<PAGE>


EXHIBIT 10.50





                            MARINA BAY BUSINESS PARK
                                  OFFICE LEASE



                                 By and Between



                        MARINA WESTSHORE PARTNERS, LLC
                   a California limited liability company




                                    and




                               QRS CORPORATION
                           a Delaware corporation




                          Dated as of May 15, 1998




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                                TABLE OF CONTENTS


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Section 1.   DEFINITIONS.....................................................    1
      1.1    Buildings.......................................................    1
      1.2    Common Area.....................................................    1
      1.3    Environmental Law...............................................    1
      1.4    Expiration Date.................................................    1
      1.5    Hazardous Material..............................................    1
      1.6    Interest Rate...................................................    2
      1.7    Lease Year......................................................    2
      1.8    Operating Expenses..............................................    2
      1.9    Permitted Use...................................................    3
      1.10   Premises........................................................    3
      1.11   Property........................................................    3
      1.12   Real Property Taxes.............................................    3
      1.13   Rentable Area...................................................    4
      1.14   Tenant Improvements.............................................    4
      1.15   Tenant's Share..................................................    4
      1.16   Term............................................................    4
Section 2.   LEASE OF PREMISES...............................................    4
      2.1    Premises........................................................    4
      2.2    Landlord's Reserved Rights......................................    4
      2.3    No Representations or Warrants..................................    4
Section 3.   TERM............................................................    5
      3.1    Initial Term....................................................    5
Section 4.   RENT: ADDITIONAL CHARGES........................................    5
      4.1    Fixed Monthly Rent and Additional Charges.......................    5
      4.2    Net Lease.......................................................    5
Section 5.   PAYMENT OF OPERATING EXPENSES...................................    5
      5.1    Payment By Tenant...............................................    5
      5.2    Manner of Payment...............................................    5
      5.3    Adjustments to Operating Expenses...............................    6
      5.4    Tenant's Inspection and Audit Rights............................    6
Section 6.   TAXES PAYABLE BY TENANT.........................................    6
Section 7.   CONDITION AND OPERATION OF THE BUILDING.........................    7
      7.1    As Is...........................................................    7
      7.2    Security........................................................    7
Section 8.   USE AND COMPLIANCE WITH LAWS....................................    7
      8.1    Use of Premises.................................................    7
      8.2    No Nuisance.....................................................    7
      8.3    Compliance with Laws and Insurance Requirement..................    7
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      8.4    Hazardous Materials.............................................    7
             (a) Prohibition on Use of Hazardous Materials...................    7
             (b) Permitted Hazardous Materials...............................    8
             (c) Compliance with Environmental Laws..........................    8
             (d) Routine Monitoring..........................................    8
             (e) Notice to Landlord..........................................    9
             (f) Landlord's Right to Participate............................     9
             (g) Tenant's Indemnity..........................................    9
             (h) Remedial Work...............................................   10
Section 9.   ALTERATIONS, TENANT'S PROPERTY, TENANTS WORK AND LIENS..........   10
      9.1    Alterations by Tenant...........................................   10
      9.2    Title to Alterations............................................   10
      9.3    Liens...........................................................   10
Section 10.  REPAIRS AND MAINTENANCE.........................................   11
      10.1   Landlord's Obligations..........................................   11
      10.2   Tenant's Obligations............................................   11
Section 11.  UTILITIES.......................................................   11
      11.1   Utilities.......................................................   11
      11.2   Interruption....................................................   11
Section 12.  DAMAGE OR DESTRUCTION............................................  12
      12.1   Loss Covered by Insurance.......................................   12
             (a) Repairs Which Can Be Completed Within Four (4) Months.......   12
             (b) Repairs Which Cannot Be Completed Within Four (4) Months....   12
      12.2   Loss Not Covered by Insurance...................................   13
      12.3   Destruction During Final Year...................................   13
      12.4   Destruction of Tenant's Personal Property, Tenant Improvements 
             or Property of Tenant's Employees...............................   13
Section 15.  INSURANCE AND INDEMNITY.........................................   13
      13.1   Insurance on Tenant's Property..................................   13
      13.2   Tenant's Liability Insurance....................................   14
      13.3   Fire and Extended Coverage Insurance............................   14
      13.4   Waiver of Subrogation...........................................   14
      13.5   Tenant's Indemnity..............................................   14
      13.6   Landlord's Indemnity............................................   15
Section 14.  EMINENT DOMAIN..................................................   15
      14.1   Effect of Taking................................................   15
      14.2   Award...........................................................   15
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     14.3    Abatement of Rent...............................................   15
Section 15.  SUBLEASE AND ASSIGNMENT.........................................   16
     15.1    Consent Required................................................   16
     15.2    Notice..........................................................   16
     15.3    Conditions of Approval..........................................   16
     15.4    Cost of Processing Requests.....................................   16
     15.5    Scope of Assignment.............................................   16
     15.6    Assumption of Obligations.......................................   17
     15.7    Excess Rent; Recapture Rights...................................   17
Section 16.  DEFAULT REMEDIES................................................   17
     16.1    Events of Default...............................................   17
             (a) Vacation or Abandonment.....................................   17
             (b) Nonpayment of Money.........................................   17
             (c) Other Obligations...........................................   18
             (d) Insolvency..................................................   18
     16.2    Notice to Tenant................................................   18
             (a) Nonpayment of Money.........................................   18
             (b) Other Obligations...........................................   18
     16.3    Remedy Upon Occurrence of Uncured Event of Default...............  18
     16.4    Damages Upon Termination........................................   19
     16.5    Computation of Rent and Other Amounts for Purposes 
             of Default......................................................   19
     16.6    Landlord's Right to Perform on Tenant's Breach..................   19
     16.7    Landlord's Defaults.............................................   20
             (a) Notice and Cures; Landlord's Liability......................   20
             (b) Recovery Against Landlord...................................   20
     16.8    Waiver; Remedies Cumulative.....................................   20
Section 17.  SUBORDINATION, ATTORNMENT AND ESTOPPELS.........................   21
     17.1    Subordination...................................................   21
     17.2    Attornment by Tenant; Non Disturbance...........................   21
     17.3    Certificates....................................................   21
Section 18.  FEES AND EXPENSES; PAYMENT......................................   22
     18.1    Interest On Past Due Obligations................................   22
     18.2    Late Charges....................................................   22
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Section 19.  ACCESS TO PREMISES..............................................   22
     19.1    Landlord Access.................................................   22
     19.2    NTI Access......................................................   22
Section 20.  NOTICES.........................................................   23
Section 21.  RULES AND REGULATIONS...........................................   23
Section 22.  SECURITY DEPOSIT................................................   24
Section 23.  SURRENDER OF PREMISES ON TERMINATION............................   24
Section 24.  MISCELLANEOUS...................................................   24
     24.1    Successors and Assigns..........................................   24
     24.2    Construction....................................................   25
     24.3    Integration.....................................................   25
     24.4    Light, Air, View, Signs, Etc....................................   25
     24.5    Holding Over....................................................   25
     24.6    Counterparts....................................................   26
     24.7    Broker's Commissions............................................   26
     24.8    Landlord's Consents.............................................   26
     24.9    Amendments......................................................   26
     24.10   Confidentiality.................................................   26
     24.11   Attorneys' Fees.................................................   26
     24.12   No Discrimination...............................................   27
Section 25.  PARKING AND SIGNAGE.............................................   27
     25.1    Parking.........................................................   27
     25.2    Signage.........................................................   27
Section 26.  EXPANSION OPTION................................................   27
Section 27.  OPTION TO EXTEND................................................   28
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                                       iv

<PAGE>

                            BASIC LEASE INFORMATION
                            MARINA BAY BUSINESS PARK
                                  OFFICE LEASE

Lease Date:                      Dated as of May 15, 1998

Landlord:                        Marina Westshore Partners, LLC, a 
                                 California limited liability company

Address of Landlord:             c/o Penterra Company
                                 1391 Marina Way South
                                 Richmond, CA 94804

Tenant:                          QRS Corporation, a Delaware corporation

Address of Tenant: (prior to     QRS Corporation
Commencement Date; thereafter    1400 Marina Way South
at the Premises:                 Richmond, CA 94804

Premises:                        Portion of Building C of Marina Bay Business 
                                 Park Phase I, Richmond, California, more 
                                 specifically set forth on the floor plan 
                                 attached as EXHIBIT A.

Rentable Area of the 
Premises:                        5,588 Square Feet

Term:                            The period from the Commencement Date to the 
                                 Expiration Date.

Commencement Date:               May 15, 1998.

Expiration Date:                 December 31, 2000.

Tenant's Share:                  4.34%

Fixed Rent (Monthly):            PERIOD OF TERM                    AMOUNT
                                 --------------                  ------------
                                 Commencement Date through       $8,550.00/mo.
                                 Expiration Date

Option to Extend:                One (1) five (5) year option, more 
                                 specifically set forth in Section 27 of this 
                                 Lease.

Security Deposit:                $8,550.00

Brokers:                         N/A

Exhibits:                        Exhibit A Floor Plan
                                 Exhibit B Legal Description
                                 Exhibit C Work Letter

NOTE: This Basic Lease Information is provided solely as a convenience to 
summarize certain Lease provisions and is not intended as a complete summary 
of all material terms and conditions of the Lease. In the event of any 
inconsistency between any information shown on this Basic Lease Information 
and the provisions of the Lease, the provisions of the Lease govern.

<PAGE>

                  MARINA BAY BUSINESS PARK OFFICE LEASE

     This Lease is made and entered in to as of the date specified in the 
Basic Lease Information, by and between MARINA WESTSHORE PARTNERS, LLC, a 
California limited liability company ("LANDLORD"), and the Tenant identified 
in the Basic Lease Information.

