Document:

EXCHANGE AGREEMENT BY AND BETWEEN
                   LIGHTEN UP ENTERPRISES INTERNATIONAL, INC.
                         MARY E. ROSS and GARY C. LEWIS

      THIS  AGREEMENT  is made  and  entered  into  by and  between  Lighten  Up
Enterprises  International,  Inc.,  ("Lighten Up) a Nevada corporation,  Gary C.
Lewis and Mary E. Ross ("Ross) on this 4th day of April, 2005.

      WHEREAS, Lighten Up Enterprises International, Inc. was incorporated under
the laws of the  state of Nevada  on  January  29,  1998  under the name  K.H.F.
Technologies.  Since  May 30,  2002  the  Company  has been in the  business  of
publishing and selling books, promoting the food services marketed by Mary Ross,
and engaging in related business activities; and

      WHEREAS,  the results of those business operations have been disappointing
and management has been engaged in seeking new business opportunities with which
Lighten Up could become involved; and

      WHEREAS,  such an opportunity has now presented itself and through related
negotiations,  it has been determined that it is in the best interest of Lighten
Up to divest itself of its prior business  assets in exchange for the redemption
of a substantial  portion of its presently  outstanding  restricted shares which
are registered to Mary E. Ross and Gary C. Lewis; and

      WHEREAS,  the parties hereto wish to enter into this written  agreement to
effect the foregoing exchange.

<PAGE>

      NOW, THEREFORE,  in consideration of the mutual covenants and promises set
forth herein, the parties hereto mutually agree as follows:

      1. Sale,  Conveyance  and  Assignment of Assets.  Lighten Up hereby sells,
assigns and conveys to Mary E. Ross all of its right,  title and interest in and
to all books related to food , cooking and nourishment  (including  intellectual
properties, copyrights, trademarks and logos), all promotional materials related
thereto,  any interest in the  personality or  professional  property of Mary E.
Ross  also  known as "Mary  Ross,  any and all  websites  featuring  the name or
likeness  of Mary Ross or  intellectual  properties  owned or  supplies  by her,
together with 100% of the member interests of Lighten Up Enterprises LLC, a Utah
Limited  Liability  Company  acquired  by  Lighten Up on May 30,  2002,  and all
Lighten Up's interest in any and all  businesses in which it has been engaged at
any time prior to the date of this agreement.

      2.  Cancellation  of Shares.  In exchange for the foregoing,  Mary E. Ross
tenders certificates  representing 19,975,000 restricted $0.001 par value common
shares of Lighten Up for  cancellation;  and Gary C. Lewis tenders  certificates
representing  1,065,000  restricted $0.001 par value common shares of Lighten Up
for cancellation. Mary E. Ross and Gary C. Lewis agree that the assets received

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by Mary E. Ross hereunder  constitute  full and adequate  consideration  for the
cancellation  of the  foregoing  shares of stock,  and agree that the same will,
hereafter,  be deemed null and void, and will constitute no claim of any type or
sort in or against the assets or equity of Lighten Up Enterprises International,
Inc., or any of its subsidiaries or successors. Ross and Lewis agree to take all
measures necessary to effect the cancellation of these shares.

      3. Effective  date of Exchange.  The parties agree that the effective date
of the foregoing Exchange shall not occur until the date upon which an Agreement
of Merger and Plan of Reorganization Among Lighten Up Enterprises International,
Inc., LTUP Acquisition Corp. and BioNovo,  Inc. has been closed according to its
terms, and BioNovo has been fully vested as a wholly-owned subsidiary of Lighten
Up Enterprises International, Inc.

      4. Entire Agreement.  This Written Agreement contains the entire agreement
and  understanding  of the  parties  hereto with  respect to the subject  matter
hereof.

      5.  Severability.  Any provision of this  Agreement  that is prohibited or
unenforceable in any jurisdiction  shall be ineffective in any such jurisdiction
to the extent of such prohibition or unenforceability  without  invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render  unenforceable such provision in any
other jurisdiction.

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      6. Successors and Assigns.  This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their  respective  successors,  assigns
and heirs.

      7. Governing  Law. This  Agreement  shall be governed by and construed and
enforced in accordance with the laws of the State of Nevada. The parties to this
Agreement  agree that any breach of any term or condition  of this  Agreement or
the transactions contemplated hereby shall be deemed to be a breach occurring in
the State of Nevada.

                         LIGHTEN UP ENTERPRISES INTERNATIONAL, INC.

                         By:
                             --------------------------------------------
                         Mary E. Ross

                         ------------------------------------------------
                         Mary E. Ross, an individual

                         ------------------------------------------------
                         Gary C. LewisEXHIBIT 10.17

                                 DECLARATION OF
                                  MARY E. ROSS

      I, Mary E. Ross,  2029 East Bengal Hills Cove Salt Lake City,  Utah 84121,
being  first duly sworn upon my oath,  do declare  that  Lighten Up  Enterprises
International, Inc. has been indebted to me for wages and expenses paid by me on
behalf of the corporation under a promissory note dated December 31, 2004 in the
face amount of $130,382,  bearing  interest at the rate of 7% per annum which is
due and payable on May 31, 2006, and for additional sums  representing  expenses
paid by me on  behalf  of the  corporation  in the  sum of  $7,800  through  and
including the date of this  declaration.  I have  delivered the aforesaid  note,
marked "Paid In Full", to Lighten Up Enterprises International, Inc., and hereby
declare that all  indebtedness  owed to me thereunder,  together with additional
indebtedness in the sum of $7,800 which has accrued since December 31, 2004, has
been forgiven and cancelled and is now null and void in all respects. Lighten Up
Enterprises  International,  Inc.  is not  presently  indebted to me in any sums
whatsoever.

         Dated this __6th__ day of April, 2005.

                              ----------------------------------------
                              Mary E. Ross

         Subscribed and sworn to before me this ____ day of April, 2005.

                              ----------------------------------------
                              Notary PublicEXHIBIT 10.18

                                 DECLARATION OF
                                  GARY C. LEWIS

      I, Gary C. Lewis,  4423 South 1800 West Roy, Utah 84047,  being first duly
sworn upon my oath, do declare that Lighten Up Enterprises  International,  Inc.
has been indebted to me under a series of promissory notes which were aggregated
into a single  note  dated  December  31,  2004 in the face  amount of  $41,152,
bearing interest at the rate of 7% per annum which is due and payable on May 31,
2006.  I have  delivered  that  note,  marked  "Paid In Full",  to Mary E. Ross,
president of the corporation,  and hereby declare that all indebtedness  owed to
me  thereunder  has been  forgiven and cancelled and is now null and void in all
respects. Lighten Up Enterprises  International,  Inc. is not presently indebted
to me in any sums whatsoever.

         Dated this _6th__ day of April, 2005.

                ----------------------------------------
                Gary C. Lewis

         Subscribed and sworn to before me this ____ day of April, 2005.

                ----------------------------------------
                Notary PublicEXHIBIT 10.19

                                  OFFICE LEASE

                                     BETWEEN

                   EMERY STATION JOINT VENTURE, LLC (LANDLORD)

                                       AND

         BIONOVO, INC., and LIGHTEN UP ENTERPRISES INTERNATIONAL, INC.,
                                    (TENANT)

                                  EMERYSTATION

                             EMERYVILLE, CALIFORNIA

<PAGE>

                                TABLE OF CONTENTS

                                                                          Page

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

         1.1      BASIC LEASE PROVISIONS.....................................

         1.2      ENUMERATION OF EXHIBITS AND RIDER..........................

         1.3      DEFINITIONS................................................

ARTICLE 2 PREMISES, TERM, FAILURE TO GIVE POSSESSION, AND PARKING............

         2.1      LEASE OF PREMISES..........................................

         2.2      TERM.......................................................

         2.3      FAILURE TO GIVE POSSESSION.................................

         2.4      CONDITION OF PREMISES......................................

         2.5      PARKING....................................................

ARTICLE 3 RENT...............................................................

ARTICLE 4 RENT ADJUSTMENTS AND PAYMENTS......................................

         4.1      RENT ADJUSTMENTS...........................................

         4.2      STATEMENT OF LANDLORD......................................

         4.3      BOOKS AND RECORDS..........................................

         4.4      TENANT OR LEASE SPECIFIC TAXES.............................

ARTICLE 5 SECURITY DEPOSIT...................................................

ARTICLE 6 SERVICES...........................................................

         6.1      LANDLORD'S GENERAL SERVICES................................

         6.2      ELECTRICAL SERVICES........................................

         6.3      ADDITIONAL AND AFTER HOUR SERVICES.........................

         6.4      TELEPHONE SERVICES.........................................

         6.5      DELAYS IN FURNISHING SERVICES..............................

         6.6      CHOICE OF SERVICE PROVIDER.................................

         6.7      SIGNAGE....................................................

ARTICLE 7 POSSESSION, USE AND CONDITION OF PREMISES..........................

         7.1      POSSESSION AND USE OF PREMISES.............................

         7.2      LANDLORD ACCESS TO PREMISES; APPROVALS.....................

         7.3      QUIET ENJOYMENT............................................

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ARTICLE 8 MAINTENANCE........................................................

         8.1      LANDLORD'S MAINTENANCE.....................................

         8.2      TENANT'S MAINTENANCE.......................................

ARTICLE 9 ALTERATIONS AND IMPROVEMENTS.......................................

         9.1      TENANT ALTERATIONS.........................................

         9.2      LIENS......................................................

ARTICLE 10 ASSIGNMENT AND SUBLETTING.........................................

         10.1     ASSIGNMENT AND SUBLETTING..................................

         10.2     RECAPTURE..................................................

         10.3     EXCESS RENT................................................

         10.4     TENANT LIABILITY...........................................

         10.5     ASSUMPTION AND ATTORNMENT..................................

ARTICLE 11 DEFAULT AND REMEDIES..............................................

         11.1     EVENTS OF DEFAULT..........................................

         11.2     LANDLORD'S REMEDIES........................................

         11.3     ATTORNEY'S FEES............................................

         11.4     BANKRUPTCY.................................................

         11.5     LANDLORD'S DEFAULT.........................................

ARTICLE 12 SURRENDER OF PREMISES.............................................

         12.1     IN GENERAL.................................................

         12.2     LANDLORD'S RIGHTS..........................................

ARTICLE 13 HOLDING OVER......................................................

ARTICLE 14 DAMAGE BY FIRE OR OTHER CASUALTY..................................

         14.1     SUBSTANTIAL UNTENANTABILITY................................

         14.2     INSUBSTANTIAL UNTENANTABILITY..............................

         14.3     RENT ABATEMENT.............................................

         14.4     WAIVER OF STATUTORY REMEDIES...............................

ARTICLE 15 EMINENT DOMAIN....................................................

         15.1     TAKING OF WHOLE OR SUBSTANTIAL PART........................

         15.2     TAKING OF PART.............................................

         15.3     COMPENSATION...............................................

ARTICLE 16 INSURANCE.........................................................

         16.1     TENANT'S INSURANCE.........................................

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         16.2     FORM OF POLICIES...........................................

         16.3     LANDLORD'S INSURANCE.......................................

         16.4     WAIVER OF SUBROGATION......................................

         16.5     NOTICE OF CASUALTY.........................................

ARTICLE 17 WAIVER OF CLAIMS AND INDEMNITY....................................

         17.1     WAIVER OF CLAIMS...........................................

         17.2     INDEMNITY BY TENANT........................................

ARTICLE 18 RULES AND REGULATIONS.............................................

         18.1     RULES......................................................

         18.2     ENFORCEMENT................................................

ARTICLE 19 LANDLORD'S RESERVED RIGHTS........................................

ARTICLE 20 ESTOPPEL CERTIFICATE..............................................

         20.1     IN GENERAL.................................................

         20.2     ENFORCEMENT................................................

ARTICLE 21 RELOCATION OF TENANT..............................................

ARTICLE 22 REAL ESTATE BROKERS...............................................

ARTICLE 23 MORTGAGEE PROTECTION..............................................

         23.1     SUBORDINATION AND ATTORNMENT...............................

         23.2     MORTGAGEE PROTECTION.......................................

ARTICLE 24 NOTICES...........................................................

ARTICLE 25 MISCELLANEOUS.....................................................

         25.1     LATE CHARGES...............................................

         25.2     NO JURY TRIAL; VENUE; JURISDICTION.........................

         25.3     DEFAULT UNDER OTHER LEASE..................................

         25.4     OPTION.....................................................

         25.5     TENANT AUTHORITY...........................................

         25.6     ENTIRE AGREEMENT...........................................

         25.7     MODIFICATION OF LEASE FOR BENEFIT OF MORTGAGEE.............

         25.8     EXCULPATION................................................

         25.9     ACCORD AND SATISFACTION....................................

         25.10    LANDLORD'S OBLIGATIONS ON SALE OF BUILDING.................

         25.11    BINDING EFFECT.............................................

         25.12    CAPTIONS...................................................

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<PAGE>

         25.13    TIME; APPLICABLE LAW; CONSTRUCTION.........................

         25.14    ABANDONMENT................................................

         25.15    LANDLORD'S RIGHT TO PERFORM TENANT'S DUTIES................

         25.16    SECURITY SYSTEM............................................

         25.17    NO LIGHT, AIR OR VIEW EASEMENTS............................

         25.18    RECORDATION................................................

         25.19    SURVIVAL...................................................

         25.20    RIDERS.....................................................

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<PAGE>

                                  OFFICE LEASE

                                   ARTICLE 1
                             BASIC LEASE PROVISIONS

1.1   BASIC LEASE PROVISIONS

      In the event of any conflict  between these Basic Lease Provisions and any
other Lease provision, such other Lease provision shall control.

      (1) BUILDING AND ADDRESS:

          EmeryStation
          5858 Horton Street
          Emeryville, California 94608

      (2) LANDLORD AND ADDRESS:

          Emery Station Joint Venture, LLC
          1120 Nye Street, Suite 400
          San Rafael, California 94901

          Notices to Landlord shall be addressed:

          Emery Station Joint Venture, LLC
          c/o Wareham Development Corporation
          1120 Nye Street, Suite 400
          San Rafael, California 94901

          With a copy to:

          Shartsis, Friese LLP
          One Maritime Plaza, 18th Floor
          San Francisco, California 94901
          Attention:  Alan Robin, Esq.

      (3) TENANT AND ADDRESS:

          Name: BIONOVO   INC.,   a  Delaware   corporation   and  LIGHTEN  UP
                ENTERPRISES INTERNATIONAL, INC., a Nevada corporation, jointly
                and severally

          Notices to Tenant shall be addressed:

          To the Premises:

          Attention: President

      (4) DATE OF LEASE: as of July 6, 2005

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<PAGE>

      (5) LEASE TERM: 48 months

      (6) PROJECTED COMMENCEMENT DATE: Upon Substantial Completion of the Tenant
Improvements which is estimated to occur on or before September 1, 2005

      (7) PROJECTED  EXPIRATION  DATE:  The last day of the 48th calendar  month
following the Commencement Date which is estimated to be August 31, 2009

      (8) MONTHLY BASE RENT:

                                             MONTHLY RATE/SF OF
   PERIOD FROM/TO              MONTHLY         RENTABLE AREA

Months 1-12                   $8,572.50           $2.50

Months 13-24                  $8,846.80           $2.58

Months 25-36                  $9,086.85           $2.65

Months 37-48                  $9,359.46           $2.73

      (9) RENTABLE AREA OF THE PREMISES: 3,429

      (10) SECURITY DEPOSIT: $18,718.92 (equal to last two month's rent).

      (11) SUITE NUMBER OF PREMISES: ______________

      (12) TENANT'S USE OF PREMISES: General office and laboratory use

      (13) PARKING:     The total  number of parking  spaces  shall not exceed 3
                        cars per 1,000  square feet of rentable  square feet and
                        shall be non-premium spaces in the Terraces Garage

      (14) BROKERS:

      Landlord's Broker: CB Richard Ellis
                         155 Grand Avenue
                         Oakland, California 94612
                         Attention:  Mike Raffetto

      Tenant's Broker:   BT Commercial
                         555 12th Street
                         Oakland, CA 94607
                         Attention:  Eli Ceryak

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<PAGE>

1.2   ENUMERATION OF EXHIBITS AND RIDER

      The  Exhibits  and Rider set forth  below and  attached  to this Lease are
incorporated in this Lease by this reference:

      EXHIBIT A         Plan of Premises
      EXHIBIT B         Workletter Agreement
      EXHIBIT C         Rules and Regulations
      RIDER 1           Commencement Date Agreement
      ADDENDUM

1.3   DEFINITIONS

      For  purposes  hereof,  the  following  terms  shall  have  the  following
meanings:

      AFFILIATE:  Any  corporation  or other  business  entity that is currently
owned or  controlled  by, owns or  controls,  or is under  common  ownership  or
control with Tenant.

      BUILDING:  The building  located at the address  specified in Section 1.1.
The Building includes office, lab, retail and other uses.

      COMMENCEMENT  DATE:  The date  specified  in Section 1.1 as the  Projected
Commencement Date, unless changed by operation of Article Two.

      COMMON  AREAS:  All areas of the Project made  available by Landlord  from
time to time  for the  general  common  use or  benefit  of the  tenants  of the
Building,  and their  employees  and  invitees,  or the  public,  as such  areas
currently exist and as they may be changed from time to time.

      DECORATION:  Tenant Alterations which do not require a building permit and
which do not involve any of the structural  elements of the Building,  or any of
the  Building's  systems,  including  its  electrical,   mechanical,   plumbing,
security, heating, ventilating,  air-conditioning,  communication,  and fire and
life safety systems.

      DEFAULT RATE: Two (2) percentage  points above the rate then most recently
announced by Bank of America  N.T.&S.A.  at its San Francisco main office as its
base lending reference rate, from time to time announced, but in no event higher
than the maximum rate permitted by Law.

      ENVIRONMENTAL  LAWS:  All Laws  governing  the use,  storage,  disposal or
generation  of  any  Hazardous  Material,  including,  without  limitation,  the
Comprehensive  Environmental Response Compensation and Liability Act of 1980, as
amended, and the Resource Conservation and Recovery Act of 1976, as amended.

      EXPIRATION  DATE: The date  specified in Section 1.1, as determined  under
Article Two.

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<PAGE>

      FORCE MAJEURE: Any accident, casualty, act of God, war or civil commotion,
strike or labor troubles,  or any cause whatsoever beyond the reasonable control
of  Landlord,  including  water  shortages,  energy  shortages  or  governmental
preemption in connection with an act of God, a national emergency,  or by reason
of Law, or by reason of the  conditions  of supply and demand which have been or
are affected by act of God, war or other emergency.

      HAZARDOUS  MATERIAL:  Such  substances,  material  and wastes which are or
become  regulated  under  any  Environmental  Law;  or which are  classified  as
hazardous or toxic under any  Environmental  Law; and  explosives  and firearms,
radioactive  material,   asbestos,   polychlorinated  biphenyls,  and  petroleum
products.

      INDEMNITEES: Collectively, Landlord, any Mortgagee or ground lessor of the
Property,  the  property  manager and the leasing  manager for the  Property and
their respective partners, members, directors, officers, agents and employees.

      LAND:  The  parcel(s) of real estate on which the Building and Project are
located.

      LANDLORD WORK: The  construction  or  installation  of improvements to the
Premises,  to be  furnished  by  Landlord,  as  specifically  described  in  the
Workletter or exhibits attached hereto.

      LAWS OR LAW: All laws, ordinances, rules, regulations, other requirements,
orders,  rulings or decisions adopted or made by any governmental  body, agency,
department or judicial  authority  having  jurisdiction  over the Property,  the
Premises or Tenant's activities at the Premises and any covenants, conditions or
restrictions of record which affect the Property.

      LEASE: This instrument and all exhibits and riders attached hereto, as may
be amended from time to time.

      LEASE YEAR: The twelve month period beginning on the Commencement Date and
each subsequent twelve month, or shorter, period until the Expiration Date.

      MONTHLY BASE RENT: The monthly rent specified in Section 1.1.

      MORTGAGEE:  Any  holder  of a  mortgage,  deed of trust or other  security
instrument encumbering the Property.

      NATIONAL HOLIDAYS:  New Year's Day, Memorial Day,  Independence Day, Labor
Day,  Thanksgiving  Day and Christmas Day and other  holidays  recognized by the
Landlord  and  the  janitorial  and  other  unions  servicing  the  Building  in
accordance with their contracts.

      OPERATING  EXPENSES:  All costs,  expenses and disbursements of every kind
and nature which  Landlord  shall pay or become  obligated to pay in  connection
with the ownership, management, operation,  maintenance,  replacement and repair
of the  Building  and the  Property  (including,  without  limitation,  property
management  fees, costs and expenses,  and the amortized  portion of any capital
expenditure or  improvement,  together with interest  thereon,  and the costs of
changing utility service providers).  Operating Expenses shall not include,  (i)
costs of  alterations  of the premises of tenants of the Project,  (ii) costs of
capital  improvements  to the Project  (except for amortized  portion of capital

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<PAGE>

improvements  installed  for the purpose of reducing  or  controlling  Operating
Expenses or complying with applicable Laws),  (iii) depreciation  charges,  (iv)
interest  and  principal  payments  on  loans  (except  for  Loans  for  capital
improvements  which  Landlord  is allowed to include in  Operating  Expenses  as
provided  above),  (v) ground rental  payments,  (vi) real estate  brokerage and
leasing commissions,  (vii) advertising and marketing expenses,  (viii) costs of
Landlord reimbursed by insurance proceeds, (ix) expenses incurred in negotiating
leases of tenants in the Project or enforcing  lease  obligations  of tenants in
the Project and (x)  Landlord's  general  corporate  overhead.  If any Operating
Expense, though paid in one year, relates to more than one calendar year, at the
option of Landlord  such  expense may be  proportionately  allocated  among such
related  calendar  years.  Operating  Expenses for the Building that are not, in
Landlord's reasonable discretion,  allocable solely to either the lab, office or
retail portion of the Building shall be equitably  allocated by Landlord between
such uses.

