hour.

f.      Parking is prohibited in all areas not expressly designated for parking,
        including without limitation:

        1.     Aisles.
        2.     Loading zones.
        3.     Areas not striped for parking.
        4.     Areas where "No Parking" signs are posted.
        5.     Ramps, right side up - left side down.

g.      Spaces reserved for handicapped parking must be used only by vehicles
        properly designated.

        Lessor Initial Here                    Lessee Initial Here

        [GS] [ILLEGIBLE]                       [ILLEGIBLE] [ILLEGIBLE]

<PAGE>
                                PARKING AGREEMENT
                                   (continued)

h.      Parking stickers, card-key or any other devices or forms of
        identification or entry supplied by Lessor shall remain the property of
        Lessor. Such devices must be displayed as requested and may not be
        mutilated in any manner. The serial number of the parking identification
        device may not be obliterated. Devices are not transferable and any
        device in the possession of any unauthorized holder will be void.

i.      Monthly fees shall be payable in advance prior to the first day of each
        month. Failure to do so will automatically cancel parking privileges and
        the card-keys used by Lessee will be voided on the fifth (5th) day of
        the month. No deductions or allowances from the monthly rate will be
        made for days on which the Garage is not used by Lessee or its
        designees.

j.      Garage managers or personnel are not authorized to make or allow any
        exceptions to these Rules.

k.      Each driver of a vehicle is required to drive and park safely, and lock
        and secure their own vehicle.

l.      Loss or theft of parking identification, card-keys or other such devices
        must be reported to Lessor immediately. Any parking devices reported
        lost or stolen found on any unauthorized car will be confiscated and the
        illegal holder will be fined at the then prevailing written rate. Lost
        or stolen devices found by Lessee or its employees must be returned to
        Lessor.

m.      Washing, waxing, cleaning or servicing of any vehicle by Lessee or its
        employees or agents is prohibited. Parking spaces may only be used for
        parking automobiles.

n.      Parking spaces shall be used only for parking by vehicles no larger than
        full size passenger automobiles or pick-up trucks. Prohibited vehicles
        are not permitted; examples of prohibited vehicles shall include, but
        shall not be limited to, vehicles exceeding 6' 6" in height, trucks or
        trucking equipment, trailers, campers, recreational vehicles, boats,
        "dead automobiles" or automobiles parked longer than 24 hours. No
        automotive repair or work is permitted. If Lessee permits or allows any
        of the aforedescribed prohibited vehicles to park on any portion of the
        parking areas, then Lessor shall have the right, without notice, in
        addition to other rights and remedies it may have, to remove or tow away
        the vehicle involved and charge the cost to Lessee which cost shall be
        immediately payable by Lessee upon demand by Lessor.

o.      Other prohibitions include but are not limited to: eating in Garage,
        loitering, throwing trash, leaky vehicles, damage to gates, arms,
        card-key readers, entry or exit equipment, other vehicles, real or
        personal property, fences, rails or walls.

p.      Lessor may prohibit violators of Rules from using parking spaces
        provided to Lessee hereunder. In such case, Lessor shall void the
        violator's card-key and notify Lessee in writing. Said individual(s)
        would be prohibited from using Garage, but Lessee would continue leasing
        same until a fine of $75.00 is paid or until Lessor agrees to reinstate
        the violator, at Lessor's option.

LESSOR:                                       LESSEE:

NORTHPARK INDUSTRIAL                          INTERNATIONAL REMOTE IMAGING
                                              SYSTEMS INC.

By: /s/ [SIGNATURE ILLEGIBLE]                 By: /s/ [SIGNATURE ILLEGIBLE]
   -----------------------------                 -------------------------------

By: /s/ [SIGNATURE ILLEGIBLE]                 By: /s/ [SIGNATURE ILLEGIBLE]
   -----------------------------                 -------------------------------<PAGE>
                                                                EXHIBIT 10.18(a)

                                  EXHIBIT "A"

                               ADDENDUM TO LEASE

                 FOR PREMISES COMMONLY KNOWN AND DESIGNATED AS:

            OFFICES #7, 8, AND 9, SECOND FLOOR OF THE SOUTH BUILDING
                             904 MANHATTAN AVENUE,
                          MANHATTAN BEACH, CALIFORNIA

          This Addendum to Lease executed on March _____, 2000, by and between
DOLORES MCNABB, as Landlord, and SKECHERS U.S.A., Inc., a Delaware corporation,
as Tenant, is an integral part of said Lease as if fully set forth therein.

