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                                                                    EXHIBIT 10.2

                                 4 August 1997

                           AMERSHAM INTERNATIONAL PLC

                         AMERSHAM LIFE SCIENCE LIMITED

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                                     AMLABS

                            CONTRACT MANUFACTURE AND
                            RESEARCH AND DEVELOPMENT
                              AMENDMENT AGREEMENT

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THIS AGREEMENT is made on 4 August 1997

BETWEEN:

(1)  AMERSHAM INTERNATIONAL PLC, (Company no. 1002610) whose registered office
     is at Amersham Place, Little Chalfont, Buckinghamshire HP7 9NA (Amersham)

(2)  AMERSHAM LIFE SCIENCE LIMITED, (Company no. 3337033) whose registered
     office is at Amersham Place, Little Chalfont, Buckinghamshire HP7 9NA (Life
     Science)

WHEREAS:

(A)  Pursuant to an Agreement dated 2 June 1997, Amersham agreed to sell and
     Life Science agreed to purchase the Business.

(B)  Amersham wished to sell the Business to Life Science but was unable to sell
     that part of the Business at the Site until such time as the NII had
     granted the Licence to Life Science. The parties entered into a contract
     manufacture and research and development agreement on 2 June 1997 (the
     Contract Manufacture Agreement).

(C)  Amersham and Life Science have agreed to amend and restate the Contract
     Manufacture Agreement in the terms set out in this Agreement.

NOW IT IS AGREED as follows:

INTERPRETATION

1.1  In this Agreement, unless the context otherwise requires:

AMERSHAM YEAR END is, in any one year, 31 December (or such other date as
Amersham may select from time to time);

BUSINESS means the business of Amersham conducted at the Site and being the
supply of biotechnology in the fields of molecular biology, cell biology and
sequencing, and known as the Life Science Division;

BUSINESS DAY means any day other than Saturday or Sunday or a Bank or Public
Holiday;

BUSINESS HOURS means the hours of 8:30 a.m. to 5:30 p.m.;

COP SYSTEM means the order processing system of Amersham in place at the date
of this Agreement (as may be amended from time to time);

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DEVELOPMENT means any development, enhancement or derivative of any Product, or
its design or manufacturing process, which arises out of the Research and
Development;

DISPOSAL means the disposal of the Business by Amersham to Life Science;

FORCE MAJEURE means in relation to either party, any circumstances beyond the
reasonable control of that party (including, without limitation, any strike,
lockout or similar form of industrial action);

GENERAL SERVICES AGREEMENT means the general services agreement to be entered
into between Amersham and Life Science pursuant to which Amersham provides Life
Science with certain services required to operate the Business;

INTELLECTUAL PROPERTY RIGHTS means patents, trade marks, service marks, trade
names, design rights, copyright (including rights in computer software), rights
in know-how and other intellectual property rights (including the
Specifications), in each case whether registered or unregistered and including
applications for the grant of any such rights and all rights or forms of
protection having equivalent or similar effect anywhere in the world;

LIBOR means the arithmetic mean (rounded upward to five decimal places) of the
rates quoted by the principal office in London of Lloyds Bank plc and National
Westminster Bank plc to leading banks in the London Interbank market at or
about 11:00 a.m. on the relevant date for the offering of deposits in Sterling
for a one month period;

LICENCE means the licence to be applied for by Life Science under the Nuclear
Installations Act 1965 to operate the Business at the Site;

LIFE SCIENCE CATALOGUE means the document annexed hereto and marked "A";

NII means the Nuclear Installations Inspectorate;

PHARMACIA & UPJOHN means Pharmacia & Upjohn Inc., a company incorporated in the
State of Delaware, USA;

PRODUCTS means the products listed in the Life Science Catalogue which are
manufactured at the Site, together with any Developments (or any other product
as may be agreed between the parties);

RESEARCH AND DEVELOPMENT means the research into and development of the
Products carried on at the Site by Amersham under the terms of this Agreement;

SITE means the site known as Amersham Laboratories, White Lion Road, Amersham;

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Specifications means the specifications for each of the Products agreed between
the parties from time to time (such agreement not to be unreasonably withheld);

Trade Marks means any registered trade marks of Life Science.

1.2  References to statutory provisions shall, except where the context
requires otherwise, be construed as references to those provisions as
respectively amended or re-enacted or as their application is modified by other
statutory provisions (whether before or after the date hereof) from time to
time.

1.3  Headings are inserted for convenience only and shall not affect the
construction of this Agreement or the Schedules hereto.

SUPPLY OF THE SPECIFICATION

2.   Forthwith upon the execution of this Agreement, Life Science shall at its
own cost disclose to Amersham the Specifications in order that Amersham shall
be able to manufacture the Products, and Amersham shall be entitled to use the
Specifications by way of an exclusive, royalty-free licence solely for the
purpose of performing its obligations under this Agreement, which licence shall
terminate immediately upon the termination of this Agreement.

MANUFACTURE OF THE PRODUCTS

3.1  Amersham hereby warrants to Life Science that the Products shall be
manufactured by it in compliance with the Specifications and in the manner
reasonably requested by Life Science. Amersham shall manufacture the Products
and undertake the Research and Development at the Site for Life Science in a
manner and on a basis which shall be, at a minimum, consistent with the same
level of efficiency and in accordance with the same practices and procedures as
were used in the manufacture of such products and the conduct of such research
and development at the Site immediately prior to the Disposal. Unless, in its
absolute discretion it agrees otherwise, Amersham shall be obliged under the
terms of this Agreement to manufacture from time to time only such quantity of
the Products as Amersham may reasonably be expected to manufacture at the Site
(and in assessing what Amersham may reasonably be expected to manufacture in
any period, account will be taken of the manufacturing capacity of the Site by
the Business in an equivalent period preceding the Disposal).

3.2  Life Science shall order the Products from Amersham using the COP System
on the same basis and in the same manner that Products were ordered to be
manufactured and supplied immediately prior to the Disposal. Amersham shall
maintain the COP System. Life Science shall purchase such volumes of the
Products as may be ordered by Life Science from time to time under this clause.

3.3  Amersham shall not supply the Products to any party other than Life
Science or such other parties as Life Science may direct.

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     3.4  Amersham shall use all reasonable endeavours to ensure that the
     personnel manufacturing the Products and supplying the Research and
     Development services are suitably qualified. In connection with the
     manufacture of the Products and the supply of the Research and Development
     services hereunder, Amersham will comply in all material respects with all
     applicable laws, regulations and safety guidelines of all governmental
     entities.

     3.5  For the purposes of assuring to Life Science the quality of the
     Products manufactured and the Research and Development services provided
     under this Agreement, Amersham shall permit a duly authorised
     representative of Life Science, at any time during normal working hours and
     on reasonable notice, to inspect the Site and any finished goods or work in
     progress and shall, as soon as reasonably practicable following any request
     therefor, provide Life Science with such information concerning the
     manufacture of Products under this Agreement as Life Science shall
     reasonably request.

     3.6  Amersham shall be obliged to employ such additional manpower as Life
     Science may request in order to carry out the contract manufacturing in
     accordance with the terms of this Agreement.

     SUPPLY OF RESEARCH AND DEVELOPMENT SERVICES

     4.1  Following the execution of this Agreement, both parties shall nominate
     suitably qualified employees acceptable to each other to liaise on a
     continuing basis on matters concerning Research and Development and
     Amersham shall, as a result of such meetings, undertake such Research and
     Development for Life Science as Life Science may (through such nominee)
     reasonably request. Amersham shall be obliged to employ such additional
     manpower as Life Science may request in order to carry out the Research and
     Development.

     4.2  Amersham shall not supply Research and Development services at the
     Site to any party other than Life Science or such other parties as Life
     Science may direct.

     4.3  Without prejudice to the generality of clause 4.1:

     (a)  Life Science shall provide Amersham with details of any Development
          belonging to Life Science which it wishes to be incorporated into the
          Product or any other modification which it wishes to be made to the
          Product or the Specifications from time to time as a result of any
          Development; and

     (b)  Amersham shall provide Life Science with details of any Development
          which is make, developed or acquired by Amersham from time to time
          and, in particular, any such Development which improves any Product or
          extends the range of Products.

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4.4  The title to and all Intellectual Property Rights in respect of any
Development made, developed or acquired shall belong to Life Science, but
Amersham shall be entitled to use any Development which is made, developed or
acquired by Life Science, and any applicable Intellectual Property, for the
purposes of manufacturing the Products in accordance with this Agreement by way
of a non-exclusive, royalty-free licence which shall terminate on the
termination of this Agreement. For the avoidance of doubt, costs associated
with patenting (including acquiring, filing and defending any patents or patent
applications) or otherwise protecting any Intellectual Property Rights to which
Life Science is entitled (and which Amersham undertakes on behalf of Life
Science) under this Agreement shall be borne by Life Science.

SUPPLY OF THE PRODUCTS

5.1  All sales of the Products pursuant to this Agreement shall be subject to
the terms and conditions of sale set out in this Agreement, including Schedule
2, to the exclusion of any other terms and conditions.

5.2  Amersham will apply such labels or other identification codes to the
Products as are reasonably requested from time to time by Life Science. All
Products will be packaged in accordance with Life Science's standard
specifications for shipments with such modifications as are agreed by the
parties. The parties will agree on appropriate labelling for packaging to be
used by Amersham.

5.3  Amersham shall deliver the Products to the storage facility at Amersham
Laboratories, White Lion Road, Amersham and at St George's Industrial Estate,
White Lion Road, Amersham. Title to and risk in the Products shall pass to Life
Science upon such delivery. Upon delivery, the Products shall be distributed
under the terms of the General Services Agreement.

COSTS

6.1  The charges for the manufacture, packaging, supply and insurance of the
Products and the provision of Research and Development services shall be
calculated by Amersham using the bases set out in Schedule 1. All prices quoted
shall be exclusive of value added tax or any other taxes or customs/excise
duties and Amersham shall be entitled to charge these items to Life Science at
the rate applicable at the date of invoice. For the avoidance of doubt, in no
event shall Life Science be obliged to pay an amount in respect of the
manufacture of the Products or the provision of the Research and Development
services in excess of the cost to Amersham of the manufacture of the Products
or the provision of the Research and Development services and, for this
purpose, the cost to Amersham shall be determined in accordance with the bases
set out in Schedule 1 (provided that such bases are no less favourable to Life
Science than past practice as previously disclosed to Pharmacia & Upjohn).
Subject to any special terms agreed in writing between Amersham and Life
Science:

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(a)  Amersham shall invoice Life Science at the end of the following calendar
     month in respect of the Products manufactured and the Research and
     Development undertaken pursuant to this Agreement in the previous calendar
     month; and

(b)  subject to Life Science's rights under this clause, Life Science shall pay
     the price stated in each invoice submitted by Amersham pursuant to
     sub-clause (a) above within 30 days of the date of the invoice.

6.2  If Life Science shall not pay any amount on the due date therefrom in
accordance with this Agreement, any amount unpaid shall bear interest at a rate
of 1% above the rate from time to time of LIBOR from the date of due payment to
and including the date of payment, whether before or after judgment.

6.3  In the event that Life Science and/or Pharmacia & Upjohn disagrees with
any invoice delivered by Amersham pursuant to clause 6.1 above, Amersham shall,
upon request, supply Life Science (and/or, if requested, to Pharmacia & Upjohn)
with such information as is reasonably necessary to support the calculations
contained in such invoice. Amersham shall also permit Life Science to have such
access as it may reasonably request on reasonable notice to the books and
records maintained by Amersham in connection with the manufacture of the
Products or the provision of the Research and Development services to enable
Life Science to verify such information. The parties shall use all reasonable
endeavours (in conjunction with their respective accountants) to meet and
discuss the basis of the calculations contained in such invoice but if they
fail to reach agreement within twenty Business Days of delivery of the invoice,
then, unless the parties agree otherwise, the dispute shall be referred to a
partner of an independent internationally recognised firm of chartered
accountants agreed upon by the parties or, failing agreement, to be selected by
the president for the time being of the Institute of Chartered Accountants in
England and Wales. The terms of reference set out in clause 17 shall apply.

6.4  Amersham shall not provide Life Science with any cost estimates for the
Products ordered pursuant to clause 3.2 unless specifically requested by Life
Science in writing.

6.5  Life Science shall have no right to set off any amounts owing to or
alleged to be owing to it by Amersham against unpaid invoices due to Amersham.

PLANT AND EQUIPMENT

7.1  Life Science may request Amersham in stall new plant and equipment at the
Site or make alterations to and improvements of the premises at the Site (THE
PREMISES).

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7.2  Amersham shall agree to any request of Life Science and/or Pharmacia &
Upjohn made under clause 7.1 unless it has reasonably determined that complying
with such request would not be feasible or would be materially adverse to
Amersham as a result of Amersham's obligations to comply with the requirements
of the NII, any safety regulations or any relevant statutes (together, the
Requirement Obligations). In that event, Amersham shall, upon request, supply
to Life Science (and/or, if requested, to Pharmacia & Upjohn) the details of
such Requirement Obligations. The parties shall use all reasonable endeavours
to meet and discuss the Requirement Obligations, but if they fail to reach
agreement within twenty Business Days of Amersham refusal, then, unless the
parties agree otherwise, the dispute shall be referred to a partner of an
independent internationally recognised firm of chartered accountants agreed
upon by the parties or, failing agreement, to be selected by the president for
the time being of the Institute of Chartered Accountants in England and Wales.
The terms of reference set out in clause 17 shall apply.

7.3  All cost of any new plant and equipment requested by Life Science under
clause 7.1 and its installation and the cost of any capital expenditure at the
Premises shall be borne by, and shall be the property of, Amersham.

LIABILITY

8.1  Without prejudice to any other limitation or exclusion of liability under
this Agreement (and without prejudice to the rights of either party to sue the
other for damages for breach of this Agreement):

(a)  Amersham shall not be liable to Life Science for any loss of profits or
     other indirect or consequential loss of any kind, as a result of the
     manufacture of the Products or the provision of the Research and
     Development services (excluding, for the avoidance of doubt, any loss or
     liability arising from death or personal injury due to the negligence of
     Amersham);

(b)  the total liability of Amersham to Life Science in respect of any one
     event, or series of connected events, shall not exceed the total charges
     paid by Life Science to Amersham for the manufacture of the Products or the
     provision of the Research and Development services in the twelve month
     period prior to the occurrence of such event or series of events less any
     amount already paid in that period to Life Science by Amersham under any
     warranty, indemnity or other obligation under this Agreement or in respect
     of any breach of this Agreement.

8.2  Subject to clause 8.1, Amersham will indemnify Life Science and hold it
harmless from and against any claim or action (including reasonable litigation
costs and expenses including reasonable legal fees) brought by any third party
against Life Science arising from any negligent or reckless act or omission on
the part of Amersham or any of the personnel of Amersham.

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8.3  Life Science will indemnify Amersham for any loss or damage (including
reasonable litigation costs and expenses including reasonable legal fees) which
Amersham suffers as a result of any claim or action brought by a third party
against Amersham in respect of any Products manufactured hereunder or the
Research and Development services provided by Amersham hereunder, which claim or
action has not arisen from any negligent or reckless act or omission on the part
of Amersham or any of the personnel of Amersham.

8.4  Where Products are manufactured in accordance with the Specifications or
are modified, altered, processed or amended at Life Science's request, or
Research and Development services are provided to Life Science, Life Science
shall satisfy itself that the Products or Research and Development services are
suitable for its use and, subject to clause 8.1, Amersham shall not be liable
in any way for the Products, their performance or fitness for any particular
purpose or the suitability or quality of any Research and Development services
provided.

INTELLECTUAL PROPERTY AND TRADE MARKS

9.1  Life Science authorises Amersham for the term of this Agreement and only
to the extent necessary to perform Amersham's obligations pursuant to this
Agreement:

(a)  to use such Intellectual Property of Life Science which shall be required
     by Amersham to manufacture the Products/carry out the Research and
     Development; and

(b)  to apply the Trade Marks to the Products, for the purposes of exercising
     its rights and performing its obligations under this Agreement.

9.2  Subject to clauses 2, 4.4 and 9.1, Amersham shall have no rights in
respect of any Intellectual Property of Life Science in respect of it or any of
the Trade Marks, and Amersham shall not use any of that Intellectual Property
except for the purposes of performing its obligations in accordance with this
Agreement.

9.3  Amersham shall use the Trade Marks on or in relation to the Products in
the form and manner specified by Life Science from time to time, and not
otherwise.

9.4  All artwork supplied by Life Science from time to time for use in relation
to the Products or their labelling and packaging, and all Intellectual Property
in respect of it, shall belong exclusively to Life Science.

9.5  Where Life Science supplies designs, drawings, and specifications to
Amersham to enable it to manufacture non-standard or custom made Products Life
Science warrants that such manufacture will not infringe the intellectual
property rights of any third party.

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CONFIDENTIALITY

10.1   Neither party shall, either during the period of this Agreement or at any
subsequent time, disclose to any other person any information disclosed to it by
the other party pursuant to this Agreement, and shall use its best endeavours to
keep the same confidential (whether marked as such or not), except as provided
by clause 10.2 or 10.3.

10.2   Any of the information referred to in clause 10.1 may be disclosed to:

(a)    any governmental or other authority or regulatory body; or

(b)    any directors or employees of the party in question; to such extent only
       as is necessary for the purposes contemplated by this Agreement or as
       required by law.

10.3 Any of the information referred to in clause 10.1 may be used by the party
in question for any purpose, or disclosed by that party to any other person, to
the extent only that any part of it is now, or hereafter becomes, public
knowledge through no fault of the party in question, provided that in so doing
that party does not disclose any information which is not public knowledge.

DURATION AND TERMINATION

11.1   This Agreement shall come into force immediately and shall continue in
force unless and until terminated in accordance with the following provisions
of this clause 11.

11.2.1 Either party shall be entitled forthwith to terminate this Agreement by
written notice to the other if:

(a)    that other party commits any material breach of any of the provisions of
       this Agreement (save for any breach which is caused by the party seeking
       to rely on it) and, in the case of such a breach which is capable of
       remedy, fails to remedy the same within 30 days after receipt of a
       written notice giving reasonable information concerning the breach;

(b)    an encumbrance takes possession of, or a receiver is appointed over, a
       substantial proportion of the property or assets of that other party;

(c)    that other party makes any voluntary arrangement with its creditors or
       becomes subject to an administration order;

(d)    that other party goes into liquidation (except for the purposes of an
       amalgamation, reconstruction or other reorganisation and in such manner
       that the company resulting from the reorganisation effectively agrees to
       be bound by or to assume the obligations imposed on that other party
       under this Agreement); or

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(e)  that other party ceases, or is likely to cease, to carry on business.

11.2.2 Life science shall be entitled at any time following such event to
terminate this Agreement by 30 days written notice to Amersham in the event of
a Controlling Interest in Amersham being acquired by a third party (CONTROLLING
INTEREST meaning (i) the ownership or control (directly or indirectly) of more
than fifty (50) per cent of the voting share capital of Amersham; or (ii) the
ability to direct the casting of more than fifty (50) per cent of the votes
exercisable at general meetings of Amersham on all, or substantially all,
matters; or (iii) the right to appoint or remove directors of Amersham holding
a majority of the voting rights at meetings of the board on all, or
substantially all, matters).

11.3   For the purpose of clause 11.2(a), a breach shall be considered capable
of remedy if the party in breach can comply with the provision in question in
all respects other than as to the time of performance.

11.4   This Agreement may terminate at any time with the written agreement of
all parties.

11.5.1 The obligation on Amersham to manufacture the Products in accordance
with clause 3, subject to the other provisions of this clause 11, shall
continue in force for a period of seven years (the INITIAL MANUFACTURING TERM).
Life Science shall be able to renew the terms of the Agreement with regard to
the manufacturing of the Products in accordance with clause 3 for one or more
additional periods of five years following the Initial Manufacturing Term (a
FURTHER MANUFACTURING TERM) by serving a notice to this effect upon Amersham at
any time during the period of 30 days immediately preceding (and ending on) the
date which is two years prior to the end of the initial Manufacturing Term or
any Further Manufacturing Term.

11.5.2 The obligation on Amersham to provide Research and Development services
to Life Science in accordance with clause 4, subject to the other provisions of
this clause 11, shall continue until 31 December 2000 (the INITIAL R&D TERM).
Life Science shall be able to renew the terms of this Agreement with regard to
the provision of Research and Development services for further periods of one
year each (the FURTHER R&D TERM) by serving a notice to this effect upon
Amersham at least 6 months before the expiry of the Initial R&D Term or at
least 6 months before the expiry of each Further R&D Term.

11.5.3 Subject to the other provisions of this clause 11, this Agreement shall
terminate at the expiry of the later of (i) the end of the Initial
Manufacturing Term (ii) the end of any Further Manufacturing Term or (iii) any
Further R&D Term which is not renewed in accordance with clause 11.5.2, However,
if at any time the NII shall have indicated its willingness to grant to Life
Science (or to a any other company is under the control of Life Science) a
License in respect of any part of the Site then this Agreement shall terminate
upon

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Amersham having transferred title to that part of the Site to Life Science (or
such other company). Amersham shall use its best endeavours to assist Life
Science in obtaining such a Licence.

EFFECT OF TERMINATION

12.1 Upon the termination of this Agreement for any reason, Life Science shall
be obliged (i) to purchase and take delivery of all Products which have been
manufactured by Amersham but not delivered to Life Science at the date of
termination, and all usable but unused stocks of labelling and packaging for the
Products bearing any of the Trade Marks, at a price equal to their actual,
out-of-pocket cost to Amersham; (ii) to pay to Amersham an amount equal to the
actual, out-of-pocket cost to Amersham of any raw materials purchased by
Amersham for the purposes of this Agreement together with any work in progress;
(iii) to the extent permitted by law, to purchase and take delivery of all plant
and equipment purchased by Amersham pursuant to clause 7 for an amount in cash
payable on termination equal to the book value of all such plant and equipment
as at the date of such termination; and (iv) to pay to Amersham an amount in
cash payable on termination equal to the book value as at the date of such
termination of any plant and equipment purchased by Amersham pursuant to clause
7 but not purchased under paragraph (iii) and of any capital expenditure made by
Amersham pursuant to clause 7.

12.2 Upon the termination of this Agreement for any reason Amersham shall:

(a)  cease to manufacture and sell the Products or to use, either directly or
     indirectly, any of the Intellectual Property and forthwith return to Life
     Science any documents in its possession or control which contain or record
     any part of any of that Intellectual Property;

(b)  cease to use any of the Trade Marks;

(c)  consent to the cancellation of any formal licence granted to it, or of any
     record of it in any register, in respect of any Intellectual Property of
     Life Science or any of the Trade Marks;

(d)  cease all Research and Development;

and, subject as provided in this clause and except in respect of any accrued
rights, neither party shall have any further obligation to the other.

12.3 Subject (i) to the remainder of this clause 12 and to the obligations of
the parties under clauses 8.1, 8.2 and 10 which shall continue to have effect
following termination; (ii) to any rights or obligations which have accrued
prior to termination; and (iii) as otherwise expressly provided in this
Agreement, upon the termination of this Agreement for any reason, neither party
shall have any further obligation to the other under this Agreement.

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     12.4  Following termination of this Agreement by Life Science (other than
     pursuant to clause 11.2.2), Life Science will continue to pay to Amersham
     amounts in respect of the actual costs incurred by Amersham following such
     termination as a result of having made available, inter alia, facilities
     and personnel so as to have been able to perform its obligations under this
     Agreement, such amounts to be determined and paid in accordance with the
     provisions of Schedule 3.

     12.5  Following termination of this Agreement, Amersham shall, in
     consultation with and taking into account any requests of Life Science, use
     reasonable endeavours to reduce the costs incurred by Amersham referred to
     in clause 12.4 above. Subject as provided below, Life Science will
     reimburse Amersham for such sums as may be certified by Amersham as equal
     to any costs, expenses or other liabilities incurred by Amersham as a
     result of reducing such costs as aforesaid (including, but not exclusively
     limited to, redundancy payments incurred in respect of the termination of
     the employment of any person involved in manufacturing the Products or
     providing the Research and Development services, payments made to third
     parties, relocation costs, surrender of leases, writing down of assets and
     decommissioning and waste disposal costs insofar as they relate to the
     period on or after the date of this Agreement) PROVIDED THAT in no event
     shall Life Science be required to reimburse Amersham for sums which, in the
     aggregate (and taking into account a discount rate equal to LIBOR to
     present value for amounts to be paid by Life Science pursuant to clause
     12.4), exceed the amounts which would otherwise have been paid by Life
     Science pursuant to clause 12.4 and Schedule 3. Amersham will consult with
     Life Science to determine whether any such costs, expenses or liabilities
     may be reduced by Life Science agreeing to employ any personnel involved in
     manufacturing the Products or providing the Research and Development
     services or otherwise. Any certificate produced or prepared by Amersham in
     accordance with this clause shall be delivered to Life Science on the first
     Business Day of each of the four three calendar month periods ending on an
     Amersham Year End, together with an invoice in respect of the amount of the
     costs, expenses and other liabilities (including VAT) incurred in that
     quarter. Any amounts payable by Life Science under this clause shall be
     paid within twenty Business Days of delivery of such invoice.

     12.6  In the event that Life Science and/or Pharmacia & Upjohn disagrees
     with the amount of the actual costs referred to in clause 12.4 or any
     amount certified under clause 12.5, Amersham shall upon request, supply
     Life Science (and/or, if requested, Pharmacia & Upjohn) with such
     information as is reasonably necessary to support the calculations of such
     costs. Amersham shall allow Life Science to have such access as it may
     reasonably request on reasonable notice to the books and records maintained
     by Amersham in connection with manufacturing the Products or providing the
     Research and Development services to enable it to verify such information.
     The parties shall use all reasonable endeavours (in conjunction with their
     respective accountants) to

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meet and discuss the basis of the calculations of each cost but if they fail to
reach agreement within twenty business days of delivery of the statement, then,
unless the parties agree otherwise, the dispute shall be referred to a partner
of an independent internationally recognised firm of chartered accountants
agreed upon by the parties or, failing agreement, to be selected by the
president for the time being of the Institute of Chartered Accountants in
England and Wales. The terms of reference set out in clause 17 shall apply.