     IN CONSIDERATION OF THE MUTUAL COVENANTS AND AGREEMENTS CONTAINED IN 
THIS LEASE, THE PARTIES AGREE AS FOLLOWS:

SECTION 1. DEFINITIONS

     Certain terms used in this Lease and the Exhibits attached to this Lease 
shall have the meaning set forth below for each such term. Certain other 
terms shall have the meaning set forth elsewhere in this Lease and the 
Exhibits attached to this Lease.

     1.1 BUILDINGS. The three (3) office buildings and related improvements 
located on the real property described in EXHIBIT B attached to this Lease. 
Any enlargements to the Buildings or additional improvements on the real 
property described in EXHIBIT B attached to this Lease shall be included in 
the definition of Buildings for purposes of this Lease.

     1.2 COMMON AREA. All of the Property, excluding the Buildings.

     1.3 ENVIRONMENTAL LAW. Any federal, state or local law, ordinance or 
regulation or policy applicable to the Premises during the Term, relating to 
the environment, health and safety, any Hazardous Materials (including, 
without limitation, the use, handling, transportation, production, disposal, 
discharge or storage thereof) or to Tenant's use of the Premises, or to 
industrial hygiene or the environmental conditions on, under or about the 
Property, including, without limitation, soil, groundwater and indoor and 
ambient air conditions.

     1.4 EXPIRATION DATE. The Lease shall expire on December 31, 2000 
("Expiration Date"). The Expiration Date is subject to extension pursuant to 
the provisions of Section 27 of this Lease.

     1.5 HAZARDOUS MATERIAL. Any hazardous or toxic substance, material or 
waste the storage, use, or disposition of which is or becomes regulated by 
any local governmental authority with jurisdiction, the State of California 
or the United States Government during the Term. The term "Hazardous 
Material" includes, without limitation, any material or substance which is 
(i) defined during the Term as hazardous or extremely hazardous pursuant to 
Article 11 of Title 22 of the California Administrative Code, Division 4, 
Chapter 20, (ii) defined as a "hazardous waste" pursuant to Section 1004 of 
the Federal Resource Conservation and Recovery Act, 42 U.S.C. 6901 ET SEQ. 
(42 U.S.C. 6903), (iii) defined as a "hazardous substance" pursuant to 
Section 101 of the Comprehensive Environmental Response, Compensation and 
Liability Act 

                                   1
<PAGE>

42 U.S.C. 9601 ET SEQ. (42 U.S.C. 9601) or (iv) is listed or defined as a 
"hazardous waste", "hazardous substance", or other similar designation by any 
regulatory scheme of the State of California or the U.S. Government that is 
similar to the foregoing.

     1.6 INTEREST RATE. The per annum rate equal to the lesser of (i) the 
reference rate, or succeeding similar index, of Bank of America, N.T. & S.A. 
in effect from time to time plus two percent (2%), or (ii) the maximum rate 
allowed by applicable usury law.

     1.7 LEASE YEAR. A period of twelve (12) consecutive calendar months 
during the Term, commencing with the Commencement Date if the Commencement 
Date is the first day of a calendar month, or commencing with the first day 
of the month following the Commencement Date if the Commencement Date is not 
the first day of a calendar month. The first Lease Year shall include the 
period between the Commencement Date and the first day of the month following 
the Commencement Date if the Commencement Date is not the first day of a 
calendar month. The last Lease Year shall consist of the period between the 
date on which the Term expires or terminates and the day after the last day 
of the preceding Lease Year.

     1.8 OPERATING EXPENSES. All expenses and costs of every kind and nature 
actually incurred and paid by Landlord in, or properly allocable to, a 
calendar year, in connection with the ownership, management, operation, 
maintenance, repair and preservation of the Property. Specifically, but 
without limiting the generality of the foregoing, Operating Expenses shall 
include the following: (a) wages, salaries, payroll burdens and all related 
expenses and benefits of all on-site and off-site employees to the extent 
attributable to the operation, repair and maintenance of the Property; (b) 
all supplies, materials, tools and rental equipment to the extent used in 
connection with the ownership, operation, management, repair and maintenance 
of the Property; (c) property management fees and other costs of property 
management, maintenance and other services for the Property and the equipment 
therein which management fees shall not exceed four percent (4%) of gross 
rental revenues from the Property; (d) reasonable legal and accounting costs 
for the Property; provided, however, that legal expenses shall not include 
the cost of negotiating leases, termination of leases, extension of leases, 
legal costs incurred in proceedings against any specific tenant or in 
connection with any breach by Landlord of this Lease or refinancing of the 
Property; (e) premiums and all additional costs for all insurance carried 
with respect to the Property (whether or not such insurance is required to 
be carried pursuant to the terms of this Lease, but limited to the type and 
amount of insurance customarily carried by owners of property comparable to 
the Property); (f) costs of all repairs, service, service contracts and 
general maintenance of the Property; (g) all maintenance and operating costs 
for the Common Area and the cost of performing Landlord's maintenance and 
repair obligations as provided in Section 10; (h) all Real Property Taxes; 
(i) subject to the exclusion of capital items set forth below, all costs and 
expenses levied, incurred or required to be paid either directly or 
indirectly, in order to comply with laws, statutes, ordinances, rules and 
regulations or the requirements of governmental or public authorities with 
respect to the Property, or the operation of the Buildings, or any portion 
thereof such as parking facilities, sources of air pollution, traffic, storm 
water run-off or other adverse environmental effects, and transit taxes, 

                                  2

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assessments or fees; and (j) amortization of capital improvements made to the 
Property by Landlord which result in a net annual reduction to the operating 
costs of the Property, with amortization over such period as Landlord shall 
reasonably determine to be the projected useful life of such capital 
improvement, together with interest thereon at the rate paid by Landlord on 
funds borrowed for the purpose of making such capital improvements, or at the 
Interest Rate if Landlord does not borrow funds for such purpose. Operating 
Expenses shall exclude the following: (1) any depreciation of the Buildings or 
other improvements on the Property or of the equipment used in connection 
therewith; (2) any expense for which Landlord is reimbursed pursuant to any 
insurance policy, warranty or other means of recovery from third parties; (3) 
any costs (including permit, license and inspection fees) of improving space 
for any other tenant of the Buildings; (4) any real estate brokerage 
commissions or finders fees, advertising and promotional expenditures; (5) 
any capital improvements except those described in clause (k) above; (6) any 
rental under any ground or underlying lease; (7) any financing costs, 
including principal and interest payments; (8) any penalties, fines, interest 
or other charges attributable to the late payment of any Real Property Taxes 
or other Operating Expenses; (9) Landlord's general overhead and 
administrative expenses; (10) any expenses or costs incurred by Landlord as a 
result of special services, privileges or amenities provided to tenants on an 
individual basis rather than generally to all tenants; and (11) any expenses 
or costs incurred by Landlord with respect to facilities for the benefit of 
tenants of the Buildings other than Tenant. In calculating Operating 
Expenses, (i) the total Operating Expenses charged to the tenants of the 
Buildings shall in no event be greater than actual total Operating Expenses 
for the Property; (ii) no item of Operating Expenses shall be included more 
than once; (iii) Landlord shall comply with generally accepted accounting 
principles, consistently applied.

     1.9 PERMITTED USE. General office purposes and research and development. 
Tenant shall not use any portion of the Premises for any use that is 
currently categorized as a biolevel-3 or higher use, unless such use is 
permitted by the City of Richmond and all other governmental authorities with 
jurisdiction over the Property. Landlord shall cooperate with Tenant in 
obtaining any permits, licenses or other governmental approvals required or 
necessary for Tenant's business at the Premises.

     1.10 PREMISES. The portion of Property described in the Basic Lease 
Information and designated on EXHIBIT A, together with the appurtenant right 
to use the Common Area in common with the Yacht Club and other tenants of the 
Property, subject to the Rules and Regulations.     

     1.11 PROPERTY. The Buildings and that certain real property located in 
the City of Richmond, County of Contra Costa, State of California, more 
particularly described in EXHIBIT B hereto.

     1.12 REAL PROPERTY TAXES. "Real Property Taxes" includes: (i) all real 
estate taxes and assessments, and all other taxes relating to, or levied, 
assessed or imposed on, the Property, or any portion thereof, or interest 
therein; and (ii) all other taxes, assessments, charges, levies, fees, or 
penalties of any kind and nature imposed, levied, assessed, charged, 
conformed or collected by any governmental authority or other entity either 
directly or indirectly (A) for public


                                        3
<PAGE>

improvements, user, maintenance or development fees, transit, housing, 
police, fire, open space, streets, sidewalks, utilities, job training or 
other governmental services or benefits, and (B) upon or with respect to the 
development, possession, leasing, operation, management, maintenance, 
alteration, repair, use or occupancy of, or business operations in, the 
Property. All special or one-time assessments shall be amortized over the 
longest period allowed by the applicable taxing authority. Real Property 
Taxes shall exclude: (1) taxes or assessments against the personal property 
of Tenant or any other tenant of the Buildings; and (2) income, franchise, 
estate or gift taxes of Landlord.

     1.13 RENTABLE AREA. The number of square feet in the Buildings, or 
portions of the Buildings, calculated by Landlord, measured from the outside 
walls of the Buildings, calculated in accordance with the most recent 
American National Standard published by the Building Owners and Managers 
Association International. The Rentable Area of the Premises is set forth on 
the Basic Lease Information, shall be binding on Landlord and Tenant, and 
shall be adjusted if Landlord materially adjusts the size of the Buildings, 
calculated in accordance with the most recent American National Standard 
published by the Building Owners and Managers Association International.