      PREMISES:  The space located in the Building at the Suite Number listed in
Section 1.1 and depicted on Exhibit A attached hereto.

      PROJECT or  PROPERTY:  The Project  consists of the office  building  with
ground floor office and/or retail spaces located at the street address specified
in Section 1.1 in Emeryville,  California, associated surface and garage parking
as  designated  by Landlord  from time to time,  landscaping  and  improvements,
together  with the Land,  any  associated  interests in real  property,  and the
personal property, fixtures, machinery, equipment, systems and apparatus located
in or used in  conjunction  with any of the  foregoing.  The Project may also be
referred to as the Property.

      REAL PROPERTY: The Property excluding any personal property.

      RENT:   Collectively,   Monthly  Base  Rent,  Rent  Adjustments  and  Rent
Adjustment Deposits. and all other charges, payments, late fees or other amounts
required to be paid by Tenant under this Lease.

      RENT  ADJUSTMENT:  Any  amounts  owed by Tenant for  payment of  Operating
Expenses or Taxes. The Rent Adjustments shall be determined and paid as provided
in Article Four.

      RENT  ADJUSTMENT  DEPOSIT:  An amount equal to Landlord's  estimate of the
Rent Adjustment  attributable to each month of the applicable  Lease Year. On or
before the beginning of each Lease Year or with Landlord's Statement (defined in
Article  Four),  Landlord  may  estimate  and  notify  Tenant in  writing of its
estimate of the  Operating  Expenses and of Taxes for such Lease Year.  Prior to
the first  determination by Landlord of the amount of Operating  Expenses and of
Taxes for the first  Lease  Year,  Landlord  may  estimate  such  amounts in the
foregoing  calculation.  The last estimate by Landlord shall remain in effect as
the applicable Rent Adjustment Deposit unless and until Landlord notifies Tenant
in writing of a change,  which notice may be given by Landlord from time to time
during a Lease Year.

      RENTABLE AREA OF THE PREMISES:  The amount of square  footage set forth in
Section 1.1.

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<PAGE>

      SECURITY DEPOSIT: The funds specified in Section 1.1, if any, deposited by
Tenant with  Landlord as security for Tenant's  performance  of its  obligations
under this Lease.

      STANDARD  OPERATING  HOURS:  Monday  through Friday from 8:00 A.M. to 6:00
P.M. and Saturdays  from 9:00 A.M. to 1:00 P.M.,  excluding  National  Holidays.
Tenant shall have access to the Premises 24 hours a day, 7 days a week.

      SUBSTANTIALLY  COMPLETE or SUBSTANTIAL  COMPLETION:  The completion of the
Landlord Work or Tenant Work, as the case may be, except for minor insubstantial
details of construction, decoration or mechanical adjustments which remain to be
done.

      TAXES: All federal,  state and local governmental  taxes,  assessments and
charges  of  every  kind  or  nature,  whether  general,  special,  ordinary  or
extraordinary, which Landlord shall pay or become obligated to pay because of or
in connection with the ownership,  leasing, management,  control or operation of
the Property or any of its components  (including any personal  property used in
connection therewith), which may also include any rental or similar taxes levied
in lieu of or in addition to general real and/or personal  property  taxes.  For
purposes  hereof,  Taxes for any year shall be Taxes which are  assessed for any
period of such year,  whether  or not such  Taxes arc  billed  and  payable in a
subsequent  calendar  year.  There  shall be  included in Taxes for any year the
amount of all fees, costs and expenses  (including  reasonable  attorneys' fees)
paid by  Landlord  during  such  year in  seeking  or  obtaining  any  refund or
reduction of Taxes. Taxes for any year shall be reduced by the net amount of any
tax  refund  received  by  Landlord  attributable  to such  year.  If a  special
assessment  payable in  installments is levied against any part of the Property,
Taxes for any year shall include only the installment of such assessment and any
interest  payable or paid during such year.  Taxes shall not include any federal
or state  inheritance,  general income,  gift or estate taxes,  except that if a
change  occurs in the method of  taxation  resulting  in whole or in part in the
substitution of any such taxes, or any other assessment,  for any Taxes as above
defined, such substituted taxes or assessments shall be included in the Taxes.

      TENANT  ADDITIONS:  Collectively,  Landlord  Work,  Tenant Work and Tenant
Alterations.

      TENANT   ALTERATIONS:    Any   alterations,    improvements,    additions,
installations  or  construction  in or to the Premises or any  Building  systems
serving  the  Premises  (excluding  Landlord  Work  or  Tenant  Work);  and  any
supplementary  air-conditioning  systems  installed  by Landlord or by Tenant at
Landlord's request pursuant to Section 6.1(b).

      TENANT DELAY:  Any event or occurrence  that delays the  completion of the
Landlord Work which is caused by or is described as follows:

      (1) special work,  changes,  alterations or additions requested or made by
Tenant in the design or finish in any part of the Premises after approval of the
plans and specifications (as described in the Workletter);

      (2) Tenant's delay in submitting plans, supplying  information,  approving
plans, specifications or estimates, giving authorizations or otherwise;

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<PAGE>

      (3) failure to approve and pay for such Tenant Work as Landlord undertakes
to complete at Tenant's expense;

      (4) the  performance  or  completion  by Tenant or any  person  engaged by
Tenant of any work in or about the Premises; or

      (5) failure to perform or comply with any obligation or condition  binding
upon Tenant pursuant to the Workletter, including the failure to approve and pay
for such  Landlord  Work or  other  items if and to the  extent  the  Workletter
provides they are to be approved or paid by Tenant.

      TENANT  WORK:  All work  installed  or furnished to the Premises by Tenant
pursuant to the Workletter.

      TENANT' S SHARE:  The percentage that represents the ratio of the Rentable
Area of the Premises to the Rentable  Area of the  Building,  as  determined  by
Landlord from time to time.

      TERM:  The term of this  Lease  commencing  on the  Commencement  Date and
expiring on the Expiration Date.

      TERMINATION  DATE: The Expiration  Date or such earlier date as this Lease
terminates or Tenant's right to possession of the Premises terminates.

      WORKLETTER:  The Agreement  regarding the manner of completion of Landlord
Work and Tenant Work set forth on Exhibit B attached hereto.

                                   ARTICLE 2
            PREMISES, TERM, FAILURE TO GIVE POSSESSION, AND PARKING

2.1   LEASE OF PREMISES

      Landlord  hereby  leases to Tenant and Tenant  hereby leases from Landlord
the Premises for the Term and upon the terms,  covenants and conditions provided
in this Lease.  In the event  Landlord  delivers  possession  of the Premises to
Tenant  prior to the  Commencement  Date,  Tenant shall be subject to all of the
terms,  covenants  and  conditions  of this Lease  (except  with  respect to the
payment of Rent) as of the date of such possession.

2.2   TERM

      (a)  The  Commencement  Date  shall  be the  date  the  Landlord  Work  is
Substantially Complete.

      (b) Within thirty (30) days following the  occurrence of the  Commencement
Date,  Landlord and Tenant  shall enter into an agreement  (the form of which is
attached hereto as Rider 1) confirming the Commencement  Date and the Expiration
Date. If Tenant fails to enter into such agreement,  then the Commencement  Date
and the  Expiration  Date  shall be the dates  designated  by  Landlord  in such
agreement.

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2.3   FAILURE TO GIVE POSSESSION

      If  Landlord  shall be unable to give  possession  of the  Premises on the
Projected Commencement Date by reason of the following: (i) the Building has not
been sufficiently  completed to make the Premises ready for occupancy,  (ii) the
Landlord Work is not Substantially Complete, (iii) the holding over or retention
of possession of any tenant, tenants or occupants, or (iv) for any other reason,
then except as specifically  provided  herein,  Landlord shall not be subject to
any  liability  for the  failure to give  possession  on said  date.  Under such
circumstances  the rent  reserved  and  covenanted  to be paid herein  shall not
commence  until the  Premises are made  available to Tenant by Landlord,  and no
such failure to give possession on the Projected  Commencement Date shall affect
the validity of this Lease or the  obligations of the Tenant  hereunder.  At the
option of  Landlord  to be  exercised  within  thirty  (30) days of the  delayed
delivery of  possession  to Tenant,  the Lease shall be amended so that the Term
shall be extended by the period of time possession is delayed. The said Premises
shall be deemed to be ready for Tenant's  occupancy in the event Landlord's Work
is Substantially  Complete,  or if the delay in the availability of the Premises
for  occupancy  shall be due to any Tenant Delay  and/or  default on the part of
Tenant  and/or its  subtenant or  subtenants.  In the event of any dispute as to
whether the Landlord Work is Substantially  Complete, the decision of Landlord's
architect shall be final and binding on the parties. Notwithstanding anything to
the  contrary  contained  in this  Section,  if the  Commencement  Date  has not
occurred on or before the later of (a)  September 1, 2005, or (b) sixty two (62)
days after the  approval of the space plan for the Landlord  Work (the  "Outside
Completion  Date"),  Tenant shall be entitled to a rent abatement  following the
Commencement  Date of  $285.75  for every  day in the  period  beginning  on the
Outside Completion Date and ending on the Commencement Date, Landlord and Tenant
acknowledge and agree that: (i) the determination of the Commencement Date shall
take into  consideration  the effect of any  Tenant  Delays  including,  without
limitation  Tenant's  failure to approve  architectural  drawings or mechanical,
electrical  and plumbing  drawings that are  consistent  with the approved space
plan within two (2) business days of submission; and (ii) the Outside Completion
Date shall be postponed by the number of days the  Commencement  Date is delayed
due to events of force  majeure.  In the  event  the  Commencement  Date has not
occurred  on or before the  Outside  Completion  Date,  Landlord  shall  provide
Tenant, at no charge, with certain storage space ("Storage Space"), the location
and size of which shall be reasonably determined by Landlord.  The Storage Space
shall  be used by  Tenant  for the  storage  of  equipment,  inventory  or other
nonperishable items normally used in Tenant's business, and for no other purpose
whatsoever.  Landlord  reserves the right to adopt and enforce  reasonable rules
and regulations governing the use of the Storage Space from time to time. Within
two (2) days after the Commencement  Date,  Tenant shall  completely  vacate and
surrender  the  Storage  Space  to  Landlord  in the  condition  in which it was
delivered to Tenant,  ordinary wear and tear excepted,  broom-clean and empty of
all  personalty  and other  items  placed  therein  by or on  behalf of  Tenant.
Landlord  shall not be liable for any theft or damage to any items or  materials
stored  in the  Storage  Space,  it being  understood  that  Tenant is using the
Storage Space at its own risk.

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<PAGE>

2.4   CONDITION OF PREMISES

      Tenant shall notify  Landlord in writing within thirty (30) days after the
later of  Substantial  Completion  of the  Landlord  Work or when  Tenant  takes
possession  of the Premises of any defects in the Premises  claimed by Tenant or
in the materials or workmanship furnished by Landlord in completing the Landlord
Work.  Except for defects  stated in such notice,  Tenant shall be  conclusively
deemed to have  accepted the Premises "AS IS" in the  condition  existing on the
date Tenant first takes  possession,  and to have waived all claims  relating to
the condition of the Premises.  Landlord shall proceed diligently to correct the
defects stated in such notice unless Landlord disputes the existence of any such
defects.  In the event of any dispute as to the  existence of any such  defects,
the decision of Landlord's  architect shall be final and binding on the parties.
No  agreement  of Landlord  to alter,  remodel,  decorate,  clean or improve the
Premises or the Real Property and no  representation  regarding the condition of
the  Premises or the Real  Property has been made by or on behalf of Landlord to
Tenant, except as may be specifically stated in this Lease or in the Workletter.

2.5   PARKING

      During the Term,  Tenant may use the number of spaces specified in Section
1.1 for parking at the standard prevailing monthly rates being charged from time
to time by Landlord or its parking operator without regard to discounts provided
to any other  occupants of the  Buildings.  Tenant shall be charged on a monthly
basis for the number of parking spaces used by Tenant. In the event Tenant fails
at any time to pay the full amount of such  parking  charges,  Tenant's  parking
rights  shall be reduced to the extent of  Tenant's  failure to pay for any such
parking.  The  locations  and type of parking shall be designated by Landlord or
Landlord's  parking operator from time to time.  Tenant  acknowledges and agrees
that the parking  spaces  serving the Project may include  tandem  parking and a
mixture  of  spaces  for  compact  vehicles  as  well  as  full-size   passenger
automobiles,  and that Tenant shall not use parking  spaces for vehicles  larger
than the striped size of the parking  spaces.  All vehicles  utilizing  Tenant's
parking privileges shall prominently  display  identification  stickers or other
markers,  and/or  have passes or  keycards  for  ingress  and egress,  as may be
required  and  provided by Landlord or its parking  operator  from time to time.
Tenant shall comply with any and all parking rules and regulations  from time to
time  established  by  Landlord  or  Landlord's  parking  operator,  including a
requirement that Tenant pay to Landlord or Landlord's  parking operator a charge
for loss  and  replacement  of  passes,  keycards,  identification  stickers  or
markers,  and for any and all loss or other damage caused by persons or vehicles
related  to use of  Tenant's  parking  privileges.  Tenant  shall  not allow any
vehicles  using  Tenant's  parking  privileges to be parked,  loaded or unloaded
except in accordance with this Section, including in the areas and in the manner
designated  by Landlord  or its parking  operator  for such  activities.  If any
vehicle is using the parking or loading areas  contrary to any provision of this
Section,  Landlord or its parking  operator shall have the right, in addition to
all other  rights and  remedies of Landlord  under this Lease,  to remove or tow
away the vehicle  without prior notice to Tenant,  and the cost thereof shall be
paid to Landlord within ten (10) days after notice from Landlord to Tenant.

                                    ARTICLE 3
                                      RENT

      Tenant agrees to pay to Landlord at the first office  specified in Section
1.1, or to such other persons,  or at such other places  designated by Landlord,
without any prior demand therefor in immediately available funds and without any
deduction  or offset  whatsoever,  Rent,  including  Monthly  Base Rent and Rent
Adjustments in accordance with Article Four, during the Term.  Monthly Base Rent
shall be paid  monthly  in  advance  on the first day of each month of the Term,

                                       9
<PAGE>

except that the first  installment  of Monthly Base Rent shall be paid by Tenant
to Landlord  concurrently with execution of this Lease.  Monthly Base Rent shall
be prorated for partial months within the Term.  Unpaid Rent shall bear interest
at the Default Rate from the date due until paid.  Tenant's covenant to pay Rent
shall be independent of every other covenant in this Lease.

                                   ARTICLE 4
                          RENT ADJUSTMENTS AND PAYMENTS

4.1   RENT ADJUSTMENTS

      Tenant shall pay to Landlord Rent  Adjustments  with respect to each Lease
Year as follows:

      (1) The Rent Adjustment Deposit  representing  Tenant's Share of Operating
Expenses for the applicable Lease Year, monthly during the Term with the payment
of Monthly Base Rent; and

      (2) The Rent Adjustment Deposit  representing  Tenant's Share of Taxes for
the applicable  Lease Year,  monthly during the Term with the payment of Monthly
Base Rent; and

      (3) Any Rent Adjustments due in excess of the Rent Adjustment  Deposits in
accordance  with Section 4.2. Rent  Adjustments  due from Tenant to Landlord for
any Lease Year shall be Tenant's  Share of Operating  Expenses for such year and
Tenant's Share of Taxes for such year.

4.2   STATEMENT OF LANDLORD

      As soon as feasible after the  expiration of each calendar year,  Landlord
will furnish Tenant a statement ("Landlord's Statement") showing the following:

      (1) Operating Expenses and Taxes for the calendar year;

      (2) The amount of Rent  Adjustments  due  Landlord  for the last  calendar
year, less credit for Rent Adjustment Deposits paid, if any; and

      (3) Any change in the Rent  Adjustment  Deposit due monthly in the current
calendar year,  including the amount or revised amount due for months  preceding
any such change pursuant to Landlord's Statement.

      Tenant  shall pay to Landlord  within ten (10) days after  receipt of such
statement  any  amounts  for  Rent  Adjustments  then  due  in  accordance  with
Landlord's  Statement.  Any amounts due from Landlord to Tenant pursuant to this
Section  shall be credited to the Rent  Adjustment  Deposit  next coming due, or
refunded to Tenant if the Term has  already  expired  provided  Tenant is not in
default  hereunder.  No interest or  penalties  shall accrue on any amounts that
Landlord is  obligated  to credit or refund to Tenant by reason of this  Section
4.2. Landlord's failure to deliver Landlord's Statement or to compute the amount
of the Rent  Adjustments  shall not constitute a waiver by Landlord of its right

                                       10
<PAGE>

to deliver such items nor constitute a waiver or release of Tenant's obligations
to pay such amounts.  The Rent Adjustment Deposit shall be credited against Rent
Adjustments  due for the applicable  Lease Year.  During the last complete Lease
Year or during any partial  Lease Year in which the Lease  terminates,  Landlord
may  include in the Rent  Adjustment  Deposit its  estimate of Rent  Adjustments
which may not be finally  determined  until after the termination of this Lease.
Tenant's  obligation  to  pay  Rent  Adjustments   survives  the  expiration  or
termination of the Lease.  Notwithstanding the foregoing,  in no event shall the
sum of Monthly Base Rent and the Rent  Adjustments be less than the Monthly Base
Rent payable.

4.3   BOOKS AND RECORDS

      Landlord shall maintain books and records showing  Operating  Expenses and
Taxes in accordance with sound accounting and management practices, consistently
applied.  The  Tenant or its  representative  (which  representative  shall be a
certified  public  accountant  licensed to do business in the state in which the
Property is located and whose primary  business is certified  public  accounting
and who shall not be paid on a  contingency  basis) shall have the right,  for a
period of sixty (60) days following the date upon which Landlord's  Statement is
delivered to Tenant, to examine the Landlord's books and records with respect to
the items in the  foregoing  statement  of  Operating  Expenses and Taxes during
normal  business  hours,  upon  written  notice,  delivered  at least  three (3)
business  days in advance.  If Tenant  does not object in writing to  Landlord's
Statement within ninety (90) days of Tenant's  receipt  thereof,  specifying the
nature  of the  item  in  dispute  and the  reasons  therefor,  then  Landlord's
Statement  shall be  considered  final and  accepted  by Tenant.  If Tenant does
dispute any Landlord's Statement,  Tenant shall deliver a copy of any such audit
to  Landlord  at the time of  notification  of the  dispute.  If Tenant does not
provide such notice of dispute and a copy of such audit to Landlord  within such
ninety  day (90) day  period,  it shall be deemed to have  waived  such right to
dispute  Landlord's  Statement.  Any  amount  due to the  Landlord  as  shown on
Landlord's Statement, whether or not disputed by Tenant as provided herein shall
be paid by Tenant  when due as provided  above,  without  prejudice  to any such
written  exception.  In no event shall Tenant be permitted to examine Landlord's
records or to dispute  any  statement  of  Expenses  unless  Tenant has paid and
continues to pay all Rent when due. Upon  resolution of any dispute with respect
to Operating Expenses and Taxes,  Tenant shall either pay Landlord any shortfall
or Landlord shall credit Tenant with respect to any overages paid by Tenant. The
records  obtained by Tenant shall be treated as confidential  and neither Tenant
nor  any  of its  representatives  or  agents  shall  disclose  or  discuss  the
information  set  forth in the  audit  to or with any  other  person  or  entity
("Confidentiality  Requirement").  Tenant  shall  indemnify  and  hold  Landlord
harmless  for  any  losses  or  damages   arising  out  of  the  breach  of  the
Confidentiality  Requirement.  In no event shall  Tenant be permitted to examine
Landlord's  records or to dispute any  statement of Expenses  unless  Tenant has
paid and continues to pay all Rent when due.

4.4   TENANT OR LEASE SPECIFIC TAXES

      In  addition  to Monthly  Base Rent,  Rent  Adjustments,  Rent  Adjustment
Deposits and other  charges to be paid by Tenant,  Tenant shall pay to Landlord,
upon demand,  any and all taxes payable by Landlord (other than federal or state
inheritance,  general income, gift or estate taxes) whether or not now customary
or within the  contemplation of the parties hereto:  (a) upon,  allocable to, or
measured by the Rent  payable  hereunder,  including  any gross  receipts tax or
excise tax levied by any governmental or taxing body with respect to the receipt

                                       11
<PAGE>

of such rent; or (b) upon or with respect to the possession, leasing, operation,
management,  maintenance,  alteration, repair, use or occupancy by Tenant of the
Premises  or any portion  thereof;  or (c) upon the  measured  value of Tenant's
personal property located in the Premises or in any storeroom or any other place
in the  Premises  or the  Property,  or the areas  used in  connection  with the
operation of the  Property,  it being the intention of Landlord and Tenant that,
to the extent possible, such personal property taxes shall be billed to and paid
directly by Tenant;  (d)  resulting  from Landlord  Work,  Tenant Work or Tenant
Alterations to the Premises,  whether title thereto is in Landlord or Tenant; or
(e) upon this  transaction.  Taxes paid by Tenant  pursuant to this  Section 4.5
shall not be included in any  computation of Taxes payable  pursuant to Sections
4.1 and 4.2.

