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                                                            Exhibit 10.33
FORDHAM PROPERTIES INC.
5743 Landregan St.
Emeryville, CA 94608



ARTICLE ONE: BASIC TERMS

   This Article One contains the Basic Terms of this Lease between the 
Landlord and Tenant named below. Other Articles, Sections and Paragraphs of 
the Lease referred to in this Article One explain and define the Basic Terms 
and are to be read in conjunction with the Basic Terms.

   Section 1.01. DATE OF LEASE:   Nov. 14, 1994
                               ------------------------------------------------
   Section 1.02. LANDLORD (INCLUDE LEGAL ENTITY): EMERYVILLE BUSINESS CENTRE, 
                                                  -----------------------------
   a California Limited Partnership
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Address of Landlord:      5743 LANDREGAN STREET
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                          EMERYVILLE, CA  94608
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   Section 1.03. TENANT (INCLUDE LEGAL ENTITY): BERKELEY LEARNING 
                                                -------------------------------
    TECHNOLOGIES, INC. A CALIFORNIA CORPORATION
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Address of Tenant:     1250 - 45TH STREET
                   ------------------------------------------------------------
                       EMERYVILLE, CA  94605
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   Section 1.04. PROPERTY: The Property is part of Landlord's multi-tenant 
real property development known as   EMERYVILLE BUSINESS CENTRE
                                     -----------------------------------
and described or depicted in Exhibit "A" (the "Project"). The Project 
includes the land, the buildings and all other improvements located on the 
land, and the common areas described in Paragraph 4.05(a). The Property is 
(include street address, approximate square footage and description)
                                                                    -----------

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  1250 - 45TH STREET, SUITE 150
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  EMERYVILLE, CA  94608
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  APPROXIMATELY 6,500 SQUARE FEET OF OFFICE SPACE
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   Section 1.05. LEASE TERM:  FIVE (5)   years   -0-    months
                             ---------         ------- 
                                                          See Addendum, Sec. 15
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   Section 1.06. PERMITTED USES: (See Article Five) OFFICE AND RESEARCH AND 
                                                    ---------------------------
DEVELOPMENT AND RELATED LEGAL USES
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   Section 1.07. TENANT'S GUARANTOR: (If none, so state)     NONE
                                                        -----------------------
   Section 1.08. BROKERS: (See Article Fourteen) (If none, so state)
Landlord's Broker:   CB COMMERCIAL
                  -------------------------------------------------------------
Tenant's Broker:     CUSHMAN & WAKEFIELD
                  -------------------------------------------------------------

   Section 1.09.  COMMISSION PAYABLE TO LANDLORD'S BROKER: (See Article 
Fourteen) $   PER AGREEMENT
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   Section 1.10.  INITIAL SECURITY DEPOSIT: (See Section 3.03) $ 16,640
                                                               ----------------
   Section 1.11.  VEHICLE PARKING SPACES ALLOCATED TO TENANT: (See Section 
4.05)   NINETEEN (19)
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   Section 1.12. RENT AND OTHER CHARGES PAYABLE BY TENANT:
   (a) BASE RENT: 
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SEE ADDENDUM SEC. 17
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(If (ii) is completed, then (i) and Section 3.02 are inapplicable)

   (b) OTHER PERIODIC PAYMENTS: (i) Real Property Taxes (See Section 4.02); 
(ii) Utilities (See Section 4.03); (iii) Insurance Premiums (See Section 
4.04); (iv) Tenant's Initial Pro Rata Share of Common Area Expenses 6.13% 
(See Section 4.05); (v) Impounds for Insurance Premiums and Property Taxes 
(See Section 4.08); (vi) Maintenance, Repairs and Alterations (See Article 
Six).

   Section 1.13 LANDLORD'S SHARE OF PROFIT ON ASSIGNMENT OR SUBLEASE: (See 
Section 9.05)    FIFTY
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percent (     50  %) of the Profit (the "Landlord's Share").
         ----------
    Section 1.14. RIDERS: The following riders are attached to and made a 
part of this Lease: (If none, so state) 
                                        ---------------------------------------
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         Exhibits A, B and C
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   ADDENDUM
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   Section 2.01. LEASE OF PROPERTY FOR LEASE TERM. Landlord leases the 
Property to Tenant and Tenant leases the Property from Landlord for the Lease 
Term. The Lease Term is for the period stated in Section 1.05 above and shall 
begin and end on the dates specified in Section 1.05 above, unless the 
beginning or end of the Lease Term is changed under any provision of this 
Lease.

   Section 2.02. DELAY IN COMMENCEMENT. 

               See Addendum, Sec. 16

   Section 2.03. EARLY OCCUPANCY. If Tenant occupies the Property prior to 
the Commencement Date, Tenant's occupancy of the Property shall be subject to 
all of the provisions of this Lease. Early occupancy of the Property shall 
not advance the expiration date of this Lease. Tenant shall pay Base Rent and 
all other charges specified in this Lease for the early occupancy period.

   Section 2.04. HOLDING OVER. Tenant shall vacate the Property upon the 
expiration or earlier termination of this Lease. Tenant shall reimburse 
Landlord for and indemnify Landlord against all damages which Landlord incurs 
from Tenant's delay in vacating the Property. If Tenant does not vacate the 
Property upon the expiration or earlier termination of the Lease and Landlord 
thereafter accepts rent from Tenant, Tenant's occupancy of the Property shall 
be a "month-to-month" tenancy, subject to all of the terms of this Lease 
applicable to a month-to-month tenancy, except that the Base Rent then in 
effect shall be increased by twenty-five percent (25%).

ARTICLE THREE: BASE RENT

   Section 3.01. TIME AND MANNER OF PAYMENT. Upon execution of this Lease, 
Tenant shall pay Landlord the Base Rent in the amount stated in Paragraph 
1.12(a) above for the first month of the Lease Term. On the first day of the 
second month of the Lease Term and each month thereafter, Tenant shall pay 
Landlord the Base Rent, in advance, without offset, deduction or prior 
demand. The Base Rent shall be payable at Landlord's address or at such other 
place as Landlord may designate in writing. See Addendum, Sec. 17

   Section 3.03. SECURITY DEPOSIT; INCREASES.

   (a) Upon the execution of this Lease, Tenant shall deposit with Landlord a 
cash Security Deposit in the amount set forth in Section 1.10 above. Landlord 
(1) may apply all or part of the Security Deposit to any unpaid rent or other 
charges due from Tenant or to cure any other defaults of Tenant. If Landlord 
uses any part of the Security Deposit, Tenant shall restore the Security 
Deposit to its full amount within ten (10) days after Landlord's written 
request. Tenant's failure to do so shall be a material default under this 
Lease. No interest shall be paid on the Security Deposit. Landlord shall not 
be required to keep the Security Deposit separate from its other accounts and 
no trust relationship is created with respect to the Security Deposit.


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     Section 3.04. TERMINATION; ADVANCE PAYMENTS. Upon termination of this 
Lease under Article Seven (Damage or Destruction), Article Eight 
(Condemnation) or any other termination not resulting from Tenant's default, 
and after Tenant has vacated the Property in the manner required by this 
Lease, Landlord shall refund or credit to Tenant (or Tenant's successor) the 
unused portion of the Security Deposit, any advance rent or other advance 
payments made by Tenant to Landlord, and any amounts paid for real property 
taxes and other reserves which apply to any time periods after termination of 
the Lease.

     ARTICLE FOUR: OTHER CHARGES PAYABLE BY TENANT

     Section 4.01 ADDITIONAL RENT. All charges payable by Tenant other than 
Base Rent are called "Additional Rent." Unless this Lease provides otherwise, 
Tenant shall pay all Additional Rent then due with the next monthly 
installment of Base Rent. The term "rent" shall mean Base Rent and Additional 
Rent.


     Section 4.02. PROPERTY TAXES

     (a) REAL PROPERTY TAXES. Tenant shall pay all real property taxes on the 
Property (including any fees, taxes or assessments against, or as a result 
of, any tenant improvements installed on the Property by or for the benefit 
of Tenant) during the Lease Term. Subject to Paragraph 4.02(c) and Section 
4.08 below, such payment shall be made at least ten (10) days prior to the 
delinquency date of the taxes. Within such ten (10)-day period, Tenant shall 
furnish Landlord with satisfactory evidence that the real property taxes have 
been paid. Landlord shall reimburse Tenant for any real property taxes paid 
by Tenant covering any period of time prior to or after the Lease Term. If 
Tenant fails to pay the real property taxes when due, Landlord may pay the 
taxes and Tenant shall reimburse Landlord for the amount of such tax payment 
as Additional Rent.

     (b) DEFINITION OF "REAL PROPERTY TAX." "Real property tax" means: (i) 
any fee, license fee, license tax, business license fee, commercial rental 
tax, levy, charge, assessment, penalty or tax imposed by any taxing authority 
against the Property; (ii) any tax on the Landlord's right to receive, or the 
receipt of, rent or income from the Property or against Landlord's business 
of Leasing the Property; (iii) any tax or charge for fire protection, 
streets, sidewalks, road maintenance, refuse or other services provided to 
the Property by any governmental agency; (iv) any tax imposed upon this 
transaction or based upon a reassessment of the Property due to a change in 
ownership, as defined by applicable law, or other transfer of all or part of 
Landlord's interest in the Property; and (v) any charge or fee replacing any 
tax previously included within the definition of real property tax. "Real 
property tax" does not, however, include Landlord's federal or state income, 
franchise, inheritance or estate taxes. See Addendum, Sec. 18

     (c) JOINT ASSESSMENT. If the Property is not separately assessed, 
Landlord shall reasonably determine Tenant's share of the real property tax 
payable by Tenant under Paragraph 4.02(a) from the assesser's worksheets or 
other reasonably available information. Tenant shall pay such share to 
Landlord within fifteen (15) days after receipt of Landlord's written 
statement.

     (d) PERSONAL PROPERTY TAXES.

         (i) Tenant shall pay all taxes charged against trade fixtures, 
     furnishings, equipment or any other personal property belonging to Tenant.
     Tenant shall try to have personal property taxed separately from the 
     Property.

         (ii) If any of Tenant's personal property is taxed with the 
     Property, Tenant shall pay Landlord the taxes for the personal property 
     within fifteen (15) days after the Tenant receives a written statement 
     from Landlord for such personal property taxes. 

     Section 4.03. UTILITIES. Tenant shall pay, directly to the appropriate 
supplier, the cost of all natural gas, heat, light, power, sewer service, 
telephone, water, refuse disposal and other utilities and services supplied 
to the Property. However, if any services or utilities are jointly metered 
with other property, Landlord shall make a reasonable determination of 
Tenant's proportionate share of the cost of such utilities and services and 
Tenant shall pay such share to Landlord within fifteen (15) days after 
receipt of Landlord's written statement.

     Section 4.04. INSURANCE POLICIES.