     1.14 TENANT IMPROVEMENTS. The improvements to the Premises that may be 
constructed by Tenant during the Term of this Lease as to the unfinished 
portions of the Premises, including new restroom facilities, HVAC systems, 
drop ceilings and floor coverings pursuant to EXHIBIT C hereto.

     1.15 TENANT'S SHARE. The percentage share described in the Basic Lease 
Information, which is equal to the Rentable Area of the Premises divided by 
the Rentable Area of the Buildings (128,160).

     1.16 TERM. The period from the Commencement Date to the Expiration Date.

SECTION 2. LEASE OF PREMISES

     2.1 PREMISES. Landlord leases to Tenant and Tenant leases from Landlord 
the Premises, subject to and upon all the terms, covenants and conditions 
contained in this Lease.

     2.2 LANDLORD'S RESERVED RIGHTS. Landlord reserves the right, without 
unreasonable interference with Tenant's use and without diminution of 
Tenant's usable space or other rights hereunder, including but not limited to 
the right of access to alter or relocate any Building and any Common Area 
facility or any other common facility, and to make changes or alterations 
therein or enlargements thereof.

     2.3 NO REPRESENTATIONS OR WARRANTIES. Neither Landlord nor Landlord's 
agent have made any representations or warranties with respect to the 
Premises, the Property or this Lease except as expressly set forth in this 
Lease, and no rights, casements or licenses are or shall be acquired by 
Tenant by implication or otherwise unless expressly set forth in this Lease.


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<PAGE>

SECTION 3. TERM

     3.1 INITIAL TERM. This Lease shall be effective as of the date hereof. 
The Term shall commence on the Commencement Date set forth in the Basic Lease 
information and shall expire on the Expiration Date unless the Term is 
earlier terminated as provided in this Lease or extended as provided in this 
Lease. Notwithstanding the foregoing, if Landlord, for any reason, cannot 
deliver vacant possession of the Premises to Tenant as of the Commencement 
Date, the Commencement Date and Expiration Date shall be revised to conform 
to the date of Landlord's actual delivery of possession of the Premises. In 
such event, Landlord and Tenant shall execute a letter confirming the 
Commencement Date and Expiration Date of this Lease.

SECTION 4. RENT: ADDITIONAL CHARGES

     4.1 FIXED MONTHLY RENT AND ADDITIONAL CHARGES. Commencing on the 
Commencement Date, Tenant shall pay to Landlord Fixed Rent in the amounts and 
during the periods described in the Basic Lease Information. Fixed Rent 
shall be payable by Tenant in consecutive monthly installments on or before 
the first day of each month, in advance. If the Commencement Date occurs on a 
day other than the first day of a calendar month, or if the Expiration Date 
occurs on a day other than the last day of a calendar month, then the Fixed 
Rent for such fractional month shall be prorated upon a daily basis based 
upon a thirty (30) day calendar month. Tenant shall also pay to Landlord all 
Additional Charges required under this Lease ("ADDITIONAL CHARGES"), 
including without limitation all amounts due pursuant to the provisions of 
Section 5 and Section 6. Except as otherwise provided in this Lease, all 
payments of Fixed Rent and Additional Charges ("RENT") shall be made without 
prior demand or notice and without offset, deduction or counterclaim, in 
lawful money of the United States of America. Such payments shall be made at 
Landlord's Address.

     4.2 NET LEASE. Except as otherwise provided herein, this shall be a 
triple net lease and Rent shall be paid to Landlord absolutely net of all 
costs and expenses incurred by Landlord in the ownership, maintenance, 
management, repair, preservation and operation of the Property.

SECTION 5. PAYMENT OF OPERATING EXPENSES

     5.1 PAYMENT BY TENANT. Tenant shall pay to Landlord Tenant's Share of 
the Operating Expenses for each calendar year. The monthly estimated Tenant's 
Share of Operating Expenses is $1,173.48.

     5.2 MANNER OF PAYMENT. On or before the Commencement Date, with respect 
to estimated Operating Expenses payable during the first calendar year of the 
Term, and December 31 of each calendar year during the Term, or as soon 
thereafter as practicable, Landlord shall furnish to Tenant a statement 
setting forth the estimated Operating Expenses for the subsequent calendar 
year. On the Commencement Date, and on the first day of each calendar month 
during each ensuing calendar year, Tenant shall pay in advance to Landlord 
Tenant's Share of one-twelfth (1/12th) of the most recent estimated Operating 
Expenses; provided,


                                        5
<PAGE>

however, that if such notice is not given in December, Tenant shall continue 
to pay to Landlord Tenant's Share of one-twelfth (1/12th) of the Estimated 
Operating Expenses of the previous calendar year until the month after such 
statement is given. Within one hundred twenty (120) days after the end of 
each calendar year during the Term or as soon thereafter as practicable, 
Landlord shall furnish to Tenant a statement of the actual Operating Expenses 
for such calendar year. If Tenant's Share of the estimated Operating Expenses 
paid by Tenant during such calendar year is (x) less than Tenant's Share of 
the actual Operating Expenses for such period as shown on Landlord's 
statement, then Tenant shall pay the difference to Landlord within 30 days 
after the date of Landlord's statement, or (y) more than Tenant's Share of 
the actual Operating Expenses for such period, then Tenant shall be allowed a 
credit on future payments of Estimated Operating Expenses for the amount of 
such excess, or, if the statement is given by Landlord with respect to the 
calendar year in which the term expires, Landlord shall pay such excess to 
Tenant together with such statement.

     5.3 ADJUSTMENTS TO OPERATING EXPENSES. If at any time, but no more than 
once each calendar year, it appears to Landlord that the actual Operating 
Expenses for any calendar year during the Term will exceed the estimated 
Operating Expenses set forth in Landlord's statement to Tenant by more than 
five percent (5%), then Landlord shall have the right by notice to Tenant to 
revise the estimated Operating Expenses for such year and subsequent payments 
thereof shall, commencing with the first month after which Tenant receives 
such notice, be increased based upon such revised statement.

    5.4 TENANT'S INSPECTION AND AUDIT RIGHTS. Tenant or Tenant's authorized 
agent or representative, including a certified public accountant retained by 
Tenant, shall have the right to inspect the books and records of Landlord 
relating to Operating Expenses after giving reasonable prior written notice to 
Landlord and during the business hours of Landlord at Landlord's office at 
Marina Bay or at such other location in Richmond, California as Landlord may 
designate, for the purpose of verifying Landlord's statement of Operating 
Expenses.  If Tenant has an audit performed of such books and records by a 
certified public accountant and such audit reveals an overstatement of 
Operating Expenses by Landlord of more than five percent (5%), then Landlord 
shall, within thirty (30) days after receipt of such audit, reimburse to 
Tenant any excess Operating Expenses previously paid to Landlord by Tenant 
and Landlord shall reimburse Tenant for the cost of such audit.

SECTION 6. TAXES PAYABLE BY TENANT

     In addition to payment of Fixed Rent and Operating Expenses, Tenant shall 
pay prior to delinquency, any and all taxes, assessments, license fees, 
levies, businesses taxes, impositions, transit development fees, assessments 
or charges for housing funds, service payments, in lieu taxes or fees, and 
any other governmental fees, excises or charges of any kind or character, 
general and special, ordinary and extraordinary, whether or not customary or 
now within the contemplation of the parties hereto, levied against, upon, 
measured by or attributable to Tenant's use of the Premises, excluding Real 
Estate Taxes and taxes based upon Landlord's taxable income.


                                        6
<PAGE>

SECTION 7. CONDITION AND OPERATION OF THE BUILDING

     7.1 AS IS. Except as specifically provided for herein, Landlord 
represents and warrants, to its knowledge, that the Buildings and the 
Property are in compliance with all material requirements of all municipal, 
county, state and federal governmental authorities in effect as of the date 
of this Lease and that the Building systems supplying utilities and services 
to the Premises are in good working order and condition as of the 
Commencement Date. Except as so provided, no representation or warranty is 
made or shall be deemed made by Landlord concerning the nature, quality or 
suitability for Tenant's business of the Buildings or the Premises, and 
Tenant shall have no rights against Landlord by reason of such matters except 
as otherwise expressly set forth in this Lease.

     7.2 SECURITY. Tenant shall be solely responsible for security in the 
Premises. Landlord shall have no obligations regarding the security of the 
Premises or the Property.

SECTION 8. USE AND COMPLIANCE WITH LAWS

     8.1 USE OF PREMISES. Tenant shall use and occupy the Premises during the 
Term solely for the Permitted Use.

     8.2 NO NUISANCE. Tenant shall not suffer, permit or commit any waste, 
nor allow, suffer or permit any odors, vapors, steam, water, vibrations, 
noises or undesirable effects to emanate from the Premises or from any 
apparatus, equipment or installation in the Premises or outside the Premises 
which would violate any applicable governmental law, order, rule, ordinance 
or regulation. Tenant shall not allow, suffer or permit the Premises or any 
use thereof to constitute a nuisance or interfere with the safety, comfort 
or enjoyment of the Property by Landlord or any other occupants of the 
Buildings.

     8.3 COMPLIANCE WITH LAWS AND INSURANCE REQUIREMENTS. Tenant, at Tenant's 
sole cost and expense, shall comply during the Term with all applicable laws, 
orders, rules, ordinances and regulations of federal, state, county and 
municipal authorities. Tenant shall not do anything, or permit anything to be 
done, in or about the Premises that shall (a) invalidate or be in conflict 
with the provisions of any fire, public liability or other insurance policies 
covering the Buildings or any property located therein, or (b) subject 
Landlord to any liability or responsibility for injury to any person or 
property by reason of any business operation or other practice being 
conducted in the Premises. Notwithstanding the foregoing, unless arising as 
a result of its specific use of the Premises, Tenant need not perform any 
structural or other major renovations, improvements or additions to the 
Premises as part of such compliance.