                                   ARTICLE 5
                                SECURITY DEPOSIT

      Tenant concurrently with the execution of this Lease shall pay to Landlord
in immediately available funds the Security Deposit. The Security Deposit may be
applied by Landlord to cure, in whole or part,  any default of Tenant under this
Lease, and upon notice by Landlord of such  application,  Tenant shall replenish
the  Security  Deposit  in full by paying to  Landlord  within  ten (10) days of
demand the amount so applied.  Landlord's  application  of the Security  Deposit
shall not  constitute  a waiver  of  Tenant's  default  to the  extent  that the
Security  Deposit does not fully  compensate  Landlord for all losses,  damages,
costs and  expenses  incurred by Landlord in  connection  with such  default and
shall not  prejudice  any other rights or remedies  available to Landlord  under
this  Lease or by Law.  Landlord  shall  not pay any  interest  on the  Security
Deposit.  Landlord shall not be required to keep the Security  Deposit  separate
from its general  accounts.  The Security Deposit shall not be deemed an advance
payment  of Rent or a measure of damages  for any  default by Tenant  under this
Lease,  nor shall it be a bar or defense of any action that  Landlord may at any
time  commence  against  Tenant.  In the  absence of  evidence  satisfactory  to
Landlord of an  assignment  of the right to receive the Security  Deposit or the
remaining  balance  thereof,  Landlord  may return the  Security  Deposit to the
original Tenant,  regardless of one or more assignments of this Lease.  Upon the
transfer of  Landlord's  interest  under this Lease,  Landlord's  obligation  to
Tenant with respect to the Security Deposit shall terminate upon transfer to the
transferee  of the Security  Deposit,  or any balance  thereof.  If Tenant shall
fully and  faithfully  comply  with all the terms,  provisions,  covenants,  and
conditions of this Lease, the Security Deposit, or any balance thereof, shall be
returned to Tenant within thirty (30) days after Landlord recovers possession of
the Premises or such longer time as may be permissible  under Law. Tenant hereby
waives any and all rights of Tenant under the  provisions  of Section  1950.7 of
the California Civil Code or other Law regarding security deposits.

                                    ARTICLE 6
                                    SERVICES

6.1   LANDLORD'S GENERAL SERVICES

      (a) So long as the Lease is in full  force and  effect and Tenant has paid
all Rent then due,  Landlord  shall furnish the  following  services the cost of
which  services  shall be included  in  Operating  Expenses or paid  directly by
Tenant to the utility or service provider:

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<PAGE>

            (1) heat, ventilation and air-conditioning  ("HVAC") in the Premises
during Standard Operating Hours as necessary in Landlord's  reasonable  judgment
for the  comfortable  occupancy of the Premises under normal business office and
lab  operations,  subject  to  compliance  with  all  applicable  voluntary  and
mandatory regulations and Laws;

            (2) tempered and cold water for use in the labs and in lavatories in
common with other tenants from the regular supply of the Building;

            (3) customary cleaning and janitorial  services in the Premises five
(5) days per week, excluding National Holidays;

            (4)  washing  of  the  outside  windows  in  the  Premises   weather
permitting at intervals determined by Landlord; and

            (5) automatic passenger and swing/freight elevator service in common
with other tenants of the Building.  Freight elevator service will be subject to
reasonable scheduling by Landlord and payment of Landlord's standard charges.

      (b) If Tenant uses heat  generating  machines or equipment in the Premises
to an extent which adversely affects the temperature otherwise maintained by the
air-cooling  system or whenever  the  occupancy  or  electrical  load  adversely
affects the temperature otherwise maintained by the air-cooling system, Landlord
reserves  the right to  install or to  require  Tenant to install  supplementary
air-conditioning units in the Premises. Tenant shall bear all costs and expenses
related to the installation, maintenance and operation of such units.

6.2   ELECTRICAL SERVICES

      (a) So long as the Lease is in full  force and  effect and Tenant has paid
all Rent then due,  Landlord  shall  furnish  to the  Premises  as an  Operating
Expense or a service Which is paid  directly by Tenant to the utility  provider,
electric  current for general  office use,  including  normal  lighting,  normal
business office machines and customary  janitorial service.  Notwithstanding any
provision of the Lease to the contrary,  without,  in each  instance,  the prior
written approval of Landlord,  in Landlord's prudent business  judgment,  Tenant
shall not: (i) make any  alterations  or additions to the electric  equipment or
systems;  or  (ii)  install  or use or  permit  the  installation  or use of any
computer or  electronic  data  processing  equipment in the Premises  other than
personal computers,  laptop computers and ancillary  equipment.  Tenant's use of
electric current shall at no time exceed the capacity of the wiring, feeders and
risers providing  electric current to the Premises or the Building.  The consent
of Landlord to the  installation of electric  equipment shall not relieve Tenant
from the obligation to limit usage of electricity to no more than such capacity.

      (b) At any time and from time to time, Landlord may in its sole discretion
either (i) install one or more meters to measure electric  current  furnished to
the  Premises or (ii)  reasonably  estimate  electric  current  furnished to the
Premises.  Upon notice from  Landlord,  Tenant  shall pay  Landlord  the cost of
installing and maintaining all such meters and of any electrical  engineering or
consulting  firm, if Landlord retains such firm to estimate the electric current
furnished to the Premises in lieu of installation of a meter.

                                       13
<PAGE>

      (c) So long as the Lease is in full  force and  effect and Tenant has paid
all Rent then due,  Landlord  shall furnish to the Premises  replacement  lamps,
bulbs,  ballasts and starters used in any normal Building lighting  installed in
the Premises, except that if the replacement or repair of such items is a result
of negligence of Tenant, its employees, agents, servants, licensees, subtenants,
contractors or invitees, such cost shall be paid by Tenant within ten days after
notice from Landlord and shall not be included as part of Operating Expenses.

6.3   ADDITIONAL AND AFTER HOUR SERVICES

      At Tenant's written request,  Landlord shall furnish additional quantities
of any of the  services or  utilities  specified in Section 6.1, if Landlord can
reasonably  do so, on the terms set forth  herein.  For  services  or  utilities
requested by Tenant and furnished by Landlord, Tenant shall pay to Landlord as a
charge therefor  Landlord's  prevailing rates charged from time to time for such
services and utilities.  Without  limiting the generality of the foregoing,  for
HVAC service beyond Standard Operating Hours,  Landlord's  prevailing rate as of
the date of this Lease includes a one (1) hour minimum per activation. If Tenant
shall fail to make any such payment,  Landlord may, upon notice to Tenant and in
addition to Landlord's  other remedies under this Lease,  discontinue any or all
of such additional services.

6.4   TELEPHONE SERVICES

      All telegraph,  telephone, and communication  connections which Tenant may
desire shall be subject to  Landlord's  prior  written  approval,  in Landlord's
reasonable discretion,  and the location of all wires and the work in connection
therewith  shall be performed by  contractors  approved by Landlord and shall be
subject to the direction of Landlord,  except that such approval is not required
as to Tenant's telephone  equipment  (including cabling) within the Premises and
from the Premises in a route designated by Landlord to any telephone  cabinet or
panel provided (as existing or as installed as part of Landlord's  Work, if any)
on Tenant's  floor for Tenant's  connection to the  telephone  cable serving the
Building so long as Tenant's  equipment does not require  connections  different
than or additional to those to the telephone  cabinet or panel provided.  Except
to the extent of such  cabling  within the Premises or from the Premises to such
telephone cabinet or panel, Landlord reserves the right to designate and control
the  entity  or  entities  providing  telephone  or  other  communication  cable
installation,  removal,  repair and  maintenance in the Building and to restrict
and  control  access to  telephone  cabinets  or panels.  In the event  Landlord
designates  a particular  vendor or vendors to provide such cable  installation,
removal, repair and maintenance for the Building,  Tenant agrees to abide by and
participate in such program.  Tenant shall be responsible  for and shall pay all
costs  incurred in  connection  with the  installation  of telephone  cables and
communication  wiring  in  the  Premises,  including  any  hook-up,  access  and
maintenance  fees  related to the  installation  of such wires and cables in the
Premises and the commencement of service therein, and the maintenance thereafter
of such wire and cables;  and there shall be included in Operating  Expenses for
the Building all installation, removal, hook-up or maintenance costs incurred by
Landlord in connection with telephone  cables and  communication  wiring serving
the Building which are not allocable to any individual users of such service but
are  allocable  to the  Building  generally.  If Tenant  fails to  maintain  all
telephone  cables and  communication  wiring in the  Premises  and such  failure
affects or interferes  with the operation or maintenance of any other  telephone
cables or  communication  wiring  serving the  Building,  Landlord or any vendor
hired by Landlord  may enter into and upon the  Premises  forthwith  and perform

                                       14
<PAGE>

such repairs,  restorations  or alterations as Landlord deems necessary in order
to eliminate any such  interference (and Landlord may recover from Tenant all of
Landlord's  costs in connection  therewith).  If required by Landlord,  no later
than  the  Termination  Date  Tenant  shall  remove  all  telephone  cables  and
communication  wiring  installed  by Tenant for and during  Tenant's  occupancy.
Tenant agrees that neither  Landlord nor any of its agents or employees shall be
liable to Tenant, or any of Tenant's employees, agents, customers or invitees or
anyone claiming through, by or under Tenant, for any damages,  injuries, losses,
expenses,  claims or causes of action because of any  interruption,  diminution,
delay or  discontinuance  at any time for any  reason in the  furnishing  of any
telephone or other communication service to the Premises and the Building.

6.5   DELAYS IN FURNISHING SERVICES

      Tenant  agrees that  Landlord  shall not be in breach of this Lease nor be
liable to Tenant for damages or  otherwise,  for any  failure to  furnish,  or a
delay in  furnishing,  or a change in the  quantity or  character of any service
when  such  failure,  delay or  change is  occasioned,  in whole or in part,  by
repairs,  improvements or mechanical  breakdowns by the act or default of Tenant
or other  parties or by an event of Force  Majeure.  No such  failure,  delay or
change  shall be deemed to be an eviction  or  disturbance  of Tenant's  use and
possession  of the  Premises,  or  relieve  Tenant  from  paying  Rent  or  from
performing  any other  obligations  of Tenant  under  this  Lease,  without  any
deduction or offset.  Failure to any extent to make available,  or any slowdown,
stoppage,  or interruption of, the specified utility services resulting from any
cause,  including changes in service provider or Landlord's  compliance with any
voluntary  or similar  governmental  or  business  guidelines  now or  hereafter
published or any requirements  now or hereafter  established by any governmental
agency,  board, or bureau having jurisdiction over the operation of the Property
shall not render  Landlord  liable in any respect for damages to either persons,
property,  or  business,  nor be  construed  as an eviction of Tenant or work an
abatement of Rent, nor relieve Tenant of Tenant's obligations for fulfillment of
any covenant or agreement hereof. Should any equipment or machinery furnished by
Landlord break down or for any cause cease to function properly,  Landlord shall
use reasonable diligence to repair same promptly, but Tenant shall have no claim
for  abatement  of Rent or damages on  account  of any  interruption  of service
occasioned thereby or resulting therefrom.

6.6   CHOICE OF SERVICE PROVIDER

      Tenant  acknowledges  that Landlord may, at Landlord's sole option, to the
extent  permitted by applicable  law,  elect to change,  from time to time,  the
company or companies which provide services (including  electrical service,  gas
service,  water, telephone and technical services) to the Building, the Premises
and/or its occupants. Notwithstanding anything to the contrary set forth in this
Lease,  Tenant  acknowledges  that  Landlord  has  not and  does  not  make  any
representations  or  warranties  concerning  the identity or  identities  of the
company or companies which provide  services to the Building and the Premises or
its occupants and Tenant  acknowledges  that the choice of service providers and
matters  concerning the engagement and termination  thereof shall be solely that
of Landlord. The foregoing provision is not intended to modify, amend, change or
otherwise  derogate any provision of this Lease concerning the nature or type of
service to be provided or any specific information concerning the amount thereof
to be provided. Tenant agrees to cooperate with Landlord and each of its service
providers in connection with any change in service or provider.

                                       15
<PAGE>

6.7   SIGNAGE

      Initial  Building  standard  signage  will be installed by Landlord in the
directory  in the main lobby of the  Building,  in the listing of tenants in the
elevator  lobby for the floor on which the  Premises  is located and at Tenant's
main entry door to the Premises at Landlord's sole cost and expense.  Any change
in such initial  signage shall be only with  Landlord's  prior written  consent,
shall  conform to Building  standard  signage and shall be at Tenant's sole cost
and expense.

                                   ARTICLE 7
                    POSSESSION, USE AND CONDITION OF PREMISES

7.1   POSSESSION AND USE OF PREMISES

      (a) Tenant  shall be  entitled  to  possession  of the  Premises  when the
Landlord  Work  is  Substantially  Complete.  Tenant  shall  occupy  and use the
Premises  only  for the  uses  specified  in  Section  1.1 to  conduct  Tenant's
business.  Tenant  shall not  occupy or use the  Premises  (or permit the use or
occupancy  of the  Premises)  for any  purpose  or in any manner  which:  (1) is
unlawful or in violation of any Law or  Environmental  Law; (2) may be dangerous
to persons or property or which may  increase  the cost of, or  invalidate,  any
policy of insurance  carried on the Building or covering its operations;  (3) is
contrary to or prohibited by the terms and conditions of this Lease or the rules
of the  Building set forth in Article  Eighteen;  or (4) would tend to create or
continue a nuisance.

      (b) Landlord shall provide Tenant with Access Card Keys, the cost of which
shall be deducted from the Tenant Improvement Allowance.

      (c) Tenant shall comply with all Environmental Laws pertaining to Tenant's
occupancy and use of the Premises and  concerning the proper  storage,  handling
and disposal of any Hazardous Material introduced to the Premises,  the Building
or the  Property  by  Tenant  or  other  occupants  of the  Premises,  or  their
employees, servants, agents, contractors,  customers or invitees. Landlord shall
comply with all  Environmental  Laws applicable to the Property other than those
to be complied with by Tenant pursuant to the preceding  sentence.  Tenant shall
not  generate,  store,  handle or dispose of any  Hazardous  Material in, on, or
about the Property  without the prior written consent of Landlord,  which may be
withheld in Landlord's  sole  discretion,  except that such consent shall not be
required to the extent of Hazardous  Material  packaged and  contained in office
products for consumer use in general business offices in quantities for ordinary
day-to-day  use  provided  such use does  not give  rise to,  or pose a risk of,
exposure  to or  release of  Hazardous  Material.  In the event  that  Tenant is
notified of any investigation or violation of any Environmental Law arising from
Tenant's  activities  at the  Premises,  Tenant  shall  immediately  deliver  to

                                       16
<PAGE>

Landlord  a copy  of  such  notice.  In  such  event  or in the  event  Landlord
reasonably  believes that a violation of Environmental Law exists,  Landlord may
conduct  such  tests  and  studies   relating  to   compliance  by  Tenant  with
Environmental  Laws or the alleged  presence  of  Hazardous  Materials  upon the
Premises  as  Landlord  deems  desirable,  all of which  shall be  completed  at
Tenant's expense. Landlord's inspection and testing rights are or Landlord's own
protection  only,  and Landlord has not, and shall not be deemed to have assumed
any   responsibility   to  Tenant  or  any  other  party  for  compliance   with
Environmental Laws, as a result of the exercise, or non-exercise of such rights.
Tenant hereby indemnifies,  and agrees to defend, protect and hold harmless, the
Indemnitees from any and all loss, claim, demand, action, expense, liability and
cost  (including  attorneys'  fees and  expenses)  arising  out of or in any way
related to the presence of any  Hazardous  Material  introduced  to the Premises
during  the Term by any party  other  than  Landlord.  In case of any  action or
proceeding  brought  against the  Indemnitees by reason of any such claim,  upon
notice from  Landlord,  Tenant  covenants to defend such action or proceeding by
counsel chosen by Landlord, in Landlord's sole discretion. Landlord reserves the
right to  settle,  compromise  or  dispose  of any and all  actions,  claims and
demands  related  to the  foregoing  indemnity.  If any  Hazardous  Material  is
released,  discharged  or disposed of on or about the Property and such release,
discharge  or  disposal  is not  caused  by  Tenant  or other  occupants  of the
Premises,  or  their  employees,  servants,  agents,  contractors  customers  or
invitees,  such release,  discharge or disposal shall be deemed  casualty damage
under Article Fourteen to the extent that the Premises are affected thereby;  in
such case,  Landlord and Tenant shall have the obligations and rights respecting
such casualty damage provided under such Article.

      (d) Landlord and Tenant  acknowledge that the Americans With  Disabilities
Act of 1990 (42  U.S.C.  ss.  12101  et seq.)  and  regulations  and  guidelines
promulgated thereunder,  as all of the same may be amended and supplemented from
time  to  time  (collectively   referred  to  herein  as  the  "ADA")  establish
requirements for business  operations,  accessibility  and barrier removal,  and
that such  requirements  may or may not apply to the Premises,  the Building and
the Project  depending on, among other things:  (1) whether Tenant's business is
deemed a "public  accommodation"  or  "commercial  facility",  (2) whether  such
requirements  are  "readily  achievable",  and (3)  whether  a given  alteration
affects a "primary function area" or triggers "path of travel" requirements. The
parties hereby agree that: (a) Landlord shall be responsible  for A1)A Title III
compliance in the Common Areas,  except as provided  below,  (b) Tenant shall be
responsible  for  ADA  Title  III  compliance  in the  Premises,  including  any
leasehold improvements or other work to be performed in the Premises under or in
connection  with this Lease,  (c) Landlord  may perform,  or require that Tenant
perform, and Tenant shall be responsible for the cost of, ADA Title III "path of
travel"  requirements  triggered by Tenant  Additions in the  Premises,  and (d)
Landlord  may  perform,  or  require  Tenant to  perform,  and  Tenant  shall be
responsible  for the cost of,  ADA  Title III  compliance  in the  Common  Areas
necessitated by the Building being deemed to be a "public accommodation" instead
of a "commercial  facility" as a result of Tenant's use of the Premises.  Tenant
shall be solely  responsible for requirements  under Title I of the ADA relating
to Tenant's employees.

7.2   LANDLORD ACCESS TO PREMISES; APPROVALS

      (a) Tenant shall permit Landlord to erect, use and maintain pipes,  ducts,
wiring and conduits in and through the Premises, so long as Tenant's use, layout
or design of the  Premises is not  materially  affected or altered.  Landlord or
Landlord's  agents  shall have the right to enter upon the Premises in the event
of an emergency,  or to inspect the Premises,  to perform  janitorial  and other
services,  to conduct  safety and other testing in the Premises and to make such
repairs, alterations,  improvements or additions to the Premises or the Building
or other parts of the  Property  as Landlord  may deem  necessary  or  desirable
(including  all  alterations,  improvements  and additions in connection  with a
change in service provider or providers). Janitorial and cleaning services shall
be performed after normal  business hours.  Any entry or work by Landlord may be
during normal  business hours and Landlord may use reasonable  efforts to ensure
that any entry or work shall not materially interfere with Tenant's occupancy of
the Premises.

                                       17
<PAGE>

      (b) If Tenant shall not be personally  present to permit an entry into the
Premises when for any reason an entry therein shall be necessary or permissible,
Landlord (or  Landlord's  agents),  after  attempting to notify  Tenant  (unless
Landlord believes an emergency situation exists), may enter the Premises without
rendering  Landlord or its agents liable therefor,  and without relieving Tenant
of any obligations under this Lease.

      (c) Landlord may enter the  Premises  for the purpose of  conducting  such
inspections,  tests and studies as Landlord  may deem  desirable or necessary to
confirm Tenant's  compliance with all Laws and  Environmental  Laws or for other
purposes  necessary  in  Landlord's  reasonable  judgment  to  ensure  the sound
condition  of the  Property  and the systems  serving the  Property.  Landlord's
rights under this Section 7.2(c) are for  Landlord's  own  protection  only, and
Landlord has not, and shall not be deemed to have assumed, any responsibility to
Tenant or any other party as a result of the  exercise or  non-exercise  of such
rights,  for compliance with Laws or  Environmental  Laws or for the accuracy or
sufficiency  of any  item or the  quality  or  suitability  of any  item for its
intended use.

      (d)  Landlord  may  do  any  of the  foregoing,  or  undertake  any of the
inspection  or work  described in the preceding  paragraphs  without such action
constituting an actual or constructive  eviction of Tenant, in whole or in part,
or giving  rise to an  abatement  of Rent by reason of loss or  interruption  of
business of the Tenant, or otherwise.

      (e) The review,  approval or consent of Landlord  with respect to any item
required or permitted  under this Lease is for Landlord's  own protection  only,
and  Landlord  has  not,  and  shall  not  be  deemed  to  have   assumed,   any
responsibility  to Tenant or any other  party,  as a result of the  exercise  or
non-exercise of such rights,  for compliance with Laws or Environmental  Laws or
for the accuracy or sufficiency of any item or the quality or suitability of any
item for its intended use.

7.3   QUIET ENJOYMENT

      Landlord covenants, in lieu of any implied covenant of quiet possession or
quiet enjoyment,  that so long as Tenant is in compliance with the covenants and
conditions  set  forth in this  Lease,  Tenant  shall  have  the  right to quiet
enjoyment of the Premises  without  hindrance or  interference  from Landlord or
those claiming through Landlord, and subject to the covenants and conditions set
forth in the Lease and to the rights of any Mortgagee or ground lessor.