     (a) LIABILITY INSURANCE. During the Lease Term, Tenant shall maintain a 
policy of commercial general liability insurance (sometimes known as broad 
form comprehensive general liability insurance) insuring Tenant against 
liability for bodily injury, property damage (including loss of use of 
property) and personal injury arising out of the operation, use or occupancy 
of the Property. Tenant shall name Landlord as an additional insured under 
such policy. The initial amount of such insurance shall be One Million 
Dollars ($1,000,000) per occurrence and shall be subject to periodic increase 
based upon inflation, increased liability awards, recommendation of 
Landlord's professional insurance advisors and other relevant factors. The 
liability insurance obtained by Tenant under this Paragraph 4.04(a) shall (i) 
be primary and non-contributing; (ii) contain cross-liability endorsements; 
and (iii) insure Landlord against Tenant's performance under Section 5.05, if 
the matters giving rise to the indemnity under Section 5.05 result from the 
negligence of Tenant. The amount and coverage of such insurance shall not 
limit Tenant's liability nor relieve Tenant of any other obligation under 
this Lease. Landlord may also obtain comprehensive public liability insurance 
in an amount and with coverage determined by the Landlord insuring Landlord 
against liability arising out of ownership, operation, use or occupancy of 
the Property. The policy obtained by Landlord shall not be contributory and 
shall not provide primary insurance.

     (b) PROPERTY AND RENTAL INCOME INSURANCE. During the Lease Term, 
Landlord shall maintain policies of insurance covering loss of or damage to 
the Property in the full amount of its replacement value. Such policy shall 
contain an Inflation Guard Endorsement and shall provide protection against 
all perils included within the classification of fire, extended coverage, 
vandalism, malicious mischief, special extended perils (all risk), sprinkler 
leakage and any other perils which Landlord deems reasonably necessary. 
Landlord shall have the right to obtain flood and earthquake insurance if 
required by any lender holding a security interest in the Property. Landlord 
shall not obtain insurance for Tenant's fixtures or equipment or building 
improvements installed by Tenant on the Property. During the Lease Term, 
Landlord shall also maintain a rental income insurance policy, with loss 
payable to Landlord, in an amount equal to one year's Base Rent, plus 
estimated real property taxes and insurance premiums. Tenant shall be liable 
for the payment of any deductible amount under Landlord's or Tenant's 
insurance policies maintained pursuant to this Section 4.04, in an amount not 
to exceed Ten Thousand Dollars ($10,000). Tenant shall not do or permit 
anything to be done which invalidates any such insurance policies.

     (c) PAYMENT OF PREMIUMS. Subject to Section 4.08, Tenant shall pay all 
premiums for the policies described in Paragraphs 4.04(a) and (b) (whether 
obtained by Landlord or Tenant) within fifteen (15) days after Tenant's 
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of the premium statement or other evidence of the amount due, except Landlord 
shall pay all premiums for non-primary comprehensive public liability 
insurance which Landlord elects to obtain as provided in Paragraph 4.04(a). 
For insurance policies maintained by Landlord which cover improvements on the 
entire Project, Tenant shall pay Tenant's prorated share of the premiums, in 
accordance with the formula in Paragraph 4.05(e) for determining Tenant's 
share of Common Area costs. If insurance policies maintained by Landlord 
cover improvements on real property other than the Project, Landlord shall 
deliver to Tenant a statement of the premium applicable to the Property 
showing in reasonable detail how Tenant's share of the premium was computed. 
If the Lease Term expires before the expiration of an insurance policy 
maintained by Landlord, Tenant shall be liable for Tenant's prorated share of 
the insurance premiums. Before the Commencement Date, Tenant shall deliver to 
Landlord a copy of any policy of insurance which Tenant is required to 
maintain under this Section 4.04 At least thirty (30) days prior to the 
expiration of any such policy, Tenant shall deliver to Landlord a renewal of 
such policy. As an alternative to providing a policy of insurance Tenant 
shall have the right to provide Landlord a certificate of insurance, executed 
by an authorized officer of the insurance company, showing that the insurance 
which Tenant is required to maintain under this Section 4.04 is in full force 
and effect and containing such other information which Landlord reasonably 
requires.

     (d) GENERAL INSURANCE PROVISIONS.

         (i)   Any insurance which Tenant is required to maintain under this 
     Lease shall include a provision which requires the insurance carrier to 
     give Landlord not less than thirty (30) days' written notice prior to 
     any cancellation or(1) modification of such coverage.

         (ii)  If Tenant fails to deliver any policy, certificate or renewal 
     to Landlord required under this Lease within the prescribed time period 
     or if any such policy is cancelled or modified during the Lease Term 
     without Landlord's consent, Landlord may obtain such insurance, in which 
     case Tenant shall reimburse Landlord for the cost of such insurance 
     within fifteen (15) days after receipt of a statement that indicates the 
     cost of such insurance.

         (iii) Tenant shall maintain all insurance required under this Lease 
     with companies holding a "General Policy Rating" of A-12 or better, as 
     set forth in the most current issue of "Best Key Rating Guide". Landlord 
     and Tenant acknowledge the insurance markets are rapidly changing and 
     that insurance in the form and amounts described in this Section 4.04 
     may not be available in the future. Tenant acknowledges that the 
     insurance described in this Section 4.04 is for the primary benefit of 
     Landlord. If at any time during the Lease Term, Tenant is unable to 
     maintain the insurance required under the Lease, Tenant shall 
     nevertheless maintain insurance coverage which is customary and 
     commercially reasonable in the insurance industry for Tenant's type of 
     business, as that coverage may change from time to time. Landlord makes 
     no representation as to the adequacy of such insurance to protect 
     Landlord's or Tenant's interests. Therefore, Tenant shall obtain any 
     such additional property or liability insurance which Tenant deems 
     necessary to protect Landlord and Tenant.

         (iv)  Unless prohibited under any applicable insurance policies 
     maintained, Landlord and Tenant each hereby waive any and all rights of 
     recovery against the other, or against the officers, employees, agents 
     or representatives of the other, for loss of or damage to its property 
     or the property of others under its control, if such loss or damage is 
     covered by any insurance policy in force (whether or not described in 
     this Lease) at the time of such loss or damage. Upon obtaining the 
     required policies of insurance, Landlord and Tenant shall give notice to 
     the insurance carriers of this mutual waiver of subrogation.

     Section 4.05.  COMMON AREAS; USE, MAINTENANCE AND COSTS.

     (a)  COMMON AREAS. As used in this Lease, "Common Areas" shall mean all 
areas within the Project which are available for the common use of tenants of 
the Project and which are not leased or held for the exclusive use of Tenant 
or other tenants, including, but not limited to, parking areas, driveways, 
sidewalks, loading areas, access roads, corridors, landscaping and planted 
areas. Landlord, from time to time, may change the size, location, nature and 
use of any of the Common Areas, convert Common Areas into leaseable areas, 
construct additional parking facilities (including parking structures) in the 
Common Areas, and increase or decrease Common Area land and/or facilities. 
Tenant acknowledges that such activities may result in inconvenience to 
Tenant. Such activities and changes are permitted if they do not materially 
affect Tenant's use of the Property.

     (b)  USE OF COMMON AREAS. Tenant shall have the nonexclusive right (in 
common with other tenants and all others to whom Landlord has granted or may 
grant such rights) to use the Common Areas for the purposes intended, subject 
to such reasonable rules and regulations as Landlord may establish from time 
to time. Tenant shall abide by such rules and regulations and shall use its 
best effort to cause others who use the Common Areas with Tenant's express 
or implied permission to abide by Landlord's rules and regulations. At any 
time, Landlord may close any Common Areas to perform any acts in the Common 
Areas as, in Landlord's(2) judgement, are desirable to improve the Project. 
Tenant shall not interfere with the rights of Landlord, other tenants or any 
other person entitled to use the Common Areas.

     (c)  SPECIFIC PROVISION RE: VEHICLE PARKING. Tenant shall be entitled to 
use the number of vehicle parking spaces in the Project allocated to Tenant 
in Section 1.11 of the Lease without paying any additional rent. Tenant's 
parking shall not be reserved and shall be limited to vehicles no larger than 
standard size automobiles or pickup utility vehicles. Tenant shall not cause 
large trucks or other large vehicles to be parked within the Project or on 
the adjacent public streets. Temporary parking of large delivery vehicles in 
the Project may be permitted by the rules and regulations established by 
Landlord. Vehicles shall be parked only in striped parking spaces and not in 
driveways, loading areas or other locations not specifically designated for 
parking. Handicapped spaces shall only be used by those legally permitted to 
use them. If Tenant parks more vehicles in See Addendum, Sec. 19

     (d)  MAINTENANCE OF COMMON AREAS. Landlord shall maintain the Common 
Area in good order, condition and repair and shall operate the Project as a 
first-class industrial/commercial real property development. Tenant shall pay 
Tenant's pro rata share (as determined below) of all costs incurred by 
Landlord for the operation and maintenance of the Common Areas. Common Area 
costs include, but are not limited to, costs and expenses for the following: 
gardening and landscaping; utilities, water and sewage charges; maintenance 
of signs (other than tenants' signs); premiums for liability, property 
damage, fire and other types of casualty insurance on the Common Areas and 
workers' compensation insurance; all property taxes and assessments levied on 
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personal property taxes levied on or attributable to personal property used 
in connection with the Common Areas; straightline depreciation on personal 
property owned by Landlord which is consumed in the operation or maintenance 
of the Common Areas; rental or lease payments paid by Landlord for rented or 
leased personal property used in the operation or maintenance of the Common 
Areas; fees for required licenses and permits; repairing, resurfacing, 
repaving, maintaining, painting, lighting, cleaning, refuse removal, security 
and similar items; reserves for roof replacement and exterior painting and 
other appropriate reserves; and a reasonable allowance to Landlord for 
Landlord's supervision of the Common Areas (not to exceed eight percent (8%) 
of the gross rents of the Project for the calendar year). Landlord may cause 
any or all of such services to be provided by third parties and the cost of 
such services shall be included in Common Areas costs. Common Area costs shall 
not include depreciation of real property which forms part of the Common 
Areas. See Addendum, Sec. 20

     (e) TENANT'S SHARE AND PAYMENT. Tenant shall pay Tenant's annual pro 
rata share of all Common Area costs (prorated for any fractional month) upon 
written notice from Landlord that such costs are due and payable, and in any 
event prior to delinquency. Tenant's pro rata share shall be calculated by 
dividing the square foot area of the Property, as set forth in Section 1.04 
of the Lease, by the aggregate square foot area of the Project which is 
leased or held for lease by tenants, as of the date on which the computation 
is made. Tenant's initial pro rata share is set out in Paragraph 1.13(b). Any 
changes in the Common Area costs and/or the aggregate area of the Project 
leased or held for lease during the Lease Term shall be effective on the 
first day of the month after such change occurs. Landlord may, at Landlord's 
election(1), estimate in advance and charge to Tenant as Common Area costs, 
all real property taxes for which Tenant is liable under Section 4.02 of the 
Lease, all insurance premiums for which Tenant is liable under Section 4.04 
of the Lease, all maintenance and repair costs for which the Tenant is 
liable under Section 6.04 of the Lease, and all other Common Area costs 
payable by Tenant hereunder. At Landlord's election, such statements of 
estimated Common Area costs shall be delivered monthly, quarterly or at any 
other periodic intervals to be designated by Landlord(2). Landlord may adjust 
such estimates at any time based upon Landlord's experience and reasonable 
anticipation of costs. Such adjustments shall be effective as of the next 
rent payment date after notice to Tenant. Within sixty (60) days after the 
end of each calendar year of the Lease Term. Landlord shall deliver to Tenant 
a statement prepared in accordance with generally accepted accounting 
principles setting forth, in reasonable detail, the Common Area costs paid or 
incurred by Landlord during the preceding calendar year and Tenant's pro rata 
share. Upon receipt of such statement, there shall be an adjustment between 
Landlord and Tenant, with payment to or credit(3) given by Landlord given by 
Landlord (as the case may be) so that Landlord shall receive the entire 
amount of Tenant's share of such costs and expenses for such periods.(4)

     Section 4.06. LATE CHARGES. Tenant's failure to pay rent promptly may 
cause Landlord to incur unanticipated costs. The exact amount of such costs 
are impractical or extremely difficult to ascertain. Such costs may include, 
but are not limited to, processing and accounting charges and charges which 
may be imposed on Landlord by any ground lease, mortgage or trust deed 
encumbering the Property. Therefore, if Landlord goes not receive any rent 
payment within ten (10) days after it becomes due(5), Tenant shall pay 
Landlord a late charge equal to ten percent (10%) of the overdue amount. The 
parties agree that such late charge represents a fair and reasonable estimate 
of the costs Landlord will incur by reason of such late payment.

