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                                                           Exhibit 10.11

         STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE--GROSS

1.       BASIC LEASE PROVISIONS ("BASIC LEASE PROVISIONS"):

         1.1       DATE AND EFFECTIVE DATE: This Lease is dated March 20,
1996, for reference purposes only. The Effective Date shall XXX date inserted
below by Lessor and shall be: (a) the date this Lease is executed by Lessor;
or in the event this Lease is served upon you as Lessee of the Premises, (b)
the date that the terms of this Lease become effective due to service upon
Lessee by Lessor. PRIOR TO THE EFFECTIVE DATE, THE TERMS OF THIS LEASE SHALL
NOT BE BINDING ON LESSOR AND UNTIL SIGNED BY LESSOR THIS DOCUMENT SHALL BE
CONSTRUED ONLY AS AN OFFER BY LESSEE TO LEASE THE PREMISES. UNTIL SIGNED BY
LESSOR, LESSOR SHALL HAVE NO OBLIGATION OF ANY KIND TO ANY OF THE PARTIES
INVOLVED IN MAKING THE OFFER TO LEASE THE PREMISES.

         1.2       PARTIES: This Lease is made by and between Neuron
Enterprises, LLC (herein called "Lessor") and Ciphergen Biosystems, Inc.,
(herein called "Lessee").

         1.3       PREMISES: Suite Number(s) 201, consisting of approximately
8,456 square feet, more or less, as defined in paragraph and as shown on
Exhibit "A" hereto (the "Premises"). The rentable area of the Premises as
stated in the preceding sentence is based on (i) the areas of the Premises
measured to the lease line for street elevations (which shall extend to the
property line and/or to the public area boundary with respect to the interior
frontage, if any, of the Premises) and to the center line of interior walls,
(without deduction for level change, openings in the floor, or for stairs and
stair openings which connect levels within the Premises), and shall include
structural elements, stairs, elevators, escalators, display areas and other
interior construction or equipment (the "usable area"), plus (ii) amounts
equal to portions of an area of the receiving and trash areas, elevators and
elevator lobbies, vestibules, restrooms, exit and access corridors, parking
areas, loading areas, electrical, mechanical and telephone rooms and other
areas designated by Lessor as necessary to the Building. The Base Rent may
have been calculated based on this square footage, however, the square
footage figure used in this lease is a rough approximation. Lessor and Lessee
agree that the Base Rent is derived from the beneficial use of the Premises
as described and not from any mathematical calculation involved square
footage. Neither Lessor nor Lessee shall be entitled to have the Base Rent
adjusted, recalculated, raised or lowered as a result of discrepancy between
the square footage approximation contained in this Lease and any measurement
that may be determined to be the actual square footage of the premises.

         1.4       BUILDING: Commonly described as being located at 490 San
Antonio Road in the City of Palo Alto, County of Santa Clara, State of
California.

         1.5       VEHICLE PARKING: Subject to the rules and regulations
attached hereto and as established by Lessor from time to time, Lessor shall
be entitled to non-exclusive use of available parking at the Office Building
Project, proportionate to Lessee's pro-rata share of total building space.

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

         1.6       TERM: Twenty four (24) months ("Original Term") commencing
April 1, 1996 ("Commencement Date") and ending March 31, 1998 ("Expiration
Date"). (Also, see Paragraph 3.) With an option to renew for one (1) year
given five (5) months prior written notice to Lessor at the rate of $1.20 per
square foot per month Gross.

         1.7       EARLY POSSESSION: N/A ("Early Possession Date"), (Also
see Paragraphs 3.2 and 3.3.)

         1.8       BASE RENT: $9,724.40 per month ("Base Rent"), payable on
the first day of each month commencing April 1, 1996 (see Paragraph 4.)

/ /      If this box is checked, this Lease provides for the Base Rent to be
adjusted per Addendum ___, attached hereto.

         1.9       BASE RENT PAID UPON EXECUTION: $9,724.40 as Base Rent for
the Period April 1-30, 1996.

         1.10      LESSEE'S SHARE OF COMMON AREA OPERATING EXPENSES: Thirty
eight percent (38%) ("Lessee's Share") as determined prorata square footage
of the Premises as compared to the total square footage of the Building.

         1.11      SECURITY DEPOSIT: $9,724.40 ("Security Deposit"). (Also
see Paragraph 8.)

         1.12      PERMITTED USE: Business Office/Storage/R&D of
bioanalytical instrumentation systems ("Permitted Use") (Also see
Paragraph 6.)

         1.13      INSURING PARTY. Lessor is the "Insuring Party". (Also see
Paragraph 8.)

         1.14      REAL ESTATE BROKERS. The following real estate broker(s)
(collectively, the "Brokers") and the brokerage relationships exists in this
transaction and are consented to by the Parties (check applicable boxes):

/ /      N/A represents Lessor exclusively ("Lessor's Broker")l

/X/      Randy Scott of Cornish & Carey represents Lessee exclusively
("Lessee's Broker"); or

         1.15      PAYMENT TO BROKERS. Upon the execution of this Lease by
both Parties, Lessor shall pay to said Broker(s) jointly, or in such separate
shares as they may mutually designate in writing, a fee as set forth in a
separate written agreement between Lessor and said Broker(s) (or in the event
there is no separate written agreement between Lessor and said Broker(s), the
sum of $14,000.00) for brokerage services rendered by said Broker(s) in
connection with this transaction.

         1.16      GUARANTOR. The obligations of the Lessee under this Lease
are to be guaranteed by N/A ("Guarantor"). (Also see Paragraph 37.)

         1.17      ADDENDA AND EXHIBITS. Attached hereto is an Addendum or
Addenda consisting of Exhibits A through C, all of which constitute a part of
this lease.

2.       PREMISES, PARKING AND COMMON AREAS.

         2.1       LETTING. Lessor hereby leases to Lessee, and Lessee hereby
leases from Lessor, the Premises for a term, at the rental, and upon the
terms, covenants and conditions set forth in this Lease. Unless otherwise
provided herein, any statement of square footage set forth in this Lease, or
that may have been used in calculating rental and/or Common Area Operating
Expenses, is an approximation which Lessor and Lessee agree is reasonable and
the rental and Lessee's Share (as defined in Paragraph 1.6(b)) based thereon
is not subject to revision whether or not the actual square footage is more
or less.

         2.2       CONDITION. Lessor shall deliver the Premises to Lessee
clean and free of debris on the Commencement Date and warrants to Lessee that
the existing plumbing, electrical systems, fire sprinkler system, lighting,
air conditioning and heating systems and loading doors, if any, in the
Premises, other than those constructed by Lessee, shall be in good operating
condition on the Commencement Date. If a non-compliance with said warranty
exists as of the Commencement Date, Lessor shall, 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 as Lessee's expense. If Lessee does not give Lessor written
notice of non-compliance with this warranty within sixty (60) days after the
Commencement Date, correction of that non-compliance shall be the obligation
of Lessee at Lessee's sole cost and expense.

         2.3       COMPLIANCE WITH COVENANTS, RESTRICTIONS AND BUILDING CODE.
Lessor warrants that any improvements (other than those constructed by Lessee
or at Lessee's direction) on or in the Premises which have been constructed
or installed by Lessor or with Lessor's consent or at Lessor's direction
shall comply with all applicable covenants or restrictions of record and
applicable building codes, regulations and ordinances in effect on the
Commencement Date. Lessor further warrants to Lessee that Lessor has no
knowledge of any claim having been made by any governmental agency that a
violation or violations of applicable building codes, regulations or
ordinances exist with regard to

                   INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE--GROSS
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Premises as of the Commencement Date. Said warranties shall not apply to any
Alterations or Utility Installations (defined in Paragraph 7.3(a) made or to
be made by Lessee. If the Premises do not comply with said warranties, Lessor
shall, except as otherwise provided in this Lease promptly after receipt of
written notice from Lessee given within six (6) months following the
Commencement Date and setting forth specifically the nature and extent of
such non-compliance, take such action, at Lessor's expense, as may be
reasonable or appropriate to rectify the non-compliance. Lessor makes no
warranty that the Permitted Use in Paragraph 1.12 is permitted for the
Premises under Applicable Laws (as defined in Paragraph 2.4).

         2.4       ACCEPTANCE OF PREMISES. Subject to Lessor's
representations and warranties contained herein, Lessee hereby acknowledges
(a) that it has been advised by the Broker(s) to satisfy itself with respect
to the condition of the Premises (including but not limited to the electrical
and fire sprinkler systems, security, environmental aspects, seismic and
earthquake requirements, and compliance with the Americans With Disabilities Act
and applicable zoning, municipal, county, state and federal laws, ordinances
and regulations and any covenants or restrictions of record (collectively
"Applicable Laws") and the present and future suitability of the Premises for
Lessee's intended use; (b) that Lessee made such investigation as it deems
necessary with reference to such matters, is satisfied with reference
thereto, and assumes all responsibility therefore as the same relate to
Lessee's occupancy of the Premises and/or the terms of this Lease; and (c)
that neither Lessor, nor any of Lessor's agents, has made any oral or written
representations or warranties with respect to said matters other than as set
forth in this Lease.

         2.5       LESSEE AS PRIOR OWNER/OCCUPANT. The warranties made by
Lessor in this Paragraph 2 shall be of no force or effect XXX immediately
prior to the date set forth in Paragraph 1.1 Lessee was the owner or occupant
of the Premises. In such event, Lessee shall XXX Lessee's sole cost and
expense, correct any non-compliance of the Premises with said warranties.

         2.6       VEHICLE PARKING. Lessee shall be entitled to use the
number of Unreserved Parking Spaces and Reserved Parking Spaces specified in
Paragraph 1.2(b) on those portions of the Common Areas designated from time
to time by Lessor for parking. Lessee shall not use more parking spaces than
said number. Said parking spaces shall be used for parking by vehicles no
larger than full-size passenger automobiles or pick-up trucks, herein called
"Permitted Size Vehicles." Vehicles other than Permitted Size Vehicles shall
be parked and loaded or unloaded as directed by Lessor in the Rules and
Regulations (as defined in Paragraph 40) issued by Lessor. (Also see
Paragraph 2.9).

         2.7       COMMON AREAS -- DEFINITION. The term "Common Areas" is
defined as all areas and facilities outside the Premises and within the
exterior boundary line of the Industrial Center and interior utility raceways
within the Premises that are provided and designated by Lessor from time to
time for the general non-exclusive use of Lessor, Lessee and other lessees of
the Industrial Center and their respective employees, suppliers, shippers,
customers, contractors and invitees, including parking areas, loading and
unloading areas, trash areas, roadways, sidewalks, walkways, parkways,
driveways and landscaped areas.

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

         2.9       COMMON AREA -- RULES AND REGULATIONS. Lessor or such other
person(s) as Lessor may appoint shall have the exclusive control and
management of the Common Areas and shall have the right, from time to time,
to establish, modify, amend and enforce reasonable Rules and Regulations with
respect thereto in accordance with Paragraph 40. Lessee agrees to abide by
and conform to all such Rules and Regulations, and cause its employees,
suppliers, shippers, customers, contractors, and invitees to so abide and
conform. Lessor shall not be responsible to Lessee for the non-compliance
with said rules and regulations by other lessees of the Industrial Center.

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

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

                   (b) To close temporarily any of the Common Areas for
maintenance purposes so long as reasonable access to the Premises remains
available;

                   (c) To designate other land outside the boundaries of the
Industrial Center to be a part of the Common Areas;

                   (d) To add additional buildings and improvements to the
Common Areas;

                   (e) To use the Common Areas while engaged in making
additional improvements, repairs or alterations to the Industrial Center, or
any portion thereof; and,

                   (f) To do and perform such other acts and make such other
changes in, to or with respect to the Common Areas Industrial Center as
lessor may, in the exercise of sound business judgment, deem to be
appropriate.

3.       TERM.

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

         3.2       EARLY POSSESSION. If an early Possession Date is specified
in Paragraph 1.4 and if Lessee totally or partially occupies Premises after
the Early Possession Date but prior to Commencement Date, the obligation to
pay Base Rent shall be abated for the period of such early occupancy. All of
the terms of this Lease, however, (including but not limited to the
obligations to pay Lessee's Share of Common Area Operating Expenses and to
carry the insurance required by Paragraph 8) shall be in effect during such
period. Any such early possession shall not affect nor advance the expiration
Date of the Original Term.

         3.3       DELAY IN POSSESSION. If for any reason Lessor cannot
deliver possession of the Premises to Lessee by the Early Possession Date, if
one is specified in Paragraph 1.4, or if no Early Possession Date is
specified, by the Commencement Date, Lessor shall not be subject to any
liability therefor, nor shall such failure affect the validity of the Lease,
or the obligations of Lessee hereunder, or extend the term hereof, in such
case, Lessee shall not except as otherwise provided herein, be obligated to
pay rent or perform any other obligation of Lessee under terms of this Lease
until Lessor delivers possession of the Premises to Lessee. If possession of
the Premises is not delivered to Lessee within sixty (60) days after the
Commencement Date, Lessee may, at its option, by notice in writing to Lessor
within (10) days after the end of said sixty (60) day period, cancel this
Lease, in which event the parties shall be discharged from all obligations
hereunder, provided further, however that if such written notice of Lessee is
not received by Lessor within said ten (10) day period, Lessee's right to
cancel this Lease hereunder shall terminate and be of no further force or
effect. Except as may be otherwise provided, and regardless of when the
Original Term actually commences, if possession is not tendered to Lessee
when required by this Lease and Lessee does not terminate this Lease, as
aforesaid, the period free of the obligation to pay Base Rent, if any, that
Lessee would otherwise have enjoyed shall run from the date of delivery of
possession

                   INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE--GROSS
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and continue for a period equal to the period during which the Lessee would
have otherwise enjoyed under the terms hereof, but minus any day of delay
caused by the acts, changes or omissions of Lessee.

4.       RENT.

         4.1       BASE RENT. Lessee shall pay Base Rent and other rent or
charges, as the same may be adjusted from time to time, to Lessor in lawful
money of the United States, without offset or deduction, on or before the day
on which it is due under the terms of this Lease. Base Rent and all other
rent and charges for any period during the term hereof which is for less than
one full month shall be prorated based upon the actual number of days of the
month involved. Payment of Base Rent and other charges shall be made to
Lessor at its address stated herein or to such other persons or at such other
addresses as Lessor may from time to time designate in writing to Lessee.

         4.2       COMMON AREA OPERATING EXPENSES. Lessee shall pay to Lessor
during the term hereof, in addition to the Base Rent Lessee's Share (as
specified in Paragraph 1.10) of all Common Area Operating Expenses, as
hereinafter defined, during each calendar year or the term of this Lease, in
accordance with the following provisions:

                   (a) "COMMON AREA OPERATING EXPENSES" are defined, for
purpose of this Lease, as all costs incurred by Lessor relating to the
ownership and operation of the Industrial Center, including, but not limited
to, the following:

                           (i)         The operation, repair and maintenance,
in neat, clean, good order and condition, of the following:

                                       (aa) The Common Areas, including
parking areas, loading and unloading areas, trash areas, roadways, sidewalks,
walkways, parkways, driveways, landscaped areas, striping, bumpers,
irrigation systems, Common Area lighting facilities, fence and gates,
elevators and roof.

                                       (bb) Exterior signs and any tenant
directories.

                                       (cc) Fire detection and sprinkler
systems.

                           (ii)        The cost of water, gas, electricity
and telephone to service the Common Areas.

                           (iii)       Trash disposal, property management
and security services and the costs of any environmental inspections.

                           (iv)        Reserves set aside for maintenance and
repair of Common Area.

                           (v)         Any increase above the Base Real
Property Taxes (as defined in Paragraph 10.2(b)) for the Building and the
Common Areas.

                           (vi)        Any "Insurance Cost Increase" (as
defined in Paragraph 8.1).

                           (vii)       The cost of insurance carried by
Lessor with respect to Common Areas.

                           (viii)      Any deductible portion of an insured
loss concerning the Building or the Common Areas.

                           (ix)        Any other services to be provided by
Lessor that are stated elsewhere in this Lease to be a Common Area Operating
Expense.

                   (b) Any Common Area Operating Expense and Real Property
Taxes that are specifically attributable to the Building or to any other
building in the Industrial Center or to the operation, repair and maintenance
thereof, shall be allocated entirely to the Building or to such other
building. However, any Common Area Operating Expenses and Real Property Taxes
that are not specifically attributable to the Building or to any other
building or to the operation, repair and maintenance thereof, shall be
equitably allocated by Lessor to all buildings in the Industrial Center.

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

                   (d) Lessee's Share of Common Area Operating Expenses shall
be payable by Lessee within ten (10) days after a reasonably detailed
statement of actual expenses is presented to Lessee by Lessor. At Lessor's
option, however, an amount may be estimated by Lessor from time to time of
Lessee's Share of annual Common Area Operating Expenses and the same shall be
payable monthly or quarterly, as Lessor shall designate, during each 12-month
period of the Lease term, on the same day as the Base Rent is due hereunder.
Lessor shall deliver to Lessee within a reasonable period after the
expiration of each calendar year a reasonably detailed statement showing
Lessee's Share of the actual Common Area Operating Expenses incurred during
the preceding year. If Lessee's payments under this Paragraph 4.2(d) during
said preceding year exceed Lessee's Share as indicated on said statement,
Lessor shall be credited the amount of such overpayment against Lessee's
Share of Common Area Operating Expenses next becoming due. If Lessee's
payments under the Paragraph 4.2(d) during said preceding year were less than
Lessee's Share as indicated on said statement, Lessee shall pay to Lessor the
amount of the deficiency within ten (10) days after delivery by Lessor to
Lessee of said statement.

         4.3       UTILITIES. Lessee shall pay to Lessor during the term
hereof, in addition to the Base Rent and Common Area Operating Expenses,
Lessee's Share of all Utilities, as hereinafter defined, during each calendar
year of the term of this Lease. Lessee's Share of Utilities shall be payable
by Lessee within ten (10) days after a reasonably detailed statement of
actual expenses is presented to Lessee by Lessor. At Lessor's option,
however, an amount may be estimated by Lessor from time to time of Lessee's
Share of annual Common Area Operating Expenses and the same shall be payable
monthly or quarterly, as Lessor shall designate, during each 12-month period
of the Lease term, on the same day as the Base Rent is due hereunder. Lessor
shall deliver to Lessee within a reasonable period after the expiration of
each calendar year a reasonably detailed statement showing Lessee's Share of
the actual Utilities incurred during the preceding year. If Lessee's payments
under this Paragraph 4.2(d) during said preceding year exceed Lessee's Share
as indicated on said statement, Lessor shall be credited the amount of such
overpayment against Lessee's Share of Utilities next becoming due. If
Lessee's payments under this Paragraph 4.2(d) during said preceding year were
less than Lessee's Share as indicated on said statement, Lessee shall pay to
Lessor the amount of the deficiency within ten (10) days after delivery by
Lessor to Lessee of said statement.

5.       SECURITY DEPOSIT. Lessee shall deposit with Lessor upon Lessee's
execution hereof the Security Deposit set forth in Paragraph 1.2 as security
for Lessee's faithful performance of Lessee's obligations under this Lease.
If Lessee fails to pay Base Rent or other rent charges due hereunder, or
otherwise Defaults under this Lease (as defined in Paragraph 13.1), 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, cost, expense, loss or damage (including attorneys' fees) 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 therefore deposit monies with Lessor sufficient to
restore said Security Deposit to the full amount required by this Lease. Any
time the Base Rent increases during the term of this Lease, Lessee shall,
upon written request from Lessor, deposit additional monies with Lessor as an
addition to the Security Deposit so that the total amount of the Security
Deposit shall at all times bear the same proportion to the then current Base
Rent as the initial Security Deposit bear to the initial Base Rent set forth
in Paragraph 1.5. Lessor shall not be required to keep all or any part of the
Security Deposit separate from its general accounts. Lessor shall, at the
expiration or earlier termination of the term hereof and after Lessee has
vacated the Premises, return to Lessee (or, at Lessor's option, to the last
assignee, if any, of Lessee's interest herein), that portion of the Security
Deposit not used or applied by Lessor. Unless otherwise expressly agreed in
writing by Lessor, no part of the Security Deposit shall be consider to be
held in trust, to bear interest or other increment for its use, or to be
prepayment for any monies to be paid by Lessee under this Lease.

6.       USE.

         6.1      PERMITTED USE.

                  (A) Lessee shall use and occupy the Premises only for the
Permitted Use set forth in Paragraph 1.3, 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

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unlawful, creates waste or a nuisance, or that disturbs owners and/or
occupants of, or causes damage to the Premises or neighboring premises or
properties.

                   (b) Lessor hereby agrees to not unreasonably withhold or
delay its consent to any written request by Lessee, Lessee's assignees or
subtenants, and by prospective assignees and subtenants of Lessee, its
assignees and subtenants, for a modification of said Permitted Use, so long
as the same will not impair the structural integrity of the improvements on
the Premises or in the Building or the mechanical or electrical systems
therein, does not conflict with uses by other lessees, is not significantly
more burdensome to the Premises of the building and improvements thereon, and
is otherwise permissible pursuant to this Paragraph 6. If Lessor elects to
withhold such consent, Lessor shall within five (5) business days after such
request give a written notification of same, which notice shall include an
explanation of Lessor's reasonable 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, chemical,
material or waste whose presence, nature, quantity and/or intensity of
existence, use, manufacture, disposal, transportation, spill, release or
effect, 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 loss to any governmental agency or third party under the
applicable statute or common law theory. Hazardous Substance shall include,
but not be limited to, hydrocarbons, petroleum, gasoline, crude oil or any
products or by-products thereof. Lessee shall not engage in activity in or
about the Premises which constitutes a Reportable Use (as hereinafter
defined) of Hazardous Substances without the express prior written consent of
Lessor and compliance in a timely manner (at Lessee's sole cost and expense)
with all Applicable Requirements (as defined in Paragraph 6.3). "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 (iii) the presence in, on
or about the Premises of a Hazardous Substance with respect to which any
Applicable Laws require that a notice be given to persons entering or
occupying the Premises or neighboring properties. Notwithstanding the
foregoing, Lessee may, without Lessor's prior consent, but upon notice to
Lessor and in compliance with all Applicable Requirements, use any ordinary
and customary materials reasonably required to be used by Lessee in the
normal course of the Permitted Use, so long as such use is not a Reportable
Use and does not expose the Premises or neighboring properties to any
meaningful risk of contamination or damage or expose Lessor to any liability
therefore. In addition, Lessor may (but without any obligation to do so)
condition its consent to any Reportable Use of any Hazardous Substance by
Lessee upon Lessee's giving Lessor such additional assurances Lessor, in its
reasonable discretion, deems necessary to protect itself, the public, the
Premises and the environment against damage, contamination or injury and/or
liability therefore, including but not limited to the installation (and, at
Lessor's option, removal on or before Lease contamination or injury and/or
liability therefore, including but not limited to the installation (and, at
Lessor's option, removal on or before Lease expiration or earlier
termination) of reasonably necessary protective modification to the Premises
(such as concrete encasements) and/or the deposit of an additional Security
Deposit under Paragraph 5 hereof.

                   (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 or the Building, other than as
previously consented to by Lessor, Lessee shall immediately give Lessor
written notice thereof, together with a copy of any statement, report,
notice, registration, application, permit, business plan, license, claim,
action, or proceeding given to, or received from, any governmental authority
or private party concerning the presence, spill, release, discharge of, or
exposure to, such Hazardous Substance including but not limited to all such
documents as may be involved in any Reportable Use involving the Premises.
Lessee shall not cause or permit any Hazardous Substance to be spilled or
released in, on, under or about the Premises (including, without limitation,
through the plumbing or sanitary sewer system).

                   (c) DUTY TO INFORM LESSEE. If Lessor knows, or has
reasonable cause to believe, that a Hazardous Substance has come to be
located in, on, under or about the Premises or the Building, Lessor shall
immediately give Lessee written notice thereof, together with a copy of any
statement, report, notice, registration, application, permit, business plan,
license, claim, action, or proceeding given to, or received from, any
governmental authority or private party concerning the presence, spill,
release, discharge of, or exposure to, such Hazardous Substance including but
not limited to all such documents as may be involved in any Reportable Use
involving the Premises. Lessor shall not cause or permit any Hazardous
Substance to be spilled or released in, on, under or about the Premises
(including, without limitation, through the plumbing or sanitary sewer
system).

                   (d) INDEMNIFICATION. Lessee shall indemnify, protect,
defend and hold Lessor, its agents, employees, lenders and ground lessor, if
any, and the Premises, harmless from and against any and all damages,
liabilities, judgments, costs, claims, liens, expenses, penalties, loss of
permits and attorneys' and consultants' fees arising out of involving any
Hazardous Substance brought onto the Premises by or for Lessee or by anyone
under Lessee's control. Lessee's obligations under this Paragraph 6.2(o)
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 (including consultants' and attorneys' fees and
testing), removal, remediation, restoration and/or abatement thereof, or of
any contamination therein involved, and shall survive the expiration or
earlier termination of this lease. No termination, cancellation or release
agreement entered into by Lessor and Lessee shall release the 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.

         6.3       LESSEE'S COMPLIANCE WITH REQUIREMENTS. Lessee shall, at
Lessee's sole cost and expense, fully, diligently and in a timely manner,
comply with all "Applicable Requirements," which term is used in this Lease
to mean all laws, rules, regulations, ordinances, directives, covenants,
easements and restrictions of record, permits, and the requirements of any
applicable fire insurance underwriter or rating bureau, and the
recommendations of Lessor's engineers and/or consultants, relating in any
manner to the Premises (including but not limited to matters pertaining to
(i) industrial hygiene, (ii) environmental conditions on, in, under or about
the Premises, including soil and groundwater conditions, and (iii) the use,
generation, manufacture, production, installation, maintenance, removal,
transportation, storage, spill, or release of any Hazardous Substance), now
in effect or which may hereafter come into effect. Lessee shall, within ten
(10) days after receipt of Lessor's written request, provide Lessor with
copies of all documents and information, including but not limited to
permits, registrations, manifests, applications, reports and certificates,
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 of actual claim, notice,
citation, warning, complaint or report pertaining to or involving failure by
Lessee to the Premises to comply with any Applicable Requirements.

         Notwithstanding anything to the contrary contained herein, Lessee's
obligation to comply with Applicable Requirements, as set forth in Section
6.3 above, shall only apply if such compliance is required or necessitated by
Lessee's acts, use, or occupancy of the Premises. For example, if any
governmental authority should require the Building of the Premises to be
structurally strengthened against earthquake, or should require the removal
of asbestos from the Premises and such measures are imposed as a general
requirement applicable to all tenants rather than as a condition to Lessee's
specific use or occupancy of the PREMISES, such work shall be performed by
and at the sole cost of Lessor.