                                       18
<PAGE>

                                    ARTICLE 8
                                   MAINTENANCE

8.1   LANDLORD'S MAINTENANCE

      Subject to the  provisions of Articles Four and Fourteen,  Landlord  shall
maintain and make necessary repairs to the foundations,  roofs,  exterior walls,
and the structural elements of the Building, the electrical,  plumbing, heating,
ventilating, air-conditioning,  mechanical, communication, security and the fire
and life safety  systems of the  Building  and those  corridors,  washrooms  and
lobbies which are Common Areas of the Building,  except that: (a) Landlord shall
not be responsible  for the maintenance or repair of any floor or wall coverings
in the Premises or any of such systems which are located within the Premises and
are supplemental or special to the Building's standard systems; and (b) the cost
of performing any of said  maintenance or repairs  whether to the Premises or to
the  Building  caused  by the  negligence  of  Tenant,  its  employees,  agents,
servants,  licensees,  subtenants,  contractors  or  invitees,  shall be paid by
Tenant,  subject to the waivers set forth in Section 16.4. Landlord shall not be
liable to Tenant for any expense,  injury,  loss or damage  resulting  from work
done in or upon,  or in  connection  with the use of,  any  adjacent  or  nearby
building, land, Street or alley.

8.2   TENANT'S MAINTENANCE

      Tenant shall periodically  inspect the Premises to identify any conditions
that are dangerous or in need of  maintenance  or repair.  Tenant shall promptly
provide Landlord with notice of any such  conditions.  Tenant shall, at its sole
cost and expense,  perform all  maintenance and repairs to the Premises that are
not Landlord's express responsibility under this Lease, and keep the Premises in
good condition and repair,  reasonable  wear and tear excepted.  Tenant's repair
and maintenance obligations include,  without limitation,  repairs to: (a) floor
covering; (b) interior partitions;  (c) doors; (d) the interior side of demising
walls;  (e)  electronic,  phone and data cabling and related  equipment  that is
installed by or for the exclusive benefit of Tenant (collectively, "Cable"); (f)
supplemental  air  conditioning  units,  kitchens,  including hot water heaters,
plumbing,   and  similar   facilities   exclusively   serving  Tenant;  and  (g)
Alterations.  To the extent  Landlord is not  reimbursed by insurance  proceeds,
Tenant shall reimburse Landlord for the cost of repairing damage to the Building
caused by the acts of  Tenant,  Tenant  Related  Parties  and  their  respective
contractors and vendors. If Tenant fails to make any repairs to the Premises for
more than 15 days after  notice  from  Landlord  (although  notice  shall not be
required in an emergency),  Landlord may make the repairs,  and Tenant shall pay
the reasonable cost of the repairs, together with an administrative charge in an
amount equal to 10% of the cost of the repairs.  Tenant  hereby waives all right
to make  repairs at the  expense of  Landlord  or in lieu  thereof to vacate the
Premises  and its other  similar  rights as  provided in  California  Civil Code
Sections 1932(1),  1941 and 1942 or any other Legal Requirement  (whether now or
hereafter in effect). In addition to the foregoing,  Tenant shall be responsible
for repairing all special tenant fixtures and  improvements,  including  garbage
disposals, showers, plumbing, and appliances.

                                   ARTICLE 9
                          ALTERATIONS AND IMPROVEMENTS

9.1   TENANT ALTERATIONS

      (a) Except for completion of Tenant Work  undertaken by Tenant pursuant to
the Work letter,  the following  provisions shall apply to the completion of any
Tenant Alterations:

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<PAGE>

            (1) Tenant shall not, except as provided  herein,  without the prior
written consent of Landlord,  which consent shall not be unreasonably  withheld,
make or cause to be made any Tenant  Alterations  in or to the  Premises  or any
Property systems serving the Premises.  Prior to making any Tenant  Alterations,
Tenant shall give Landlord ten (10) days prior  written  notice (or such earlier
notice as would be  necessary  pursuant to  applicable  Law) to permit  Landlord
sufficient time to post appropriate  notices of  non-responsibility.  Subject to
all other  requirements  of this Article Nine,  Tenant may undertake  Decoration
work without  Landlord's  prior written  consent.  Tenant shall furnish Landlord
with the names and addresses of all contractors and subcontractors and copies of
all  contracts.  All Tenant  Alterations  shall be completed at such time and in
such manner as Landlord may from time to time designate, and only by contractors
or mechanics  approved by Landlord,  which  approval  shall not be  unreasonably
withheld, provided, however, that Landlord may, in its sole discretion,  specify
the engineers  and  contractors  to perform all work relating to the  Building's
systems (including the mechanical,  heating,  plumbing,  security,  ventilating,
air-conditioning, electrical, communication and the fire and life safety systems
in the Building).  The contractors,  mechanics and engineers who may be used are
further  limited  to those  whose  work  will not  cause  or  threaten  to cause
disharmony  or  interference  with Landlord or other tenants in the Building and
their  respective  agents  and  contractors  performing  work  in or  about  the
Building.  Landlord may further  condition its consent upon Tenant furnishing to
Landlord  and  Landlord  approving  prior  to the  commencement  of any  work or
delivery of materials to the Premises related to the Tenant  Alterations such of
the following as specified by Landlord:  architectural plans and specifications,
opinions from Landlord's  engineers stating that the Tenant Alterations will not
in any way  adversely  affect the  Building's  systems,  necessary  permits  and
licenses,  certificates  of  insurance,  and such other  documents  in such form
reasonably  requested by Landlord.  Landlord  may, in the exercise of reasonable
judgment,  request that Tenant  provide  Landlord with  appropriate  evidence of
Tenant's  ability  to  complete  and  pay  for  the  completion  of  the  Tenant
Alterations such as a performance  bond or letter of credit.  Upon completion of
the Tenant  Alterations,  Tenant shall deliver to Landlord an as-built mylar and
digitized  (if  available)  set of  plans  and  specifications  for  the  Tenant
Alterations.

            (2) Tenant shall pay the cost of all Tenant Alterations and the cost
of decorating the Premises and any work to the Property occasioned thereby. Upon
completion  of  Tenant   Alterations,   Tenant  shall   furnish   Landlord  with
contractors'  affidavits and full and final waivers of lien and receipted  bills
covering all labor and materials  expended and used in connection  therewith and
such other documentation reasonably requested by Landlord or Mortgagee.

            (3)  Tenant  agrees  to  complete  all  Tenant  Alterations  (i)  in
accordance  with all Laws,  Environmental  Laws, all  requirements of applicable
insurance  companies and in accordance  with  Landlord's  standard  construction
rules and regulations, and (ii) in a good and workmanlike manner with the use of
good grades of materials.  Tenant shall notify  Landlord  immediately  if Tenant
receives any notice of violation of any Law in connection with completion of any
Tenant  Alterations  and shall  immediately  take such steps as are necessary to
remedy such violation.  In no event shall such supervision or right to supervise
by  Landlord  nor  shall  any  approvals  given by  Landlord  under  this  Lease
constitute  any  warranty by  Landlord to Tenant of the  adequacy of the design,
workmanship or quality of such work or materials for Tenant's intended use or of
compliance  with the  requirements  of Section 9.1  (a)(3)(i)  and (ii) above or
impose any liability  upon Landlord in connection  with the  performance of such
work.

                                       20
<PAGE>

      (b) All Tenant Additions  whether  installed by Landlord or Tenant,  shall
without  compensation  or credit to Tenant,  become part of the Premises and the
property of Landlord at the time of their  installation  and shall remain in the
Premises,  unless  pursuant  to Article  Twelve,  Tenant  may remove  them or is
required to remove them at Landlord's request.

9.2   LIENS

      Tenant  shall  not  permit  any  lien or claim  for lien of any  mechanic,
laborer or supplier  or any other lien to be filed  against  the  Building,  the
Land,  the  Premises,  or any other  part of the  Property  arising  out of work
performed,  or alleged to have been  performed by, or at the direction of, or on
behalf of  Tenant.  If any such lien or claim  for lien is filed,  Tenant  shall
within  ten (10)  days of  receiving  notice of such lien or claim (a) have such
lien or claim for lien  released  of record or (b) deliver to Landlord a bond in
form,  content,  amount,  and  issued  by  surety,   satisfactory  to  Landlord,
indemnifying, protecting, defending and holding harmless the Indemnitees against
all costs  and  liabilities  resulting  from such lien or claim for lien and the
foreclosure or attempted foreclosure thereof. If Tenant fails to take any of the
above  actions,  Landlord,  in addition to its rights and remedies under Article
Eleven,  without  investigating the validity of such lien or claim for lien, may
pay or  discharge  the same and Tenant  shall,  as payment  of  additional  Rent
hereunder,  reimburse  Landlord  upon demand for the amount so paid by Landlord,
including Landlord's expenses and attorneys' fees.

                                   ARTICLE 10
                            ASSIGNMENT AND SUBLETTING

10.1  ASSIGNMENT AND SUBLETTING

      (a) Without the prior written  consent of Landlord,  which may be withheld
in  Landlord's  sole  discretion,  Tenant may not  sublease,  assign,  mortgage,
pledge,  hypothecate or otherwise  transfer or permit the transfer of this Lease
or the  encumbering  of  Tenant's  interest  therein  in whole  or in  part,  by
operation of Law or otherwise or permit the use or occupancy of the Premises, or
any part thereof,  by anyone other than Tenant,  provided,  however, if Landlord
chooses  not to  recapture  the space  proposed to be  subleased  or assigned as
provided in Section 10.2,  Landlord shall not unreasonably  withhold its consent
to a subletting  or assignment  under this Section 10.1.  Tenant agrees that the
provisions governing sublease and assignment set forth in this Article Ten shall
be deemed to be reasonable.  If Tenant desires to enter into any sublease of the
Premises or  assignment  of this Lease,  Tenant  shall  deliver  written  notice
thereof to  Landlord  ("Tenant's  Notice"),  together  with the  identity of the
proposed  subtenant  or assignee and the proposed  principal  terms  thereof and
financial  and other  information  sufficient  for  Landlord to make an informed
judgment with respect to such proposed subtenant or assignee at least sixty (60)
days prior to the  commencement  date of the term of the  proposed  sublease  or
assignment. If Tenant proposes to sublease less than all of the Rentable Area of
the Premises,  the space  proposed to be sublet and the space retained by Tenant
must  each be a  marketable  unit  as  reasonably  determined  by  Landlord  and
otherwise in compliance  with all Laws.  Landlord shall notify Tenant in writing
of its approval or  disapproval  of the proposed  sublease or  assignment or its
decision to exercise its rights under Section 10.2 within thirty (30) days after
receipt of  Tenant's  Notice  (and all  required  information).  In no event may
Tenant  sublease  any  portion of the  Premises or assign the Lease to any other
tenant of the  Project.  Tenant  shall  submit for  Landlord's  approval  (which
approval shall not be unreasonably withheld) any advertising which Tenant or its
agents intend to use with respect to the space proposed to be sublet.

                                       21
<PAGE>

      (b) With  respect to  Landlord's  consent to an  assignment  or  sublease,
Landlord  may  take  into  consideration  any  factors  that  Landlord  may deem
relevant,  and the reasons  for which  Landlord's  denial  shall be deemed to be
reasonable shall include, without limitation, the following:

            (1) the  business  reputation  or  creditworthiness  of any proposed
subtenant or assignee is not acceptable to Landlord; or

            (2) in  Landlord's  reasonable  judgment  the  proposed  assignee or
sublessee would diminish the value or reputation of the Building or Landlord; or

            (3) any proposed assignee's or sublessee's use of the Premises would
violate  Section 7.1 of the Lease or would  violate the  provisions of any other
leases of tenants in the Project; or

            (4) the proposed  sublessee  or assignee is a bona fide  prospective
tenant of Landlord in the Project as  demonstrated  by a written  proposal dated
within ninety (90) days prior to the date of Tenant's request; or

            (5) the proposed sublessee or assignee would materially increase the
estimated  pedestrian  and  vehicular  traffic to and from the  Premises and the
Building.

      (c) Any sublease or assignment shall be expressly subject to the terms and
conditions of this Lease. Any subtenant or assignee shall execute such documents
as Landlord may  reasonably  require to evidence  such  subtenant or  assignee's
assumption of the obligations and liabilities of Tenant under this Lease. Tenant
shall  deliver to Landlord a copy of all  agreements  executed by Tenant and the
proposed  subtenant  and  assignee  with  respect  to the  Premises.  Landlord's
approval of a sublease, assignment,  hypothecation,  transfer or third party use
or  occupancy  shall not  constitute a waiver of Tenant's  obligation  to obtain
Landlord's  consent  to  further   assignments  or  subleases,   hypothecations,
transfers or third party use or occupancy.

      (d) For  purposes of this Article  Ten, an  assignment  shall be deemed to
include a change in the majority control of Tenant, resulting from any transfer,
sale or assignment of shares of stock of Tenant occurring by operation of Law or
otherwise  if  Tenant is a  corporation  whose  shares  of stock are not  traded
publicly. If Tenant is a partnership, any change in the partners of Tenant shall
be deemed to be an assignment.

10.2  RECAPTURE

      Landlord  shall have the option to exclude  from the  Premises  covered by
this  Lease  ("recapture")  the space  proposed  to be sublet or  subject to the
assignment,  effective as of the proposed  commencement date of such sublease or
assignment.  If Landlord elects to recapture,  Tenant shall surrender possession
of the space  proposed to be subleased or subject to the  assignment to Landlord
on the effective  date of recapture of such space from the  Premises,  such date
being the Termination Date for such space. Effective as of the date of recapture
of any portion of the Premises pursuant to this section,  the Monthly Base Rent,
Rentable Area of the Premises and Tenant's Share shall be adjusted accordingly.

                                       22
<PAGE>

10.3  EXCESS RENT

      Tenant  shall pay  Landlord on the first day of each month during the term
of the sublease or  assignment,  fifty  percent (50%) of the amount by which the
sum of all  rent and  other  consideration  (direct  or  indirect)  due from the
subtenant  or assignee for such month  exceeds:  (i) that portion of the Monthly
Base Rent and Rent  Adjustments  due under this  Lease for said  month  which is
allocable  to the space  sublet or assigned;  and (ii) the  following  costs and
expenses  for  the  subletting  or  assignment  of  such  space:  (1)  brokerage
commissions  and  attorneys'  fees and  expenses,  (2) the actual  costs paid in
making  any  improvements  or  substitutions  in the  Premises  required  by any
sublease or assignment; and (3) "free rent" periods, costs of any inducements or
concessions  given to subtenant or assignee,  moving costs, and other amounts in
respect  of  such   subtenant's   or   assignee's   other  leases  or  occupancy
arrangements.  All such costs and expenses  shall be amortized  over the term of
the sublease or assignment pursuant to sound accounting principles.

10.4  TENANT LIABILITY

      In the event of any sublease or assignment, whether or not with Landlord's
consent, Tenant shall not be released or discharged from any liability,  whether
past, present or future, under this Lease,  including any liability arising from
the exercise of any renewal or expansion  option, to the extent such exercise is
expressly permitted by Landlord. Tenant's liability shall remain primary, and in
the event of  default  by any  subtenant,  assignee  or  successor  of Tenant in
performance  or  observance of any of the covenants or conditions of this Lease,
Landlord may proceed directly against Tenant without the necessity of exhausting
remedies  against said subtenant,  assignee or successor.  After any assignment,
Landlord may consent to subsequent  assignments or subletting of this Lease,  or
amendments  or  modifications  of this Lease with  assignees of Tenant,  without
notifying Tenant, or any successor of Tenant, and without obtaining its or their
consent  thereto,  and such action shall not relieve  Tenant or any successor of
Tenant of  liability  under  this  Lease.  If  Landlord  grants  consent to such
sublease or  assignment,  Tenant shall pay all  reasonable  attorneys'  fees and
expenses  incurred by Landlord with respect to such  assignment or sublease.  In
addition,  if Tenant has any options to extend the Term or to add other space to
the Premises,  such options shall not be available to any subtenant or assignee,
directly or indirectly without Landlord's express written consent,  which may be
withheld in Landlord's sole discretion.

10.5  ASSUMPTION AND ATTORNMENT

      If Tenant shall assign this Lease as permitted herein,  the assignee shall
expressly  assume  all of the  obligations  of  Tenant  hereunder  in a  written
instrument  satisfactory  to Landlord  and  furnished to Landlord not later than
fifteen (15) days prior to the effective date of the assignment. If Tenant shall
sublease the Premises as permitted herein,  Tenant shall, at Landlord's  option,
within fifteen (15) days  following any request by Landlord,  obtain and furnish
to  Landlord  the written  agreement  of such  subtenant  to the effect that the
subtenant will attorn to Landlord and will pay all subrent directly to Landlord.

                                       23
<PAGE>

                                   ARTICLE 11
                              DEFAULT AND REMEDIES

11.1  EVENTS OF DEFAULT

      The  occurrence  or  existence of any one or more of the  following  shall
constitute a "Default" by Tenant under this Lease:

            (1) Tenant  fails to pay any  installment  or other  payment of Rent
including  Rent  Adjustment  Deposits or Rent  Adjustments  within five (5) days
after the date when due;

            (2) Tenant  fails to observe or perform any of the other  covenants,
conditions or provisions of this Lease or the  Workletter and fails to cure such
default within fifteen (15) days after written notice thereof to Tenant,  unless
the default  involves a hazardous  condition,  which shall be cured forthwith or
unless the failure to perform is a Default for which this Lease  specifies there
is no cure or grace period;

            (3) the  interest  of Tenant  in this  Lease is  levied  upon  under
execution or other legal process;

            (4) a  petition  is filed by or  against  Tenant to  declare  Tenant
bankrupt or seeking a plan of reorganization or arrangement under any Chapter of
the Bankruptcy Act, or any amendment,  replacement or substitution  therefor, or
to delay payment of, reduce or modify  Tenant's  debts,  which in the case of an
involuntary action is not discharged within thirty (30) days;

            (5)  Tenant  is  declared  insolvent  by Law or  any  assignment  of
Tenant's property is made for the benefit of creditors;

            (6) a receiver is appointed for Tenant or Tenant's  property,  which
appointment is not discharged within thirty (30) days;

            (7) any action taken by or against  Tenant to  reorganize  or modify
Tenant's capital  structure in a materially  adverse way which in the case of an
involuntary action is not discharged within thirty (30) days;

            (8) upon the dissolution of Tenant; or

            (9) upon the third  occurrence  within  any Lease  Year that  Tenant
fails to pay Rent when due or has breached a  particular  covenant of this Lease
(whether or not such  failure or breach is  thereafter  cured  within any stated
cure or grace period or statutory period).

11.2  LANDLORD'S REMEDIES

      (a) A Default  shall  constitute a breach of the Lease for which  Landlord
shall have the rights and  remedies set forth in this Section 11.2 and all other
rights and remedies set forth in this Lease or now or hereafter  allowed by Law,
whether  legal or  equitable,  and all rights and remedies of Landlord  shall be
cumulative and none shall exclude any other right or remedy.

                                       24
<PAGE>

      (b) With respect to a Default, at any time Landlord may terminate Tenant's
right to  possession  by written  notice to Tenant  stating such  election.  Any
written  notice  required  pursuant to Section 11.1 shall  constitute  notice of
unlawful  detainer  pursuant to California Code of Civil Procedure  Section 1161
if, at Landlord's sole discretion,  it states Landlord's  election that Tenant's
right to possession is terminated after expiration of any period required by Law
or any longer period required by Section 11.1. Upon the expiration of the period
stated in  Landlord's  written  notice of  termination  (and  unless such notice
provides  an option to cure  within  such  period and Tenant  cures the  Default
within such period), Tenant's right to possession shall terminate and this Lease
shall terminate,  and Tenant shall remain liable as hereinafter  provided.  Upon
such termination in writing of Tenant's right to possession, Landlord shall have
the right,  subject to applicable  Law, to re-enter the Premises and  dispossess
Tenant and the legal  representatives  of Tenant and all other  occupants of the
Premises by unlawful  detainer or other  summary  proceedings,  or  otherwise as
permitted by Law,  regain  possession of the Premises and remove their  property
(including  their trade fixtures,  personal  property and those Tenant Additions
which  Tenant is required or  permitted to remove  under  Article  Twelve),  but
Landlord  shall not be obligated to effect such removal,  and such property may,
at  Landlord's  option,  be stored  elsewhere,  sold or otherwise  dealt with as
permitted by Law, at the risk of, expense of and for the account of Tenant,  and
the proceeds of any sale shall be applied pursuant to Law.  Landlord shall in no
event be  responsible  for the value,  preservation  or  safekeeping of any such
property.  Tenant  hereby  waives all claims for  damages  that may be caused by
Landlord's  removing  or storing  Tenant's  personal  property  pursuant to this
Section or Section 12.1,  and Tenant hereby  indemnifies,  and agrees to defend,
protect  and hold  harmless,  the  Indemnitees  from any and all  loss,  claims,
demands,  actions,  expenses,  liability and cost (including attorneys' fees and
expenses) arising out of or in any way related to such removal or storage.  Upon
such  written  termination  of  Tenant's  right to  possession  and this  Lease,
Landlord  shall  have the right to  recover  damages  for  Tenant's  Default  as
provided  herein  or  by  Law,  including  the  following  damages  provided  by
California Civil Code Section 1951.2:

            (1) the worth at the time of award of the unpaid Rent which had been
earned at the time of termination;

            (2) the worth at the time of award of the amount by which the unpaid
Rent which  would have been  earned  after  termination  until the time of award
exceeds the amount of such Rent loss that Tenant  proves could  reasonably  have
been avoided;

            (3) the worth at the time of award of the amount by which the unpaid
Rent for the balance of the term of this Lease  after the time of award  exceeds
the amount of such Rent loss that Tenant proves could be reasonably avoided; and

            (4) any other amount  necessary to  compensate  Landlord for all the
detriment  proximately  caused by Tenant's  failure to perform  its  obligations
under this Lease or which in the  ordinary  course of things  would be likely to
result therefrom, including, without limitation, Landlord's unamortized costs of
tenant  improvements,  leasing commissions and legal fees incurred in connection
with  entering  into this Lease.  The word "rent" as used in this  Section  11.2
shall have the same meaning as the defined  term Rent in this Lease.  The "worth
at the time of award" of the amount  referred to in clauses (1) and (2) above is
computed by allowing  interest  at the  Default  Rate.  The worth at the time of
award of the amount  referred to in clause (3) above is computed by  discounting
such amount at the discount rate of the Federal Reserve Bank of San Francisco at
the time of award plus one percent (1%). For the purpose of  determining  unpaid
Rent under clause (3) above,  the monthly  Rent  reserved in this Lease shall be
deemed to be the sum of the Monthly Base Rent,  monthly  storage  space rent, if
any, and the amounts last payable by Tenant as Rent Adjustments for the calendar
year in which Landlord terminated this Lease as provided hereinabove.