     Section 4.07. INTEREST ON PAST DUE OBLIGATIONS. Any amount owed by 
Tenant to Landlord which is not paid when due shall bear interest at the rate 
of fifteen percent (15%) per annum from the due date of such amount. However, 
interest shall not be payable on late charges to be paid by Tenant under this 
Lease. The payment of interest on such amounts shall not excuse or cure any 
default by Tenant under this Lease. If the interest rate specified in this 
Lease is higher than the rate permitted by law, the interest rate is hereby 
decreased to the maximum legal interest rate permitted by law.

     Section 4.08. IMPOUNDS FOR INSURANCE PREMIUMS AND REAL PROPERTY TAXES. 
If requested by any ground lessor or lender to whom Landlord has granted a 
security interest in the Property, or if Tenant is more than ten (10) days 
late in the payment of rent more than once in any consecutive twelve 
(12)-month period, Tenant shall pay Landlord a sum equal to one-twelfth 
(1/12) of the annual real property taxes and insurance premiums payable by 
Tenant under this Lease, together with each payment of Base Rent. Landlord 
shall hold such payments in a non-interest bearing impound account. If 
unknown, Landlord shall reasonably estimate the amount of real property taxes 
and insurance premiums when due. Tenant shall pay any deficiency of funds in 
the impound account to Landlord upon written request. If Tenant defaults 
under this Lease, Landlord may apply any funds in the impound account to any 
obligation then due under this Lease.

ARTICLE FIVE: USE OF PROPERTY

     Section 5.01. PERMITTED USES. Tenant may use the Property only for the 
Permitted Uses set forth in Section 1.06 above.

     Section 5.02. MANNER OF USE. Tenant shall not cause or permit the 
Property to be used in any way which constitutes a violation of any law, 
ordinance, or governmental regulation or order, which annoys or interferes 
with the rights of tenants of the Project, or which constitutes a nuisance or 
waste. Tenant shall obtain and pay for all permits, including a Certificate 
of Occupancy, required for Tenant's occupancy of the Property and shall 
promptly take all actions necessary to comply with all applicable statutes, 
ordinances rules, regulations, orders and requirements regulating(6) 
including the Occupational Safety and Health Act.

     Section 5.03. HAZARDOUS MATERIALS. As used in this Lease, the term 
"Hazardous Material" means any flammable items, explosives, radioactive 
materials, hazardous or toxic substances, material or waste or related 
materials, including any substances defined as or included in the definition 
of "hazardous substances", "hazardous waste", "hazardous materials" or "toxic 
substances" now or subsequently regulated under any applicable federal, state 
or local laws or regulations, including without limitation petroleum-based 
products, paints, solvents, lead, cyanide, DDT, printing inks, acids, 
pesticides, ammonia compounds and other chemical products, asbestos, PCBs and 
similar compounds, and including any different products and materials which 
are subsequently found to have adverse effects on the environment or the 
health and safety of persons. Tenant shall not cause or permit any Hazardous 
Material to be generated, produced, brought upon, used, stored, treated or 
disposed of in or about the Property by Tenant, its agents, employees, 
contractors, sublessees or invitees without the prior written consent of 
Landlord(7). Landlord shall be entitled to take into account such other 
factors or facts as Landlord may reasonably determine to be relevant in 
determining whether to grant or withhold consent to Tenant's proposed 
activity with respect to Hazardous Material. In no event, however, shall 
Landlord be required to consent to the installation or use of any storage 
tanks on the Property. See Addendum, Sec. 21

     Section 5.04. SIGNS AND AUCTIONS. Tenant shall not place any signs on 
the Property without Landlord's prior written consent(8). Tenant shall not 
conduct or permit any auctions or sheriff's sales at the Property.




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     Section 5.05. INDEMNITY. Tenant shall indemnify Landlord against and 
hold Landlord harmless from any and all costs, claims or liability arising 
from: (a) Tenant's use of the Property; (b) the conduct of Tenant's business 
or anything else done or permitted by Tenant to be done in or about the 
Property, including any contamination of the Property or any other property 
resulting from the presence or use of Hazardous Material caused or permitted 
by Tenant; (c) any breach or default in the performance of Tenant's 
obligations under this Lease; (d) any misrepresentation or breach of warranty 
by Tenant under this Lease; or (e) other acts or omissions of Tenant. Tenant 
shall defend Landlord against any such cost, claim or liability at Tenant's 
expense with counsel reasonably acceptable to Landlord or, at Landlord's 
election, Tenant shall reimburse Landlord for any legal fees or costs(1) 
incurred by Landlord in connection with any such claim. As a material part of 
the consideration to Landlord, Tenant assumes all risk of damage to property 
or injury to persons in or about the Property arising from any cause, and 
Tenant hereby waives all claims in respect thereof against Landlord, except 
for any claim arising out of Landlord's negligence or willful misconduct. As 
used in this Section, the term "Tenant" shall include Tenant's employees, 
agents, contractors and invitees, if applicable. See Addendum, Sec. 22

     Section 5.06. LANDLORD'S ACCESS. Landlord or its agents may enter the 
Property at all reasonable times to show the Property to potential buyers, 
investors or tenants(2) or other parties; to do any other act or to inspect 
and conduct tests in order to monitor Tenant's compliance with all applicable 
environmental laws and all laws governing the presence and use of Hazardous 
Material; or for any other purpose Landlords(3) deems necessary. Landlord 
shall give Tenant(4) prior notice of such entry, except in the case of an 
emergency. Landlord may place customary "For Sale" or "For Lease" signs on 
the Property.

     Section 5.07. QUIET POSSESSION. If Tenant pays the rent and complies 
with all other terms of this Lease, Tenant may occupy and enjoy the Property 
for the full Lease Term, subject to the provisions of this Lease.

ARTICLE SIX: CONDITION OF PROPERTY; MAINTENANCE, REPAIRS AND ALTERATIONS

     Section 6.01. EXISTING CONDITIONS. Tenant accepts the Property in its 
condition as of the execution of the Lease, subject to all recorded matters, 
laws, ordinances, and governmental regulations and orders. Except as provided 
herein, Tenant acknowledges that neither Landlord nor any agent of Landlord 
has made any representation as to the condition of the Property or the 
suitability of the Property for Tenant's intended use. Tenant represents and 
warrants that Tenant has made its own inspection of and inquiry regarding the 
condition of the Property and is not relying on any representations of 
Landlord or any Broker with respect thereto. If Landlord or Landlord's Broker 
has provided a Property Information Sheet or other Disclosure Statement 
regarding the Property, a copy is attached as an exhibit to the Lease.

     Section 6.02. EXEMPTION OF LANDLORD FROM LIABILITY. Landlord shall not 
be liable for any damage or injury to the person, business (or any loss of 
income therefrom), goods, wares, merchandise or other property of Tenant, 
Tenant's employees, invitees, customers or any other person in or about the 
Property, whether such damage or injury is caused by or results from: (a) 
fire, steam, electricity, water, gas or rain; (b) the breakage, leakage, 
obstruction or other defects of pipes, sprinklers, wires, appliances, 
plumbing, air conditioning or lighting fixtures or any other cause; (c) 
conditions arising in or about the Property or upon other portions of the 
Project, or from other sources or places; or (d) any act or omission of any 
other tenant of the Project. Landlord shall not be liable for any such damage 
or injury even though the cause of or the means of repairing such damage or 
injury are not accessible to Tenant. The provisions of this Section 6.02 
shall not, however, exempt Landlord from liability for Landlord's negligence 
or willful misconduct.

     Section 6.03. LANDLORD'S OBLIGATIONS.

     (a) Except as provided in Article Seven (Damage or Destruction) and 
Article Eight (Condemnation), Landlord shall keep the following in good 
order, condition and repair: the foundations(5), exterior walls and roof of 
the Property (including painting the exterior surface of the exterior walls 
of the Property not more often than once every five (5) years, if necessary) 
and all components of electrical, mechanical, plumbing, heating and air 
conditioning systems and facilities located in the Property which are 
concealed or used in common by tenants of the Project. However, Landlord 
shall not be obligated to maintain or repair windows, doors, plate glass or 
the interior surfaces of exterior walls. Landlord shall make repairs under 
this Section 6.03 within a reasonable time after receipt of written notice 
from Tenant of the need for such repairs.

     (b) Tenant shall pay or reimburse Landlord for all costs Landlord incurs 
under Paragraph 6.03(a) above as Common Area costs as provided for in Section 
4.05 of the Lease. Tenant waives the benefit of any statute in effect now or 
in the future which might give Tenant the right to make repairs at Landlord's 
expense or to terminate this Lease due to Landlord's failure to keep the 
Property in good order, condition and repair.

     Section 6.04. TENANT'S OBLIGATIONS.

     (a) Except as provided in Section 6.03, Article Seven (Damage or 
Destruction) and Article Eight (Condemnation), Tenant shall keep all portions 
of the Property (including nonstructural, interior, systems and equipment) in 
good order, condition and repair (including interior repainting and 
refinishing, as needed). If any portion of the Property or any system or 
equipment in the Property which Tenant is obligated to repair cannot be fully 
repaired or restored, Tenant shall promptly replace such portion of the 
Property or system or equipment, in the Property, regardless of whether the 
benefit of such replacement extends beyond the Lease Term; but if the benefit 
or useful life of such replacement extends beyond the Lease Term (as such 
term may be extended by exercise of any options), the useful life of such 
replacement shall be prorated over the remaining portion of the Lease Term 
(as extended), and Tenant shall be liable only for that portion of the cost 
which is applicable to the Lease Term (as extended). Tenant shall maintain a 
preventative maintenance contract providing for the regular inspection and 
maintenance of the heating and air conditioning system by a licensed heating 
and air conditioning contractor, unless Landlord maintains such equipment 
under Section 6.03 above(6). If any part of the Property or the Project is 
damaged by any act or omission of Tenant, Tenant shall pay Landlord the cost 
of repairing or replacing such damaged property, whether or not Landlord 
would otherwise be obligated to pay the cost of maintaining or repairing such 
property. It is the intention of Landlord and Tenant that at all times Tenant 
shall maintain the portions of the Property which Tenant is obligated to 
maintain in an attractive, first-class and fully operative condition(7).