         It is being expressly agreed that Lessee shall have no obligation or
liability of any kind or nature with respect to contamination or Hazardous
Substances that existed at, on or under the Premises and Building (which
shall be deemed to include the underlying soil and groundwater) prior to the
commencement of this Lease or that was not caused by Lessee's acts, use or
occupancy of the Premises.

         To the best of Lessor's current, actual knowledge, none of Lessor's
tenants at the Office Building Project are in violation of subject to any
existing, pending or threatened investigation or order by any governmental
authority under any applicable federal, state or local law, regulation or
ordinance pertaining to air and water quality, the handling, transportation,
storage, treatment, usage or disposal of Hazardous Substances, air emissions,
other environmental matters and all zoning and land use matters.

                   INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE--GROSS
                                       4

<PAGE>

         To the best of Lessor's current, actual knowledge, any handling,
transportation, storage, treatment or use of Hazardous Substances that has
occurred on the Premises to date is not in non-compliance with all Applicable
Requirements regulating same.

         To the best of Lessor's current, actual knowledge, no leak, spill,
release, discharge, emission or disposal of Hazardous Substances has occurred
on the Premises, Building and Industrial Center to date and the soil,
groundwater and soil vapor on or under the Premises, Building and Industrial
Center is free of Hazardous Substances as of the date the term of this Lease
commences.

         In the event of (i) a breach of the foregoing representations, or
(ii) the occurrence, release or threatened release of any Hazardous
Substances on or about the Premises, Building and Industrial Center during
the term hereof that is not caused by Lessee, Lessor, at Lessor's sole
expense, shall (a) promptly remove, eliminate or remediate said Hazardous
Substances and/or take such other action with respect thereto as is required
by any federal, state or local government agency having jurisdiction thereof.

         6.4       INSPECTION; COMPLIANCE WITH LAW. Lessor, Lessor's agents,
employees, contractors and designated representatives, and the holders of any
mortgages, deeds of trust or ground leases on the Premises ("Lenders") 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 inspecting the
condition of the Premises and for verifying compliance by Lessee with this
Lease and all Applicable Requirements (as defined in Paragraph 6.3), and
Lessor shall be entitled to employ experts and/or consultants in connection
therewith to advise Lessor with respect to Lessee's activities, including but
not limited to Lessee's installation, operation, use, monitoring,
maintenance, or removal of any Hazardous Substance on or from the Premises.
The costs and expenses of any such inspections shall be paid by the party
requesting same, unless a Default or Breach of this Lease by Lessee or a
violation of Applicable Requirements or a contamination, caused or materially
contributed to by Lessee, is found to exist or to be imminent, or unless the
inspection is requested or ordered by a governmental authority as the result
of any such existing or imminent violation or contamination. In such case,
Lessee shall upon request, reimburse Lessor or Lessor's Lender, as the case
may be, for the costs and expenses of such inspections.

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

         7.1      LESSEE'S OBLIGATIONS.

                  (a) Subject to the provisions of Paragraphs 2.2
(Condition), 2.4 (Compliance with Covenants, Restrictions and Building Code),
7.2 (Lessor's Obligations), 9 (Damage or Destruction), and 14 (Condemnation),
Lessee shall, at Lessee's sole cost and expense and at all times, keep the
Premises and every part thereof in good order, condition and repair (whether
or not such portion of the Premises requiring repair, 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, without limiting the generality of the foregoing, all equipment or
facilities specifically serving the Premises, such as plumbing, heating, air
conditioning, ventilating, electrical, lighting, facilities, boilers, fired
or unfired pressure vessels, fire hose connections if within the Premises,
fixtures, interior walls, interior surfaces of exterior walls, ceilings,
floors, windows, doors, plate, glass, and skylights, but excluding any items
which are the responsibility of Lessor pursuant to Paragraph 7.2 below.
Lessee, in keeping the Premises in good order, condition and repair, shall
exercise and perform good maintenance practices. 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.

                  (b) Lessee shall at Lessee's sole cost and expense, procure
and maintain a contract, with copies to Lessor, in customary form and
substance for and with a contractor specializing and experienced in the
inspection, maintenance and service of the heating, air conditioning and
ventilation system for the Premises. However, Lessor reserves the right, upon
notice to Lessee, to procure and maintain the contract for the heating, air
conditioning and ventilating systems, and, if Lessor so elects, Lessee shall
reimburse Lessor, upon demand, for the cost thereof.

                  (c) If Lessee fails to perform Lessee's obligations under
this Paragraph 7.1, Lessor may enter upon the premises after ten (10) days'
prior written notice to Lessee (except in the case of an emergency, in which
case no notice shall be required), perform such obligations on Lessee's
behalf, and put the Premises in good order, condition and repair, in
accordance with Paragraph 13.2 below.

         7.2      LESSOR'S OBLIGATIONS. Subject to the provisions of
Paragraphs 2.2 (Condition), 2.3 (Compliance with Covenants, Restrictions and
Building Code), 4.2 (Common Area Operating Expenses), 6 (Use), 7.1 (Lessee's
Obligations), 9 (Damage or Destruction) and 14 (Condemnation), Lessor,
subject to reimbursement pursuant to Paragraph 4.2, shall keep in good order,
condition and repair the foundations, exterior walls, structural condition of
interior bearing walls, exteriors roof, fire sprinkler and/or standpipe and
hose (if located in the Common Areas) or other automatic fire extinguishing
system including fire alarm and/or smoke detection systems and equipment,
fire hydrants, parking lots, walkways, driveways, landscaping, fences, signs
and utility systems serving the Common Areas and all parts thereof, as well
as providing the services for which there is a Common Area Operating Expense
pursuant to Paragraph 4.2. Lessor shall not be obligated to paint the
exterior or interior surfaces of exterior walls nor shall Lessor be obligated
to maintain, repair or replace windows, doors or plate glass of the Premises.
Lessee expressly waives the benefit of any statute now or hereafter in effect
which would otherwise afford Lessee the right to make repairs at Lessor's
expense or to terminate this Lease because of Lessor's failure to keep the
Building, Industrial Center or Common Areas in good order, condition and
repair.

         7.3      UTILITY INSTALLATIONS, TRADE FIXTURES, ALTERATIONS.

                  (a) DEFINITIONS; CONSENT REQUIRED. The term "Utility
Installations" is used in this Lease to refer to all air lines, power panels,
electrical distribution, security, fire protection systems, communications
systems, lighting fixtures, heating, ventilation and air conditioning
equipment, plumbing, and fencing in, on or about the Premises. The term
"Trade Fixtures" shall mean Lessee's machinery and equipment which can be
removed without doing material damage to the Premises. The term "Alterations"
shall mean any modification of the improvements on the Premises which are
provided by Lessor under the terms of this Lease, other than Utility
Installations or Trade Fixtures. "Lessee-Owned Alterations and/or Utility
Installations" are defined as Alterations and/or Utility Installations in, on,
under or about 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 Lessor's consent but upon notice to
Lessor, so long as they are not visible from the outside of the Premises, do
not involve puncturing, relocating or removing the roof or any existing
walls, or changing or interfering with the fire sprinkler or fire detection
systems and the cumulative cost thereof during the term of this Lease as
extended does not exceed $3,000.00.

                  (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. All consents
given to Lessor, whether by virtue of Paragraph 7.3(a) or by subsequent
specific consent, shall be deemed condition upon: (i) Lessee's acquiring all
applicable permits required by governmental authorities; (ii) the furnishing
of copies of such permits together with a copy of the plans and
specifications for the Alteration or Utility Installations to Lessor prior to
commencement of the work thereon; and (iii) the compliance by Lessee with all
conditions of said permits in a prompt and expeditious manner. Any
Alterations or Utility Installations by Lessee during the term of this Lease
shall be done in a good and sufficient materials, and be in compliance with
all Applicable Requirements. Lessee shall promptly upon completion thereof
furnish Lessor with as-built plans and specifications therefor. Lessor may,
(but without obligation to do so) condition its consent to any requested
Alteration or Utility Installation that costs $3,000.00 or more upon Lessee's
providing Lessor with a lien and completion bond in an amount equal to one
and one-half times the estimated cost of such Alteration or Utility
Installations.

                  (c) LIEN PROTECTION. Lessee shall pay when due all claims
for labor or materials furnished to or for Lessee at or for use on the
Premises, which claims are or may be secured by any mechanic's or
materialman'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 notice of non-responsibility in or on the Premises as provided by law.
If Lessee shall, in good faith, 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
against the Lessor or the Premises. If Lessor shall require, Lessee shall
furnish to Lessor a surety bond satisfactory to Lessor in an amount equal to
one and one-half times the amount

                   INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE--GROSS
                                       5

<PAGE>

of such contested lien, claim or demand, indemnifying Lessor against liability
for the same, as required by law for the holding of the Premises free from
the affect of such lien or claim. In addition, Lessor may require Lessee to
pay Lessor's attorney's fees and costs in participating in such action if
Lessor shall decide it is to its best interest to do so.

         7.4      OWNERSHIP, REMOVAL, SURRENDER, AND RESTORATION.

                  (a) OWNERSHIP. Subject to Lessor's right to require their
removal and to cause Lessee to become the owner thereof as hereinafter
provided in this Paragraph 7.4, all Alterations and Utility Installations
made to the Premises by Lessee shall be the property of and owned by Lessee,
but considered a part of the Premises. Lessor may, at any time and at its
option, elect in writing to Lessee to be the owner of all or any specified
part of the Lessee-Owned Alterations and Utility Installations excepting on
fume hood installed by Lessee. Unless otherwise instructed per Subparagraph
7.4 (b) hereof, all Lease-Owned Alterations and Utility Installations shall,
at the expiration or earlier termination of this Lease, become the property
of Lessor and remain upon the Premises and be surrendered with the Premises
by Lease.

                  (b) REMOVAL. Unless otherwise agreed in writing, Lessor may
require that any or all Lessee-Owned Alterations or Utility Installations be
removed by the expiration or earlier termination of this Lease,
notwithstanding that their installation may have been consented to by Lessor.
Lessor may require the removal at any time of all or any part of any
Alterations or Utility Installations made without the required consent of
Lessor.

                  (c) SURRENDER/RESTORATION. Lessee shall surrender the
Premises by the end of the last day of the Lease term or any earlier
termination date, 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 or by Lessee performing all of its
obligations under this Lease. Except as otherwise agreed or specified herein,
the Premises, as surrendered, shall include the Alterations and Utility
Installations. The obligation of Lessee shall include the repair of any
damage occasioned by the installation, maintenance or removal of Lessee's
Trade Fixtures, furnishings, equipment, and Lessee-Owned Alterations and
Utility Installations, 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 ground water contaminated by Lessee and shall be removed by
Lessee subject to its obligation to repair and restore the Premises per this
Lease.

8.       INSURANCE; INDEMNITY.

         8.1      PAYMENT OF PREMIUM INCREASES.

                  (a) As used herein, the term "Insurance Cost Increase" is
defined as any increase in the actual cost of the insurance applicable to the
Building and required to be carried by Lessor pursuant to Paragraphs 8.2(b),
8.3(a), and 8.3(b), ("Required Insurance"), over and above the Base Premium,
as hereinafter defined, calculated on an annual basis. "Insurance Cost
Increase" shall include, but not be limited to, requirements of the holder of
a mortgage or deed of trust covering Premises, increased valuation of the
Premises, and/or a general premium rate increase. The term "Insurance Cost
Increase" shall not, however, include any premium increase resulting from the
nature of the occupancy of any other lessee of the Building. If the parties
insert a dollar amount in Paragraph 1.9, such amount shall be considered the
"Base Premium". If a dollar amount has not been inserted in Paragraph 1.9 and
if the Building has been previously occupied during the twelve (12) month
period immediately preceding the Commencement Date, the "Base Premium" shall
be the annual premium applicable to such twelve (12) month period. If the
Building was not fully occupied during such twelve (12) month period, the
"Base Premium" shall be the lowest annual premium reasonably obtainable for
the Required Insurance as of the Commencement Date, assuming the most nominal
use possible of the Building. In no event, however, shall Lessee be
responsible for any portion of the premium cost attributable to liability
insurance coverage in excess of $1,000.0000 procured under paragraph 8.2(b).

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

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

                  (a) BUILDING AND IMPROVEMENTS. Lessor shall obtain and keep
in force during the term of this Lease a policy and policies in the name of
Lessor, with loss payable to Lessor and any Lender(s), insuring against loss
or damage to the Premises. Such insurance shall be for full replacement cost,
as the same shall exist from time to time, or the amount required by any
Lender(s), but in no event more than the commercially reasonable and
available insurable value thereof if, by reason of the unique nature or age
of this improvements involved, such latter amount is less than full
replacement cost. Lessee-Owned Alterations and Utility Installations, Trade
Fixtures and Lessee's personal property shall be insured by Lessee pursuant
to Paragraph 8.4. If the coverage is available and commercially appropriate,
Lessor's 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 or included in the Base Premium), including coverage for any
additional costs resulting from debris removal and reasonable amounts of
coverage for the enforcement of any ordinance or law regulating the
reconstruction or replacement of any undamaged sections of the Building
required by a Lender or included in the Base Premium), including coverage for
any additional costs resulting from debris removal and reasonable amounts of
coverage for the enforcement of any ordinance or law regulating the
reconstruction or replacement of any undamaged sections of the Building
required to be demolished or removed by reason of the enforcement of any
building, zoning, safety or land use laws as the result of a covered loss,
but not including plate glass insurance. Said policy or policies shall also
contain an agreed valuation provision in lieu of any co-insurance 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.

                  (b) RENTAL VALUE. Lessor shall also obtain and keep in
force during the term of this Lease a policy or policies in the name of
Lessor, with loss payable to Lessor and any Lender(s), insuring the loss of
the full rental and other charges payable by all leases of the Building to
Lessor for one year (including all Real Property Taxes, insurance costs, all
Common Area Operating Expenses and any scheduled rental increases). Said
insurance may 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 the rental revenues from the date of
any such loss. Said insurance shall contain an agreed valuation provision in
lieu of any co-insurance clause, and the amount of coverage shall be adjusted
annually to reflect the projected rental income, Real Property Taxes,
insurance premium costs and other expenses, if any otherwise payable, for the
next 12-month period. Common Area Operating Expenses shall include any
deductible amount in the event of such loss.

                   INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE--GROSS
                                       6

<PAGE>

                  (c) ADJACENT PREMISES. Lessee shall pay for any increase in
the premiums for the property insurance of the Building and for the Common
Areas or other buildings in the Industrial Center if said increase is caused
by Lessee's acts, omissions, use or occupancy of the Premises.

                  (d) LESSEE'S IMPROVEMENTS. Since Lessor is the Insuring
Party, Lessor shall not be required to insure Lessee-Owner Alterations and
Utility Installations unless the item in question has become the property of
Lessor under the terms of this Lease.

         8.4       LESSEE'S PROPERTY INSURANCE. Subject to the requirements
of Paragraph 8.5, Lessee at its cost shall either by separate policy or, at
Lessor's option by endorsement to a policy already carried, maintain
insurance coverage on all of Lessee's personal property, Trade Fixtures, and
Lessee-Owned Alterations and Utility Installations in, on, or about the
Premises similar in coverage to that carried by Lessor as the Insuring Party
under Paragraph 8.3(a). Such insurance shall be full replacement cost
coverage with a deductible not to exceed $1,000 per occurrence. The proceeds
from any such insurance by shall be used by Lessee for the replacement of
personal property and the restoration of Trade Fixtures and Lessee-Owned
Alterations and Utility Installations. Upon request from Lessor, Lessee shall
provide Lessor with written evidence that such insurance is in force.

         8.5       INSURANCE POLICIES. Insurance required hereunder shall be
in companies duly licensed 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, or such other rating as may be
required by a Lender, as set forth in the most current issue of "Best
Insurance Guide." Lessee shall not do or permit to be done anything which
shall invalidate the Insurance policies referred to in this Paragraph 8.
Lessee shall cause to be delivered to Lessor, within seven (7) days after the
earlier of the Early Possession Date or Commencement Date, copies of, or
certificates evidencing the existence and amounts of, the insurance required
under Paragraph 8.2(a) and 8.4. No such policy shall be cancelable or subject
to modification except after 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, following notice to Lessee, order
such insurance and charge the cost thereof to Lessee, which amount shall be
payable by Lessee to Lessor upon demand.

         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 (whether in contract or in tort)
against the other for loss or damage to their property arising out of or
incident to the perils required to be insured against under Paragraph 8. The
effect of such releases and waivers of the right to recover damages shall not
be limited by the amount of insurance carried or required, or by any
deductibles applicable thereto. Lessor and Lessee agree to have their
respective insurance companies issuing property damage insurance 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 or its agents, contractors,
or employees negligence, or willful misconduct and/or breach of express
warranties, or its obligations hereunder, 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, costs, liens, judgements, penalties, loss of
permits, attorneys' and consultants' fees, expenses and/or liabilities
arising out of, involving, or in connection with the occupancy of the
Premises by Lessee, the conduct of Lessee's business, any act, omission, or
neglect of Lessee, it's agents, contractors, employees or invitees, and out
of any Default or Breach by Lessee in the performance in a timely manner of
any obligation on Lessee's part to be performed under this Lease. The
foregoing shall include, but not be limited to, the defense or pursuit of any
claim or any action or proceeding involved therein, and whether or not (in
the case of claims made against Lessor), litigated and/or reduced to
judgement. In case any action or proceeding be brought against Lessor by
reason of any of the foregoing matters, Lessee upon notice from Lessor shall
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 so 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, air conditioning or
lighting fixtures, or from any other cause, whether 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, from other sources or places,
and regardless of whatever the cause of such damage or injury or the means of
repairing the same is accessible or not. Lessor shall not be liable for any
damages arising from any act or neglect of any other lessee of Lessor nor
from the failure by Lessor to enforce the provisions of any other lease in
the Industrial Center. 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 Premises, other than Lessee-Owned Alterations and Utility
Installations, the repair cost of which damage or destruction is less than
percent (50%) of the then Replacement Cost (as defined in Paragraph 9.1(d))
of the Premises (excluding Lessee-Owned Alterations and Utility Installations
and Trade Fixtures) immediately prior to such damage or destruction.

                  (b) "PREMISES TOTAL DESTRUCTION" shall mean damage or
destruction to the Premises, other than Lessee-Owned Alterations and Utility
Installations, the repair cost of which damage or destruction is fifty
percent (50%) or more of the then Replacement Cost of the Premises (excluding
Lessee-Owned Alterations and Utility Installations and Trade Fixtures)
immediately prior to such damage or destruction. In addition, damage or
destruction to the Building, other than Lessee-Owned Alterations and Utility
Installations and Trade Fixtures or any lessees of the Building, the cost of
which damage or destruction is fifty percent (50%) or more of the then
Replacement Cost Premises (excluding Lessee-Owned Alterations and Utility
Installations and Trade Fixtures of any lessees of the Building) of the
Building shall, at the option of Lessor, be deemed to be Premise Total
Destruction.

                  (c) "INSURED LOSS" shall mean damage or destruction to 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 building
codes, ordinances or laws, 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      PREMISES PARTIAL DAMAGE--INSURED LOSS. If Premises Partial
Damage that is an Insured Loss occurs, then Lessor shall, at Lessor's
expense, repair such damage (but not Lessor'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. In the event, however,
that there is a shortage of insurance proceeds and such shortage is due to
the fact that, by reason of the unique nature of the improvements in the
Premises, 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, Lessor shall
complete them as soon as reasonably possible and this Lease shall remain in
full force and effect. If Lessor does not receive such funds or assurance
within said period, Lessor may nevertheless elect by written notice to Lessee
within ten (10) days thereafter to make such restoration and repair as is
commercially reasonable with Lessor paying any shortage in proceeds, in which
case

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                                       7

<PAGE>

this Lease shall remain in full force and effect. If Lessor does not receive
such funds or assurance within such ten (10) day period, and if Lessor does
not so elect to restore and repair, then this shall terminate sixty (60) days
following the occurrence of the damage or destruction. Unless otherwise
agreed, Lessee shall in no event have any right to reimbursement from Lessor
for 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 rather than Paragraph 9.2, 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 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 and this Lease shall continue in full force and effect),
Lessor may at Lessor's option, 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) give written notice to Lessee
within thirty (30) days after receipt by Lessor of Knowledge of the
occurrence of such damage 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 such notice of Lessor's intention to terminate this
Lease, Lessee shall have the right within ten (10) days after the receipt of
such notice to give written notice to Lessor of Lessee's commitment to pay
for the repair of such damage totally at Lessee's expense and without
reimbursement from Lessor. Lessee shall provide Lessor with the required
funds or satisfactory assurance thereof within thirty (30) days following
such commitment from Lessee. 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 give such notice and provide the funds or assurance thereof within the
times specified above, this Lease shall terminate as of the date specified in
Lessor's notice of termination.

         9.4       TOTAL DESTRUCTION. Notwithstanding any other provisions
hereof, if Premises Total Destruction occurs (including any destruction
required by any authorized public authority), this Lease shall terminate
sixty (60) days following the date of such Premises Total Destruction,
whether or not the damage or destruction is an Insured Loss or was caused by
a negligent or willful act of Lessee. In the event, however, that the damage
or destruction was caused by Lessee, Lessor shall have the right to recover
Lessor's damages from Lessee except as released and waived in Paragraph 9.7.

         9.5       DAMAGE NEAR END OF TERM. If at any time during the last
six (6) months of the term of this Lease there is damage for which the cost
to repair exceeds one month's Base Rent, whether or not an Insured Loss,
Lessor and Lessee may, terminate this Lease effective thirty (30) days
following the date of occurrence of such damage by giving written notice to
the other of its election to do so within thirty (30) days after the date of
occurrence of such damage. Provided, however, if Lessee at this 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 (10) days after Lessee's receipt of Lessor's written
notice purporting to terminate this Lease, or (ii) the day prior to the date
upon which such option expires. If Lessee duly exercises such option during
such period and provide Lessor with funds (or adequate assurance thereof) to
cover any shortage in insurance proceeds, Lessor shall, at Lessor's 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 as of the date set forth in the first sentence of this
Paragraph 9.5.

         9.6      ABATEMENT OF RENT; LESSEE'S REMEDIES.

                  (a) In the event of (i) Premises Partial Damage or (ii)
Hazardous Substance Condition for which Lessee is not legally responsible,
the Base Rent, Common Area Operating Expenses and other charges, if any,
payable by Lessee hereunder for the period during which such damage or
condition, its repair, remediation or restoration continues, shall be abated
in proportion to the degree to which Lessee's use of the Premises is
impaired. Except for abatement of Base Rent, Common Area Operating Expenses
and other charges, if any, as aforesaid, all other obligations of Lessee
hereunder shall be performed by Lessee, and Lessee shall have no claim
against Lessor for any damage suffered by reason of any such damage,
destruction, repair, remediation or restoration.

                  (b) If Lessor shall be obligated to repair or restore the
Premises under the provision of this Paragraph 9 and shall not commence, in a
substantial and meaningful way, the repair or restoration of the Premises
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) following the giving of such notice. If Lessee gives such notice to
Lessor and such Lenders and such repair or restoration is not commenced
within thirty (30) days after receipt of such notice, this Lease shall
terminate as of the date specified in said notice. If Lessor or a Lender
commence the repair or restoration of the Premises within thirty (30) days
after the receipt of such notice, this Lease shall continue in full force and
effect. "Commence" as used in this Paragraph 9.6 shall mean either the
unconditional authorization of the preparation of the required plans, or the
beginning of the actual work on the Premises, whichever occurs first.

         9.7      HAZARDOUS SUBSTANCE CONDITIONS. If a Hazardous Substance
Condition occurs, unless Lessee is legally responsible therefor (in which
case Lessee shall make the investigation and remediation thereof required by
Applicable Requirements and this Lease shall continue in full force and
effect, but subject to Lessor's rights under Paragraph 6.2(c) 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 investigate and 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 such notice of Lessor's intention to terminate this Lease, Lessee
shall have the right within ten (10) days after the receipt of such notice to
give notice to Lessor of Lessee's commitment to pay for the excess costs of
(a) investigation and remediation of such Hazardous Substance Condition to
the extent required by Applicable Requirements, over (b) an amount equal to
twelve (12) times the then monthly Base Rent or $100,000, whichever is
greater. Lessee shall provide Lessor with the funds required of Lessee or
satisfactory assurance thereof within thirty (30) days following said
commitment by Lessee. In such event this Lease shall continue in full force
and effect, and Lessor shall proceed to make such investigation and
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 period specified above, this Lease shall
terminate as of the date specified in Lessor's notice of termination.

         9.8      TERMINATION - ADVANCE PAYMENTS. Upon termination of this
Lease pursuant to this Paragraph 9, Lessor shall return to Lessee any advance
payment made by Lessee to Lessor and so much of Lessee's Security Deposit as
has not been, or is not then required to be, used by Lessor under the terms
of this Lease.

         9.9      WAIVER OF STATUS. Lessor and Lessee agree that the terms
of this Lease shall govern the effect of any damage to or destruction of the
Premises and the Building with respect to the termination of this Lease and
hereby waive the provisions of any present or future statute to the extent it
is inconsistent herewith.

10.      REAL PROPERTY TAXES.

         10.1     PAYMENT OF TAXES. Lessor shall pay the Real Property
Taxes, as defined in Paragraph 10.2(a), applicable to the Industrial Center,
and except as otherwise provided in Paragraph 10.3, any increases in such
amounts over the Base Real Property Taxes shall be included in the
calculation of Common Area Operating Expenses in accordance with the
provisions of Paragraph 4.2.

         10.2     REAL PROPERTY TAX DEFINITIONS.

                  (a) As used herein, the term "Real Property Taxes" shall
include any form of real estate tax or assessment, general, special, ordinary
or extraordinary, and any license fee, commercial rental tax, improvement
bond or bonds, levy tax (other than inheritance, personal income or estate
taxes) imposed upon the Industrial Center by any authority having the direct
or indirect power to tax, including any city, state or federal government, or
any school, agricultural, sanitary, fire, street, drainage, or other
improvement district thereof, levied against any legal equitable interest of
Lessor in the Industrial Center or any portion thereof, Lessor's right to
rent or other income therefrom, and/or Lessor business of leasing the
Premises. 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, or changes in Applicable Law taking effect, during the term
of this Lease, including the execution of this Lease, or any

                   INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE--GROSS
                                       8

<PAGE>

modification, amendment or transfer thereof, and any modification made to the
Premises by or for Lessee whether or not contemplated by the Parties, but not
including a change in ownership of the Industrial Center.