NOTICES

13.1 All notices, requests, demands, or other communications made pursuant to
this Agreement shall be made by telefax, overnight express courier or hand
delivered against receipt to the applicable party as indicated below:

(a)  if to Amersham, to:

     Fax No:             01494 542242

     Address:            Amersham Place
                         Little Chalfont
                         Buckinghamshire HP7 9NA

     For the attention of: G.F.B. Kerr (Company Secretary)

(b)  if to Life Science, to:

     Fax No:             01494 542242

     Address:            Amersham Place
                         Little Chalfont
                         Buckinghamshire HP7 9NA

     For the attention of: J.A. Cooper (Company Secretary)

          With a copy to Pharmacia & Upjohn at:

     Fax No:             01753 744 008

     Address:            67 Alma Road
                         Windsor
                         Berkshire
                         England SL4 3HD

     For the attention of: Executive Vice President, General Counsel and
                           Secretary

13.2 Communications shall be deemed to have been made upon receipt if by
telefax, overnight express courier or by hand delivery, except that a telefax,
that is received on a day which is not Business Day or after Business Hours
shall be

                                                                         Page 13
<PAGE>   15
deemed to have been made at the opening of business on the first following day
that is a Business Day.

NON-ASSIGNMENT

14.  Neither party shall, without the prior written consent of the other, be
entitled to assign the benefit or burden of this Agreement in whole or in part
other than to any holding company of such party or subsidiary of such party or
fellow subsidiary of such party.

NATURE OF AGREEMENT

15.1 Nothing in this Agreement shall create, or be deemed to create, a
partnership or joint venture between the parties.

15.2 Nothing in this Agreement shall constitute one party as the agent of any
other party.

15.3 Nothing in this Agreement shall make any of the employees of one party the
employees of any other party.

15.4 This Agreement replaces the agreement between the same parties dated 2
June 1997 which shall cease and determine with effect from the execution of
this Agreement, save in respect of any rights and obligations which have
occurred prior thereto.

15.5 Any provision of this Agreement may be modified or amended or waived only
by an instrument in writing signed by duly authorised representatives of each
of the parties, in the case of a modification or an amendment, or by the party
against whom the waiver is to be effective, in the case of a waiver.

15.6 If any of the provisions of this Agreement is or becomes invalid, illegal
or unenforceable, the validity, legality or enforceability of the remaining
provisions shall not in any way be affected or impaired. If any provision of
this Agreement, or the application thereof to any person or entity or any
circumstance, is invalid or unenforceable, the parties shall make suitable and
equitable provision therefor in order to carry out, so far as may be valid and
enforceable, the intent and purpose of such invalid or unenforceable provision.

RESTRICTIVE TRADE PRACTICES ACT

16.  Notwithstanding any other provisions of this Agreement (or any other
agreement which, together with this Agreement, may form part of an agreement
for the purposes of the Restrictive Trade Practices Act 1976 (the RTPA)
(together the RTPA Agreement), each party declares that it will not give
effect, and will procure that none of its subsidiaries shall give effect, to
any restriction or restrictions contained in the RTPA Agreement which cause the
RTPA Agreement to be registrable under the Act until one day after particulars
of the

                                                                         Page 14

<PAGE>   16
RTPA Agreement shall have been furnished to the Director General of Fair
Trading.

TERMS OF REFERENCE FOR DISPUTES

17.  In the event of a dispute arising under this Agreement, the following terms
of reference shall apply:

(a)  the parties shall each use all reasonable endeavours to assist the firm to
     resolve the matter and to ensure that the independent firm has such access
     to all relevant working papers of each party as are reasonably necessary
     for the purpose;

(b)  any such independent firm shall act as an expert (and not as an arbitrator)
     in making any such determination which shall be binding on the parties;

(c)  the expenses of any such determination by an independent firm shall be
     borne between the parties in such proportions as the firm shall in its
     discretion determine.

ARBITRATION AND GOVERNING LAW

18.1 In the event of any dispute between Amersham and Life Science arising in
connection with this Agreement, the parties, shall use all reasonable
endeavours to resolve the matter on an amicable basis. If one party serves
formal written notice on the other that a material dispute of such a
description has arisen and the parties are unable to resolve the dispute within
a period of thirty days from the service of such notice, then the dispute shall
be referred to the respective chief executive officers of Amersham, Life
Science and Pharmacia & Upjohn with a view to the dispute being resolved as
early as possible.

18.2 If any dispute is unresolved by the chief executive officers within a
period of thirty days from the date such referral of such dispute to them, such
dispute may after the expiry of such period of thirty days be referred by
either party to and finally settled by arbitration under the Rules of the
London Court of International Arbitration by one or more arbitrators appointed
in accordance with those Rules. The place of arbitration shall be London. The
language of arbitration proceedings shall be English.

18.3 This Agreement shall be governed by and construed in all respects in
accordance with the laws of England.

AS WITNESS this Agreement has been signed by the duly authorised
representatives of the parties the day and year first before written.

                                                                         Page 15
<PAGE>   17
                                   SCHEDULE 1

                                     COSTS

CRITERIA FOR CALCULATING THE COST OF THE PRODUCTS

In calculating the cost of manufacturing the Products during any calendar month
for the purposes of clause 6, the following costs may be included:

(i)   materials costs including import duties and transport costs, but net of
      discounts, rebates and subsidies

(ii)  stock write-offs and provisions

(iii) costs of labour involved in the production process

(iv)  production overheads which may include each of the following:

      -  indirect labour costs (managerial and support staff working on
         production, but not actually manufacturing the Products)

      -  the following production services:

         *  engineering

         *  effluent disposal

         *  decommissioning

         *  Health Physics

         *  site purchasing

         *  raw material stores

         *  product packaging

         *  cost of services bought-in from central departments to support
            production processes e.g. computer services

      -  Public and Site Liability Insurance

      -  canteen, security, occupational health, cleaning and library costs

      -  depreciation on plant and equipment acquired, or capital expenditure
         made, by Amersham pursuant to clause 7

      -  interest on all costs incurred by Amersham pursuant to clause 7 at the
         average rate of interest chargeable on Amersham's bank borrowings from
         time to time

                                                                         Page 16

<PAGE>   18
      -  any other cost of operating the production area which is not directly
         attributable to the Products e.g. fuel, power, depreciation on assets
         used in production processes.

This list is not intended to be exhaustive and other costs may be included where
they are used directly or indirectly in the manufacture of the Products.

                                                                         Page 17
<PAGE>   19

CRITERIA FOR CALCULATING THE COST OF RESEARCH AND DEVELOPMENT

All expenditure related to discovery, development, clinical trials and
regulatory approval of:-

(a)  new products

(b)  new or extended indications for existing products

(c)  new formulations or applications of existing products

together with expenditure associated with the acquisition, filing and defence
of patents and other intellectual property up to the date of product launch.

In the case of products which require a marketing licence to be granted by a
regulatory authority before they can be sold, all expenditure incurred in order
to obtain (but not to maintain) such a licence is considered shall be a
Research and Development cost.

Expenditure includes payroll and related costs of employees, payments to third
parties for extra-mural contract work; laboratory supplies and consumable;
depreciation and expenses relating to laboratory facilities, equipment and
pilot plants; costs associated with dossier preparation, translation and
submission to regulatory agencies; payments to third parties for access to
know-how, compounds, designs and technology; patent agent fees; costs or patent
filing and of defending patents.

For the purposes of this Agreement "Research and Development" will also include
"Technical support" which is defined as any expenditure which does not fall
under the definition of Research and Development or Selling cost but which is
related to:-

(a)  the generation (other than by clinical trials) of supplementary information
     on products which have already been granted a marketing licence (in the
     case of products subject to licensing controls) of which have already been
     launched (in the case of all other products)

(b)  the technical promotion of such products

In the case of products which require a marketing licence to be granted by a
regulatory authority before they can be sold, all expenditure incurred in order
to maintain the validity of an existing licence is considered to be Technical
Support Expense.

Note that all clinical trial expenditure is considered to be Research and
Development expense.

                                                                         Page 18
<PAGE>   20
                                   SCHEDULE 2

                               CONDITIONS OF SALE

CONDITION 1

PACKAGING AND CONTAINERS

1.1  Containers, packaging, labelling, equipment and vehicles where provided by
Life Science must comply with all relevant national and international safety
regulations.

1.2  Where Products are supplied by Amersham in returnable containers these
must be returned to Amersham at Life Science's expense in good condition within
the period specified by Amersham in writing. Title to the containers shall
remain with Amersham at all times but they shall be held at the risk of Life
Science until return to Amersham.

1.3  Failure by Life Science to comply with Condition 1.2 shall entitle
Amersham to invoice Life Science for the full replacement value of the
container.

CONDITION 2

DELIVERY

2.   All delivery dates are quoted in good faith but Amersham reserves the
right to alter them notifying Life Science as soon as reasonably practicable.

CONDITION 3

ACCEPTANCE

3.1  Life Science shall inspect the Products within seven days of receipt and
failure to notify Amersham in writing of any defect or other proper objection
to the Products or their packaging within such period shall constitute
acceptance by Life Science.

3.2  Acceptance by Life Science shall be without prejudice to its rights under
Condition 5.

CONDITION 4

RISK AND TITLE

4.1  The risk in the Products shall pass to Life Science on delivery.

4.2  Title to the Products shall pass to Life Science on delivery.

                                                                         Page 19

<PAGE>   21
4.3  In the event that Life Science enters into liquidation or has a winding up
     order made against it or has a receiver appointed in respect of its assets
     Amersham shall be entitled immediately to terminate the Agreement without
     notice.

CONDITION 5

LIMITATIONS OF LIABILITY

5.1  Amersham shall not be bound by any representations or statements on the
     part of its employees or agents whether oral or in writing and including
     those made in catalogues and other promotional material (excluding
     technical details and specifications) except where such representations or
     statements are expressly made part of the Agreement.

5.2  Life Science shall ensure that the specification of the Products ordered is
     suitable and safe for the intended use or environment of use except where
     it makes known details of such use to Amersham in writing prior to
     conclusion of the Agreement in such a way as clearly to place reliance on
     Amersham's special skills.

5.3  Life Science shall handle the Products in a suitable and safe manner and
     shall comply with any instructions supplied to it by Amersham. Life Science
     shall also pass on to users (including purchasers and users of other goods
     and equipment into which the Products are incorporated) all relevant safety
     information.

5.4  Where Amersham experiences technical difficulties in the production of any
     non-standard or custom made Product the parties shall discuss such
     technical difficulties and shall decide whether it is reasonably
     practicable for such Product to be continued to be manufactured by Amersham
     under the terms of this Agreement.

CONDITION 6

INDEMNITIES

6.1  Life Science shall indemnify Amersham in respect of any claim which may be
made against Amersham:

     6.1.1  that the use to which the Products are put constitutes a breach of
            Section 6 of The Health and Safety at Work Act 1974 or any other
            relevant United Kingdom or overseas safety legislation;

     6.1.2  that the use to which the Products are put infringes the patent,
            copyright or other intellectual property rights of any third party;
            and/or

                                                                         Page 20
<PAGE>   22
     6.1.3  arising out of the failure by Life Science to observe the terms of
            the Agreement.

6.2  The provisions of Condition 7.1 shall not apply where the claim arises as a
     result of any negligent or reckless act or omission on the part of Amersham
     or any of the personnel of Amersham.

CONDITION 7

STANDING ORDERS

7.1  Acceptance by Amersham of each standing and call off order received from
     Life Science for the supply and delivery of fixed quantities of the
     Products at stated intervals or for the supply of fixed quantities of
     Products at intervals to be advised by Life Science shall constitute a
     single contract.

7.2  All such orders once accepted are subject to cancellation by Amersham
     giving one month's prior written notice to Life Science and are subject to
     immediate cancellation by Amersham without notice in the event that the
     provisions of Condition 4.3 apply to Life Science.

7.3  Life Science shall only be entitled to cancel such orders on giving one
     month's prior written notice to Amersham and after repayment to Amersham of
     the amount of any discount or special price reduction from which Life
     Science has benefited up to the date of cancellation.

CONDITION 8

FORCE MAJEURE

8.1  If either party is affected by Force Majeure it shall promptly notify the
     other party of the nature and extent of the circumstances in question.

8.2  Notwithstanding any other provision of this Agreement, neither party shall
     be deemed to be in breach of this Agreement, or otherwise be liable to the
     other, for any delay in performance or other non-performance of any of its
     obligations under this Agreement to the extent that the delay or
     non-performance is due to any Force Majeure of which it has notified the
     other party.

8.3  Where a Force Majeure prevents performance of any of their obligations
     under this Agreement, Amersham and Life Science undertake to use reasonable
     endeavours to bring the Force Majeure to a close. If Life Science has paid
     to Amersham any amount in respect of the cost of Products or services that
     it has not provided as a result of Force Majeure and Amersham has a policy
     of insurance in force which enables it to make a claim to cover any loss it
     suffers as a result of such Force Majeure, Amersham shall make a claim
     under such policy and account to Life Science for the proceeds of any such
     claim to the extent that

                                                                         Page 21

<PAGE>   23
they represent an amount in respect of the same costs for which  Amersham has
been paid by Life Science as referred to above.

8.4  If at any time Amersham is affected by Force Majeure in respect of its
obligations under this Agreement, Life Science shall be entitled to obtain from
any other person the provision of any services as Amersham is unable to
provide, but Amersham shall, in no way, be held liable or accountable for any
additional cost, loss or liability incurred by Life Science in so doing.

8.5  Where a Force Majeure event comprises any strike, lock out or similar
industrial action involving some or all of Amersham's employees at the Site,
Amersham shall be obliged to consult with Life Science regarding such
industrial action and Amersham will be obliged to take such course of action in
respect of such strike, lock out or similar industrial action as Life Science
may reasonably request.

CONDITION 9

MISCELLANEOUS

9.1  The failure of Amersham to enforce its rights under the Agreement at any
time for any period of time shall not be construed as a waiver of any such
rights.

9.2  Life Science undertakes not to use any trademarks or tradenames applied by
Amersham to the Products nor to do or permit anything whereby the goodwill and
reputation of such trademarks or tradenames is prejudiced or damaged.

                                                                         Page 22
<PAGE>   24
                                   SCHEDULE 3

                               TERMINATION COSTS

1.   The charges to be paid by Life Science in respect of the continuing costs
of the Site following termination shall be calculated in accordance with the
provisions of clause 6.1. The provisions of clause 6 shall to the extent
applicable continue to apply to the manner and timing of any payment and to any
dispute as to the amount of any charges. The proportion of the charges payable
by Life Science in the period following such termination shall be reduced in
accordance with paragraph 2 below.

2.

<TABLE>
                                                    NUMBER OF MONTHS AFTER TERMINATION
<S>                                <C>            <C>            <C>            <C>
                                   0-6 mths       7-12 mths      13-18          each month
                                                                 mths            from and
                                                                                including 19
                                                                                   months

Actual costs incurred by           100%           80%            50%               0%
Amersham on termination
and proportion of continuing
costs of the Site to be paid
</TABLE>

                                                                         Page 23

<PAGE>   25
SIGNED by Kevin P Kissane                )
for and on behalf of                     ) /s/ Kevin P Kissane
AMERSHAM INTERNATIONAL                   )
PLC in the presence of: James Woods      )
Freshfields, 65 Fleet St, London

SIGNED by Ronald E Long                  )
for and on behalf of                     ) /s/ Ronald E Long
AMERSHAM LIFE SCIENCE                    )
LIMITED                                  )
in the presence of: Arvinder Mangat      )
Freshfields, 65 Fleet St, London<PAGE>   1
                                                                    EXHIBIT 10.4

                            INDUSTRIAL COMPLEX LEASE
                                  (California)

Industrial Complex:      Arques and DeGuine

Landlord:                MP Arques, Inc.

Tenant:                  Molecular Dynamics, Inc.

Reference Date:          November 30, 1999

                                 INDEX TO LEASE

TITLE                                                                       PAGE
ARTICLE 1. DEFINITIONS AND CERTAIN BASIC PROVISIONS..........................  1
ARTICLE 2. GRANTING CLAUSE...................................................  2
ARTICLE 3. LEASEHOLD IMPROVEMENTS/DELIVERY OF DEMISED PREMISES...............  2
ARTICLE 4. RENT..............................................................  3
ARTICLE 5. FINANCIAL REPORTS.................................................  4
ARTICLE 6. TENANT'S RESPONSIBILITY FOR TAXES, OTHER REAL ESTATE
           CHARGES AND INSURANCE EXPENSES....................................  4
ARTICLE 7. COMMON AREA.......................................................  5
ARTICLE 8. LOADING DOCK......................................................  6
ARTICLE 9. USE AND CARE OF DEMISED PREMISES..................................  7
ARTICLE 10. MAINTENANCE AND REPAIR OF DEMISED PREMISES.......................  7
ARTICLE 11. ALTERATIONS......................................................  8
ARTICLE 12. LANDLORD'S RIGHT OF ACCESS.......................................  9
ARTICLE 13. SIGNS; STORE FRONTS..............................................  9
ARTICLE 14. UTILITIES........................................................  9
ARTICLE 15. INSURANCE COVERAGES.............................................. 10
ARTICLE 16. WAIVER OF LIABILITY; MUTUAL WAIVER OF SUBROGATION................ 11
ARTICLE 17. DAMAGES BY CASUALTY.............................................. 12
ARTICLE 18. EMINENT DOMAIN................................................... 13
ARTICLE 19. ASSIGNMENT AND SUBLETTING........................................ 13
ARTICLE 20. SUBORDINATION; ATTORNMENT; ESTOPPELS............................. 15
ARTICLE 21. TENANT'S INDEMNIFICATION......................................... 15
ARTICLE 22. DEFAULT BY TENANT AND REMEDIES................................... 16
ARTICLE 23. LANDLORD'S CONTRACTUAL SECURITY INTEREST......................... 19
ARTICLE 24. HOLDING OVER..................................................... 20
ARTICLE 25. NOTICES.......................................................... 20
ARTICLE 26. COMMISSIONS...................................................... 20
ARTICLE 27. REGULATIONS...................................................... 21
ARTICLE 28. HAZARDOUS MATERIALS.............................................. 21
ARTICLE 29. INTENTIONALLY DELETED............................................ 23
ARTICLE 30. MISCELLANEOUS.................................................... 23

EXHIBIT "A"         DEMISED PREMISES
EXHIBIT "B"         LEASEHOLD IMPROVEMENTS WORK LETTER
EXHIBIT "C"         SUBSEQUENT IMPROVEMENTS WORK LETTER
EXHIBIT "D"         TENANT CONSTRUCTION RULES AND REGULATIONS
EXHIBIT "E"         RIGHT OF FIRST OPPORTUNITY
EXHIBIT "F"         GUARANTY OF LEASE
EXHIBIT "G"         HVAC REPAIR WORK
EXHIBIT "H"         RENEWAL OPTION
<PAGE>   2
                            INDUSTRIAL COMPLEX LEASE
                                  (California)

                                   ARTICLE 1.
                    DEFINITIONS AND CERTAIN BASIC PROVISIONS

1.1  The following list sets out certain defined terms and certain financial
and other information pertaining to this lease:

     (a)  "Landlord": MP Arques, Inc., a Delaware corporation, whose taxpayer
identification number is 33-0666682.

     (b)  Landlord's address: c/o GE Capital Investment Advisors, Inc., 444
Market Street, Suite 2100, San Francisco, California 94111, Attention: Asset
Management and Legal Department.

     (c)  "Tenant": Molecular Dynamics, Inc., a Delaware corporation, whose
taxpayer identification number is 94-3050031.

     (d)  Tenant's address:

          Prior to Commencement Date:   928 E. Arques Avenue
                                        Sunnyvale, CA 94086

          Upon Commencement Date:       928 E. Arques Avenue
                                        Sunnyvale, CA 94086

     (e)  Tenant's trade name: Molecular Dynamics

     (f)  Tenant's Guarantor: Nycomed Amersham, a public limited company
organized under the laws of England, in accordance with the terms of the
Guaranty of Lease attached hereto as Exhibit "F" attached hereto.

     (g)  "Agent": South Bay Development Company, whose address is 511 Division
Street, Campbell, California 95008, Attention: Maureen Bowers.

     (h)  "Industrial Complex": Landlord's property in the City of Sunnyvale,
Santa Clara County, California, which property is commonly known as: 929 E.
Arques Avenue and 310 DeGuigne Avenue, Sunnyvale, California.

     (i)  "Demised Premises": that certain area in the Industrial Complex
located at 929 E. Arques Avenue, Sunnyvale, California 94086, California and
being described or shown cross-hatched on the floor plan(s) attached hereto as
Exhibit "A" which Landlord and Tenant acknowledge and agree to contain 58,688
square feet of rentable area. Additionally, Tenant shall have the right to
lease certain additional space in the Industrial Complex, as described in, and
subject to and in accordance with the terms of Exhibit "E" attached hereto.

     (j)  "Commencement Date": March 1, 2000, which date may be extended in
accordance with Section 3.2 below.

     (k)  "Lease term": commencing on the Commencement Date and continuing for
seven (7) years and zero (0) months after the Commencement Date; provided that
if the Commencement Date is a date other than the first day of a calendar
month, the lease term shall be extended by the number of days remaining in the
calendar month in which the Commencement Date occurs.

     (l)  Minimum guaranteed rental: $111,507.20, which amount shall be
adjusted  annually in accordance with Section 4.1 below.

     (m)  Prepaid rental: $111,507.20, being an estimate of the initial minimum
guaranteed rental, for the first month of the lease term, such prepaid rental
being due and payable upon execution of this lease.

     (n)  Security deposit: $33,145.39, such security deposit being due and
payable upon execution of this lease.

     (o)  Permitted use: for office, research and development, and the
marketing, warehousing, distribution, sales and light manufacturing of life
science equipment and related consumables and components, and for no other
purpose whatsoever. Provided, however, any other legal use not permitted
pursuant to the foregoing sentence shall be subject to Landlord's prior written
consent, not to be unreasonably withheld.

     (p)  Tenant's maximum insurance deductible: $25,000.00

                                       1
<PAGE>   3
          (q) "Tenant's Broker": Colliers International and Cornish & Carey
     Commercial

          (r) "Tenant's Proportionate Share": Sixty-two and Eighty-five
     Hundredths Percent (62.85%)

          (s) Tenant parking: Two Hundred Twenty-Eight (228) unreserved parking
      spaces.

                                   ARTICLE 2.
                                GRANTING CLAUSE

     2.1 Landlord leases the Demised Premises to Tenant, and Tenant leases the
Demised Premises from Landlord, upon all of the terms and conditions set forth
in this lease.

                                   ARTICLE 3.
              LEASEHOLD IMPROVEMENTS/DELIVERY OF DEMISED PREMISES

     3.1.Based on preliminary plans to be submitted to Landlord by Tenant,
Landlord shall prepare plans and specifications for all initial leasehold
improvements (the "Leasehold Improvements") to be constructed or installed or
other work to be performed by Landlord in the Demised Premises, in accordance
with the terms and provisions of the Work Letter attached hereto as Exhibit
"B". The Work Letter sets forth certain dates by which plans and specifications
for the Leasehold Improvements must be prepared, reviewed and approved,
allocates the costs of the Leasehold Improvements, and further describes the
circumstances, if applicable, under which the Commencement Date hereof may be
delayed. In addition, prior to the Commencement Date, landlord shall perform,
at its sole cost and expense, the repair work to the existing HVAC system
serving the Demised Premises (the "HVAC Repair Work") detailed on Exhibit "G"
attached hereto. Tenant acknowledges that the HVAC Repair Work shall only
include the work detailed on Exhibit "G" and shall in no event include any HVAC
work necessitated by Tenant's particular floor plan or Tenant's particular
requirements.

     3.2 If the Demised Premises are not ready for occupancy by Tenant on the
Commencement Date, Landlord shall not be liable for any costs, claims, damages,
or liabilities incurred by Tenant as a result thereof, and the lease term and
the obligations of Tenant hereunder shall nonetheless commence and continue in
full force and effect; provided, however, if the Demised Premises are not ready
for occupancy on the Commencement Date due to omission, delay, or default on
the part of Landlord, the lease term shall not commence until the Demised
Premises are ready for occupancy by Tenant. In such event, the Commencement
Date shall be deemed to be postponed to the date the Demised Premises are ready
for occupancy, whereupon the lease term shall commence. Such postponement of
rent and of the Commencement Date of this Lease shall constitute full
settlement of all claims that Tenant might otherwise have against Landlord by
reason of the Demised Premises not being ready for occupancy by Tenant on the
stated Commencement Date. Should the lease term commence on a date other than
that specified in Section 1(j) above, Landlord will send Tenant a written
statement of such adjusted Commencement Date, and Tenant will, if Landlord
requests, confirm such adjusted date in writing. The Demised Premises shall be
deemed to be ready for occupancy on the first to occur of (i) the date that all
work required to be completed pursuant to the terms of the Work Letter attached
hereto as Exhibit "B" as well as the HVAC Repair Work detailed on Exhibit "G"
attached hereto has been substantially completed (except for minor finishing
jobs); provided, however, that if such work is delayed because of a default or
failure, or both, of Tenant, then the Demised Premises shall also be deemed
ready for occupancy when such work would have been substantially completed if
Tenant's default or failure had not occurred; such date shall be deemed to have
occurred on the date there is delivered to Tenant a certificate from Landlord's
architect that all improvements required to be constructed or repairs to be
performed by Landlord in the Demised Premises under the terms of this lease are
substantially complete (except for minor finishing jobs, which Landlord shall
complete using due diligence, and "punchlist" items, which shall be addressed
in accordance with the terms of Paragraph 6 of Exhibit "B") (or would have been
complete but for the default or failure of Tenant), which certificate shall be
binding and conclusive upon Tenant in the absence of bad faith and collusion on
the part of or between Landlord and Landlord's architect, or (ii) the date on
which Tenant begins occupancy of the Demised Premises.