      (b) Tenant shall fulfill all of Tenant's obligations under this Section 
6.04 at Tenant's sole expense. If Tenant fails to maintain, repair or replace 
the Property as required by this Section 6.04, Landlord may, upon ten (10) 
days' prior notice to Tenant (except that no notice shall be required in the 
case of an emergency), enter the Property and perform such maintenance or 
repair (including replacement, as needed) on behalf of Tenant. In such case, 
Tenant shall reimburse Landlord for all(8) costs incurred in performing such 
maintenance or repair immediately upon demand.

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     Section 6.05. ALTERATIONS, ADDITIONS, AND IMPROVEMENTS.

     (a) Tenant shall not make any alterations, additions, or improvements to 
the Property without Landlord's prior written consent, except for 
non-structural alterations which do not exceed Ten Thousand Dollars ($10,000) 
in cost(1) and which are not visible from the outside of any building of 
which the Property is part. Tenant shall promptly remove any alterations, 
additions, or improvements constructed in violation of this Paragraph 6.05(a) 
upon Landlord's written request. All alterations, additions, and improvements 
shall be done in a good and workmanlike manner, in conformity with all 
applicable laws and regulations, and by a contractor approved by Landlord. 
Upon completion of any such work, Tenant shall provide Landlord with "as 
built" plans, copies of all construction contracts, and proof of payment for 
all labor and materials.

     (b) Tenant shall pay when due all claims for labor and material 
furnished to the Property. Tenant shall give Landlord at least twenty (20) 
days' prior written notice of the commencement of any work on the Property, 
regardless of whether Landlord's consent to such work is required. Landlord 
may elect to record and post notices of non-responsibility on the Property.

     Section 6.06. CONDITION UPON TERMINATION. Upon the termination of the 
Lease, Tenant shall surrender the Property to Landlord, broom clean and in 
the same condition as received except for ordinary wear and tear which Tenant 
was not otherwise obligated to remedy under any provision of this Lease. 
However, Tenant shall not be obligated to repair any damage which Landlord is 
required to repair under Article Seven (Damage or Destruction)(2). All 
alterations, additions and improvements which Landlord has not required 
Tenant to remove shall become Landlord's property and shall be surrendered to 
Landlord upon the expiration or earlier termination of the Lease, except that 
Tenant may remove any of Tenant's machinery or equipment which can be removed 
without material damage to the Property. Tenant shall repair, at Tenant's 
expense, any damage to the Property caused by the removal of any such 
machinery or equipment. In no event, however, shall Tenant remove any of the 
following materials or equipment (which shall be deemed Landlord's property) 
without Landlord's prior written consent: any power wiring or power panels; 
lighting or lighting fixtures; wall coverings; drapes, blinds or other window 
coverings; carpets or other floor coverings; heaters, air conditioners or any 
other heating or air conditioning equipment; fencing or security gates; or 
other similar building operating equipment and decorations.

ARTICLE SEVEN: DAMAGE OR DESTRUCTION

     Section 7.01. PARTIAL DAMAGE TO PROPERTY.

     (a) Tenant shall notify Landlord in writing immediately upon the 
occurrence of any damage to the Property. If the Property is only partially 
damaged (i.e., less than fifty percent (50%) of the Property is untenantable 
as a result of such damage or less than fifty percent (50%) of Tenant's 
operations are materially impaired) and if the proceeds received by Landlord 
from the insurance policies described in Paragraph 4.04(b)(3) are sufficient 
to pay for the necessary repairs, this Lease shall remain in effect and 
Landlord shall repair the damage as soon as reasonably possible. Landlord may 
elect (but is not required) to repair any damage to Tenant's fixtures, 
equipment, or improvements.

     (b) If the insurance proceeds received by Landlord(3) are not sufficient 
to pay the entire cost of repair, or if the cause of the damage is not 
covered by the insurance policies which Landlord(4) maintain under Paragraph 
4.04(b), Landlord may elect either to (i) repair the damage as soon as 
reasonably possible, in which case this Lease shall remain in full force and 
effect, or (ii) terminate this Lease as of the date the damage occurred. 
Landlord shall notify Tenant within thirty (30) days after receipt of notice 
of the occurrence of the damage whether Landlord elects to repair the damage 
or terminate the Lease. If Landlord elects to repair the damage, Tenant shall 
pay Landlord the "deductible amount" (if any) under Landlord's insurance 
policies and, if the damage was due to an act or omission of Tenant, or 
Tenant's employees, agents, contractors or invitees, the difference between 
the actual cost of repair and any insurance proceeds received by Landlord. If 
Landlord elects to terminate the Lease, Tenant may elect to continue this 
Lease in full force and effect, in which case Tenant shall repair any damage 
to the Property and any building in which the Property is located. Tenant 
shall pay the cost of such repairs, except that upon satisfactory completion 
of such repairs, Landlord shall deliver to Tenant any insurance proceeds 
received by Landlord for the damage repaired by Tenant. Tenant shall give 
Landlord written notice of such election within ten (10) days after receiving 
Landlord's termination notice.

     (c) If the damage to the Property occurs during the last six (6) months 
of the Lease Term and such damage will require more than thirty (30) days to 
repair, either Landlord or Tenant may elect to terminate this Lease as of the 
date the damage occurred, regardless of the sufficiency of any insurance 
proceeds. The party electing to terminate this Lease shall give written 
notification to the other party of such election within thirty (30) days 
after Tenant's notice to Landlord of the occurrence of the damage.

     Section 7.02. SUBSTANTIAL OR TOTAL DESTRUCTION. If the Property is 
substantially or totally destroyed by any cause whatsoever (i.e., the damage 
to the Property is greater than partial damage as described in Section 7.01), 
and regardless of whether Landlord receives any insurance proceeds, this 
Lease shall terminate as of the date the destruction occurred. 
Notwithstanding the preceding sentence, if the Property can be rebuilt within 
six (6) months after the date of destruction, Landlord may elect to rebuild 
the Property at Landlord's own expense, in which case this Lease shall remain 
in full force and effect. Landlord shall notify Tenant of such election 
within thirty (30) days after Tenant's notice of the occurrence of total or 
substantial destruction. If Landlord so elects, Landlord shall rebuild the 
Property at Landlord's sole expense, except that if the destruction was 
caused by an act or omission of Tenant, Tenant shall pay Landlord the 
difference between the actual cost of rebuilding and any insurance proceeds 
received by Landlord.

     Section 7.03. TEMPORARY REDUCTION OF RENT. If the Property is destroyed 
or damaged and Landlord or Tenant repairs or restores the Property pursuant 
to the provisions of this Article Seven, any rent payable during the period 
of such damage, repair and/or restoration shall be reduced according to the 
degree, if any, to which Tenant's use of the Property is impaired. Except for 
such possible reduction in Base Rent, insurance premiums and real property 
taxes, Tenant shall not be entitled to any compensation, reduction, or 
reimbursement from Landlord as a result of an damage, destruction, repair, or 
restoration of or to the Property.


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     Section 7.04. WAIVER. Tenant waives the protection of any statute, code 
or judicial decision which grants a tenant the right to terminate a lease in 
the event of the substantial or total destruction of the leased property. 
Tenant agrees that the provisions of Section 7.02 above shall govern the 
rights and obligations of Landlord and Tenant in the event of any substantial 
or total destruction to the Property.

ARTICLE EIGHT: CONDEMNATION

     If all or any portion of the Property is taken under the power of 
eminent domain or sold under the threat of that power (all of which are 
called "Condemnation"), this Lease shall terminate as to the part taken or 
sold on the date the condemning authority takes title or possession, 
whichever occurs first. If more than twenty percent (20%) of the floor area 
of the building in which the Property is located, or which is located on the 
Property, is taken, either Landlord or Tenant may terminate this Lease as of 
the date the condemning authority takes title or possession, by delivering 
written notice to the other within ten (10) days after receipt of written 
notice of such taking (or in the absence of such notice, within ten (10) days 
after the condemning authority takes title or possession). If neither 
Landlord nor Tenant terminates this Lease, this Lease shall remain in effect 
as to the portion of the Property not taken, except that the Base Rent and 
Additional Rent shall be reduced in proportion to the reduction in the floor 
area of the Property. Any Condemnation award or payment shall be distributed 
in the following order: (a) first, to any ground lessor, mortgagee or 
beneficiary under a deed of trust encumbering the Property, the amount of its 
interest in the Property; (b) second, to Tenant, only the amount of any award 
specifically designated for loss of or damage to Tenant's trade fixtures or 
removable personal property; and (c) third, to Landlord, the remainder of 
such award, whether as compensation for reduction in the value of the 
leasehold, the taking of the fee, or otherwise. If this Lease is not 
terminated, Landlord shall repair any damage to the Property caused by the 
Condemnation, except that Landlord shall not be obligated to repair any 
damage for which Tenant has been reimbursed by the condemning authority. If 
the severance damages received by Landlord are not sufficient to pay for such 
repair, Landlord shall have the right to either terminate this Lease or make 
such repair at Landlord's expense.

ARTICLE NINE: ASSIGNMENT AND SUBLETTING

     Section 9.01. LANDLORD'S CONSENT REQUIRED. No portion of the Property or 
of Tenant's interest in this Lease may be acquired by any other person or 
entity, whether by sale, assignment, mortgage, sublease, transfer, operation 
of law, or act of Tenant, without Landlord's prior written consent, except as 
provided in Section 9.02 below. Landlord has the right to grant or withhold 
its consent as provided in Section 9.05 below. Any attempted transfer without 
consent shall be void and shall constitute a breach of this Lease. If Tenant 
is a partnership, any cumulative transfer of more than twenty percent (20%) 
of the partnership interests shall require Landlord's consent. If Tenant is a 
corporation, any change in the ownership of a controlling interest of the 
voting stock of the corporation shall require Landlord's consent.(1)

     Section 9.02. TENANT AFFILIATE. Tenant may assign this Lease or sublease 
the Property, without Landlord's consent, to any corporation which controls, 
is controlled by or is under common control with Tenant, or to any 
corporation resulting from the merger of or consolidation with Tenant 
("Tenant's Affiliate"). In such case, any Tenant's Affiliate shall assume in 
writing all of Tenant's obligations under this Lease.

     Section 9.03. NO RELEASE OF TENANT. No transfer permitted by this 
Article Nine, whether with or without Landlord's consent, shall release 
Tenant or change Tenant's primary liability to pay the rent and to perform 
all other obligations of Tenant under this Lease. Landlord's acceptance of 
rent from any other person is not a waiver of any provision of this Article 
Nine. Consent to one transfer is not a consent to any subsequent transfer. If 
Tenant's transferee defaults under this Lease, Landlord may proceed directly 
against Tenant without pursuing remedies against the transferee.

     Section 9.05. LANDLORD'S CONSENT.

     (a) Tenant's request for consent to any transfer described in Section 
9.01 shall set forth in writing the details of the proposed transfer, 
including the name, business and financial condition of the prospective 
transferee, financial details of the proposed transfer (e.g., the term of and 
the rent and security deposit payable under any proposed assignment or 
sublease), and any other information Landlord deems relevant. Landlord shall 
have the right to withhold consent, if reasonable, or to grant consent, based 
on the following factors: (i) the business of the proposed assignee or 
subtenant and the proposed use of the Property; (ii) the net worth and 
financial reputation of the proposed assignee or subtenant; (iii) Tenant's 
compliance with all of its obligations under the Lease; and (iv) such other 
factors as Landlord may reasonably deem relevant. If Landlord objects to a 
proposed assignment solely because of the net worth and/or financial 
reputation of the proposed assignee, Tenant may nonetheless sublease (but not 
assign), all or a portion of the Property to the proposed transferee, but 
only on the other terms of the proposed transfer.