                  (b) As used herein, the term "BASE REAL PROPERTY TAXES"
shall be the amount of Real Property Taxes, which are assessed against the
Premises, Building or Common Area in the calendar year during which the Lease
is executed. In calculating Real Property Taxes for any calendar year, the
Real Property Taxes for any real estate tax year shall be included in the
calculation of Real Property Taxes for such calendar year and tax year have
in common.

         10.3     ADDITIONAL IMPROVEMENTS. Common Area Operating Expenses
shall not include Real Property Taxes specified in the tax assessor's records
and worksheets as being caused by additional improvements placed upon the
Industrial Center by other lessees or by Lessor for the exclusive enjoyment
of such other lessees. Notwithstanding Paragraph 10.1 hereof, Lessee shall,
however, pay to Lessor at the time Common Area Operating Expenses are
payable under Paragraph 4.2, the entirety of any increase in Real Property
Taxes if assessed solely by reason of Alteration, Trade Fixtures or Utility
Installations placed upon the Premises by Lessee or at Lessee's request.

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

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

11.      UTILITIES. Lessee shall pay directly for all utilities and services
supplied to the Premises, including but not limited to electricity,
telephone, security, gas and cleaning of the Premises, together with any
taxes thereon. If any such utilities or services are not separately metered
to the Premises or separately billed to the Premises, Lessee shall pay to the
Lessor a reasonable proportion to be determined by Lessor of all such changes
jointly metered or billed with other premises in the Building, in the manner
and within the time periods set forth in Paragraph 4.2(d).

12.      ASSIGNMENT AND SUBLETTING.

         12.1     LESSOR'S CONSENT REQUIRED.

                  (a) Lessee shall not voluntarily or by operation of law
assign, transfer, mortgage or otherwise transfer or encumber (collectively
"assign") or sublet all or any part of Lessee's interest in this Lease or in
the Premises without Lessor's prior written consent given under and subject
to the terms of Paragraph 36.

                  (b) a change in the control of Lessee shall constitute an
assignment requiring Lessor's consent. The transfer, on a cumulative basis,
of forty-nine percent (49%) or more of the voting control of Lessee shall
constitute a change in control for this purpose.

                  (c) The involvement of Lessee or its assets in any
transaction, or series of transactions (by way of merger, sale, acquisition,
financing, refinancing, transfer, leveraged buy-out or otherwise), whether or
not a formal assignment or hypothecation of this Lease or Lessee's assets
occurs, which results or will result in a reduction of Net Worth of Lessee,
as hereafter defined, by an amount equal to or greater than twenty-five
percent (25%) of such Net Worth of Lessee as it was represented to Lessor at
the time of full execution and delivery 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, at whichever time said Net Worth of Lessee was or is greater,
shall be considered an assignment of this Lease by Lessee to which Lessor may
reasonably withhold its consent. "NET WORTH OF LEASE" for purpose of this
Lease shall be the net worth of Lessee (excluding Guarantors) established
under generally accepted accounting principles consistently applied.

                  (d) An assignment or subletting of Lessee's interest in
this Lease without Lessor's specific prior written consent shall, at Lessor's
option, be a Default curable after notice per Paragraph 13.1, or a
non-curable Breach without the necessity of any notice and grace period. If
Lessor elects to treat such uncontested to assignment or subletting as a
non-curable Breach, Lessor shall have the right to either: (i) terminate this
Lease, or (ii) upon thirty (30) days written notice ("Lessor's Notice"),
increase the monthly Base Rent for the Premises to the greater of the then
fair market rental value of the Premises, as reasonably determined by Lessor,
or one hundred ten percent (110%) of the Base Rent then in effect. Pending
determination of the new fair market rental value, if disputed by Lessee,
Lessee shall pay the amount set forth in Lessor's Notice, with any
overpayment credited against the next installment(s) of Base Rent coming due,
and any underpayment for the period retroactively to the effective date of
the adjustment being due and payable immediately upon the determination
thereof. 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 the then fair market value as reasonably
determined by Lessor (without the Lease being considered an encumbrance or
any deduction for depreciation or obsolescence, and considering the Premises
at its highest and best use and in good condition) or one hundred ten percent
(110%) of the price previously in effect, (ii) any index-oriented rental or
price adjustment formula contained in this Lease shall be adjusted to require
that the base index be determined with reference to the index applicable to
the time of such adjustment, and (iii) any fixed rental adjustment scheduled
during the remainder of the Lease term shall be increased in the same ratio
as the new rental bears to the Base Rent in effect immediately prior to the
adjustment specified in Lessor's Notice.

                  (e) Lessee's remedy for any breach of this 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, nor (iii) alter the primary
liability of Lessee for the payment of Base Rent and other sums due Lessor
hereunder or for the performance of any other obligations to be performed by
Lessee under this Lease.

                  (b) Lessor may accept any 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 any rent for performance shall constitute a
waiver or estoppel of Lessor's right to exercise its remedies for the Default
or Breach by Lessee of any of the terms, covenants or conditions of this
Lease.

                  (c) The consent of Lessor to any assignment or subletting
shall not constitute a consent to any subsequent assignment or subletting by
Lessee or to any subsequent or successive assignment or subletting by the
assignee or sublessee. However, Lessor may consent to subsequent subletting
and assignments of the sublease or any amendments or modifications thereto
without notifying Lessee or anyone else liable under this Lease or the
sublease and without obtaining their consent, and such actions shall not
relieve such persons from liability under this Lease or the sublease.

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

                  (e) Each request for consent to an assignment or subletting
shall be writing, accompanied by information relevant Lessor's determination as
to the financial and operational responsibility and appropriateness of the
proposed assignee or sublessee, including but not limited to the intended use
and/or required modification of the Premises, if any, together with a
non-refundable deposit of $1,000 or ten percent (10%) of the monthly Base Rent
applicable to the portion of the Premises which is the subject of the proposed
assignment or sublease whichever is greater, as

                   INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE--GROSS
                                       9

<PAGE>

reasonable consideration for Lessor's considering and processing the request
for consent. Lessee agrees to provide Lessor with such other or additional
information and/or documentation as may be reasonably requested by Lessor.

                  (f) Any assignee of, or sublessee under, this Lease shall,
by reason of accepting such assignment or entering into such sublease, be
deemed, for the benefit of Lessor, 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 in writing.

                  (g) The occurrence of a transaction described in paragraph
12.2(c) shall give Lessor the right (but not the obligation) to require that
the Security Deposit be increased by an amount equal to two (2) times the
then monthly Base Rent, and Lessor may make the actual receipt by Lessor of
the Security Deposit increase a condition to Lessor's consent to such
transaction.

                  (h) Lessor, as a condition to giving its consent to any
assignment or subletting may require that the amount and adjustment schedule
of the rent payable under this Lease be adjusted to what is then the market
value and/or adjustment schedule for property similar to the Premises as then
constituted, as determined by Lessor.

         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 herein:

                  (a) Lessee hereby assigns and transfers to Lessor fifty
percent (50%) above its cost of Lessee's interest in all rentals and income
arising from any sublease of all or a portion of the Premises heretofore or
hereafter made by Lessee, and Lessor may collect such rent and income and
apply same toward Lessee's obligations under this Lease; provided, however,
that until a Breach (as defined in Paragraph 13.1) shall occur in the
performance of Lessee's obligations under this Lease, Lessee may, except as
otherwise provided in this Lease, receive, collect, and enjoy the rents
accruing under such sublease. Lessor shall not, by reason of the foregoing
provision or any other assignment of such sublease to Lessor, nor by reason
of the collection of the rents from a sublessee, be deemed liable to the
sublessee for any failure of Lessee to perform and comply with any of
Lessee's obligations to such sublessee under such Sublease. Lessee hereby
irrevocably authorizes and directs any such sublessee, upon receipt of a
written notice from Lessor stating that Breach exists in the performance of
Lessee's obligations under this Lease, to pay to Lessor the rents and other
charges due and to become due under the sublease. Sublessee shall rely upon
any such statement and request from Lessor and shall pay such rents and other
charges to Lessor without any obligation or rights to inquire as to whether
such Breach exists and notwithstanding any notice from or claim from Lessee
to the contrary. Lessee shall have no right or claim against such sublessee,
or, until the Breach has been cured, against Lessor, for any such rents and
other charges so paid by said sublessee to Lessor.

                  (b) In the event of a Breach by Lessee in the performance
of its obligations under this Lease, Lessor, at its option and without any
obligation to do so, may 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
other prior defaults or breaches of such sublessor under such sublease.

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

                  (d) No sublessee under a sublease approved by Lessor 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 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 the 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. Lessor and Lessee agree that if an
attorney is consulted by Lessor in connection with a Lessee Default or Breach
(as hereinafter defined), actual fees and costs is a reasonable sum for legal
services and costs in the preparation and service of a notice of Default,
Lessor may include the cost of such services and costs in said notice as rent
due and payable to cure said default. A "Default" by Lessee is defined as a
failure by Lessee to observe, comply with or perform any of the terms,
covenants, conditions or rules applicable to Lessee under this Lease. A
"Breach" by Lessee is defined as the occurrence of any one or more of the
following Defaults, and, where a grace period for cure after notice is
specified herein, the failure by Lessee to cure such Default prior to the
expiration of the applicable grace period, and shall entitle Lessor to pursue
the remedies set forth in Paragraph 13.2 and/or 13.3:

                  (a) The vacating of the Premises without the intention to
reoccupy the same, or the abandonment of the Premises.

                  (b) Except as expressly otherwise provided in this Lease,
the failure by Lessee to make any payments of Base Rent, Lessee's Share of
Common Area Operating Expenses, or any other monetary payment required to be
made by Lessee hereunder as and when due, the failure by Lessee to provide
Lessor with reasonable evidence of insurance or surety bond required under
this Lease, or the failure of Lessee to fulfill any obligation under this
Lease, where such failure continues for a period of five (5) days following
written notice thereof by or on behalf of Lessor to Lessee, except that which
endangers or threatens life or property where such failure continues for a
period of one (1) day.

                  (c) Except as expressly otherwise provided in this Lease,
the failure by Lessee to provide Lessor with reasonable written evidence (in
duly executed original form, if applicable) of (i) compliance with Applicable
Requirements per Paragraph 6.3, (ii) the inspection, maintenance and service
contracts required under Paragraph 7, (iii) the rescission of an unauthorized
assignment or subletting per Paragraph 12.1, (iv) a Tenancy Statement per
Paragraphs 16 or 37, (v) the subordination or non-subordination of this Lease
per Paragraph 30, (vi) the guaranty of the performance of Lessee's
obligations under this Lease if required under Paragraphs 1.11 and 37, (vii)
the execution of 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 fifteen (15) days following written notice by or on
behalf of Lessor 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 that are to be observed, complied with or performed by
Lessee, 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 thereof by or on behalf of Lessor to Lessee; 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 of this Lease by Lessee 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 by Lessee of any general arrangements or assignments for the benefit
of creditors; (ii) Lessee's becoming a "debtor" as defined in 11 U.S. Code
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

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                                       10

<PAGE>

any provision of this Subparagraph 13.1(c) is contrary to any applicable law,
such provision shall be of no force or effect, and shall not affect the
validity of the remaining provisions.

                  (f) The discovery by Lessor that any financial state of
Lessee or of any Guarantor, given to Lessor by Lessee or any Guarantor, 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
anticipatory breach basis, and Lessee failure, within sixty (60) days
following written notice by or on behalf of Lessor to Lessee of any such
event, to provide Lessor with written alternative assurances of 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 an affirmative duty or
obligation of Lessee under this Lease, within ten (10) days after written
notice to Lessee (or in case of an emergency, without notice), Lessor may at
its option (but without obligation to do so), 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 to Lessor upon 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 own option, may require all future payments to be made under
this Lease by Lessee to be made only by cashier's check. In the event of a
Breach of this Lease by Lessee (as defined in Paragraph 13.1), with or without
further notice or demand, and without limiting Lessor in the exercise of any
right or remedy which Lessor may have by any reason of such Breach, Lessor
may:

                  (a) Terminate and Lessee shall immediately surrender
possession of the Premises to Lessor. In such event Lessor shall be entitled
to recover from Lessee: (i) the worth at the time of the award of the unpaid
rent which had been earned at the time of termination; (ii) the worth at the
time of the amount by which the unpaid rent which would have been earned
after termination until the time of award exceeds the amount of 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 (iii)
any other amount necessary to compensate Lessor for all the detriment
proximately award exceeds the amount of unpaid rent for the balance of the
terms after the time of award excess the amount of such rental by the Lessee
failure to perform its obligations under this Lease or which in the ordinary
course of things could 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 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
discount in such amount at the discount rate of the Federal Reserve Bank of
San Francisco or the Federal Reserve Bank District in which the Premises are
located at the time of award plus one percent (1%). Efforts by Lessor to
mitigate damages caused by Lessee's Default or Breach of this Lease shall not
waive Lessor's right to recover damages under this Paragraph 13.2. If
termination of this Lease is obtained through the provisional remedy of
unlawful detainer, Lessor shall have the right to recover in such proceeding
the unpaid rent and damages are recoverable therein, or Lessor may reserve the
right to recover all or any part thereof in a separate suit for such rent
and/or damages if a notice and grace may be given to Lessee under any
statute authorizing the forfeiture of leases for unlawful detainer shall also
constitute the applicable notice for grace period purposes required by
Subparagraph 13.1(b), (c) or (d). In such case, the applicable grace period
under this unlawful detainer statute shall run concurrently after the one
such statutory notice, and the failure of Lessee to cure the Default within
the greater of the two (2) such grace periods shall constitute both an
unlawful detainer and a Breach of this Lease entitle in Lessor to the remedies
provided for this Lease and/or by said statute.

                  (b) Continue the Lease and Lessee's right to possession in
effect (in California under California Civil Code Section 1951.4) after
Lessee's Breach and recover the rent as it becomes due, provided Lessee has
the right to sublet or assign, subject only to reasonable limitations. Lessor
and Lessee agree that the limitations on assignment and subletting in this
Lease are reasonable. Acts of maintenance or preservation, efforts to relet
the Premises, or the appointment of a receiver to protect the Lessor's
interest under this Lease, shall not constitute a termination of the Lessee's
right to possession.

                  (c) Pursue any other remedy now or hereafter available to
Lessor under the laws or judicial decisions of the state wherein the Premises
are located.

                  (d) 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 by reason of Lessee's occupancy
of the Premises.

         13.3     INDUCEMENT RECAPTURE IN EVENT OF BREACH. Any agreement by
Lessor for free or abated rent or other charges applicable to the Premises,
or forth giving or paying by Lessor to or for Lessee of any cash or other
bonus, inducement reconsideration 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 to be performed or
observed by Lessee during the term hereof as the same may be extended. Upon
the occurrence of a Breach (as defined in paragraph 13.1) of this Lease by
Lessee, any such Inducement or vision shall automatically be deemed deleted
from the lease and of no further force or effect, and any rent, other
change, bonus inducement or consideration therefor abated, given or paid by
Lessor under such an Inducement Provision shall be immediately due and
payable by Lessee to Lessor, and recoverable by Lessor, as additional rent
due under this Lease, 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 13.3 shall not be deemed waiver
by Lessor of the Provisions of this Paragraph 13.3 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 to Lessor of rent and other sums due hereunder 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 alter charges which may be imposed
upon Lessor by the terms of any ground lease, mortgage or deed of trust
covering the Premises. Accordingly, if any installment of rent or the sum due
from Lessee shall not be received by Lessor or Lessor's designee with three
(3) business days after such amount shall be due, then, without any
requirement for notice to Lessee, Lessee shall pay to Lessor a late charge
equal to six percent (6%) of 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 late payment by Lessee. 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 Lessor
from exercising 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
Paragraph 4.1 or any other provision of this Lease to the contrary, Base Rent
shall, at Lessor's option, become due and payable quarterly in advance.

         13.5     BREACH BY LESSOR. Lessor shall not 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 13.5, a
reasonable time shall in no event be less then perform an obligation required
to be performed by Lessor. For purposes of this paragraph 13.5, a reasonable
time shall in no event be less than thirty (30) days after receipt by
Lessor, and by any Lender(s) whose names and address shall have been furnished
to Lessee in writing for such purpose, or written notice specifying wherein
such obligation of Lessor has not been performed; provided, however, that if
the nature of Lessor's

                   INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE--GROSS
                                       11

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obligation is such that more than thirty (30) days after such notice are
reasonably required for its performance, then Lessor shall not be in breach
of this Lease if performance is commenced within such thirty (30) day period
and thereafter diligently pursued to completion.

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 such
power (all of which are herein called "condemnation"), this Lease shall
terminate as to the part so taken as of the date of the condemnation
authority takes title or possession, whichever first occurs. If more than ten
percent (10%) of the floor area of the Premises, or more than twenty five
percent (25%) of the portion of the Common Areas designated for Lessee's
parking, is taken by condemnation, Lessee may, at Lessee's option, to be
exercise in writing within ten (10) days after Lessor shall have given
Lessees written notice of such taking over 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 the same proportion as the rentable floor area of the Premises
taken bears to the total rentable floor area of the Premises. No reduction of
Base Rent shall occur if the condemnation does not apply to any portion of
the Premises. Any award for the taking of all or any part of the Premises
under the power of eminent domain or any payment made under threat of the
exercise of such power shall be the property of Lessor, whether such award
shall be made as compensation for diminution of value of the leasehold or for
the making of the fee or as severance damages; provided, however, that Lessee
shall be entitled to any compensation, separately awarded to Lessee for
Lessee's relocation expenses and/or loss of Lessee's Trade Fixtures. In the
event that this Lease is not terminated by reason of such condemnation,
Lessor shall to the extent of its net severance damages receive, over and
above Lessee's Share of the legal and other expenses incurred by Lessor in
the condemnation matter, repair any damage to the Premises caused by such
condemnation authority.

15.      BROKER'S FEES.

         15.1     PROCURING CAUSE. The Broker(s) named in Paragraph 1.14
is/are the procuring cause of this Lease.

         15.2     ADDITIONAL TERMS. Unless Lessor and Broker(s) have
otherwise agreed in writing, Lessor agrees that: (a) if Lessee exercises any
Option (as defined in Paragraph 39.1) granted under this Lease or any Option
subsequently granted, or (b) if Lessee acquires any rights to the Premises or
other premises in which Lessor has an interest, or (c) if Lessee remains in
possession of the Premises with the consent of Lessor after the expiration of
the term of this Lease after having failed to exercise an Option, or (d) if
said Brokers are the procuring cause of any other lease or sale entered into
between the Parties pertaining to the Premises and/or any adjacent property
in which Lessor has an interest, or (e) if Base Rent is increased, whether by
agreement or operation of an escalation clause herein, then as to any of said
transactions, Lessor shall pay said Broker(s) a fee in accordance with the
schedule of said Broker(s) in effect at the time of the execution of this
Lease.

         15.3     ASSUMPTION OF OBLIGATIONS. Any buyer or transferee of
Lessor's interest in this Lease, whether such transfers by agreement or by
operation of law shall be deemed to have assumed Lessor's obligation under this
paragraph 15. Each Broker shall be an intended third party beneficiary of the
provisions of Paragraph 1.14 and of this Paragraph 15 to the extent of its
interest in any commission arising from this Lease and may enforce that right
directly against Lessor and its successors.

         15.4     REPRESENTATIONS AND WARRANTIES. Lessee and Lessor each
represent and warrant to the other that it has had no dealings with any
person, firm, broker or finder other than as named Paragraph 1.14 in
connection with the negotiation of this Lease and/or the consummation of the
transaction contemplated hereby, and that no broker or other firm or entity
other than said named Broker(s) is entitled to any commission or finder's fee
in connection with said transaction. Lessee and Lessor do each hereby agree
to indemnify, protect, defend and hold the other harmless from and against
liability for compensation or charges which may be claimed by any such
unnamed broker, finder or other similar party by reason of any dealings or
actions of the indemnifying Party, including any costs, expenses, and/or
attorney' fees reasonably incurred with respect thereto.

16.      TENANCY AND FINANCIAL STATEMENTS.

         16.1     TENANCY STATEMENT. 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 a form similar to the then most current "Tenancy
Statement" 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.

         16.2     FINANCIAL STATEMENT. If Lessor desires to finance,
refinance, or sell the Premises or the building, or any part thereof, Lessee
and all Guarantors shall deliver to any potential lender or purchaser
designated by Lessor such financial statements of Lessee and such Guarantors
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.      LESSOR'S LIABILITY. The term "Lessor" as used herein shall mean the
owner or owners at the time in question of the fee title to the Premises. In
the event of a transfer of Lessor's title or interest in the Premises or in
this Lease, Lessor shall deliver to the transferee or assignee (in cash or by
credit) any unused Security Deposit held by Lessor at the time of such
transfer or assignment. Except as provided in Paragraph 15.3, upon such
transfer or assignment and delivery of the Security Deposit as aforesaid the
prior Lessor shall be relieved of all liability with respect to the
obligations and/or covenants under this Lease thereafter to be performed by
the Lessor. Subject to the foregoing, the obligations and/or covenants in
this Lease to be performed by the Lessor shall be binding only upon the
Lessor as hereinabove defined.

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

19.      INTEREST OF PAST-DUE OBLIGATIONS. Any monetary payment due Lessor
hereunder, other than late charges, not received by Lessor within ten (10)
days following the date on which it was due, shall bear interest from the
date due at the prime rate charged by the largest state chartered bank in the
state in which the Premises are located plus four percent (4%) per annum, but
not exceeding the maximum rate allowed by law, in addition to the potential
late charge provided for in Paragraph 13.4.

20.      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.

21.      RENT DEFINED. All monetary obligations of Lessee to Lessor under the
terms of this Lease are deemed to be rent.

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. Each Broker shall be an
intended third party beneficiary of the provisions of this Paragraph 22.

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

                   INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE--GROSS
                                       12

<PAGE>

         23.3     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 therein and
mailed with postage prepaid. Notice delivered by United States Express Mail or
overnight courier that guarantees next day delivery shall be deemed given
twenty-four hours after delivery of the same served or delivered upon
telephone or facsimile confirmation of receipt of the transmission thereto,
provided a copy is also delivered via delivery or mail. If notice is received
on a Saturday or a Sunday or a legal holiday, it shall be deemed received on
the next business day.

24.      WAIVERS. No waiver by Lessor or 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 any other 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 any other term,
covenant or condition hereof. Lessor's consent to, or approval of, any such
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 the Lease requiring such consent. Regardless of Lessor's knowledge of a
Default or Breach at the time of accepting rent, the acceptance of rent by
Lessor shall not be a waiver of any Default or Breach by Lessee of any
provision hereof. Any payment given Lessor by Lessee may be accepted by
Lessor on account of money or damages due Lessor, notwithstanding any
qualifying terms or conditions made by Lessee in connection therewith, which
such statements and/or conditions shall be of no force of 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 the payment of any fees or taxes 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 earlier termination
of this Lease. In the event that Lessee holds over in violation of this
Paragraph 26 then the Base Rent applicable during the month immediately
preceding such expiration or earlier termination. Nothing contained herein
shall be construed as a consent by Lessor to any holding over by Lessee.

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

28.      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 to and subordinate to any ground lease, mortgage deed of
trust, or other type hypothecation or security device (collectively "Security
Device"), now or hereafter placed by Lessor upon the real property of which
the Premises are a part, to any and all advances made on the security
thereof, and to all renewals, modifications, consolidations, replacements and
extensions thereof. Lessee agrees that the Lenders holding any such Security
Device shall have not duty, liability or obligation to perform any of the
obligations of Lessor under this Lease, but that in the event of Lessor's
default with respect to any default pursuant to Paragraph 13.5 if any Lender
shall elect to have this Lease and/or any Option granted hereby superior to
the lien of its Security Device and shall give written notice thereof to
Lessee, this Lease and such Options shall be deemed prior to such Security
Device, notwithstanding the relative dates of the documentary or recordation
thereof.

         30.2     ATTORNMENT. Subject to the non-disturbance provisions of
Paragraph 30.3, Lessee agrees to attorn to a Lender or any other party who
acquires ownership of the Premises by reason of a foreclosure of a Security
Device, and that in the event of such foreclosure such new shall not: (i) be
liable for any act or omission of any prior Lessor with respect to events
occurring prior to acquisition of ownership, (i) 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 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 assurance (a "non-disturbance
agreement") from the Lender that Lessee's possession and his Lease, including
any options to extend the term thereof, will not be disturbed so long as
Lessee is not in Breach hereof and attorns to the record owner of the
Premises.

         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 documents; provided,
however, that upon written request from Lessor or a Lender in connection with
a sale financing or refinancing of the Premises, Lessee and Lessor shall
execute such further writing as may be reasonably required to separately
document any such subordination or non-subordination, attornment and/or
non-disturbance agreement as is provided for herein.

31.      ATTORNEYS' FEES. If any Party brings an action or proceeding to
enforce the term thereof or 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 who substantially obtains or
defects the relief sought, as the case may be, whether by compromise,
settlement, judgment, or the abandonment by the other Party of its claim or
defense. The attorneys' fee award shall not be computed by compromise,
settlement, judgment, or the abandonment by the other Party of its claim or
defense. The attorney's fee 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. Lessor shall be entitled to attorneys'
fees, costs and expenses incurred in preparation and service of notices of
Default and consultations in connection therewith, whether or not a legal
action subsequently commenced in connection with such Default or resulting
Breach.

32.      LESSOR'S ACCESS: SHOWING PREMISES; REPAIR. 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 with reasonable advance
notice for the purpose of showing the same to prospective purchasers,
lenders, or lessee, and making such alterations, repairs, improvements or
additions to the Premises or to the Building, as Lessor may reasonably deem
necessary. Lessor may at any time place on or about the Premises or Building
any ordinary "For Sale" signs and Lessor may at any item during the last one
hundred eighty (180) days of the term thereof place on or about the Premises
ordinary "For Lease" signs. All such activities of Lessor shall be without
abatement of rent or liability to Lessee.

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

34.      SIGNS. Lessee shall not place any sign upon the exterior of the
Premises of the Building, except that Lessee may, with Lessor's prior written
consent, install (but not on the roof) such signs as are reasonably required
to advertise Lessee's own business so long as such signs are in a location
designated by Lessor and comply with the Applicable Requirements and the
signage criteria established for the Industrial Center by Lessor. The
installation of any sign on the Premises by or for Lessee shall be subject to
the provisions of Paragraph 7 (Maintenance, Repairs, Utility Installations,
Trade Fixtures and Alterations). Unless otherwise expressly agreed herein,
Lessor reserves all rights to the use of the roof of the Building, and the
right to install advertising signs on the Building, including the roof, which
do not unreasonably interfere with the conduct of Lessee's business; Lessor
shall be entitled to all revenues from such advertising signs.