     8.4 HAZARDOUS MATERIALS. Landlord and Tenant agree as follows with 
respect to the existence or use of Hazardous Materials on the Premises.

     (a) PROHIBITION ON USE OF HAZARDOUS MATERIALS. Subject to the provisions 
of Section 8.4(b) of this Lease, Tenant shall not use, generate, manufacture, 
produce, store, release, 


                                        7
<PAGE>

discharge, or dispose of, on, under or about the Premises or any part of the 
Property or transport to or from the Premises or any part of the Property any 
Hazardous Material or allow its employees, agents, contractors, licensees, 
invitees or subtenants (collectively, "TENANT'S AGENTS") to do so.

     (b) PERMITTED HAZARDOUS MATERIALS. Notwithstanding any other provision 
of this Lease, Tenant shall be permitted to use, generate, manufacture, 
produce and store in, and transport to and from the Premises Hazardous 
Materials so long as: (a) each of the Hazardous Materials is used, generated, 
manufactured, produced or stored in, or transported to and from, the Premises 
only to the extent necessary for Tenant's operation of its business at the 
Premises, and (b) the conditions set forth in this Section 8.4 are complied 
with.

     (c) COMPLIANCE WITH ENVIRONMENTAL LAWS. Tenant shall comply with and 
shall cause Tenant's Agents to comply with, and shall keep and maintain the 
Premises and cause Tenant's Agents to keep and maintain the Premises in 
compliance with, all Environmental Laws. Tenant shall, at its own expense 
prior to Tenant's use and occupancy, procure, maintain in effect and comply 
with all conditions of any and all permits, licenses and other governmental 
and regulatory approvals required for Tenant's use of the Premises. Tenant 
shall cause any and all Hazardous Materials removed from the Premises to be 
removed and transported solely by duly licensed handlers to duly licensed 
facilities for final disposal of such materials and wastes or as may otherwise 
be permitted under applicable Environmental Laws. Only materials that, under 
all applicable governmental laws, orders, rules, ordinances and regulations, 
may be disposed of into the drains are permitted to be put into the drains at 
the Premises. Tenant shall make available to Landlord for inspection and 
copying upon reasonable advance notice and during the business hours of 
Tenant each and all of the following to the extent the same are required by 
applicable law to be maintained on-site at the Premises: (a) a copy of each 
hazardous material management plan or similar document required by any 
federal, state or local governmental or regulatory authority to be submitted 
by Tenant; (b) copies of all permits, licenses and other governmental and 
regulatory approvals with respect to the use of Hazardous Materials; (c) 
copies of hazardous waste manifests reflecting the legal and proper disposal 
of all Hazardous Materials removed from the Premises; and (d) copies of all 
reports, studies and written results of tests or inspections concerning the 
Premises or any part of the Property with respect to Hazardous Materials 
(collectively "DOCUMENTS").

     (d) ROUTINE MONITORING. Upon commencing any activity involving Hazardous 
Materials on the Premises, and continuing thereafter throughout the Term, 
Tenant shall initiate and maintain any reporting and/or monitoring system 
required under all applicable Environmental Laws to ensure the routine 
monitoring of the levels of Hazardous Materials which may be present on, 
under or about the Premises or any part of the Property resulting from 
Tenant's activities. At Landlord's written request, Tenant shall provide 
Landlord copies of such reports, if any, as are provided by Tenant to any 
governmental agency.

          (1) LANDLORD'S RIGHT TO INSTALL TESTING WELLS. Provided it does not
     unreasonably interfere with Tenant's business operations on the Premises,
     Landlord may


                                        8

<PAGE>




    install permanent or other testing wells or devices at or about the Premises
    or any part of the Property, and may cause the ground water to be tested 
    to detect the presence of Hazardous Materials at least once every twelve 
    (12) months during the term of the Lease by use of such wells or devices 
    as are then customarily used for such purposes. The costs of any such 
    tests shall be borne solely by the Tenant if, following the initiation of 
    such testing, the presence of Hazardous Materials in violation of 
    Environmental Laws or this Lease is detected to the extent Tenant or 
    Tenant's Agents are responsible therefor. Tenant's obligations under this 
    Section 8.4(d)(1) shall survive for a period of one year after the 
    expiration or earlier termination of this Lease.

          (2) LANDLORD'S RIGHT TO INSPECT. Provided it does not unreasonably 
    interfere with Tenant's business operations on the Premises, Landlord, 
    Lender and their representatives shall have the right, at any time, but 
    not more often than once every six months, upon at least three (3) 
    business days' prior notice (except in an emergency) to enter the 
    Premises during Tenant's business hours to: (i) conduct any testing, 
    monitoring and analysis for Hazardous Materials; (ii) review any 
    Documents, materials, inventory, or notices to or from governmental or 
    regulatory authorities relating to Tenant's use of Hazardous Materials 
    at the Premises; and (iii) review all storage, use, transportation and 
    disposal facilities and procedures required to be maintained by 
    applicable law for the storage, use, transportation and disposal of 
    Hazardous Materials.

      (c) NOTICE TO LANDLORD. Tenant shall give written notice to Landlord 
    promptly after Tenant receives notice of any of the following: (i) any 
    proceeding or inquiry by, notice from, or order of any governmental 
    authority (including, without limitation, the California State Department 
    of Health Services) with respect to the presence of any Hazardous 
    Material on, under or about the Premises or any part of the Property or 
    the migration thereof from or to other property; and (ii) all claims made 
    or threatened by any third party against Tenant, the Premises or any part 
    of the Property relating to any loss or injury resulting from any 
    Hazardous Materials. Tenant shall give written notice to Landlord 
    promptly after Tenant becomes aware of any spill, release, discharge or 
    nonroutine disposal of Hazardous Materials of a reportable quantity with 
    respect to the Premises or operations at the Premises by Tenant or 
    Tenant's Agents. Tenant shall also promptly provide copies to Landlord of 
    all reports pertaining to the use, generation, manufacture, release, 
    discharge or disposal of Hazardous Materials on the Premises that tenant 
    provides to any governmental body or agency.

    (f) LANDLORD'S RIGHT TO PARTICIPATE. If Landlord is joined in any legal 
    proceeding or action affecting the Premises or any part of the Property 
    initiated in connection with any Environmental Law, and if such 
    proceeding or action is brought in connection with a Release (as defined 
    in Section 8.4(g) below) or Hazardous Materials by Tenant or Tenant's 
    Agents, Tenant shall defend Landlord, or at Tenant's option pay 
    Landlord's reasonable attorneys fees in connection therewith.

    (g) TENANT'S INDEMNITY. Tenant shall protect, defend, indemnify and hold 
    harmless Landlord, its directors, officers, partners, employees, agents, 
    successors and assigns from and

                                      9

<PAGE>

    against any and all claims, fines, judgements, penalties, losses, 
    damages, costs, expenses or liability (including reasonable attorneys' 
    fees and costs) to the extent directly arising out of or attributable to 
    the use, generation, manufacture, production, storage, release, 
    threatened release, discharge or disposal of any Hazardous Material on, 
    under or about the Premises or any part of the Property by Tenant or 
    Tenant's Agents or the transportation of any Hazardous Material to or 
    from the Premises (collectively, a "RELEASE") by Tenant or Tenant's 
    Agents including, without limitation: the costs of any investigation, 
    monitoring, removal, restoration, abatement, repair, cleanup, 
    detoxification or other ameliorative work of any kind or nature 
    (collectively "REMEDIAL WORK") and the preparation and implementation of 
    any closure, remedial or other required plans, as required by 
    Environmental Laws. For purposes of this Section 8.4(g), any acts or 
    omissions of Tenant or Tenant's Agents (whether or not they are 
    negligent, intentional, willful or unlawful) shall be strictly 
    attributable to Tenant. Tenant's obligations under this Section 8.4(g) 
    shall survive for a period of one year after the expiration or earlier 
    termination of this Lease.

      (h) REMEDIAL WORK. Upon any spill or release of a reportable quantity of 
    Hazardous Material by Tenant or Tenant's Agents, Tenant shall, subject to 
    Section 8.4(f) of this Lease, promptly notify Landlord of the spill or 
    release of Hazardous Material and shall, at its sole expense, commence to 
    perform and thereafter diligently prosecute to completion such Remedial 
    Work as required under Environmental Laws.


SECTION 9.  ALTERATIONS, TENANT'S PROPERTY, TENANT'S WORK AND LIENS

  9.1 ALTERATIONS BY TENANT. Tenant shall not make or allow to be be made any 
structural alterations, additions or improvements in or to the Premises 
whatsoever (collectively, "ALTERATIONS") without first (i) providing Landlord 
with copies of the plans and specifications for the Alterations, and (ii) 
obtaining Landlord's prior written consent, which consent shall not be 
unreasonably withheld. All Alterations undertaken by Tenant shall be done in 
accordance with the provisions of EXHIBIT C to this Lease.

  9.2 TITLE TO ALTERATIONS. Tenant's Improvements and any other Alterations, 
paid for by Tenant shall be Tenant's property during the Term. Except as 
expressly set forth below, upon expiration of the Term or termination of this 
Lease, all Alterations shall become the Property of Landlord and shall be 
surrendered to Landlord, in the condition required by this Lease.