     (b) If Tenant assigns or subleases, the following shall apply:

         (i)  Tenant shall pay to Landlord as Additional Rent under the Lease 
     the Landlord's Share (stated in Section 1.13) of the Profit (defined 
     below) on such transaction as and when received by Tenant. The "Profit" 
     means (A) all amounts paid to Tenant for such assignment or sublease, 
     including "key" money, monthly rent in excess of the monthly rent 
     payable under the Lease, and all fees and other consideration paid for 
     the assignment or sublease, including fees under any collateral 
     agreements, less (B) costs and expenses directly incurred by Tenant in 
     connection with the execution and performance of such assignment or 
     sublease for real estate broker's commissions(2) and costs of renovation 
     or construction of tenant improvements required under such assignment or 
     sublease. Tenant is entitled


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     to recover such costs and expenses before Tenant is obligated to pay the 
     Landlord's Share to Landlord. The Profit in the case of a sublease of 
     less than all the Property is the rent allocable to the subleased space 
     as a percentage on a square footage basis.

         (ii) Tenant shall provide Landlord a written statement certifying 
     all amounts to be paid from any assignment or sublease of the Property 
     within thirty (30) days after the transaction documentation is signed, 
     and Landlord(1) may inspect Tenant's books and records to verify the 
     accuracy of such statement. On written request, Tenant shall promptly 
     furnish to Landlord copies of all the transaction documentation, all of 
     which shall be certified by Tenant to be complete, true and correct. 
     Landlord's receipt of Landlord's Share shall not be a consent to any 
     further assignment or subletting. The breach of Tenant's obligation 
     under this Paragraph 9.05(b) shall be a material default of the Lease.

     Section 9.06. NO MERGER. No merger shall result from Tenant's sublease 
of the Property under this Article Nine, Tenant's surrender of this Lease 
or the termination of this Lease in any other manner. In any such event, 
Landlord may terminate any or all subtenancies or succeed to the interest of 
Tenant as sublandlord under any or all subtenancies.

ARTICLE TEN: DEFAULTS; REMEDIES

     Section 10.01. COVENANTS AND CONDITIONS. Tenant's performance of each of 
Tenant's obligations under this Lease is a condition as well as a covenant. 
Tenant's right to continue in possession of the Property is conditioned upon 
such performance. Time is of the essence in the performance of all covenants 
and conditions.

     Section 10.02. DEFAULTS. Tenant shall be in material default under this 
Lease:

     (a) If Tenant's vacation of the Property results in the cancellation of 
any insurance described in Section 4.04;

     (b) If Tenant fails to pay rent or any other charge(2) due;

     (c) If Tenant fails to perform any of Tenant's non-monetary obligations 
under this Lease for a period of thirty (30) days after written notice from 
Landlord; provided that if more than thirty (30) days are required to 
complete such performance, Tenant shall not be in default if Tenant commences 
such performance within the thirty (30) -day period and thereafter diligently 
pursues its completion. However, Landlord shall not be required to give such 
notice if Tenant's failure to perform constitutes a non-curable breach of 
this Lease. The notice required by this Paragraph is intended to satisfy any 
and all notice requirements imposed by law on Landlord and is not in addition 
to any such requirement.

     (d) (i) If Tenant makes a general assignment or general arrangement for 
the benefit of creditors; (ii) if a petition for adjudication of bankruptcy 
or for reorganization or rearrangement is filed by or against Tenant and is 
not dismissed within thirty (30) days; (iii) if a trustee or receiver is 
appointed to take possession of substantially all of Tenant's assets located 
at the Property or of Tenant's interest in this Lease and possession is not 
restored to Tenant within thirty (30) days; or (iv) if substantially all of 
Tenant's assets located at the Property or of Tenant's interest in this Lease 
is subjected to attachment, execution or other judicial seizure which is not 
discharged within thirty (30) days. If a court of competent jurisdiction 
determines that any of the acts described in this subparagraph (d) is not a 
default under this Lease, and a trustee is appointed to take possession (or 
if Tenant remains a debtor in possession) and such trustee or Tenant 
transfers Tenant's interest hereunder, then Landlord shall receive, as 
Additional Rent, the excess, if any, of the rent (or any other consideration) 
paid in connection with such assignment or sublease over the rent payable by 
Tenant under this Lease.

     Section 10.03. REMEDIES. On the occurrence of any material default by 
Tenant, Landlord may, at any time thereafter, with or without notice or 
demand and without limiting Landlord in the exercise of any right or remedy 
which Landlord may have:

     (a) Terminate Tenant's right to possession of the Property by any lawful 
means, in which case this Lease shall terminate and Tenant shall immediately 
surrender possession of the Property to Landlord. In such event, Landlord 
shall be entitled to recover from Tenant all damages incurred by Landlord by 
reason of Tenant's default, including (i) the worth at the time of the award 
of the unpaid Base Rent, Additional Rent and other charges which Landlord had 
earned at the time of the termination; (ii) the worth at the time of the 
award of the amount by which the unpaid Base Rent, Additional Rent and other 
charges which Landlord would have earned after termination until the time of 
the award exceeds the amount of such rental loss that Tenant proves Landlord 
could have reasonably avoided; (iii) the worth at the time of the award of 
the amount by which the unpaid Base Rent, Additional Rent and other charges 
which Tenant would have paid for the balance of the Lease Term after the time 
of award exceeds the amount of such rental loss that Tenant proves Landlord 
could have reasonably avoided; and (iv) any other amount necessary to 
compensate Landlord for all the detriment proximately caused by Tenant's 
failure to perform its obligations under the Lease or which in the ordinary 
course of things would be likely to result therefrom, including, but not 
limited to, any costs or expenses Landlord incurs in maintaining or 
preserving the Property after such default, the cost of recovering possession 
of the Property, expenses of reletting, including necessary renovation or 
alteration of the Property, Landlord's reasonable attorneys' fees incurred in 
connection therewith, and any real estate commission paid or payable. As used 
in subparts (i) and (ii) above, the "worth at the time of the award" is 
computed by allowing interest on unpaid amounts at the rate of fifteen 
percent (15%) per annum, or such lesser amount as may then be the maximum 
lawful rate. As used in subpart (iii) above, the "worth at the time of the 
award" is computed by discounting such amount at the discount rate of the 
Federal Reserve Bank of San Francisco at the time of the award, plus one 
percent (1%). If Tenant has abandoned the Property, Landlord shall have the 
option of (i) retaking possession of the Property and recovering from Tenant 
the amount specified in this Paragraph 10.03(a), or (ii) proceeding under 
Paragraph 10.03(b);

     (b) Maintain Tenant's right to possession, in which case this Lease 
shall continue in effect whether or not Tenant has abandoned the Property. In 
such event, Landlord shall be entitled to enforce all of Landlord's rights 
and remedies under this Lease, including the right to recover the rent as it 
becomes due;

     (c) Pursue any other remedy now or hereafter available to Landlord under 
the laws or judicial decisions of the state in which the Property is located.


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     Section 10.05. AUTOMATIC TERMINATION. Notwithstanding any other term or 
provision hereof to the contrary, the Lease shall terminate on the occurrence 
of any act which affirms the Landlord's intention to terminate the Lease as 
provided in Section 10.03 hereof, including the filing of an unlawful 
detainer action against Tenant. On such termination, Landlord's damages for 
default shall include all costs and fees, including reasonable attorneys' 
fees that Landlord incurs in connection with the filing, commencement, 
pursuing and/or defending of any action in any bankruptcy court or other 
court with respect to the Lease; the obtaining of relief from any stay in 
bankruptcy restraining any action to evict Tenant; or the pursuing of any 
action with respect to Landlord's right to possession of the Property. All 
such damages suffered (apart from Base Rent and other rent payable hereunder) 
shall constitute pecuniary damages which must be reimbursed to Landlord prior 
to assumption of the Lease by Tenant or any successor to Tenant in any 
bankruptcy or other proceeding.

     Section 10.06. CUMULATIVE REMEDIES. Landlord's exercise of any right or 
remedy shall not prevent it from exercising any other right or remedy.

ARTICLE ELEVEN: PROTECTION OF LENDERS

     Section 11.01. SUBORDINATION. Landlord shall have the right to 
subordinate this Lease to any groundlease, deed of trust or mortgage 
encumbering the Property, any advances made on the security thereof and any 
renewals, modifications, consolidations, replacements or extensions thereof, 
whenever made or recorded(1). Tenant shall cooperate with Landlord and any 
lender which is acquiring a security interest in the Property or the Lease. 
Tenant shall execute such further documents and assurances as such lender may 
require, provided that Tenant's obligations under this Lease shall not be 
increased in any material way (the performance of ministerial acts shall not 
be deemed material), and Tenant shall not be deprived of its rights under 
this Lease. Tenant's right to quiet possession of the Property during the 
Lease Term shall not be disturbed if Tenant pays the rent and performs all of 
Tenant's obligations under this Lease and is not otherwise in default. If any 
ground lessor, beneficiary or mortgagee elects to have this Lease prior to the 
lien of its ground lease, deed of trust or mortgage and gives written notice 
thereof to Tenant, this Lease shall be deemed prior to such ground lease, 
deed of trust or mortgage whether this Lease is dated prior or subsequent to 
the date of said ground lease, deed of trust or mortgage or the date of 
recording thereof.

     Section 11.02. ATTORNMENT. If Landlord's interest in the Property is 
acquired by any ground lessor, beneficiary under a deed of trust, mortgagee, 
or purchaser at a foreclosure sale, Tenant shall attorn to the transferee of 
or successor to Landlord's interest in the Property and recognize such 
transferee or successor as Landlord under this Lease. Tenant waives the 
protection of any statute or rule of law which gives or purports to give 
Tenant any right to terminate this Lease or surrender possession of the 
Property upon the transfer of Landlord's interest.

     Section 11.03. SIGNING OF DOCUMENTS. Tenant shall sign and deliver any 
instrument or documents necessary or appropriate to evidence any such 
attornment or subordination or agreement to do so. If Tenant fails to do so 
within ten (10) days after written request, Tenant hereby makes, constitutes 
and irrevocably appoints Landlord, or any transferee or successor of 
Landlord, the attorney-in-fact of Tenant to execute and deliver any such 
instrument or document.

     Section 11.04. ESTOPPEL CERTIFICATES.

     (a) Upon Landlord's written request, Tenant shall execute, acknowledge 
and deliver to Landlord a written statement certifying: (i) that none of the 
terms or provisions of this Lease have been changed (or if they have been 
changed, stating how they have been changed); (ii) that this Lease has not 
been cancelled or terminated; (iii) the last date of payment of the Base Rent 
and other charges and the time period covered by such payment; (iv) that (2) 
Landlord is not in default under this Lease (or, if Landlord is claimed 
to be in default, stating why); and (v) such other representations or 
information with respect to Tenant or the Lease as Landlord may reasonably 
request or which any prospective purchaser or encumbrancer of the Property 
may(3) require. Tenant shall deliver such statement to Landlord within ten 
(10) days after(4) Landlord's request. Landlord may give any such statement 
by Tenant to any prospective purchaser or encumbrancer of the Property. Such 
purchaser or encumbrancer may rely conclusively upon such statement as true 
and correct.