                   INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE--GROSS
                                       13

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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, Lessor shall, in the event of any
such surrender, termination or cancellation, have the option to continue any
one or all of any existing subtenancies. Lessor's failure within ten (10)
days following any such event to make a written elect to the contrary by
written notice to the holder of any such lessor interest, shall constitute
Lessor's election to have such event constitute termination of such interest.

36.      CONSENTS.

                  (a) Except for Paragraph 33 hereof (auctions) or 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 pertaining to this Lease or the
Premises, including, but not limited to consents to an assignment subletting
or the presence or use of a Hazardous Substance, shall be paid by Lessee to
Lessor upon receipt of an invoice and supporting documentation therefor. In
addition to the deposit described in Paragraph 12.2(e), Lessor may as a
condition to considering any such request by Lessee, require that Lessee
deposit with Lessor an amount of money (in addition to the Security Deposit
held under Paragraph 5) reasonably calculated by Lessor to represent the cost
Lessor will incur in considering and responding to Lessee's request. Any
unused portion of a deposit shall be refunded to Lessee without interest.
Lessor's consent to any act, assignment of this Lease or subletting of the
Premises by Lessee shall not constitute an acknowledgment that no Default or
Breach by Lessee of this Lease exists, nor shall such consent be deemed
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.

                  (b) All conditions to Lessor's consent authorized by this
Lease are acknowledged by Lessee as being reasonable. The failure to specify
herein any particular condition to Lessor's consent shall not preclude the
impositions 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.

37.      GUARANTOR.

         37.1     FORM OF GUARANTY. If there are to be any Guarantors of this
lease per Paragraph 1.11, the form of the guaranty to be executed by each
such Guarantor shall be 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, including but not limited to the
obligation to provide the tenancy statements and information required in
Paragraph 16.

         37.2     ADDITIONAL OBLIGATIONS OF GUARANTOR. It shall constitute a
Default of the Lessee under this Lease if any such Guarantor fails or
refuses, upon reasonable request by Lessor to give: (a) evidence of the due
execution of the guaranty called for by this Lease, including the authority
of the Guarantor (and of the party signing on the Guarantor's behalf) to
obligate such Guarantor on said guaranty, and resolution of its board of
directors authorizing the making of such guaranty, together with a
certificate of incumbency showing the signatures of the persons authorized to
sign on its behalf, (b) current financial statements of Guarantor as may from
time to time be requested by Lessor, (c) a Tenancy Statement, or (d) written
confirmation that the guaranty is still in effect.

38.      QUIET POSSESSION. Upon payment by Lessee for the rent for the
Premises and the 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 of the Premises or for the entire term
hereof subject to all provisions of this Lease.

39.      OPTIONS.

         39.1     DEFINITIONS. As used in this Lease, the word "Option" has
the following meaning: (a) the right to extend the term of this Lease or to
renew this Lease or to extend or renew any lease that Lessee has on other
property of Lessor: (b) the right of first refusal to lease the Premises or
their right of first offer to lease the Premises or the right of first
refusal to lease other property of Lessor, or the right of first offer to
lease other property of Lessor; (c) the right to purchase the Premises, or
the right of first refusal to purchase the Premises, or the right of first
offer to purchase the Premises, or the right to purchase other property of
Lessor or the right of first refusal to purchase other property of Lessor, or
the right of first offer to purchase 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 named in Paragraph
1.1. hereof, and cannot be voluntarily or involuntarily assigned or exercised
by any person or entity other than said original Lessee while the original
Lessee is in full and actual possession of the Premises and without the
intention of thereafter assigning or subletting. The Options, if any, herein
granted to Lessee are not assignable, with a part of an assignment of this
Lease or separately or apart therefrom, and no Option may be separated from
this Lease in any manner, by reservation or otherwise.

         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 to extend or renew this Lease have been validly
exercised.

         39.4     EFFECT OF DEFAULT ON OPTIONS.

                  (a) Lessee shall have no right to exercise an Option,
notwithstanding any provisions the grant of Option of the contrary: (i)
during the period commencing with the giving of any notice of Default under
Paragraph 13.1 and continuing until the noticed Default is cured, or (ii)
during the period of time any monetary obligation due Lessor from Lessee is
unpaid (without regard to whether notice thereof is given Lessee) or (iii)
during the time Lessee is in Breach of this Lease, or (iv) in the event that
Lessor has given to Lessee three (3) or more notices of separate Defaults
under Paragraph 13.1 during the twelve (12) month period immediately
preceding the exercise of the option, whether or not the Defaults are cured.

                  (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) All rights of Lessee under the provisions of an option
shall terminate and be of no further force of effect, notwithstanding
Lessee's due and timely exercise of the Option, if, after such exercise and
during the term of this Lease (i) Lessee fails to pay to Lessor a monetary
obligation of Lessee for a period of thirty (30) days after such obligation
becomes due (without any necessity of Lessor to give notice thereof to
Lessee), or (ii) Lessor gives to Lessee three (3) or more notices of separate
Defaults under Paragraph 13.1 during any twelve (12) month period, whether or
not the Defaults are cured, or (iii) if Lessee is in a Breach of this Lease.

40.      RULES AND REGULATIONS. Lessee agrees that it will abide by, and keep
and observe all reasonable rules and regulations ("Rules and Regulations")
which Lessor may make from time to time for the management, safety, care, and
cleanliness of the grounds, the parking and unloading of vehicles and the
preservation of good order, as well as for the convenience of other occupants
or tenants of the Building and the Industrial Centre and their invitees.

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 the right, from time to time, to
grant, without the consent or joinder of Lessee, such easements, rights of
way, utility raceways, and dedications that Lessor deems necessary, and to
cause the recordation of parcel map and restrictions, so long as such
easements, rights of way, utility raceways, 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

                   INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE--GROSS
                                       14

<PAGE>

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 under the provisions of Lease.

44.      AUTHORITY. If either Party hereto is a corporation, trust, or
general or limited partnership, 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. If Lessee is a
corporation, trust or partnership, Lessee shall, within thirty (30) days after
request by Lessor, deliver to Lessor evidence satisfactory to lessor of XXX
authority.

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

46.      OFFER. Preparation of this Lease by either Lessor or Lessee or
Lessor's agent or Lessee's agent and submission of same to Lessee XXX Lessor
shall not be deemed an offer to lease. 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. The Parties shall amend
this Lease from time to time to reflect any adjustments that are made to the
Base Rent or other rent payable under this Lease. As long as they do not
materially change Lessee's obligations hereunder, Lessee agrees to make such
reasonable non-monetary modifications to the Lease as may be reasonably
required by an institutional insurance company or pension plan Lender in
connection with the obtaining of normal financing or refinancing of the
property of which the Premises are a part.

48.      MULTIPLE PARTIES. Except as otherwise expressly provided herein, if
more than one person or entity is named herein as either Lessor or Lessee,
the obligations of such multiple parties shall be joint and several
responsibility of all persons or entities named herein as such Lessor or
Lessee.

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM
AND PROVISION CONTAINED HEREIN AND, BY 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 REASONABLE AND
EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.

IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR YOUR ATTORNEY'S
REVIEW AND APPROVAL. FURTHER EXPERTS SHOULD BE CONSULTED TO EVALUATE THE
CONDITION OF THE PROPERTY FOR THE POSSIBLE PRESENCE OF ASBESTOS, UNDERGROUND
STORAGE TANKS OR HAZARDOUS SUBSTANCES. NO REPRESENTATION OR RECOMMENDATION IS
MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR BY THE REAL ESTATE
BROKERS OR THEIR CONTRACTORS, AGENTS OR EMPLOYEES AS TO THE LEGAL
SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE
TRANSACTION TO WHICH IT RELATES; THE PARTIES SHALL RELY SOLELY UPON THE
ADVICE OF THEIR OWN COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS
LEASE. IF THE SUBJECT PROPERTY IS IN A STATE OTHER THAN CALIFORNIA, AN
ATTORNEY FROM THE STATE WHERE THE PROPERTY IS LOCATED SHOULD BE CONSULTED.

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

    LESSOR NEARON ENTERPRISES, LLC

    By                                      By   /s/ William E. Rich
      -------------------------------         --------------------------------

                   Its                               Its   President
                      ---------------                   ----------------------

    By                                      By
      -------------------------------         --------------------------------

                   Its                               Its
                      ---------------                   ----------------------

    Executed at                             Executed at
               ----------------------                  -----------------------

    On (date)                               On (date)  April 16, 1996
             ------------------------                -------------------------

    Address   30 Oak Court                  Address    470 San Antonio Rd.
           --------------------------              ---------------------------
          Danville, CA 94526                       Palo Alto, CA 94306
    ---------------------------------       ----------------------------------

                   INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE--GROSS
                                       15

<PAGE>

                                    EXHIBIT B

                                  GENERAL RULES

1. Lessee shall not suffer or permit the obstruction of any Common Areas,
including driveways, walkways and stairways.

2. Lessor reserves the right to refuse access to any persons Lessor in good
faith judges to be a threat to the safety, reputation, property of the Office
Building Project and its occupants.

3. Lessee shall not make or permit any noise or odors that annoy or interfere
with other lessees or persons having business within Office Building Project.

4. Lessee shall not keep animals or birds within the Office Building Project,
and shall not bring bicycles, motorcycles or other vehicles into areas not
designated as authorized for same.

5. Lessee shall not make, suffer or permit litter except in appropriate
receptacles for that purpose.

6. Lessee shall not alter any lock or install new or additional locks or
bolts.

7. Lessee shall be responsible for the inappropriate use of any toilet rooms,
plumbing or other utilities. No foreign substances of any kind are to be
inserted therein.

8. Lessee shall not deface the walls, partitions or other surfaces of the
premises or Office Building Project.

9. Lessee shall not suffer or permit anything in or around the Premises or
Building that causes excessive vibration or floor loading in a part of the
Office Building Project.

10. Furniture, significant freight and equipment shall be moved into or out
of the building only with the Lessor's knowledge and consent and subject to
such reasonable limitations, techniques and timing, as may be designated by
Lessor. Lessee shall be responsible for any damage to the Office Building
Project arising from any such activity.

11. Lessee shall not employ any service or contractor for services or work to
be performed in the Building, except as approved by Lessor.

12. Lessor reserves the right to close and lock the Building on Saturdays,
Sundays and legal holidays, and on other days between the hours of 5:00 p.m.
and 8:00 a.m. It is Lessee's responsibility to keep the Building locked at
all times other than ordinary business hours. If Lessee uses the Premises
during such periods, Lessee shall be responsible for securely locking any
doors it may have opened for entry or exit.

13. Lessee shall be provided with two sets of keys upon occupancy. Lessee
shall return all keys at the termination of its tenancy and shall be
responsible for the cost of replacing any lost keys.

14. No window coverings, shades or awnings shall be installed or used by
Lessee.

15. No Lessee, employee or invitee shall go upon the roof of the Building.

16. Lessee shall not suffer or permit smoking or carrying of lighted cigars
or cigarettes anywhere inside the Building.

17. Lessee shall not use any method of heating or air conditioning other than
as provided by Lessor.

18. Lessee shall not install, maintain or operate any vending machines upon
the Premises without Lessor's written consent.

19. The Premises shall not be used for lodging or manufacturing, cooking or
food preparation.

20. Lessee shall comply with all safety, fire protection and evacuation
regulations established by Lessor any applicable governmental agency.

21. Lessor reserves the right to waive any one of these rules or regulations,
and/or as to any particular Lessee, and any such waiver shall not constitute
a waiver of any other rule or regulation or any subsequent application
thereof to such Lessee.

22. Lessee assumes all risks from theft of vandalism and agrees to keep its
Premises locked as may be required.

23. Lessor reserves the right to make such other reasonable rules and
regulations as it may from time to time deem necessary for the regulations.

                                  PARKING RULES

1. Parking Areas shall be used only for parking by vehicles no longer than
full size, passenger automobiles herein called "Permitted Size Vehicles".
Vehicles other than Permitted Size Vehicles are herein referred to as
"Oversized Vehicles".

2. Lessee shall not permit or allow any vehicles that belong to or are
controlled by Lessee or Lessee's employees, suppliers, shippers, customers,
or invitees to be loaded, unloaded, or parked in areas other than those
designated by Lessor for such activities.

3. Lessor reserves the right to relocate all or a part of parking spaces from
floor to floor, within one floor, and/or to reasonably adjacent off site
location(s), and to reasonably allocate them between compact and standard
size spaces, as long as the same complies with applicable laws, ordinances
and regulations.

4. Users of the parking area will obey all posted signs and park only in the
areas designated for vehicle parking.

5. Unless otherwise instructed, every person using the parking area is
required to park and lock his own vehicle. Lessor will not be responsible for
any damage to vehicles, injury to property, all of which risks are assumed by
the party using the parking area.

6. The maintenance, washing, waxing or cleaning of vehicles in the parking
structure of Common Area is prohibited.

7. Lessee shall be responsible for seeing that all of its employees, agents
and invitees comply with the applicable parking rules, regulations, laws and
agreements.

8. Lessor reserves the right to modify these rules and/or adopt such other
reasonable and nondiscriminatory rules and regulations as it may deem
necessary for the proper operation of the parking area.

9. Such parking used herein provided is intended merely as a license only and
no bailment is intended or shall be created hereby.

                   INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE--GROSS
                                       16

<PAGE>

                                    EXHIBIT C

                               TENANT IMPROVEMENTS

The premises shall be constructed in accordance with Lessor's Standard
Improvements, as follows:

As shown on Exhibit "A" and as follows:

1.       PARTITIONS - Demolish walls in Areas 6 & 7; Install walls in
         Areas 2, 5, & 9.

2.       WALL SURFACES - Installed walls will be painted to match existing.

3.       WINDOW COVERINGS - As is.

4.       FLOORING - As is.

5.       DOORS - Seal door in Area 1; Install doors in Areas 3, 4, & 8.

6.       ELECTRICAL AND TELEPHONE OUTLETS - As is.

7.       CEILINGS - As is.

8.       LIGHTING - As is.

9.       HEATING AND AIR CONDITIONING DUCTS - As is.

10.      PLUMBING - As is.

11.      VENT HOOD - Lessee to install vent hood in Area 10.

                   INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE--GROSS
                                       17

<PAGE>

                               AMENDMENT OF LEASE

THIS EXTENSION AND AMENDMENT OF LEASE is entered into as of APRIL 22, 1997, by
and between NEARON ENTERPRISES, LLC, hereinafter called "Lessor", and CIPHERGEN
BIOSYSTEMS, INC., hereinafter called "Lessee".

                                   WITNESSETH

WHEREAS, under a Lease dated MARCH 20, 1996, Lessor is leasing and Lessee is
hiring from Lessor that certain Premises situated at 490 SAN ANTONIO ROAD, SUITE
201, PALO ALTO, CALIFORNIA, together with non-exclusive use of parking areas and
public facilities appurtenant to said Premises;

WHEREAS, Lessor and Lessee wish to amend, modify, and change the terms,
covenants, and conditions of said Lease;

NOW, THEREFORE, the following portions of the aforementioned Lease shall be
amended as follows:

<TABLE>
<CAPTION>

<S><C>
1.3      PREMISES:         Current:         Suite 201, approximately 8,456 square feet
                           Additional:      Suite 202, approximately 2,744 square feet
                           Total:           Suites 201 and 202, approximately 11,200 square
                                            feet

1.6      TERM:  Eleven (11) months, commencing MAY 1, 1997 ("Commencement Date") and
                ending MARCH 31, 1998, as defined in paragraph 3.

1.8      BASE RENT:        Current:         $9,724.0 per month
                           Additional:      $3,567.00 per month begining May 1, 1997, payable
                                            on or before the first (1st) day of each month.
                           Total:           $13,291.00 per month

1.9      BASE RENT PAID UPON EXECUTION:     $13,291.00
                                            ($1,784.00) discounted rent for the period
                                                     May 1-31, 1997
                Total paid upon execution:  $11,507.00 for the period May 1-31, 1997

1.10     SECURITY DEPOSIT: Current:         $9,724.00
                           Total:           $9,724.00
</TABLE>

All other terms and conditions of said Lease shall remain unchanged.

LESSOR:                                     LESSEE:

NEARON ENTERPRISES, LLC                     CIPHERGEN BIOSYSTEMS, INC.

BY:  Nearon Enterprises,                    BY:    /s/ William E. Rich
     a California Corporation                    ----------------------------
                                                      William E. Rich

     Its: Designated Manager                  Its:    President
          ------------------                       --------------------------

BY:                                         Date:  April 28, 1997
   -------------------------                     ----------------------------
     David S. Christensen
     EVP & COO

     Date:
          ------------------

<PAGE>

                               AMENDMENT OF LEASE

THIS EXTENSION AND AMENDMENT OF LEASE is entered into as of MAY 19, 1997, by and
between NEARON ENTERPRISES, LLC, hereinafter called "Lessor", and CIPHERGEN
BIOSYSTEMS, INC., hereinafter called "Lessee".

                                   WITNESSETH

WHEREAS, under a Lease dated MARCH 20, 1996, Lessor is leasing and Lessee is
hiring from Lessor that certain Premises situated at 490 SAN ANTONIO ROAD, SUITE
201, PALO ALTO, CALIFORNIA, together with non-exclusive use of parking areas
and public facilities appurtenant to said Premises;

WHEREAS, Lessor and Lessee wish to amend, modify, and change the terms,
covenants, and conditions of said Lease;

NOW, THEREFORE, the following portions of the aforementioned Lease shall be
amended as follows:

<TABLE>
<CAPTION>
<S><C>
1.3      PREMISES:                  Current:         Suite 201, approximately 8,456 square feet
                                    Additional:      Suite 202, approximately 2,744 square feet
                                    Total:           Suites 201 and 202, approximately 11,200 square feet

1.6      TERM:     Eleven (11) months, commencing MAY 1, 1997 ("Commencement Date") and ending
                   MARCH 31, 1998, as defined in paragraph 3.

1.8      BASE RENT:                 Current:         $9,724.0 per month
                                    Additional:      $3,567.00 per month beginning May 1, 1997, payable on or
                                                     before the first (1st) day of each month.
                                    Total:           $13,291.00 per month

1.9      BASE RENT PAID UPON EXECUTION:              $13,291.00
                                                    ($1,784.00) discounted rent for the period
                                                             May 1-31, 1997
                 Total paid upon execution:          $11,507.00 for the period May 1-31, 1997

1.10     LESSEE'S SHARE OF COMMON AREA OPERATING EXPENSES:
                                    Current:         Thirty-eight percent (38%) as determined by prorata
                                                     square footage of the Premises as compared to the
                                                     total square footage of the Building.
                                    Modified         Fifty percent (50%)

1.11     SECURITY DEPOSIT:          Current:         $9,724.00
                                    Additional:      $ - 0 -
                                    Total:           $9,724.00
</TABLE>

All other terms and conditions of said Lease shall remain unchanged.

LESSOR:                                    LESSEE:

NEARON ENTERPRISES, LLC                    CIPHERGEN BIOSYSTEMS, INC.

BY:  Nearon Enterprises,                   BY:      /s/ William E. Rich
     a California Corporation                       ---------------------
                                                        William E. Rich

     Its: Designated Manager                        Its: President
          ------------------                             ----------------

BY: /s/ David S. Christensen               Date:    May 22, 1997
    ------------------------                        ---------------------
    David S. Christensen
    EVP & COO

    Date: 6-4-97
          ------------------
<PAGE>

                            SECOND AMENDMENT OF LEASE

THIS AMENDMENT OF LEASE is entered into as of October 31, 1997, by and between
NEARON ENTERPRISES, LLC, Lessor, and CIPHERGEN BIOSYSTEMS, INC., Lessee.

                                   WITNESSETH

WHEREAS, under a Lease dated MARCH 20, 1996 and as previously amended on MAY 19,
1997, Lessor is leasing and Lessee is hiring from Lessor that certain Premises
situated at 490 SAN ANTONIO ROAD, SUITES 201 AND 202, PALE ALTO, CALIFORNIA,
together with non-exclusive use of parking areas and public facilities
appurtenant to said Premises;

WHEREAS. Lessor end Lessee wish to amend, modify, end change the terms,
covenants, and conditions of said Lease;

NOW, THEREFORE, the following portions of the aforementioned Lease shall be
amended as follows:

1.6         TERM: Twenty-four (24) months, ("ORIGINAL TERM") commencing
                  April l, 1996 ("COMMENCEMENT DATE") and ending MARCH 31, 1998
                  ("EXPIRATION DATE"). (Also see paragraph 3.) Provided Lesee is
                  not in default of any of the terms of this Lease and by giving
                  written notice on or before November 7, 1997, Lessee has the
                  option to renew for one (1) year. The monthly rental rate for
                  Suite 201 during said option period shall be $1.20 per square
                  foot, gross.

All other terms and conditions of said Lease shall remain unchanged.

LESSOR:                                      LESSEE:

NEARON ENTERPRISES, LLC                      CIPHERGEN BIOSYSTEMS, INC.

BY:  Nearon Enterprise,                      BY:  /S/ WILLIAM E. RICH
     a California Corporation                   --------------------------
                                                     William E Rich

       Its: DESIGNATED MANAGER                   Its: PRESIDENT/CEO

BY:      /S/ RANDOLPH N. SAAR                Date:    10-31-97
             ------------------------              ------------------------
              Randolph N. Saar
              Operations Manager

         Date:    10/31/97

<PAGE>

                         THIRD AMENDMENT OF LEASE

THIS AMENDMENT OF LEASE is entered into as of NOVEMBER 7, 1997, by and between
NEARON ENTERPRISES, LLC, Lessor, and CIPHERGEN BIOSYSTEMS, INC., Lessee.

                                   WITNESSETH

WHEREAS, under a Lease dated MARCH 20, 1996 and as previously amended on MAY
19, 1997 AND OCTOBER 31, 1997, Lessor is leasing and Lessee is hiring from
Lessor that certain Premises situated at 490 SAN ANTONIO ROAD, SUITES 201 AND
202, PALO ALTO, CALIFORNIA, together with non-exclusive use of parking areas
and public facilities appurtenant to said Premises;

WHEREAS, Lessor and Lessee wish to amend, modify, and change the terms,
covenants, and conditions of said Lease;

NOW, THEREFORE, the following portions of the aforementioned Lease shall be
amended as follows:

1.6    TERM:               THE EXPIRATION DATE (Also see paragraph 3.) shall
                           be extended to MARCH 31, 1999.

1.8    BASE RENT:          $14,729.68 per month BASE RENT, payable on the first
                           day of each month Commencing April 1, 1998.

All other terms and conditions of said Lease shall remain unchanged.

LESSOR:                                        LESSEE:

NEARON ENTERPRISES, LLC                        CIPHERGEN BIOSYSTEMS, INC.

By:  Nearon Enterprises,                       By:  /s/
     a California Corporation                     -------------------------
                                                    for  William E. Rich

     Its: DESIGNATED MANAGER                        Its: PRESIDENT/CEO

By:  /s/ RANDOLPH N. SAAR                      Date:    11-7-97
     ---------------------------                    ------------------------
         Randolph N. Saar
         Operations Manager

         Date:    11/7/97
                -------------------<PAGE>
                                                                  Exhibit 10.12

                                 LEASE AGREEMENT

   THIS LEASE, made this 28th day of January, 2000 between JOHN ARRILLAGA,
Trustee, or his Successor Trustee, UTA dated 7/20/77 (JOHN ARRILLAGA
SURVIVOR'S TRUST) as amended, and RICHARD T. PEERY, Trustee, or his Successor
Trustee, UTA dated 7/20/77 (RICHARD T. PEERY SEPARATE PROPERTY TRUST) as
amended hereinafter called Landlord, and CIPHERGEN BIOSYSTEMS, INC., a
California corporation, hereinafter called Tenant.

                                   WITNESSETH:

   Landlord hereby leases to Tenant and Tenant hereby hires and takes from
Landlord those certain premises (the "Premises") outlined in red on Exhibit
"A", attached hereto and incorporated herein by this reference thereto more
particularly described as follows:

A portion of that certain 60,720 PLUS OR MINUS square foot, one-story
building located at 6607 Dumbarton Circle, Suite 200, Fremont, California
94555, consisting of approximately 30,232 PLUS OR MINUS square feet of space.
Said Premises is more particularly shown within the area outlined in Red on
EXHIBIT A attached hereto. The entire parcel, of which the Premises is a
part, is shown within the area outlined in Green on EXHIBIT A attached. The
Premises shall be constructed by Landlord as set forth in the related
Construction Agreement of even date herewith. The improved interior
configuration is shown in Red on EXHIBIT B to be attached hereto.

   The word "Premises" as used throughout this lease is hereby defined to
include the nonexclusive use of landscaped areas, sidewalks and driveways in
front of or adjacent to the Premises, and the nonexclusive use of the area
directly underneath or over such sidewalks and driveways. The gross leasable
area of the building shall be measured from outside of exterior walls to
outside of exterior walls, and shall include any atriums, covered entrances
or egresses and covered loading areas.

   Said letting and hiring is upon and subject to the terms, covenants and
conditions hereinafter set forth and Tenant covenants as a material part of
the consideration for this Lease to perform and observe each and all of said
terms, covenants and conditions. This Lease is made upon the conditions of
such performance and observance.

1. USE Tenant shall use the Premises only in conformance with applicable
governmental laws, regulations, rules and ordinances for the purpose of
general office, laboratory, research and development, storage and other uses
necessary for Tenant to conduct Tenant's business, provided that such uses
shall be in accordance with all applicable governmental laws and ordinances,
and for no other purpose. Tenant shall not do or permit be done in or about
the Premises nor bring or keep or permit to be brought or kept in or about
the Premises anything which is prohibited by or will in any way increase the
existing rate of (or otherwise affect) fire or any insurance covering the
Premises or any part thereof, or any of its contents, or will cause a
cancellation of any insurance covering the Premises or any part thereof, or
any of its contents. Tenant shall not do or permit to be done anything in, on
or about the Premises which will in any way obstruct or interfere with the
rights of other tenants or occupants of the Premises or neighboring premises
or injure or annoy them, or use or allow the Premises to be used for any
improper, immoral, unlawful or objectionable purpose, nor shall Tenant cause,
maintain or permit any nuisance in, on or about the Premises. No sale by
auction shall be permitted on the Premises. Tenant shall not place any loads
upon the floors, walls, or ceiling which endanger the structure, or place any
harmful fluids or other materials in the drainage system of the building, or
overload existing electrical or other mechanical systems. No waste materials
or refuse shall be dumped upon or permitted to remain upon any part of the
Premises or outside of the building in which the Premises are a part, except
in trash containers placed inside exterior enclosures designated by Landlord
for that purpose or inside of the building proper where designated by
Landlord. No materials, supplies, equipment, finished products or
semi-finished products, raw materials or articles of any nature shall be
stored upon or permitted to remain outside the Premises. Tenant shall not
place anything or allow anything to be placed near the glass of any window,
door partition or wall which may appear unsightly from outside the Premises.
No loudspeaker or other device, system or apparatus which can be heard
outside the Premises shall be used in or at the Premises without the prior
written consent of Landlord. Tenant shall not commit or suffer to be
committed any waste in or upon the Premises. Tenant shall indemnify, defend
and hold Landlord harmless against any loss, expense, damage, reasonable
attorneys' fees, or liability arising out of failure of Tenant to comply with
any applicable law. Tenant shall comply with any covenant, condition, or
restriction ("CC&R's") affecting the Premises.  The provisions of this
paragraph are for the benefit of Landlord only and shall not be construed to
be for the benefit of any tenant or occupant of the Premises. Landlord has
provided a copy of said CC&R's to Tenant.