                                       25
<PAGE>

      (c) Even if Tenant is in Default  and/or has abandoned the Premises,  this
Lease  shall  continue  in effect  for so long as  Landlord  does not  terminate
Tenant's  right to possession by written  notice as provided in Section  11.2(b)
above,  and Landlord  may enforce all its rights and remedies  under this Lease,
including the right to recover Rent as it becomes due under this Lease.  In such
event,  Landlord  shall have all of the rights and remedies of a landlord  under
California  Civil Code Section 1951.4 (lessor may continue Lease in effect after
Tenant's  Default and  abandonment and recover Rent as it becomes due, if Tenant
has the right to sublet or assign, subject only to reasonable  limitations),  or
any successor statute. During such time as Tenant is in Default, if Landlord has
not terminated  this Lease by written notice and if Tenant  requests  Landlord's
consent to an assignment of this Lease or a sublease of the Premises, subject to
Landlord's  option to recapture  pursuant to Section  10,2,  Landlord  shall not
unreasonably  withhold  its  consent  to such  assignment  or  sublease.  Tenant
acknowledges  and agrees that the  provisions  of Article Ten shall be deemed to
constitute reasonable  limitations of Tenant's right to assign or sublet. Tenant
acknowledges  and  agrees  that in the  absence of written  notice  pursuant  to
Section 11.2(b) above terminating Tenant's right to possession,  no other act of
Landlord  shall  constitute a termination  of Tenant's right to possession or an
acceptance of Tenant's surrender of the Premises,  including acts of maintenance
or  preservation  or  efforts  to relet the  Premises  or the  appointment  of a
receiver upon initiative of Landlord to protect  Landlord's  interest under this
Lease  or  the  withholding  of  consent  to  a  subletting  or  assignment,  or
terminating a subletting or assignment,  if in accordance with other  provisions
of this Lease.

      (d) In the event  that  Landlord  seeks an  injunction  with  respect to a
breach or  threatened  breach by Tenant of any of the  covenants,  conditions or
provisions of this Lease, Tenant agrees to pay the premium for any bond required
in connection with such injunction.

      (e) Tenant  hereby  waives any and all rights to relief  from  forfeiture,
redemption or reinstatement  granted by Law (including  California Civil Code of
Procedure  Sections  1174 and  1179) in the  event of Tenant  being  evicted  or
dispossessed for any cause or in the event of Landlord  obtaining  possession of
the Premises by reason of Tenant's Default or otherwise;

      (f)  Notwithstanding any other provision of this Lease, a notice to Tenant
given under this Article and Article Twenty-four of this Lease or given pursuant
to California  Code of Civil  Procedure  Section 1161,  and any notice served by
mail shall be deemed  served,  and the requisite  waiting period deemed to begin
under said Code of Civil Procedure Section upon mailing,  without any additional
waiting  requirement  under Code of Civil  Procedure  Section 1011 et seq. or by
other Law. For purposes of Code of Civil Procedure Section 1162, Tenant's "place
of  residence",  "usual place of business",  "the property" and "the place where
the property is situated" shall mean and be the Premises,  whether or not Tenant
has vacated same at the time of service.

                                       26
<PAGE>

      (g) The voluntary or other  surrender or termination  of this Lease,  or a
mutual  termination or cancellation  thereof,  shall not work a merger and shall
terminate  all  or  any  existing   assignments,   subleases,   subtenancies  or
occupancies permitted by Tenant, except if and as otherwise specified in writing
by Landlord.

      (h) No delay or omission in the exercise o any right or remedy of Landlord
upon any default by Tenant,  and no exercise by Landlord of its rights  pursuant
to Section 25.15 to perform any duty which Tenant fails timely to perform, shall
impair any right or remedy or be  construed  as a waiver.  No  provision of this
Lease shall be deemed waived by Landlord unless such waiver is in writing signed
by Landlord. The waiver by Landlord of any breach of any provision of this Lease
shall not be deemed a waiver of any  subsequent  breach of the same or any other
provision of this Lease.

11.3  ATTORNEY'S FEES

      In the event any party brings any suit or other proceeding with respect to
the subject  matter or  enforcement  of this  Lease,  the  prevailing  party (as
determined  by the court,  agency or other  authority  before which such suit or
proceeding  is  commenced)  shall,  in addition  to such other  relief as may be
awarded,  be  entitled  to  recover  attorneys'  fees,  expenses  and  costs  of
investigation as actually incurred,  including court costs, expert witness fees,
costs and expenses of investigation, and all attorneys' fees, costs and expenses
in any such suit or proceeding  (including in any action or  participation in or
in connection with any case or proceeding  under the Bankruptcy  Code, 11 United
States Code Sections 101 et seq., or any successor statutes,  in establishing or
enforcing  the  right  to  indemnification,  in  appellate  proceedings,  or  in
connection  with the  enforcement or collection of any judgment  obtained in any
such suit or proceeding).

11.4  BANKRUPTCY

      The  following  provisions  shall apply in the event of the  bankruptcy or
insolvency of Tenant:

      (a) In connection  with any  proceeding  under Chapter 7 of the Bankruptcy
Code where the trustee of Tenant elects to assume this Lease for the purposes of
assigning it, such election or assignment, may only be made upon compliance with
the  provisions  of (b) and (c)  below,  which  conditions  Landlord  and Tenant
acknowledge to be  commercially  reasonable.  In the event the trustee elects to
reject this Lease then Landlord  shall  immediately be entitled to possession of
the Premises without further obligation to Tenant or the trustee.

      (b) Any  election  to assume  this  Lease  under  Chapter  11 or 13 of the
Bankruptcy Code by Tenant as  debtor-in-possession  or by Tenant's  trustee (the
"Electing Party") must provide for:

      The Electing Party to cure or provide to Landlord adequate  assurance that
it will cure all monetary  defaults  under this Lease  within  fifteen (15) days
from the date of assumption and it will cure all nonmonetary defaults under this
Lease within thirty (30) days from the date of  assumption.  Landlord and Tenant
acknowledge such condition to be commercially reasonable.

      (c) if the  Electing  Party  has  assumed  this  Lease or elects to assign
Tenant's  interest  under this Lease to any other  person,  such interest may be
assigned only if the intended assignee has provided adequate assurance of future
performance (as herein  defined),  of all of the  obligations  imposed on Tenant
under this Lease.

                                       27
<PAGE>

      For the purposes hereof,  "adequate assurance of future performance" means
that Landlord has  ascertained  that each of the following  conditions  has been
satisfied:

            (1) The  assignee  has  submitted  a  current  financial  statement,
certified by its chief  financial  officer,  which shows a net worth and working
capital in amounts  sufficient to assure the future  performance by the assignee
of Tenant's obligations under this Lease; and

            (2) Landlord has obtained consents or waivers from any third parties
that may be required under a lease, mortgage,  financing  arrangement,  or other
agreement  by which  Landlord  is bound,  to  enable  Landlord  to  permit  such
assignment.

      (d)  Landlord's  acceptance of rent or any other payment from any trustee,
receiver,  assignee,  person, or other entity will not be deemed to have waived,
or waive, the requirement of Landlord's  consent,  Landlord's right to terminate
this Lease for any transfer of Tenant's  interest  under this Lease without such
consent, or Landlord's claim for any amount of Rent due from Tenant.

11.5  LANDLORD'S DEFAULT

      Landlord shall be in default hereunder in the event Landlord has not begun
and pursued  with  reasonable  diligence  the cure of any failure of Landlord to
meet its  obligations  hereunder  within  thirty  (30) days after the receipt by
Landlord of written notice from Tenant of the alleged failure to perform.  In no
event shall Tenant have the right to terminate or rescind this Lease as a result
of Landlord's  default as to any covenant or agreement  contained in this Lease.
Tenant hereby  waives such remedies of  termination  and  rescission  and hereby
agrees  that  Tenant's  remedies  for  default  hereunder  and for breach of any
promise or inducement shall be limited to a suit for damages and/or  injunction.
In addition,  Tenant hereby  covenants  that,  prior to the exercise of any such
remedies,  it will give the Mortgagee  notice and a reasonable  time to cure any
default by Landlord.

                                   ARTICLE 12
                              SURRENDER OF PREMISES

12.1  IN GENERAL

      Upon the Termination  Date, Tenant shall surrender and vacate the Premises
immediately  and deliver  possession  thereof to  Landlord in a clean,  good and
tenantable  condition,  ordinary  wear and tear,  and damage  caused by Landlord
excepted.  Tenant  shall  deliver  to  Landlord  all keys to the  Premises.  All
improvements in and to the Premises,  including any  Alterations  (collectively,
"Leasehold  Improvements") shall remain upon the Premises at the end of the Term
without compensation to Tenant.  Landlord,  however, by written notice to Tenant
at least 30 days prior to the  Termination  Date,  may  require  Tenant,  at its
expense,  to remove (a) any Cable installed by or for the benefit of Tenant, and
(b) any Landlord Work or Alterations  that, in Landlord's  reasonable  judgment,
are of a nature that would require  removal and repair costs that are materially
in excess of the  removal  and repair  costs  associated  with  standard  office
improvements  (collectively  referred  to as  "Required  Removable?').  Required
Removables shall include, without limitation, internal stairways, raised floors,
personal  baths  and  showers,  vaults,  rolling  file  systems  and  structural
alterations  and  modifications.  The designated  Required  Removables  shall be
removed by Tenant before the Termination Date. Tenant shall repair damage caused

                                       28
<PAGE>

by the  installation  or  removal of  Required  Removables.  If Tenant  fails to
perform its  obligations in a timely  manner,  Landlord may perform such work at
Tenant's  expense.  Tenant,  at the time it  requests  approval  for a  proposed
Alteration,  may request in writing  that  Landlord  advise  Tenant  whether the
Alteration or any portion of the Alteration is a Required  Removable.  Within 10
days after receipt of Tenant's request,  Landlord shall advise Tenant in writing
as to which portions of the Alteration  are Required  Removables.  If any of the
Tenant  Additions  which were  installed  by Tenant  involved  the  lowering  of
ceilings,  raising of floors or the  installation  of specialized  wall or floor
coverings or lights, then Tenant shall also be obligated to return such surfaces
to their condition prior to the commencement of this Lease. Tenant shall also be
required to close any staircases or other openings between floors.  In the event
possession of the Premises is not delivered to Landlord when required hereunder,
or if Tenant shall fail to remove those items described above, Landlord may (but
shall not be obligated to), at Tenant's expense, remove any of such property and
store,  sell or otherwise  deal with such property,  and undertake,  at Tenant's
expense, such restoration work as Landlord deems necessary or advisable.

12.2  LANDLORD'S RIGHTS

      All property  which may be removed from the Premises by Landlord  shall be
conclusively  presumed to have been  abandoned  by Tenant and  Landlord may deal
with such  property  as provided in Section  11.2(b),  including  the waiver and
indemnity  obligations  provided in that  Section.  Tenant shall also  reimburse
Landlord  for all costs and  expenses  incurred by  Landlord in removing  any of
Tenant Additions and in restoring the Premises to the condition required by this
Lease at the Termination Date.

                                   ARTICLE 13
                                  HOLDING OVER

      In the event that Tenant holds over in  possession  of the Premises  after
the Termination Date, Tenant shall pay Landlord 150% of the monthly Rent payable
for the month  immediately  preceding the holding over (including  increases for
Rent Adjustments which Landlord may reasonably  estimate.  Tenant shall also pay
all damages sustained by Landlord by reason of such retention of possession. The
provisions  of this  Article  shall not  constitute  a waiver by Landlord of any
re-entry  rights of Landlord  and Tenant's  continued  occupancy of the Premises
shall be as a tenancy in sufferance.

                                   ARTICLE 14
                        DAMAGE BY FIRE OR OTHER CASUALTY

14.1  SUBSTANTIAL UNTENANTABILITY

                                       29
<PAGE>

      (a) If any fire or other casualty  (whether insured or uninsured)  renders
all or a  substantial  portion of the  Premises  or the  Building  untenantable,
Landlord shall, with reasonable  promptness after the occurrence of such damage,
estimate the length of time that will be required to substantially  complete the
repair  and  restoration  and shall by  notice  advise  Tenant of such  estimate
("Landlord's Notice"). If Landlord estimates that the amount of time required to
substantially  complete  such  repair and  restoration  will  exceed one hundred
eighty (180) days from the date such damage occurred,  then Landlord,  or Tenant
if all or a substantial portion of the Premises is rendered untenantable,  shall
have the right to terminate this Lease as of the date of such damage upon giving
written  notice to the other at any time within twenty (20) days after  delivery
of Landlord's  Notice,  provided that if Landlord so chooses,  Landlord's Notice
may also constitute such notice of termination.

      (b)  Unless  this  Lease  is  terminated  as  provided  in  the  preceding
subparagraph,  Landlord shall proceed with  reasonable  promptness to repair and
restore the Premises to its condition as existed prior to such casualty, subject
to reasonable  delays for insurance  adjustments and Force Majeure  delays,  and
also subject to zoning Laws and building  codes then in effect.  Landlord  shall
have no liability to Tenant,  and Tenant shall not be entitled to terminate this
Lease if such repairs and restoration are not in fact completed  within the time
period  estimated by Landlord so long as Landlord shall proceed with  reasonable
diligence to complete such repairs and restoration.

      (c)  Tenant  acknowledges  that  Landlord  shall be  entitled  to the full
proceeds of any insurance  coverage,  whether carried by Landlord or Tenant, for
damages to the Premises,  except for those proceeds of Tenant's insurance of its
own personal  property and  equipment  which would be removable by Tenant at the
Termination  Date.  All such  insurance  proceeds  shall be payable to  Landlord
whether or not the Premises are to be repaired and restored,  provided, however,
if this Lease is not  terminated  and the parties  proceed to repair and restore
Tenant Additions at Tenant's cost, to the extent Landlord  received  proceeds of
Tenant's insurance covering Tenant Additions,  such proceeds shall be applied to
reimburse Tenant for its cost of repairing and restoring Tenant Additions.

      (d)  Notwithstanding  anything  to the  contrary  herein  set  forth:  (i)
Landlord  shall have no duty  pursuant to this  Section to repair or restore any
portion of any Tenant  Additions or to expend for any repair or  restoration  of
the  Premises  or  Building  amounts  in excess of  insurance  proceeds  paid to
Landlord and available for repair or restoration; and (ii) Tenant shall not have
the right to  terminate  this Lease  pursuant  to this  Section if any damage or
destruction was caused by the act or neglect of Tenant,  its agent or employees.
Whether or not the Lease is terminated pursuant to this Article Fourteen,  in no
event shall  Tenant be entitled to any  compensation  or damages for loss of the
use of the  whole  or any  part  of the  Premises  or for any  inconvenience  or
annoyance occasioned by any such damage, destruction,  rebuilding or restoration
of the Premises or the Building or access thereto.

      (e) Any repair or restoration of the Premises performed by Tenant shall be
in accordance with the provisions of Article Nine hereof.

                                       30
<PAGE>

14.2  INSUBSTANTIAL UNTENANTABILITY

      If the  Premises or the  Building is damaged by a casualty  but neither is
rendered  substantially  untenantable  and Landlord  estimates  that the time to
substantially  complete  the repair or  restoration  will not exceed one hundred
eighty  (180)  days from the date such  damage  occurred,  then  Landlord  shall
proceed to repair and restore the  Building  or the  Premises  other than Tenant
Additions, with reasonable promptness, unless such damage is to the Premises and
occurs  during the last six (6) months of the Term, in which event either Tenant
or Landlord  shall have the right to terminate this Lease as of the date of such
casualty by giving  written  notice thereof to the other within twenty (20) days
after  the date of such  casualty.  Notwithstanding  the  aforesaid,  Landlord's
obligation  to repair  shall be Limited in  accordance  with the  provisions  of
Section 14.1 above.

14.3  RENT ABATEMENT

      Except  for  the  negligence  or  willful  act of  Tenant  or its  agents,
employees,  contractors  or  invitees,  if all or any part of the  Premises  are
rendered  untenantable  by  fire  or  other  casualty  and  this  Lease  is  not
terminated,  Monthly Base Rent and Rent Adjustments shall abate for that part of
the  Premises  which is  untenantable  on a per diem  basis from the date of the
casualty until Landlord has  Substantially  Completed the repair and restoration
work in the Premises which it is required to perform, provided, that as a result
of such  casualty,  Tenant does not occupy the portion of the Premises  which is
untenantable during such period.

14.4  WAIVER OF STATUTORY REMEDIES

      The provisions of this Lease, including this Article Fourteen,  constitute
an express  agreement  between  Landlord  and Tenant with respect to any and all
damage  to, or  destruction  of, the  Premises  or the  Property  or any part of
either, and any Law, including Sections 1932(2),  1933(4),  1941 and 1942 of the
California  Civil Code,  with  respect to any rights or  obligations  concerning
damage or  destruction  shall have no application to this Lease or to any damage
to or destruction of all or any part of the Premises or the Property or any part
of either, and are hereby waived.

                                   ARTICLE 15
                                 EMINENT DOMAIN

15.1  TAKING OF WHOLE OR SUBSTANTIAL PART

      In the event the whole or any  substantial  part of the Building or of the
Premises is taken or condemned by any competent  authority for any public use or
purpose (including a deed given in lieu of condemnation) and is thereby rendered
untenantable,  this Lease  shall  terminate  as of the date title  vests in such
authority, and Monthly Base Rent and Rent Adjustments shall be apportioned as of
the Termination Date. Notwithstanding anything to the contrary herein set forth,
in the event the taking is temporary  (for less than the  remaining  Term of the
Lease),  Landlord may elect  either (i) to  terminate  this Lease or (ii) permit
Tenant to receive the entire  award  attributable  to the Premises in which case
Tenant shall continue to pay Rent and this Lease shall not terminate.

                                       31
<PAGE>

15.2  TAKING OF PART

      In the event a part of the  Building or the Premises is taken or condemned
by any competent  authority (or a deed is delivered in lieu of condemnation) and
this Lease is not terminated,  the Lease shall be amended to reduce or increase,
as the case may be, the  Monthly  Base Rent and  Tenant's  Share to reflect  the
Rentable Area of the Premises or Building,  as the case may be,  remaining after
any such taking or condemnation. Landlord, upon receipt and to the extent of the
award in  condemnation  (or proceeds of sale) shall make  necessary  repairs and
restorations to the Premises (exclusive of Tenant Additions) and to the Building
to the extent  necessary to constitute  the portion of the Building not so taken
or  condemned  as a complete  architectural  and  economically  efficient  unit.
Notwithstanding  the foregoing,  if as a result of any taking, or a governmental
order that the grade of any street or alley  adjacent  to the  Building is to be
changed and such taking or change of grade makes it  necessary  or  desirable to
substantially  remodel  or restore  the  Building  or  prevents  the  economical
operation of the Building, Landlord shall have the right to terminate this Lease
upon ninety (90) days prior written notice to Tenant.

15.3  COMPENSATION

      Landlord  shall be entitled to receive the entire award (or sale proceeds)
from any such taking,  condemnation  or sale without any payment to Tenant,  and
Tenant  hereby  assigns to Landlord  Tenant's  interest,  if any, in such award;
provided,  however, Tenant shall have the right separately to pursue against the
condemning  authority a separate award in respect of the loss, if any, to Tenant
Additions  paid for by Tenant  without any credit or allowance  from Landlord so
long as there is no diminution of Landlord's award as a result.

                                   ARTICLE 16
                                    INSURANCE

16.1  TENANT'S INSURANCE

      Tenant, at Tenant's  expense,  agrees to maintain in force, with a company
or companies  acceptable to Landlord,  during the Term: (a)  Commercial  General
Liability  Insurance  on a primary  basis and without any right of  contribution
from any  insurance  carried by Landlord  covering the Premises on an occurrence
basis against all claims for personal injury,  bodily injury, death and property
damage, including contractual liability covering the indemnification  provisions
in this Lease,  and such insurance  shall be for such limits that are reasonably
required by Landlord from time to time but not less than a combined single limit
of Three Million and No/100 Dollars  ($3,000,000.00);  (b) Workers' Compensation
and Employers'  Liability  Insurance to the extent required by and in accordance
with the Laws of the State of California;  (c) "All Risks" property insurance in
an amount adequate to cover the full replacement  cost of all Tenant  Additions,
equipment, installations,  fixtures and contents of the Premises in the event of
loss;  (d) in the event a motor  vehicle  is to be used by Tenant in  connection
with  its  business  operation  from  the  Premises,   Comprehensive  Automobile
Liability Insurance coverage with limits of not less than One Million and No/100
Dollars  ($1,000,000.00)  combined  single limit coverage  against bodily injury
liability and property damage  liability  arising out of the use by or on behalf
of Tenant, its agents and employees in connection with this Lease, of any owned,
nonowned or hired motor  vehicles;  and (e) such other insurance or coverages as
Landlord reasonably requires.