     3.3 The taking of possession of the Demised Premises by Tenant shall be
conclusive evidence (a) that Tenant accepts the Demised Premises as suitable
for the purposes for which the same are leased, (b) that Tenant accepts the
Industrial Complex and each and every part and appurtenance thereof as being in
a good and satisfactory condition, and (c) that Landlord has fully complied
with Landlord's obligations contained in this Lease with respect to the
construction of the Industrial Complex and the Leasehold Improvements. A site
inspection by Tenant accompanied by a representative of Landlord shall not be
deemed "the taking of possession" under the preceding sentence. Tenant
acknowledges that the Demised Premises are being leased "AS IS," with Tenant
accepting all defects, if any; and Landlord makes no warranty of any kind,
express or implied, with respect to the Demised Premises (without limitation,
Landlord makes no warranty as to the habitability, fitness or suitability of
the Demised Premises for a particular purpose nor as to the absence of any
toxic or otherwise hazardous substances). This Section 3.3 is subject to any
contrary requirements under applicable law; however, in this regard Tenant
acknowledges that it has been given the opportunity to inspect the Demised
Premises and to have qualified experts inspect the Demised Premises prior to
the execution of this lease.

                                       2
<PAGE>   4
     3.4  Provided Tenant is not then in default under this lease and upon
receipt of a written request and preliminary plans therefor from Tenant (which
notice must be given not earlier than January 1, 2001 but prior to July 31,
2002), Landlord shall construct certain subsequent improvements (the
"Subsequent Improvements") to the Demised Premises in accordance with the terms
and provisions of the Work Letter attached hereto as Exhibit "C". The
Subsequent Improvements shall be performed solely to what is currently the
warehouse portion of the Demised Premises and are more particularly described
in the Work Letter attached hereto as Exhibit "C". The Work Letter sets forth
certain dates by which plans and specifications for the Subsequent Improvements
must be prepared, reviewed and approved and allocates the cost of the
Subsequent Improvements. Should Tenant fail to provide Landlord with a written
request and preliminary plans for the construction of the Subsequent
Improvements within the time period required by the first sentence of this
Section 3.4, then in such event this Section 3.4 shall be void and of no
further force and effect.

                                   ARTICLE 4.
                                      RENT

     4.1  The minimum guaranteed rental shall be subject to periodic increases
based upon the following schedule and which increases shall become effective
automatically and without further notice as of the first day of the specified
lease month:

<TABLE>
<CAPTION>
               Lease Months                  Monthly Rental
               ------------                  --------------
               <S>                           <C>
               1-12                          $111,507.20
               13-24                          114,852.41
               25-36                          118,297.98
               37-48                          121,846.91
               49-60                          125,502.31
               61-72                          129,267.37
               73-84                          133,145.39
</TABLE>

     4.2  Rental shall accrue from the Commencement Date, and shall be payable
to Landlord at Agent's address specified in Section 1.1(g) above or at such
other address as Landlord shall so notify Tenant from time to time.

     4.3  Tenant shall pay to Landlord minimum guaranteed rental in monthly
installments in the amounts specified in Section 1.1(l) and Section 4.1 of this
lease. The first such monthly installment shall be due and payable on or before
the Commencement Date, and subsequent installments shall be due and payable on
or before the first day of each succeeding calendar month during the lease term;
provided that if the Commencement Date is a date other than the first day of a
calendar month, there shall be due and payable on or before such date as minimum
guaranteed rental for the balance of such calendar month a sum equal to that
proportion of the rent specified for the first full calendar month as herein
provided, which the number of days from the Commencement Date to the end of the
calendar month during which the Commencement Date shall fall bears to the total
number of days in such month. Tenant agrees to pay to Landlord, if assessed by
the jurisdiction in which the Industrial Complex is located, any sales, excise
or other tax imposed, assessed or levied in connection with Tenant's payment of
rents.

     4.4  It is understood that the minimum guaranteed rental is payable on or
before the first day of each calendar month (in accordance with Section 4.2
above), without offset or deduction of any nature. In the event any rental is
not received within five (5) days after its due date for any reason whatsoever,
or if any rental payment is by check which is returned for insufficient funds,
then in addition to the past due amount Tenant shall pay to Landlord one of the
following (the choice to be at the sole option of Landlord unless one of the
choices is improper under applicable law, in which event the other alternative
will automatically be deemed to have been selected): (a) a late charge in an
amount equal to eight percent (8%) of the rental then due, in order to
compensate Landlord for its administrative and other overhead expenses; or (b)
interest on the rental then due at the maximum contractual rate which could
legally be charged in the event of a loan of such rental to Tenant (but in no
event to exceed 1-1/2% per month), such interest to accrue continuously on any
unpaid balance due to Landlord by Tenant during the period commencing with the
rental due date and terminating with the date on which Tenant makes full payment
of all amounts owing to Landlord at the time of said payment. Any such late
charge or interest payment shall be payable as additional rental under this
lease, shall not be considered a waiver by Landlord of any default by Tenant
hereunder, and shall be payable immediately on demand.

     4.5  If Tenant fails in two (2) consecutive months to make rental payments
within ten (10) days after it is due, Landlord, in order to reduce its
administrative costs, may require, by giving written notice to Tenant (and in
addition to any late charge or interest accruing pursuant to Section 4.4 above,
as well as any other rights and remedies accruing pursuant to Article 22 or
Article 23 below, or any other provision of this lease or at law), that minimum
guaranteed rentals are to be paid quarterly in advance instead of monthly, and
that all future rental payments are to be made on or before the due date by
cash, cashier's check, or money order and that the delivery of Tenant's
personal or corporate check will no longer constitute a payment of rental as
provided in this lease. Any acceptance of a monthly rental payment or of a
personal or corporate check thereafter by Landlord shall not be construed as a
subsequent waiver of said rights.

                                       3
<PAGE>   5
     4.6  Tenant shall pay when due any and all sales taxes levied, imposed or
assessed by the United States of America, the State of California, or any
political subdivision thereof or other taxing authority upon the minimum
guaranteed rental, additional rent and all other sums payable hereunder.

                                   ARTICLE 5.
                               FINANCIAL REPORTS

     5.1  Tenant shall, when requested by Landlord from time to time, furnish a
true and accurate audited statement of its financial condition prepared in
conformity with recognized accounting principles, and in a form reasonably
satisfactory to Landlord.

                                   ARTICLE 6.
                     TENANT'S RESPONSIBILITY FOR TAXES, OTHER
                   REAL ESTATE CHARGES AND INSURANCE EXPENSES

     6.1  Tenant shall be liable for all taxes levied against personal property
and trade fixtures placed by Tenant in the Demised Premises which taxes shall be
paid when due and before any delinquency. If any such taxes are levied against
Landlord or Landlord's property and if Landlord elects to pay the same or if the
assessed value of Landlord's property is increased by inclusion of personal
property and trade fixtures placed by Tenant in the Demised Premises and
Landlord elects to pay the taxes based on such increase, Tenant shall pay to
Landlord upon demand (and upon Tenant's receipt of proof thereof) of that part
of such taxes for which Tenant is primarily liable hereunder.

     6.2  Tenant shall also be liable for Tenant's Proportionate Share (as
specified in Section 1.1(r) above) of all "real estate charges" (as defined
below) and "insurance expenses" (as defined below) related to the Industrial
Complex or Landlord's ownership of the Industrial Complex. Tenant's obligations
under this Section 6.2 shall be prorated during any partial year (i.e., the
first year and the last year of the lease term). Tenant's Proportionate Share
shall be adjusted as reasonably determined by Landlord in the event that the
total rentable area of the buildings in the Industrial Complex shall change
after the date hereof. "Real estate charges" shall include ad valorem taxes,
general and special assessments, parking surcharges, any tax or charge for
governmental services (such as street maintenance or fire protection) which are
attributable to the transfer or transaction directly or indirectly represented
by this Lease, by any sublease or assignment hereunder or by any document to
which Tenant is a party creating or transferring (or reflecting the creation or
transfer of) any interest or an estate in the Demised Premises and any tax or
charge which replaces or is in addition to any of such above-described "real
estate charges"; real estate charges shall also include any fees, expenses or
costs (including reasonable attorneys' fees, expert fees and the like) incurred
by Landlord in protesting or contesting any assessments levied or the tax rate.
"Real estate charges" shall not be deemed to include sales tax payable by Tenant
pursuant to Section 4.6 above and any franchise, estate, inheritance or general
income tax. "Insurance expenses" shall include all premiums and other expenses
incurred by Landlord for liability insurance and fire and extended coverage
property insurance (plus whatever endorsements or special coverages which
Landlord, in Landlord's sole discretion, may consider appropriate) business
interruption, and rent loss, earthquake and any other insurance policy which may
be carried by Landlord insuring the Demised Premises, the Common Area, the
Industrial Complex, or any improvements thereon.

     6.3  At Landlord's sole option, Landlord and Tenant shall attempt to obtain
separate assessments for Tenant's obligations pursuant to Section 6.1 and; with
respect to Section 6.2, for such of the "real estate charges" as are readily
susceptible of separate assessment. To the extent of a separate assessment,
Tenant agrees to pay such assessment before it becomes delinquent and to keep
the Demised Premises free from any lien or attachment; moreover, as to all
periods of time during the lease term, this covenant of Tenant shall survive the
termination of the lease. With regard to the calendar year during which the
lease term expires, Landlord at its option either may bill Tenant when the
charges become payable or may charge Tenant an estimate of Tenant's pro rata
share of whichever charges have been paid directly by Tenant (based upon
information available for the current year plus, if current year information is
not adequate in itself, information relating to the immediately preceding year).

     6.4  At such time as Landlord has reason to believe that at some time
within the immediately succeeding twelve (12) month period Tenant will owe
Landlord any amounts pursuant to one or more of the preceding sections of this
Article 6, Landlord may direct that Tenant prepay monthly a pro rata portion of
the prospective future payment (i.e., the prospective future payment divided by
the number of months before the prospective future payment will be due). Tenant
agrees that any such prepayment directed by Landlord shall be due and payable
monthly on the same day that minimum guaranteed rental is due.

     6.5  In the event that any payment due from Tenant to Landlord is not
received within ten (10) days after its due date for any reason whatsoever, or
if any such payment is by check which is returned for insufficient funds, then
in addition to the amount then due, Tenant shall pay to Landlord interest on the
amount then due at the maximum contractual rate which could legally be charged
in the event of a loan of such amount to Tenant (but in no event to exceed
1-1/2% per month), such interest to accrue continuously on any unpaid balance
until paid.

                                       4

<PAGE>   6
                                   ARTICLE 7.
                                  COMMON AREA

     7.1  The term "Common Area" is defined for all purposes of this lease as
that part of the Industrial Complex intended for the common use of all tenants,
including among other facilities (as such may be applicable to the Industrial
Complex), parking areas, private streets and alleys, landscaping, curbs,
loading areas, side-walks, recreation/picnic areas, malls and promenades
(enclosed or otherwise), lighting facilities, drinking fountains, meeting
rooms, public toilets, and the like, but excluding (i) space in buildings (now
or hereafter existing) designated for rental for commercial purposes, as the
same may exist from time to time; (ii) streets and alleys maintained by a
public authority; (iii) areas within the Industrial Complex which may from time
to time not be owned by Landlord (unless subject to a cross-access agreement
benefiting the area which includes the Demised Premises, the existence of which
Landlord shall notify Tenant); and (iv) areas leased to a single-purpose user
where access is restricted. In addition, although the roof(s) of the
building(s) in the Industrial Complex are not literally part of the Common
Area, they will be deemed to be so included for purposes of (i) Landlord's
ability to prescribe rules and regulations regarding same, and (ii), subject to
the terms of Section 7.4 below, their inclusion for purposes of common area
maintenance reimbursements. For purposes of this lease, the building containing
the Demised Premises is referred to as the "Building". Landlord reserves the
right to change from time to time the dimensions and location of the Common
Area, as well as the dimensions, identities, locations and types of any
buildings, except for the location of the Building, signs or other improvements
in the Industrial Complex. For example, and without limiting the generality of
the immediately preceding sentence, Landlord may from time to time substitute
for any parking area other areas reasonably accessible to the tenants of the
Industrial Complex, which areas may be elevated, surface or underground.

     7.2  Tenant, and its employees and customers, and when duly authorized
pursuant to the provisions of this lease, its subtenants, licensees, invitees,
contractors and concessionaires, shall have the nonexclusive right to use the
Common Area (excluding (subject to Section 7.2(d) below) roofs of buildings in
the Industrial Complex) as constituted from time to time, such use to be in
common with Landlord, other tenants in the Industrial Complex and other persons
permitted by Landlord to use the same, and subject to rights of governmental
authorities, easements, other restrictions of record, and such reasonable rules
and regulations governing use as Landlord may from time to time prescribe. For
example, and without limiting the generality of Landlord's ability to establish
reasonable rules and regulations governing all aspects of the Common Area,
Tenant agrees as follows:

          (a)  Landlord may from time to time designate specific areas within
     the Industrial Complex or in reasonable proximity thereto in which
     automobiles owned by Tenant, its employees, subtenants, licensees,
     invitees, contractors and concessionaires shall be parked in a
     non-reserved manner in common with other tenants of the Industrial
     Complex; and in this regard, Tenant shall furnish to Landlord upon request
     a complete list of license numbers of all automobiles operated by Tenant,
     its employees, its subtenants, its licensees or its concessionaires, or
     their employees; and Tenant agrees that if any automobile or other vehicle
     owned by Tenant or any of its employees, its subtenants, its licensees or
     its concessionaires, or their employees, shall at any time be parked in
     any part of the Industrial Complex other than the specified areas
     designated for employee parking, Tenant shall pay to Landlord as
     additional rent upon demand an amount equal to the daily rate or charge
     for such parking as established by Landlord from time to time for each
     day, or part thereof, that such automobile or other vehicle is so parked.
     Subject to the foregoing, during the initial lease term, provided no event
     of default has occurred under this lease and is continuing beyond the
     expiration of applicable notice and cure periods, if any, Landlord agrees
     to make available to Tenant, at no additional charge to Tenant, on an
     unreserved basis in common with the other tenants of the Industrial
     Complex, the number of parking spaces set out in Section 1.1(s) above.

          (b)  Tenant shall not solicit business within the Common Area nor
     take any action which would interfere with the rights of other persons
     to use the Common Area.

          (c)  Landlord may temporarily close any part of the Common Area for
     such periods of time as may be necessary to make repairs or alterations or
     to prevent the public from obtaining prescriptive rights.

          (d)  With regard to the roof(s) of the building(s) in the Industrial
     Complex, use of the roof(s) is reserved to Landlord, or with regard to any
     tenant demonstrating to Landlord's satisfaction a need to use same, to
     such tenant after receiving prior written consent from Landlord.
     Notwithstanding the foregoing, subject to such reasonable restrictions as
     Landlord may impose, Tenant shall have such access to the roof of the
     Building as is strictly necessary to perform (i) its obligations under
     this lease (e.g., the maintenance of the HVAC system); and (ii)
     alterations approved in advance under the terms of Article 11 of this
     lease. Tenant shall not be entitled to place any antennae or other
     communications equipment on the roof of the Building until it has first
     obtained Landlord's reasonable consent, which may be conditioned upon
     Tenant's execution of Landlord's standard form roof access agreement. All
     such access by Tenant to the roof shall be subject to all terms and
     conditions of this lease, including without limitation the insurance
     provisions of Article 15 and the indemnification obligations under Article
     21 of this lease.

                                       5

<PAGE>   7
     7.3  Landlord shall be responsible for the operation, management and
maintenance of the Common Area, the manner of maintenance and the expenditures
therefor to be in the sole discretion of Landlord, but to be generally in
keeping with similar industrial centers within the same geographical area as the
Industrial Complex. Landlord shall be the sole determinant of the type and
amount of security services to be provided, if any. Landlord shall not be
liable to Tenant, and Tenant hereby waives any claim against Landlord for (i)
any unauthorized or criminal entry of third parties into the Demised Premises or
Industrial Complex, (ii) any damage to persons or property, or (iii) any loss of
property in and about the Demised Premises or Industrial Complex from any
unauthorized or criminal acts of third parties, regardless of any action,
inaction, failure, breakdown or insufficiency of security.

     7.4  In addition to the rentals and other charges prescribed in this lease,
Tenant shall pay to Landlord Tenant's Proportionate Share of the cost of
operation and maintenance of the Common Area which may be incurred by Landlord
in its discretion, including, among other costs, those for lighting, painting,
cleaning, policing, inspecting, repairing and replacing; Tenant's Proportionate
Share of capital expenditures and expenses incurred by Landlord to increase the
operating efficiency of the Industrial Complex or to cause the Common Area to
comply with applicable Regulations (as such term is defined in Section 27.1), it
being agreed that the cost of such capital expenditures and installation shall
be amortized over the reasonable life of the capital expenditure, with the
reasonable life and amortization schedule being determined in accordance with
generally accepted accounting principles consistently applied; Tenant's
Proportionate Share of the management fee Landlord pays to the property manager
for the Industrial Complex; a reasonable allowance for Landlord's overhead costs
and the cost of any insurance for which Landlord is not reimbursed pursuant to
Section 6.2, but specifically excluding all expenses paid or reimbursed pursuant
to Article 6. In addition, although the roof(s) of the building(s) in the
Industrial Complex are not literally part of the Common Area, Landlord and
Tenant agree that roof maintenance, repair and replacement shall be included as
a common area maintenance item to the extent not specifically allocated to
Tenant under this lease nor to another tenant pursuant to its lease.
Notwithstanding the foregoing, with respect to the cost of the maintenance,
repair and replacement of the roof(s) of the building(s) in the Industrial
Complex, Landlord and Tenant agree as follows: (i) Tenant shall pay one hundred
percent (100%) of the cost of the maintenance, repair and replacement of the
roof of the Building; and (ii) Common Area Costs charged to Tenant under this
lease shall not include the cost of the maintenance, repair and replacement of
the roof of the other buildings currently located in the Industrial Complex.
With regard to capital expenditures other than the capital expenditures
contemplated by the first sentence of this Section, (i) the original investment
in capital improvements, i.e., upon the initial construction of the Industrial
Complex, shall not be included, and (ii) improvements and replacements, to the
extent capitalized on Landlord's records, shall be included only to the extent
of a reasonable depreciation or amortization (including interest accruals
commensurate with Landlord's interest costs). If this lease should commence on a
date other than the first day of a calendar year or terminate on a date other
than the last day of a calendar year, Tenant's reimbursement obligations under
this Section 7.4 shall be prorated based upon Landlord's expenses for the entire
calendar year. Tenant shall make such payment to Landlord on demand, at
intervals not more frequent than monthly. Landlord may, at its option, make
monthly or other periodic charges based upon the estimated annual cost of
operation and maintenance of the Common Area, payable in advance but subject to
adjustment after the end of the year on the basis of the actual cost for such
year. In the event that any payment due from Tenant to Landlord is not received
within ten (10) days after its due date for any reason whatsoever, or if any
such payment is by check which is returned for insufficient funds, then, in
addition to the amount then due, Tenant shall pay to Landlord interest on the
amount then due at the maximum contractual rate which could legally be charged
in the event of a loan of such amount to Tenant (but in no event to exceed
1-1/2% per month), such interest to accrue continuously on any unpaid balance
until paid. Any delay or failure of Landlord in delivering any estimate or
statement described in this Section 7.4 or in computing or billing Tenant's
Proportionate Share of the foregoing costs shall not constitute a waiver of
Landlord's right to require an increase in rent as provided herein or in any way
impair the continuing obligations of Tenant under this Section.

                                   ARTICLE 8.

                                  LOADING DOCK

     8.1  Tenant shall have a license to use and occupy the loading dock(s)
outside the Demised Premises as shown on Exhibit "A" (collectively, the "Loading
Dock"). Subject to the provisions of this lease, and such rules and regulations
as may be promulgated by Landlord from time to time, Tenant, its employees,
agents, contractors, licensees, guests and invitees may use the Loading Dock for
loading and access to and from the Demised Premises for the permitted use set
forth in Section 1.1(o) above. Tenant's use of the Loading Dock shall be at its
sole risk, and Landlord shall not be liable for any injury to any person or
property, or for any loss or damage to any vehicle or its contents resulting
from theft, collision, vandalism or any other cause whatsoever. Tenant shall
cause its personnel and visitors to remove their vehicles from the Loading Dock
at the end of each business day. In the event the Loading Dock is intended for
use in common with other tenants in the Industrial Complex, Tenant shall pay
Landlord within ten (10) days after rendition of a bill therefor an equitable
share of the costs of maintenance and repair of the Loading Dock as such costs
are allocated by Landlord based upon the estimated use by each of the respective
tenants using the Loading Dock.

                                       6

<PAGE>   8
                                   ARTICLE 9.
                        USE AND CARE OF DEMISED PREMISES

     9.1   The Demised Premises shall be used and occupied by Tenant solely for
the permitted use specified in Section 1.1(o) above and for no other purpose.
Tenant, at its sole cost and expense, shall obtain and keep in effect during the
term, all permits, licenses and other authorizations necessary to permit Tenant
to use and occupy the Demised Premises for the permitted use. Without limiting
the generality of the foregoing, Tenant shall not use or store any gasoline or
flammable or so called "Red Label" materials in or about the Demised Premises.
All equipment used within the Demised Premises shall be subject to approval by
Landlord's insurance carriers and shall be Underwriters Laboratory or Factory
Mutual approved for the uses intended, evidence of which shall be furnished to
Landlord upon request. Subject to Section 28.2 below, Tenant shall not operate
any machinery or equipment in the Demised Premises which, in Landlord's sole
discretion, shall cause any excessive noise, vibration, damage or disturbance to
the other tenants in the Industrial Complex.

     9.2   Tenant shall take good care of the Demised Premises and Loading Dock
and keep the same free from waste at all times. Tenant shall not over-load the
floors in the Demised Premises, nor deface or injure the Demised Premises or
Loading Dock. Tenant shall keep the Demised Premises, Loading Dock and all
side-walks, service-ways and loading areas adjacent to the Demised Premises
neat, clean and free from dirt, rubbish, ice or snow at all times. Tenant shall
store all trash and garbage within the Demised Premises or in a trash dumpster
or similar container approved by Landlord as to type, location and screening;
and Tenant shall arrange for the regular pick-up of such trash and garbage at
Tenant's expense (unless Landlord finds its necessary to furnish such a service,
in which event Tenant shall be charged an equitable portion of the total of the
charges to all tenants using the service). Receiving and delivery of goods and
merchandise and removal of garbage and trash shall be made only in the manner
and areas prescribed by Landlord. Tenant shall not operate an incinerator or
burn trash or garbage within the Industrial Complex.

                                  ARTICLE 10.
                   MAINTENANCE AND REPAIR OF DEMISED PREMISES

     10.1  Landlord shall, at Landlord's sole cost and expense, keep the
foundation, the exterior walls (except plate glass; windows, doors and other
exterior openings; window and door frames, molding, closure devices, locks and
hardware; special store fronts; lighting, heating, air conditioning, plumbing
and other electrical, mechanical and electromotive installation, equipment and
fixtures; signs, placards, decorations or other advertising media of any type;
and interior painting or other treatment of exterior walls) and structural
elements of the roof of the Demised Premises in good repair. Landlord, however,
shall not be required to make any repairs occasioned by the act or negligence of
Tenant, its agents, contractors, employees, subtenants, invitees, customers,
licensees and concessionaires (including, but not limited to, roof leaks
resulting from Tenant's installation of air conditioning equipment or any other
roof penetration or placement); and the provisions of the previous sentence are
expressly recognized to be subject to the provisions of Article 17 and Article
18 of this lease. In the event that the Demised Premises should become in need
of repairs required to be made by Landlord hereunder, Tenant shall give
immediate written notice thereof to Landlord and Landlord shall have a
reasonable time after receipt by Landlord of such written notice in which to
make such repairs. All such repairs shall be commenced promptly and prosecuted
with reasonable diligence, and Landlord shall use good faith efforts to expedite
any emergency repairs. Landlord shall not be liable to Tenant for any
interruption of Tenant's business or inconvenience caused due to any work
performed in the Demised Premises or in the Industrial Complex pursuant to
Landlord's rights and obligations under the Lease, so long as the work is
performed without gross negligence or willful misconduct. Landlord shall use
commercially reasonable and good faith efforts to minimize the disruption to and
interference with Tenant's business caused by its performance of work in the
Demised Premises pursuant to Landlord's rights and obligations under this lease.

     10.2  Tenant shall keep the Demised Premises in good, clean and habitable
condition and shall at its sole cost and expense keep the Demised Premises free
of insects, rodents, vermin and other pests and make all needed repairs and
replacements, including replacement of cracked or broken glass, except for
repairs and replacements required to be made by Landlord under the provisions of
Section 10.1, Article 17 and 18. Without limiting the coverage of the previous
sentence, it is understood that Tenant's responsibilities therein include the
repair and replacement in accordance with all applicable Regulations (as defined
in Section 27.1 below) of all lighting, heating, air conditioning, plumbing and
other electrical, mechanical and electromotive installation, equipment and
fixtures and also include all utility repairs in ducts, conduits, pipes and
wiring, and any sewer stoppage located in, under and above the Demised Premises,
regardless of when or how the defect or other cause for repair or replacement
occurred or became apparent; provided, however, that as to the maintenance and
repair of the HVAC equipment in the Demised Premises, Landlord shall have the
option of contracting directly with an HVAC servicing company for all such work
and charging Tenant for all costs thereof. If any repairs required to be made by
Tenant hereunder are not made within ten (10) days after written notice
delivered to Tenant by Landlord, Landlord may at its option make such repairs
without liability to Tenant for any loss or damage which may result to its stock
or business by reason of such repairs and Tenant shall pay to Landlord upon
demand, as additional rental hereunder, the cost of such repairs plus interest
at the maximum contractual rate which could legally be charged in the event of a
loan of such payment to Tenant (but in no event to exceed 1-1/2% per month),
such interest to accrue continuously from the date of payment by Landlord until
repayment by Tenant. At the expiration of this lease, Tenant shall surrender

                                       7
<PAGE>   9
the Demised Premises in good condition, excepting reasonable wear and tear and
losses required to be restored by Landlord in Section 10.1, Article 17 and
Article 18 of this lease.