2. TERM*
   A. The term of this Lease shall be for a period of EIGHT (8) years (unless
sooner terminated as hereinafter provided) and, subject to Paragraphs 2B and
3, shall commence on the 1st day of April , 2000 and end on the 31st day of
March, 2008.

   B. Possession of the Premises shall be deemed tendered and the term of the
Lease shall commence when the first of the following occurs:

     (a) One day after a Certificate of Occupancy is granted by the proper
governmental agency, or, if the governmental agency having jurisdiction over the
area in which the Premises are situated does not issue certificates of
occupancy, then the same number of days after certification by Landlord's
architect or contractor that Landlord's construction work has been completed;
or
     (b) Upon the occupancy of the Premises by any of Tenant's operating
personnel; or

     (c) When the Tenant Improvements have been substantially completed for
Tenant's use and occupancy, in accordance and compliance with Exhibit B of this
Lease Agreement; or

     (d) As otherwise agreed in writing.

* It is agreed in the event said Lease commences on a date other than the first
day of the month the term of the Lease will be extended to account for the
number of days in the partial month. The Basic Rent during the resulting partial
month will be pro-rated (for the number of days in the partial month) at the
Basic Rent rate scheduled for the projected commencement date as shown in
Paragraph 39.

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3. POSSESSION If Landlord, for any reason whatsoever, cannot deliver possession
of said premises to Tenant at the commencement of the said term, as hereinbefore
specified, this Lease shall not be void or voidable; no obligation of Tenant
shall be affected thereby; nor shall Landlord or Landlord's agents be liable to
Tenant for any loss or damage resulting therefrom; but in that event the
commencement and termination dates of the Lease, and all other dates affected
thereby shall be revised to conform to the date of Landlord's delivery of
possession, as specified in Paragraph 2B, above. The above is, however, subject
to the provision that the period of delay of delivery of the Premises shall not
exceed 90 days from the commencement date herein (except those delays caused by
Acts of God, strikes, war, utilities, governmental bodies, weather, unavailable
materials, and delays beyond Landlord's control shall be excluded in calculating
such period) in which instance Tenant, at its option, may, by written notice to
Landlord, terminate this Lease.

4. RENT

   A. BASIC RENT. Tenant agrees to pay to Landlord at such place as Landlord may
designate without deduction, offset, prior notice, or demand, and Landlord
agrees to accept as Basic Rent for the leased Premises the total sum of EIGHT
MILLION TWO HUNDRED SEVENTY ONE THOUSAND FOUR HUNDRED SEVENTY FIVE AND 20/100
Dollars ($ 8,271,475.20) in lawful money of the United States of America,
payable as follows:

       See Paragraph 39 for Basic Rent Schedule

   B. TIME FOR PAYMENT. Full monthly rent is due in advance on the first day of
each calendar month. In the event that the term of this Lease commences on a
date other than the first day of a calendar month, on the date of commencement
of the term hereof Tenant shall pay to Landlord as rent for the period from such
date of commencement to the first day of the next succeeding calendar month that
proportion of the monthly rent hereunder which the number of days between such
date of commencement and the first day of the next succeeding calendar month
bears to thirty (30). In the event that the term of this Lease for any reason
ends on a date other than the last day of a calendar month, on the first day of
the last calendar month of the term hereof Tenant shall pay to Landlord as rent
for the period from said first day of said last calendar month to and including
the last day of the term hereof that proportion of the monthly rent hereunder
which the number of days between said first day of said last calendar month and
the last day of the term hereof bears to thirty (30).

   C. LATE CHARGE. Notwithstanding any other provision of this Lease, if Tenant
is in default in the payment of rental as set forth in this Paragraph 4 when
due, or any part thereof, Tenant agrees to pay Landlord, in addition to the
delinquent rental due, a late charge for each rental payment in default ten (10)
days. Said late charge shall equal ten percent (10%) of each rental payment so
in default.

   D. ADDITIONAL RENT. Beginning with the commencement date of the term of this
Lease, Tenant shall pay to Landlord or to Landlord's designated agent in
addition to the Basic Rent and as Additional Rent the following:

     (a) All Taxes relating to the Premises as set forth in Paragraph 9, and

     (b) All insurance premiums and deductibles relating to the Premises, as set
     forth in Paragraph 12, and

     (c) All charges, costs and expenses, which Tenant is required to pay
hereunder, together with all interest and penalties, costs and expenses
including reasonable attorneys' fees and legal expenses, that may accrue thereto
in the event of Tenant's failure to pay such amounts, and all damages,
reasonable costs and expenses which Landlord may incur by reason of default of
Tenant or failure on Tenant's part to comply with the terms of this Lease. In
the event of nonpayment by Tenant of Additional Rent, Landlord shall have all
the rights and remedies with respect thereto as Landlord has for nonpayment of
rent, and

     (d) all prorated costs and expenses related to the Ardenwood Property
Owners' Association as set forth in Paragraph 53.

     The Additional Rent due hereunder shall be paid to Landlord or Landlord's
agent (i) within five days for taxes and insurance and within thirty days for
all other Additional Rent items after presentation of invoice from Landlord or
Landlord's agent setting forth such Additional Rent and/or (ii) at the option of
Landlord, Tenant shall pay to Landlord monthly, in advance, Tenant's pro rata
share of an amount estimated by Landlord to be Landlord's approximate average
monthly expenditure for such Additional Rent items, which estimated amount shall
be reconciled within 120 days of the end of each calendar year or more
frequently if Landlord elects to do so at Landlord's sole and absolute
discretion as compared to Landlord's actual expenditure for said Additional Rent
items, with Tenant paying to Landlord, upon demand, any amount of actual
expenses expended by Landlord in excess of said estimated amount, or Landlord
crediting to Tenant (providing Tenant is not in default in the performance of
any of the terms, covenants and conditions of this Lease) any amount of
estimated payments made by Tenant in excess of Landlord's actual expenditures
for said Additional Rent items.

   The respective obligations of Landlord and Tenant under this paragraph shall
survive the expiration or other termination of the term of this Lease, and if
the term hereof shall expire or shall otherwise terminate on a day other than
the last day of a calendar year, the actual Additional Rent incurred for the
calendar year in which the term hereof expires or otherwise terminates shall be
determined and settled on the basis of the statement of actual Additional Rent
for such calendar year and shall be prorated in the proportion which the number
of days in such calendar year preceding such expiration or termination bears to
365.

   E. FIXED MANAGEMENT FEE. Beginning with the Commencement Date of the Term of
this Lease, Tenant shall pay to Landlord, in addition to the Basic Rent and
Additional Rent, a fixed monthly management fee ("Management Fee") equal to 3%
of the Basic Rent due for each month during the Lease Term.

   F. PLACE OF PAYMENT OF RENT AND ADDITIONAL RENT. All Basic Rent hereunder and
all payments hereunder for Additional Rent shall be paid to Landlord at the
office of Landlord at Peery/Arrillaga, File 1504, Box 60000, San Francisco, CA
94160 or to such other person or to such other place as Landlord may from time
to time designate in writing.

   G. SECURITY DEPOSIT. Concurrently with Tenant's execution of this Lease,
Tenant shall deposit with Landlord the sum of ONE HUNDRED NINETY THREE THOUSAND
FOUR HUNDRED EIGHTY FOUR AND 80/100 Dollars ($ 193,484.80). Said sum shall be
held by Landlord as a Security Deposit for the faithful performance by Tenant of
all of the terms, covenants, and conditions of this Lease to be kept and
performed by Tenant during the term hereof. If Tenant defaults with respect to
any provision of this Lease, including, but not limited to, the provisions
relating to the payment of rent and any of the monetary sums due herewith,
Landlord may (but shall not be required to) use, apply or retain all or any part
of this Security Deposit for the payment of any other amount which Landlord may
spend by reason of Tenant's default or to compensate Landlord for

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any other loss or damage which Landlord may suffer by reason of Tenant's
default. If any portion of said Deposit is so used or applied, Tenant shall,
within ten (10) days after written demand therefor, deposit cash with Landlord
in the amount sufficient to restore the Security Deposit to its original amount.
Tenant's failure to do so shall be a material breach of this Lease. Landlord
shall not be required to keep this Security Deposit separate from its general
funds, and Tenant shall not be entitled to interest on such Deposit. If Tenant
fully and faithfully performs every provision of this Lease to be performed by
it, the Security Deposit or any balance thereof shall be returned to Tenant (or
at Landlord's option, to the last assignee of Tenant's interest hereunder) at
the expiration of the Lease term and after Tenant has vacated the Premises. In
the event of termination of Landlord's interest in this Lease, Landlord shall
transfer said Deposit to Landlord's successor in interest whereupon Tenant
agrees to release Landlord from liability for the return of such Deposit or the
accounting therefor.

5. ACCEPTANCE AND SURRENDER OF PREMISES By entry hereunder, Tenant accepts the
Premises as being in good and sanitary order, condition and repair and accepts
the building and improvements included in the Premises in their present
condition and without representation or warranty by Landlord as to the condition
of such building or as to the use or occupancy which may be made thereof. Any
exceptions to the foregoing must be by written agreement executed by Landlord
and Tenant. Tenant agrees on the last day of the Lease term, or on the sooner
termination of this Lease, to surrender the Premises promptly and peaceably to
Landlord in good condition and repair (damage by Acts of God, fire, normal wear
and tear excepted), with all interior walls painted, or cleaned so that they
appear freshly painted, and repaired and replaced, if damaged; all floors
cleaned and waxed; all carpets cleaned and shampooed; all broken, marred or
nonconforming acoustical ceiling tiles replaced; all windows washed; the air
conditioning and heating systems serviced by a reputable and licensed service
firm and in good operating condition and repair; the plumbing and electrical
systems and lighting in good order and repair, including replacement of any
burned out or broken light bulbs or ballasts; the lawn and shrubs in good
condition including the replacement of any dead or damaged plantings; the
sidewalk, driveways and parking areas in good order, condition and repair;
together with all alterations, additions, and improvements which may have been
made in, to, or on the Premises (except moveable trade fixtures installed at the
expense of Tenant) except that Tenant shall ascertain from Landlord within
thirty (30) days before the end of the term of this Lease whether Landlord
desires to have the Premises or any part or parts thereof restored to their
condition and configuration as when the Premises were delivered to Tenant and if
Landlord shall so desire, then Tenant shall restore said Premises or such part
or parts thereof before the end of this Lease at Tenant's sole cost and expense.
Tenant, on or before the end of the term or sooner termination of this Lease,
shall remove all of Tenant's personal property and trade fixtures from the
Premises, and all property not so removed on or before the end of the term or
sooner termination of this Lease shall be deemed abandoned by Tenant and title
to same shall thereupon pass to Landlord without compensation to Tenant.
Landlord may, upon termination of this Lease, remove all moveable furniture and
equipment so abandoned by Tenant, at Tenant's sole cost, and repair any damage
caused by such removal at Tenant's sole cost. If the Premises be not surrendered
at the end of the term or sooner termination of this Lease, Tenant shall
indemnify Landlord against loss or liability resulting from the delay by Tenant
in so surrendering the Premises including, without limitation, any claims made
by any succeeding tenant founded on such delay. Nothing contained herein shall
be construed as an extension of the term hereof or as a consent of Landlord to
any holding over by Tenant. The voluntary or other surrender of this Lease or
the Premises by Tenant or a mutual cancellation of this Lease shall not work as
a merger and, at the option of Landlord, shall either terminate all or any
existing subleases or subtenancies or operate as an assignment to Landlord of
all or any such subleases or subtenancies.

6. ALTERATIONS AND ADDITIONS Tenant shall not make, or suffer to be made, any
alteration or addition to the Premises, or any part thereof, without the written
consent of Landlord first had and obtained by Tenant (such consent not to be
unreasonably withheld), but at the cost of Tenant, and any addition to, or
alteration of, the Premises, except moveable furniture and trade fixtures, shall
at once become a part of the Premises and belong to Landlord. Landlord reserves
the right to approve all contractors and mechanics proposed by Tenant to make
such alterations and additions. Tenant shall retain title to all moveable
furniture and trade fixtures placed in the Premises. All heating, lighting,
electrical, airconditioning, floor to ceiling partitioning, drapery, carpeting,
and floor installations made by Tenant, together with all property that has
become an integral part of the Premises, shall not be deemed trade fixtures.
Tenant agrees that it will not proceed to make such alteration or additions,
without having obtained consent from Landlord to do so, and until five (5) days
from the receipt of such consent, in order that Landlord may post appropriate
notices to avoid any liability to contractors or material suppliers for payment
for Tenant's improvements. Tenant will at all times permit such notices to be
posted and to remain posted until the completion of work. Tenant shall, if
required by Landlord, secure at Tenant's own cost and expense, a completion and
lien indemnity bond, satisfactory to Landlord, for such work. Tenant further
covenants and agrees that any mechanic's lien filed against the Premises for
work claimed to have been done for, or materials claimed to have been furnished
to Tenant, will be discharged by Tenant, by bond or otherwise, within ten (10)
days after the filing thereof, at the cost and expense of Tenant. Any exceptions
to the foregoing must be made in writing and executed by both Landlord and
Tenant.

7. TENANT MAINTENANCE Tenant shall, at its sole cost and expense, keep and
maintain the Premises (including appurtenances) and every part thereof in a high
standard of maintenance and repair, and in good and sanitary condition. Tenant's
maintenance and repair responsibilities herein referred to include, but are not
limited to, janitorization, plumbing systems within the non-common areas of the
Premises (such as water and drain lines, sinks), electrical systems within the
non-common areas of the Premises (such as outlets, lighting fixtures, lamps,
bulbs, tubes, ballasts), heating and airconditioning controls within the
non-common areas of the Premises (such as mixing boxes, thermostats, time
clocks, supply and return grills), all interior improvements within the premises
including but not limited to: wall coverings, window coverings, acoustical
ceilings, vinyl tile, carpeting, partitioning, doors (both interior and
exterior, including closing mechanisms, latches, locks), and all other interior
improvements of any nature whatsoever. Tenant agrees to provide carpet shields
under all rolling chairs or to otherwise be responsible for wear and tear of the
carpet caused by such rolling chairs if such wear and tear exceeds that caused
by normal foot traffic in surrounding areas. Areas of excessive wear shall be
replaced at Tenant's sole expense upon Lease termination.

9. TAXES

   A. As Additional Rent and in accordance with Paragraph 4D of this Lease,
Tenant shall pay to Landlord, or if Landlord so directs, directly to the Tax
Collector, all Real Property Taxes relating to the Premises. In the event the
Premises leased hereunder consist of only a portion of the entire tax parcel,
Tenant shall pay to Landlord Tenant's proportionate share of such real estate
taxes allocated to the leased Premises by square footage or other reasonable
basis as calculated and determined by Landlord. If the tax billing pertains 100%
to the leased Premises, and Landlord chooses to have Tenant pay said real estate
taxes directly to the Tax Collector, then in such event it shall be the
responsibility of Tenant to obtain the tax and assessment bills and pay, prior
to delinquency, the applicable real property taxes and assessments pertaining to
the leased Premises, and failure to receive a bill for taxes and/or assessments
shall not provide a basis for cancellation of or nonresponsibility for payment
of penalties for nonpayment or late payment by Tenant. The term "Real Property
Taxes", as used herein, shall mean (1) all taxes, assessments, levies and other
charges of any kind or nature whatsoever, general and special, foreseen and
unforeseen (including all installments of principal and interest required to pay
any general or special assessments for public improvements and any increases
resulting from reassessments caused by any change in ownership of the Premises)
now or hereafter imposed by any governmental or quasi-governmental authority or
special district having the direct or indirect power to tax or levy assessments,
which are levied or assessed against, or with respect to the value, occupancy or
use of, all or any portion of the Premises (as now constructed or as may at any
time hereafter be constructed, altered, or otherwise changed) or Landlord's
interest therein; any improvements located within the Premises (regardless of
ownership); the fixtures, equipment and other property of Landlord, real or
personal, that are an integral part of and located in the Premises; or parking
areas, public utilities, or energy within the Premises; (ii) all charges, levies
or fees imposed by reason of environmental regulation or other governmental
control of the Premises; and (iii) all costs and fees (including

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reasonable attorneys' fees) Incurred by Landlord in reasonably contesting any
Real Property Tax and in negotiating with public authorities as to any Real
Property Tax. If at any time during the term of this Lease the taxation or
assessment of the Premises prevailing as of the commencement date of this Lease
shall be altered so that in lieu of or in addition to any Real Property Tax
described above there shall be levied, assessed or imposed (whether by reason of
a change in the method of taxation or assessment, creation of a new tax or
charge, or any other cause) an alternate or additional tax or charge (i) on the
value, use or occupancy of the Premises or Landlord's interest therein or (ii)
on or measured by the gross receipts, income or rentals from the Premises, on
Landlord's business of leasing the Premises, or computed in any manner with
respect to the operation of the Premises, then any such tax or charge, however
designated, shall be included within the meaning of the term "Real Property
Taxes" for purposes of this Lease. If any Real Property Tax is based upon
property or rents unrelated to the Premises, then only that part of such real
Property Tax that is fairly allocable to the Premises shall be included within
the meaning of the term "Real Property Taxes". Notwithstanding the foregoing,
the term "Real Property Taxes" shall not include estate, inheritance, gift or
franchise taxes of Landlord or the federal or state net income tax imposed on
Landlord's income from all sources. The term "Real Estate Taxes" shall also
include supplemental taxes related to the period of Tenant's Lease Term whenever
levied, including any such taxes that may be levied after the Lease Term has
expired.

   B. TAXES ON TENANT'S PROPERTY Tenant shall be liable for and shall pay ten
days before delinquency, taxes levied against any personal property or trade
fixtures placed by Tenant in or about the Premises. If any such taxes on
Tenant's personal property or trade fixtures are levied against Landlord or
Landlord's property or if the assessed value of the Premises is increased by the
inclusion therein of a value placed upon such personal property or trade
fixtures of Tenant and if Landlord, after written notice to Tenant, pays the
taxes based on such increased assessment, which Landlord shall have the right to
do regardless of the validity thereof, but only under proper protest if
requested by Tenant, Tenant shall upon demand, as the case may be, repay to
Landlord the taxes so levied against Landlord, or the proportion of such taxes
resulting from such increase in the assessment; provided that in any such event
Tenant shall have the right, in the name of Landlord and with Landlord's full
cooperation, to bring suit in any court of competent jurisdiction to recover the
amount of any such taxes so paid under protest, and any amount so recovered
shall belong to Tenant.

10. LIABILITY INSURANCE Tenant, at Tenant's expense, agrees to keep in force
during the term of this Lease a policy of commercial general liability
insurance with combined single limit coverage of not less than Two Million
Dollars ($2,000,000) per occurrence for bodily injury and property damage
occurring in, on or about the Premises, including parking and landscaped
areas. Such insurance shall be primary and noncontributory as respects any
insurance carried by Landlord. The policy or policies effecting such
insurance, shall name Landlord as additional insureds, and shall insure any
liability of Landlord, contingent or otherwise, as respects acts or omissions
of Tenant, its agents, employees or invitees or otherwise by any conduct or
transactions of any of said persons in or about or concerning the Premises,
including any failure of Tenant to observe or perform any of its obligations
hereunder; shall be issued by an insurance company admitted to transact
business in the State of California; and shall provide that the insurance
effected thereby shall not be canceled, except upon thirty (30) days' prior
written notice to Landlord. A certificate of insurance of said policy shall
be delivered to Landlord. If during the term of this Lease, in the considered
opinion of Landlord's Lender, insurance advisor, or counsel, the amount of
insurance described in this Paragraph 10 is not adequate, Tenant agrees to
increase said coverage to such reasonable amount as Landlord's Lender,
insurance advisor, or counsel shall deem adequate.

11. TENANT'S PERSONAL PROPERTY INSURANCE AND WORKMAN'S COMPENSATION INSURANCE
Tenant shall maintain a policy or policies of fire and property damage insurance
in "all risk" form with a sprinkler leakage endorsement insuring the personal
property, inventory, trade fixtures, and leasehold improvements within the
leased Premises for the full replacement value thereof. The proceeds from any of
such policies shall be used for the repair or replacement of such items so
insured.

   Tenant shall also maintain a policy or policies of workman's compensation
insurance and any other employee benefit insurance sufficient to comply with all
laws.

12. PROPERTY INSURANCE Landlord shall purchase and keep in force, and as
Additional Rent and in accordance with Paragraph 4D of this Lease, Tenant shall
pay to Landlord (or Landlord's agent if so directed by Landlord) Tenant's
proportionate share (allocated to the leased Premises by square footage or other
equitable basis as calculated and determined by Landlord) of the deductibles on
insurance claims and the cost of, policy or policies of insurance covering loss
or damage to the Premises (excluding routine maintenance and repairs and
incidental damage or destruction caused by accidents or vandalism for which
Tenant is responsible under Paragraph 7) in the amount of the full replacement
value thereof, providing protection against those perils included within the
classification of "all risks" insurance and flood and/or earthquake insurance,
if available, plus a policy of rental income insurance in the amount of one
hundred (100%) percent of twelve (12) months Basic Rent, plus sums paid as
Additional Rent. If such insurance cost is increased due to Tenant's use of the
Premises, Tenant agrees to pay to Landlord the full cost of such increase.
Tenant shall have no interest in nor any right to the proceeds of any insurance
procured by Landlord for the Premises.

   Landlord and Tenant do each hereby respectively release the other, to the
extent of the insurance coverage of the releasing party, from any liability for
loss or damage caused by fire or any of the extended coverage casualties
included in the releasing party's insurance policies, irrespective of the cause
of such fire or casualty; provided, however, that if the insurance policy of
either releasing party prohibits such waiver, then this waiver shall not take
effect until consent to such waiver is obtained. If such waiver is so
prohibited, the insured party affected shall promptly notify the other party
thereof.

13. INDEMNIFICATION Landlord shall not be liable to Tenant and Tenant hereby
waives all claims against Landlord for any injury to or death of any person
or damage to or destruction of property in or about the Premises by or from
any cause whatsoever, including, without limitation, gas, fire, oil,
electricity or leakage of any character from the roof, walls, basement or
other portion of the Premises but excluding, however, the willful misconduct
or negligence of Landlord, its agents, servants, employees, invitees, or
contractors of which negligence Landlord has knowledge and reasonable time to
correct. Except as to injury to persons or damage to property to the extent
arising from the willful misconduct or the negligence of Landlord its agents,
servants, employees, invitees, or contractors. Tenant shall hold Landlord
harmless from and defend Landlord against any and all expenses, including
reasonable attorneys' fees, in connection therewith, arising out of any
injury to or death of any person or damage to or destruction of property
occurring in, on or about the Premises, or any part thereof, from any cause
whatsoever.

14. COMPLIANCE Tenant, at its sole cost and expense, shall promptly comply
with all laws, statutes, ordinances and governmental rules, regulations or
requirements now or hereafter in effect; with the requirements of any board
of fire underwriters or other similar body now or hereafter constituted; and
with any direction or occupancy certificate issued pursuant to law by any
public officer; provided, however, that no such failure shall be deemed a
breach of the provisions if Tenant, immediately upon notification, commences
to remedy or rectify said failure. The judgment of any court of competent
jurisdiction or the admission of Tenant in any action against Tenant, whether
Landlord be a party thereto or not, that Tenant has violated any such law,
statute, ordinance or governmental rule, regulation, requirement, direction
or provision, shall be conclusive of that fact as between Landlord and
Tenant. Tenant shall, at its sole cost and expense, comply with any and all
requirements pertaining to said Premises, of any insurance organization or
company, necessary for the maintenance of reasonable fire and public
liability insurance covering requirements pertaining to said Premises.

15. LIENS Tenant shall keep the Premises free from any liens arising out of
any work performed, materials furnished or obligation incurred by Tenant. In
the event that Tenant shall not, within ten (10) days following the
imposition of such lien, cause the same to be released of record, Landlord
shall have, in addition to all other remedies provided herein and by law, the
right, but no obligation, to cause the same to be released by such means as
it shall deem proper, including payment of the claim giving rise to such
lien. All sums paid by Landlord for such purpose, and all expenses incurred
by it in connection therewith, shall be payable to Landlord by Tenant on
demand with interest at the prime rate of interest as quoted by the Bank of
America.