     (b) If Tenant does not deliver such statement to Landlord within such 
ten (10)-day period, Landlord, and any prospective purchaser or encumbrancer, 
may conclusively presume and rely upon the following facts: (i) that the 
terms and provisions of this Lease have not been changed except as otherwise 
represented by Landlord; (ii) that this Lease has not been cancelled or 
terminated except as otherwise represented by Landlord; (iii) that not more 
than one month's Base Rent or other charges have been paid in advance; and 
(iv)that Landlord is not in default under the Lease. In such event, Tenant 
shall be estopped from denying the truth of such facts.

     Section 11.05. TENANT'S FINANCIAL CONDITION. Within ten (10) days after 
written request from Landlord, Tenant shall deliver to Landlord such 
financial statements as Landlord reasonably requires to verify the net worth 
of Tenant or any assignee, subtenant, or guarantor of Tenant. In addition, 
Tenant shall deliver to any lender designated by Landlord any financial 
statements(3) required by such lender to facilitate the financing or 
refinancing of the Property. Tenant represents and warrants to Landlord that 
each such financial statement is a true and accurate statement as of the date 
of such statement. All financial statements shall be confidential and shall be 
used only for the purposes set forth in this Lease.

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<PAGE>

ARTICLE TWELVE: LEGAL COSTS

     Section 12.01. LEGAL PROCEEDINGS. If Tenant or Landlord shall be in 
breach or default under this Lease, such party (the "Defaulting Party") shall 
reimburse the other party (the "Nondefaulting Party") upon demand for any 
costs or expenses that the Nondefaulting Party incurs in connection with any 
breach or default of the Defaulting Party under this Lease, whether or not 
suit is commenced or judgment entered. Such costs shall include (1) legal 
fees and costs incurred for the negotiation of a settlement, enforcement of 
rights or otherwise. Furthermore, if any action for breach of or to enforce 
the provisions of this Lease is commenced, the court in such action shall 
award to the party in whose favor a judgment is entered, a reasonable sum as 
attorneys' fees and costs. The losing party in such action shall pay such 
attorneys' fees and costs. Tenant shall also indemnify Landlord against and 
hold Landlord harmless from all costs, expenses, demands and liability 
Landlord may incur if Landlord becomes or is made a party to any claim or 
action (a) instituted by Tenant against any third party, or by any third 
party against Tenant, or by or against any person holding any interest under 
or using the Property by license of or agreement with Tenant; (b) for 
foreclosure of any lien for labor or material furnished to or for Tenant or 
such other person; (c) otherwise arising out of or resulting from any act or 
transaction of Tenant or such other person; or (d) necessary to protect 
Landlord's interest under this Lease in a bankruptcy proceeding, or other 
proceeding under Title 11 of the United States Code, as amended. Tenant shall 
defend Landlord against any such claim or action at Tenant's expense with 
counsel reasonably acceptable to Landlord or, at Landlord's election, Tenant 
shall reimburse Landlord for any legal fees or costs Landlord incurs in any 
such claim or action.

     Section 12.02. LANDLORD'S CONSENT. Tenant shall pay Landlord's 
reasonable attorneys' fees incurred in connection with Tenant's request for 
Landlord's consent under Article Nine (Assignment and Subletting), or in 
connection with any other act which Tenant proposes to do and which requires 
Landlord's consent.

ARTICLE THIRTEEN: MISCELLANEOUS PROVISIONS

     Section 13.01. NON-DISCRIMINATION. Tenant promises, and it is a 
condition to the continuance of this Lease, that there will be no 
discrimination against, or segregation of, any person or group of persons on 
the basis of race, color, sex, creed, national origin or ancestry in the 
leasing, subleasing, transferring, occupancy, tenure or use of the Property 
or any portion thereof.

     Section 13.02. LANDLORD'S LIABILITY; CERTAIN DUTIES.

     (a) As used in this Lease, the term "Landlord" means only the current 
owner or owners of the fee title to the Property or Project or the leasehold 
estate under a ground lease of the Property or Project at the time in 
question. Each Landlord is obligated to perform the obligations of Landlord 
under this Lease only during the time such Landlord owns such interest or 
title. Any Landlord who transfers its title or interest is relieved of all 
liability with respect to the obligations of Landlord under this Lease to be 
performed on or after the date of transfer. However, each Landlord shall 
deliver to its transferee all funds that Tenant previously paid if such funds 
have not yet been applied under the terms of this Lease.

     (b) Tenant shall give written notice of any failure by Landlord to 
perform any of its obligations under this Lease to Landlord and to any ground 
lessor, mortgagee or beneficiary under any deed of trust encumbering the 
Property whose name and address have been furnished to Tenant in writing. 
Landlord shall not be in default under this Lease unless Landlord (or such 
ground lessor, mortgagee or beneficiary) fails to cure non-performance within 
thirty (30) days after receipt of Tenant's notice. However, if such 
non-performance reasonably requires more than thirty (30) days to cure, 
Landlord shall not be in default if such cure is commenced within such thirty 
(30)-day period and thereafter diligently pursued to completion.

     (c) Notwithstanding any term or provision herein to the contrary, the 
liability of Landlord for the performance of its duties and obligations under 
this Lease is limited to Landlord's interest in the Property and the Project, 
and neither the Landlord nor its partners, shareholders, officers or other 
principals shall have any personal liability under this Lease.

     Section 13.03. SEVERABILITY. A determination by a court of competent 
jurisdiction that any provision of this Lease or any part thereof is illegal 
or unenforceable shall not cancel or invalidate the remainder of such 
provision or this Lease, which shall remain in full force and effect.

     Section 13.04. INTERPRETATION. The captions of the Articles or Sections 
of this Lease are to assist the parties in reading this Lease and are not a 
part of the terms or provisions of this Lease. Whenever required by the 
context of this Lease, the singular shall include the plural the plural shall 
include the singular. The masculine, feminine and neuter genders shall each 
include the other. In any provision relating to the conduct, acts or 
omissions of Tenant, the term "Tenant" shall include Tenant's agents, 
employees, contractors, invitees, successors or others using the Property 
with Tenant's expressed or implied permission.

     Section 13.05. INCORPORATION OF PRIOR AGREEMENTS; MODIFICATIONS. This 
Lease is the only agreement between the parties pertaining to the lease of 
the Property and no other agreements are effective. All amendments to this 
Lease shall be in writing and signed by all parties. Any other attempted 
amendment shall be void.

     Section 13.06. NOTICES. All notices required or permitted under this 
Lease shall be in writing and shall be personally delivered or sent by 
certified mail, return receipt requested, postage prepaid. Notices to Tenant 
shall be delivered to the address specified in Section 1.03 above, except 
that upon Tenant's taking possession of the Property, the Property shall be 
Tenant's address for notice purposes. Notices to Landlord shall be delivered 
to the address specified in Section 1.02 above. All notices shall be 
effective upon delivery. Either party may change its notice address upon 
written notice to the other party.

     Section 13.07. WAIVERS. All waivers must be in writing and signed by the 
waiving party. Landlord's failure to enforce any provision of this Lease or 
its acceptance of rent shall not be a waiver and shall not prevent Landlord 
from enforcing that provision or any other provision of this Lease in the 
future. No statement on a payment check from Tenant or in a letter 
accompanying a payment check shall be binding on Landlord. Landlord may, with 
or without notice to Tenant, negotiate such check without being bound to the 
conditions of such statement.

     Section 13.08. NO RECORDATION. Tenant shall not record this Lease 
without prior written consent from Landlord. However, either Landlord or 
Tenant may require that a "Short Form" memorandum of this Lease executed by 
both parties be recorded. The party requiring such recording shall pay all 
transfer taxes and recording fees.

     Section 13.09. BINDING EFFECT; CHOICE OF LAW. This Lease binds any party 
who legally acquires any rights or interest in this Lease from Landlord or 
Tenant. However, Landlord shall have no obligation to Tenant's successor 
unless the rights or interests of Tenant's successor are acquired in 
accordance with the terms of this Lease. The laws of the state in which the 
Property is located shall govern this Lease.

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<PAGE>

     Landlord and Tenant have signed this Lease at the place and on the dates 
specified adjacent to their signatures below and have initialled all Riders 
which are attached to or incorporated by reference in this Lease.


                                               "LANDLORD"

Signed on   11- 15, 1994          Emeryville Business Centre, A California
            ------------------    ----------------------------------------
at Emeryville, CA                 Limited Partnership
   --------------                 ----------------------------------------
                                  By: [illegible]
                                      ------------------------------------
                                  Its: General Partner
                                       -----------------------------------
                                  By:
                                       -----------------------------------
                                  Its:
                                       -----------------------------------



                                               "TENANT"

Signed on   November 14, 1994     Berkeley Learning Technologies, Inc.,
            ------------------    ----------------------------------------
at Berkeley, CA                   a California corporation
   --------------                 ----------------------------------------
                                  By: [illegible]
                                      ------------------------------------
                                  Its: CEO
                                       -----------------------------------
                                  By:
                                       -----------------------------------
                                  Its:
                                       -----------------------------------

     IN ANY REAL ESTATE TRANSACTION, IT IS RECOMMENDED THAT YOU CONSULT WITH 
A PROFESSIONAL, SUCH AS A CIVIL ENGINEER, INDUSTRIAL HYGIENIST OR OTHER 
PERSON WITH EXPERIENCE IN EVALUATING THE CONDITION OF THE PROPERTY, INCLUDING 
THE POSSIBLE PRESENCE OF ASBESTOS, HAZARDOUS MATERIALS AND UNDERGROUND 
STORAGE TANKS.

     THIS PRINTED FORM LEASE HAS BEEN DRAFTED BY LEGAL COUNSEL AT THE 
DIRECTION OF THE SOUTHERN CALIFORNIA CHAPTER OF THE SOCIETY OF INDUSTRIAL AND 
OFFICE REALTORS-Registered Trademark-, INC. NO REPRESENTATION OR 
RECOMMENDATION IS MADE BY THE SOUTHERN CALIFORNIA CHAPTER OF THE SOCIETY OF 
INDUSTRIAL AND OFFICE REALTORS-Registered Trademark-, INC., ITS LEGAL 
COUNSEL, THE REAL ESTATE BROKERS NAMED HEREIN, OR THEIR EMPLOYEES OR AGENTS, 
AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT OR TAX CONSEQUENCES OF THIS LEASE 
OR OF THIS TRANSACTION. LANDLORD AND TENANT SHOULD RETAIN LEGAL COUNSEL TO 
ADVISE THEM ON SUCH MATTERS AND SHOULD RELY UPON THE ADVICE OF SUCH LEGAL 
COUNSEL.