  9.3 LIENS. Tenant shall keep the Premises and the Property free from any 
liens arising out of any (i) work performed by or for Tenant or any person 
claiming through or under Tenant or material furnished to or for the Premises 
before or during the Term by or for Tenant or any person claiming through or 
under Tenant, and (ii) obligations incurred by or for Tenant or any 
person claiming through or under Tenant before or during the Term. Landlord 
shall have the right at all times to post and keep posted on the Premises 
any notices permitted or required by law with respect to any mechanics', 
materialmen's and other liens. In addition to all other requirements 
contained in this Lease, Tenant shall give to Landlord at least ten (10) 
business days prior notice of commencement of any construction on the 
Premises.

                                 10

<PAGE>

SECTION 10. REPAIRS AND MAINTENANCE

  10.1 LANDLORD'S OBLIGATIONS. As a part of the consideration for the leasing 
of the Premises, and subject to the obligations of Tenant set forth in this 
Lease, Landlord shall maintain, in good condition, the following: (i) the 
Common Area, (ii) the foundations, (iii) exterior walls, (iv) the structural 
portions of the roof of the Buildings, (v) all window frames, (vi) all 
gutters and down spouts on the Building, and (vii) structural elements of the 
Buildings. Landlord shall have no obligation to commence any repairs or 
replacements hereunder until the expiration of fifteen (15) days following 
written notice from Tenant to Landlord of the need therefor. Notwithstanding 
the foregoing, in the event of any emergency, Landlord shall in good faith and 
with diligence to cause necessary repairs to be made as soon as possible. 
Except as set forth in Section 16.7 hereof, Tenant waives any right now or 
hereafter granted by law to make any repairs under this Section 10.1 upon 
Landlord's failure to do so hereunder. Except as set forth in Section 16.7 
hereof, Landlord shall not be liable for and, except as provided in Section 
12, there shall be no abatement of Rent with respect to any injury or to 
interference with Tenant's business arising from any repairs, maintenance, 
alteration or improvement in or to any portion of the Buildings, including 
the Premises, or in or to the fixtures, appurtenances and equipment therein. 
Except as otherwise expressly provided herein, Tenant hereby waives and 
releases its rights under Sections 1941, 1941.1, 1942 and 1942.5 of the 
California Civil Code or under any similar law now or hereinafter in effect.

  10.2 TENANT'S OBLIGATIONS. Tenant shall be solely responsible for all 
janitorial services for the Premises and may select persons to perform such 
services in its reasonable discretion. Tenant at its sole expenses shall 
clean, keep, and maintain in good order, condition, and repair and replace 
when necessary the Premises and every part thereof (but excluding only the 
items which Landlord is obligated to maintain, repair or replace under 
Section 10.1).


SECTION 11. UTILITIES

  11.1 UTILITIES. Landlord shall provide water, sewer, gas and electrical 
connections to the Premises and separate metering facilities therefor. Tenant 
shall promptly pay as the same becomes due, all charges for water, gas, 
electricity, telephone, sewer service, waste pickup and any other utilities, 
materials or services furnished directly to or used by Tenant on or about the 
Premises during the Lease Term.

  11.2 INTERRUPTION. If Tenant is unable to conduct its ordinary business 
activities in the Premises because of any failure or interruption of any 
utility to the Premises for a period in excess of thirty (30) consecutive 
days (except if due to the negligence or willful misconduct of Tenant's Agents 
or if due to Tenant's failure to make repairs to the Premises as required 
hereunder), unless Landlord is exercising commercially reasonable efforts to 
restore the utility, Tenant shall have the right to terminate this Lease, 
without any liability to Landlord, upon five (5) days' prior written notice. 
Nothwithstanding the foregoing, in the event such failure or interruption is 
caused by damage or destruction covered by Section 12 hereof, the provisions 
of Section 12 shall apply in lieu of the foregoing. Except as set forth in 
this Section or in Section 12

                                     11

<PAGE>

hereof, failure by Landlord to furnish any service herein specified or any 
cessation thereof due to accident, making of repairs, alterations or 
improvements, weather, unusual difficulty or ability to obtain services or 
supplies from sources usually used for the Property, labor difficulties or 
other causes beyond Landlord's reasonable control shall not render Landlord 
liable in any respect for damages of any kind, nor be construed as an 
eviction of Tenant nor work an abatement of Rent.

SECTION 12. DAMAGE OR DESTRUCTION

     12.1 LOSS COVERED BY INSURANCE. If, at any time prior to the expiration 
or termination of this Lease, the Premises or the Building in which the 
Premises are located is wholly or partially damaged or destroyed by a 
casualty, which loss to Landlord is (except for any applicable deductible) 
fully covered by insurance maintained by Landlord or for Landlord's benefit 
(or required to be maintained by Landlord pursuant to Section 13), which 
casualty renders the Premises totally or partially inaccessible or unusable 
by Tenant in the ordinary conduct of Tenant's business, then;

     (a) REPAIRS WHICH CAN BE COMPLETED WITHIN FOUR (4) MONTHS. Within twenty 
(20) days of notice to Landlord of such damage or destruction, Landlord shall 
provide Tenant with notice of its determination of whether the damage or 
destruction can be repaired within four (4) months of such damage or 
destruction without the payment of overtime or other premiums. If all repairs 
to such Premises or Building can, in Landlord's reasonable judgment, be 
completed within four (4) months following the date of such damage or 
destruction without the payment of overtime or other premiums, Landlord 
shall, at Landlord's expense, repair the same and this Lease shall remain in 
full force and effect and a proportionate reduction of the Rent shall be 
allowed Tenant for such portion of the Premises as shall be rendered 
inaccessible or unusable to Tenant, and which is not used by Tenant, during 
the period of time that such portion is unusable or inaccessible and not used 
by Tenant.

     (b) REPAIRS WHICH CANNOT BE COMPLETED WITHIN FOUR (4) MONTHS. If all 
such repairs to the Building and Premises cannot, in Landlord's reasonable 
judgment, be completed within four (4) months following the date of notice 
to Landlord of such damage or destruction without the payment of overtime or 
other premiums, Landlord shall notify Tenant of such determination and either 
Landlord or Tenant may, at its option, upon written notice to the other party 
given within thirty (30) days after the occurrence of such damage or 
destruction, elect to terminate this Lease as of the date of the occurrence 
of such damage or destruction. In the event that neither Landlord nor Tenant 
elects to terminate this Lease in accordance with the foregoing provisions, 
then Landlord shall, at Landlord's expense, repair such damage or 
destruction, and in such event, this Lease shall continue in full force and 
effect but the Rent shall be proportionately reduced as hereinabove provided 
in Section 12.1 (a); provided, however, that if any such repair is not 
commenced by Landlord within thirty (30) days after the occurrence of such 
damage or destruction or is not substantially completed by Landlord within 
eight (8) months after the occurrence of such damage or destruction, then in 
either such event Tenant may, at its option, upon written notice to Landlord, 
elect to terminate this Lease as of the date of the occurrence of such damage 
or destruction.


                                       12
<PAGE>

     12.2 LOSS NOT COVERED BY INSURANCE. If, at any time prior to the 
expiration or termination of this Lease, the Premises or the Building in 
which the Premises are located is totally or partially damaged or destroyed 
from a casualty, which loss to Landlord is not fully covered (except for any 
deductible) by insurance maintained by Landlord or for Landlord's benefit (or 
required to be maintained by Landlord pursuant to Section 13), Landlord may, 
at its option, upon written notice to Tenant within thirty (30) days after 
notice to Landlord of the occurrence of such damage or destruction, elect to 
restore or repair such damage or destruction, or Landlord may elect to 
terminate this Lease so long as Landlord terminates every other lease in the 
Building which was affected by the casualty. Notwithstanding the foregoing, 
Landlord may not elect to terminate this Lease if (i) the uninsured portion 
of the damage is less than ten percent (10%) of the replacement cost of the 
Building and/or (ii) Landlord does not elect to terminate the leases of all 
other tenants in the Building who are similarly affected by such damage 
and/or destruction. If Landlord elects to repair or restore such damage or 
destruction, this Lease shall continue in full force and effect but the Rent 
shall be proportionately reduced as provided in Section 12.1(a). If Landlord 
does not elect by notice to Tenant to repair such damage the Lease shall 
terminate. Notwithstanding the foregoing, if all repairs to the Premises or 
the Building cannot, in Landlord's reasonable judgment, be completed within 
four (4) months following the date of such damage or destruction without the 
payment of overtime or other expenses, then either Landlord or Tenant may at 
its option, upon written notice to the other party given within thirty (30) 
days after the occurrence of such damage or destruction, elect to terminate 
this Lease as of the date of the occurrence of such damage or destruction.

     12.3 DESTRUCTION DURING FINAL YEAR. Notwithstanding anything to the 
contrary contained in Sections 12.1 and 12.2 hereof, if the Premises or the 
Building in which the Premises are located is wholly or partially damaged or 
destroyed within the final twelve (12) months of the Term of this Lease, or, 
if the Option to Extend pursuant to Section 27 hereof has been exercised, 
during the last year of any Extended Term, so that Tenant shall be prevented 
from using the Premises for sixty (60) consecutive days due to such damage or 
destruction, then either Landlord or Tenant may, at its option, by notice to 
the other party within thirty (30) days after the occurrence of such damage 
or destruction, elect to terminate this Lease.

     12.4 DESTRUCTION OF TENANT'S PERSONAL PROPERTY, TENANT IMPROVEMENTS OR 
PROPERTY OF TENANT'S EMPLOYEES. In the event of any damage to or destruction 
of the Premises or the Building, under no circumstances shall Landlord be 
required to repair any injury, or damage to, or make any repairs to or 
replacements of Tenant's Improvements. Landlord shall have no responsibility 
for any contents placed or kept in or on the Premises or the Building by 
Tenant or Tenant's agents or employees.