     A.   OPTION TO EXTEND LEASE TERM.

     So long as Tenant has fully performed all the obligations on its part to be
performed, Landlord hereby grants to Tenant two (2) consecutive options to
extend this lease for five (5) years each, on the same terms and conditions as
are contained herein except as to increases in real estate taxes as hereinafter
provided. It is contemplated that Tenant's occupancy shall be continuous;
therefore, in the event Tenant fails to exercise any of the options granted
herein, the remaining options shall immediately expire and be of no further
force or effect.  The parties specifically acknowledge that the Lease rent terms
provide for annual increases of 3%. Such increases shall continue to be applied
annually during each and every option exercised hereunder.

     Tenant shall exercise each such option by delivering written notice to
Landlord at least six (6) months, but not more that twelve (12) months, prior to
the end of each five (5) year term. TIME IS OF THE ESSENCE IN REGARD TO THE
DELIVERY OF THE NOTICE. In the event Tenant fails to deliver written notice as
herein provided, the options granted herein shall expire and be of no further
force or effect.

     B.   RENT.

     Tenant shall pay to Landlord rent, free from all claims, demands or
set-offs against Landlord of any kind or character whatsoever, except as
otherwise expressly provided to the contrary, in advance, in the amount of
$199,804.15, payable $3,800.00 on execution of this lease and thereafter on the
first day of each month (except May 1, 2000) as follows:

<Table>

          <S>                                          <C>
          June 1, 2000 to March 31, 2001               $3,800.00 per month
          April 1, 2001 to March 31, 2002              $3,914.00 per month
          April 1, 2002 to March 31, 2003              $4,031.42 per month
          April 1, 2003 to March 31, 2004              $4,152.36 per month
          April 1, 2004 to June 30, 2004               $4,276.93 per month
</Table>
<PAGE>
Landlord agrees that Tenant shall be given possession on April, 2000 to install
such tenant improvements as it deems necessary and proper for its purposes,
however, nothing in this paragraph shall eliminate the requirement that Tenant
obtain Landlord's approval prior to making any such tenant improvements.

     LATE PAYMENTS: In the event that Tenant shall fail to pay to landlord
within 5 days of the date when due, any payment owing to Landlord pursuant to
the terms of this Lease, Tenant shall pay Landlord a late charge in the amount
of ten percent (10%) of the rent payment then due in addition to said rent.

     SQUARE FOOTAGE DISCLAIMER: The parties hereto hereby acknowledge that
during the negotiations for this Lease, the parties discussed the rent as a
function of an amount per square feet of rentable space. Prior to the execution
of this Lease, Tenant has had the opportunity to inspect the space and satisfy
itself as to the size and suitability of the space for its intended purposes.
The parties hereto hereby agree the above dollar figures of rent shall be due
and payable regardless of the actual square feet in the demised premises and
Tenant acknowledges that Landlord makes no representation or warranty as to the
actual size of the premises. Any discussions concerning a rental per square
foot of space is superceded by this provision.

     C.   USE.

          The sole permitted use of the premised shall be commercial office and
related activities.

     D.   REAL ESTATE TAXES-OPTION PERIODS

          Upon the exercise of the options hereinabove provided for, Tenant
agrees to pay during the term of each such option period, or periods, as the
case may be, its pro rata share of any increase in real estate taxes and
assessments levied or imposed against the real property of which the demised
premises are a part over an above the taxes imposed on said real property during
the fifth year of the original term of this Lease (the base year). The parties
hereto acknowledge and agree that Tenant occupies approximately 20% of the
building and agree that for purposes of this provision that Tenant shall pay 20%
of any such increase. Landlord shall provide Tenant with a copy of the tax bill
for the fiscal year July 2003- June 2004 (the base year) of the initial term
along with a copy of the tax bill for each year during any option period that
Tenant continues in possession under this Lease. Tenant shall pay to Landlord
one half of its pro rata share (20%) of such increase on or before December 10
of each year and the remaining on half of its pro rata share (20%) on or before
April 10 of each year.

     E.   AIR CONDITIONING REPAIR AND MAINTENANCE.

          Landlord has provided an air conditioner in good working condition
that services Officers 7, 8 and 9 on the second floor of the south building.
Tenant hereby agrees that it will pay any and all costs related to the repair
and maintenance of said air conditioner.