     10.3 Tenant waives the right to make repairs at Landlord's expense under
Sections 1941 and 1942 of the California Civil Code and all other laws now or
hereafter in effect.

                                  ARTICLE 11.
                                  ALTERATIONS

     11.1 Tenant shall not make any alterations, additions or improvements to
the Demised Premises (collectively, the "Alterations") without the prior written
consent of Landlord, which consent shall not be unreasonably withheld or
delayed, except for (i) the installation of unattached, movable trade fixtures
which may be installed without drilling, cutting or otherwise defacing the
Demised Premises, and (ii) nonstructural Alterations in the Demised Premises
which are not visible from the outside of the Demised Premises, if the cost of
such nonstructural Alterations do not exceed Fifty Thousand Dollars ($50,000.00)
in any twelve (12) month period. Even though Landlord's consent is not required,
the foregoing alterations shall be subject to all other requirements of Article
11. Tenant shall furnish complete plans and specifications to Landlord at the
time it requests Landlord's consent to any Alterations if the desired
Alterations (i) will affect the Industrial Complex's mechanical, electrical,
plumbing or life safety systems or services, or (ii) will affect any structural
component of the Demised Premises or the Industrial Complex, or (iii) will
require the filing of plans and specifications with any governmental or
quasi-governmental agency or authority, or (iv) will cost in excess of Fifty
Thousand Dollars ($50,000.00). Subsequent to obtaining Landlord's consent and
prior to commencement of the Alterations, Tenant shall deliver to Landlord any
building permit required by applicable law and a copy of the executed
construction contract(s). Tenant shall reimburse Landlord within ten (10) days
after the rendition of a bill for all of Landlord's actual out-of-pocket costs
incurred in connection with any Alterations, including, without limitation, all
reasonable management, engineering, outside consulting, and construction fees
incurred by or on behalf of Landlord for the review and approval of Tenant's
plans and specifications and for the reasonable monitoring of construction of
the Alterations. If Landlord consents to the making of any Alterations, such
Alterations shall be made by Tenant at Tenant's sole cost and expense by a
contractor approved in writing by Landlord. Tenant shall give Landlord not less
than ten (10) days advance written notice of the commencement of Tenant's
Alterations to enable Landlord to post and record notices of nonresponsibility.
Tenant shall require its contractor to maintain insurance in such commercially
reasonable amounts and in such form as Landlord may require. Any construction,
alteration, maintenance, repair, replacement, installation, removal or
decoration undertaken by Tenant in connection with the Demised Premises shall be
completed in accordance with plans and specifications which must be approved by
Landlord, shall be carried out in a good, workmanlike and prompt manner and in
accordance with the provisions of Exhibit "D" attached hereto, shall comply with
all applicable Regulations of the authorities having jurisdiction thereof, and
shall be subject to supervision by Landlord or its employees, agents or
contractors. Without limiting the generality of the immediately preceding
sentence, any installation or replacement of Tenant's heating or air
conditioning equipment must be effected strictly in accordance with Landlord's
instructions, the Clean Air Act and all other applicable Regulations. Without
Landlord's prior written consent, Tenant shall not use any portion of the Common
Areas either within or without the Industrial Complex in connection with the
making of any Alterations. If the Alterations which Tenant causes to be
constructed result in Landlord being required to make any alterations and/or
improvements to other portions of the Industrial Complex in order to comply with
any applicable Regulations, then Tenant shall reimburse Landlord upon demand for
all costs and expenses incurred by Landlord in making such alterations and/or
improvements. Any Alterations made by Tenant shall become the property of
Landlord upon installation and shall remain on and be surrendered with the
Demised Premises upon the expiration or sooner termination of this lease, except
Tenant shall upon demand by Landlord, at Tenant's sole cost and expense,
forthwith and with all due diligence remove all or any portion of any
Alterations made by Tenant which are designated in writing by Landlord to be
removed and repair and restore the Demised Premises in a good and workmanlike
manner to their original condition, reasonable wear and tear excepted.
Notwithstanding the foregoing, Landlord acknowledges that Tenant shall not be
required to remove the Leasehold Improvements to be constructed by Landlord in
accordance with Exhibit "B" or the Subsequent Improvements to be constructed in
accordance with Exhibit "C".

     11.2 All construction work done by Tenant within the Demised Premises shall
be performed in a good and workmanlike manner with new materials of first-class
quality, lien-free and in compliance with all governmental requirements and
Regulations, and in such manner as to cause a minimum of interference with other
construction in progress and with the transaction of business in the Industrial
Complex. Tenant agrees to indemnify Landlord and hold Landlord harmless against
any loss, liability or damage resulting from such work, and Tenant shall, if
requested by Landlord, furnish a bond or other security reasonably satisfactory
to Landlord against any such loss, liability or damage.

     11.3 In the event Tenant uses a general contractor to perform construction
work within the Demised Premises, Tenant shall, prior to the commencement of
such work, require said general contractor to execute and deliver to Landlord a
waiver and release of any and all claims against Landlord and liens against the
Industrial Complex to which such contractor might at any time be entitled. The
delivery of the waiver and release of lien within the time period set forth
above shall be a condition precedent to Tenant's ability to enter on and begin
its construction work at the Demised Premises and, if applicable, to any
reimbursement from Landlord for its construction work.

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<PAGE>   10
     11.4  Nothing contained in this lease shall be construed as constituting
the consent or request of Landlord, express or implied, to or for the
performance by any contractor, laborer, materialman or vendor of any labor or
services or for the furnishing of any materials for any construction,
alteration, addition, repair or demolition of or to the Demised Premises or any
part thereof. All materialmen, contractors, artisans, mechanics, laborers and
any other persons now or hereafter furnishing any labor, services, materials,
supplies or equipment to Tenant with respect to any portion of the Demised
Premises are hereby charged with notice that they must look exclusively to
Tenant to obtain payment for same. Tenant and any subtenants shall have no power
to do any act or make any contract which may create or be the foundation of any
lien, mortgage or other encumbrance upon the reversionary or other estate of
Landlord, or any interest of Landlord in the Demised Premises. NOTICE IS HEREBY
GIVEN THAT LANDLORD IS NOT AND SHALL NOT BE LIABLE FOR ANY LABOR, SERVICES OR
MATERIALS FURNISHED OR TO BE FURNISHED TO TENANT OR TO ANYONE HOLDING THE
DEMISED PREMISES OR ANY PART THEREOF, AND THAT NO MECHANICS' OR OTHER LIENS FOR
ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF
LANDLORD IN AND TO THE DEMISED PREMISES.

     11.5  In the event that Landlord elects to remodel all or any portion of
the Industrial Complex, Tenant will cooperate with such remodeling, including
Tenant's tolerating temporary inconveniences (and even the temporary removal of
Tenant's signs in order to facilitate such remodeling, as it may relate to the
exterior of the Demised Premises).

                                  ARTICLE 12.
                           LANDLORD'S RIGHT OF ACCESS

     12.1  Landlord and Landlord's agents and representatives shall have the
right to enter the Demised Premises at any time in case of an emergency, and at
all other reasonable times upon prior reasonable notice (which notice shall not
be required in event of emergency) for any purpose permitted pursuant to the
terms of this lease, including, but not limited to, examining the Demised
Premises; making such repairs or alterations therein as may be necessary or
appropriate in Landlord's sole judgment for the safety and preservation
thereof; erecting, installing, maintaining, repairing or replacing wires,
cables, conduits, vents, ducts, risers, pipes, HVAC equipment or plumbing
equipment running in, to or through the Demised Premises; showing the Demised
Premises to prospective purchasers or mortgagees and during the last year of
this lease, prospective tenants; and posting notices of nonresponsibility.

     12.2  If requested in writing by Landlord, Tenant shall give Landlord a key
for all of the doors for the Demised Premises, excluding Tenant's vaults, safes,
files and private offices of Tenant's executives. Landlord shall have the right
to use any and all means to open the doors to the Demised Premises in an
emergency in order to obtain entry thereto without liability to Tenant therefor,
except for Landlord's willful misconduct. Any entry to the Demised Premises by
Landlord by any of the foregoing means, or otherwise, shall not be construed or
deemed to be a forcible or unlawful entry into or a detainer of the Demised
Premises, or an eviction, partial eviction or constructive eviction of Tenant
from the Demised Premises or any portion thereof, and shall not relieve Tenant
of its obligations hereunder.

                                  ARTICLE 13.
                              SIGNS; STORE FRONTS

     13.1  Tenant shall not place or permit to be placed any signs upon (i) the
roof, facade or windows of the Demised Premises, or (ii) the Common Areas or any
exterior area of the Industrial Complex without Landlord's prior written
approval which approval shall not be unreasonably withheld or delayed provided
any proposed sign is placed only in those locations as may be designated by
Landlord, and complies with the sign criteria promulgated by Landlord from time
to time. Upon request of Landlord, Tenant shall immediately remove any sign,
advertising material or lettering which Tenant has placed or permitted to be
placed upon the exterior or interior surface of any door or window or at any
point inside the Demised Premises, on the exterior of the Industrial Complex if
reasonably required in connection with any cleaning, maintenance or repairs to
the Industrial Complex or which, in Landlord's reasonable opinion, is of such a
nature as to not be in keeping with the standards of the Industrial Complex and
if Tenant fails to do so, Landlord may without liability remove the same at
Tenant's expense. Tenant shall comply with such reasonable regulations as may
from time to time be promulgated by Landlord governing signs, advertising
material or lettering of all tenants in the Industrial Complex.

                                  ARTICLE 14.
                                   UTILITIES

     14.1  Tenant shall obtain all water, electricity, sewerage, gas, telephone
and other utilities directly from the public utility company furnishing same.
Any meters required in connection therewith shall be installed at Tenant's sole
cost. Tenant shall pay all utility deposits and fees, and all monthly service
charges for water, electricity, sewage, gas, telephone and any other utility
services furnished to the Demised Premises during the term of this lease. In the
event any such utilities are not separately metered on the Commencement Date,
then until such time as such services are separately metered, Tenant shall pay
Landlord Tenant's equitable share of the cost of such services, as determined by
Landlord. If for any reason the use of any utility is measured on a meter(s)
indicating the usage of Tenant

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<PAGE>   11
and other tenants of the Industrial Complex, Tenant and such other tenants
shall allocate the cost of such utility amongst themselves and shall each be
responsible for the payment of its allocable share. Landlord shall furnish and
install all piping, feeders, risers and other connections necessary to bring
utilities to the perimeter walls of the Demised Premises. Anything to the
contrary notwithstanding, Tenant shall remain obligated for the payment of
Tenant's pro-rata share of any heating costs and/or other utilities or services
furnished to the Common Areas pursuant to Section 7.4.

     14.2 Tenant shall have the right to use the existing heating, air
conditioning and ventilation equipment in the Demised Premises, if any. All
such equipment shall be maintained, repaired and replaced, as necessary, by
Tenant at its sole expense and shall be surrendered by Tenant to Landlord at
the end of the term of this lease together with the Demised Premises. Landlord
makes no representation or warranty as to the condition or capacity of such
equipment. Landlord shall have no obligation whatsoever to provide the Demised
Premises with any additional heat, air conditioning, ventilation or hot water.

     14.3 Landlord shall not be liable for any interruption whatsoever, nor
shall Tenant be entitled to an abatement or reduction of rent on account
thereof, in utility services not furnished by Landlord, nor for interruptions
in utility services furnished by Landlord which are due to fire, accident,
strike, acts of God or other causes beyond the control of Landlord or which are
necessary or useful in connection with making any alterations, repairs or
improvements. Notwithstanding anything to the contrary contained in this lease,
if any utility services to the Demised Premises are interrupted due to the act
or omission of Landlord, its authorized agents, or employees, and such utility
is not substantially restored within five (5) business days, then the rent
payable hereunder shall thereafter abate in proportion to the extent of the
actual interference with Tenant's use of the Demised Premises, until such time
as the affected utility has been restored.

     14.4 Tenant shall not install any equipment which exceeds or overloads the
capacity of the utility facilities serving the Demised Premises.

                                  ARTICLE 15.
                              INSURANCE COVERAGES

     15.1 Landlord shall procure and maintain throughout the term of this lease
a policy or policies of insurance, at its sole cost and expense (but subject to
Article 6 above), causing the Industrial Complex to be insured under standard
fire and extended coverage insurance (excluding hurricane and storm insurance
unless readily obtainable at commercially reasonable rates) and liability
insurance (plus whatever endorsements or special coverages Landlord, in its
sole but reasonable discretion, may consider appropriate), to the extent
necessary to comply with Landlord's obligations pursuant to other provisions of
this lease. All payments for losses thereunder shall be made solely to
Landlord. If the annual premiums charged to Landlord shall exceed the standard
rates because Tenant's operations, the contents of the Demised Premises, or
improvements made to the Demised Premises beyond standard improvements result
in extra-hazardous exposure, Tenant shall pay the excess amount of the premium
upon demand therefor by Landlord.

     15.2 Tenant shall procure and maintain throughout the term of this lease,
at its sole cost and expense, all of the following insurance coverages:

          (a)  Commercial General Liability Insurance, providing coverage for
     bodily injury (including death), property damage and products liability
     insurance (where such exposure exists). This policy shall contain a broad
     form contractual liability endorsement under which the insurer agrees to
     insure Tenant's obligations under Section 16.2 and Article 21 hereof. Such
     insurance shall have a combined single limit of not less than Three Million
     Dollars ($3,000,000) per occurrence, or such greater amount as Landlord may
     from time to time require. If Tenant uses vehicles, owned and non-owned, in
     any way to carry out business on or about the Industrial Complex, Tenant
     shall also maintain Motor Vehicle Liability Insurance; such insurance shall
     have a combined single limit of not less than One Million Dollars
     ($1,000,000) for bodily injury and property damage.

          (b)  Fire and extended coverage insurance covering Tenant's personal
     property, fixtures, improvements, wall coverings, floor coverings, window
     coverings, signs, alterations, furniture, furnishings, equipment, lighting,
     ceilings, heating, ventilation and air conditioning equipment and interior
     plumbing against loss or damage by fire, flood, windstorms, hail,
     earthquakes, explosion, riot, damage from aircraft and vehicles, smoke
     damage, vandalism and malicious mischief and such other risks as are from
     time to time covered under "extended coverage" endorsements and special
     extended coverage endorsements commonly known as "all risks" endorsements,
     containing the waiver of subrogation required in Section 16.3 of this lease
     and in an amount equal to the greater of the full replacement value or the
     amount required by the holder of any mortgage from time to time placed upon
     the Industrial Complex or a portion of the Industrial Complex containing
     the Demised Premises, with business interruption insurance covering the
     Demised Premises. Replacement value is understood to mean the cost to
     replace without deduction for depreciation.

          (c)  State Worker's Compensation Insurance in the statutorily
     mandated limits.

                                       10
<PAGE>   12
               (d) Employer's Liability insurance with limits of not less than
     One Hundred Thousand Dollars ($100,000) for bodily injury per accident and
     each disease, per employee, and a total combined limit for bodily injury in
     amounts not less than One Hundred Thousand ($100,000) per accident and Five
     Hundred ($500,000) per each disease, or such greater amount as Landlord may
     from time to time require.

               (e) Plate Glass Insurance.

It is expressly understood and agreed that the foregoing minimum limits of
insurance coverage shall not limit the liability of Tenant for its acts or
omissions as provided in this lease. All of the foregoing insurance policies
(with the exception of Workers' Compensation Insurance to the extent not
available under applicable law) shall name Landlord, GE Capital Investment
Advisors, Inc., the Agent identified in Section 1.1(g), any mortgagee, the
managing agent for the Industrial Complex, and such other parties as Landlord
shall from time to time designate, as additional insureds as their respective
interests may appear, through an ISO Additional Insured Endorsement CG20281185
or equivalent, and shall provide that any loss shall be payable to Landlord and
such other additional insured parties as their respective interests may appear.
All insurance required hereunder shall be placed with companies which are rated
AVII or better by Best's Insurance Guide (or such other comparable publication
if Best's is no longer published) and which are licensed to do business in the
State of California. All such policies shall be written as primary policies with
deductibles not to exceed the amount specified in Section 1.1(p) above;
provided, however, that the deductible for the Plate Glass Insurance shall not
exceed Two Hundred Fifty Dollars ($250). Any other policies, including
Landlord's policy, will serve as excess coverage. Tenant shall deliver duplicate
original copies of all such policies and all endorsements thereto (or
certificates evidencing that the required insurance coverages and endorsements,
including waiver of subrogation, are in full force and effect) to Landlord,
prior to the Commencement Date, or, in the case of renewals thereto, fifteen
(15) days prior to the expiration of the prior insurance policy, together with
evidence that (1) such policies are fully paid for, and (2) no cancellation,
material change or non-renewal thereof shall be effective except upon thirty
(30) days' prior written notice by registered mail from the insurer to Landlord,
as well as to Landlord's managing agent (at the address for the payment of rent
set forth in Section 4.2 above). Whenever, in Landlord's reasonable judgment,
good business practice or change in conditions indicate a need for additional or
different types of insurance. Tenant shall, within fifteen (15) days of receipt
of Landlord's request therefor, obtain the insurance at its own expense. If
Tenant should fail to comply with the foregoing requirements relating to
insurance, Landlord may obtain such insurance and Tenant shall pay to Landlord
on demand as additional rental hereunder the premium cost thereof plus interest
at the maximum contractual rate (but in no event to exceed 1-1/2% per month)
from the date of payment by Landlord until repaid by Tenant.

     15.3  In addition to the foregoing, Tenant shall obtain certificates of
insurance evidencing Commercial General Liability insurance, including
Completed Operations, Motor Vehicle Liability Insurance, Worker's Compensation
Insurance and Employer's Liability Insurance in the amounts required above from
any contractor or subcontractor engaged by Tenant for repairs or maintenance
during the lease term.

                                  ARTICLE 16.
               WAIVER OF LIABILITY; MUTUAL WAIVER OF SUBROGATION

     16.1 Landlord and Landlord's agents and employees shall not be liable to
Tenant, nor to Tenant's employees, agents, contractors, subcontractors,
invitees, subtenants, or licensees, nor to any other person whomsoever, for any
injury to person or damage to property caused by the Demised  Premises or
other portions of the Industrial Complex becoming out of repair or by defect
or failure of any structural element of the Demised Premises or of any
equipment, pipes or wiring, or broken glass, or by the backing up of drains, or
by gas, water, storms, electricity, or off leaking, escaping or flowing into
the Demised Premises (except where due to Landlord's (1) willful failure to make
repairs required to be made by Landlord hereunder, after the expiration of a
reasonable time after written notice to Landlord of the need for such repairs;
or (2) gross negligence), nor shall Landlord be liable to Tenant, nor to
Tenant's employees, agents, contractors, subcontractors, invitees, subtenants or
licensees, nor to any other persons whomsoever, (or any loss or damage that may
be occasioned by or through the acts or omissions of other tenants of the
Industrial Complex or of any other persons whomsoever, excepting only duly
authorized employees and agents of Landlord. Landlord shall not be held
responsible in any way on account of any construction, repair or reconstruction
(including widening) of any private or public roadways, walkways or utility
lines.

     16.2 Landlord shall not be liable to Tenant or to Tenant's employees,
agents, contractors, subcontractors, invitees, subtenants or licensees, or to
any other person whomsoever, for any injury to person or damage to property on
or about the Demised Premises or the Common Area caused by the negligence or
misconduct of Tenant, it employees, agents, contractors, subcontractors,
invitees, subtenants or licensees, or of any other person entering the
Industrial Complex under express or implied invitation of Tenant (with
exception of invitees in the Common Area), or arising out of the use of the
Demised Premises by Tenant and the conduct of its business therein, or
arising out of any breach or default by Tenant in the performance of its
obligations under this lease; and Tenant hereby agrees to indemnify, defend and
hold Landlord harmless from any loss, expense or claims arising out of such
damage or injury. Furthermore, Tenant agrees to indemnify, defend and hold
Landlord harmless from damage or injury. Furthermore, Tenant agrees to
indemnify, defend and hold Landlord harmless from and against any and all
liability, claims, demands, causes of action of any kind and nature arising or

<PAGE>   13
growing out of or in any way connected with Tenant's use, occupancy, management
or control of the Demised Premises and Tenant's operations or activities in the
Industrial Complex. Upon notice from Landlord, Tenant shall defend any such
claim, demand, cause of action or suit referenced hereinabove at Tenant's
expense by counsel reasonably satisfactory to Landlord in its sole discretion.

     16.3  Landlord and Tenant each hereby release the other from any and all
liability or responsibility to the other, or to any other party claiming through
or under them by way of subrogation or otherwise, for any loss or damage to
property caused by a casualty which is insurable under standard fire and
extended coverage insurance; provided, however, that this mutual waiver shall be
applicable only with respect to a loss or damage occurring during the time when
property insurance policies, which are readily available in the marketplace,
contain a clause or permit an endorsement to the effect that any such release
shall not adversely affect or impair the policy or the right of the insured
party to receive proceeds under the policy; provided, further, that this release
shall not be applicable to the portion of any damage which is not reimbursed by
the damaged party's insurer because of the "deductible" in the damaged party's
insurance coverage. The release specified in this Section 16.3 is cumulative
with any releases or exculpations which may be contained in other provisions of
this lease. Landlord and Tenant agree that all policies of insurance obtained by
them pursuant to the terms of this lease shall contain provisions or
endorsements thereto waiving the insurer's rights of subrogation with respect to
claims against the other, and, unless the policies permit waiver of subrogation
without notice to the Insurer, each shall immediately notify its insurance
companies of the existence of the waiver and indemnity provisions set forth in
this lease.

                                  ARTICLE 17.
                              DAMAGES BY CASUALTY

     17.1  Tenant shall give immediate written notice to Landlord of any damage
caused to the Demised Premises by fire or other casualty.

     17.2  In the event that the Demised Premises shall be damaged or destroyed
by fire or other casualty insurable under standard fire and extended coverage
insurance and Landlord does not elect to terminate this lease as hereinafter
provided, Landlord shall proceed with reasonable diligence and at its sole cost
and expense to rebuild and repair the Demised Premises; provided, however, in
the event that such repair and rebuilding shall reasonably be expected to
require more than two hundred and ten (210) days, Tenant shall have the right to
terminate this lease upon written notice to Landlord delivered to Landlord
within thirty (30) days of Tenant's receipt of Landlord's Election Notice (as
defined below). In the event (a) the building in which the Demised Premises are
located is destroyed or substantially damaged by a casualty not covered by
Landlord's insurance, or (b) such building is destroyed or rendered untenantable
to an extent in excess of fifty percent (50%) of the first floor area by a
casualty covered by Landlord's insurance, or (c) the holder of a mortgage, deed
of trust or other lien on such building at the time of the casualty elects,
pursuant to such mortgage, deed of trust or other lien, to require the use of
all or part of Landlord's insurance proceeds in satisfaction of all or part of
the indebtedness secured by the mortgage, deed of trust or other lien, or (d)
the Demised Premises shall be damaged to the extent of fifty percent (50%) or
more of the cost or replacement, then Landlord may elect either to terminate
this lease or to proceed to rebuild and repair the Demised Premises. Landlord
shall give written notice to Tenant ("Landlord's Election Notice") of such
election within sixty (60) days after the occurrence of such casualty and, if it
elects to rebuild and repair, shall proceed to do so with reasonable diligence
and at its sole cost and expense; provided, however, in the event that such
repair and rebuilding shall reasonably be expected to require more than two
hundred and ten (210) days, Tenant shall have the right to terminate this lease
upon written notice to Landlord delivered to Landlord within thirty (30) days of
tenant's receipt of Landlord's Election Notice. Provided, further, in the event
(i) of a fire or other casualty to the Demised Premises where Landlord has
elected to rebuild the Demised Premises and Tenant has not terminated the lease
pursuant to a termination right contained in this Section 17.2, and (ii) the
Demised premises are not materially rebuilt by Landlord in accordance with
Section 17.3 below within two hundred and ten days (210) from the date of the
casualty, then Tenant may provide Landlord with not less than thirty (30) days'
prior written notice of its intent to terminate this lease ("Tenant's
Termination Notice"). Provided, however, Tenant's right to terminate the lease
shall be voided if the Demised Premises are materially rebuilt prior to the
termination date set out in Tenant's Termination notice. In addition to the
foregoing, Tenant shall have the right to terminate this lease upon written
notice to Landlord in the event that a casualty to the building containing the
Demised Premises during the last twelve (12) months of the lease term destroys
or renders the Demised Premises untenantable to an extent in excess of thirty
percent (30%) of the floor area thereof.

     17.3  Landlord's obligation to rebuild and repair under this Article 17
shall in any event be limited to restoring Landlord's Work, as described in the
applicable exhibit attached to this lease (if such an exhibit is attached), to
substantially the same condition in which the same existed prior to the
casualty. Tenant agrees that promptly after completion of such work by Landlord,
Tenant will proceed with reasonable diligence and at Tenant's sole cost and
expense to restore, repair and replace all alterations, additions, improvements,
fixtures, signs and equipment installed by Tenant, and, if an exhibit describing
Tenant's Work is attached hereto, all items of Tenant's Work as described in
such exhibit.