SECTION 13. INSURANCE AND INDEMNITY

     13.1 INSURANCE ON TENANT'S PROPERTY. Tenant shall during the Term 
provide insurance coverage against loss or damage by fire and such other 
risks as are from time to time included in a standard of special extended 
coverage endorsement insuring Tenant's merchandise, trade fixtures, 
furnishings, equipment and all other items of personal property of Tenant.


                                      13
<PAGE>

     13.2 TENANT'S LIABILITY INSURANCE. Tenant shall procure at its sole cost 
and expense and keep in effect from the date of this Lease and at all times 
during the Term either comprehensive general liability insurance or 
commercial general liability insurance applying to the use or occupancy of 
the Premises, and contractual liability insurance applying to Tenant's 
indemnity obligations under this Lease with respect to bodily injury, 
property damage, or other loss covered by Tenant's liability insurance. Such 
coverage shall be written by insurance companies reasonably acceptable to 
Landlord and its Lender and shall have a minimum combined single limit of 
liability of at least two million dollars ($2,000,000.00). All such policies 
shall be written to apply to all bodily injury, property damage or other 
covered loss occurring during the policy term, shall be endorsed to add 
Landlord as an additional named insured, to provide that such coverage shall 
be primary and that any insurance maintained by Landlord shall be excess 
insurance only. All such insurance shall provide for severability of 
interests; shall provide that an act or omission of one of the named insureds 
shall not reduce or avoid coverage to the other named insureds; and shall 
afford coverage for all claims based on acts, omissions, injury and damage, 
which claims occurred or arose (or the onset of which occurred or arose) in 
whole or in part during the policy period.

     13.3 FIRE AND EXTENDED COVERAGE INSURANCE. Landlord shall maintain 
insurance on the Buildings and the Premises against damage by fire and those 
perils now specified in the most current standard extended coverage 
endorsement in an amount equal to the full insurable cost of the Buildings 
and the Premises, excluding any of Tenant's Improvements and Alterations, as 
reasonably determined by Landlord, exclusive of excavations and foundations 
and subject to such "deductibles" as Landlord may reasonably determine. In 
addition, Landlord shall maintain loss of rent insurance and a policy of 
commercial general liability and property damage insurance. All insurance 
proceeds payable under Landlord's insurance carried hereunder shall by 
payable solely to Landlord.

     13.4 WAIVER OF SUBROGATION. To the extent permitted by law and without 
affecting the coverage provided by insurance required to be maintained 
hereunder, Landlord and Tenant each waive any right to recover against the 
other on account of any and all claims Landlord or Tenant may have against 
the other with respect to any risk insured against by insurance actually 
carried, or required to be carried hereunder. Each casualty insurance policy 
carried by Landlord or Tenant hereunder, or which either may obtain with 
respect to the Premises or the Property independent of obligations hereunder, 
shall provide that the insurer waives all rights of recovery by way of 
subrogation against Landlord or Tenant in connection with all matters 
included within the scope of the waiver of recovery contained in this Section 
13.4.

     13.5 TENANT'S INDEMNITY. To the fullest extent permitted by law, Tenant 
shall indemnify Landlord, and its officers, directors, partners, employees, 
servants, and agents, and all mortgagees or beneficiaries of Landlord's 
interest in all or any portion of the Property, (collectively, "RELATED 
ENTITIES") against and save Landlord and its Related Entities harmless from 
and defend Landlord and Related Entities through attorneys reasonably 
satisfactory to Landlord from and against any and all claims, loss, cost 
liability, damage and expense including,


                                      14
<PAGE>

without limitation, penalties, fines and reasonable attorneys' fees 
(collectively, "CLAIMS"), incurred in connection with or arising in whole or 
in part from the activities of Tenant or Tenant's Related Entities, or any 
negligence or willful misconduct by Tenant or Tenant's Related Entities, 
excluding any Claims to the extent arising out of: (i) the negligence or 
willful misconduct of Landlord or Landlord's Related Entities, or (ii) 
Landlord's breach of this Lease.

     13.6 LANDLORD'S INDEMNITY. To the fullest extent permitted by law, 
Landlord shall indemnify Tenant and its officers, directors, shareholders, 
partners, employees, servants and agents (collectively "RELATED ENTITIES") 
against and save Tenant and its Related Entities harmless from and defend 
Tenant and its Related Entities through attorneys reasonably satisfactory to 
Tenant from and against any and all Claims incurred in connection with or 
arising in whole or in part from the activities of Landlord or Landlord's 
Related Entities or any negligence or willful misconduct of Landlord or 
Landlord's Related Entities, excluding any Claims to the extent arising out 
of: (i) the negligence or willful misconduct of Tenant or Tenant's Related 
Entities, or (ii) Tenant's breach of this Lease.

Section 14. EMINENT DOMAIN

     14.1 EFFECT OF TAKING. If all of the premises is condemned or taken in 
any manner before or during the Term for public or quasi-public use, or any 
transfer of the Premises is made in avoidance of an exercise of the power of 
eminent domain (each of which acts shall be referred to as a "TAKING"), this 
Lease shall automatically terminate as of the date of the vesting of title as 
a result of such taking. If a part of the Premises is so taken, this Lease 
shall automatically terminate as to the portion of the Premises so taken as 
of the date of the vesting of title as a result of such taking. If such 
portion of the Property is taken as to render the Property incapable of 
economically feasible operation or to require a substantial alteration or 
reconstruction of the remaining portions thereof, this Lease may be 
terminated by Landlord, as of the date of the vesting of title as a result of 
such taking, by written notice to Tenant within sixty (60) days following 
notice to Landlord of the date of which said vesting will occur. If such 
portion of the Premises is taken as, in the reasonable opinion of Tenant, to 
materially impair the ability of Tenant to use and conduct its business from 
the Premises, this Lease may be terminated by Tenant as of the date of the 
vesting of title as a result of such taking, by written notice to Landlord 
within sixty (60) days following notice to Tenant of the date of which said 
vesting will occur.

     14.2 AWARD. Landlord shall be entitled to the entire award for any 
taking; provided, however, that Landlord shall have no interest in any award 
made to Tenant for its leasehold interest, relocation expenses, the taking of 
personal property and fixtures belonging to Tenant or the interruption of or 
damage to Tenant's business, or attributable to improvements of the Premises 
actually paid by Tenant.

     14.3 ABATEMENT OF RENT. In the event of a partial or temporary taking 
that does not result in a termination of this Lease as to the entire 
Premises, the Rent shall abate in proportion to the portion of the Premises 
taken or rendered untenable by such taking. Tenant hereby waives 

                                  15

<PAGE>


and releases its rights under Section 1265.130 of the California Code of 
Civil Procedure or any similar statute now or hereafter in effect.

Section 15. SUBLEASE AND ASSIGNMENT

     15.1 CONSENT REQUIRED. Subject to Section 15.5 hereof, Tenant shall not 
sell, assign, encumber, pledge or otherwise transfer or hypothecate all or 
any part of the Premises or Tenant's leasehold estate hereunder (each such 
act is referred to herein as an "ASSIGNMENT"), or sublet the Premises or any 
portion thereof or permit the Premises to be occupied by anyone other than 
Tenant (each such act is referred to herein as a "SUBLEASE") without 
Landlord's prior written consent in each instance, which consent shall not be 
unreasonably withheld.

     15.2 NOTICE. Tenant shall have no right to enter into an Assignment or a 
Sublease unless Tenant shall have first requested in writing Landlord's 
consent to such Assignment or Sublease. Any request by Tenant for Landlord's 
consent to a specific Assignment or Sublease shall include (a) the name of 
the proposed assignee, subtenant or occupant, (b) the nature of the proposed 
assignee's, subtenant's or occupant's business to be carried on in the 
Premises, (c) a copy of the proposed Assignment or Sublease, and (d) such 
financial information as Landlord may reasonably request concerning the 
proposed assignee, subtenant or occupant or its business. 

     15.3 CONDITIONS OF APPROVAL. Without limiting the circumstances under 
which it may be reasonable for Landlord to withhold its consent to an 
Assignment or Sublease, it is expressly agreed that it shall be reasonable 
for Landlord to withhold its consent if Landlord reasonably determines that 
(i) the character or value of the Buildings are likely to be adversely 
affected during the Term as a result of such Assignment or Sublease, or (ii) 
the financial condition of the proposed new tenant or subtenant at the time 
of the proposed Assignment or Sublease is, in the reasonable opinion of 
Landlord, insufficient to meet the obligations of Tenant being assigned to 
such new tenant or subtenant.

     15.4 COST OR PROCESSING REQUEST. Tenant shall reimburse Landlord for 
Landlord's reasonable attorney's fees for the review and documentation of any 
proposed Assignment or Sublease within thirty (30) days after Landlord gives 
notice to Tenant of the amount thereof, together with reasonable documentation 
supporting such fees. 

     15.5 SCOPE of ASSIGNMENT. Any sale or other transfer of a majority of 
(i) the partnership interests in Tenant or any beneficial interest therein, 
if Tenant is a partnership, or (ii) the capital stock in Tenant or any 
beneficial interest therein, if Tenant is a corporation, shall be an 
Assignment for purposes of this Lease. The sale or other transfer of more 
than fifty percent (50%), by value, of the assets of Tenant used in 
conducting its business in the Premises shall also constitute an Assignment 
for purposes of this Lease. Notwithstanding anything to the contrary 
contained in this Section 15, Tenant may assign or sublet the Premises, or 
any portion thereof, without Landlord's consent, to any entity which controls,
is controlled by or is under common control with Tenant, or to any entity 
resulting from the merger or consolidation with Tenant, or to any entity 
which acquires all or substantially all the assets of Tenant as a going 
concern of the 

                                   16
<PAGE>

business that is being conducted on the Premises, and any such Assignment 
shall not be subject to the provisions of Section 15.7 below.