                                       32
<PAGE>

16.2  FORM OF POLICIES

      Each policy referred to in 16.1 shall satisfy the following  requirements.
Each policy shall (i) name Landlord and the  Indemnitees as additional  insureds
(except  Workers'  Compensation  and Employers'  Liability  Insurance),  (ii) be
issued by one or more responsible insurance companies licensed to do business in
the  State of  California  reasonably  satisfactory  to  Landlord,  (iii)  where
applicable,  provide for  deductible  amounts  satisfactory  to Landlord and not
permit  coinsurance,  (iv) shall provide that such insurance may not be canceled
or amended  without thirty (30) days' prior written notice to the Landlord,  and
(v) each policy of "All-Risks"  property insurance shall provide that the policy
shall not be  invalidated  should the insured  waive in writing prior to a loss,
any or all rights of recovery against any other party for losses covered by such
policies.  Tenant shall  deliver to Landlord,  certificates  of insurance and at
Landlord's request, copies of all policies and renewals thereof to be maintained
by Tenant hereunder,  not less than ten (10) days prior to the Commencement Date
and not less than ten (10) days prior to the expiration date of each policy.

16.3  LANDLORD'S INSURANCE

      Landlord  agrees to purchase and keep in full force and effect  during the
Term hereof,  including any  extensions  or renewals  thereof,  insurance  under
policies  issued by  insurers  of  recognized  responsibility,  qualified  to do
business in the State of California on the Building in amounts not less than the
greater of eighty  (80%)  percent  of the then full  replacement  cost  (without
depreciation) of the Building (above foundations and excluding Tenant Additions)
or an amount sufficient to prevent Landlord from becoming a co-insurer under the
terms of the  applicable  policies,  against fire and such other risks as may be
included in standard forms of all risk coverage insurance  reasonably  available
from  time to time.  Landlord  agrees  to  maintain  in force  during  the Term,
Commercial  General Liability  Insurance  covering the Building on an occurrence
basis against all claims for personal injury, bodily injury, death, and property
damage.  Such  insurance  shall be for a combined  single limit of not less than
Three Million and No/I 00 Dollars ($3,000,000.00). Neither Landlord's obligation
to carry such insurance nor the carrying of such insurance shall be deemed to be
an indemnity by Landlord  with respect to any claim,  liability,  loss,  cost or
expense  due, in whole or in part,  to Tenant's  negligent  acts or omissions or
willful  misconduct.  Without  obligation  to do so,  Landlord  may, in its sole
discretion  from time to time,  carry  insurance in amounts  greater  and/or for
coverage additional to the coverage and amounts set forth above.

16.4  WAIVER OF SUBROGATION

      (a) Landlord  agrees that,  if  obtainable  at no, or minimal,  additional
cost,  and so long as the  same is  permitted  under  the  laws of the  State of
California,  it will  include in its "All Risks"  policies  appropriate  clauses
pursuant to which the  insurance  companies  (i) waive all right of  subrogation
against  Tenant with respect to losses  payable under such policies  and/or (ii)
agree that such policies  shall not be  invalidated  should the insured waive in
writing  prior to a loss any or all  right of  recovery  against  any  party for
losses covered by such policies.

                                       33
<PAGE>

      (b) Tenant agrees to include, if obtainable at no, or minimal,  additional
cost,  and so long as the  same is  permitted  under  the  laws of the  State of
California, in its "All Risks" insurance policy or policies on Tenant Additions,
whether or not removable, and on Tenant's furniture,  furnishings,  fixtures and
other  property   removable  by  Tenant  under  the  provisions  of  this  Lease
appropriate  clauses  pursuant to which the  insurance  company or companies (i)
waive the right of subrogation  against  Landlord  and/or any tenant of space in
the Building with respect to losses payable under such policy or policies and/or
(ii) agree that such  policy or  policies  shall not be  invalidated  should the
insured  waive in writing  prior to a loss any or all right of recovery  against
any party for losses covered by such policy or policies.  If Tenant is unable to
obtain  in such  policy  or  policies  either of the  clauses  described  in the
preceding sentence,  Tenant shall, if legally possible and without necessitating
a change in insurance  carriers,  have Landlord named in such policy or policies
as an additional insured. If Landlord shall be named as an additional insured in
accordance with the foregoing,  Landlord agrees to endorse promptly to the order
of Tenant, without recourse, any check, draft, or order for the payment of money
representing  the proceeds of any such policy or representing  any other payment
growing  out of or  connected  with said  policies,  and  Landlord  does  hereby
irrevocably waive any and all rights in and to such proceeds and payments.

      (c) Provided that  Landlord's  right of full recovery  under its policy or
policies  aforesaid is not adversely  affected or prejudiced  thereby,  Landlord
hereby  waives  any and all  right of  recovery  which it might  otherwise  have
against Tenant, its servants, agents and employees, for loss or damage occurring
to the Real Property and the fixtures,  appurtenances and equipment therein,  to
the extent the same is covered by  Landlord's  insurance,  notwithstanding  that
such loss or damage  may result  from the  negligence  or fault of  Tenant,  its
servants,  agents or employees.  Provided  that Tenant's  right of full recovery
under its aforesaid  policy or policies is not adversely  affected or prejudiced
thereby,  Tenant  hereby  waives  any and all right of  recovery  which it might
otherwise have against Landlord,  its servants,  and employees and against every
other tenant of the Real  Property who shall have  executed a similar  waiver as
set forth in this  Section  16.4 (c) for loss or  damage  to  Tenant  Additions,
whether or not removable, and to Tenant's furniture,  furnishings,  fixtures and
other property removable by Tenant under the provisions hereof to the extent the
same  is   coverable   by  Tenant's   insurance   required   under  this  Lease,
notwithstanding that such loss or damage may result from the negligence or fault
of Landlord,  its servants,  agents or  employees,  or such other tenant and the
servants, agents or employees thereof.

      (d) Landlord and Tenant  hereby agree to advise the other  promptly if the
clauses to be  included  in their  respective  insurance  policies  pursuant  to
subparagraphs  (a) and (b) above  cannot be obtained  on the terms  hereinbefore
provided and  thereafter to furnish the other with a certificate of insurance or
copy of such policies showing the naming of the other as an additional  insured,
as aforesaid. Landlord and Tenant hereby also agree to notify the other promptly
of any  cancellation or change of the terms of any such policy that would affect
such clauses or naming. All such policies which name both Landlord and Tenant as
additional  insureds shall, to the extent obtainable,  contain agreements by the
insurers to the effect that no act or omission of any  additional  insured  will
invalidate the policy as to the other additional insureds.

16.5  NOTICE OF CASUALTY

      Tenant  shall give  Landlord  notice in case of a fire or  accident in the
Premises promptly after Tenant is aware of such event.

                                       34
<PAGE>

                                   ARTICLE 17
                         WAIVER OF CLAIMS AND INDEMNITY

17.1  WAIVER OF CLAIMS

      To the extent permitted by Law, Tenant releases the Indemnitees  from, and
waives all claims for,  damage to person or property  sustained by the Tenant or
any occupant of the Premises or the Property  resulting  directly or  indirectly
from any existing or future condition,  defect, matter or thing in and about the
Premises or the Property or any part of either or any equipment or  appurtenance
therein,  or  resulting  from any  accident  in or  about  the  Premises  or the
Property,  or resulting  directly or  indirectly  from any act or neglect of any
tenant or occupant of the Property or of any other person,  including Landlord's
agents and  servants,  except to the extent  caused by the gross  negligence  or
willful and wrongful act of any of the  Indemnitees.  To the extent permitted by
Law, Tenant hereby waives any consequential damages,  compensation or claims for
inconvenience or loss of business,  rents, or profits as a result of such injury
or damage, whether or not caused by the gross negligence or willful and wrongful
act of any of the  Indemnitees.  If any such damage,  whether to the Premises or
the Property or any part of either,  or whether to Landlord or to other  tenants
in the  Property,  results  from any act or neglect of  Tenant,  its  employees,
servants,  agents,  contractors,  invitees or customers,  Tenant shall be liable
therefor and Landlord may, at Landlord's  option,  repair such damage and Tenant
shall,  upon  demand by  Landlord,  as payment  of  additional  Rent  hereunder,
reimburse  Landlord  within  ten (10) days of demand  for the total cost of such
repairs, in excess of amounts, if any, paid to Landlord under insurance covering
such damages.  Tenant shall not be liable for any such damage caused by its acts
or neglect if Landlord or a tenant has  recovered  the full amount of the damage
from  proceeds of insurance  policies and the  insurance  company has waived its
right of subrogation against Tenant.

17.2  INDEMNITY BY TENANT

      To the extent permitted by Law, Tenant hereby  indemnifies,  and agrees to
protect, defend and hold the Indemnitees harmless,  against any and all actions,
claims, demands,  liability,  costs and expenses,  including attorneys' fees and
expenses  for the  defense  thereof,  arising  from  Tenant's  occupancy  of the
Premises,  from the  undertaking  of any  Tenant  Additions  or  repairs  to the
Premises,  from the conduct of Tenant's  business on the  Premises,  or from any
breach or default on the part of Tenant in the  performance  of any  covenant or
agreement  on the part of Tenant to be  performed  pursuant to the terms of this
Lease, or from any willful act or negligence of Tenant, its agents, contractors,
servants,  employees,  customers  or  invitees,  in or about the Premises or the
Property  or any part of  either.  In case of any action or  proceeding  brought
against the indemnitees by reason of any such claim,  upon notice from Landlord,
Tenant  covenants  to defend  such  action or  proceeding  by counsel  chosen by
Landlord, in Landlord's sole discretion.  Landlord reserves the right to settle,
compromise or dispose of any and all actions,  claims and demands related to the
foregoing  indemnity.  The  foregoing  indemnity  shall not  operate  to relieve
Indemnitees  of liability to the extent such  liability is caused by the willful
and wrongful act of Indemnitees.  Further, the foregoing indemnity is subject to
and shall not diminish any waivers in effect in accordance  with Section 16.4 by
Landlord  or its  insurers to the extent of  amounts,  if any,  paid to Landlord
under its "All-Risks" property insurance.

                                       35
<PAGE>

                                   ARTICLE 18
                             RULES AND REGULATIONS

18.1  RULES

      Tenant agrees for itself and for its subtenants,  employees,  agents,  and
invitees to comply with the rules and  regulations  listed on Exhibit C attached
hereto  and  with all  reasonable  modifications  and  additions  thereto  which
Landlord may make from time to time.

18.2  ENFORCEMENT

      Nothing in this Lease shall be  construed  to impose upon the Landlord any
duty or obligation to enforce the rules and  regulations as set forth on Exhibit
C or as hereafter  adopted,  or the terms,  covenants or conditions of any other
lease as against any other tenant,  and the Landlord  shall not be liable to the
Tenant for violation of the same by any other tenant,  its servants,  employees,
agents, visitors or licensees.  Landlord shall use reasonable efforts to enforce
the rules and  regulations  of the Project in a uniform  and  non-discriminatory
manner.

                                   ARTICLE 19
                           LANDLORD'S RESERVED RIGHTS

      Landlord  shall have the following  rights  exercisable  without notice to
Tenant and without liability to Tenant for damage or injury to persons, property
or business and without being deemed an eviction or  disturbance of Tenant's use
or  possession  of the  Premises  or  giving  rise to any  claim  for  offset or
abatement  of Rent:  (1) to change the  Building's  name or street  address upon
thirty  (30) days' prior  written  notice to Tenant;  (2) to install,  affix and
maintain  all signs on the  exterior  and/or  interior of the  Building;  (3) to
designate  and/or  approve  prior to  installation,  all types of signs,  window
shades,  blinds,  drapes,  awnings  or other  similar  items,  and all  internal
lighting  that  may be  visible  from the  exterior  of the  Premises;  (4) upon
reasonable notice to Tenant,  to display the Premises to prospective  purchasers
and lenders at reasonable  hours at any time during the Term and to  prospective
tenants at reasonable  hours during the last twelve (12) months of the Term; (5)
to grant to any party the exclusive  right to conduct any business or render any
service in or to the Building,  provided such exclusive  right shall not operate
to prohibit Tenant from using the Premises for the purpose permitted  hereunder;
(6) to change the arrangement and/or location of entrances or passageways, doors
and doorways, corridors,  elevators, stairs, washrooms or public portions of the
Building,  and  to  close  entrances,  doors,  corridors,   elevators  or  other
facilities,  provided  that such  action  shall  not  materially  and  adversely
interfere  with  Tenant's  access to the Premises or the  Building;  (7) to have
access for  Landlord  and other  tenants of the  Building to any mail chutes and
boxes located in or on the Premises as required by any  applicable  rules of the
United  States  Post  Office;  and (8) to  close  the  Building  after  Standard
Operating  Hours,  except that Tenant and its  employees  and invitees  shall be
entitled  to  admission  at  all  times,  under  such  regulations  as  Landlord
prescribes for security purposes.

                                       36
<PAGE>

                                   ARTICLE 20
                              ESTOPPEL CERTIFICATE

20.1  IN GENERAL

      Within ten (10) days after request therefor by Landlord,  Mortgagee or any
prospective  mortgagee  or owner,  Tenant  agrees as directed in such request to
execute an  Estoppel  Certificate  in  recordable  form,  binding  upon  Tenant,
certifying (i) that this Lease is unmodified and in full force and effect (or if
there have been modifications, a description of such modifications and that this
Lease as modified is in full force and effect); (ii) the dates to which Rent has
been paid; (iii) that Tenant is in the possession of the Premises if that is the
case;  (iv) that  Landlord  is not in default  under this  Lease,  or, if Tenant
believes Landlord is in default,  the nature thereof in detail;  (v) that Tenant
has no offsets or  defenses to the  performance  of its  obligations  under this
Lease (or if Tenant  believes  there are any  offsets  or  defenses,  a full and
complete  explanation  thereof);  (vi) that the Premises have been  completed in
accordance with the terms and provisions  hereof or the Workletter,  that Tenant
has  accepted the Premises  and the  condition  thereof and of all  improvements
thereto  and has no claims  against  Landlord  or any other  party with  respect
thereto; (vii) that if an assignment of rents or leases has been served upon the
Tenant by a Mortgagee,  Tenant will acknowledge  receipt thereof and agree to be
bound by the provisions  thereof;  (viii) that Tenant will give to the Mortgagee
copies of all notices  required or  permitted to be given by Tenant to Landlord;
and (ix) to any other information reasonably requested.

20.2  ENFORCEMENT

      In the event that Tenant  fails to deliver an Estoppel  Certificate,  then
such  failure  shall be a  Default  for  which  there  shall be no cure or grace
period.  In addition to any other remedy  available  to  Landlord,  Landlord may
impose a charge  equal to $500.00 for each day that  Tenant  fails to deliver an
Estoppel  Certificate and Tenant shall be deemed to have  irrevocably  appointed
Landlord as Tenant's  attorney-in-fact  to execute  and  deliver  such  Estoppel
Certificate.

                                   ARTICLE 21
                              RELOCATION OF TENANT

      At any time after the date of this Lease,  Landlord may substitute for the
Premises, other premises in the Project,  EmeryStation North, or Heritage Square
(the "New Premises"),  in which event the New Premises shall be deemed to be the
Premises for all purposes  under this Lease,  provided that (i) the New Premises
shall be substantially  similar to the Premises in area and configuration;  (ii)
if Tenant is then  occupying  the  Premises,  Landlord  shall pay the actual and
reasonable  expenses of physically moving Tenant,  its property and equipment to
the New  Premises;  (iii)  Landlord  shall give  Tenant not less than sixty (60)
days' prior  written  notice of such  substitution;  and (iv)  Landlord,  at its
expense, shall improve the New Premises with improvements  substantially similar
to those in the Premises at the time of such  substitution,  if the Premises are
then improved.

                                       37
<PAGE>

                                   ARTICLE 22
                               REAL ESTATE BROKERS

      Tenant  represents  that,  except for the broker(s) listed in Section 1.1,
Tenant has not dealt with any real estate  broker,  sales  person,  or finder in
connection with this Lease,  and no such person initiated or participated in the
negotiation  of this  Lease,  or showed the  Premises to Tenant.  Tenant  hereby
agrees to  indemnify,  protect,  defend and hold  Landlord and the  Indemnitees,
harmless from and against any and all liabilities and claims for commissions and
fees arising out of a breach of the foregoing representation. Landlord agrees to
pay any  commission  to which the brokers  listed in Section 1.1 are entitled in
connection  with this Lease pursuant to Landlord's  written  agreement with such
broker.

                                   ARTICLE 23
                              MORTGAGEE PROTECTION

23.1  SUBORDINATION AND ATTORNMENT

      This Lease is and shall be expressly  subject and subordinate at all times
to (i) any ground or  underlying  lease of the Real  Property,  now or hereafter
existing, and all amendments, extensions, renewals and modifications to any such
lease,  and (ii)  the  lien of any  mortgage  or  trust  deed  now or  hereafter
encumbering fee title to the Real Property and/or the leasehold estate under any
such  lease,  and  all  amendments,   extensions,   renewals,  replacements  and
modifications  of such  mortgage  or trust deed  and/or the  obligation  secured
thereby,  unless such ground lease or ground lessor, or mortgage,  trust deed or
Mortgagee, expressly provides or elects that the Lease shall be superior to such
lease  or  mortgage  or  trust  deed.  If any such  mortgage  or  trust  deed is
foreclosed  (including  any sale of the  Real  Property  pursuant  to a power of
sale),  or if any such lease is  terminated,  upon  request of the  Mortgagee or
ground  lessor,  as the case may be, Tenant shall attorn to the purchaser at the
foreclosure  sale or to the ground lessor under such lease,  as the case may be,
provided,  however,  that such purchaser or ground lessor shall not be (i) bound
by any payment of Rent for more than one month in advance except payments in the
nature of security for the performance by Tenant of its  obligations  under this
Lease;  (ii) subject to any offset,  defense or damages arising out of a default
of any obligations of any preceding Landlord; or (iii) bound by any amendment or
modification  of this Lease made without the written consent of the Mortgagee or
ground lessor; or (iv) liable for any security deposits not actually received in
cash  by  such  purchaser  or  ground  lessor.   This  subordination   shall  be
self-operative and no further certificate or instrument of subordination need be
required  by any such  Mortgagee  or  ground  lessor.  In  confirmation  of such
subordination, however, Tenant shall execute promptly any reasonable certificate
or instrument  that  Landlord,  Mortgagee or ground  lessor may request.  Tenant
hereby  constitutes  Landlord  as  Tenant's  attorney-in-fact  to  execute  such
certificate or instrument  for and on behalf of Tenant upon Tenant's  failure to
do so within  fifteen  (15) days of a request  to do so.  Upon  request  by such
successor in interest,  Tenant shall execute and deliver reasonable  instruments
confirming the attornment provided for herein.

                                       38
<PAGE>

23.2  MORTGAGEE PROTECTION

      Tenant  agrees to give any  Mortgagee or ground  lessor,  by registered or
certified  mail,  a copy of any notice of default  served  upon the  Landlord by
Tenant, provided that prior to such notice Tenant has received notice (by way of
service on Tenant of a copy of an assignment of rents and leases,  or otherwise)
of the address of such Mortgagee or ground lessor. Tenant further agrees that if
Landlord  shall have failed to cure such default within the time provided for in
this Lease,  then the Mortgagee or ground lessor shall have an additional thirty
(30) days after receipt of notice  thereof  within which to cure such default or
if such default cannot be cured within that time,  then such  additional  notice
time as may be  necessary,  if,  within such thirty (30) days,  any Mortgagee or
ground lessor has commenced and is diligently pursuing the remedies necessary to
cure such default  (including  commencement of foreclosure  proceedings or other
proceedings to acquire  possession of the Real Property,  if necessary to effect
such cure).  Such period of time shall be  extended by any period  within  which
such  Mortgagee or ground lessor is prevented  from  commencing or pursuing such
foreclosure  proceedings or other proceedings to acquire  possession of the Real
Property by reason of Landlord's bankruptcy. Until the time allowed as aforesaid
for Mortgagee or ground  lessor to cure such defaults has expired  without cure,
Tenant shall have no right to, and shall not, terminate this Lease on account of
default.  This Lease may not be  modified or amended so as to reduce the Rent or
shorten  the Term,  or so as to  adversely  affect in any other  respect  to any
material extent the rights of the Landlord,  nor shall this Lease be canceled or
surrendered,  without the prior written consent, in each instance, of the ground
lessor or the Mortgagee.

                                   ARTICLE 24
                                     NOTICES

      (a) All notices, demands or requests provided for or permitted to be given
pursuant  to this Lease must be in writing  and shall be  personally  delivered,
sent by Federal Express or other reputable  overnight courier service, or mailed
by first class,  registered  or certified  United  States mail,  return  receipt
requested, postage prepaid.

      (b) All  notices,  demands or requests  to be sent  pursuant to this Lease
shall be deemed to have been  properly  given or served by delivering or sending
the same in  accordance  with this Section,  addressed to the parties  hereto at
their respective addresses listed in Sections 1.1.