     F.   SECURITY DEPOSIT

          Tenant shall pay Landlord on execution of this Lease the sum of
$4,000.00 as a security deposit in accordance with the provisions of Paragraph
19 of the lease.

<PAGE>
     G.    PARKING

     Landlord hereby grants to Tenant the exclusive use of one (1) parking
space, the location of which will be designated by Landlord.

     H.    RULES AND REGULATIONS

     The Rules and regulations attached hereto and hereby incorporated by this
reference as if fully set forth herein and shall be an integral part of this
Lease.

     I.    ASSIGNMENT

     Notwithstanding the provisions of Paragraph 11 of the Lease, no consent
from Landlord shall be required for the assignment of this Lease under the
following circumstances, each of which shall be considered a Permitted
Assignment:

           (1) the transfer of stock of Tenant to members of the immediate
               family of a shareholder of Tenant, to a living trust for estate-
               planning purposes, or by will or intestacy, or,
           (2) Tenant sells or offers for sale its voting stock to the public
               in accordance with the qualifications or registration
               requirements of the State of California and the Security Act
               of 1933, as amended.

     H.    TENANT'S RIGHT TO TERMINATE IN THE EVENT OF DESTRUCTION OF THE
           PREMISES

     Notwithstanding the provisions of Paragraph 16. DESTRUCTION OF PREMISES of
the Lease, in the event Landlord cannot complete the repairs and return
possession to Tenant within a period of six (6) months, Tenant shall have the
option of terminating this Lease. Notice of such election to terminate shall be
given by Tenant to landlord within ten (10) days of Tenant's receipt of written
notice from Landlord that the repair period is projected to exceed (6) months.
In the event Tenant fails to so notify Landlord in writing, this right to
terminate shall expire.

     I.    MUTUAL INDEMNIFICATION

     Tenant Agrees to defend, with counsel reasonably satisfactory to Landlord,
indemnify and hold harmless, Landlord, its agents, employees, officers,
directors, shareholders, partners, members and representatives (collectively
"Landlord") from and against any and all loss, cost, action liability, damage or
expense, including but not limited to, penalties, fines, attorneys' fees or
costs (collectively "claims"), to any person, property or entity resulting from
the following: (i) the negligence or wilful misconduct of Tenant, its agents,
employees or contractors; (ii) Tenant's default or breach of any of the terms
and conditions of this Lease; and (iii) any occurrences within the Premises, not
resulting from the negligence or wilful misconduct of Landlord, its agents,
employees or contractors.

           Landlord agrees to defend with counsel reasonably satisfactory to
Tenant, indemnify and hold harmless,  Tenant, its agents, employees, officers,
directors, shareholders, partners, members and representatives (collectively
"Tenant") from and against any and all loss, costs, action,

<PAGE>
liability, damage or expense, including but not limited to, penalties, fines,
attorneys' fees or costs (collectively "claims"), to any person, property or
entity resulting from the following: (i) the negligence or wilful misconduct of
Landlord, its agents, employees or contractors; (ii) Landlord's default or
breach of any of the terms and conditions of this Lease; and (iii) any
occurrences within the Premises, not resulting from the negligence or wilful
misconduct of Tenant its agents, employees or contractors.

     Notwithstanding the foregoing, however, because Landlord is required to
maintain property insurance on the Building, and because of the existence of
waivers of subrogation set forth in this Lease, Landlord hereby agrees to
defend, indemnify and hold Tenant harmless on any Claims to the extent such
claim is covered by such insurance, even if resulting from the negligent acts,
omissions or misconduct of Tenant or those of its agents, employees or
contractors. Similarly, since Tenant must carry insurance to cover its personal
property within the premises, and because of the waivers of subrogation set
forth in this Lease, Tenant hereby agrees to defend, indemnify and hold Landlord
harmless from any claims to the extent any such claim is covered by such
insurance, if resulting from the negligent acts, omissions or misconduct of
Landlord or those of its agents, employees or contractors. The provisions of
this section shall survive the expiration or sooner termination of the Lease
with respect to any occurrences, claims or liabilities occurring prior to such
expiration or termination.

LANDLORD                               TENANT

DOLORES MC NABB                        SKECHERS USA, INC.,
                                       a Delaware corporation

Delores L. Mc Nabb                     by   /s/ Michael Greenberg
---------------------------              -------------------------

Date   April 15   , 2000               by   Michael Greenberg
    --------------                       -------------------------

                                       Date    4/14   , 2000
                                           -----------

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