     15.6 ASSUMPTION OF OBLIGATIONS. Each assignee, subtenant or other 
transferee of all or a portion of Tenant's interest hereunder, other than 
Landlord, shall assume, as provided in this Section 15.6, all obligations of 
Tenant under this Lease and shall be and remain liable jointly and severally 
with Tenant for the payment of Rent, and for the performance of all the 
terms, covenants, conditions and agreements herein contained on Tenant's part 
to be performed during the Term; provided, however, that a sublessee shall 
be liable to Landlord for Rent only in the amount set forth in the Sublease.

    15.7 EXCESS RENT; RECAPTURE RIGHTS. Landlord's right to the portion of 
excess rent specified in this Section 15.7 is expressly reserved from the 
grant of Tenant's leasehold estate. Landlord shall have such right to such 
portion of the excess rent in the event of any Assignment or Sublease by any 
succeeding subtenant or assignee, regardless of whether (i) the instrument 
effecting any such Assignment or Sublease provides such right to Landlord, or 
(ii) Landlord has approved such an instrument which fails to provide such 
right to Landlord. If Landlord consents to any Assignment or Sublease, then 
Tenant shall pay to Landlord within five (5) business days after Tenant's 
receipt thereof, 50% of any and all consideration, as calculated pursuant to 
the following sentence, received by Tenant on account of such transaction, 
howsoever the same may be denominated, and in the case of Subleases, to the 
extent that such consideration exceeds the pro rata portion of the Fixed Rent 
and other charges payable by Tenant hereunder attributable to the sublet 
portion of the Premises, based on the net Rentable Area of the Premises and 
the net Rentable Area of the Premises sublet. In calculating the 
consideration subject to the preceding sentence, the following items shall be 
deducted therefrom: (a) the reasonable costs paid by Tenant for additional 
improvements installed in the portion of the Premises subject to such 
assignment or sublease by Tenant for the specific subtenant or assignee in 
question, amortized over the term of such assignment or sublease with interest 
thereon at the rate paid by Tenant on funds borrowed for the purpose of 
making such improvements or at the Interest Rate if Tenant does not borrow 
funds for such purpose and (b) reasonable leasing commissions paid by Tenant 
in connection with such assignment or subletting.

Section 16. DEFAULT: REMEDIES

     16.1 EVENTS OF DEFAULT. The occurrence of any of the following shall 
constitute an "EVENT OF DEFAULT" by Tenant;

     (a) VACATION OR ABANDONMENT. Abandonment of the Premises for a 
continuous period in excess of ninety (90) days.

     (b) NONPAYMENT OF MONEY. Failure to pay Rent or any other sum due and 
payable by Tenant under this Lease.

                                     17
<PAGE>


     (c) OTHER OBLIGATIONS. Failure to perform any term, obligation, 
condition, agreement or covenant under this Lease, other than nonpayment of 
money;

     (d) INSOLVENCY. The admission by Tenant in writing of its inability to 
pay its debts as they become due; the filing by Tenant of a petition seeking 
any reorganization, arrangement, composition, readjustment, liquidation, 
dissolution or similar relief under any present or future statute, law or 
regulation, the filing by Tenant of an answer admitting or failing timely to 
contest a material allegation of a petition filed against Tenant in any such 
proceedings or, if within thirty (30) days after the commencement of any 
proceeding against Tenant seeking any such relief, such proceeding shall not 
have been dismissed; the appointment of a receiver or trustee to take 
possession of all or substantially all of the assets of Tenant unless such 
appointment is vacated or annulled within sixty (60) days; a general 
assignment by Tenant for the benefit of creditors; any action or proceeding 
commenced by Tenant under any insolvency or bankruptcy act, or under any 
other statute or regulation having as its purpose the protection of 
creditors, or any such action commenced against Tenant and not discharged 
within thirty (30) days after the date of commencement, or the attachment, 
execution or other judicial seizure of all or substantially all of Tenant's 
assets or the Premises, if such attachment or other seizure remains 
undismissed or undischarged for a period of ten (10) days after the levy 
thereof.

     16.2 NOTICE TO TENANT. Upon the occurrence of any Event of Default, 
Landlord shall give Tenant written notice thereof, specifying the Event of 
Default and the provisions of this Lease breached by Tenant and Tenant shall 
have the right to cure such Event of Default within the time periods,if any,
hereinafter specified.

     (a) NONPAYMENT OF MONEY. For failure to pay Rent or any other sum, 
within ten (10) days after Landlord's notice.

     (b) OTHER OBLIGATIONS. For failure to perform any term, obligation, 
condition, agreement or covenant under this Lease, other than nonpayment of 
monies, thirty (30) days after Landlord's notice. Notwithstanding the 
foregoing, if such failure cannot reasonably be cured within such 30-day 
period, Tenant shall continue to have the right to cure and shall not be in 
default under this Lease if Tenant commences within such 30-day period such 
cure and thereafter diligently prosecutes the same to completion. No notice 
of cure period shall be required or applicable hereunder for any Event of 
Default specified in Section 16.1(d) except as expressly set forth in Section 
16.1(d) of this Lease.

     16.3 REMEDY UPON OCCURRENCE OF UNCURED EVENT OF DEFAULT. On the 
occurrence of an uncured Event of Default, Landlord shall have the right 
either (i) to terminate this Lease, and at any time thereafter recover 
possession of the Premises, or any part thereof, and expel and remove 
therefrom Tenant and any other person occupying the same, by any lawful 
means, and again repossess and enjoy the Premises without prejudice to any of 
the remedies that Landlord may have under this Lease, or at law or equity by 
reason of the Event of Default or of such termination, or (ii) to continue 
this Lease in effect for so long as Landlord does not so terminate Tenant's 
right to possession, and enforce all Landlord's rights and remedies under 
this Lease,


                                       18

<PAGE>


including the right to (A) recover Fixed Rent and Additional Charges as they 
become due, or (B) relet the Premises at such rental and upon such terms and 
conditions as Landlord, in its reasonable discretion, may deem advisable. Acts 
of maintenance, preservation or efforts to lease the Premises, the 
appointment of a receiver upon application of Landlord to protect Landlord's 
interest under this Lease, or re-entry or taking of possession of the 
Premises by Landlord hereunder, shall not constitute an election to terminate 
Tenant's right to possession unless specific written notice of such 
termination is given to Tenant hereunder. Notwithstanding any relating 
without termination, Landlord may at any time thereafter elect to terminate 
this Lease pursuant to this Section 16.3. Provided Tenant cooperates with 
Landlord, Landlord agrees to make reasonable efforts to mitigate its damages 
arising from an uncured Event of Default by Tenant.

     16.4 DAMAGES UPON TERMINATION. If Landlord terminates this Lease 
pursuant to Section 16.3, Landlord may exercise all rights and remedies 
available to a landlord at law or in equity, including, without limitation, 
the right to recover from Tenant: (i) the worth at the time of award of the 
unpaid Rent and other amounts payable by Tenant hereunder which had been 
earned at the time of termination; (ii) the worth at the time of award of the 
amount by which the unpaid Rent and such other amounts which would have been 
earned after termination until the time of the award exceeds the amount of 
loss of Rent and such other amounts that the Tenant proves could have been 
reasonably avoided; (iii) the worth at the time of award of the amount by 
which the unpaid Rent and such other amounts for the balance of the term 
after the time of the award exceeds the amount of loss of Rent and such other 
amounts that the Tenant proves could be reasonably avoided; and (iv) any 
other amount necessary to compensate Landlord for all the direct costs 
proximately caused by Tenant's failure to perform its obligations under this 
Lease or which, in the ordinary course of things, would be likely to result 
therefrom. The "worth at the time of award" of the amounts referred to in 
clauses (i) and (ii) shall be computed with Interest. The "worth at the time 
of award" of the amount referred to in clause (iii) shall be computed by 
discounting such amount at the discount rate of the Federal Reserve Bank of 
San Francisco, California, plus one percent (1%). As used herein "time of 
award" shall mean either the date upon which Tenant pays to Landlord the 
amount recoverable by Landlord as hereinabove set forth, or the date of entry 
of any determination, order or judgment, of any court or other legally 
constituted body determining the amount recoverable, whichever first occurs.

     16.5 COMPUTATION OF RENT AND OTHER AMOUNTS FOR PURPOSES OF DEFAULT. For 
purposes of Section 10.4, unpaid Rent and other amounts which would have 
accrued and become payable under this Lease shall consist of the sum of: 
(i) the total Fixed Rent for the balance of the Term, plus (ii) a computation 
of Tenant's Share of the Operating Expenses for the balance of the Term.

     16.6 LANDLORD'S RIGHT TO PERFORM ON TENANT'S BREACH. In addition to any 
other right or remedy of Landlord hereunder, upon the occurrence of an 
uncured Event of Default and without waiving or releasing Tenant from any 
obligation of Tenant hereunder, Landlord may (but shall not be required) to 
cure such uncured Event of Default for the account of Tenant.


                                   19


<PAGE>

Landlord shall not be responsible or liable to Tenant for any loss or damage 
that may be caused to Tenant's stock or business by reason of effecting cure 
hereunder, unless caused by the gross negligence or willful misconduct of 
Landlord or Landlord's Agents. All sums paid by Landlord and all costs and 
expenses incurred by Landlord in connection with such cure (including 
attorneys' fees), together with interest thereon at the Interest Rate from 
the respective dates of Landlord's payment of each item of cost or expenses, 
shall be payable by the Tenant on demand.