16. ASSIGNMENT AND SUBLETTING Tenant shall not assign, transfer, or hypothecate
the leasehold estate under this Lease, or any interest therein, and shall not
sublet the Premises, or any part thereof, or any right or privilege appurtenant
thereto, or suffer any other person or entity to occupy or use the Premises, or
any portion thereof, without, in each case, the prior written consent of
Landlord which consent will not be unreasonably withheld. As a condition for
granting this consent to any assignment, transfer, or subletting, Landlord shall
require that (i) the sublease be a triple net sublease and that the basic rent
due under any such sublease be no less than the then current market rate with
annual increases at the then prevailing market rate, and (ii) Tenant to pay
Landlord, as Additional Rent, all rents and/or additional consideration due
Tenant from its assignees, transferees, or subtenants in excess of the Rent
payable by Tenant to Landlord hereunder for the assigned, transferred and/or
subleased space ("Excess Rent"). Tenant shall, by thirty (30) days written
notice, advise Landlord of its intent to assign or transfer Tenant's interest in
the Lease or sublet the Premises or any portion thereof for any part of the term
hereof. Within thirty (30) days after receipt of said written notice, Landlord
may, in its sole discretion, elect to terminate this Lease as to the portion of
the Premises described in Tenant's notice on the date specified in Tenant's
notice by giving written notice of such election to terminate. If no such notice
to terminate is given to Tenant within said thirty (30) day period, Tenant may
proceed to locate an acceptable sublessee, assignee, or other transferee from
presentment to Landlord for Landlord's approval, all in accordance with the
terms, covenants, and conditions of this paragraph 16. If Tenant intends to
sublet the entire Premises and Landlord elects to terminate this Lease, this
Lease shall be terminated on the date specified in Tenant's notice. If, however,
this Lease shall terminate pursuant to the foregoing with respect to less than
all the Premises, the rent, as defined and reserved hereinabove shall be
adjusted on a pro rata basis to the number of square feet retained by Tenant,
and this Lease as so amended shall continue in full force and effect. In the
event Tenant is allowed to assign, transfer or sublet the whole or any part of
the Premises, with the prior written

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consent of Landlord, no assignee, transferee or subtenant shall assign or
transfer this Lease, either in whole or in part, or sublet the whole or any part
of the Premises, without also having obtained the prior written consent of
Landlord XXX. A consent of Landlord to one assignment, transfer, hypothecation,
subletting, occupation or use by any other person shall not release Tenant from
any of Tenant's obligations hereunder or be deemed to be a consent to any
subsequent similar or dissimilar assignment, transfer, hypothecation,
subletting, occupation or use by any other person. Any such assignment,
transfer, hypothecation, subletting, occupation or use without such consent
shall be void and shall constitute a breach of this Lease by Tenant and shall,
at the option of Landlord exercised by written notice to Tenant, terminate this
Lease. The leasehold estate under this Lease shall not, nor shall any interest
therein, by assignable for any purpose by operation of law without the written
consent of Landlord. As a condition to its consent, Landlord shall require
Tenant to pay all expenses in connection with the assignment, and Landlord shall
require Tenant's assignee or transferee (or other assignees or transferees) to
assume in writing all of the obligations under this Lease and for Tenant to
remain liable to Landlord under the Lease. Notwithstanding the above, in no
event will Landlord consent to a sub-sublease.

17. SUBORDINATION AND MORTGAGES In the event Landlord's title or leasehold
interest is now or hereafter encumbered by a deed of trust, upon the interest of
Landlord in the land and buildings in which the demised Premises are located, to
secure a loan from a lender (hereinafter referred to as "Lender") to Landlord,
Tenant shall, at the request of Landlord or Lender, execute in writing an
agreement subordinating its rights under this Lease to the lien of such deed of
trust, or, if so requested, agreeing that the lien of Lender's deed of trust
shall be or remain subject and subordinate to the rights of Tenant under this
Lease. Notwithstanding any such subordination, Tenant's possession under this
Lease shall not be disturbed if Tenant is not in default and so long as Tenant
shall pay all rent and observe and perform all of the provisions set forth in
this Lease.

18. ENTRY BY LANDLORD Landlord reserves, and shall at all reasonable times
after at least 24 hours notice (except in emergencies) have, the right to
enter the Premises to inspect them; perform any services to be provided by
Landlord hereunder; to make repairs or provide any services to a contiguous
tenant(s); to submit the Premises to prospective purchasers, mortgagers or
tenants; to post notices of nonresponsibility; and to alter, improve or
repair the Premises or other parts of the building, all without abatement of
rent, and may erect scaffolding and other necessary structures in or through
the Premises where reasonably required by the character of the work to be
performed; provided, however that the business of Tenant shall be interfered
with to the least extent that is reasonably practical. Any entry to the
Premises by Landlord for the purposes provided for herein shall not under any
circumstances be construed or deemed to be a forcible or unlawful entry into
or a detainer of the Premises or an eviction, actual or constructive, of
Tenant from the Premises or any portion thereof.

19. BANKRUPTCY AND DEFAULT The commencement of a bankruptcy action or
liquidation action or reorganization action or insolvency action or an
assignment of or by Tenant for the benefit of creditors, or any similar
action undertaken by Tenant, or the insolvency of Tenant, shall, at
Landlord's option, constitute a breach of this Lease by Tenant. If the
trustee or receiver appointed to serve during a bankruptcy, liquidation,
reorganization, insolvency or similar action elects to reject Tenant's
unexpired Lease, the trustee or receiver shall notify Landlord in writing of
its election within thirty (30) days after an order for relief in a
liquidation action or within thirty (30) days after the commencement of any
action.

   Within thirty (30) days after court approval of the assumption of this
Lease, the trustee or receiver shall cure (or provide adequate assurance to
the reasonable satisfaction of Landlord that the trustee or receiver shall
cure) any and all previous defaults under the unexpired Lease and shall
compensate Landlord for all actual pecuniary loss and shall provide adequate
assurance of future performance under said Lease to the reasonable
satisfaction of Landlord. Adequate assurance of future performance, as used
herein, includes, but shall not be limited to: (i) assurance of source and
payment of rent, and other consideration due under this Lease; (ii) assurance
that the assumption or assignment of this Lease will not breach substantially
any provision, such as radius, location, use, or exclusivity provision, in
any agreement relating to the above described Premises.

   Nothing contained in this section shall affect the existing right of
Landlord to refuse to accept an assignment upon commencement of or in
connection with a bankruptcy, liquidation, reorganization or insolvency
action or an assignment of Tenant for the benefit of creditors or other
similar act. Nothing contained in this Lease shall be construed as giving
or granting or creating an equity in the demised Premises to Tenant. In no
event shall the leasehold estate under this Lease, or any interest therein,
be assigned by voluntary or involuntary bankruptcy proceeding without the
prior written consent of Landlord. In no event shall this Lease or any rights
or privileges hereunder be an asset of Tenant under any bankruptcy,
insolvency or reorganization proceedings.

   The failure to perform or honor any covenant, condition or representation
made under this Lease shall constitute a default hereunder by Tenant upon
expiration of the appropriate grace period hereinafter provided. Tenant shall
have a period of five (5) days from the date of written notice from Landlord
within which to cure any default in the payment of rental or adjustment
thereto. Tenant shall have a period of thirty (30) days from the date of the
written notice from Landlord within which to cure any other default under
this Lease. Upon an uncured default of this Lease by Tenant, Landlord shall
have the following rights and remedies in addition to any other rights or
remedies available to Landlord at law or in equity:

         (a) The rights and remedies provided for by California Civil Code
Section 1951.2, including but not limited to, recovery of 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 rental loss for the same period
that Tenant proves could be reasonably avoided, as computed pursuant to
subsection (b) of said Section 1951.2. Any proof by Tenant under subparagraphs
(2) and (3) of Section 1951.2 of the California Civil Code of the amount of
rental loss that could be reasonably avoided shall be made in the following
manner: Landlord and Tenant shall each select a licensed real estate broker in
the business of renting property of the same type and use as the Premises and in
the same geographic vicinity. Such two real estate brokers shall select a third
licensed real estate broker, and the three licensed real estate brokers so
selected shall determine the amount of the rental loss that could be reasonably
avoided from the balance of the term of this Lease after the time of award. The
decision of the majority of said licensed real estate brokers shall be final and
binding upon the parties hereto.

         (b) The rights and remedies provided by California Civil Code Section
which allows Landlord to continue the Lease in effect and to enforce all of its
rights and remedies under this Lease, including the right to recover rent as it
becomes due, for so long as Landlord does not terminate Tenant's right to
possession; acts of maintenance or preservation, efforts to relet the Premises,
or the appointment of a receiver upon Landlord's initiative to protect its
interest under this Lease shall not constitute a termination of Tenant's right
to possession.

         (c) The right to terminate this Lease by giving notice to Tenant in
accordance with applicable law.

         (d) To the extent permitted by law, the right and power to enter the
Premises and remove therefrom all persons and property, to store such
property in a public warehouse or elsewhere at the cost of and for the
account of Tenant, and to sell such property and apply such proceeds
therefrom pursuant to applicable California law. Landlord may from time to
time sublet the Premises or any part thereof for such term or terms (which
may extend beyond the term of this Lease) and at such rent and such other
terms as Landlord in its sole discretion may deem advisable, with the right
to make alterations and repairs to the Premises. Upon each subletting, (i)
Tenant shall be immediately liable to pay Landlord, in addition to
indebtedness other that rent due hereunder, the cost of such subletting,
including, but not limited to, reasonable attorney's fees, and any real
estate commissions actually paid, and the costs of such alterations and
repairs incurred by Landlord and the amount, if any, by which the rent
hereunder for the period of such subletting (to the extent such period does
not exceed the term hereof) exceeds the amount to be paid as rent for the
Premises for such period or (ii) at the option of Landlord, rents received
from such subletting shall be applied first to payment of indebtedness other
than rent due hereunder from Tenant to Landlord; second, to the payment of
any costs of such subletting and of such alterations and repairs; third to
payment of rent due and unpaid hereunder; and the residue, if any, shall be
held by Landlord and applied in payment of future rent as the same becomes
due hereunder. If Tenant has been credited with any rent to be received by
such subletting under option (i) and such rent shall not be promptly paid to
Landlord by the subtenant(s), or if such rentals received from such
subletting under option (ii) during any month be less than that to be paid
during that month by Tenant hereunder, Tenant shall pay any such deficiency
to Landlord. Such deficiency shall be calculated and paid monthly. No taking
possession of the Premises by Landlord, shall be construed as an election on
its part to terminate this Lease unless a written notice of such intention be
given to Tenant. Notwithstanding any such subletting without termination,
Landlord may at any time hereafter elect to terminate this Lease for such
previous breach.

         (e) The right to have a receiver appointed for Tenant upon application
by Landlord, to take possession of the Premises and to apply any rental
collected from the Premises and to exercise all other rights and remedies
granted to Landlord pursuant to subparagraph d, above.

20. ABANDONMENT Tenant shall not vacate or abandon the Premises at any time
during the term of this Lease, and if Tenant shall abandon, vacate or surrender
said Premises, or be dispossessed by the process of law, or otherwise, any
personal property belonging to Tenant and left on the Premises shall be deemed
to be abandoned, at the option of Landlord, except such property as may be
mortgaged to Landlord.

21. DESTRUCTION In the event the Premises are destroyed in whole or in part from
any cause, except for routine maintenance and repairs and incidental

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damage and destruction caused from vandalism and accident for which Tenant is
responsible under Paragraph 7, Landlord may, at its option:

      (a) Rebuild or restore the Premises to their condition prior to the damage
or destruction, or

      (b) Terminate this Lease. (providing that the Premises is damaged to the
extent of 33 1/3% of the replacement cost)

   If Landlord does not give Tenant notice in writing within thirty (30) days
from the destruction of the Premises of its election to either rebuild and
restore them, or to terminate this Lease, Landlord shall be deemed to have
elected to rebuild or restore them, in which event Landlord agrees, at its
expense except for any deductible, which is the responsibility of Tenant,
promptly to rebuild or restore the Premises to their condition prior to the
damages or destruction. Tenant shall be entitled to a reduction in rent from
the date of such damage or destruction, provided Tenant is not using any
portion of such damaged area, while such repair is being made in the
proportion that the area of the Premises rendered untenantable by such damage
bears to the total area of the Premises. If Landlord initially estimates that
the rebuilding or restoration will exceed 180 days or if Landlord does not
complete the rebuilding or restoration within one hundred eighty (180) days
following the date of destruction (such period of time to be extended for
delays caused by the fault or neglect of Tenant or because of Acts of God,
acts of public agencies, labor disputes, strikes, fires, freight embargos,
rainy or stormy weather, inability to obtain materials, supplies or fuels,
acts of contractors or subcontractors, or delay of the contractors or
subcontractors due to such causes or other contingencies beyond the control
of Landlord), then Tenant shall have the right to terminate this Lease by
giving fifteen (15) days prior written notice to Landlord, Notwithstanding
anything herein to the contrary, Landlord's obligation to rebuild or restore
shall be limited to the building and interior improvements constructed by
Landlord as they existed as of the commencement date of the Lease and shall
not include restoration of Tenant's trade fixtures, equipment, merchandise,
or any improvements, alterations or additions made by Tenant to the Premises,
which Tenant shall forthwith replace or fully repair at Tenant's sole cost
and expense provided this Lease is not cancelled according to the provisions
above.

   Unless this Lease is terminated pursuant to the foregoing provisions, this
Lease shall remain in full force and effect. Tenant hereby expressly waives
the provisions of Section 1932, Subdivision 2, in Section 1933, Subdivision 4
of the California Civil Code.

   In the event that the building in which the Premises are situated is
damaged or destroyed to the extent of not less than 33 1/3% of the
replacement cost thereof, Landlord may elect to terminate this Lease, whether
the Premises be injured or not. Notwithstanding anything to the contrary
herein, Landlord may terminate this Lease in the event of an uninsured event
or if insurance proceeds are insufficient to cover one hundred percent of the
rebuilding costs net of the deductible

22. EMINENT DOMAIN If all or any part of the Premises shall be taken by any
public or quasi-public authority under the power of eminent domain or
conveyance in lieu thereof, this Lease shall terminate as to any portion of
the Premises so taken or conveyed on the date when title vests in the
condemnor, and Landlord shall be entitled to any and all payment, income,
rent, award, or any interest therein whatsoever which may be paid or made in
connection with such taking or conveyance, and Tenant shall have no claim
against Landlord or otherwise for the value of any unexpired term of this
Lease. Notwithstanding the foregoing paragraph, any compensation specifically
awarded to Tenant for loss of business, Tenant's personal property, moving
cost or loss of good will, shall be and remain the property of Tenant.

   If any action or proceeding is commenced for such taking of the Premises
or any part thereof, or if Landlord is advised in writing by any entity or
body having the right or power of condemnation of its intention to condemn
the premises or any portion thereof, then Landlord shall have the right to
terminate this Lease by giving Tenant written notice thereof within sixty
(60) days of the date of receipt of said written advice, or commencement of
said action or proceeding, or taking conveyance, which termination shall take
place as of first to occur of the last day of the calendar month next
following the month in which such notice is given or the date on which title
to the Premises shall vest in the condemnor.

   In the event of such a partial taking or conveyance of the Premises, if
the portion of the Premises taken or conveyed is so substantial that the
Tenant can no longer reasonably conduct its business, Tenant shall have the
privilege of terminating this Lease within sixty (60) days from the date of
such taking or conveyance, upon written notice to Landlord of its intention
so to do, and upon giving of such notice this Lease shall terminate on the
last day of the calendar month next following the month in which such notice
is given, upon payment by Tenant of the rent from the date of such taking or
conveyance to the date of termination.

   If a portion of the Premises be taken by condemnation or conveyance in
lieu thereof and neither Landlord nor Tenant shall terminate this Lease as
provided herein, this Lease shall continue in full force and effect as to the
part of the Premises not so taken or conveyed, and the rent herein shall be
apportioned as of the date of such taking or conveyance so that thereafter
the rent to be paid by Tenant shall be in the ratio that the area of the
portion of the Premises not so taken or conveyed bears to the total area of
the Premises prior to such taking.

23. SALE OR CONVEYANCE BY LANDLORD In the event of a sale or conveyance of
the Premises or any interest therein, by any owner of the reversion then
constituting Landlord, the transferor shall thereby be released from any
further liability upon any of the terms, covenants or conditions (express or
implied) herein contained in favor of Tenant, and in such event, insofar as
such transfer is concerned, Tenant agrees to look solely to the
responsibility of the successor in interest of such transferor in and to the
Premises and this Lease. This Lease shall not be affected by any such sale or
conveyance, and Tenant agrees to attorn to the successor in interest of such
transferor.

24. ATTORNMENT TO LENDER OR THIRD PARTY In the event the interest of Landlord
in the land and buildings in which the leased Premises are located (whether
such interest of Landlord is a fee title interest or a leasehold interest) is
encumbered by deed of trust, and such interest is acquired by the lender or
any third party through judicial foreclosure or by exercise of a power of
sale at private trustee's foreclosure sale, Tenant hereby agrees to attorn to
the purchaser at any such foreclosure sale and to recognize such purchaser as
the Landlord under this Lease. In the event the lien of the deed of trust
securing the loan from a Lender to Landlord is prior and paramount to the
Lease, this Lease shall nonetheless continue in full force and effect for the
remainder of the unexpired term hereof, at the same rental herein reserved
and upon all the other terms, conditions and covenants herein contained.

25. HOLDING OVER Any holding over by Tenant after expiration or other
termination of the term of this Lease with the written consent of Landlord
delivered to Tenant shall not constitute a renewal or extension of the Lease or
give Tenant any rights in or to the leased Premises except as expressly provided
in this Lease. Any holding over after the expiration or other termination of the
term of this Lease, with the consent of Landlord, shall be construed to be a
tenancy from month to month, on the same terms and conditions herein specified
insofar as applicable except that the monthly Basic Rent shall be increased to
an amount equal to one hundred fifty (150%) percent of the monthly Basic Rent
required during the last month of the Lease term.

26. CERTIFICATE OF ESTOPPEL Tenant shall at any time upon not less than ten
(10) days' prior written notice from Landlord execute, acknowledge and
deliver to Landlord a statement in writing (i) certifying that this Lease is
unmodified and in full force and effect (or, if modified, stating the nature
of such modification and certifying that this Lease, as so modified, is in
full force and effect) and the date to which the rent and other charges are
paid in advance, if any, and (ii) acknowledging that there are not, to
Tenant's knowledge, and any uncured defaults on the part of Landlord
hereunder, or specifying such defaults, if any, are claimed. Any such
statement may be conclusively relied upon by any prospective purchaser or
encumbrancer of the Premises. Tenant's failure to deliver such statement
within such time shall be conclusive upon Tenant that this Lease is in full
force and effect, without modification except as may be represented by
Landlord; that there are no uncured defaults in Landlord's performance, and
that not more than one month's rent has been paid in advance.

27. CONSTRUCTION CHANGES It is understood that the description of the
Premises and the location of ductwork, plumbing and other facilities therein
are subject to such minor changes as Landlord or Landlord's architect
determines to be desirable in the course of construction of the Premises, and
no such changes shall affect this Lease or entitle Tenant to any reduction of
rent hereunder or result in any liability of Landlord to Tenant. Landlord
does not guarantee the accuracy of any drawings supplied to Tenant and
verification of the accuracy of such drawings rests with Tenant.

28. RIGHT OF LANDLORD TO PERFORM All terms, covenants and conditions of this
Lease to be performed or observed by Tenant shall be performed or observed by
Tenant at Tenant's sole cost and expense and without any reduction of rent. If
Tenant shall fail to pay any sum of money, or other rent, required to be paid by
it hereunder and such failure shall continue for five (5) days after written
notice by Landlord, or shall fail to perform any other term or covenant
hereunder on its part to be performed, and such failure shall continue for
thirty (30) days after written notice thereof by Landlord. Landlord, without
waiving or releasing Tenant from any obligations of Tenant hereunder, may, but
shall not be obligated to, make any such payment or perform any such other term
or covenant on Tenant's part to be performed. All sums so paid by Landlord and
all necessary costs of such performance by Landlord together with interest
thereon at the rate of the prime rate of interest per annum as quoted by the
Bank of America from the date of such payment or performance by Landlord, shall
be paid (and Tenant covenants to make such payment) to Landlord on demand by
Landlord, and Landlord shall have (in addition to any other right or remedy of
Landlord) the same rights and remedies in the event of nonpayment by Tenant in
the case of failure by Tenant in the payment of rent hereunder.

29. ATTORNEY'S FEES.

   A. In the event that either Landlord or Tenant should bring suit for the
possession of the Premises, for the recovery of any sum due under this Lease, or
because of the breach of any provision of this Lease, or for any other relief
against the other party hereunder, then all costs and expenses, including
reasonable attorneys' fees,

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incurred by the prevailing party therein shall be paid by the other party, which
obligation on the part of the other party shall be deemed to have accrued on the
date of the commencement of such action and shall be enforceable whether or not
the action is prosecuted to judgement.

   (B) Should Landlord be named as a defendant in any suit brought against
Tenant in connection with or arising out of Tenant's occupancy hereunder, Tenant
shall pay to Landlord its costs and expenses incurred in such suit, including a
reasonable attorney's fee.

33. WAIVER The waiver by either party of the other party's failure to perform or
observe any term, covenant or condition herein contained to be performed or
observed by such wavering party shall not be deemed to be a waiver of such term,
covenant or condition or of any subsequent failure of the party failing to
perform or observe the same or any other such term, covenant or condition
therein contained, and no custom or practice which may develop between the
parties hereto during the term hereof shall be deemed a waiver of, or in any way
affect, the right of either party to insist upon performance and observance by
the other party in strict accordance with the terms hereof.

31. NOTICES All notices, demands, requests, advices or designations which may
be or are required to be given by either party to the other hereunder shall
be in writing. All notices, demands, requests, advices or designations by
Landlord to Tenant shall be sufficiently given, made or delivered if
personally served on Tenant by leaving the same at the Premises or if sent by
United States certified or registered mail, postage prepaid, addressed to
Tenant at the Premises. All notices demands, requests, advices or
designations by Tenant to Landlord shall be sent by the United States
certified or registered mail, postage prepaid, addressed to Landlord at its
offices at Peery/Arrillaga, 2560 Mission College Blvd., Suite 101, Santa
Clara, CA 95054 Each notice, request, demand, advice or designation referred
to in this paragraph shall be deemed received on the date of the personal
service or mailing thereof in the manner herein provided, as the case may be.

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

33. DEFAULT BY LANDLORD Landlord shall not be in default unless Landlord fails
to perform obligations required of Landlord within a reasonable time, but in no
event earlier than thirty (30) days after written notice by Tenant to Landlord
and to the holder of any first mortgage or deed of trust covering the Premises
whose name and address shall have heretofore been furnished to Tenant in
writing, specifying wherein Landlord has failed to perform such obligations;
provided, however, that if the nature of Landlord's obligations is such that
more than thirty (30) days are required for performance, then Landlord shall not
be in default if Landlord commences performance within such thirty (30) day
period and thereafter diligently prosecutes the same to completion.

34. CORPORATE AUTHORITY If Tenant is a corporation, (or a partnership) each
individual executing this Lease on behalf of said corporation (or partnership)
represents and warrants that he is duly authorized to execute and deliver this
Lease on behalf of said corporation (or partnership) in accordance with the
by-laws of said corporation (or partnership in accordance with the partnership
agreement) and that this Lease is binding upon said corporation (or partnership)
in accordance with its terms. If Tenant is a corporation, Tenant shall, within
thirty (30) days after execution of this Lease, deliver to Landlord a certified
copy of the resolution of the Board of Directors of said corporation authorizing
or ratifying the execution of this Lease.

36. LIMITATION OF LIABILITY In consideration of the benefits accruing hereunder,
Tenant and all successors and assigns covenant and agree that, in the event of
any actual or alleged failure, breach or default hereunder by Landlord:
         (a)      the sole and exclusive remedy shall be against Landlord's
                  interest in the Premises leased herein;
         (b)      no partner of Landlord shall be sued or named as party in any
                  suit or action (except as may be necessary to secure
                  jurisdiction of the partnership);
         (c)      no service of process shall be made against any partner of
                  Landlord (except as may be necessary to secure jurisdiction of
                  the partnership);
         (d)      no partner of Landlord shall be required to answer or
                  otherwise plead to any service of process;
         (e)      no judgement will be taken against any partner of Landlord;
         (f)      any judgement taken against any partner of Landlord may be
                  vacated and set aside at any time without hearing;
         (g)      no writ of execution will ever be levied against the assets of
                  any partner of Landlord;
         (h)      these covenants and agreements are enforceable by both
                  Landlord and also by any partner of Landlord.
   Tenant agrees that each of the foregoing covenants and agreements shall be
applicable to any covenant or agreement either expressly contained in this
Lease or imposed by statute or at common law.

37. SIGNS No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside of
the Premises or any exterior windows of the Premises without the written consent
of Landlord first had and obtained and Landlord shall have the right to remove
any such sign, placard, picture, advertisement, name or notice to and at the
expense of Tenant. If Tenant is allowed to print or affix or in any way place a
sign in, on or about the Premises, upon expiration or other sooner termination
of this Lease, Tenant at Tenant's sole cost and expense shall both remove such
sign and repair all damage in such a manner as to restore all aspects of the
appearance of the Premises to the condition prior to the placement of said sign.

   All approved signs or lettering on outside doors shall be printed, painted,
affixed or inscribed at the expense of Tenant by a person approved of by
Landlord.

   Tenant shall not place anything or allow anything to be placed near the glass
of any window, door partition or wall which may appear unsightly from outside
the Premises.

38. MISCELLANEOUS AND GENERAL PROVISIONS

   A. USE OF BUILDING NAME. Tenant shall not, without the written consent of
Landlord, use the name of the building for any purpose other than as the address
of the business conducted by Tenant in the Premises.

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   B. CHOICE OF LAW; SEVERABILITY. This Lease shall in all respects be governed
by and construed in accordance with the laws of the State of California. If any
provision of this Lease shall be invalid, unenforceable or ineffective for any
reason whatsoever, all other provisions hereof shall be and remain in full force
and effect.

   C. DEFINITION OF TERMS. The term "Premises" includes the space leased hereby
and any improvements now or hereafter installed therein or attached thereto. The
term "Landlord" or any pronoun used in place thereof includes the plural as well
as the singular and the successors and assigns of Landlord. The term "Tenant" or
any pronoun used in place thereof includes the plural as well as the singular
and individuals, firms, associations, partnerships and corporations, and their
and each of their respective heirs, executors, administrators, successors and
permitted assigns according to the context hereof, and the provisions of this
Lease shall inure to the benefit of and bind such heirs, executors,
administrators, successors and permitted assigns.

   The term "person" includes the plural as well as the singular and
individuals, firms, associations, partnerships and corporations. Words used in
any gender include other genders. If there be more than one Tenant the
obligations of Tenant hereunder are joint and several. The paragraph headings of
this Lease are for convenience of reference only and shall have no effect upon
the construction or interpretation of any provisions hereof.

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

   E. QUITCLAIM. At the expiration or earlier termination of this Lease, Tenant
shall execute, acknowledge and deliver to Landlord, within ten (10) days after
written demand from Landlord to Tenant, any quitclaim deed or other document
required by any reputable title company, licensed to operate in the State of
California, to remove the cloud or encumbrance created by this Lease from the
real property of which Tenant's Premises are a part.

   F. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS. This instrument along with
any exhibit and attachments hereto constitutes the agreement between Landlord
and Tenant relative to the Premises and this agreement and the exhibits and
attachments may be altered, amended or revoked only by an instrument in writing
signed by both Landlord and Tenant. Landlord and Tenant agree hereby that all
prior or contemporaneous oral agreements between and among themselves and their
agents or representatives relative to the leasing of the Premises are merged in
or revoked by this agreement.

   G. RECORDING. Neither Landlord nor Tenant shall record this Lease or a short
form memorandum hereof without the consent of the other.

   H. AMENDMENTS FOR FINANCING. Tenant further agrees to execute any amendments
required by a lender to enable Landlord to obtain financing, so long as Tenant's
rights hereunder are not substantially affected.