     17.4  Tenant agrees that during any period of reconstruction or repair of
the Demised Premises, it will continue the operation of its business within the
Demised Premises to the extent practicable. During the period from the
occurrence of the casualty until Landlord's repairs are completed,

                                       12
<PAGE>   14
the minimum guaranteed rental, Real Estate Charges, Insurance Expenses and
Common Area operation and maintenance costs shall be reduced to such extent as
may be fair and reasonable under the circumstances.

     17.5 Tenant hereby waives the provisions of California Civil Code Sections
1932(2) and 1933(4) and the provisions of any successor or other law of like
import.

                                  ARTICLE 18.
                                 EMINENT DOMAIN

     18.1 If more than thirty percent (30%) of the floor area of the Demised
Premises should be taken for any public or quasi-public use under any
governmental law, ordinance or regulation or by right of eminent domain or by
private purchase in lieu thereof, this lease shall terminate and the rent shall
be abated during the unexpired portion of this lease, effective on the date
physical possession is taken by the condemning authority.

     18.2 If less than thirty percent (30%) of the floor area of the Demised
Premises should be taken as aforesaid, this lease shall not terminate; however,
the minimum guaranteed rental payable hereunder during the unexpired portion of
this lease shall be reduced in proportion to the area taken, effective on the
date physical possession is taken by the condemning authority. Following such
partial taking, Landlord shall make all necessary repairs or alterations to the
remaining premises or, if an exhibit describing Landlord's Work is attached to
this lease, all necessary repairs within the scope of Landlord's Work as
described in such exhibit, as the case may be, required to make the remaining
portions of the Demised Premises an architectural whole, but in no event shall
Landlord be required to expend an amount greater than the award actually
received by Landlord in connection with such taking.

     18.3 If any part of the Common Area should be taken as aforesaid, this
lease shall not terminate, nor shall the rent payable hereunder be reduced,
except that either Landlord or Tenant may terminate this lease if the area of
the Common Area remaining following such taking plus any additional parking area
provided by Landlord in reasonable proximity to the Industrial Complex shall be
less than seventy percent (70%) of the area of the Common Area immediately
prior to the taking. Any election to terminate this lease in accordance with
this provision shall be evidenced by written notice of termination delivered to
the other party within thirty (30) days after the date physical possession is
taken by the condemning authority.

     18.4 All compensation awarded for any taking (or the proceeds of private
sale in lieu thereof) of the Demised Premises or Common Area shall be the
property of Landlord, and Tenant hereby assigns its interest in any such
award to Landlord; provided, however, Landlord shall have no interest in any
award made to Tenant for Tenant's moving and relocation expenses or for the
loss of Tenant's fixtures and other tangible personal property if a separate
award for such items is made to Tenant as long as such separate award does not
reduce the amount that would otherwise be awarded to Landlord.

     18.5 The rights contained in this Article 18 shall be Tenant's sole and
exclusive remedy in the event of a taking or condemnation. Each party waives
the provisions of Section 1265.130 and 1265.150 of the California Code of Civil
Procedure and the provisions of any successor or other law of like import.

     18.6 Notwithstanding anything to the contrary, Landlord may terminate this
lease with no further liability to Tenant if (i) fifty percent (50%) or more of
the gross leasable area of the Industrial Complex is taken or (ii) if following
any taking, Landlord's mortgagee elects to require Landlord to apply all or a
portion of such award to the outstanding indebtedness.

                                  ARTICLE 19.
                           ASSIGNMENT AND SUBLETTING

     19.1 Tenant shall not assign or in any manner transfer this lease or any
estate or interest therein, or sublet the Demised Premises or any part thereof,
or grant any license, concession or other right of occupancy of any portion of
the Demised Premises without the prior written consent of Landlord. Landlord
agrees that it will not withhold, delay or condition its consent in an
unreasonable manner (as further explained in Section 30.4 of this lease);
however, in determining whether or not to grant its consent, Landlord shall be
entitled to take into consideration factors such as Landlord's desired tenant
mix, the reputation and net worth of the proposed transferee, and the then
current market conditions (including market rentals). In addition, Landlord
shall also be entitled to charge Tenant a reasonable fee for processing
Tenant's request. Consent by Landlord to one or more assignments or sublettings
shall not operate as a waiver of Landlord's rights as to any subsequent
assignments or sublettings. In all events, Landlord can refuse to consent to an
assignment or sublease if there shall exist any uncured event of default of
Tenant or a matter which will become a default with the passage of time.
Notwithstanding the foregoing, Tenant may, without Landlord's prior written
consent but otherwise subject to all of the provision of this Article 19
(except for Section 19.7), upon concurrent written notice to Landlord sublet
the Demised Premises or assign this lease to the following parties (singularly,
a "Permitted Assignee", collectively, "Permitted Assignees"): (i) a subsidiary,
affiliate or corporation controlling, controlled by or under common control
with Tenant, (II) a successor corporation related to

                                       13

<PAGE>   15
Tenant by merger, consolidation, nonbankruptcy reorganization, or government
action, or (iii) a purchaser of substantially all of Tenant's assets, provided
that in the case of a transfer set out in Items (ii) or (iii) above, the net
worth of the surviving entity is equal to or greater than that of Tenant prior
to the date of the transfer. Upon Landlords request, Tenant shall provide
Landlord with such information as Landlord may reasonably require to confirm
that Tenant's assertion as to a Permitted Assignee is in fact correct.

     19.2  If Tenant is a corporation, partnership or other entity and if at any
time during the term of this lease the person or persons who own a majority of
either the outstanding voting rights or the outstanding ownership interests of
Tenant at the time of the execution of this lease cease to own a majority of
such voting rights or ownership interests (except as a result of transfers by
devise or descent), the loss of a majority of such voting rights or ownership
interests shall be deemed an assignment of this lease by Tenant and, therefore,
subject in all respects to the provisions of Section 19.1 above. The previous
sentence shall not apply, however, if at the time of the execution of this
lease, Tenant is a corporation and the outstanding voting shares of capital
stock of Tenant are listed on a recognized security exchange or over-the-counter
market.

     19.3  Notwithstanding anything to the contrary contained herein, and
without prejudice to Landlord's right to require a written assumption from each
assignee, any person or entity to whom this lease is assigned including, without
limitation, assignees pursuant to the provisions of the Bankruptcy Code, 11
U.S.C. Paragraph 101, et seq. (the "Bankruptcy Code"), shall automatically be
deemed, by acceptance of such assignment or sublease or by taking actual or
constructive possession of the Demised Premises, to have assumed all obligations
of Tenant arising under this lease effective as of the earlier of the date of
such assignment or sublease or the date on which the assignee or sublessee
obtains possession of the Demised Premises. In the event this lease is assigned
to any person or entity pursuant to the provisions of the Bankruptcy Code, any
and all monies or other consideration payable or otherwise to be delivered in
connection with such assignment shall be paid or delivered to Landlord and shall
remain the exclusive property of Landlord and not constitute the property of
Tenant or Tenant's estate within the meaning of the Bankruptcy Code. All such
money or other consideration not paid or delivered to Landlord shall be held in
trust for the benefit of Landlord and shall be promptly paid or delivered to
Landlord.

     19.4  Notwithstanding any assignment or subletting, Tenant and any
guarantor of Tenant's obligations under this lease shall at all times remain
fully responsible and liable for the payment of the rent herein specified and
for compliance with all of its other obligations under this lease (even if
future assignments and sublettings occur subsequent to the assignment or
subletting by Tenant, and regardless of whether or not Tenant's approval has
been obtained for such future assignments and sublettings). Moreover, in the
event that the rental due and payable by a sublessee (or a combination of the
rental payable under such sublease plus any bonus or other consideration
therefor or incidental thereto) exceeds the minimum guaranteed rental payable
hereunder by Tenant, after deducting reasonable leasing commissions paid by
Tenant in connection with such subletting, then fifty percent (50%) of such
excess rent and other consideration shall be deemed additional rent owed by
Tenant to Landlord, and shall be payable to Landlord by Tenant in the same
manner and on the same terms as installments of minimum guaranteed rental are
payable by Tenant hereunder (or upon Tenant's receipt thereof, whichever is
earlier). If, with respect to a permitted assignment, permitted license or other
transfer by Tenant permitted by Landlord, the rental due and payable by the
assignee, licensee or other transferee (or a combination of the rental payable
under such sublease plus any bonus or other consideration therefor or incidental
thereto) exceeds the minimum guaranteed rental payable hereunder by Tenant, then
all of such excess rent and other consideration shall be deemed additional rent
owed by Tenant to Landlord, and shall be payable to Landlord by Tenant in the
same manner and on the same terms as installments of minimum guaranteed rental
are payable by Tenant hereunder (or upon Tenant's receipt thereof, whichever is
earlier). Finally, in the event of an assignment or subletting, it is understood
and agreed that all rentals paid to Tenant by an assignee or sublessee shall be
received by Tenant in trust for Landlord, to be forwarded immediately to
Landlord without offset or reduction of any kind; and upon election by Landlord
such rentals shall be paid directly to Landlord as specified in Section 4.2 of
this lease (to be applied as a credit and offset to Tenant's rental obligation).

     19.5  Tenant shall not mortgage, pledge or otherwise encumber its interest
in this lease or in the Demised Premises.

     19.6  In the event of the transfer and assignment by Landlord of its
interest in this lease and in the building containing the Demised Premises to a
person expressly assuming Landlord's obligations under this lease, Landlord
shall thereby be released from any further obligations hereunder, and Tenant
agrees to look solely to such successor in interest of the Landlord for
performance of such obligations. Any security given by Tenant to secure
performance of Tenant's obligations hereunder may be assigned and transferred by
Landlord to such successor in interest and Landlord shall thereby be discharged
of any further obligation relating thereto.

     19.7  Notwithstanding anything to the contrary contained herein, Landlord
shall have the option, in its sole discretion, in the event of any proposed
subletting or assignment, to terminate this lease, or in the case of a proposed
subletting of less than the entire Demised Premises for substantially all of the
remaining term of this lease, to recapture the portion of the Demised Premises
to be sublet, as of the date the subletting or assignment is to be effective.
The option shall be exercised by Landlord giving Tenant written notice within
twenty (20) days following Landlord's receipt of Tenant's written notice as
required above. If this lease shall be terminated with respect to the entire
Demised Premises, the term

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<PAGE>   16
shall end on the date stated in Tenant's notice as the effective date of the
sublease or assignment as if that date had been originally fixed in this lease
for the expiration of the term. If Landlord recaptures only a portion of the
Demised Premises, the minimum guaranteed rental during the unexpired term shall
abate, proportionately, based on the minimum guaranteed rental due as of the
date immediately prior to such recapture.

     19.8 Tenant hereby waives any suretyship defenses it may now or hereafter
have to an action brought by Landlord including those contained in Sections 2787
through 2856, inclusive, 2899 and 3433 of the California Civil Code, as now or
hereafter amended, or similar laws of like import.

     19.9 Landlord and Tenant expressly agree that Tenant shall be permitted,
upon written notice to Landlord, to sublet the warehouse portion of the Demised
Premises (not to exceed 12,960 rentable square feet or a term running beyond
April 30, 2002) to Nanometrics, Inc. ("Nanometrics"), another tenant of the
Industrial Complex, subject to the following: If the rental or other
consideration payable by Nanometrics to Tenant exceeds the minimum guaranteed
rental payable hereunder by Tenant, after deducting reasonable leasing
commissions paid by Tenant, then fifty percent (50%) of all such excess rent and
other consideration shall be deemed additional rent owed by Tenant to Landlord
and shall be payable to Landlord by Tenant in the same manner and on the same
terms as installments of minimum guaranteed rental are payable by Tenant
hereunder (or upon Tenant's receipt thereof, whichever is earlier).

                                  ARTICLE 20.
                      SUBORDINATION; ATTORNMENT; ESTOPPELS

     20.1 Tenant accepts this lease subject and subordinate to any mortgage,
deed of trust or other lien presently existing or hereafter placed upon the
Industrial Complex or any portion of the Industrial Complex which includes the
Demised Premises, and to any renewals, modifications and extensions thereof and
this subordination shall be self operative and no further instrument of
subordination is needed. Tenant agrees that any mortgagee shall have the right
at any time to subordinate its mortgage, deed of trust or other lien to this
lease; provided, however, notwithstanding that this lease may be (or is made to
be) superior to a mortgage, deed of trust or other lien, the mortgagee shall not
be liable for prepaid rentals, security deposits and claims accruing during or
with respect to Landlord's ownership, any amendment or modification made to this
lease without its prior written consent or any offsets or claims against
Landlord; further provided that the provisions of a mortgage, deed of trust or
other lien relative to the right of the mortgagee with respect to proceeds
arising from an eminent domain taking (including a voluntary conveyance by
Landlord) and provisions relative to proceeds arising from insurance payable by
reason of damage to or destruction of the Demised Premises shall be prior and
superior to any contrary provisions contained in this instrument with respect to
the payment or usage thereof. Landlord is hereby irrevocably vested with full
power and authority to subordinate this lease to any mortgage, deed of trust or
other lien hereafter placed upon the Demised Premises or the Industrial Complex
as a whole, and Tenant agrees upon demand to execute such further instruments
subordinating this lease as Landlord may request. If the holder of any mortgage,
indenture or deed of trust or similar instrument (each a "Mortgagee") succeeds
to Landlord's interest in the Demised Premises, Tenant shall, upon request of
any such Mortgagee, automatically become the tenant of and attorn to and
recognize such Mortgagee as the landlord under this lease and will pay to it all
rents and other amounts payable by Tenant under this lease, in accordance with
the applicable terms of this lease. Notwithstanding that the foregoing
provisions of this Section are self-operative, upon request of Landlord or any
Mortgagee, Tenant shall execute and deliver to Landlord and to such Mortgagee a
subordination and attornment agreement in recordable form confirming the
foregoing and otherwise in form and substance acceptable to Landlord and such
Mortgagee.

     20.2 Tenant may not exercise any remedies for default by Landlord hereunder
unless and until Landlord and the holder(s) of any indebtedness secured by
mortgage, deed of trust or other lien on the Demised Premises shall have
received written notice of such default and a reasonable time (not less than 90
days) shall thereafter have elapsed without the default having been cured.

     20.3 Tenant agrees that it will from time to time upon request by Landlord
execute and deliver to Landlord a written statement addressed to Landlord (and
to a party[ies] designated by Landlord), which statement shall identify Tenant
and this lease, shall certify that this lease is unmodified and in full force
and effect (or if there have been modifications, that the same is in full force
and effect as so modified), shall confirm that Landlord is not in default as to
any obligations of Landlord under this Lease (or if Landlord is in default,
specifying any default), shall confirm Tenant's agreements contained above in
this Article 20, and shall contain such other information or confirmations as
Landlord may reasonably require. Landlord is hereby irrevocably appointed and
authorized as the agent and attorney-in-fact of Tenant to execute and deliver
any such written statement on Tenant's behalf if Tenant fails to do so within
seven (7) days after the delivery of a written request from Landlord to Tenant.

                                  ARTICLES 21.
                            TENANT'S INDEMNIFICATION

     21.1 Except to the extent such claims or liabilities arise out of the gross
negligence or willful misconduct of Landlord or any of the Indemnitees, Tenant
shall indemnify, defend and hold harmless Landlord, Landlord's asset manager,
Landlord's subasset manager, Landlord's partners, any subsidiary or

                                       15
<PAGE>   17
affiliate of Landlord and the officers, directors, shareholders, partners,
employees, managers, independent contractors, attorneys and agents of any of
the foregoing (collectively, the "Indemnitees") from and against any and all
claims, demands, causes of action, judgments, costs and expenses, and all
losses and damages (including consequential and punitive damages) arising from
Tenant's use of the Demised Premises or from the conduct of its business or
from any activity, work, or other acts or things done, permitted or suffered by
Tenant in or about the Demised Premises, and shall further indemnify, defend
and hold harmless the Indemnitees from and against any and all claims arising
from any breach or default in the performance of any obligation on Tenant's
part to be performed under the terms of this lease, or arising from any act,
omission or negligence or willful or criminal misconduct of Tenant, or any
officer, agent, employee, independent contractor, guest, or invitee thereof,
and from all costs, reasonable attorneys' fees and disbursements, and
liabilities incurred in the defense of any such claim or any action or
proceeding which may be brought against, out of or in any way related to this
lease. Upon notice from Landlord, Tenant shall defend any such claim, demand,
cause of action or suit at Tenant's expense by counsel satisfactory to Landlord
in its sole discretion. As a material part of the consideration to Landlord for
this lease, Tenant hereby assumes all risk of damage to property or injury to
persons in, upon or about the Demised Premises from any cause, and Tenant
hereby waives all claims with respect thereto against Landlord except to the
extent resulting from Landlord's gross negligence or willful misconduct. Tenant
shall give immediate notice to Landlord in case of casualty or accidents in the
Demised Premises. The provisions of this Article 21 shall survive the
expiration or sooner termination of this lease.

     21.2 All personal property of Tenant, including goods, wares, merchandise,
inventory, trade fixtures and other personal property of Tenant, shall be
stored at the sole risk of Tenant. Landlord or its agents shall not be liable
for any loss or damage to persons or property resulting from fire, explosion,
falling plaster, steam, gas, electricity, water or rain which may leak from any
part of the Industrial Complex or from the pipes, appliances or plumbing works
therein or from the roof, street or subsurface or from any other places
resulting from dampness or any other cause whatsoever, or from the act or
negligence of any other tenant or any officer, agent, employee, contractor or
guest of any such tenant, except personal injury or property damage caused by
or due to the gross negligence or willful misconduct of Landlord. Landlord or
its agents shall not be liable for interference with the electrical service,
ventilation, or for any latent defect (subject to Landlord's repair obligation
contained in Paragraph 6 of Exhibit "B") in the Demised Premises.

     21.3 The parties hereto acknowledge that all or a part of the Demised
Premises may be used for the storage and shipment of goods not owned by Tenant,
and Landlord is not willing to enter into this lease unless Tenant indemnifies
the Indemnitees to Landlord's satisfaction from any liability on the part of
the Indemnitees to the owner(s) of such goods for damage to the same arising
out of any acts or omissions of the Indemnitees. As a material inducement to
Landlord to enter into this lease, except to the extent such claims or
liabilities arise out of the gross negligence or willful misconduct of Landlord
or any of the Indemnitees, Tenant agrees to defend, indemnify and hold the
Indemnitees harmless from and against any and all losses, claims, liabilities,
obligations and damages imposed upon or incurred or asserted against the
Indemnitees by reason of damage to goods of persons storing such goods with
Tenant, notwithstanding the fact that such losses, claims, liabilities,
obligations or damages may have been caused by the acts or omissions of
Landlord. Tenant agrees that at all times during which it shall store goods not
owned by it in the Demised Premises, it shall insure the Indemnity described
under this Section 21.3 in a manner reasonably satisfactory to Landlord.
Landlord shall not be deemed a bailee, consignee, or warehouseman (or
responsible for the standard of care incidental thereto) with respect to any
goods stored or shipped to or from the Demised Premises for consignment or
bailment and Tenant shall insert a clause to that effect in all warehouse
receipts or consignment agreements for the storage or shipment of goods to or
from the Demised Premises.

                                  ARTICLE 22.
                         DEFAULT BY TENANT AND REMEDIES

     22.1 The continuance beyond expiration of any applicable notice and cure
periods (as set out below) of the following events shall be deemed to be events
of default by Tenant under this lease:

          (a) Tenant shall fail to pay any installment of rental or any other
     obligation under this lease involving the payment of money on the date such
     payment shall become due and payable.

          (b) Tenant shall fail to comply with any provision of this lease,
     other than as described in subsection (a) above, and Tenant shall either
     (i) not cure such failure within fifteen (15) days after written notice
     thereof to Tenant (or, where such default is not capable of being cured
     within such fifteen (15) day period, Tenant shall fail to commence said
     cure within such fifteen (15) day period and, using best efforts,
     diligently bring such cure to completion; provided, however, in no event
     shall Tenant have more than ninety (90) days to cure any such default); or
     (ii) cure that particular failure but shall again fail to comply with the
     same provision of this lease within three (3) months after Landlord's
     written notice; provided, however, that any such notice where prepared and
     delivered in accordance with Section 1161, et seq., of the California Code
     of Civil Procedure shall be in lieu of, and not in addition to, any notice
     required under Section 1161, et seq., of the California Code of Civil
     Procedure.

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<PAGE>   18
          (c) Tenant or any guarantor of Tenant's obligations under this lease
     shall become insolvent, or shall make a transfer in fraud of creditors, or
     shall make an assignment for the benefit of creditors.

          (d) Tenant or any guarantor of Tenant's obligations under this lease
     shall file a petition under any section or chapter of the federal
     Bankruptcy Code, as amended, or under any similar law or statute of the
     United States or any state thereof; or Tenant or any guarantor of Tenant's
     obligations under this lease shall be adjudged bankrupt or insolvent in
     proceedings filed against Tenant or any guarantor of Tenant's obligations
     under this lease thereunder.

          (e) A receiver or Trustee shall be appointed for the Demised Premises
     or for all or substantially all of the assets of Tenant or any guarantor of
     Tenant's obligations under this lease.

          (f) Tenant shall desert or vacate or shall commence to desert or
     vacate the Demised Premises or any substantial portion of the Demised
     Premises or at any time prior to the last month of the lease term shall
     remove or attempt to remove, without the prior written consent of Landlord,
     all or a substantial amount of Tenant's goods, wares, equipment, fixtures,
     furniture, or other personal property.

          (g) Tenant shall do or permit to be done anything which creates a lien
     upon the Demised Premises or upon all or any part of the Industrial
     Complex.

          (h) Any transfer of a substantial portion of the assets of Tenant, or
     any incurrence of a material obligation by Tenant, unless such transfer or
     obligation is undertaken or incurred in the ordinary course of Tenant's
     business or in good faith for equivalent consideration, or with Landlord's
     consent.

          (i) The default of any guarantors of Tenant's obligations hereunder
     under any guaranty of this Lease, or the attempted repudiation or
     revocation of any such guaranty.

     22.2 Upon the occurrence of any such event of default, Landlord shall have
the option to pursue any one or more of the following remedies to the extent
permitted by law:

          (a) Without any further notice or demand whatsoever, Tenant shall be
     obligated to reimburse Landlord for the damages suffered by Landlord as a
     result of the event of default, plus interest on such amount at the maximum
     contractual rate which could legally be charged in the event of a loan of
     such amount to Tenant (but in no event to exceed 1-1/2% per month); and
     Landlord may pursue a monetary recovery from Tenant.

          (b) Without any further notice or demand whatsoever, Landlord may take
     any one or more of the actions permissible at law to insure performance by
     Tenant of Tenant's covenants and obligations under this lease. In this
     regard, and without limiting the generality of the immediately preceding
     sentence, it is agreed that if Tenant fails to open for business as
     required in this lease or, having opened for business, deserts or vacates
     the Demised Premises, Landlord may enter upon and take possession of such
     premises in order to protect them from deterioration and continue to demand
     from Tenant the monthly rentals and other charges provided in this lease,
     without any obligation to relet; however, if Landlord does, at its sole
     discretion, elect to relet the Demised Premises, such action by Landlord
     shall not be deemed an acceptance of Tenant's surrender of the Demised
     Premises unless Landlord expressly notifies Tenant of such acceptance in
     writing pursuant to this subsection (b), Tenant hereby acknowledging that
     Landlord shall otherwise be reletting as Tenant's agent and Tenant
     furthermore hereby agreeing to pay to Landlord on demand any deficiency
     that may arise between the monthly rentals and other charges provided in
     this lease and that actually collected by Landlord. In the event that
     Landlord shall elect to relet, then rentals received by Landlord from such
     reletting shall be applied: first, to the payment of any indebtedness
     (other than rent) due hereunder from Tenant to Landlord; second, to the
     payment of any cost of such reletting (including brokerage commissions);
     third, to the payment of the cost of any alterations and repairs to the
     Demised Premises; fourth, to the payment of rent due and unpaid hereunder;
     and the residue, if any, shall be held by Landlord and applied in payment
     of future rent as the same may become due and payable hereunder. Should
     reletting, during any month to which such rent is applied, result in the
     actual payment of rentals at less than the rent payable during that month
     by Tenant hereunder, then Tenant shall pay such deficiency to Landlord
     immediately upon demand therefor by Landlord. Such deficiency shall be
     calculated and paid monthly. Tenant shall also pay to Landlord as soon as
     ascertained, any costs and expenses incurred by Landlord in such reletting
     or in making such alterations and repairs not covered by the rentals
     received from such reletting. Finally, it is agreed that in the event of
     any default described in subsection (g) of Section 22.1 of this lease,
     Landlord may pay or bond around such lien, whether or not contested by
     Tenant; and in such event Tenant agrees to reimburse Landlord on demand for
     all costs and expenses incurred in connection with any such action, with
     Tenant further agreeing that Landlord shall in no event be liable for any
     damages or claims resulting from such action. No action or inaction by
     Landlord including, without limitation, the re-entry or taking of
     possession of the Demised Premises by Landlord pursuant to this Section
     22.2(b) shall be construed as an election to terminate this lease or as
     interference with Tenant's rights of possession, assignment or subletting
     unless a written notice of such election shall be given to Tenant or unless
     the termination thereof be decreed by a court of competent

                                       17
<PAGE>   19
     jurisdiction. Notwithstanding any reletting without termination by
     Landlord, Landlord may, at any time after such reletting, elect to
     terminate this lease for any such default.

          (c)  Landlord may terminate this lease by written notice to Tenant, in
     which event Tenant shall immediately surrender the Demised Premises to
     Landlord. In the event that Landlord shall elect to so terminate this
     lease, then Landlord may recover from Tenant:

               (i)       The worth at the time of award of any unpaid rent which
          had been earned at the time of such termination; plus

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

               (iii)     The worth at the time of award of the amount by which
          the unpaid rent for the balance of the term after the time of award
          exceeds the amount of such rental loss that Tenant proves reasonably
          could be avoided; plus

               (iv)      Any other amount necessary to compensate Landlord for
          all detriment proximately caused by Tenant's failure to perform its
          obligations under this lease or which in the ordinary course would be
          likely to result therefrom, plus

               (v)       At Landlord's election, such other amounts in addition
          to or in lieu of the foregoing as may be permitted from time to time
          by applicable California law.