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<PAGE>

                                  ENDNOTES
                                  --------

PAGE 2

1/  , after the expiration of any applicable cure period,

PAGE 3

1/   (excluding any deductible under Landlord's comprehensive public liability 
insurance policy)

PAGE 4

1/   substantial

2/   reasonable

PAGE 5

1/   reasonably

2/   (but not more often than monthly)

3/   against Tenant's obligation to pay rent

4/   Landlord's statement of Common Area costs shall be certified to be 
correct by Landlord.  Tenant shall have the right, for a period of one (1) 
year after receipt of Landlord's statement, to question the accuracy of any 
Common Area cost specified in the statement.  If Tenant questions any Common 
Area cost within the aforementioned time period, Landlord, after receipt of 
written notice from Tenant, shall make Landlord's books and records regarding 
the Common Area cost in question available to Tenant in a timely manner for 
Tenant to audit.  Tenant shall conduct the audit at a place other than 
Landlord's office.  Tenant shall pay the costs and expenses of any such 
audit, unless the audit reveals a discrepancy of at least three percent (3%) 
in the Common Area cost, in which event Landlord shall reimburse Tenant for 
the costs and expenses of the audit within ten (10) days of Tenant's written 
request therefor.

5/   and Landlord notifies Tenant that it has not yet received said rent

6/   any use by Tenant of the Property other than for a Permitted Use

7/   except for routine office and janitorial supplies in usual and customary 
quantities stored, used and disposed of in accordance with all applicable 
environmental laws

8/  , which consent shall not be unreasonably withheld or delayed

PAGE 6

1/  reasonably

2/  (during the last six (6) months of the Lease Term only)

3/  reasonably

4/  not less than twenty-four (24) hours'

5/  structural components,

6/  or such maintenance is covered under Landlord's warranty for the HVAC unit


                                      1.
<PAGE>

7/   provided, however, that this sentence shall not be construed to require 
Tenant to put the Property in better condition than the condition of the 
Property as it existed as of the Commencement Date

8/   reasonable

PAGE 7

1/   per year

2/   Within ten (10) days of Landlord's receipt of Tenant's notice to 
Landlord informing Landlord of its intent to make any alterations, additions 
or improvements to the Premises, Landlord shall notify Tenant in writing as 
to whether Tenant is required to remove the proposed alterations at the end 
of the Lease Term and restore the Premises to its original condition.  If 
Landlord fails to notify Tenant in writing of its obligation to remove the 
proposed alterations, improvements or additions at the end of the Lease Term 
within said ten (10) day period, Tenant shall not be required to remove the 
alterations, additions and improvements at the end of the Lease Term.

3/   together with the amount of the deductible

4/   is required to

PAGE 8

1/   Tenant shall not be deemed in violation of this Section 9.01 if a change 
in voting control of Tenant's stock, or the stock of any corporate entity 
which directly or indirectly controls Tenant, results by virtue of Tenant's 
initial public offering of Tenant's stock.

2/   and finders' fees, advertising costs, legal fees

PAGE 9

1/  , upon reasonable notice to Tenant of not less than five (5) days,

2/   within ten (10) days after written notice from Landlord that such amount 
is

PAGE 10

1/  ; provided, that in connection with any such subordination, the ground 
lessor, beneficiary or mortgagee, as the case may be, executes an agreement 
confirming that Tenant's right to quiet possession of the Property during the 
Lease Term shall not be disturbed if Tenant pays the Rent and performs all of 
Tenant's other obligations under this Lease and is not otherwise in default.

2/  , to Tenant's actual knowledge,

3/  reasonably

4/  Tenant's receipt of

PAGE 11

1/  reasonable


                                      2.
<PAGE>

PAGE 12

1/   Tenant's receipt of Landlord's written request therefor

2/   or Tenant

3/   the non-performing party's

4/   or Tenant's

5/   and Landlord

6/   each other

7/   each Party


Tenant:                               Landlord:

[illegible]                           [illegible]
-------------                         -------------
(initial)                             (initial)




                                      3.
<PAGE>

                                 EXHIBIT "A"

                                                                    FLOOR PLAN



                          EMERYVILLE BUSINESS CENTER

                  1250 45TH STREET - EMERYVILLE, CALIFORNIA






<PAGE>

                                  EXHIBIT B

                               Reserved Parking

                               [to be attached]

<PAGE>

                                  EXHIBIT C

                                Adjacent Space

                               [to be attached]
<PAGE>

                                   ADDENDUM
                                   --------

     This Addendum shall be a part of, and is hereby incorporated into, that 
certain lease (the "Lease") by and between Emeryville Business Centre, a 
California Limited Partnership ("Landlord"), and Berkeley Learning 
Technologies, Inc., a California corporation ("Tenant"), for the property 
located at 1250 - 45th Street, Suite 150, Emeryville, California, as more 
fully described in Section 1.04 of the Lease.  Capitalized terms used herein 
shall have the meaning ascribed to them in the Lease, unless otherwise 
indicated.

15.  COMMENCEMENT DATE.  The Lease Term shall commence (the "Commencement 
Date") on the date on which the Property is Ready for Occupancy (as 
hereinafter defined), and shall end on the date which is five (5) years after 
the Commencement Date, plus the number of days necessary to end the Lease 
Term on the last day of a month.  The Property shall be ready for occupancy 
("Ready for Occupancy") when construction of the Tenant Improvements (as 
defined in Section 26 herein), excluding the installation of the HVAC unit, 
is completed in accordance with the conditions called for in Section 26 of 
this Lease.  Within ten (10) days of the Commencement Date, Landlord and 
Tenant shall execute a "Memorandum of Commencement", stating the Commencement 
Date and the expiration date of this Lease.

16.  DELAY IN COMMENCEMENT.  If the Property is not Ready For Occupancy on or 
before December 23, 1994, then Tenant, at its election and without waiving 
any rights it may have, may terminate this Lease at any time prior to the 
Commencement Date by written notice to Landlord.  In addition, if Landlord 
has not installed a new HVAC unit in the Property pursuant to Section 26 of 
this Lease within one hundred twenty (120) days from the date of this Lease, 
Tenant, at its election and without waiving any rights it might have, may 
terminate this Lease upon written notice to Landlord.

17.  BASE RENT.  The Base Rent during the Lease Term is set forth in the 
following table:

<TABLE>
<CAPTION>
                   PERIOD                              BASE RENT
                   ------                              ---------
     <S>                                               <C>
     Commencement Date through the 3rd
     full calendar month of the Lease
     Term                                              $0.64 psf

     4th full calendar month through
     the 36th full calendar month of
     the Lease Term                                    $1.28 psf

     37th full calendar month through
     the 48th full calendar month of
     the Lease Term                                    $1.38 psf

     49th full calendar month through
     the 60th full calendar month of
     the Lease Term                                    $1.48 psf
</TABLE>

18.  REAL PROPERTY TAXES.  Notwithstanding anything to the contrary contained 
in Section 4.05 of this Lease, any increases in taxes attributable to change 
of ownership (E.G., sale) of all or any part of the Property, building in 
which the Property is located ("Building") or Project shall not constitute a 
"real property tax" for purposes of this Lease.

19.  PARKING.  Notwithstanding anything to the contrary contained in this 
Lease, Landlord shall reserve three (3) of the nineteen (19) vehicle parking 
spaces allocated to Tenant for the exclusive use of Tenant and its agents, 
employees, contractors and invitees.  Landlord shall designate such parking 
spaces as reserved for use by Tenant.  The location of the parking spaces 
reserved for Tenant's exclusive use are more particularly shown on EXHIBIT A.


                                       1.

<PAGE>

20.  COMMON AREA COSTS.  Notwithstanding anything to the contrary contained 
in Section 4.05 of this Lease, Common Area costs shall not include the 
following: (1) legal fees, brokerage commissions, advertising costs or other 
related expenses incurred in connection with the leasing of the Project; (2) 
repairs, alterations, additions, improvements or replacements made to rectify 
or correct any defect in the design, materials or workmanship of the Building 
or to comply with any requirements of any governmental authority in effect as 
of the Commencement Date; (3) any improvements, alterations or expenditures 
of a capital nature; (4) depreciation or amortization of the Building; (5) 
damage and repairs attributable to fire or other casualty; (6) damage and 
repairs covered under any insurance policy required to be carried by Landlord 
in connection with the Building or Common Areas; (7) damage and repairs 
necessitated by the negligence or wilful misconduct of Landlord or Landlord's 
employees, contractors or agents; (8) payments of principal or interest on 
any mortgage or other encumbrance; (9) legal fees, accountants' fees and 
other expenses incurred in connection with disputes with Tenant, tenants or 
other occupants or associated with the enforcement of any leases or defense 
of Landlord's title to or interest in the Building and/or Project or any part 
thereof; (10) costs incurred in renovating or otherwise improving, 
decorating, painting or altering space for other tenants or other occupants 
or vacant space in the Building; (11) overhead and profit paid to 
subsidiaries or affiliates of Landlord for management or other services for 
the Project or Building or for supplies or other materials to the extent that 
the costs of the services, supplies or materials exceed the competitive costs 
of the services, supplies or materials if they were not provided by a 
subsidiary or an affiliate; (12) costs incurred to test, survey, cleanup, 
contain, abate, remove or otherwise remedy Hazardous Materials (as defined in 
Section 5.03) from the Project unless the Hazardous Materials were in or on 
the Project because of Tenant's gross negligence or intentional acts; and 
(13) any other expense which, under generally accepted accounting principles 
and practice, would not be considered a normal maintenance and operating 
expense.

21.  HAZARDOUS MATERIALS.  Landlord represents and warrants to Tenant that to 
the best of Landlord's knowledge there are no Hazardous Materials located 
within the Property or Project as of the date of this Lease in violation of 
applicable laws.

22.  LANDLORD'S INDEMNITY.  Landlord shall indemnify, defend (with counsel 
reasonably satisfactory to Tenant), protect and hold harmless Tenant and its 
officers, directors, employees and shareholders from and against any and all 
costs, claims or liability (including without limitation reasonable 
attorneys' fees) arising from the injury of any person or persons (including 
wrongful death) or the damage or destruction of any property occurring in, on 
or about the Common Areas that is due to or caused by the acts or omissions 
of Landlord or Landlord's employees, agents, contractors and invitees.  
Tenant's and Landlord's obligations under Section 5.05 of this Lease shall 
survive the expiration or earlier termination of this Lease.

23.  OPTION TO TERMINATE

     Tenant shall have an option to terminate this Lease at the end of the 
twenty-fourth (24th), thirty-sixth (36th) or forty-eighth (48th) full 
calendar month of the Lease Term upon six (6) months prior written notice to 
Landlord; provided, however, Tenant may not exercise its option to terminate 
this Lease if, prior to Tenant's exercise of its option to terminate this 
Lease, (1) Landlord delivers to Tenant Landlord's Notice (as defined in 
Section 25 below) pursuant to which Landlord offers to lease to Tenant a 
portion of the Adjacent Space (as defined in Section 25 of this Lease) 
consisting of 3,500 or more square feet of office space contiguous to the 
Property (hereinafter referred to as the "Expansion Space") in accordance 
with the provisions set forth in Section 25 of this Lease, AND (ii) Tenant 
leases the Expansion


                                       2.

<PAGE>

Space.  If Tenant terminates this Lease pursuant to this Section, Tenant 
shall pay to Landlord within ten (10) days after the effective date of 
termination the unamortized amount of any brokerage fees and improvement 
costs incurred by Landlord in connection with this Lease, excluding the cost 
incurred by Landlord in installing or repairing the HVAC unit servicing the 
Property and constructing the demising walls in the Property.  Such costs 
shall be amortized on a straight line basis over the original term of this 
Lease (i.e., five (5) years).