   I. ADDITIONAL PARAGRAPHS. Paragraphs 39 through 53 are added hereto and are
included as a part of this Lease.

   J. CLAUSES, PLATS, AND RIDERS. Clauses, plats and riders, if any, signed
by Landlord and Tenant and endorsed on or affixed to this Lease are a part
hereof.

   K. DIMINUTION OF LIGHT, AIR OR VIEW. Tenant covenants and agrees that no
diminution or shutting off of light, air or view by any structure which may be
hereafter erected (whether or not by Landlord) shall in any way affect his
Lease, entitle Tenant to any reduction of rent hereunder or result in any
liability of Landlord or Tenant.

   IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered this
Lease as of the day and year last written below.

LANDLORD:                                      TENANT:

JOHN ARRILLAGA SURVIVOR'S TRUST                CIPHERGEN BIOSYSTEMS, INC.,
                                               a California corporation

By                                              By   /s/ James H. Stanford
  ---------------------------------------         ----------------------------
   John Arrillaga, Trustee                          James H. Stanford, Vice
                                                    President and Chief
                                                    Financial Officer

Date:
     ------------------------------------
                                               Date: February 3, 2000
                                                    --------------------------

RICHARD T. PEERY SEPARATE PROPERTY TRUST

By
   --------------------------------------
   Richard T. Peery, Trustee

Date:
     ------------------------------------

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Paragraphs 39 through 53 to Lease Agreement dated January 28, 2000, By and
Between the John Arrillaga Survivor's Trust and the Richard T. Peery Separate
Property Trust, as Landlord, and CIPHERGEN BIOSYSTEMS, INC., A CALIFORNIA
CORPORATION, as Tenant for 30,232 PLUS OR MINUS Square Feet of Space Located at
6607 Dumbarton Circle, Suite 200, Fremont, California.

39. BASIC RENT: In accordance with Paragraph 4A herein, the total aggregate sum
of EIGHT MILLION TWO HUNDRED SEVENTY ONE THOUSAND FOUR HUNDRED SEVENTY FIVE AND
20/100 DOLLARS ($8,271,475.20), shall be payable as follows:

         On April 1, 2000, the sum of SEVENTY FIVE THOUSAND FIVE HUNDRED EIGHTY
AND NO/100 DOLLARS ($75,580.00) shall be due, and a like sum due on the first
day of each month thereafter, through and including March 1, 2001.

         On April 1, 2001, the sum of SEVENTY EIGHT THOUSAND SIX HUNDRED THREE
AND 20/100 DOLLARS ($78,603.20) shall be due, and a like sum due on the first
day of each month thereafter, through and including March 1, 2002.

         On April 1, 2002, the sum of EIGHTY ONE THOUSAND SIX HUNDRED TWENTY SIX
AND 40/100 DOLLARS ($81,626.40) shall be due, and a like sum due on the first
day of each month thereafter, through and including March 1, 2003.

         On April 1, 2003, the sum of EIGHTY FOUR THOUSAND SIX HUNDRED FORTY
NINE AND 60/100 DOLLARS ($84,649.60) shall be due, and a like sum due on the
first day of each month thereafter, through and including March 1, 2004.

         On April 1, 2004, the sum of EIGHTY SEVEN THOUSAND SIX HUNDRED SEVENTY
TWO AND 80/100 DOLLARS ($87,672.80) shall be due, and a like sum due on the
first day of each month thereafter, through and including March 1, 2005.

         On April 1, 2005, the sum of NINETY THOUSAND SIX HUNDRED NINETY SIX AND
NO/100 DOLLARS ($90,696.00) shall be due, and a like sum due on the first day of
each month thereafter, through and including March 1, 2006.

         On April 1, 2006, the sum of NINETY THREE THOUSAND SEVEN HUNDRED
NINETEEN AND 20/100 DOLLARS ($93,719.20) shall be due, and a like sum due on the
first day of each month thereafter, through and including March 1, 2007.

         On April 1, 2007, the sum of NINETY SIX THOUSAND SEVEN HUNDRED FORTY
TWO AND 40/100 DOLLARS ($96,742.40) shall be due, and a like sum due on the
first day of each month thereafter, through and including March 1, 2008; or
until the entire aggregate sum of EIGHT MILLION TWO HUNDRED SEVENTY ONE THOUSAND
FOUR HUNDRED SEVENTY FIVE AND 20/100 DOLLARS ($8,271,475.20) has been paid.

40. "AS-IS" BASIS: Subject only to the Construction Agreement of even date
herewith and to Landlord making the improvements shown on EXHIBIT B to be
attached hereto, it is hereby agreed that the Premises leased hereunder is
leased strictly on an "as-is" basis and in its present condition, and in the
configuration as shown on EXHIBIT B to be attached hereto, and by reference made
a part hereof. Except as noted within said Construction Agreement, it is
specifically agreed between the parties that after Landlord makes the interior
improvements as shown on EXHIBIT B, Landlord shall not be required to make, nor
be responsible for any cost, in connection with any repair, restoration, and/or
improvement to the Premises in order for this Lease to commence, or thereafter,
throughout the Term of this Lease. Notwithstanding anything to the contrary
within this Lease, Landlord makes no warranty or representation of any kind or
nature whatsoever as to the condition or repair of the Premises, nor as to the
use or occupancy which may be made thereof.

41. RULES AND REGULATIONS AND COMMON AREA: Subject to the terms and conditions
of this Lease and such Rules and Regulations as Landlord may from time to time
prescribe, Tenant and Tenant's employees, invitees and customers shall, in
common with other occupants of the Parcel/Building in which the premises are
located, and their respective employees, invitees and customers, and others
entitled to the use thereof, have the non-exclusive right to use the access
roads, parking areas, and facilities provided and designated by Landlord for the
general use and convenience of the occupants of the Parcel/Building in which the
Premises are located, which areas and facilities

                                     Page 9
<PAGE>

are referred to herein as "Common Area". This right shall terminate upon the
termination of this Lease. Landlord reserves the right from time to time to make
changes in the shape, size, location, amount and extent of Common Area. Landlord
further reserves the right to promulgate such reasonable rules and regulations
relating to the use of the Common Area, and any part or parts thereof, as
Landlord may deem appropriate for the best interests of the occupants of the
Parcel/Building. Such Rules and Regulations may be amended by Landlord from time
to time, with or without advance notice, and all amendments shall be effective
upon delivery of a copy to Tenant. Landlord shall not be responsible to Tenant
for the non-performance by any other tenant or occupant of the Parcel/Building
of any of said Rules and Regulations.

Landlord shall operate, manage and maintain the Common Area. The manner in which
the Common Area shall be maintained and the expenditures for such maintenance
shall be at the discretion of Landlord.

42. EXPENSES OF OPERATION, MANAGEMENT, AND MAINTENANCE OF THE COMMON AREAS OF
THE PARCEL AND BUILDING IN WHICH THE PREMISES ARE LOCATED: As Additional Rent
and in accordance with Paragraph 4D of this Lease, Tenant shall pay to Landlord
Tenant's proportionate share (calculated on a square footage or other equitable
basis as calculated by landlord) of all expenses of operation, management,
maintenance and repair of the Common Areas of the Parcel including, but not
limited to, license, permit, and inspection fees; security; utility charges
associated with exterior landscaping and lighting (including water and sewer
charges); all charges incurred in the maintenance and replacement of landscaped
areas, lakes, parking lots and paved areas (including repairs, replacement,
resealing and restriping), sidewalks, driveways, maintenance, repair and
replacement of all fixtures and electrical, mechanical and plumbing systems;
supplies, materials, equipment and tools; the cost of capital expenditures which
have the effect of reducing operating expenses, provided, however, that in the
event Landlord makes such capital improvements, Landlord may amortize its
investment in said improvements (together with interest at the rate of fifteen
(15%) percent per annum on the unamortized balance) as an operating expense in
accordance with standard accounting practices, provided, that such amortization
is not at a rate greater than the anticipated savings in the operating expenses.

As Additional Rent and in accordance with Paragraph 4D of this Lease, Tenant
shall pay its proportionate share (calculated on a square footage or other
equitable basis as calculated by Landlord) of the cost of operation (including
common utilities), management, maintenance, and repair of the building
(including structural and common areas such as lobbies, restrooms, janitor's
closets, hallways, elevators, mechanical and telephone rooms, stairwells,
entrances, spaces above the ceilings and janitorization of said common areas) in
which the Premises are located. The maintenance items herein referred to
include, but are not limited to, all windows, window frames, plate glass,
glazing, truck doors, main plumbing systems of the building (such as water drain
lines, sinks, toilets, faucets, drains, showers and water fountains), main
electrical systems (such as panels and conduits), heating and air-conditioning
systems (such as compressors, fans, air handlers, ducts, boilers, heaters),
structural elements and exterior surfaces of the building; store fronts, roof,
downspouts, building common area interiors (such as wall coverings, window
coverings, floor coverings and partitioning), ceilings, building exterior doors,
skylights (if any), automatic fire extinguishing systems, and elevators (if
any); license, permit and inspection fees; security, supplies, materials,
equipment and tools; the cost of capital expenditures which have the effect of
reducing operating expenses, provided, however, that in the event Landlord makes
such capital improvements, Landlord may amortize its investment in said
improvements (together with interest at the rate of fifteen (15%) percent per
annum on the unamortized balance) as an operating expense in accordance with
standard accounting practices, provided, that such amortization is not at a rate
greater than the anticipated savings in the operating expenses. Tenant hereby
waives all rights hereunder, and benefits of, subsection 1 of Section 1932 and
Sections 1941 and 1942 of the California Civil Code and under any similar law,
statute or ordinance now or hereafter in effect.

"Additional Rent" as used herein shall not include Landlord's debt repayments;
interest on charges, expenses directly or indirectly incurred by Landlord for
the benefit of any other tenant; cost for the installation of partitioning or
any other tenant improvements; cost of attracting tenants; depreciation;
interest; or executive salaries.

43. UTILITIES OF THE BUILDING IN WHICH THE PREMISES ARE LOCATED: As Additional
Rent and in accordance with Paragraph 4D of this Lease Tenant shall pay its
proportionate share (calculated on a square footage or other equitable basis as
calculated by Landlord) of the cost of all utility charges such as water, gas,
electricity, (telephone, telex and other electronic communications service, if
applicable) sewer service, waste pick-up and any other utilities, materials or
services

                                    Page 10
<PAGE>

furnished directly to the building in which the Premises are located, including,
without limitation, any temporary or permanent utility surcharge or other
exactions whether or not hereinafter imposed.

Landlord shall not be liable for and Tenant shall not be entitled to any
abatement or reduction of rent by reason of any interruption or failure of
utility services to the Premises when such interruption or failure is caused by
accident, breakage, repair, strikes, lockouts, or other labor disturbances or
labor disputes of any nature, or by any other cause, similar or dissimilar,
beyond the reasonable control of Landlord.

Provided that Tenant is not in default in the performance or observance of any
of the terms, covenants or conditions of this Lease to be performed or observed
by it, Landlord shall furnish to the Premises between the hours of 8:00 a.m. and
6:00 p.m., Mondays through Fridays (holidays excepted) and subject to the rules
and regulations of the Common Area hereinbefore referred to, reasonable
quantities of water, gas and electricity suitable for the intended use of the
Premises and heat and air-conditioning required in Landlord's judgment for the
comfortable use and occupation of the Premises for such purposes. Tenant agrees
that at all times it will cooperate fully with Landlord and abide by all
regulations and requirements that Landlord may prescribe for the proper
functioning and protection of the building heating, ventilating and
air-conditioning systems. Whenever heat generating machines, equipment, or any
other devices (including exhaust fans) are used in the Premises by Tenant which
affect the temperature or otherwise maintained by the air-conditioning system,
Landlord shall have the right to install supplementary air-conditioning units in
the Premises and the cost thereof, including the cost of installation and the
cost of operation and maintenance thereof, shall be paid by Tenant to Landlord
upon demand by Landlord. Tenant will not, without the written consent of
Landlord, use any apparatus or device in the Premises (including, without
limitation), electronic data processing machines or machines using current in
excess of 110 Volts which will in any way increase the amount of electricity,
gas, water or air-conditioning usually furnished or supplied to premises being
used as general office space, or connect with electric current (except through
existing electrical outlets in the Premises), or with gas or water pipes any
apparatus or device for the purposes of using electric current, gas, or water.
If Tenant shall require water, gas, or electric current in excess of that
usually furnished or supplied to premises being used as general office space,
Tenant shall first obtain the written consent of Landlord, which consent shall
not be unreasonably withheld and Landlord may cause an electric current, gas or
water meter to be installed in the Premises in order to measure the amount of
electric current, gas or water consumed for any such excess use. The cost of any
such meter and of the installation, maintenance and repair thereof, all charges
for such excess water, gas and electric current consumed (as shown by such
meters and at the rates then charged by the furnishing public utility); and any
additional expense incurred by Landlord in keeping account of electric current,
gas, or water so consumed shall be paid by Tenant, and Tenant agrees to pay
Landlord therefor promptly upon demand by Landlord.

44. PARKING: Tenant shall have the right to the nonexclusive use of one hundred
seventeen (117) parking spaces in the common parking area of the building.
Tenant agrees that Tenant, Tenant's employees, agents, representatives, and/or
invitees shall not use parking spaces in excess of said 117 parking spaces
allocated to Tenant hereunder. Landlord shall have the right, at Landlord's sole
discretion, to specifically designate the location of Tenant's parking spaces
within the common parking area of the building in the event of a dispute among
the tenants occupying the building referred to herein, in which event Tenant
agrees that Tenant, Tenant's employees, agents, representatives and/or invitees
shall not use any parking spaces other than those parking spaces specifically
designated by Landlord for Tenant's use. Said parking spaces, if specifically
designated by Landlord to Tenant, may be relocated by Landlord at any time, and
from time to time. Landlord reserves the right, at Landlord's sole discretion,
to rescind any specific designation of parking spaces, thereby returning
Tenant's parking spaces to the common parking area. Landlord shall give Tenant
written notice of any change in Tenant's parking spaces. Tenant shall not, at
any time, park, or permit to be parked, any trucks or vehicles adjacent to the
loading area so as to interfere in any way with the use of such areas, nor shall
Tenant, at any time, park or permit the parking of Tenant's trucks and other
vehicles or the trucks and vehicles of Tenant's suppliers or others, in any
portion of the common areas not designated by Landlord for such use by Tenant.
Tenant shall not park nor permit to be parked, any inoperative vehicles or
equipment on any portion of the common parking area or other common areas of the
building. Tenant agrees to assume responsibility for compliance by its employees
with the parking provision contained herein. If Tenant or its employees park in
other than designated parking areas, then Landlord may charge Tenant, as an
additional charge, and Tenant agrees to pay Ten Dollars ($10.00) per day for
each day or partial day each such vehicle is parking in any area other than that
designated. Tenant hereby authorizes Landlord, at Tenant's sole expense, to tow
away from the building any vehicle belonging to Tenant or Tenant's employees
parked in violation of these provisions, or to attach violation stickers or
notices to such vehicles. Tenant shall use the parking area for vehicle parking
only and shall not use the parking areas for storage.

                                    Page 11
<PAGE>

45. ASSESSMENT CREDITS: The demised property herein may be subject to a special
assessment levied by the City of Fremont as part of an Improvement District. As
a part of said special assessment proceedings (if any), additional bonds were or
may be sold and assessments were or may be levied to provide for construction
contingencies and reserve funds. Interest shall be earned on such funds created
for contingencies and on reserve funds which will be credited for the benefit of
said assessment district. To the extent surpluses are created in said district
through unused contingency funds, interest earnings or reserve funds, such
surpluses shall be deemed the property of Landlord. Notwithstanding that such
surpluses may be credited on assessments otherwise due against the Leased
Premises, Tenant shall pay to Landlord, as additional rent if, and at the time
of any such credit of surpluses, an amount equal to all such surpluses so
credited. For example: if (i) the property is subject to an annual assessment of
$1,000.00, and (ii) a surplus of $200.00 is credited towards the current year's
assessment which reduces the assessment amount shown on the property tax bill
from $1,000.00 to $800.00, Tenant shall, upon receipt of notice from Landlord,
pay to Landlord said $200.00 credit as Additional Rent.

46. ASSIGNMENT AND SUBLETTING (CONTINUED):

         A. Notwithstanding the foregoing, Landlord and Tenant agree that it
shall not be unreasonable for Landlord to refuse to consent to a proposed
assignment, sublease or other transfer ("Proposed Transfer") if the Premises or
any other portion of the Property would become subject to additional or
different Government Requirements as a direct or indirect consequence of the
Proposed Transfer and/or the Proposed Transferee's use and occupancy of the
Premises and the Property. However, Landlord may, in its sole discretion,
consent to such a Proposed Transfer where Landlord is indemnified by Tenant and
(i) Subtenant or (ii) Assignee, in form and substance satisfactory to Landlord's
counsel, by Tenant and/or the Proposed Transferee from and against any and all
costs, expenses, obligations and liability arising out of the Proposed Transfer
and/or the Proposed Transferee's use and occupancy of the Premises and the
Property.

         B. Any and all sublease agreement(s) between Tenant and any and all
subtenant(s) (which agreements must be consented to by Landlord, pursuant to the
requirements of this Lease) shall contain the following language:

                  "If Landlord and Tenant jointly and voluntarily elect, for any
         reason whatsoever, to terminate the Master Lease prior to the scheduled
         Master Lease termination date, then this Sublease (if then still in
         effect) shall terminate concurrently with the termination of the Master
         Lease. Subtenant expressly acknowledges and agrees that (1) the
         voluntary termination of the Master Lease by Landlord and Tenant and
         the resulting termination of this Sublease shall not give Subtenant any
         right or power to make any legal or equitable claim against Landlord,
         including without limitation any claim for interference with contract
         or interference with prospective economic advantage, and (2) Subtenant
         hereby waives any and all rights it may have under law or at equity
         against Landlord to challenge such an early termination of the
         Sublease, and unconditionally releases and relieves Landlord, and its
         officers, directors, employees and agents, from any and all claims,
         demands, and/or causes of action whatsoever (collectively, "Claims"),
         whether such matters are known or unknown, latent or apparent,
         suspected or unsuspected, foreseeable or unforeseeable, which Subtenant
         may have arising out of or in connection with any such early
         termination of this Sublease. Subtenant knowingly and intentionally
         waives any and all protection which is or may be given by Section 1542
         of the California Civil Code which provides as follows: "A general
         release does not extend to claims which the creditor does not know or
         suspect to exist in his favor at the time of executing the release,
         which if known by him must have materially affected his settlement with
         debtor.

                  The term of this Sublease is therefore subject to early
         termination. Subtenant's initials here below evidence (a) Subtenant's
         consideration of and agreement to this early termination provision, (b)
         Subtenant's acknowledgment that, in determining the net benefits to be
         derived by Subtenant under the terms of this Sublease, Subtenant has
         anticipated the potential for early termination, and (e) Subtenant's
         agreement to the general waiver and release of Claims above.

                     Initials:                   Initials:
                               ----------                  ----------
                               Subtenant                   Tenant

                                    Page 12

<PAGE>

47. BANKRUPTCY AND DEFAULT: Paragraph 19 is modified to provide that with
respect to non-monetary defaults not involving Tenant's failure to pay Basic
Rent or Additional Rent, Tenant shall not be in default of any non-monetary
obligation if (i) more than thirty (30) days is required to cure such
non-monetary default, and (ii) Tenant commences cure of such default as soon as
reasonably practicable after receiving written notice of such default from
Landlord and thereafter continuously and with due diligence prosecutes such cure
to completion.

48. ABANDONMENT: Paragraph 20 is modified to provide that Tenant shall not be in
default under the Lease if it leaves all or any part of Premises vacant so long
as (i) Tenant is performing all of its other obligations under the Lease
including the obligation to pay Basic Rent and Additional Rent (ii) Tenant
provides on-site security during normal business hours for those parts of the
Premises left vacant, (iii) such vacancy does not materially and adversely
affect the validity or coverage of any policy of insurance carried by Landlord
with respect to the Premises, and (iv) the utilities and heating and
ventilation system are operated and maintained to the extent necessary to
prevent damage to the Premises or its systems.

49. HAZARDOUS MATERIALS: Landlord and Tenant agree as follows with respect to
the existence or use of "Hazardous Materials" (as defined herein) on, in, under
or about the Premises and real property located beneath said Premises and the
common areas of the Parcel, which includes the entire parcel of land on which
the Premises are located as shown in Green on EXHIBIT A attached hereto
(hereinafter collectively referred to as the "Property"):

         A. As used herein, the term "Hazardous Materials" shall mean any
material, waste, chemical, mixture or byproduct which is or hereafter is
defined, listed or designated under Environmental Laws (defined below) as a
pollutant, or as a contaminant, or as a toxic or hazardous substance, waste or
material, or any other unwholesome, hazardous, toxic, biohazardous, or
radioactive material, waste, chemical, mixture or byproduct, or which is listed,
regulated or restricted by any Environmental Law (including, without limitation,
petroleum hydrocarbons or any distillates or derivatives or fractions thereof,
polychlorinated biphenyls, or asbestos). As used herein, the term "Environmental
Laws" shall mean any applicable Federal, State of California or local government
law (including common law), statute, regulation, rule, ordinance, permit,
license, order, requirement, agreement, or approval, or any determination,
judgment, directive, or order of any executive or judicial authority at any
level of Federal, State of California or local government (whether now existing
or subsequently adopted or promulgated) relating to pollution or the protection
of the environment, ecology, natural resources, or public health and safety.

         B. Tenant shall obtain Landlord's written consent, which may be
withheld in Landlord's discretion, prior to the occurrence of any Tenant's
Hazardous Materials Activities (defined below); provided, however, that
Landlord's consent shall not be required for normal use in compliance with
applicable Environmental Laws of customary household and office supplies (Tenant
shall first provide Landlord with a list of said materials use), such as mild
cleaners, lubricants and copier toner. As used herein, the term "Tenant's
Hazardous Materials Activities" shall mean any and all use, handling,
generation, storage, disposal, treatment, transportation, release, discharge, or
emission of any Hazardous Materials on, in, beneath, to, from, at or about the
Property, in connection with Tenant's use of the Property, or by Tenant or by
any of Tenant's agents, employees, contractors, vendors, invitees, visitors or
its future subtenants or assignees. Tenant agrees that any and all Tenant's
Hazardous Materials Activities shall be conducted in strict, full compliance
with applicable Environmental Laws at Tenant's expense, and shall not result in
any contamination of the Property or the environment. Tenant agrees to provide
Landlord with prompt written notice of any spill or release of Hazardous
Materials at the Property during the term of the Lease of which Tenant becomes
aware, and further agrees to provide Landlord with prompt written notice of any
violation of Environmental Laws in connection with Tenant's Hazardous Materials
Activities of which Tenant becomes aware. If Tenant's Hazardous Materials
Activities involve Hazardous Materials other than normal use of customary
household and office supplies, Tenant also agrees at Tenant's expense: (i) to
install such Hazardous Materials monitoring, storage and containment devices as
Landlord reasonably deems necessary (Landlord shall have no obligation to
evaluate the need for any such installation or to require any such
installation); (ii) provide Landlord with a written inventory of such Hazardous
Materials, including an update of same each year upon the anniversary date of
the Commencement Date of the Lease ("Anniversary Date"); and (iii) on each
Anniversary Date, to retain a qualified environmental consultant, acceptable to
Landlord, to evaluate whether Tenant is in compliance with all applicable
Environmental Laws with respect to Tenant's Hazardous Materials Activities.
Tenant, at its expense,

                                    Page 13
<PAGE>

shall submit to Landlord a report from such environmental consultant which
discusses the environmental consultant's findings within two (2) months of each
Anniversary Date. Tenant, at its expense, shall promptly undertake and complete
any and all steps necessary, and in full compliance with applicable
Environmental Laws, to fully correct any and all problems or deficiencies
identified by the environmental consultant, and promptly provide Landlord with
documentation of all such corrections.

         C. Prior to termination or expiration of the Lease, Tenant, at its
expense, shall (i) properly remove from the Property all Hazardous Materials
which come to be located at the Property in connection with Tenant's Hazardous
Materials Activities, and (ii) fully comply with and complete all facility
closure requirements of applicable Environmental Laws regarding Tenant's
Hazardous Materials Activities, including but not limited to (x) properly
restoring and repairing the Property to the extent damaged by such closure
activities, and (y) obtaining from the local Fire Department or other
appropriate governmental authority with jurisdiction a written concurrence that
closure has been completed in compliance with applicable Environmental Laws.
Tenant shall promptly provide Landlord with copies of any claims, notices, work
plans, data and reports prepared, received or submitted in connection with any
such closure activities.

         D. If Landlord, in its sole discretion, believes that the Property has
become contaminated as a result of Tenant's Hazardous Materials Activities,
Landlord in addition to any other rights it may have under this Lease or under
Environmental Laws or other laws, may enter upon the Property and conduct
inspection, sampling and analysis, including but not limited to obtaining and
analyzing samples of soil and groundwater, for the purpose of determining the
nature and extent of such contamination. Tenant shall promptly reimburse
Landlord for the costs of such an investigation, including but not limited to
reasonable attorneys' fees Landlord incurs with respect to such investigation,
that discloses Hazardous Materials contamination for which Tenant is liable
under this Lease. Notwithstanding the above, Landlord may, at its option and in
its sole and absolute discretion, choose to perform remediation and obtain
reimbursement for cleanup costs as set forth herein from Tenant. Any cleanup
costs incurred by Landlord as the result of Tenant's Hazardous Materials
Activities shall be reimbursed by Tenant within thirty (30) days of presentation
of written documentation of the expense to Tenant by Landlord. Such reimbursable
costs shall include, but not be limited to, any reasonable consultant and
attorney fees incurred by Landlord. Tenant shall take all actions necessary to
preserve any claims it has against third parties, including, but not limited to,
its insurers, for claims related to its operation, management of Hazardous
Materials or contamination of the Property. Except as may be required of Tenant
by applicable Environmental Laws, Tenant shall not perform any sampling,
testing, or drilling to identify the presence of any Hazardous Materials at the
Property, without Landlord's prior written consent which may be withheld in
Landlord's discretion. Tenant shall promptly provide Landlord with copies of any
claims, notices, work plans, data and reports prepared, received or submitted in
connection with any sampling, testing or drilling performed pursuant to the
preceding sentence.