      (c) Notices, demands or requests sent by mall or overnight courier service
as  described  above shall be  effective  upon  deposit in the mail or with such
courier  service.  However,  the time  period  in which a  response  to any such
notice,  demand or request  must be given shall  commence to run from (i) in the
case of  delivery  by mail,  the date of receipt  on the  return  receipt of the
notice,  demand or  request  by the  addressee  thereof,  or (ii) in the case of
delivery by Federal  Express or other  overnight  courier  service,  the date of
acceptance of delivery by an employee,  officer, director or partner of Landlord
or Tenant.  Rejection  or other  refusal to accept or the  inability  to deliver
because of changed  address of which no notice was given, as indicated by advice
from  Federal  Express or other  overnight  courier  service  or by mail  return
receipt,  shall be deemed to be  receipt  of  notice,  demand or  request  sent.
Notices may also be served by personal  service  upon any  officer,  director or
partner of Landlord or Tenant, and shall be effective upon such service.

                                       39
<PAGE>

      (d) By giving to the other party at least thirty (30) days written  notice
thereof,  either party shall have the right from time to time during the term of
this Lease to change their respective addresses for notices, statements, demands
and  requests,  provided  such new address  shall be within the United States of
America.

                                   ARTICLE 25
                                  MISCELLANEOUS

25.1  LATE CHARGES

      (a) All  payments  required  hereunder  (other than the Monthly Base Rent,
Rent  Adjustments,   and  Rent  Adjustment  Deposits,  which  shall  be  due  as
hereinbefore  provided)  to  Landlord  shall be paid  within ten (10) days after
Landlord's demand therefor.  All such amounts (including Monthly Base Rent, Rent
Adjustments, and Rent Adjustment Deposits) not paid when due shall bear interest
from the date due until the date paid at the Default  Rate in effect on the date
such payment was due.

      (b) In the event  Tenant  is more  than  five (5) days late in paying  any
installment  of Rent due under  this  Lease,  Tenant  shall pay  Landlord a late
charge equal to five percent (5%) of the  delinquent  installment  of Rent.  The
parties agree that (i) such  delinquency  will cause Landlord to incur costs and
expenses not contemplated herein, the exact amount of which will be difficult to
calculate,  including  the cost and expense that will be incurred by Landlord in
processing  each  delinquent  payment of rent by Tenant,  (b) the amount of such
late charge represents a reasonable estimate of such costs and expenses and that
such late  charge  shall be paid to  Landlord  for each  delinquent  payment  in
addition to all Rent otherwise due hereunder. The parties further agree that the
payment of late charges and the payment of interest provided for in subparagraph
(a) above are  distinct  and  separate  from one  another in that the payment of
interest is to compensate Landlord for its inability to use the money improperly
withheld by Tenant,  while the payment of late charges is to compensate Landlord
for its additional administrative expenses in handling and processing delinquent
payments.

      (c) Payment of interest at the Default Rate and/or of late  charges  shall
not  excuse  or cure any  default  by Tenant  under  this  Lease,  nor shall the
foregoing  provisions of this Article or any such payments prevent Landlord from
exercising  any right or remedy  available to Landlord upon Tenant's  failure to
pay Rent when due, including the right to terminate this Lease.

25.2  NO JURY TRIAL; VENUE; JURISDICTION

      Each  party  hereto  (which  includes  any  assignee,  successor,  heir or
personal  representative of a party) shall not seek a jury trial,  hereby waives
trial by jury, and hereby further waives any objection to venue in the County in
which the Project is located,  and agrees and consents to personal  jurisdiction
of the  courts of the  State of  California,  in any  action  or  proceeding  or
counterclaim  brought  by any  party  hereto  against  the  other on any  matter
whatsoever  arising  out  of or in  any  way  connected  with  this  Lease,  the
relationship of Landlord and Tenant,  Tenant's use or occupancy of the Premises,
or any claim of injury or damage,  or the  enforcement  of any remedy  under any
statute,  emergency or otherwise,  whether any of the foregoing is based on this
Lease or on tort law. No party will seek to consolidate any such action in which
a jury has been waived with any other action in which a jury trial cannot or has
not been waived.  It is the intention of the parties that these provisions shall
be subject to no  exceptions.  By execution of this Lease the parties agree that
this  provision  may be filed by any party hereto with the clerk or judge before
whom any action is instituted, which filing shall constitute the written consent
to a waiver of jury trial pursuant to and in accordance  with Section 631 of the
California  Code of Civil  Procedure.  No party  has in any way  agreed  with or
represented  to any other party that the  provisions of this Section will not be
fully  enforced in all  instances.  The provisions of this Section shall survive
the expiration or earlier termination of this Lease.

                                       40
<PAGE>

25.3  DEFAULT UNDER OTHER LEASE

      Tenant agrees for Tenant and Tenant's  heirs,  executors,  administrators,
successors  and assigns and all persons  claiming under or through  Tenant,  and
this Lease is made and accepted  upon and subject to the  following  conditions:
that there shall be no  discrimination  against or  segregation of any person or
group of persons  on  account of race,  color,  creed,  religion,  sex,  marital
status,  national  origin  or  ancestry  (whether  in the  leasing,  subleasing,
transferring,  use, occupancy, tenure or enjoyment of the Premises or otherwise)
nor shall Tenant or any person  claiming  under or through  Tenant  establish or
permit any such  practice or practices of  discrimination  or  segregation  with
reference  to the use or  occupancy  of the  Premises  by Tenant  or any  person
claiming through or under Tenant.

25.4  OPTION

      This  Lease  shall not  become  effective  as a lease or  otherwise  until
executed and delivered by both Landlord and Tenant.  The submission of the Lease
to Tenant does not constitute a reservation  of or option for the Premises,  but
when executed by Tenant and delivered to Landlord, the Lease shall constitute an
irrevocable  offer by  Tenant  in  effect  for  fifteen  (15)  days to lease the
Premises on the terms and conditions herein contained.

25.5  TENANT AUTHORITY

      Tenant  represents and warrants to Landlord that it has full authority and
power to enter into and  perform  its  obligations  under this  Lease,  that the
person  executing this Lease is fully empowered to do so, and that no consent or
authorization  is  necessary  from any third  party.  Landlord  may request that
Tenant provide Landlord evidence of Tenant's authority.

25.6  ENTIRE AGREEMENT

      This Lease,  the Exhibits  attached hereto and the Workletter  contain the
entire agreement  between Landlord and Tenant  concerning the Premises and there
are no other agreements, either oral or written, and no other representations or
statements, either oral or written, on which Tenant has relied. This Lease shall
not be modified except by a writing executed by Landlord and Tenant.

25.7  MODIFICATION OF LEASE FOR BENEFIT OF MORTGAGEE

      If Mortgagee of Landlord requires a modification of this Lease which shall
not  result  in any  increased  cost  or  expense  to  Tenant  or in  any  other
substantial  and  adverse  change  in  the  rights  and  obligations  of  Tenant
hereunder, then Tenant agrees that the Lease may be so modified.

                                       41
<PAGE>

25.8  EXCULPATION

      Tenant agrees,  on its behalf and on behalf of its successors and assigns,
that any liability or obligation under this Lease shall only be enforced against
Landlord's  equity  interest  in the  Property  up to a maximum of Five  Million
Dollars  ($5,000,000.00)  and  in no  event  against  any  other  assets  of the
Landlord,  or  Landlord's  officers  or  directors  or  partners,  and  that any
liability of Landlord  with respect to this Lease shall be so limited and Tenant
shall not be entitled to any judgment in excess of such amount.

25.9  ACCORD AND SATISFACTION

      No payment by Tenant or receipt by  Landlord  of a lesser  amount than any
installment  or  payment of Rent due shall be deemed to be other than on account
of the amount due,  and no  endorsement  or statement on any check or any letter
accompanying  any  check or  payment  of Rent  shall be  deemed  an  accord  and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's  right to recover the balance of such  installment or payment of Rent
or pursue  any other  remedies  available  to  Landlord.  No receipt of money by
Landlord from Tenant after the  termination  of this Lease or Tenant's  right of
possession of the Premises shall reinstate, continue or extend the Term. Receipt
or acceptance of payment from anyone other than Tenant, including an assignee of
Tenant,  is not a waiver of any breach of Article  Ten,  and Landlord may accept
such payment on account of the amount due without  prejudice to Landlord's right
to pursue any remedies available to Landlord.

25.10 LANDLORD'S OBLIGATIONS ON SALE OF BUILDING

      In the event of any sale or other transfer of the Building, Landlord shall
be entirely  freed and relieved of all  agreements  and  obligations of Landlord
hereunder  accruing or to be performed  after the date of such sale or transfer,
and any  remaining  liability  of Landlord  with  respect to this Lease shall be
limited to the dollar amount  specified in Section 25.08 and Tenant shall not be
entitled to any judgment in excess of such amount. Landlord shall have the right
to assign this Lease to an entity  comprised  of the  principals  of Landlord or
affiliates  of  such  entities.  Upon  such  assignment  and  assumption  of the
obligations of Landlord hereunder, Landlord shall be entirely freed and relieved
of all obligations hereunder.

25.11 BINDING EFFECT

      Subject to the provisions of Article Ten, this Lease shall be binding upon
and inure to the  benefit of  Landlord  and Tenant and their  respective  heirs,
legal representatives, successors and permitted assigns.

25.12 CAPTIONS

      The  Article and Section  captions  in this Lease are  inserted  only as a
matter of convenience  and in no way define,  limit,  construe,  or describe the
scope or intent of such Articles and Sections.

                                       42
<PAGE>

25.13 TIME; APPLICABLE LAW; CONSTRUCTION

      Time is of the  essence of this Lease and each and all of its  provisions.
This  Lease  shall be  construed  in  accordance  with the Laws of the  State of
California.  If more than one person signs this Lease as Tenant, the obligations
hereunder imposed shall be joint and several. If any term, covenant or condition
of this Lease or the application thereof to any person or circumstance shall, to
any extent,  be invalid or  unenforceable,  the remainder of this Lease,  or the
application  of such term,  covenant or  condition  to persons or  circumstances
other than those as to which it is held invalid or  unenforceable,  shall not be
affected  thereby and each item,  covenant or  condition  of this Lease shall be
valid and be enforced to the fullest extent permitted by Law.  Wherever the term
"including" or "includes" is used in this Lease,  it shall have the same meaning
as if followed by the phrase "but not limited  to". The language in all parts of
this Lease shall be construed  according to its normal and usual meaning and not
strictly for or against either Landlord or Tenant.

25.14 ABANDONMENT

      In the event  Tenant  vacates or abandons the Premises but is otherwise in
compliance with all the terms,  covenants and conditions of this Lease, Landlord
shall (i) have the right to enter into the  Premises  in order to show the space
to prospective  tenants,  (ii) have the right to reduce the services provided to
Tenant pursuant to the terms of this Lease to such levels as Landlord reasonably
determines to be adequate services for an unoccupied premises,  and (iii) during
the last six (6) months of the Term,  have the right to prepare the Premises for
occupancy  by  another  tenant  upon  the  end of  the  Term.  Tenant  expressly
acknowledges  that in the absence of written notice  pursuant to Section 11.2(b)
or pursuant to California Civil Code Section 1951.3  terminating  Tenant's right
to  possession,  none of the  foregoing  acts of  Landlord  or any  other act of
Landlord  shall  constitute a termination  of Tenant's right to possession or an
acceptance of Tenant's  surrender of the Premises,  and the Lease shall continue
in effect.

25.15 LANDLORD'S RIGHT TO PERFORM TENANT'S DUTIES

      If Tenant  fails  timely to perform any of its duties  under this Lease or
the  Workletter,  Landlord  shall  have the right (but not the  obligation),  to
perform such duty on behalf and at the expense of Tenant without prior notice to
Tenant,  and all sums  expended or expenses  incurred by Landlord in  performing
such duty  shall be deemed to be  additional  Rent under this Lease and shall be
due and payable upon demand by Landlord.

25.16 SECURITY SYSTEM

      Landlord shall not be obligated to provide or maintain any security patrol
or security  system.  Landlord shall not be  responsible  for the quality of any
such patrol or system which may be provided hereunder or for damage or injury to
Tenant, its employees, invitees or others due to the failure, action or inaction
of such patrol or system. Notwithstanding the foregoing, Tenant may, at Tenant's
sole cost and expense, utilize the existing central building security system and
install card-controlled door(s) to and within the Premises, provided that Tenant
comply with the provisions of Article 9 of this Lease.

                                       43
<PAGE>

25.17 NO LIGHT, AIR OR VIEW EASEMENTS

      Any  diminution  or shutting  off of light,  air or view by any  structure
which may be  erected on lands of or  adjacent  to the  Project  shall in no way
affect this Lease or impose any liability on Landlord.

25.18 RECORDATION

      Neither  this Lease,  nor any notice nor  memorandum  regarding  the terms
hereof, shall be recorded by Tenant. Any such unauthorized  recording shall be a
Default  for which  there  shall be no cure or grace  period.  Tenant  agrees to
execute and acknowledge, at the request of Landlord, a memorandum of this Lease,
in recordable form.

25.19 SURVIVAL

      The  waivers of the right of jury  trial,  the other  waivers of claims or
rights,  the  releases  and the  obligations  of  Tenant  under  this  Lease  to
indemnify,  protect,  defend and hold harmless Landlord and/or Indemnitees shall
survive the  expiration  or  termination  of this Lease,  and so shall all other
obligations or agreements which by their terms survive expiration or termination
of the Lease.

25.20 RIDERS

      All Riders  attached hereto and executed both by Landlord and Tenant shall
be deemed to be a part hereof and hereby incorporated herein.

                         [Signatures on Following Page]

                                       44
<PAGE>

      IN WITNESS WHEREOF,  this Lease has been executed as of the date set forth
in Section 1.1 hereof.

TENANT:                                   LANDLORD:
BIONOVO, INC.,                            EMERY STATION JOINT VENTURE, LLC,
a Delaware corporation                    a California limited liability company
By:                    /s/                By:                    /s/
   -------------------------------           --------------------------------
Print Name:                               Print Name:
           -----------------------                   ------------------------
Its:                                      Its:
    ------------------------------             ------------------------------
LIGHTEN UP ENTERPRISES                    Date:
INTERNATIONAL, INC.                             -----------------------------

a Nevada corporation
By:                    /s/
   -----------------------
Print Name:
           ---------------------
Its:
     ---------------------------
Date:
      --------------------------

                                       45
<PAGE>

                                    EXHIBIT A

                                PLAN OF PREMISES
                                ----------------

                        [Graphic of floorplan attached]

                                       A-1

<PAGE>

                                    EXHIBIT B

                              WORKLETTER AGREEMENT
                                   (TURN-KEY)

      1. Defined Terms. Capitalized Terms used in this Workletter shall have the
same  meanings set forth in the Lease except as otherwise  specified  herein and
except for Terms capitalized in the ordinary course of punctuation. For purposes
of this Workletter the following capitalized terms have the following meanings:

            1.1. "Design  Documents"  means the layout plans and  specifications
for the real property improvements to be constructed by Landlord in the Premises
which are the final  product of the  preliminary  space  planning  and which (i)
include,  among other  things,  the space plan,  attached to this  Workletter as
Schedule 1 (or as agreed by Landlord and  Tenant);  and (ii) comply with all Law
as  applicable  and as  interpreted  at the time of  construction  of the Tenant
Improvements (defined below), including, all building codes and the ADA (defined
in the Lease);

            1.2. "Construction Drawings" means the final architectural plans and
specifications,  and engineering plans and specifications, for the real property
improvements to be constructed by Landlord in the Premises in sufficient  detail
to be submitted for governmental  approvals and building permits and to serve as
the detailed  construction  drawings and specifications for the contractor,  and
shall be based upon and consistent with the Design Documents;

            1.3. "Tenant  Improvements" means all real property  improvements to
be constructed by Landlord as shown on the Construction Drawings, as they may be
modified as provided herein; and

            1.4.  "Landlord Work" means the construction and installation of the
Tenant Improvements.

      2. Design Matters.

            2.1.   Landlord,   through  its  architects  and/or  space  planners
("Landlord's  Architect"),  has prepared the Design Documents which are attached
to this Work Letter as Schedule 1 and which have been approved by Tenant.

            2.2.  Landlord  through its Architect shall prepare the Construction
Drawings  which shall be the logical  extension  of, and  consistent  with,  the
Design Documents.

            2.2.  Tenant  shall  be  responsible  for  the  suitability  for the
Tenant's   needs  and  business  of  the  design  and  function  of  all  Tenant
Improvements.  Tenant,  at its own  expense,  shall devote such time and provide
such instructions as may be necessary to enable Landlord to complete the matters
described  below,  and  Tenant  shall  approve  such  matters,  within the times
described below:

                                      B-1
<PAGE>

                  (a) Tenant's  written  approval of the  Construction  Drawings
within 7 days after  submittal.  Tenant  cannot  withhold  its  approval  of the
Construction  Drawings  so long as they  are in  material  conformance  with the
Design Documents.

      3. Turn-Key Construction; Tenant Improvement Costs.

            3.1. Turn-key Construction.

                  (a)  Landlord,  through its  contractor,  shall  complete  the
construction  of the Tenant  Improvements  in accordance  with the  Construction
Drawings  in a  good  and  workmanlike  manner  at its  sole  cost  and  expense
("Turn-key Construction Costs").

                  (b)   Landlord   shall  retain  the  phone  and  data  cabling
("Cabling") from the prior occupant in the Premises (except for any Cabling that
needs to be removed per the Design Documents.  Landlord makes no representations
or warranties regarding the condition, quality, serviceability or utility of the
Cabling.

            3.2. Turn-Key  Construction  Costs. The Turn-key  Construction Costs
shall include only:

                  (a) The actual  costs of  Landlord's  Architect  and any other
third party consultants  retained by Landlord in connection with the preparation
of Design Documents and Constructions Drawings, and engineering Costs associated
with completion of the State of California energy utilization calculations under
Title 24 legislation;

                  (b) All  third  party  costs  of  obtaining  from  the City of
Emeryville and any other governmental authority, approvals, building permits and
occupancy permits, if any;

                  (c) All  third  party  costs of  interior  design  and  finish
schedule plans and specifications including as-built drawings; and

                  (d) All actual costs of procuring, installing and constructing
the Tenant  improvements,  including:  (1) the construction fee for overhead and
profit and the cost of all on-site supervisory and administrative staff, office,
equipment and temporary  services rendered or provided by Landlord's  contractor
in connection with construction of the Tenant Improvements; and (ii) the cost of
any services or utilities made available by Landlord; and (iii) the replacement,
as necessary, of any window blinds, as reasonably determined by Landlord.

            3.3.  Exclusions  from  Turn-key  Construction  Costs.  The Turn-key
Construction Costs shall not include:

                  (a)  Tenant  shall  be  responsible  for any  intercom/callbox
devices for Tenant's customers.

                  (b) any fees payable to Landlord's Architect if it is required
by Tenant to redesign any portion of the Tenant Improvements  following Tenant's
approval of the Construction Drawings;

                                      B-2
<PAGE>

                  (c) all costs in connection  with any approved Change Order in
accordance with the provisions of this Workletter;

                  (d) any costs of procuring or  installing  in the Premises any
trade fixtures, equipment, furniture, furnishings,  telephone equipment, cabling
for any of the foregoing, or other personal property ("Personal Property") to be
used in the Premises by Tenant, the cost of which shall be paid by Tenant; or,

                  (e) any  costs or  expenses  of any  consultants  retained  by
Tenant with respect to design,  procurement,  installation  or  construction  of
improvements  or  installations,  whether  real or  personal  property,  for the
Premises.

            3.4.  Limitations  of  Landlord's   Obligations.   Upon  Substantial
Completion of the Tenant Improvements, Landlord shall have no further obligation
to construct improvements or construct modifications to or changes in the Tenant
Improvements,  except to complete the punchlist of Landlord Work remaining to be
completed or correct any part thereof not in  compliance  with the  Construction
Drawings  and any  approved  modifications  thereof,  as  provided in the Lease.
Notwithstanding  anything  to the  contrary  contained  herein,  Landlord  shall
warrant  the  Tenant  Improvements  for a  period  of nine (9)  months  from the
Commencement  Date and  shall  pass  through  all  manufacturers  warranties  on
equipment or other items installed in the Premises as part of Landlord's Work.

      4. Changes. If Tenant shall request any change,  addition or alteration in
the  approved  Construction  Drawings,  Landlord  shall  promptly  give Tenant a
written  estimate of (a) the cost of  engineering  and design  services  and the
construction  contractor services to prepare a change order (the "Change Order")
in accordance with such request,  (b) the cost of work to be performed  pursuant
to such Change Order,  and (c) the time delay expected because of such requested
Change Order.  Within three (3) business days following  Tenant's receipt of the
foregoing written  estimate,  Tenant shall notify Landlord in writing whether it
approves such written estimate.  If Tenant approves such written estimate and if
such cost is in excess  of  Landlord's  estimate  of the  Turn-key  Construction
Costs,  Tenant shall  accompany  such approval with a good check made payable to
the order of  Landlord  in the amount of the  estimated  cost of  preparing  the
Change Order and performing the work thereto, and the foregoing shall constitute
Landlord's authorization to proceed. If such written authorization, and check if
required,  are not  received by  Landlord  within  such three (3)  business  day
period,  Landlord  shall not be obligated to prepare the Change Order or perform
any work in connection therewith.

      5. Tenant Delay. If the Substantial  Completion of the Tenant Improvements
in the  Premises is delayed  due to Tenant  Delay  (defined in the Lease),  then
Tenant shall be  responsible  for all costs and any expenses  occasioned by such
delay,  including any costs and expenses  attributable  to increases in labor or
materials, and the provisions of Article Two of the Lease shall apply.