          As used in subparagraphs (i) and (ii) above, the "worth at the time of
          award" is computed by allowing interest at the maximum rate permitted
          by law. As used in subparagraph (iii) above, the "worth at the time of
          award" 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%).

     Forbearance by Landlord to enforce one or more of the remedies herein
     provided upon an event of default shall not be deemed or construed to
     constitute a waiver of such default. Tenant hereby waives for Tenant and
     for all those claiming under Tenant all right now or hereafter existing to
     redeem by order or judgment of any court or by any legal process or writ,
     Tenant's right of occupancy of the Demised Premises after any termination
     of this lease.

          (d)  In addition to all other rights and remedies provided Landlord in
     this lease and by law, Landlord shall have the remedy described in
     California Civil Code Section 1951.4 (Landlord may continue the lease in
     effect after Tenant's breach and abandonment and recover rent as it becomes
     due if Tenant has the right to sublet or assign the lease, subject to
     reasonable limitations).

     22.3 It is expressly agreed that in determining "the unpaid rent" as that
term is used throughout subsections 22.2(c)(i) and 22.2(c)(ii) above, there
shall be added to the minimum guaranteed rental (as specified in Sections
1.1(i) and 4.1 of this lease) a sum equal to the unpaid and in default charges
for maintenance of the Common Area charges (as specified in Section 7.4 of
this lease), and the payments for taxes, charges and insurance (as specified in
Article 6 of this lease).

     22.4 It is further agreed that, in addition to payments required pursuant
to subsections 22.2(b) and 22.2(c) above, Tenant shall compensate Landlord for
all expenses incurred by Landlord in repossession (including, among other
expenses, any increase in insurance premiums caused by the vacancy of the
Demised Premises), all expenses incurred by Landlord in reletting (including,
among other expenses, repairs, remodeling, replacements, advertisements and
brokerage fees), all concessions granted to a new tenant upon reletting
(including, among other concessions, renewal options), all losses incurred by
Landlord as a direct or indirect result of Tenant's default (including, among
other losses, any adverse reaction by Landlord's mortgagee or by other tenants
or potential tenants of the industrial Complex) and a reasonable allowance for
Landlord's administrative efforts, salaries and overhead attributable directly
or indirectly to Tenant's default and Landlord's pursuing the rights and
remedies provided herein and under applicable law.

     22.5 Landlord may restrain or enjoin any breach or threatened breach of
any covenant, duty or obligation of Tenant herein contained without the
necessity of proving the inadequacy of any legal remedy or irreparable harm.
The remedies of Landlord hereunder shall be deemed cumulative and not exclusive
of each other.

     22.6 If on account of any breach or default by Tenant in its obligations
hereunder, Landlord shall employ an attorney to present, enforce or defend any
of Landlord's rights or remedies hereunder, Tenant agrees to pay any reasonable
attorneys' fees incurred by Landlord in such connection.

     22.7 Tenant acknowledges its obligation to deposit with Landlord the sum
stated in Section 1.1(n) above, to be held by Landlord without interest as
security for the performance by Tenant of Tenant's covenants and obligations
under this lease. Tenant agrees that such deposit may be commingled with
Landlord's other funds and that such security deposit is not an advance payment
of

                                       18
<PAGE>   20
rental or a measure of Landlord's damages in case of default by Tenant. Upon
the occurrence of any event of default by Tenant, Landlord may, from time to
time, without prejudice to any other remedy provided herein or provided by law,
use such funds to the extent necessary to make good any arrears of rentals and
any other damage, injury, expense or liability caused to Landlord by such event
of default, and Tenant shall pay to Landlord on demand the amount so applied in
order to restore the security deposit to its original amount. If Tenant is not
then in default hereunder, any remaining balance of such security deposit shall
be returned by Landlord to Tenant upon termination of this lease (subject to
the provisions of Section 19.5 above).

     22.8  (a)  In the event of any default described in subsection (d) of
     Section 22.1 of this lease, any assumption and assignment must conform with
     the requirements of the Bankruptcy Code and, in order to provide Landlord
     with the assurances contemplated by the Bankruptcy Code, Tenant must
     fulfill the following obligations, in addition to any other reasonable
     obligations that Landlord may require, before any assumption of this lease
     is effective: (i) all defaults under subsection (a) of Section 22.1 of this
     lease must be cured within ten (10) days after the date of assumption; (ii)
     all other defaults under Section 22.1 of this lease other than under
     subsection (d) of Section 22.1 must be cured within fifteen (15) days after
     the date of assumption; (iii) all actual monetary losses incurred by
     Landlord (including, but not limited to, reasonable attorneys' fees) must
     be paid to Landlord within ten (10) days after the date of assumption; and
     (iv) Landlord must receive within ten (10) days after the date of
     assumption a security deposit in the amount of six (6) months minimum
     guaranteed rent (using the minimum guaranteed rent in effect for the first
     full month immediately following the assumption) and an advance prepayment
     of minimum guaranteed rent in the amount of three (3) months minimum
     guaranteed rent (using the minimum guaranteed rent in effect for the first
     full month following the assumption), both sums to be held by Landlord in
     accordance with Section 22.7 above and deemed to be rent under this lease
     for the purposes of the Bankruptcy Code as amended and from time to time in
     effect.

          (b)  In the event this lease is assumed in accordance with the
     requirements of the Bankruptcy Code and this lease, and is subsequently
     assigned, then, in addition to any other reasonable obligations that
     Landlord may require and in order to provide Landlord with the assurances
     contemplated by the Bankruptcy Code, Landlord shall be provided with (i) a
     financial statement of the proposed assignee prepared in accordance with
     generally accepted accounting principles consistently applied, though on a
     cash basis, which reveals a net worth in an amount sufficient, in
     Landlord's reasonable judgment, to assure the future performance by the
     proposed assignee of Tenant's obligations under this lease; or (ii) a
     written guaranty by one or more guarantors with financial ability
     sufficient to assure the future performance of Tenant's obligations under
     this lease, such guaranty to be in form and content satisfactory to
     Landlord and to cover the performance of all of Tenant's obligations under
     this lease.

                                  ARTICLE 23.
                    LANDLORD'S CONTRACTUAL SECURITY INTEREST

     23.1  In addition to the statutory Landlord's lien, Landlord shall have at
all times a valid security interest to secure payment of all rentals and other
sums of money becoming due hereunder from Tenant, and to secure payment of any
damages or loss which Landlord may suffer by reason of the breach by Tenant of
any covenant, agreement or condition contained herein, upon all goods, wares,
equipment, fixtures, furniture, improvements and other personal property of
Tenant presently, or which may hereafter be, situated on the Demised Premises,
and all proceeds therefrom, and such property shall not be removed without the
consent of Landlord until all arrearages in rent as well as any and all other
undisputed sums of money then due to Landlord or to become due to Landlord
hereunder shall first have been paid and discharged and all the covenants,
agreements and conditions hereof have been fully complied with and performed by
Tenant. Upon the occurrence of an event of default by Tenant, Landlord may, in
addition to any other remedies provided herein, enter upon the Demised Premises
and take possession of any and all goods, wares, equipment, fixtures,
furniture, improvements and other personal property of Tenant situated on the
Demised Premises, without liability for trespass or conversion, and sell the
same at public or private sale, with or without having such property at the
sale, after giving Tenant reasonable notice of the time and place of any public
sale or of the time after which any private sale is to be made, at which sale
Landlord or its assigns may purchase unless otherwise prohibited by law. Unless
otherwise provided by law, and without intending to exclude any other manner of
giving Tenant reasonable notice, the requirement of reasonable notice shall be
met if such notice is given in the manner prescribed in this lease at least
five (5) days before the time of sale. Any sale made pursuant to the provisions
of this Section shall be deemed to have been a public sale conducted in a
commercially reasonable manner if held in the Demised Premises or where the
property is located after the time, place and method of sale and a general
description of the types of property to be sold have been advertised in a daily
newspaper published in the county in which the property is located, for five
(5) consecutive days before the date of the sale. The proceeds from any such
disposition, less any and all expenses connected with the taking of possession,
holding and selling of the property (including reasonable attorneys' fees and
legal expenses), shall be applied as a credit against the indebtedness secured
by the security interest granted in this Section. Any surplus shall be paid to
Tenant or as otherwise required by law; Tenant shall pay any deficiencies
forthwith. Tenant hereby agrees that a carbon, photographic or other
reproduction of this lease shall be sufficient to constitute a financing
statement. Tenant nevertheless agrees that upon request by Landlord, Tenant
will execute and deliver to Landlord a financing statement in form sufficient
to perfect the security interest of Landlord in the aforementioned

                                       19
<PAGE>   21
property and proceeds thereof under the provisions of the California Uniform
Commercial Code, as well as any other state the laws of which Landlord may at
any time consider to be applicable; moreover, Landlord is hereby irrevocably
vested with a power of attorney from Tenant to execute any and all such
financing statements on behalf of Tenant.

     23.2 Notwithstanding Section 23.1, Landlord agrees that it will
subordinate its security interest and landlord's lien to the security interest
of Tenant's supplier or institutional financial source for as long as the
rental account of Tenant under this lease is current (or is brought current),
provided that Landlord approves the transaction as being reasonably necessary
to Tenant's operations at the Demised Premises, and further provided that the
subordination must be limited to a specified transaction and specified items of
the fixtures, equipment or inventory involved in the transaction.

                                  ARTICLE 24.
                                 HOLDING OVER

     24.1 In the event Tenant remains in possession of the Demised Premises
after the expiration of this lease and without the execution of a new lease or
an amendment hereto, it shall be deemed to be occupying said premises as a
tenant from month to month at a rental equal to the rental herein provided plus
one hundred percent (100%) of such amount and otherwise subject to all the
conditions, provisions and obligations of this lease insofar as the same are
applicable to a month-to-month tenancy. Neither any provision hereof nor
acceptance by Landlord of rent after such expiration or earlier termination
shall be deemed a consent to a holdover hereunder or result in a renewal of
this lease or an extension of the term. Notwithstanding any provision to the
contrary contained herein, (i) Landlord expressly reserves the right to require
Tenant to surrender possession of the Demised Premises upon the expiration of
the term of this lease or upon the earlier termination hereof, the right to
reenter the Demised Premises, and the right to assert any remedy at law or in
equity to evict Tenant and collect damages in connection with any such holding
over, and (ii) Tenant shall indemnify, defend and hold Landlord harmless from
and against any and all claims, demands, actions, losses, damages, obligations,
costs and expenses, including, without limitation, attorneys' fees incurred or
suffered by Landlord by reason of Tenant's failure to surrender the Demised
Premises on the expiration or earlier termination of this Lease in accordance
with the provisions of this lease.

                                  ARTICLE 25.
                                    NOTICES

     25.1 Wherever any notice is required or permitted hereunder, such notice
shall be in writing. Any notice or document required or permitted to be
delivered hereunder shall be deemed to be delivered when actually received by
the designated addressee or, if earlier and regardless of whether actually
received or not, when deposited in the United States mail, postage prepaid,
certified mail, return receipt requested, addressed to the parties hereto at
the respective addresses set out in Section 1.1 above (or at Landlord's option,
to Tenant at the Demised Premises), or at such other addresses as they have
theretofore specified by written notice.

     25.2 If and when included within the term "Landlord" as used in this
instrument there are more than one person, firm or corporation, all shall
jointly arrange among themselves for their joint execution of such a notice
specifying some individual at some specific address for the receipt of notices
and payments to Landlord; if and when included within the term "Tenant" as used
in this instrument there are more than one person, firm or corporation, all
shall jointly arrange among themselves for their joint execution of such a
notice specifying some individual at some specific address for the receipt of
notices and payments to Tenant. All parties included within the terms
"Landlord" and "Tenant," respectively, shall be bound by notice and payments
given in accordance with the provisions of this Article to the same effect as
if each had received such notice or payment. In addition, Tenant agrees that
actions by Landlord and notices to Tenant hereunder may be taken or given by
Agent, Landlord's attorney, or any other property manager or agent.

     25.3 A copy of any notice or document required or permitted to be
delivered hereunder to Landlord shall simultaneously be delivered to Agent.

                                  ARTICLE 26.
                                  COMMISSIONS

     26.1 Tenant and Landlord warrant that they have had no dealings with any
broker or agent in connection with this lease, other than Agent and Tenant's
Brokers. Landlord and Tenant covenant to pay, hold harmless and indemnify each
other from and against any and all cost, expense or liability for any
compensation, commissions or charges claimed by any other broker or agent
utilized by the indemnitor with respect to this lease or the negotiation
hereof. Landlord shall pay the commissions of Agent and Tenant's Brokers in
connection with this lease in accordance with the terms of separate agreements
to be entered into between such parties with respect thereto.

                                       20

<PAGE>   22
                                  ARTICLE 27.
                                  REGULATIONS

     27.1      Landlord and Tenant acknowledge that there are now in effect and
may hereafter be enacted or go into effect federal, state, county and municipal
laws, orders, rules, directives and regulations relating to or affecting the
Demised Premises or the Industrial Complex, concerning the impact on the
environment of construction, land use, maintenance and operation of structures,
toxic or otherwise hazardous substances, and the conduct of business, including,
without limitation, the Americans With Disabilities Act of 1990 and the Clean
Air Act and regulations issued thereunder (all of the foregoing, as amended from
time to time, being herein called the "Regulations"). Tenant will not cause or
permit to be caused, any act or practice, by negligence, omission or otherwise,
that would adversely affect the environment or do anything or permit anything to
be done that would violate any of said Regulations. Moreover, Tenant shall have
no claim against Landlord by reason of any changes Landlord may make in the
Industrial Complex or the Demised Premises pursuant to said Regulations or any
charges imposed upon Tenant, Tenant's customers or other invitees pursuant to
same.

     27.2      If, by reason of any Regulations, the payment to, or collection
by, Landlord of any rental or other charge (collectively referred to hereinafter
as "Lease Payments") payable by Tenant to Landlord pursuant to the provisions of
this lease is in excess of the amount (the "Maximum Charge") permitted by the
Regulations, then Tenant, during the period (the "Freeze Period") when the
Regulations shall be in force and effect shall not be required to pay, nor shall
Landlord be permitted to collect, any sum in excess of the Maximum Charge. Upon
the earlier of (i) the expiration of the Freeze Period, or (ii) the issuance of
a final order or judgment of a court of competent jurisdiction declaring the
Regulations to be invalid or not applicable to the provisions of this lease,
Tenant, to the extent not then proscribed by law, and commencing with the first
day of the month immediately following, shall pay to Landlord as additional
rental, in equal monthly installments during the balance of the term of this
lease, a sum equal to the cumulative difference between the Maximum Charges and
the Lease Payments during the Freeze Period. If any provisions of this Section,
or the application thereof, shall to any extent be declared to be invalid and
unenforceable, the same shall not be deemed to affect any of the other
provisions of this Section or of this lease, all of which shall be deemed valid
and enforceable to the fullest extent permitted by law.

     27.3      Tenant acknowledges that it will be wholly responsible for any
accommodations or alterations which need to be made to the Demised Premises to
accommodate disabled employees and customers of Tenant, including without
limitation, the requirements under the Americans With Disabilities Act of 1990,
as amended from time to time ("ADA") and any equivalent California law. Any
alterations made to the Demised Premises in order to comply with either statute
must be made solely at Tenant's expense and in compliance with all terms and
requirements of this lease. Notwithstanding the foregoing, Landlord shall be
responsible for alterations to the restrooms of the Demised Premises required by
ADA to the extent such alterations are triggered by the Leasehold Improvements
to be constructed by Landlord pursuant to Exhibit "B". Landlord agrees to make
reasonable efforts to ensure that the Common Area is in compliance with the
applicable disability access laws as of the date hereof. If a complaint is
received by Landlord from either a private or government source regarding
disability access to the Common Area of the Industrial Complex, Landlord
reserves the right to mediate, contest, comply with or otherwise respond to such
complaint as Landlord deems to be reasonably prudent under the circumstances. If
Landlord decides to make alterations to the Common Area of the Industrial
Complex in response to any such complaints or in response to legal requirements
Landlord considers to be applicable to the Common Area of the Industrial
Complex, the cost of such alterations shall be included in the Common Area
maintenance charge under this lease. Landlord and Tenant agree that so long as
the governmental entity or entities charged with enforcing such statutes have
not expressly required Landlord to take specific action to effectuate compliance
with such statutes, Landlord shall be conclusively deemed to be in compliance
with such statutes. Tenant agrees to provide Landlord with written notice should
Tenant become aware of a violation of such statutes with respect to the Common
Area. In the event Landlord is required to take action to effectuate compliance
with such statutes, Landlord shall have a reasonable period of time to make the
improvements and alterations necessary to effectuate such compliance, which
period of time shall be extended by any time necessary to cause any necessary
improvements and alterations to be made.

                                  ARTICLE 28.
                              HAZARDOUS MATERIALS

     28.1      During the term of this lease, Tenant shall comply with all
Environmental Laws and Environmental Permits (each as defined in Section 28.7
hereof) applicable to the operation or use of the Demised Premises, will cause
all other persons occupying or using the Demised Premises to comply with all
such Environmental Laws and Environmental Permits, will immediately pay or cause
to be paid all costs and expenses incurred by reason of such compliance, and
will obtain and renew all Environmental Permits required for the operation or
use of the Demised Premises.

     28.2      Tenant shall not generate, use, treat, store, handle, release or
dispose of, or permit the generation, use, treatment, storage, handling, release
or disposal of Hazardous Materials (as defined in Section 28.7 hereof) on the
Demised Premises, or the Industrial Complex, or transport or permit the
transportation of Hazardous Materials to or from the Demised Premises or the
Industrial Complex except for limited quantities used or stored at the Demised
Premises and required in connection with the routine

                                       21
<PAGE>   23
operation and maintenance of the Demised Premises, and then only upon the
written consent of Landlord and in compliance with all applicable Environmental
Laws and Environmental Permits.

     28.3  At any time and from time to time during the term of this lease,
Landlord may perform, at Tenant's sole cost and expense where landlord has good
faith reason to believe that tenant has violated article 28, an environmental
site assessment report concerning the Demised Premises, prepared by an
environmental consulting firm chosen by Landlord, indicating the presence or
absence of Hazardous Materials caused or permitted by Tenant and the potential
cost of any compliance, removal or remedial action in connection with any such
Hazardous Materials on the Demised Premises. Tenant shall grant and hereby
grants to Landlord and its agents access to the Demised Premises and
specifically grants Landlord an irrevocable non-exclusive license to undertake
such an assessment; and the cost of such assessment shall be immediately due
and payable on demand.

     28.4  Tenant will immediately advise Landlord in writing of any of the
following: (1) any pending or threatened Environmental Claim (as defined in
Section 28.7 hereof) against Tenant relating to the Demised Premises or the
Industrial Complex; (2) any condition or occurrence on the Demised Premises or
the Industrial Complex that (a) results in noncompliance by Tenant with any
applicable Environmental Law, or (b) could reasonably be anticipated to form the
basis of an Environmental Claim against Tenant or Landlord or the Demised
Premises; (3) any condition or occurrence on the Demised Premised or any
property adjoining the Demised Premises that could reasonably be anticipated to
cause the Demised Premises to be subject to any restrictions on the ownership,
occupancy, use or transferability of the Demised Premises under any
Environmental Law; and (4) the actual or anticipated taking of any removal or
remedial action by Tenant in response to the actual or alleged presence of any
Hazardous Material on the Demised Premises or the Industrial Complex. All such
notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and Tenant's
response thereto. In addition, Tenant will provide Landlord with copies of all
communications regarding the Demised Premises with any government or
governmental agency relating to Environmental Laws, all such communications with
any person relating to Environmental Claims, and such detailed reports of any
such Environmental Claim as may reasonably be requested by Landlord.

     28.5  Tenant will not change or permit to be changed the present use of
the Demised Premises unless Tenant shall have notified Landlord thereof in
writing and Landlord shall have determined, in its sole and absolute
discretion, that such change will not result in the presence of Hazardous
Materials on the Demised Premises except for those described in Section 28.2
above.

      28.6  (a)  Tenant agrees to defend, indemnify and hold harmless the
      indemnitees (as defined in Section 21.1) from and against all obligations
      (including removal and remedial actions), losses, claims, suits,
      judgments, liabilities, penalties, damages (including consequential and
      punitive damages), costs and expenses (including attorneys' and
      consultants' fees and expenses) of any kind or nature whatsoever that may
      at any time be incurred by, imposed on or asserted against such
      indemnitees directly or indirectly based on, or arising or resulting from
      (a) the actual or  alleged presence of Hazardous Materials on the
      Industrial Complex which is caused or permitted by Tenant and (b) any
      Environmental Claim relating in any way to Tenant's operation or use of
      the Demised Premises (the "Hazardous Materials Indemnified Matters"). The
      provisions of this Article 28 shall survive the expiration or sooner
      termination of this lease.

            (b)  To the extent that the undertaking in the preceding paragraph
      may be unenforceable because it is violative of any law or public policy,
      Tenant will contribute the maximum portion that it is permitted to pay and
      satisfy under applicable law to the payment and satisfaction of all
      Hazardous Materials Indemnified Matters incurred by the indemnitees.

            (c)  All sums paid and costs incurred by Landlord with respect to
      any Hazardous Materials Indemnified Matter shall bear interest at the
      lesser of (i) eighteen (18%) percent per annum, or (ii) the maximum legal
      rate of interest allowed in the State of California, from the date so paid
      or incurred until reimbursed by Tenant, and all such sums and costs shall
      be immediately due and payable on demand.

     28.7  (a)  "Hazardous Materials" means (i) petroleum or petroleum
products, natural or synthetic gas, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, and radon gas; (ii) any substances
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous wastes," "restricted
hazardous wastes," "toxic substances," "toxic pollutants," "contaminants" or
"pollutants," or words of similar import, under any applicable Environmental
Law; and (iii) any other substance exposure to which is regulated by any
governmental authority; (b) "Environmental Law" means any federal, state or
local statute, law, rule, regulation, ordinance, code, policy or rule of common
law now or hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to the environment, health, safety
or Hazardous Materials, including without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C.
sub-section 9601 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C.
sub-section 6901 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C.
sub-section 1801 et seq.; the Clean Water Act, 33 U.S.C. sub-section 1251 et
seq.; the Toxic Substances Control Act, 15 U.S.C. sub-section 2601 et seq.; the
Clean Air Act, 42 U.S.C. sub-section 7401 et seq.; the Safe Drinking Water Act,
42 U.S.C. sub-section 300f et seq.; the Atomic Energy Act, 42 U.S.C. sub-section
2011 et seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.
sub-section 136 et seq.; and the Occupational Safety and Health Act, 29 U.S.C.
sub-section 651 et seq.; (c) "Environmental Claims" means any and all
administrative, regulatory or judicial actions, suits, demands, demand letters,

                                       22
<PAGE>   24
claims, liens, notices of non-compliance or violation, investigations,
proceedings, consent orders or consent agreements relating in any way to any
Environmental Law or any Environmental Permit, including without limitation (i)
any and all Environmental Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law and (ii) any and all Environmental
Claims by any third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief resulting from Hazardous Materials
or arising from alleged injury or threat of injury to health, safety or the
environment; and (d) "Environmental Permits" means all permits, approvals,
identification numbers, licenses and other authorizations required under any
applicable Environmental Law.

                                  ARTICLE 29.
                             INTENTIONALLY DELETED

                                  ARTICLE 30.
                                 MISCELLANEOUS

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

     30.2   Tenant shall not for any reason withhold or reduce Tenant's required
payments of rentals and other charges provided in this lease, it being agreed
that the obligations of Landlord under this lease are independent of Tenant's
obligations except as may be otherwise expressly provided. The immediately
preceding sentence shall not be deemed to deny Tenant the ability of pursuing
all rights granted it under this lease or at law; however, at the direction of
Landlord, Tenant's claims in this regard shall be litigated in proceedings
different from any litigation involving rental claims or other claims by
Landlord against Tenant (i.e., each party may proceed to a separate judgment
without consideration, counterclaim or offset as to the claims asserted by the
other party).

     30.3   The liability of Landlord, any agent of Landlord, or any of their
respective officers, directors, shareholders, or employees to Tenant for or in
respect of any default by Landlord under the terms of this lease or in respect
of any other claim or cause of action shall be limited to the interest of
Landlord in the Industrial Complex, and Tenant agrees to look solely to
Landlord's interest in the Industrial Complex for the recovery and satisfaction
of any judgment against Landlord, any agent of Landlord, or any of their
respective officers, directors, shareholders, and employees.

     30.4   In all circumstances under this lease where the prior consent of
one party (the "consenting party"), whether it be Landlord or Tenant, is
required before the other party (the "requesting party") is authorized to take
any particular type of action, such consent shall not be withheld in a wholly
unreasonable and arbitrary manner; however, the requesting party agrees that
its exclusive remedy if it believes that consent has been withheld improperly
(including, but not limited to, consent required from Landlord pursuant to
Section 19.1) shall be to institute litigation either for a declaratory
judgment or for a mandatory injunction requiring that such consent be given
(with the requesting party hereby waiving any claim for damages, attorneys'
fees or any other remedy unless the consenting party refuses to comply with a
court order or judgment requiring it to grant its consent).

     30.5   Whenever a period of time is herein prescribed for action to be
taken by Landlord, Landlord shall not be liable or responsible for, and there
shall be excluded from the computation of any such period of time, any delays
due to strikes, riots, acts of God, shortages of labor or materials, war,
governmental laws, regulations or restrictions or any other causes of any kind
whatsoever which are beyond the reasonable control of Landlord.

     30.6   If any provision of this lease should be held to be invalid or
unenforceable, the validity and enforceability of the remaining provisions of
this lease shall not be affected thereby.