         E. Tenant shall indemnify, defend (with legal counsel acceptable to
Landlord, whose consent shall not unreasonably be withheld) and hold harmless
Landlord, its employees, assigns, successors, successors-in-interest, agents and
representatives from and against any and all claims (including but not limited
to third party claims from a private party or a government authority),
liabilities, obligations, losses, causes of action, demands, governmental
proceedings or directives, fines, penalties, expenses, costs (including but not
limited to reasonable attorneys', consultants' and other experts' fees and
costs), and damages, which arise from or relate to: (i) Tenant's Hazardous
Materials Activities; (ii) any Hazardous Materials contamination caused by
Tenant prior to the Commencement Date of the Lease; or (iii) the breach of any
obligation of Tenant under this Paragraph 49 (collectively, "Tenant's
Environmental Indemnification"). Tenant's Environmental Indemnification shall
include but is not limited to the obligation to promptly and fully reimburse
Landlord for losses in or reductions to rental income, and diminution in fair
market value of the Property. Tenant's Environmental Indemnification shall
further include but is not limited to the obligation to diligently and properly
implement to completion, at Tenant's expense, any and all environmental
investigation, removal, remediation, monitoring, reporting, closure activities,
or other environmental response action (collectively, "Response Actions").
Tenant shall promptly provide Landlord with copies of any claims, notices, work
plans, data and reports prepared, received or submitted in connection with any
Response Actions.

As evidenced by their initials set forth immediately below, Tenant acknowledges
that Landlord has provided Tenant with copies of the environmental reports
listed on EXHIBIT C ("Reports"), and Tenant acknowledges that Tenant and
Tenant's experts (if any) have had ample opportunity to review such reports and
that Tenant has satisfied itself as to the environmental conditions of the
Property and the suitability of such conditions for Tenant's intended use of the
Property. To the best of Landlord's knowledge as of the date of this Lease,
except as noted in said Reports, no additional on site Hazardous

                                    Page 14

<PAGE>

Materials contamination exist on the Property; however, Landlord shall have no
obligation to further investigate.

                  Initial: [ILLEGIBLE]          Initial:
                           -----------                   -----------
                           Tenant                        Landlord

It is agreed that the Tenant's responsibilities related to Hazardous Materials
will survive the expiration or termination of this Lease and that Landlord may
obtain specific performance of Tenant' s responsibilities under this Paragraph
49.

50. CONSENT: Whenever the consent of one party to the other is required
hereunder, such consent shall not be unreasonably withheld.

51. AUTHORITY TO EXECUTE. The parties executing this Lease Agreement hereby
warrant and represent that they are properly authorized to execute this Lease
Agreement and bind the parties on behalf of whom they execute this Lease
Agreement and to all of the terms, covenants and conditions of this Lease
Agreement as they relate to the respective parties hereto.

52. ADDRESS FOR LEASED PREMISES: It is understood that (i) the current address
for the building in which the Premises are located is 6607 Dumbarton Circle,
Suite 200, Fremont, California, and that (ii) the address for the Premises may
be changed by the City of Fremont (the "City") upon issuance of a building
permit for the Interior Improvements as defined herein. In the event the address
assigned to the Premises is changed by the City, said Lease shall thereafter be
amended to reflect the assigned address for the Premises leased hereunder.

53. ASSOCIATION DUES: The Premises leased hereunder is part of the Ardenwood
Property Owner's Association (the "Association"), and is subject to
Association Dues to fund the cost of the Association's obligations and
expenses as authorized under said Agreement. As of the date of this Lease,
Tenant's current pro rata share of the Association Dues is currently
estimated at $28.77 per month and is subject to adjustment as provided for by
said Association. Said Association Dues are payable by Tenant to Landlord as
Additional Rent on a monthly basis throughout the Term of this Lease. Tenant
understands that it will not be a direct member of the Association

                                    Page 15

<PAGE>

January 28, 2000

CIPHERGEN BIOSYSTEMS, INC.
490 San Antonio Road
Palo Alto, CA 94306

Attention:    James H. Stanford

RE:      CONSTRUCTION AGREEMENT RELATED TO LEASE AGREEMENT DATED JANUARY 28,
         2000, BY AND BETWEEN THE JOHN ARRILLAGA SURVIVOR'S TRUST AND THE
         RICHARD T. PEERY SEPARATE PROPERTY TRUST, AS LANDLORD, AND CIPHERGEN
         BIOSYSTEMS, INC., A CALIFORNIA CORPORATION, AS TENANT, FOR
         APPROXIMATELY 30,232 SQUARE FEET OF THAT CERTAIN 60,720 SQUARE FOOT
         BUILDING LOCATED AT 6607 DUMBARTON CIRCLE, SUITE 200 IN FREMONT,
         CALIFORNIA.

Gentlemen:

This Letter will confirm our agreement relative to the shell of the building and
interior improvements related thereto to be constructed by Landlord on the
property leased under the lease referenced above, hereinafter referred to as the
"Lease", and shall be considered a part of the Lease.

1. CONSTRUCTION AND COST OF IMPROVEMENTS: The improvements to be constructed as
part of the Premises in connection with this Lease Agreement shall be
constructed, completed, and paid for in the following manner:

A. PLANS AND SPECIFICATIONS:

         1. SHELL: Tenant shall furnish to Landlord complete detailed plans and
specifications for all plumbing, electrical, heating and air conditioning that
affect the construction of the "shell" of the building, as well as any other
items that are required to construct the shell without modification being
required at a later time, not later than February 14, 2000.

         2. INTERIOR: Tenant shall furnish to Landlord complete and detailed
plans and specifications for all interior improvements Tenant desires
constructed in the building shell being constructed by Landlord not later than
February 14, 2000. Such interior plans shall be in sufficient detail for the
interior improvements to be accurately constructed. All of the plans and
specifications, when approved by Landlord and furnished to Landlord on the dates
provided for herein, shall be "EXHIBIT B" to the Lease.

         If the above plans and specifications for any items affecting the shell
of the building and/or interior plans and specifications are not received by
Landlord for Landlord's approval (which approval shall not be unreasonable
withheld) by the dates specified above, then it is agreed that, notwithstanding
anything to the contrary in the Lease, this Lease, and Tenant's obligation to
pay Rent and to perform all other terms, covenants and conditions of the Lease
shall commence on April 1, 2000 regardless of whether or not the building and
interior improvements are completed on April 1, 2000, and Landlord shall
complete construction of the building and interior improvements as soon as
reasonably possible thereafter.

B. LANDLORD'S RIGHT TO TERMINATE: It is understood that the Premises to be
leased by Tenant are to be constructed by Landlord, and that Landlord is
required to obtain the necessary building permits before construction of said
Premises can commence. Therefore, it is agreed that in the event Landlord cannot
obtain all the necessary building and governmental permits for said Premises
within 90 days from the date this executed Lease is received by Landlord, that
Landlord can terminate this Lease Agreement without any liability to Tenant, of
any type whatsoever, and that this Lease Agreement will be null and void as of
the date of said cancellation. Landlord agrees to use its best efforts to obtain
the required permits within the aforementioned 90-day

                                       1

<PAGE>

period.

C. CONSTRUCTION OF IMPROVEMENTS BY LANDLORD:

         1. The site, shell, and interior shall be constructed in accordance
with Exhibit A and EXHIBIT B of the Lease; it being agreed, however, that if the
Building does not conform exactly to the plans and specifications as set forth
in the Lease, and the general appearance, structural integrity, and Tenant's use
and occupancy of the Premises and/or building and interior improvements relating
thereto are not materially or unreasonably affected by such deviation, it is
agreed that the commencement date of the Lease, and Tenant's obligation to pay
Rent shall not be affected, and Tenant hereby agrees, in such event, to accept
the Premises and/or building and interior improvements as constructed by
Landlord.

         2. Landlord shall have a reasonable time period, not to exceed sixty
(60) days (acts of God and delays beyond Landlord's control excepted), after
completion by Landlord of Tenant's improvements set forth herein and the
commencement date of the Lease to complete the landscaping and "punch list"
items pertaining to Landlord's work with respect to Tenant's newly constructed
building and/or interior improvements relating thereto without the commencement
date of the Lease and Tenant's obligation to pay Rent thereunder being affected.

D. IMPROVEMENTS TO BE FURNISHED BY LANDLORD:

         1. Landlord agrees to furnish the shell of the building, including the
paving and parking areas, striping, curbs, and gutters as shown on EXHIBIT A of
the Lease, the main plumbing line into the building and landscaping and
irrigation system for the building.

         2. In addition, Landlord agrees to furnish Tenant with an interior
allowance of SEVEN HUNDRED FIFTY FIVE THOUSAND EIGHT HUNDRED AND NO/100 DOLLARS
($755,800.00) ("Improvement Allowance"), which allowance shall be considered
Landlord's total monetary contribution with respect to Tenant's interior
improvements to the building, which allowance shall be used for interior
improvements including, but not limited to, elevators, elevator pits and guide
rails (if any), stairwells (if any), the fire sprinkler system, loading docks,
drop ceilings, interior plumbing, heating and air conditioning system ("HVAC"),
electrical system, parking lot lighting, carpeting, vinyl floor covering,
painting, interior walls and movable floor to ceiling partitioning, normal
contractor's fees and interest due during the period of construction on the
funds advanced for installation of improvements under the improvement allowance,
Builders Risk Insurance premium and any school, City, County or governmental
fees including fees for connection to utilities, etc. Notwithstanding anything
to the contrary herein, in no event shall any of Landlord Improvement Allowance
be used for any lab equipment, cabinets or special plumbing and/or electrical
and/or HVAC requirements for any labs and/or clean rooms, if any (collectively
hereinafter referred to as "Other Improvements")

         3. Tenant hereby specifically agrees that the interior improvements to
be constructed in the Premises leased hereunder shall be spread proportionately
even within the building.

E. LIABILITY FOR INTERIOR EXPENSE ABOVE LANDLORD'S ALLOWANCE:

         1. In the event that the total cost of the interior improvements
constructed in the Premises exceeds Landlord's agreed-upon interior improvement
allowance of $755,800.00, Landlord's total liability shall be limited to
$755,800.00, which Landlord shall pay by paying the general contractor doing the
interior improvements a pro rata share of the total cost of the contract as
invoiced by the general contractor as work progresses. (For example: If the
total contract from the general contractor for such improvements is
$1,000,000.00 and Landlord agreed to contribute $755,800.00 toward the
improvements, then Landlord would pay seventy five and fifty eight hundredths
percent (75.58%) of each payment so invoiced and Tenant would pay the remaining
twenty percent (24.42%) of each payment so invoiced with the exception that
Landlord, at its option, may retain a pro rata share of the final ten percent
(10%) of the interior contract until 62 days after recordation of a Notice of
Completion on the Premises.

         2. It is further agreed that Tenant shall be responsible for and pay
one hundred percent (100%) of the costs in connection with (a) Tenant's Other
Improvements and (b) any and all interior improvements in excess of those that
are paid for with Landlord's allowance for Tenant's

                                       2

<PAGE>

improvements as set forth in Paragraph 1.C. 1 above and in addition, Tenant
shall be responsible for and pay any additional construction costs and expenses
related to the site or shell occasioned by changes or modifications by Tenant in
the plans attached as Exhibits A and B to the Lease. Landlord shall be
reimbursed by Tenant for the full cost of such improvements made by Landlord in
excess of said $755,800.00 allowance upon demand of Landlord. (Tenant shall
enter into a direct contract with the general contractor constructing the
interior improvements if Landlord so directs.)

2. CHANGES, MODIFICATIONS, OR ADDITIONS TO THE PLANS, SPECIFICATIONS AND/OR
PREMISES.

LIABILITY FOR ADDITIONAL COSTS:

         A. All construction work relating to the Premises other than that to be
performed by Landlord as set forth herein shall be performed by Landlord at
Tenant's sole cost and expense, and in accordance with any plans and
specifications first submitted and approved in writing by Landlord.

         B. Notwithstanding anything to the contrary, it is agreed that in the
event Tenant, with Landlord's written consent (which consent shall not be
unreasonably withheld), makes changes, additions, or modifications to the plans
and specifications and/or Premises to be constructed by Landlord as set forth
herein, or improvements are installed for Tenant in excess of those to be
provided Tenant by Landlord as set forth herein, any increased cost(s) resulting
from said changes, additions, and/or modifications and/or improvements in excess
of those to be provided Tenant as set forth in Paragraph 1.A. shall be
contracted for with Landlord or the general contractor (as Landlord shall so
designate) and paid for one hundred percent (100%) by Tenant.

3. TENANT DELAYS

         In the event that the completion of Tenant's interior improvements
and/or the completion of the building and Landlord's delivery of possession of
the Premises to Tenant is delayed as a result of said changes, additions, and/or
modifications made by Tenant, or because improvements installed by Tenant or
Tenant's subcontractors (with Landlord's consent, which consent shall not be
unreasonably withheld) hinder Landlord from timely completing any improvements
to be installed by Landlord, or if Tenant installs, or requests to have
installed, any special or nonstandard improvements, or if Tenant's plans and
specifications include any special materials, finishes or installations which
are not readily available, and which delay completion of the improvements due to
a longer time span for delivery or installation of said nonstandard improvement
or any other reason, including Tenant's failure to timely deliver the
Construction Plans and Specifications as provided in above Paragraph 1.A, the
commencement date of the Lease, and Tenant's obligation to pay Rent and perform
all other terms, covenants and conditions of the Lease shall commence on April
1, 2000, in which event Landlord shall complete construction of the building as
soon as reasonably possible thereafter.

Please execute this agreement in the space provided below, indicating your
agreement with the above, and return all copies. A fully executed copy will be
returned to you for your records after execution by the Landlord.

Respectfully yours,

JOHN ARRILLAGA SURVIVOR'S TRUST

By
   -------------------------------------------
         John Arrillaga, Trustee

Date:
   -------------------------------------------

                                       3

(SIGNATURES CONTINUED ON FOLLOWING PAGE)

<PAGE>

RICHARD T. PEERY SEPARATE
PROPERTY TRUST

By /s/ Richard T. Peery
   -------------------------------------------
         Richard T. Peery, Trustee

Date: 2/8/00
     -----------------------------------------

AGREED:

CIPHERGEN BIOSYSTEMS, INC.
a California corporation

By   /s/ James H. Stanford
   -------------------------------------------
       James H. Stanford, Vice President and
       Chief Financial Officer

Date:    February 3, 2000
     -----------------------------------------

                                       4

<PAGE>

                                [Image Site Plan]

EXHIBIT A TO LEASE AGREEMENT DATED JANUARY 28, 2000 BY BETWEEN THE JOHN
ARRILLAGA SURVIVOR'S TRUST AND THE RICHARD T. PEERY SEPARATE PROPERTY TRUST, AS
LANDLORD, AND CIPHERGEN BIOSYSTEMS, INC., AS TENANT.

<PAGE>

         EXHIBIT C TO LEASE AGREEMENT DATED JANUARY 28, 2000 BETWEEN THE
            JOHN ARRILLAGA SURVIVOR'S TRUST AND THE RICHARD T. PEERY
         SEPARATE PROPERTY TRUST, AS LANDLORD, AND CIPHERGEN BIOSYSTEMS,
                                INC., AS TENANT.

                           HAZARDOUS MATERIALS REPORTS
                               PROVIDED TO TENANT

1)       Preliminary Environmental Assessment and Soil Testing for Ardenwood
         Corporate Commons: prepared for Bedford Properties on August 10, 1988
         by Kaldveer Associates;

2)       Preliminary Environmental Assessment and Soil Testing for Ardenwood
         Corporate Commons Lots 1 through 27: prepared for Bedford Properties on
         June 13, 1989 by Kaldveer Associates;

3)       Phase I Site Assessment for Ardenwood Corporate Commons: prepared for
         Bedford Properties in July 1991 by Mittelhauser Corporation.

<PAGE>

                                [Image Site Plan]

EXHIBIT A TO LEASE AGREEMENT DATED JANUARY 28, 2000 BY BETWEEN THE JOHN
ARRILLAGA SURVIVOR'S TRUST AND THE RICHARD T. PEERY SEPARATE PROPERTY TRUST, AS
LANDLORD, AND CIPHERGEN BIOSYSTEMS, INC., AS TENANT.

<PAGE>

                                    FLOORPLAN

<PAGE>

                                    FLOORPLAN

<PAGE>

January 28, 2000

CIPHERGEN BIOSYSTEMS, INC.
490 San Antonio Road
Palo Alto, CA 94306

Attention:    James H. Stanford

RE:      CONSTRUCTION AGREEMENT RELATED TO LEASE AGREEMENT DATED JANUARY 28,
         2000, BY AND BETWEEN THE JOHN ARRILLAGA SURVIVOR'S TRUST AND THE
         RICHARD T. PEERY SEPARATE PROPERTY TRUST, AS LANDLORD, AND CIPHERGEN
         BIOSYSTEMS, INC., A CALIFORNIA CORPORATION, AS TENANT, FOR
         APPROXIMATELY 30,232 SQUARE FEET OF THAT CERTAIN 60,720 SQUARE FOOT
         BUILDING LOCATED AT 6607 DUMBARTON CIRCLE, SUITE 200 IN FREMONT,
         CALIFORNIA.

Gentlemen:

This Letter will confirm our agreement relative to the shell of the building and
interior improvements related thereto to be constructed by Landlord on the
property leased under the lease referenced above, hereinafter referred to as the
"Lease", and shall be considered a part of the Lease.

1. CONSTRUCTION AND COST OF IMPROVEMENTS: The improvements to be constructed as
part of the Premises in connection with this Lease Agreement shall be
constructed, completed, and paid for in the following manner:

A.   PLANS AND SPECIFICATIONS:

         1. SHELL: Tenant shall furnish to Landlord complete detailed plans and
specifications for all plumbing, electrical, heating and air conditioning that
affect the construction of the "shell" of the building, as well as any other
items that are required to construct the shell without modification being
required at a later time, not later than February 14, 2000.

         2. INTERIOR: Tenant shall furnish to Landlord complete and detailed
plans and specifications for all interior improvements Tenant desires
constructed in the building shell being constructed by Landlord not later than
February 14, 2000. Such interior plans shall be in sufficient detail for the
interior improvements to be accurately constructed. All of the plans and
specifications, when approved by Landlord and furnished to Landlord on the dates
provided for herein, shall be "EXHIBIT B" to the Lease.

         If the above plans and specifications for any items affecting the shell
of the building and/or interior plans and specifications are not received by
Landlord for Landlord's approval (which approval shall not be unreasonable
withheld) by the dates specified above, then it is agreed that, notwithstanding
anything to the contrary in the Lease, this Lease, and Tenant's obligation to
pay Rent and to perform all other terms, covenants and conditions of the Lease
shall commence on April 1, 2000 regardless of whether or not the building and
interior improvements are completed on April 1, 2000, and Landlord shall
complete construction of the building and interior improvements as soon as
reasonably possible thereafter.

B. LANDLORD'S RIGHT TO TERMINATE: It is understood that the Premises to be
leased by Tenant are to be constructed by Landlord, and that Landlord is
required to obtain the necessary building permits before construction of said
Premises can commence. Therefore, it is agreed that in the event Landlord cannot
obtain all the necessary building and governmental permits for said Premises
within 90 days from the date this executed Lease is received by Landlord, that
Landlord can terminate this Lease Agreement without any liability to Tenant, of
any type whatsoever, and that this Lease Agreement will be null and void as of
the date of said cancellation. Landlord agrees to use its best efforts to obtain
the required permits within the aforementioned 90-day

                                       1

<PAGE>

period.

C.   CONSTRUCTION OF IMPROVEMENTS BY LANDLORD:

         1. The site, shell, and interior shall be constructed in accordance
with EXHIBIT A and EXHIBIT B of the Lease; it being agreed, however, that if the
Building does not conform exactly to the plans and specifications as set forth
in the Lease, and the general appearance, structural integrity, and Tenant's use
and occupancy of the Premises and/or building and interior improvements relating
thereto are not materially or unreasonably affected by such deviation, it is
agreed that the commencement date of the Lease, and Tenant's obligation to pay
Rent shall not be affected, and Tenant hereby agrees, in such event, to accept
the Premises and/or building and interior improvements as constructed by
Landlord.

         2. Landlord shall have a reasonable time period, not to exceed sixty
(60) days (acts of God and delays beyond Landlord's control excepted), after
completion by Landlord of Tenant's improvements set forth herein and the
commencement date of the Lease to complete the landscaping and "punch list"
items pertaining to Landlord's work with respect to Tenant's newly constructed
building and/or interior improvements relating thereto without the commencement
date of the Lease and Tenant's obligation to pay Rent thereunder being affected.

D. IMPROVEMENTS TO BE FURNISHED BY LANDLORD:

         1. Landlord agrees to furnish the shell of the building, including the
paving and parking areas, striping, curbs, and gutters as shown on EXHIBIT A of
the Lease, the main plumbing line into the building and landscaping and
irrigation system for the building.

         2. In addition, Landlord agrees to furnish Tenant with an interior
allowance of SEVEN HUNDRED FIFTY FIVE THOUSAND EIGHT HUNDRED AND NO/100 DOLLARS
($755,800.00) ("Improvement Allowance"), which allowance shall be considered
Landlord's total monetary contribution with respect to Tenant's interior
improvements to the building, which allowance shall be used for interior
improvements including, but not limited to, elevators, elevator pits and guide
rails (if any), stairwells (if any), the fire sprinkler system, loading docks,
drop ceilings, interior plumbing, heating and air conditioning system ("HVAC"),
electrical system, parking lot lighting, carpeting, vinyl floor covering,
painting, interior walls and movable floor to ceiling partitioning, normal
contractor's fees and interest due during the period of construction on the
funds advanced for installation of improvements under the improvement allowance,
Builders Risk Insurance premium and any school, City, County or governmental
fees including fees for connection to utilities, etc. Notwithstanding anything
to the contrary herein, in no event shall any of Landlord Improvement Allowance
be used for any lab equipment, cabinets or special plumbing and/or electrical
and/or HVAC requirements for any labs and/or clean rooms, if any (collectively
hereinafter referred to as "Other Improvements")

         3. Tenant hereby specifically agrees that the interior improvements to
be constructed in the Premises leased hereunder shall be spread proportionately
even within the building.

E.   LIABILITY FOR INTERIOR EXPENSE ABOVE LANDLORD'S ALLOWANCE:

         1. In the event that the total cost of the interior improvements
constructed in the Premises exceeds Landlord's agreed-upon interior improvement
allowance of $755,800.00, Landlord's total liability shall be limited to
$755,800.00, which Landlord shall pay by paying the general contractor doing the
interior improvements a pro rata share of the total cost of the contract as
invoiced by the general contractor as work progresses. (For example: If the
total contract from the general contractor for such improvements is
$1,000,000.00 and Landlord agreed to contribute $755,800.00 toward the
improvements, then Landlord would pay seventy five and fifty eight hundredths
percent (75.58%) of each payment so invoiced and Tenant would pay the remaining
twenty percent (24.42%) of each payment so invoiced with the exception that
Landlord, at its option, may retain a pro rata share of the final ten percent
(10%) of the interior contract until 62 days after recordation of a Notice of
Completion on the Premises.

         2. It is further agreed that Tenant shall be responsible for and pay
one hundred percent (100%) of the costs in connection with (a) Tenant's Other
Improvements and (b) any and all interior improvements in excess of those that
are paid for with Landlord's allowance for Tenant's

                                       2

<PAGE>

improvements as set forth in Paragraph 1.C.1 above and in addition, Tenant shall
be responsible for and pay any additional construction costs and expenses
related to the site or shell occasioned by changes or modifications by Tenant in
the plans attached as Exhibits A and B to the Lease. Landlord shall be
reimbursed by Tenant for the full cost of such improvements made by Landlord in
excess of said $755,800.00 allowance upon demand of Landlord. (Tenant shall
enter into a direct contract with the general contractor constructing the
interior improvements if Landlord so directs.)

2. CHANGES, MODIFICATIONS, OR ADDITIONS TO THE PLANS, SPECIFICATIONS AND/OR
PREMISES.

LIABILITY FOR ADDITIONAL COSTS:

         A. All construction work relating to the Premises other than that to be
performed by Landlord as set forth herein shall be performed by Landlord at
Tenant's sole cost and expense, and in accordance with any plans and
specifications first submitted and approved in writing by Landlord.

         B. Notwithstanding anything to the contrary, it is agreed that in the
event Tenant, with Landlord's written consent (which consent shall not be
unreasonably withheld), makes changes, additions, or modifications to the plans
and specifications and/or Premises to be constructed by Landlord as set forth
herein, or improvements are installed for Tenant in excess of those to be
provided Tenant by Landlord as set forth herein, any increased cost(s) resulting
from said changes, additions, and/or modifications and/or improvements in excess
of those to be provided Tenant as set forth in Paragraph 1.A. shall be
contracted for with Landlord or the general contractor (as Landlord shall so
designate) and paid for one hundred percent (100%) by Tenant.

3.   TENANT DELAYS

         In the event that the completion of Tenant's interior improvements
and/or the completion of the building and Landlord's delivery of possession of
the Premises to Tenant is delayed as a result of said changes, additions, and/or
modifications made by Tenant, or because improvements installed by Tenant or
Tenant's subcontractors (with Landlord's consent, which consent shall not be
unreasonably withheld) hinder Landlord from timely completing any improvements
to be installed by Landlord, or if Tenant installs, or requests to have
installed, any special or nonstandard improvements, or if Tenant's plans and
specifications include any special materials, finishes or installations which
are not readily available, and which delay completion of the improvements due to
a longer time span for delivery or installation of said nonstandard improvement
or any other reason, including Tenant's failure to timely deliver the
Construction Plans and Specifications as provided in above Paragraph 1.A, the
commencement date of the Lease, and Tenant's obligation to pay Rent and perform
all other terms, covenants and conditions of the Lease shall commence on April
1, 2000, in which event Landlord shall complete construction of the building as
soon as reasonably possible thereafter.

Please execute this agreement in the space provided below, indicating your
agreement with the above, and return all copies. A fully executed copy will be
returned to you for your records after execution by the Landlord.

Respectfully yours,

JOHN ARRILLAGA SURVIVOR'S TRUST

By    /s/ John Arrillaga
   ---------------------------------------
          John Arrillaga, Trustee

Date:         2/8/00
     -------------------------------------

(SIGNATURES CONTINUED ON FOLLOWING PAGE)

                                       3

<PAGE>

RICHARD T. PEERY SEPARATE
PROPERTY TRUST

By    /s/ Richard T. Peery
   ---------------------------------------
           Richard T. Peery, Trustee

Date:         2/8/00
     -------------------------------------

AGREED:

CIPHERGEN BIOSYSTEMS, INC.
a California corporation

By    /s/ James H. Stanford
   ---------------------------------------
     James H. Stanford, Vice President and
     Chief Financial Officer

Date:    February 3, 2000
     -------------------------------------

                                       4

<PAGE>

                                    EXHIBIT A

                                    SITE PLAN

                                     (IMAGE)

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