      6. Entry by Tenant.  Tenant may, with Landlord's  written  consent,  which
will not  unreasonably be withheld,  enter the Premises during  construction and
prior to the  Commencement  Date for the  Premises  solely  for the  purpose  of
installing  Tenant's  personal  property and equipment and readying the Premises
for its occupancy as long as such entry will not  materially  interfere with the
timely and orderly  construction  and  completion of the Premises.  Tenant shall
notify  Landlord of its desired time(s) of entry and shall submit for Landlord's
approval  the  scope  of  the  work  to be  performed  and  the  name(s)  of the
contractor(s)  who will perform such work. Such work and such contractors  shall
be subject to  Landlord's  approval  in the same  manner as for work  subject to
Section 9.1(a) of the Lease. Such entry shall be without payment of Base Monthly
Rent  or Rent  Adjustments,  but  such  entry  and all  acts  and  omissions  in
connection  with it are subject to and governed by all other  provisions  of the
Lease, including Tenant's  indemnification  obligations,  insurance obligations,
obligations under Article Seven and the provisions of Section 9.02.

                                      B-3
<PAGE>

      7.  Force  and  Effect.  The  terms  and  conditions  of  this  Workletter
supplement  the Lease and shall be  construed  to be a part of the Lease and are
incorporated in the Lease. Without limiting the generality of the foregoing, any
default by any party hereunder shall have the same force and effect as a default
under the Lease.  Should any inconsistency arise between this Workletter and the
Lease as to the specific  matters that are the subject of this  Workletter,  the
terms and conditions of this Workletter shall control.

                                      B-4
<PAGE>

                                   SCHEDULE 1

[Graphic of floorplan attached]

                                      B-5
<PAGE>

                                    EXHIBIT C

                              RULES AND REGULATIONS
                              ---------------------

      1.  No  sidewalks,  entrance,  passages,  courts,  elevators,  vestibules,
stairways,  corridors or halls shall be  obstructed  or  encumbered by Tenant or
used for any purpose  other than ingress and egress to and from the Premises and
if the Premises  are  situated on the ground floor of the Project,  Tenant shall
further, at Tenant's own expense,  keep the sidewalks and curb directly in front
of the Premises clean and free from rubbish.

      2. No awning or other projection shall be attached to the outside walls or
windows  of the  Project  without  the prior  written  consent of  Landlord.  No
curtains,  blinds, shades, drapes or screens shall be attached to or hung in, or
used in connection  with any window or door of the  Premises,  without the prior
written  consent of  Landlord.  Such  awnings,  projections,  curtains,  blinds,
shades,  drapes,  screens and other fixtures must be of a quality, type, design,
color,  material  and  general  appearance  approved by  Landlord,  and shall be
attached in the manner  approved by  Landlord.  All  lighting  fixtures  hung in
offices or spaces  along the  perimeter  of the  Premises  must be of a quality,
type, design, bulb color, size and general appearance approved by Landlord.

      3. No sign, advertisement,  notice,  lettering,  decoration or other thing
shall be exhibited,  inscribed,  painted or affixed by Tenant on any part of the
outside or inside of the Premises or of the Project,  without the prior  written
consent of Landlord.  In the event of the  violation of the foregoing by Tenant,
Landlord  may remove  same  without  any  liability,  and may charge the expense
incurred by such removal to Tenant.

      4. The sashes,  sash doors,  skylights,  windows and doors that reflect or
admit light or air into the halls,  passageways  or other  public  places in the
Project  shall not be covered or  obstructed  by Tenant,  nor shall any bottles,
parcels  or other  articles  be  placed  on the  window  sills or in the  public
portions of the Project.

      5. No showcases or other  articles  shall be put in front of or affixed to
any part of the exterior of the Project,  nor placed in public portions  thereof
without the prior written consent of Landlord.

      6. The water and wash  closets and other  plumbing  fixtures  shall not be
used for any purposes other than those for which they were  constructed,  and no
sweepings,  rubbish,  rags or other  substances  shall be  thrown  therein.  All
damages  resulting  from any misuse of the fixtures  shall be borne by Tenant to
the extent that Tenant or Tenant's  agents,  servants,  employees,  contractors,
visitors or licensees shall have caused the same.

      7. Tenant shall not mark, paint,  drill into or in any way deface any part
of the Premises or the Project.  No boring,  cutting or stringing of wires shall
be permitted, except with the prior written consent of Landlord, and as Landlord
may direct.

      8. No animal or bird of any kind shall be brought into or kept in or about
the Premises or the Project, except seeing-eye dogs or other seeing-eye animals.

                                      C-1
<PAGE>

      9. Prior to leaving the Premises  for the day,  Tenant shall draw or lower
window coverings and extinguish all lights.

      10.  Tenant  shall  not  make,  or  permit  to be made,  any  unseemly  or
disturbing  noises or disturb or interfere  with  occupants  of the Project,  or
neighboring  buildings or premises,  or those having business with them.  Tenant
shall not throw  anything  out of the doors,  windows or  skylights  or down the
passageways.

      11.  Neither  Tenant  nor any of  Tenant's  agents,  servants,  employees,
contractors,  visitors  or  licensees  shall at any time  bring or keep upon the
Premises any flammable, combustible or explosive fluid, chemical or substance.

      12. No additional  locks,  bolts or mail slots of any kind shall be placed
upon any of the doors or  windows  by  Tenant,  nor shall any  change be made in
existing locks or the mechanism  thereof.  Tenant must,  upon the termination of
the tenancy,  restore to Landlord all keys of stores,  offices and toilet rooms,
either  furnished to, or otherwise  procured by Tenant,  and in the event of the
loss of any keys so furnished, Tenant shall pay to Landlord the cost thereof.

      13.  All  removals,  or the  carrying  in or out  of any  safes,  freight,
furniture,  construction  material,  bulky  matter  or  heavy  equipment  of any
description  must take place  during the hours  which  Landlord or its agent may
determine from time to time. Landlord reserves the right to prescribe the weight
and position of all safes, which must be placed upon two-inch thick plank strips
to distribute the weight.  The moving of safes,  freight,  furniture,  fixtures,
bulky matter or heavy equipment of any kind must be made upon previous notice to
the  Building  Manager and in a manner and at times  prescribed  by him, and the
persons  employed  by  Tenant  for such work are  subject  to  Landlord's  prior
approval.  Landlord  reserves  the right to inspect all safes,  freight or other
bulky  articles to be brought  into the Project and to exclude  from the Project
all safes,  freight or other bulky articles which violate any of these Rules and
Regulations or the Lease of which these Rules and Regulations are a part.

      14.  Tenant  shall  not  purchase  spring  water,  towels,  janitorial  or
maintenance  or other like  service  from any company or persons not approved by
Landlord. Landlord shall approve a sufficient number of sources of such services
to provide Tenant with a reasonable selection, but only in such instances and to
such extent as Landlord in its judgment shall consider  consistent with security
and proper operation of the Project.

      15.  Landlord shall have the right to prohibit any advertising or business
conducted by Tenant referring to the Project which, in Landlord's opinion, tends
to impair the  reputation  of the Project or its  desirability  as a first class
building for offices and/or  commercial  services and upon notice from Landlord,
Tenant shall refrain from or discontinue such advertising.

      16.  Landlord  reserves the right to exclude from the Project  between the
hours of 6:00 p.m.  and 8:00 am.  Monday  through  Friday,  after  1:00 p.m.  on
Saturdays  and at all hours Sundays and legal  holidays,  all persons who do not
present a pass to the Project issued by Landlord. Landlord may furnish passes to
Tenant so that Tenant may validate and issue same.  Tenant shall  safeguard said
passes and shall be responsible  for all acts of persons in or about the Project
who possess a pass issued to Tenant.

                                      C-2
<PAGE>

      17. Tenant's  contractors shall, while in the Premises or elsewhere in the
Project,  be subject to and under the  control  and  direction  of the  Building
Manager (but not as agent or servant of said Building Manager or of Landlord).

      18. If the Premises is or becomes  infested with vermin as a result of the
use or any misuse or neglect of the  Premises by Tenant,  its agents,  servants,
employees,  contractors,  visitors  or  licensees,  Tenant  shall  forthwith  at
Tenant's  expense  cause  the same to be  exterminated  from time to time to the
satisfaction of Landlord and shall employ such licensed  exterminators  as shall
be approved in writing in advance by Landlord.

      19. The  requirements of Tenant will be attended to only upon  application
at the office of the Project. Project personnel shall not perform any work or do
anything outside of their regular duties unless under special  instructions from
the office of the Landlord.

      20. Canvassing,  soliciting and peddling in the Project are prohibited and
Tenant shall cooperate to prevent the same.

      21. No water cooler,  air  conditioning  unit or system or other apparatus
shall be installed or used by Tenant without the written consent of Landlord.

      22. There shall not be used in any premises, or in the public halls, plaza
areas,  lobbies, or elsewhere in the Project,  either by Tenant or by jobbers or
others,  in the delivery or receipt of merchandise,  any hand trucks or dollies,
except those equipped with rubber tires and sideguards.

      23. Tenant, Tenant's agents, servants, employees, contractors,  licensees,
or visitors shall not park any vehicles in any driveways,  service entrances, or
areas posted "No Parking" and shall comply with any other  parking  restrictions
imposed by Landlord from time to time.

      24. Tenant shall install and maintain,  at Tenant's sole cost and expense,
an adequate visibly marked (at all times properly operational) fire extinguisher
next to any  duplicating  or  photocopying  machine  or similar  heat  producing
equipment, which may or may not contain combustible material, in the Premises.

      25. Tenant shall keep its window coverings closed during any period of the
day when the sun is shining directly on the windows of the Premises.

      26.  Tenant  shall not use the name of the Project  for any purpose  other
than as the address of the business to be  conducted by Tenant in the  Premises,
nor shall Tenant use any picture of the Project in its  advertising,  stationery
or in any  other  manner  without  the prior  written  permission  of  Landlord.
Landlord expressly reserves the right at any time to change said name without in
any manner being liable to Tenant therefor.

      27.  Tenant  shall not  prepare  any food nor do any  cooking,  operate or
conduct any  restaurant,  luncheonette  or cafeteria  for the sale or service of
food or beverages to its  employees or to others,  except that food and beverage
preparation by Tenant's  employees  using microwave ovens or coffee makers shall
be permitted  provided no odors of cooking or other  processes  emanate from the
Premises.  Tenant  shall not  install or permit the  installation  or use of any
vending  machine or permit the  delivery of any food or beverage to the Premises
except by such  persons and in such manner as are approved in advance in writing
by Landlord.

                                      C-3
<PAGE>

      28.  The  Premises  shall not be used as an  employment  agency,  a public
stenographer or typist, a labor union office, a physician's or dentist's office,
a dance or music studio,  a school, a beauty salon, or barber shop, the business
of photographic,  multilith or multigraph  reproductions or offset printing (not
precluding  using  any  part of the  Premises  for  photographic,  multilith  or
multigraph  reproductions solely in connection with Tenant's own business and/or
activities),   a  restaurant   or  bar,  an   establishment   for  the  sale  of
confectionery,  soda,  beverages,  sandwiches,  ice  cream  or baked  goods,  an
establishment  for preparing,  dispensing or consumption of food or beverages of
any  kind in any  manner  whatsoever,  or  news  or  cigar  stand,  or a  radio,
television or recording studio, theatre or exhibition hall, or manufacturing, or
the storage or sale of merchandise,  goods,  services or property of any kind at
wholesale,  retail or  auction,  or for  lodging,  sleeping  or for any  immoral
purposes.

      29  Business  machines  and  mechanical  equipment  shall  be  placed  and
maintained  by Tenant at Tenant's  expense in settings  sufficient in Landlord's
judgment to absorb and prevent vibration, noise and annoyance.  Tenant shall not
install any machine or equipment which causes noise,  heat, cold or vibration to
be  transmitted  to the  structure  of the  building in which the  Premises  are
located  without  Landlord's  prior  written  consent,   which  consent  may  be
conditioned on such terms as Landlord may require. Tenant shall not place a load
upon any floor of the  Premises  exceeding  the floor load per square  foot that
such floor was designed to carry and which is allowed by Law.

      30.  Tenant  shall not bring any  Hazardous  Materials  onto the  Premises
except  for those  that are in  general  commercial  use and are  incidental  to
Tenant's  business  office  operations  and  only  in  quantities  suitable  for
immediate use.

      31. Tenant shall not store any vehicle  within the parking area.  Tenant's
parking rights are limited to the use of parking spaces for short-term  parking,
of up to twenty-four (24) hours, of vehicles  utilized in the normal and regular
daily  travel to and from the  Project.  Tenants  who wish to park a vehicle for
longer than a 24-hour  period shall notify the Building  Manager for the Project
and consent to such  long-term  parking may be granted for periods up to two (2)
weeks.  Any motor  vehicles  parked  without  the prior  written  consent of the
Building  Manager  for the Project  for longer  than a 24-hour  period  shall be
deemed stored in violation of this rule and  regulation  and shall be towed away
and stored at the owner's expense or disposed of as provided by Law.

      32.  Smoking is prohibited in the Premises,  the Building and all enclosed
Common Areas of the Project,  including all lobbies, all hallways, all elevators
and all lavatories.

                                      C-4
<PAGE>

                                     RIDER 1

                           COMMENCEMENT DATE AGREEMENT
                           ---------------------------

      EMERY STATION JOINT VENTURE,  LLC, a California  limited liability company
("Landlord"),  and BIONOVO,  a Delaware Corp.,  ("Tenant"),  have entered into a
certain Office Lease dated as of July 8, 2005 (the "Lease").

      WHEREAS,   Landlord  and  Tenant  wish  to  confirm  and  memorialize  the
Commencement  Date and  Expiration  Date of the Lease as provided for in Section
2.2(b) of the Lease;

      NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein and in the Lease, Landlord and Tenant agree as follows:

      1. Unless otherwise  defined herein,  all capitalized terms shall have the
same meaning ascribed to them in the Lease.

      2. The  Commencement  Date  (as  defined  in the  Lease)  of the  Lease is
9/01/05.

      3. The Expiration Date (as defined in the Lease) of the Lease is 8/31/08.

      4. Tenant hereby confirms the following:

            (a) That it has accepted  possession of the premises pursuant to the
terms of the Lease;

            (b) That the Landlord Work is Substantially Complete; and

            (c) That the Lease is in full force and effect.

      5. Except as expressly  modified  hereby,  all terms and provisions of the
Lease are  hereby  ratified  and  confirmed  and shall  remain in full force and
effect and binding on the parties hereto.

      6. The Lease  and this  Commencement  Date  Agreement  contain  all of the
terms, covenants,  conditions and agreements between the Landlord and the Tenant
relating  to  the  subject   matter  herein.   No  prior  other   agreements  or
understandings pertaining to such matters arc valid or of any force and effect.

TENANT:                                   LANDLORD:
BIONOVO, INC.,                            EMERY STATION JOINT VENTURE, LLC,
a Delaware corporation                    a California limited liability company

By:               /s/                     By:
   ----------------------------------           --------------------------------
Print Name:                                       Richard K. Robbins
           --------------------------             Managing Member
Its:
    ---------------------------------

                                     RIDER 1

<PAGE>

                                     RIDER 2

By:               /s/
   ----------------------------------

Print Name:
           --------------------------
Its:
    ---------------------------------

                                     RIDER 2

<PAGE>

                            ADDENDUM TO OFFICE LEASE
                                     BETWEEN
                   EMERY STATION JOINT VENTURE, LLC (LANDLORD)
                                       AND
          BIONOVO. INC. AND LIGHTEN UP ENTERPRISES INTERNATIONAL, INC.,
                                    (TENANT)

      This  Addendum to Lease is  attached  to and forms a part of that  certain
Lease by and between  EMERY  STATION JOINT  VENTURE,  LLC, a California  general
partnership ("Landlord"), and BIONOVO, INC., a Delaware corporation, and LIGHTEN
UP ENTERPRISES INTERNATIONAL, INC., a Nevada corporation (jointly and severally,
"Tenant"),  for premises  located in the building located at 5858 Horton Street,
Emeryville, California. Words and terms that are defined in the Lease shall have
the same meaning in this Addendum as the meaning  provided in the Lease.  In the
event of any inconsistency between the terms of this Addendum and the Lease, the
terms of this Addendum shall control.

1.    Right of First Offer.

      A. Grant of Option;  Conditions.  Tenant  shall have the one time right of
first offer (the "Right of First  Offer") with respect to the  currently  vacant
space shown on Attachment 1 attached  hereto (the  "Offering  Space").  Tenant's
Right of First  Offer  shall be  exercised  as  follows:  prior to  leasing  the
Offering  Space to a party,  Landlord  shall advise Tenant (the "Advice") of the
terms under which Landlord is prepared to lease the Offering Space to Tenant for
the  remainder  of the Term,  which terms shall  reflect the  Prevailing  Market
(hereinafter  defined) rate for such Offering Space as reasonably  determined by
Landlord.  Tenant may lease such Offering Space in its entirety only, under such
terms,  by  delivering  written  notice of exercise to Landlord  (the "Notice of
Exercise") within 5 days after the date of the Advice,  except that Tenant shall
have no such Right of First Offer and Landlord  need not provide  Tenant with an
Advice, if:

            1. Tenant is in default under the Lease beyond any  applicable  cure
periods at the time that Landlord would otherwise deliver the Advice; or

            2. the  Premises,  or any  portion  thereof,  is  sublet at the time
Landlord would otherwise deliver the Advice; or

            3. the  Lease has been  assigned  prior to the date  Landlord  would
otherwise deliver the Advice; or

            4. Tenant is not occupying  the Premises on the date Landlord  would
otherwise deliver the Advice; or

            5. the  Offering  Space is not  intended  for the  exclusive  use of
Tenant during the Term.

      B. Terms for Offering Space.

                                   ADDENDUM 1
<PAGE>

            1.  The  term  for  the  Offering  Space  shall  commence  upon  the
commencement  date stated in the Advice and thereupon  such Offering Space shall
be considered a part of the  Premises,  provided that all of the terms stated in
the Advice shall govern  Tenant's  leasing of the Offering Space and only to the
extent that they do not conflict  with the Advice,  the terms and  conditions of
this Lease shall apply to the Offering Space.

            2. Tenant shall pay Monthly Base Rent and Rent  Adjustments  for the
Offering Space in accordance with the terms and conditions of the Advice,  which
terms and conditions  shall reflect the Prevailing  Market rate for the Offering
Space as determined in Landlord's reasonable judgment.

            3. The Offering Space  (including  improvements  and personalty,  if
any) shall be accepted by Tenant in its  condition  and  as-built  configuration
existing on the  earlier of the date Tenant  takes  possession  of the  Offering
Space or as of the date the term for such Offering Space  commences,  unless the
Advice  specifies any work to be performed by Landlord in the Offering Space, in
which case Landlord shall perform such work in the Offering Space.

      C.  Termination  of Right of First Offer.  The rights of Tenant  hereunder
with respect to the Offering  Space shall  terminate on the earlier to occur of:
(i) the last day of the 24th  full  calendar  month of the Term,  (ii)  Tenant's
failure to exercise its Right of First Offer within the 5 day period provided in
Section 1.A.  above;  and (iii) the date Landlord would have provided  Tenant an
Advice if Tenant had not been in violation of one or more of the  conditions set
forth in Section l.A. above.

      D.  Offering  Amendment.  If Tenant  exercises  its Right of First  Offer,
Landlord  shall  prepare an  amendment  (the  "Offering  Amendment")  adding the
Offering  Space  to the  Premises  on the  terms  set  forth in the  Advice  and
reflecting the changes in the Monthly Base Rent,  rentable square footage of the
Premises,  Tenant's  Share and other  appropriate  terms. A copy of the Offering
Amendment  shall be sent to Tenant  within a  reasonable  time after  Landlord's
receipt of the Notice of Exercise  executed by Tenant,  and Tenant shall execute
and return the Offering Amendment to Landlord within 15 days thereafter,  but an
otherwise  valid  exercise of the Right of First Offer shall be fully  effective
whether or not the Offering Amendment is executed.

      E.  Definition of Prevailing  Market.  For purposes of this Right of First
Offer  provision,  "Prevailing  Market"  shall mean the annual  rental  rate per
square foot for space  comparable  to the  Offering  Space in the  Building  and
buildings  comparable to the Building in the Berkeley and Emeryville  area under
leases and renewal and expansion  amendments  being entered into at or about the
time  that   Prevailing   Market  is  being   determined,   giving   appropriate
consideration to tenant's credit,  tenant  concessions,  brokerage  commissions,
tenant improvement  allowances,  existing improvements in the space in question,
and the method of allocating  operating expenses and taxes.  Notwithstanding the
foregoing,  space leased under any of the following  circumstances  shall not be
considered to be comparable for purposes hereof:  (i) the lease term is for less
than the lease term of the Offering  Space,  (ii) the space is encumbered by the
option rights of another tenant, or (iii) the space has a lack of windows and/or
an awkward or unusual shape or  configuration.  The foregoing is not intended to
be an exclusive list of space that will not be considered to be comparable.

                                   ADDENDUM 2
<PAGE>

      F.  Subordination.   Notwithstanding  anything  herein  to  the  contrary,
Tenant's Right of First Offer is subject and subordinate to the expansion rights
(whether such rights are  designated  as a right of first offer,  right of first
refusal,  expansion option or otherwise) of any tenant of the Building  existing
on the date hereof.

[Graphic of floorplan attached]

                                   ADDENDUM 3

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