     30.7   Intentionally Deleted.

     30.8   The laws of the State of California shall govern the
interpretation, validity, performance and enforcement of this lease. Venue for
any action under this lease shall be the county in which rentals are due
pursuant to Section 4.2 and Section 1.1 of this lease.

     30.9   The captions used herein are for convenience only and do not limit
or amplify the provisions hereof.

     30.10  Whenever herein the singular number is used, the same shall include
the plural, and words of any gender shall include each other gender.

     30.11  All covenants and obligations contained within this lease shall
bind and inure to the benefit of Landlord, its successors and assigns, and
shall be binding upon and inure to the benefit of Tenant, its permitted
successors and assigns. If either party is a corporation (including any form of
professional association), then each individual executing or attesting this
lease on behalf of such corporation covenants, warrants and represents that he
is duly authorized to execute or attest and deliver

                                       23
<PAGE>   25
this lease on behalf of such corporation. If either party is a partnership
(general or limited) or limited liability company, then each individual
executing this lease on behalf of the partnership or company hereby covenants,
warrants and represents that he is duly authorized to execute and deliver this
lease on behalf of the partnership or company in accordance with the
partnership agreement or membership agreement, as the case may be, or an
amendment thereto, now in effect.

     30.12     This lease contains the entire agreement between the parties,
and no rights are created in favor of either party other than as specified or
expressly contemplated in this lease. No brochure, rendering, information or
correspondence shall be deemed to be a part of this agreement unless
specifically incorporated herein by reference. In addition, no agreement shall
be effective to change, modify or terminate this lease in whole or in part
unless such is in writing and duly signed by the party against whom enforcement
of such change, modification or termination is sought.

     30.13     LANDLORD AND TENANT HEREBY ACKNOWLEDGE THAT THEY ARE NOT RELYING
UPON ANY BROCHURE, RENDERING, INFORMATION, REPRESENTATION OR PROMISE OF THE
OTHER, OR OF THE AGENT, EXCEPT AS MAY BE EXPRESSLY SET FORTH IN THIS LEASE.

     30.14     No waiver of any of the terms, covenants, provisions,
conditions, rules and regulations imposed by this lease, and no waiver of any
legal or equitable relief or remedy, shall be implied by the failure of
Landlord to assert any rights, declare any forfeiture, or for any other reason.
No waiver of any of the terms, provisions, covenants, conditions, rules and
regulations shall be valid unless it shall be in writing signed by Landlord. No
waiver by Landlord or forgiveness of performance by Landlord for one or more
tenants shall constitute a waiver or forgiveness of performance in respect to
Tenant. Landlord's consent to or approval of any act by Tenant requiring
Landlord's consent or approval under this lease shall not be deemed to render
unnecessary the obtaining of Landlord's consent to or approval of any
subsequent act of Tenant. No act or thing done by Landlord or Landlord's agents
during the term of this lease shall be deemed an acceptance of a surrender of
the Demised Premises, unless in writing signed by Landlord. The delivery of the
keys to any employee or agent of Landlord shall not operate as a termination of
this lease or a surrender of the Demised Premises. The acceptance of any rent
by Landlord following a breach of this lease by Tenant shall not constitute a
waiver by Landlord of such breach or any other breach unless such waiver is
expressly stated in a writing signed by Landlord.

     30.15     Tenant shall deliver and surrender to Landlord possession of the
Demised Premises (including all of Tenant's permanent work upon and to the
Demised Premises, all replacements and all fixtures permanently attached to the
Demised Premises) immediately upon the expiration of the term or the termination
of this lease in as good condition and repair as the same were on the delivery
date (loss by any insured casualty and ordinary wear and tear only excepted) and
deliver the keys at the office of Landlord or Landlord's agent; provided,
however, that upon Landlord's request made at least thirty (30) days prior to
the end of the term, or the date Tenant is otherwise required to vacate the
Demised Premises, Tenant shall remove all fixtures and equipment affixed to the
Demised Premises by Tenant, and repair and restore the Demised Premises to their
condition on the delivery date (loss by an insured casualty and ordinary wear
and tear only excepted), at Tenant's sole expense. The removal shall be
performed prior to the earlier of the end of the term or the date Tenant is
required to vacate the Demised Premises.

     30.16     Tenant shall not record this lease. Without the prior written
consent of Landlord, Tenant shall not record any memorandum of this lease,
short form or other reference to this lease.

     30.17     The submission of this lease for examination does not constitute
a reservation of or option for the Demised Premises or any other space in the
Industrial Complex, and shall not vest any right in Tenant. This lease shall
become effective as a lease only upon its execution and delivery by the parties.

     30.18     LANDLORD AND TENANT HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LEASE OR ANY
DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF
CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
EITHER PARTY ARISING OUT OF OR RELATED IN ANY MANNER WITH THE DEMISED PREMISES
INCLUDING WITHOUT LIMITATION, ANY ACTION TO RESCIND OR CANCEL THIS LEASE OR
ANY CLAIMS OR DEFENSES ASSERTING THAT THIS LEASE WAS FRAUDULENTLY INDUCED OR IS
OTHERWISE VOID OR VOIDABLE). THIS WAIVER IS A MATERIAL INDUCEMENT FOR LANDLORD
TO ENTER INTO AND ACCEPT THIS LEASE.

                                       24
<PAGE>   26
     30.19 This lease consists of thirty Articles and Exhibits "A" through "H".
With the exception of Article 7, in the event any provision of an exhibit shall
be inconsistent with a provision in the body of the lease, the provision as set
forth in the exhibit shall be deemed to control.

     EXECUTED as of the latest date accompanying a signature by Landlord or
Tenant below.

LANDLORD:               MP ARQUES, INC.,
                        a Delaware corporation

                        By: GE CAPITAL INVESTMENT ADVISORS, INC., its agent

                            By: /s/ John F. Donahue
                            Name: John F. Donahue
                            Title: Vice President

                        Date of Signature: 12/28/99

                        Taxpayer Identification No.: 33-0666682

TENANT:                 MOLECULAR DYNAMICS, Inc.,
                        a Delaware corporation

                        By: /s/ Peter B. Coggins
                        Name: Peter B. Coggins
                        Title: President

                        By: /s/ Bruce K. Leisz
                        Name: Bruce K. Leisz
                        Title: V.P. Operations

                        Date of Signature: 12/23/99

                        Taxpayer Identification No.: 943050031
<PAGE>   27
                                  EXHIBIT "A"

                                DEMISED PREMISES
                                ----------------

                           [CAD DRAWING OF PROPERTY]

<PAGE>   28
                                  EXHIBIT "B"

                     WORK LETTER FOR LEASEHOLD IMPROVEMENTS

     It is agreed that Landlord will complete construction of the initial
Demised Premises in accordance with the following terms and provisions:

     1.   Within ten (10) days of full execution and delivery of this lease by
Landlord and Tenant, Tenant shall submit to Landlord for Landlord's approval
preliminary space plans (the "Preliminary Space Plans") Based on the Preliminary
Space Plans, Landlord shall cause to be constructed in the Demised Premises
certain leasehold improvements (the "Leasehold Improvements") in accordance with
detailed plans and specifications (the "Plans") approved by Tenant and Landlord
(the "Plans"), which approvals shall not be unreasonably withheld, conditioned
or delayed by either party. Landlord shall cause the Plans to be prepared, at
Tenant's cost, by a registered professional architect and mechanical and
electrical engineer(s) to be selected by Landlord and approved by Tenant (such
approval to not be unreasonably withheld). Landlord shall furnish the initial
draft of the Plans to Tenant for Tenant's review and approval. Within five (5)
days following Tenant's receipt of the Plans, Tenant shall either provide
comments to such Plans or approve the same. If Tenant fails to provide such
approval or comments within such time period, the Plans shall be deemed approved
by Tenant. If Tenant timely provides comments to the initial draft of the Plans,
Landlord shall promptly provide revised Plans to Tenant incorporating Tenant's
comments. Within five (5) days of receipt of such revised Plans, Tenant shall
again either provide comments to such Plans or approve the same. The process
described above shall be repeated, if necessary, until the Plans have been
finally approved by Tenant.

     2.   Following the approval in writing by Landlord and Tenant of the Plans,
Landlord shall construct the Leasehold Improvements in accordance with the
Plans. At such time, Landlord shall also provide to Tenant a non-binding good
faith estimate of the cost of the Leasehold Improvements (including architect's
and contractor's fees). The cost of the Leasehold Improvements for the purpose
of billing shall equal the cost to Landlord of designing and constructing such
Leasehold Improvements (including any architect's fee, any contractor's fee and
the cost of supervision and coordination).

     3.   All costs and expenses incurred in the construction of the Leasehold
Improvements shall be borne by Tenant (and are hereinafter referred to as
"Tenant's Costs"); provided, however, that Landlord shall advance to Tenant an
amount up to Five Hundred Forty-eight Thousand Seven Hundred  Thirty-six Dollars
($548,736.00) (the "Tenant Improvement Allowance") toward the costs incurred for
the construction of the Leasehold Improvements. Any excess ("Excess") of
Tenant's Costs over the Allowance shall be payable as follows:

           (a)  Tenant shall pay, within five (5) days from delivery of
     Landlord's invoice to Tenant therefor, to Landlord prior to the
     commencement of construction of the Leasehold Improvements, an amount equal
     to fifty percent (50%) of such Excess (as then estimated by Landlord);

           (b)  After substantial completion of the Leasehold Improvements, but
     prior to occupancy of the Premises by Tenant, Tenant shall pay to Landlord,
     within five (5) days from delivery of Landlord's invoice to Tenant
     therefor, an amount equal to eighty percent (80%) of the Excess as then
     estimated by Landlord, less payments received by Landlord according to (a)
     above;

           (c)  As soon as the final accounting can be prepared and submitted to
     Tenant, Tenant shall pay to Landlord, within five (5) days from delivery of
     Landlord's invoice to Tenant therefor, the entire unpaid balance of the
     actual Excess based on the final costs to Landlord as described in
     Paragraph 2 hereof.

The amounts payable hereunder shall constitute rent due pursuant to this ease at
the times specified herein and failure to make any such payments when due shall
constitute an event of default under this Lease, entitling Landlord to all of
its remedies hereunder as well as all remedies otherwise available to Landlord.

     4.   If Tenant requests any changes in the Leasehold Improvements, Tenant
shall present Landlord with revised drawings and specifications for Landlord's
approval, which approval will not be unreasonably withheld. If Landlord approves
such changes, Landlord shall incorporate such changes in the Leasehold
Improvements following Landlord's receipt of a change order therefor executed by
Tenant. Landlord, however, may require, prior to proceeding with any changes,
additional cash advances against the Excess in the event Landlord determines
that Tenant's proposed changes will increase the amount of the Excess.

     5.   Should Landlord be delayed in substantially completing the work to be
performed hereunder as a result of (i) Tenant's failure to approve the Plans as
provided in Paragraph 1 hereof or (ii) Tenant's requests for changes in the
Plans which delay said work or (iii) the performance of any work contemplated
herein by a contractor or agent employed by Tenant (any such contractor or agent
being subject to the prior written approval of Landlord) or (iv) any other delay
caused by Tenant, its agents or employees, then Tenant's obligation to pay rent
under the lease shall nevertheless commence on the date specified in Section
1(j) of this lease and the Commencement Date under this Lease shall not be
delayed pursuant to Article 3 of this lease, unless such delays for which Tenant
is responsible are in addition to delays for which Landlord is responsible, in
which case the Commencement Date and rental

                                       1
<PAGE>   29
commencement date under this lease shall be extended for the period of delays
for which Landlord was responsible.

     6.  Landlord hereby agrees that to the extent it acts as contractor
hereunder, Landlord will commence or cause the commencement of the construction
of the Leasehold Improvements as promptly as is reasonably possible and will
proceed with due diligence to perform or cause such work to be performed in a
good and workmanlike manner. Landlord warrants to Tenant that all materials and
equipment furnished in constructing the portion of the Leasehold improvements
constructed by Landlord will be of good quality, free from faults and defects;
provided, however, Tenant's sole remedy for any breach of the above warranty
shall be that Landlord, for a period of twelve (12) months after substantial
completion of such work, at its sole cost and expense, will make all necessary
repairs, replacements, and corrections of any nature or description as may
become necessary by reason of faulty construction, labor or materials in the
portion of the Leasehold Improvements constructed by Landlord. Upon substantial
completion of the Leasehold Improvements for the Demised Premises, at Tenant's
request Landlord and Tenant shall conduct a walkthrough of the Demised Premises
and prepare a "punchlist" of items to be repaired finished or touched-up by
Landlord under this Paragraph 6. Landlord will repair any punchlist items
identified within the first forty-five (45) days following the Commencement
Date.

     7.  For the purposes of this Work Letter, the term "substantial
completion" of the Leasehold Improvements or of the work of constructing such
Leasehold Improvements shall mean completion of such Leasehold Improvements in
all material respects excepting only minor finish and touch-up work which does
not interfere with the occupancy of the Demised Premises by Tenant, as
reasonably determined by the Landlord's architect, whose determination shall be
binding upon Landlord and Tenant. To the extent substantial completion is
delayed by any act or omission of Tenant or its employees, agents or
contractors, the date of substantial completion shall be the date reasonably
determined by Landlord's space planner or architect when substantial completion
would have been achieved if such Tenant delay had not taken place.

                                       2
<PAGE>   30
                                  EXHIBIT "C"

                    WORK LETTER FOR SUBSEQUENT IMPROVEMENTS

     It is agreed that Landlord will complete construction of the Subsequent
Improvements to the Demised Premises in accordance with the following terms and
provisions:

     1. No earlier than January 1, 2001 and no later than July 31, 2002, Tenant
shall submit to Landlord for Landlord's approval Tenant's written request and
preliminary plans (the "Subsequent Space Plans") for the construction of the
Subsequent improvements. Tenant acknowledges that the Subsequent Improvements
shall consist of the following improvements to the current warehouse portion of
the Demised Premises: a buildout of all of said warehouse space as either office
or production space, including without limitation sheetrocking, floor coverings,
ceiling finishes, unfinished perimeter walls and HVAC. Should Tenant fail to
request and submit the Subsequent Space Plans for the Subsequent Improvements by
July 31, 2002, or should Tenant have prior to such date have been in default of
its obligations under this lease beyond any applicable notice and cure periods.
Tenant's rights (and Landlord's obligations) under this Exhibit "C" shall be
void and of no further force and effect. Should Landlord reasonably disapprove
Tenant's Subsequent Space Plans, Tenant shall make such revisions as reasonably
required thereto by Landlord and resubmit such revised preliminary plans to
Landlord within five (5) days of Tenant's receipt of the reasons for Landlord's
disapproval. Tenant's failure to timely resubmit such preliminary plans shall be
deemed a waiver by Tenant of its rights under this Exhibit "C".

     2. Landlord shall cause the plans for the Subsequent Improvements (the
"Subsequent Plans") to be prepared based upon the Subsequent Space Plans
submitted by Tenant pursuant to Paragraph 1 above, at Tenant's cost, by a
registered professional architect and mechanical and electrical engineer(s) to
be selected by Landlord. Landlord shall furnish the initial draft of the
Subsequent Plans to Tenant for Tenant's review and approval. Within five (5)
days following Tenant's receipt of the Subsequent Plans, Tenant shall either
provide comments to such Subsequent Plans or approve the same. If Tenant fails
to provide such approval or comments within such time period, the Subsequent
Plans shall be deemed approved by the Tenant. If Tenant timely provides comments
to the initial draft of the Subsequent Plans, Landlord shall promptly provide
revised Subsequent Plans to Tenant incorporating Tenant's comments. Within five
(5) days of receipt of such revised Subsequent Plans, Tenant shall again either
provide comments to such plans or approve the same. The process described above
shall be repeated, if necessary, until the Subsequent Plans have been finally
approved by Tenant.

     3. Following the approval in writing by Landlord and Tenant of the
Subsequent Plans, Landlord shall construct the Subsequent Improvements in
accordance with the Subsequent Plans. At such time, Landlord shall also provide
to Tenant a non-binding good faith estimate of the cost of the Subsequent
Improvements (including architect's and contractor's fees). The cost of the
Subsequent Improvements for the purpose of billing shall equal the cost to
Landlord of designing and constructing such Subsequent Improvements (including
any architect's fee, any contractor's fee and the cost of supervision and
coordination).

     4. All costs and expenses incurred in the design and construction of the
Subsequent Improvements shall be borne by Tenant; provided, however, that
Landlord shall contribute an amount not to exceed One Hundred Fifty-Five
Thousand Five Hundred and Twenty Dollars ($155,520.00) (the "Subsequent
Improvement Allowance") toward the costs incurred for the construction of the
Subsequent Improvements.

     5. If Tenant requests any changes in the Subsequent Plans following their
initial approval, Landlord shall present Tenant with revised drawings and
specifications for Tenant's approval, which approval will not be unreasonably
withheld. If Tenant approves such changes, Landlord shall incorporate such
changes in the Subsequent Improvements following Landlord's receipt of a change
order therefor executed by Tenant; provided, however, that if such changes
increase the cost of the Subsequent Improvements, Tenant shall pay such
additional cost (the "Excess") as follows:

        (a) Tenant shall pay, within five (5) days from delivery of Landlord's
invoice to Tenant therefor, to Landlord prior to the commencement of
construction of the Subsequent Improvements, an amount equal to one hundred
percent (100%) of such Excess (as then estimated by Landlord);

        (b) As soon as the final accounting can be prepared and submitted to
Tenant, Tenant shall pay to Landlord, within five (5) days from delivery of
Landlord's invoice to Tenant therefor, the entire unpaid balance of the actual
Excess based on the final costs to Landlord as described in Paragraph 3 hereof.

     The amounts payable hereunder shall constitute additional rent due
pursuant to this lease at the times specified herein and failure to make any
such payments when due shall constitute an event of default under this Lease,
entitling Landlord to all of the remedies hereunder as well as all remedies
otherwise available to Landlord.

     6. Landlord hereby agrees that to the extent it acts as contractor
hereunder, Landlord will commence or cause the commencement of the construction
of the Subsequent Improvements as promptly as is reasonably possible and will
proceed with due diligence to perform or cause such work to be performed in a
good and workmanlike manner. Landlord warrants to Tenant that all materials and

                                       1
<PAGE>   31
equipment furnished in constructing the portion of the Subsequent Improvements
constructed by Landlord will be of good quality, free from faults and defects;
provided, however, Tenant's sole remedy for any breach of the above warranty
shall be that Landlord, for a period of twelve (12) months after substantial
completion of such work, at its sole cost and expense, will make all necessary
repairs, replacements, and corrections of any nature or description as may
become necessary by reason of faulty construction, labor or materials in the
portion of the Subsequent Improvements constructed by Landlord. Tenant
acknowledges that the Subsequent Improvements will be performed during the
lease term and that in no event shall Tenant be entitled to any abatement of
rent or any claim for constructive eviction or otherwise should the performance
of the Subsequent Improvements interfere with Tenant's operations in the
Demised Premises.

                                       2

<PAGE>   32
                            INDUSTRIAL COMPLEX LEASE
                                  (California)

               Industrial Complex:      Arques and DeGuine

               Landlord:                MP Arques, Inc.

               Tenant:                  Molecular Dynamics, Inc.

               Reference Date:          November 30, 1999

                                 INDEX TO LEASE
<TABLE>
<CAPTION>
                    TITLE                                                  PAGE

<S>                                                                        <C>
ARTICLE 1.  DEFINITIONS AND CERTAIN BASIC PROVISIONS.....................     1

ARTICLE 2.  GRANTING CLAUSE..............................................     2

ARTICLE 3.  LEASEHOLD IMPROVEMENTS/DELIVERY OF DEMISED PREMISES..........     2

ARTICLE 4.  RENT.........................................................     3

ARTICLE 5.  FINANCIAL REPORTS............................................     4

ARTICLE 6.  TENANT'S RESPONSIBILITY FOR TAXES, OTHER REAL ESTATE
            CHARGES AND INSURANCE EXPENSES...............................     4

ARTICLE 7.  COMMON AREA..................................................     5

ARTICLE 8.  LOADING DOCK.................................................     6

ARTICLE 9.  USE AND CARE OF DEMISED PREMISES.............................     7

ARTICLE 10. MAINTENANCE AND REPAIR OF DEMISED PREMISES...................     7

ARTICLE 11. ALTERATIONS..................................................     8

ARTICLE 12. LANDLORD'S RIGHT OF ACCESS...................................     9

ARTICLE 13. SIGNS; STORE FRONTS..........................................     9

ARTICLE 14. UTILITIES....................................................     9

ARTICLE 15. INSURANCE COVERAGES..........................................    10

ARTICLE 16. WAIVER OF LIABILITY; MUTUAL WAIVER OF SUBROGATION............    11

ARTICLE 17. DAMAGES BY CASUALTY..........................................    12

ARTICLE 18. EMINENT DOMAIN...............................................    13

ARTICLE 19. ASSIGNMENT AND SUBLETTING....................................    13

ARTICLE 20. SUBORDINATION; ATTORNMENT; ESTOPPELS.........................    15

ARTICLE 21. TENANT'S INDEMNIFICATION.....................................    15

ARTICLE 22. DEFAULT BY TENANT AND REMEDIES...............................    16

ARTICLE 23. LANDLORD'S CONTRACTUAL SECURITY INTEREST.....................    19

ARTICLE 24. HOLDING OVER.................................................    20

ARTICLE 25. NOTICES......................................................    20

ARTICLE 26. COMMISSIONS..................................................    20

ARTICLE 27. REGULATIONS..................................................    21

ARTICLE 28. HAZARDOUS MATERIALS..........................................    21

ARTICLE 29. INTENTIONALLY DELETED........................................    23

ARTICLE 30. MISCELLANEOUS................................................    23
</TABLE>

EXHIBIT "A"    DEMISED PREMISES
EXHIBIT "B"    LEASEHOLD IMPROVEMENTS WORK LETTER
EXHIBIT "C"    SUBSEQUENT IMPROVEMENTS WORK LETTER
EXHIBIT "D"    TENANT CONSTRUCTION RULES AND REGULATIONS
EXHIBIT "E"    RIGHT OF FIRST OPPORTUNITY
EXHIBIT "F"    GUARANTY OF LEASE
EXHIBIT "G"    HVAC REPAIR WORK
EXHIBIT "H"    RENEWAL OPTION

<PAGE>   33
                                  EXHIBIT "D"

                   TENANT CONSTRUCTION RULES AND REGULATIONS

 1. All demolition, removals and other categories of work that may inconvenience
    other tenants or disturb building operations must be scheduled and performed
    before or after normal working hours, and the property manager for the
    industrial Complex (the "Property Manager") shall be provided with at least
    twenty-four (24) hours notice prior to proceeding with such work.

 2. All structural and floor loading requirements shall be subject to the prior
    approval of the industrial Complex's structural engineer. Approval shall be
    obtained by Tenant and any fees shall be at Tenant's sole expense.

 3. All mechanical (HVAC, plumbing and sprinkler) and electrical requirements
    shall be subject to the prior approval of Landlord's mechanical and
    electrical engineers. When necessary, Property Manager will require
    engineering and shop drawings, which drawings must be approved by Property
    Manager before the work is started. Drawings shall be prepared by Tenant and
    all approvals shall be obtained by Tenant.

 4. If the shutdown of risers and mains for electrical, HVAC, sprinkler and/or
    plumbing work is required, such work shall be supervised by a representative
    of Landlord at Tenant's sole expense at a time approved in advance by
    Property Manager.

 5. Tenant's general contractor is responsible to do all of the following:

    (a)   Properly supervise construction at the Demised Premises at all times.

    (b)   Police the work at all times, continually keeping the affected
          space(s) safe and orderly.

    (c)   Maintain the cleanliness and protection of all affected areas.

    (d)   Avoid and prevent the disturbance of other tenants.

 6. If Tenant's general contractor is negligent in any of its responsibilities,
    Tenant shall be charged for the corrective work done by Landlord's
    personnel.

 7. No electrical cords are to be stretched across any walkways or public areas
    in any manner that would cause any safety hazard.

 8. Radios may not be played if the sound can be heard in the Common Area or in
    other tenant suites.

 9. Electrical rooms may not be used to store any materials, fixtures, etc.

10. All sprinkler shut downs, draining or filling shall be scheduled and
    coordinated with the Landlord's chief engineer or his delegate.

11. Bracing, soldering or welding shall be scheduled in advance with Property
    Manager.

12. Dust shall be kept at a minimum to avoid smoke detector activation.

13. If requested by Tenant, Property Manager shall provide space in the parking
    lot at a location to be determined by Landlord for a trash and debris bin
    during construction of the tenant improvements.

14. Damage to any pre-installed fixtures (e.g., water fountains, sinks, lights,
    commodes, signage, etc.) shall be repaired at Tenant's sole expense.

15. Tenant's general contractor shall coordinate the keying schedule, Tenant's
    key requirements and cylinder installation with Landlord's designated
    locksmith.

16. Where appropriate, Tenant shall submit to Property Manager a final
    "as-built" set of drawings showing all items of work in full detail.
    "As-builts" shall be sepias or vellums.

                                       1
<PAGE>   34

17. Throughout the construction period and upon conclusion of the work, Tenant's
    general contractor shall cause the work areas and all other affected areas
    to be clean and free of debris.