24.  OPTION TO EXTEND.

     a.  OPTION RIGHT.  Tenant shall have the option to extend the Lease Term 
for an additional period of three (3) years (the "Extension Term") on all of 
the terms and conditions of this Lease, except (i) Tenant shall not have the 
option to further extend the Lease Term and (ii) the Base Rent shall be ninety-
five percent (95%) of the "Fair Market Rent" as of the commencement of the 
Extension Term.  Tenant shall exercise such option, if at all, by written 
notice ("Tenant's Extension Notice") to Landlord not later than one hundred 
twenty (120) days prior to the expiration of the original Lease Term.  
Tenant's failure to give Tenant's Extension Notice in a timely manner shall 
be deemed a waiver of Tenant's option to extend the Lease Term.

     b.  DETERMINATION OF FAIR MARKET RENT.

         (i)   AGREEMENT ON RENT.  For the purposes of this Lease, "Fair 
Market Rent" means the fair market monthly rent expected to prevail as of the 
commencement of the Extension Term with respect to leases for office space of 
comparable size and quality located in same geographical area as the 
Property.  The parties shall have thirty (30) days after Landlord's receipt 
of Tenant's Extension Notice within which to agree on the Fair Market Rent.

         (ii)  SELECTION OF APPRAISERS.  If Landlord and Tenant are unable to 
agree on the Fair Market Rent within the aforementioned thirty (30) day 
period as evidenced by a written amendment to this Lease executed by them, 
then, within ten (10) days after the expiration of the thirty (30) day 
period, Landlord and Tenant each, at its cost and by giving notice to the 
other party, shall appoint a competent and disinterested real estate 
appraiser with at least five (5) years' full-time commercial appraisal 
experience in the geographical area of the Property or a broker with at least 
five (5) years' brokerage experience in the geographical area of the Property 
(each is hereinafter referred to as an "appraiser") to appraise and set the 
monthly Base Rent during the Extension Term.  If either Landlord or Tenant 
does not appoint an appraiser within ten (10) days after the other party has 
given notice of the name of its appraiser, the single appraiser appointed 
shall be the sole appraiser and shall set the monthly Base Rent during the 
Extension Term.  If two (2) appraisers are appointed by Landlord and Tenant 
as stated in this Section, they shall meet promptly and attempt to set the 
monthly Base Rent for the Extension Term.  If the two (2) appraisers are 
unable to agree within thirty (30) days after the second appraiser has been 
appointed, they shall attempt to select a third appraiser meeting the 
qualifications stated in this Section within ten (10) days after the last day 
the two (2) appraisers are given to set the monthly Base Rent.  If they are 
unable to agree on the third appraiser, either Landlord or Tenant, by giving 
ten (10) days' notice to the other party, can apply to the then president of 
the real estate board of the county in which the Property is located, or to 
the Presiding Judge of the Superior Court of the county in which the Property 
is located, for the selection of a third appraiser who meets the 
qualifications stated in this paragraph.  Landlord and Tenant each shall bear 
one-half (1/2) of the cost of appointing the third appraiser and of paying 
the third appraiser's fee.  The third appraiser, however selected, shall be a 
person who has not previously acted in any capacity for either Landlord or 
Tenant.


                                       3.


<PAGE>

         (iii) VALUE DETERMINED BY THREE (3) APPRAISERS. Within thirty (30) 
days after the selection of the third appraiser, a majority of the appraisers 
shall set the monthly Base Rent for the Extension Term. If a majority of the 
appraisers is unable to set the monthly Base Rent within the stipulated 
period of time, Landlord's appraiser shall arrange for simultaneous exchange 
of written appraisals from each of the appraisers and the three (3) 
appraisals shall be added together and their total divided by three (3); the 
resulting quotient shall be the monthly Base Rent for the Property during the 
Extension Term. If, however, the low appraisal and/or the high appraisal 
are/is more than ten percent (10%) lower and/or higher than the middle 
appraisal, the low appraisal and/or the high appraisal shall be disregarded. 
If only one (1) appraisal is disregarded, the remaining two (2) appraisals 
shall be added together and their total divided by two (2); the resulting 
quotient shall be the monthly Base Rent for the Property during the Extension 
Term. If both the low appraisal and the high appraisal are disregarded as 
stated in this Section, the middle appraisal shall be the monthly Base Rent 
for the Property during the Extension Term.

         (iv)  NOTICE TO LANDLORD AND TENANT. After the monthly Base Rent for 
the Extension Term has been set, the appraisers immediately shall notify 
Landlord and Tenant, and Landlord and Tenant immediately shall execute an 
amendment to this Lease stating the monthly Base Rent.

25.  TENANT'S RIGHT OF FIRST OFFER.

     a.  RIGHT OF TENANT. Subject to the terms and conditions provided below, 
Landlord grants to Tenant a right of first offer ("Right of First Offer") to 
lease all or a portion of the adjacent space (the "Adjacent Space") to the 
Property, consisting of approximately 9,034 square feet of space and located 
within the Building, as such space becomes available for lease. The Adjacent 
Space is more particularly described in EXHIBIT A.

     b.  EXERCISE OF RIGHT. If all or any portion of the Adjacent Space 
becomes available for lease during the Term (or any extension thereof), 
Landlord shall notify Tenant in writing ("Landlord's Notice") of the 
availability of such space. Landlord shall specify in Landlord's Notice the 
approximate square footage of the space which is available for lease and the 
terms on which Landlord is willing to lease the space to Tenant. Tenant may 
exercise Tenant's Right of First Offer to lease all or any portion of the 
Adjacent Space by delivering to Landlord written notice of its election to 
lease the space described in Landlord's Notice on the terms proposed therein 
within fifteen (15) days of Tenant's receipt of Landlord's Notice. If Tenant 
does not exercise its Right of First Offer to lease the space described in 
Landlord's Notice within said fifteen (15) day period, except as otherwise 
provided below, Landlord shall be relieved of its obligation to lease to 
Tenant the space described in Landlord's Notice and Tenant's rights under 
this Section shall terminate and be of no further force or effect.

     c.  CONTINUING RIGHT. Notwithstanding anything to the contrary contained 
in this Section, Landlord may not lease the Adjacent Space during the Term 
(or any extension thereof) for less than ninety-five percent (95%) of the 
average annual Base Rent specified in Landlord's Notice unless Landlord first 
re-offers to lease the Adjacent Space to Tenant at such lesser Base Rent and 
on the same terms and conditions upon which Landlord proposes to lease the 
Adjacent Space. Landlord shall offer to lease the Adjacent Space to Tenant 
and Tenant shall exercise its Right of First Offer to lease the Adjacent 
Space (if at all) in accordance with the procedure set forth in Section 25.b 
above.

26.  TENANT IMPROVEMENTS. Prior to the Commencement Date, Landlord shall 
complete the following improvements to the 


                                       4.

<PAGE>

Property (the "Tenant Improvements"), in accordance with plans and 
specifications approved by Tenant:

     (i)   install a new pad and carpet;

     (ii)  paint the interior of the Property;

     (iii) install a new HVAC unit; and

     (iv)  to the extent a kitchen has not been installed in the Premises, 
install a kitchen (including a counter and sink) in the Premises.

Landlord shall commence construction and/or installation of the Tenant 
Improvements immediately following the execution of this Lease and shall 
diligently proceed with the construction and/or installation of the Tenant 
Improvements.

Landlord represents and warrants to Tenant, as of the Commencement Date, that 
the Property is and shall be in compliance with all applicable municipal, 
county, state and federal statutes, laws, ordinances, including, but not 
limited to, zoning ordinances, and regulations governing and relating to the 
use, construction, condition and occupancy of the Property.

27.  IMPROVEMENT ALLOWANCE. Landlord shall pay to Tenant upon the terms and 
conditions set forth below an improvement allowance (the "Improvement 
Allowance") in an amount not to exceed Three Thousand Dollars ($3,000.00). 
The amount paid by Landlord to Tenant shall not exceed Tenant's actual 
expenses for work performed and materials furnished in connection with the 
Property, including, without limitation, costs incurred by Tenant in 
demolishing certain walls and installing new electrical lighting in the 
Property. Landlord shall pay the Improvement Allowance to Tenant within ten 
(10) days after Landlord receives from Tenant its written request therefor, 
provided that Tenant's written request is accompanied by copies of invoices 
paid by Tenant in an amount equal to the amount requested by Tenant.

28.  EARLY ENTRY. Notwithstanding anything to the contrary contained in this 
Lease, Tenant, upon written notice to Landlord, may occupy the Property prior 
to the Commencement Date. Tenant's occupancy of the Property during said 
early occupancy period shall be subject to all of the provisions of this 
Lease, except that Tenant shall only be obligated to pay to Landlord 
seventy-five (75%) of the Base Rent (I.E., $0.48 psf) and all other changes 
specified in this Lease for the early occupancy period.

29.  REIMBURSEMENT UPON TERMINATION. If Landlord fails to deliver the 
Premises to Tenant Ready for Occupancy on or prior to December 23, 1994 and 
Tenant terminates this Lease in accordance with the terms of Section 16 of 
this Lease, Tenant shall reimburse Landlord an amount equal to any 
expenditure incurred by Landlord prior to Tenant's termination of this Lease 
and actually paid by Landlord with respect to Landlord's purchase and 
installation of carpet and padding in the Premises. Notwithstanding the 
foregoing, if Landlord fails to deliver the Premises to Tenant Ready for 
Occupancy within sixty (60) days after the execution of this Lease, Tenant 
may terminate this Lease as provided in Section 16 of this Lease at no cost 
to Tenant.



                 [ILLEGIBLE]                         RJS
                 -----------                     -----------


                                       5.


<PAGE>
[logo]
24 February 1998

Michelle Kraus
Theatrix/Sanctuary Woods
1250 45th Street, Suite 350
Emeryville, CA 94608

     Re: Rent Increase Suite 350

Dear Michelle,

Your present rent on Suite 350 is being increased per addendum #3 of your 
Lease dated 11/14/94:

YOUR NEW RENT ON SUITE 350 IS $5745.00 PER MONTH. EFFECTIVE DATE OF INCREASE 
4/15/98.

The rent breakdown for April is as follows:

     1/2 Present Rent $5381.00 =          $2690.50
     1/2 New Rent     $5745.00 =          $2872.50
                                          --------
     TOTAL APRIL RENT FOR SUITE 350 IS    $5563.00

TOTAL RENT DUE PER MONTH FOR THE EMERYVILLE BUSINESS CENTRE
     Suite 150          $  2094.00
     Suite 325          $  4463.00
     Suite 350          $  5745.00
                        ----------
     TOTAL MONTHLY RENT $12,302.00

On January 14,1998, I had a telephone conversation with Marge and she took 
all the information down as to what to pay in March, April, and May 1998.

If you have any questions, please give me a call.

Thank you,

/s/ Elayne M. Pieri
-------------------
Elayne M. Pieri
Property Manager
sent via fax: 658-2827
Fordham Properties Inc.
5835 Doyle St.
Suite 101
Emeryville, CA 94608
510 547-7177