                                       2

<PAGE>   35
                                  EXHIBIT "E"

                           RIGHT OF FIRST OPPORTUNITY

     Tenant shall have the one time right of first offer ("Right of First
Offer") to lease all, but not less than all, of the adjacent building at the
Industrial Complex having a street address of 310 DeGuine, Sunnyvale,
California and containing approximately 34,697 rentable square feet of space
(the "First Offer Space"), at such time as the First Offer Space becomes
"available for lease" (as defined below) during the lease term provided that
(i) Tenant is not, and has not been, in default hereunder beyond any applicable
notice and cure periods, and (ii) there remains not less than eighteen (18)
months in the lease term (inclusive of any exercised extension period). In the
event that Landlord proposes in good faith to negotiate with a prospective
tenant in leasing the First Offer Space, the First Offer Space shall be deemed
"available for lease" and, at such time, Landlord shall give written notice
thereof to Tenant ("Landlord's Notice"). If Tenant in response to a Landlord's
Notice elects to lease the First Offer Space, Tenant shall so notify Landlord
in writing (the "Election Notice"). If Tenant does not deliver to Landlord the
Election Notice within ten (10) days of Landlord's delivery of the Landlord's
Notice, Landlord shall be relieved of its obligation to make available for
lease to Tenant the First Offer Space and the provisions of this paragraph
shall be of no further force and effect. Without limiting the foregoing, upon
the non-delivery of the Election Notice by Tenant, Landlord shall be entitled
to grant options and rights free and clear of Tenant's Right of First Offer
under this paragraph to other tenants or prospective tenants of the Industrial
Complex. Upon Tenant's timely delivery of the Election Notice with respect to
the First Offer Space, Landlord and Tenant shall promptly enter into an
amendment of this Lease adding the First Offer Space to the Demised Premises on
all the terms and conditions set forth in this Lease as to the Demised
Premises, except that (i) the term of the lease to Tenant of the First Offer
Space shall commence upon the actual availability date of the First Offer
Space ("Availability Date") and shall continue coterminously with the
remaining lease term for the Demised Premises, (ii) Tenant shall take the First
Offer Space in its then "as-is" condition (subject, however, to the First Offer
Space being vacant and broom clean condition). Landlord shall neither provide
nor pay for any interior improvement work or services related to the First
Offer Space, (iii) the minimum guaranteed rental per rentable square foot
payable by Tenant for the First Offer Space shall be equal to the Market Rent
(as defined below) for the First Offer Space but in no event shall the minimum
guaranteed rental for the First Offer Space be less than the minimum guaranteed
rental payable by Tenant under the Lease for the original Demised Premises, and
(iv) Tenant's Proportionate Share shall be increased to reflect the addition of
the First Offer Space to the Demised Premises. As used herein, the term "Market
Rent" shall mean one hundred percent (100%) of the projected prevailing market
rate of rent for comparable space with comparable finish-out in comparable
space within Sunnyvale, California (as determined by Landlord and confirmed by
written statement to Tenant by a representative of Landlord).

                                       1

<PAGE>   36
                                  EXHIBIT "F"

                               GUARANTY OF LEASE

     FOR VALUE RECEIVED, and in consideration for, and as an inducement to MP
Arques, Inc., a Delaware corporation, to enter into a lease dated as of
November 30, 1999 ("the Lease"), as "Landlord" with Molecular Dynamics, Inc., a
Delaware corporation, as "Tenant," the undersigned, whether one or more,
jointly and severally do hereby unconditionally guarantee to Landlord (i) the
punctual and full payment of all rents of every kind, additional rents and all
other charges to be paid by Tenant under the Lease and (ii) the full and timely
performance and observance of all the covenants, conditions, and agreements to
be performed and observed by Tenant under the Lease. The undersigned shall
indemnify, defend and hold harmless Landlord and its affiliates from any loss,
damages or costs (including, without limitation, the reasonable fees of
Landlord's attorneys and court costs) arising out of any failure to pay the
aforesaid rents and other charges or the failure to perform any of the
aforesaid covenants, conditions and agreements under the Lease. The undersigned
further expressly agree that the validity of this Guaranty of Lease and the
obligations of the undersigned hereunder shall in no way be terminated,
affected or impaired by reason of any forbearances, settlements or compromises
between Landlord and Tenant or the invalidity or unenforceability of the Lease
for any reason whatsoever or by the relief of Tenant from any of Tenant's
obligations under the Lease by operation of law or otherwise, including,
without limitation of the generality of the foregoing, the rejection or
assignment of the Lease in connection with proceedings under any present or
future provision of the federal Bankruptcy Act, or any similar law or statute
of the United States or any state thereof.

     The undersigned further covenant and agree that this Guaranty of Lease
shall be and remain in full force and effect as to any renewal, modification or
extension of the Lease, whether or not known to or approved by the undersigned,
and that no subletting, assignment or other transfer of the Lease, or any
interest therein, or any such renewal, modification, or extension, shall
operate to extinguish or diminish the liability of the undersigned hereunder.
In the event of any termination of the Lease by Landlord, the undersigned's
liability hereunder shall not be terminated, but the undersigned shall be and
remain fully liable for all damages, costs, expenses and other claims which
may arise under or in connection with the Lease. If the undersigned shall,
directly or indirectly, advance any sums to Tenant, such sums and indebtedness
shall be subordinate in all respects to the amounts then and thereafter due and
owing by Tenant under the Lease.

     Wherever reference is made to the liability of Tenant in the Lease, such
reference shall be deemed likewise to refer to the undersigned, jointly and
severally, with Tenant. The liability of the undersigned for the obligations of
Tenant under the Lease shall be primary, absolute and unconditional. In any
right of action which shall accrue to Landlord under the Lease, Landlord may,
at Landlord's option, proceed against any one or more of the undersigned and/or
Tenant, jointly or severally, and may proceed against any one or more of the
undersigned without having demanded performance of, commenced any action
against or having obtained any judgment against Tenant. The undersigned hereby
waive any obligation on the part of Landlord to enforce or seek to enforce the
terms of the Lease against Tenant as a condition to Landlord's right to proceed
against the undersigned hereunder. The undersigned hereby expressly waive: (i)
notice of acceptance of this Guaranty of Lease and of presentment, demand and
protest; (ii) notice of any default hereunder or under the Lease and all
indulgences; (iii) demand for observance, performance or enforcement of any
terms or provisions of this Guaranty of Lease or of the Lease; and (iv) all
other notices and demands otherwise required by law which the undersigned may
lawfully waive. This Guaranty of Lease is a guaranty of payment and not a
guaranty of collection. The undersigned agree that in the event this Guaranty
of Lease shall be enforced by suit or otherwise, the non-prevailing party will
reimburse the prevailing party, upon demand, for all expenses incurred in
connection therewith, including, without limitation, reasonable attorneys' fees.

     The undersigned hereby waive, to the maximum extent permitted by law, all
defenses available to a guarantor or surety, whether the waiver is specifically
herein enumerated or not, including, without limitation, any statute of
limitations affecting the enforcement of this Guaranty of Lease, and any right
of set-off or compensation against amounts due under this Guaranty of Lease.

     The undersigned hereby knowingly, voluntarily and intentionally waive the
right to a trial by jury in respect of any litigation based hereon, arising out
of, under or in connection with this Guaranty of Lease or any documents
contemplated to be executed in connection herewith or any course of conduct,
course of dealings, statements (whether oral or written) or actions of any
party arising out of or related in any manner with the premises described in
the Lease (including without limitation, any action to rescind or cancel this
Guaranty of Lease or any claims or defenses asserting that this Guaranty of
Lease was fraudulently induced or is otherwise void or voidable). This waiver
is a material inducement for Landlord to enter into and accept the Lease and
this Guaranty of Lease.

     The undersigned hereby assign to Landlord any rights the undersigned may
have to file a claim and proof of claim in any bankruptcy or similar proceeding
of Tenant and any awards or payments thereon to which the undersigned would
otherwise be entitled.

     If is further agreed that all of the terms and provisions hereof shall
inure to the benefit of and may be enforced by the respective heirs, executors,
successors and assigns of Landlord and the holder of any mortgage to which the
Lease may be subject and subordinate from time to time, and shall be binding

                                       1
<PAGE>   37
upon the respective heirs, executors, successors and assigns of the
undersigned. Landlord may, without notice, assign this Guaranty of Lease, and
no such assignment shall diminish the undersigned's liability under this
Guaranty of Lease.

     In the event more than one person or entity executes this Guaranty of
Lease, the liability of such signatories hereunder shall be joint and several.
In the event only one person or entity executes this Guaranty of Lease, all
provisions hereof which refer to more than one guarantor shall be automatically
modified to refer to only one guarantor, and otherwise this Guaranty of Lease
shall remain unmodified and in full force and effect.

     It is understood that other agreements similar to this Guaranty of Lease
may, at Landlord's safe option and discretion, be executed by other persons with
respect to the Lease. This Guaranty of Lease shall be cumulative of any such
agreements and the liabilities and obligations of the undersigned hereunder
shall in no event be affected or diminished by reason of such other agreements.
Moreover, in the event Landlord obtains the signature of more than one guarantor
on this Guaranty of Lease or obtains additional guarantee agreements, or both,
the undersigned agree that Landlord, in Landlord's sole discretion, may (i)
compound or settle with any one or more of the guarantors for such consideration
as Landlord may deem proper, and (ii) release one or more of the guarantors from
liability. The undersigned further agree that no such action shall impair the
rights of Landlord to enforce the Lease against any remaining guarantor or
guarantors, including the undersigned.

     The undersigned agree to execute and deliver to Landlord, from time to
time, upon ten (10) days notice from Landlord, a certificate addressed to
Landlord, any mortgagee or prospective mortgagee, or any prospective purchaser,
certifying (i) that this Guaranty of Lease is unmodified and in full force and
effect and (ii) to such other matters as Landlord may reasonably request. The
undersigned further agree that upon request by Landlord from time to time, the
undersigned shall furnish Landlord, within five (5) days of receipt of such
request, with a copy of the undersigned's financial statements, in form and
substance reasonably satisfactory to Landlord, reflecting the undersigned's
current financial condition. The undersigned represents and warrants that all
financial statements, records and information furnished by the undersigned to
Landlord in connection with this Guaranty of Lease are true, correct and
complete in all respects.

     If any provision of this Guaranty of Lease or the application thereof to
any person or circumstance shall, for any reason and to any extent, be invalid
or unenforceable, the remainder of this Guaranty of Lease and the application
of that provision to other provisions or circumstances shall not be affected
but rather shall be enforced to the fullest extent permitted by law.

     If the undersigned is a corporation (including any form of professional
association), then each individual executing or attesting this Guaranty of
Lease on behalf of such corporation covenants, warrants and represents that he
or she is duly authorized to execute or attest and deliver this Guaranty of
Lease on behalf of such corporation. If the undersigned is a partnership
(general or limited) or limited liability company, then each individual
executing this Guaranty of Lease on behalf of the partnership or company hereby
covenants, warrants and represents that he or she is duly authorized to
execute and deliver this Guaranty of Lease on behalf of the partnership or
company in accordance with the partnership agreement or membership agreement,
as the case may be, or an amendment thereto, now in effect.

     As a material inducement to Landlord to enter into the Lease and accept
this Guaranty of Lease, the undersigned specifically and irrevocably
acknowledge and agree as follows:

          a.   This Guaranty of Lease shall be governed by, construed and
     enforced in accordance with the laws of the State of California without
     regard to principles of conflicts of law.

          b.   As determined by Landlord in its sole and absolute discretion,
     all actions or proceedings to enforce this Guaranty of Lease or in any way
     arising out of or related to this Guaranty of Lease shall be filed,
     litigated and maintained in the state or federal courts located in Santa
     Clara or San Francisco Counties, State of California, U.S.A. (the
     "Specified Courts"); the undersigned waive, release and relinquish any and
     all rights or privileges now or hereafter available to the undersigned to
     cause such actions or proceedings to be filed, litigated, maintained or
     removed to any other state, federal or international court.

          c.   The undersigned consent to and submit to the jurisdiction of the
     Specified Courts with respect to this Guaranty of Lease only and waive,
     release and relinquish any all defenses or claims based upon or in any way
     relating to jurisdictional issues in connection therewith.

                                       2

<PAGE>   38
                    d.   The undersigned waive personal service of any and all
               process upon the undersigned and agree that all such service of
               process may be made by United States registered or certified
               mail or international express courier service (e.g., DHL, Federal
               Express) addressed to the undersigned at the address specified
               below, and such service of process shall be deemed effective
               upon the earlier of actual receipt or three (3) days after
               posting.

         EXECUTED as of the ____ day of December, 1999.

               GUARANTOR:               NYCOMED AMERSHAM,
                                        a public company organized under the
                                          laws of England

                                        By:_________________________________

                                        Name:_______________________________

                                        Title:______________________________

                                        GUARANTOR'S ADDRESS

                                        ____________________________________

                                        ____________________________________

                                        Employer Identification Number:

                                        ____________________________________

                                       3
<PAGE>   39
                                  EXHIBIT "G"
                                HVAC REPAIR WORK

The Landlord shall provide the following upgrades to the existing A/C
equipment, including all labor, materials, supervisor, engineering, and permits:

1.   Utilize all existing HVAC equipment
2.   Re-duct air handlers #3, 4 & 5
3.   Air and water balance
4.   Relocate existing air compressor to equipment pad
5.   Rezone air handlers #1, 2 & 3
6.   Provide and install up to 22 VAV Boxes, and up to 51 new diffusers
     (excludes existing office area)
7.   Provide and install (3) powered exhaust fans
8.   Provide and install (7) variable frequency drives on existing air handlers
9.   Rigging
10.  Insulation
11.  R/A ducting from air handlers #3 & 5
12.  Design drawing
13.  Equipment repairs as follows:

     a) A/H #6:    Change filters, belt and calibrate pneumatics
     b) A/H #1:    Clean coil, change filters, belts and calibrate pneumatics
     c) A/H #2:    Change filters, belts and calibrate pneumatics
     d) A/H #3:    Change bag filters, belts and calibrate pneumatics
     e) A/H #4:    Change bag filters, belts and calibrate pneumatics
     f) C/H #1:    Clean condenser coil, replace suction gaskets and replace
                   condenser fan relay
     g) C/H #2:    Clean condenser coils, replace suction service valve
                   gaskets and straighten out condenser fan wiring
     h) A/H #5:    Change filters, belts and calibrate pneumatics
     i) Boiler #1: Clean boiler tubes and tune up
     j) Boiler #2: Clean boiler tubes and tune up
     k) C/H #2:    (Pump): Replace bearing assembly and align
     l) C/H #1:    (Pump): Replace bearing assembly and align
     m) P #3:      Replace bearing assembly and re-align

<PAGE>   40
                                  EXHIBIT "H"

                                 RENEWAL OPTION

     Tenant shall have the right to renew the term of this lease for one (1)
seven (7)-year term upon prior written notice ("Tenant's Election Notice") to
Landlord given not sooner than nine (9) months nor later than six (6) months
prior to the expiration of the initial lease term; provided that at the time
Tenant gives such notice to Landlord and for the remainder of the initial term
of this lease (i) this least has not been assigned and Tenant continues to
occupy at least seventy-five percent (75%) of the floor area of the Demised
Premises and (ii) Tenant is not in default hereunder. During the renewal term,
the provisions of this lease, as it may be amended in writing prior to the date
of the commencement of such renewal term, shall continue in full force and
effect except that Tenant shall occupy the Demised Property in its then "AS IS"
condition and there shall be no abatement of rent, nor shall there be credit or
allowances given to Tenant for Improvements to the Demised Premises, and the
minimum guaranteed rental will be an amount equal to whatever monthly rental
(plus whatever periodic adjustments) Landlord is then quoting to prospective
tenants for new leases of comparable space in the Industrial Complex for a
comparable term (as confirmed by written statement to Tenant by a
representative of Landlord), or if no comparable space exists in the Industrial
Complex, then one hundred percent (100%) of the projected prevailing market rate
of rent for comparable space with comparable finish-out in comparable buildings
within the City of Sunnyvale, California, as of the expiration of the initial
lease term (as determined by Landlord and confirmed by written statement to
Tenant by a representative of Landlord). It is understood and agreed that
Tenant's submittal of Tenant's Election Notice shall bind Tenant to a seven
(7)-year extension of this lease.

                                       1

<PAGE>   41
                               GUARANTY OF LEASE

     FOR VALUE RECEIVED, and in consideration for, and as an inducement to MP
Arques, Inc., a Delaware corporation, to enter into a lease dated as of
November 30, 1999 (the "Lease"), as "Landlord" with Molecular Dynamics, Inc., a
Delaware corporation, as "Tenant," the undersigned, whether one or more,
jointly and severally do hereby unconditionally guarantee to Landlord (i) the
punctual and full payment of all rents of every kind, additional rents and all
other charges to be paid by Tenant under the Lease and (ii) the full and timely
performance and observance of all the covenants, conditions, and agreements to
be performed and observed by Tenant under the Lease. The undersigned shall
indemnify, defend and hold harmless Landlord and its affiliates from any loss,
damages or costs (including, without limitation, the reasonable fees of
Landlord's attorneys and court costs) arising out of any failure to pay the
aforesaid rents and other charges or the failure to perform any of the
aforesaid covenants, conditions and agreements under the Lease. The undersigned
further expressly agree that the validity of this Guaranty of Lease and the
obligations of the undersigned hereunder shall in no way be terminated,
affected or impaired by reason of any forbearances, settlements or compromises
between Landlord and Tenant or the invalidity or unenforceability of the Lease
for any reason whatsoever or by the relief of Tenant from any of Tenant's
obligations under the Lease by operation of law or otherwise, including,
without limitation of the generality of the foregoing, the rejection or
assignment of the Lease in connection with proceedings under any present or
future provision of the federal Bankruptcy Act, or any similar law or statute
of the United States or any state thereof.

     The undersigned further covenant and agree that this Guaranty of Lease
shall be and remain in full force and effect as to any renewal, modification or
extension of the Lease, whether or not known to or approved by the undersigned,
and that no subletting, assignment or other transfer of the Lease, or any
interest therein, or any such renewal, modification, or extension, shall
operate to extinguish or diminish the liability of the undersigned hereunder.
In the event of any termination of the Lease by Landlord, the undersigned's
liability hereunder shall not be terminated, but the undersigned shall be and
remain fully liable for all damages, costs, expenses and other claims which may
arise under or in connection with the Lease. If the undersigned shall, directly
or indirectly, advance any sums to Tenant, such sums and indebtedness shall be
subordinate in all respects to the amounts then and thereafter due and owing by
Tenant under the Lease.

     Wherever reference is made to the liability of Tenant in the Lease, such
reference shall be deemed likewise to refer to the undersigned, jointly and
severally, with Tenant. The liability of the undersigned for the obligations of
Tenant under the Lease shall be primary, absolute and unconditional. In any
right of action which shall accrue to Landlord under the Lease, Landlord may,
at Landlord's option, proceed against any one or more of the undersigned and/or
Tenant, jointly or severally, and may proceed against any one or more of the
undersigned without having demanded performance of, commenced any action
against or having obtained any judgment against Tenant. The undersigned hereby
waive any obligation on the part of Landlord to enforce or seek to enforce the
terms of the Lease against Tenant as a condition to Landlord's right to proceed
against the undersigned hereunder. The undersigned hereby expressly waive: (i)
notice of acceptance of this Guaranty of Lease and of presentment, demand and
protest; (ii) notice of any default hereunder or under the Lease and all
indulgences; (iii) demand for observance, performance or enforcement of any
terms or provisions of this Guaranty of Lease or of the Lease; and (iv) all
other notices and demands otherwise required by law which the undersigned may
lawfully waive. This Guaranty of Lease is a guaranty of payment and not a
guaranty of collection. The undersigned agree that in the event this Guaranty
of Lease shall be enforced by suit or otherwise, the non-prevailing party will
reimburse the prevailing party, upon demand, for all expenses incurred in
connection therewith, including, without limitation, reasonable attorneys' fees.

<PAGE>   42
     The undersigned hereby waive, to the maximum extent permitted by law, all
defenses available to a guarantor or surety, whether the waiver is specifically
herein enumerated or not, including, without limitation, any statute of
limitations affecting the enforcement of this Guaranty of Lease, and any right
of set-off or compensation against amounts due under this Guaranty of Lease.

     The undersigned hereby knowingly, voluntarily and intentionally waive the
right to a trial by jury in respect of any litigation based hereon, arising out
of, under or in connection with this Guaranty of Lease or any documents
contemplated to be executed in connection herewith or any course of conduct,
course of dealings, statements (whether oral or written) or actions of any party
arising out of or related in any manner with the premises described in the Lease
(including without limitation, any action to rescind or cancel this Guaranty of
Lease or any claims or defenses asserting that this Guaranty of Lease was
fraudulently induced or is otherwise void or voidable). This waiver is a
material inducement for Landlord to enter into and accept the Lease and this
Guaranty of Lease.

     The undersigned hereby assign to Landlord any rights the undersigned may
have to file a claim and proof of claim in any bankruptcy or similar proceeding
of Tenant and any awards or payments thereon to which the undersigned would
otherwise be entitled.

     It is further agreed that all of the terms and provisions hereof shall
inure to the benefit of and may be enforced by the respective heirs, executors,
successors and assigns of Landlord and the holder of any mortgage to which the
Lease may be subject and subordinate from time to time, and shall be binding
upon the respective heirs, executors, successors and assigns of the undersigned.
Landlord may, without notice, assign this Guaranty of Lease, and no such
assignment shall diminish the undersigned's liability under this Guaranty of
Lease.

     In the event more than one person or entity executes this Guaranty of
Lease, the liability of such signatories hereunder shall be joint and several.
In the event only one person or entity executes this Guaranty of Lease, all
provisions hereof which refer to more than one guarantor shall be automatically
modified to refer to only one guarantor, and otherwise this Guaranty of Lease
shall remain unmodified and in full force and effect.

     It is understood that other agreements similar to this Guaranty of Lease
may, at Landlord's sole option and discretion, be executed by other persons with
respect to the Lease. This Guaranty of Lease shall be cumulative of any such
agreements and the liabilities and obligations of the undersigned hereunder
shall in no event be affected or diminished by reason of such other agreements.
Moreover, in the event Landlord obtains the signature of more than one guarantor
on this Guaranty of Lease or obtains additional guarantee agreements, or both,
the undersigned agree that Landlord, in Landlord's sole discretion, may (i)
compound or settle with any one or more of the guarantors for such consideration
as Landlord may deem proper, and (ii) release one or more of the guarantors from
liability. The undersigned further agree that no such action shall impair the
rights of Landlord to enforce the Lease against any remaining guarantor or
guarantors, including the undersigned.

     The undersigned agree to execute and deliver to Landlord, from time to
time, upon ten (10) days notice from Landlord, a certificate addressed to
Landlord, any mortgagee or prospective mortgagee, or any prospective purchaser,
certifying (i) that this Guaranty of Lease is unmodified and in full force and
effect and (ii) to such other matters as Landlord may reasonably request. The
undersigned further agree that upon request by Landlord from time to time, the
undersigned shall furnish Landlord, within five (5) days of receipt of such
request, with a copy of the undersigned's most recently audited financial
statements, in form and substance reasonably satisfactory to Landlord,
reflecting the undersigned's then current financial condition. The undersigned
represents and warrants that all financial statements, records and information
furnished by the undersigned to Landlord in connection with this Guaranty of
Lease give a true and fair view of the state of affairs of the undersigned.

<PAGE>   43
     If any provision of this Guaranty of Lease or the application thereof to
any person or circumstance shall, for any reason and to any extent, be invalid
or unenforceable, the remainder of this Guaranty of Lease and the application of
that provision to other provisions or circumstances shall not be affected but
rather shall be enforced to the fullest extent permitted by law.

     If the undersigned is a corporation (including any form of professional
association), then each individual executing or attesting this Guaranty of Lease
on behalf of such corporation covenants, warrants and represents that he or she
is duly authorized to execute or attest and deliver this Guaranty of Lease on
behalf of such corporation. If the undersigned is a partnership (general or
limited) or limited liability company, then each individual executing this
Guaranty of Lease on behalf of the partnership or company hereby covenants
warrants and represents that he or she is duly authorized to execute and deliver
this Guaranty of Lease on behalf of the partnership or company in accordance
with the partnership agreement or membership agreement, as the case may be, or
an amendment thereto, now in effect.

     As a material inducement to Landlord to enter into the Lease and accept
this Guaranty of Lease, the undersigned specifically and irrevocably acknowledge
and agree as follows:

     a.   This Guaranty of Lease shall be governed by, construed and enforced in
          accordance with the laws of the State of California without regard to
          principles of conflicts of law.

     b.   As determined by Landlord in its sole and absolute discretion, all
          actions or proceedings to enforce this Guaranty of Lease or in any way
          arising out of or related to this Guaranty of Lease shall be filed,
          litigated and maintained in the state or federal courts located in
          Santa Clara or San Francisco Counties, State of California, U.S.A.
          (the "Specified Courts"); the undersigned waive, release and
          relinquish any and all rights or privileges now or hereafter
          available to the undersigned to cause such actions or proceedings to
          be filed, litigated, maintained or removed to any other state, federal
          or international court.

     c.   This undersigned consent to and submit to the jurisdiction of the
          Specified Courts with respect to this Guaranty of Lease only and
          waive, release and relinquish any an all defenses or claims based upon
          or in any way relating to jurisdictional issues in connection
          herewith.
<PAGE>   44
d.   The undersigned waive personal service of any and all process upon the
     undersigned and agree that all such service of process may be made by
     United States registered or certified mail or international express courier
     service (e.g., DHL, Federal Express) addressed to the undersigned at the
     address specified below, and such service of process shall be deemed
     effective upon the earlier of actual receipt or three (3) days after
     posting.

EXECUTED as of the 22 day of December, 1999.

     GUARANTOR:     NYCOMED AMERSHAM,
                    a public company organized under the laws of
                    England & Wales

                    By:     /s/ GFB Kerr       /s/ R.E.B. Allnutt
                            ----------------------------------------
                    Name:       GFB Kerr           R.E.B. Allnutt
[SEAL]                      ----------------------------------------
                    Title:  Finance Director       Company Secretary
                            ----------------------------------------

                    GUARANTOR'S ADDRESS:

                    AMERSHAM PLACE, LITTLE CHALFONT,
                    ----------------------------------------
                    BUCKINGHAMSHIRE, ENGLAND
                    ----------------------------------------

                    Employer Identification Number:    N/A
                                                    --------

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