     16.7 LANDLORD'S DEFAULTS.

     (a) NOTICE AND CURES; LANDLORD'S LIABILITY. If Landlord fails to perform 
any of its obligations under this Lease, then Tenant shall give Landlord 
written notice thereof, specifying with particularity the breach claimed by 
Tenant. Except for Landlord's failure to make repairs required under Section 
10.1, Landlord shall have the right to cure such breach during the 30-day 
period following receipt of Tenant's notice hereunder, unless such breach 
cannot reasonably be cured within such 30-day period, in which event Landlord 
shall not be in default under this Lease if Landlord commences within such 
30-day period such cure and thereafter diligently prosecutes the same to 
completion. Notwithstanding the foregoing, if such breach causes immediate 
damage to Tenant's personal property or the ordinary conduct of Tenant's 
business, such as roof leaks, Landlord shall use commercially reasonable 
efforts to cure such breach as soon as possible. In addition, in the event 
Landlord fails to cure such breach within the time period set forth herein, 
Tenant shall have the right, but not the obligation, to cure such breach and 
the reasonable costs and expenses incurred by Tenant in connection with such 
cure, together with interest thereon at the Interest Rate from the respective 
date(s) of Tenant's payment of each item of cost or expense, shall be payable 
by Landlord upon demand. If the Premises, or any portion thereof, are at any 
time subject to any mortgage or a deed of trust, and either Landlord or the 
mortgagee or beneficiary has notified Tenant of the existence of such 
mortgage or deed of trust, Tenant shall serve on the mortgagee or beneficiary 
thereunder concurrent copies of any notice of default served on Landlord 
hereunder at the last address for such mortgagee or beneficiary of which 
Tenant has received notice from Landlord.

     (b) RECOVERY AGAINST LANDLORD. Tenant shall look solely to Landlord's 
interest in the Property for the recovery of any judgment against Landlord. 
Landlord, or if Landlord is a partnership, its partners whether general or 
limited, or if Landlord is a corporation, its directors, officers and 
shareholders, shall not be personally liable for any such judgment. 

     16.8 WAIVER; REMEDIES CUMULATIVE. Failure of Landlord or Tenant to 
declare an Event of Default immediately upon the occurrence thereof, or delay 
in taking any action in connection therewith, shall not waive such Event of 
Default, but Landlord or Tenant shall have the right to declare any such 
Event of Default at any time thereafter. No waiver by Landlord or Tenant of 
an Event of Default, or any agreement, term, covenant or condition 
contained in this Lease, shall be effective or binding on the other party 
unless made in writing and no such waiver shall be implied from any omission 
by Landlord or Tenant to take action with respect to such Event of Default or 
other such manner.


                                      20




<PAGE>

SECTION 17. SUBORDINATION, ATTORNMENT AND ESTOPPELS

     17.1 SUBORDINATION. Without the necessity of any additional document 
being executed by Tenant for the purpose of effecting a subordination, this 
Lease, and all of Tenant's rights under this Lease, shall be subject and 
subordinate at all times to the lien of any mortgage or deed of trust or 
other security instrument (and any advances or interest thereunder) that may 
now exist or hereafter be executed in any amount for which the Property or 
any portion thereof, is specified as security, and all modifications, 
renewals, supplements, consolidations and replacements thereof, provided that 
the rights of Tenant herein are not disturbed so long as Tenant is not in 
default. If any such mortgagee or beneficiary so elects in writing, then this 
Lease shall be superior to the lien of the mortgage or deed of trust held by 
such mortgagee or beneficiary, whether this Lease is dated or recorded before 
or after such mortgage or trust deed. Tenant shall promptly execute and 
deliver, upon demand by Landlord and in substantially the form reasonably 
requested by Landlord, any additional documents evidencing the priority or 
subordination of this Lease, provided such documents contain the 
nondisturbance agreement described in Section 17.2 hereof.

     17.2 ATTORNMENT BY TENANT: NON DISTURBANCE.  Upon enforcement of any 
rights or remedies under any mortgage or deed of trust to which this Lease is 
subordinated (including, without limitation, proceedings for judicial or 
power of sale foreclosure, or deed in lieu of foreclosure delivered by 
Landlord to the mortgagee or beneficiary thereunder), Tenant shall attorn to 
the purchaser or transferee under such right or remedy and recognize such 
purchaser or transferee as Landlord under this Lease. If Tenant attorns 
hereunder, then, so long as there is no uncured Event of Default, Tenant 
shall not be disturbed in its possession of the Premises. Tenant shall 
execute and deliver any reasonable document or instrument required by such 
purchaser or transferee confirming the attornment hereunder.

     17.3 CERTIFICATES. Tenant, at any time during the Term and from time to 
time, shall execute, acknowledge and deliver to Landlord, addressed (at 
Landlord's request) to any prospective purchaser or mortgagee of any part of 
the Property a certificate stating: (a) that Tenant has accepted the Premises 
(or, if Tenant has not done so, that Tenant has not accepted the Premises and 
specifying the reasons therefor), (b) the Commencement Date and Expiration 
Date of this Lease, (c) that this Lease is unmodified and in full force and 
effect (or, if there have been modifications, that this Lease is in full 
force and effect as modified and stating the modifications), (d) whether or 
not Tenant is aware of any then existing defenses against the enforcement of 
any of the obligations of Tenant under this Lease (and, if so, specifying 
same), (e) whether or not Tenant is aware of any then existing defaults by 
Landlord in the performance of its obligations under this Lease (or acts or 
omissions which would constitute defaults if uncured after notice), and, if 
so, specifying same, (f) the dates, if any, to which the Rent and Additional 
Charges and other amounts under this Lease have been paid, (g) Tenant's use 
of and knowledge with respect to Hazardous Materials under, over and upon the 
Premises, and (h) any other information and statements that may reasonably be 
required by Landlord. In addition, Landlord, at any time during the Term and 
from time to time upon reasonable request by Tenant, 


                                      21

<PAGE>

shall execute, acknowledge and deliver to Tenant, addressed to Tenant, a 
certificate containing, if true, the matters described in the foregoing items 
(b), (c), (f), and any other information and statements that may reasonably 
be required by Tenant. It is intended that any such certificate of Tenant may 
be relied upon by any prospective purchaser or mortgagee of all or any part 
of the Property. 

SECTION 18. FEES AND EXPENSES; PAYMENT

     18.1 INTEREST ON PAST DUE OBLIGATIONS. Unless otherwise specifically 
provided herein, any amount due from Tenant to Landlord under this Lease 
(including, without limitation, any payment of Rent) which is not paid within 
ten (10) after written notice to Tenant (except no notice need be given for 
failure to make any payment of Fixed Rent) shall bear interest from the due 
date until paid at the Interest Rate. The payment of such interest shall not 
alone excuse or cure any default under this Lease.

     18.2 LATE CHARGES. Tenant acknowledges that late payment by Tenant to 
Landlord of Rent will cause Landlord to incur costs not contemplated by this 
Lease, the exact amount of such costs being extremely difficult and 
impracticable to fix. Such costs include, without limitation, processing and 
accounting charges, and late charges that may be imposed on Landlord by the 
terms of any encumbrance and note secured by any encumbrance covering the 
Premises. Therefore, in addition to the provisions of Section 18.1, if any 
installment of Rent due from Tenant is not received within ten (10) days 
after written notice to Tenant (except no notice need be given for failure to 
make any payment of Fixed Rent) by Landlord, Tenant shall pay to Landlord an 
additional sum of five percent (5%) of the overdue Rent as a late charge. The 
parties agree that this late charge represents a fair and reasonable estimate 
of the costs that Landlord will incur by reason of late payment by Tenant.

SECTION 19. ACCESS TO PREMISES

     19.1 LANDLORD ACCESS. Landlord reserves for itself and its agents, 
employees and independent contractors the right to enter the Premises at all 
reasonable times and upon reasonable notice (i) to inspect the Premises, 
(ii) to supply any service to be provided by Landlord to Tenant hereunder, 
(iii) to show the Premises to prospective purchasers, mortgagees or tenants, 
(iv) to post notices of non-responsibility, (v) to determine whether Tenant is 
complying with its obligations under this Lease, (vi) to alter, improve or 
repair the Premises or any other portion of the Buildings and (vii) for any 
other lawful purpose not inconsistent with Tenant's rights hereunder. Any 
entry by Landlord or Landlord's Agents pursuant to this section shall, except 
in the case of any emergency, be upon forty-eight (48) hours' advance notice 
to Tenant. Landlord shall comply with Tenant's security, safety and other 
procedures applicable to the Premises and shall not unreasonably interfere 
with Tenant's use of the Premises or the conduct of Tenant's business therein 
while in the Premises. Provided Landlord complies with the requirements of 
this section, Tenant hereby waives any claim for damages for any injury or 
inconvenience to or interference with Tenant's business, any loss of 
occupancy or quiet enjoyment of the Premises, any right to abatement of Rent, 
or any other loss occasioned by

                                      22

<PAGE>

Landlord's exercise of any of its rights under this Section 19, unless caused 
by the negligence or willful misconduct of Landlord or its agents, employees 
or contractors. Landlord shall have the right to use any and all means that 
Landlord may reasonably deem necessary or proper in order to obtain entry to 
any portion of the Premises in an emergency.

     19.2 NTI ACCESS. Tenant acknowledges that the Fire Department for the 
City of Richmond may require an emergency access exit through the hallways of 
the Premises for the benefit of Neurobiological Technologies, Inc. (""NTI''), 
the tenant occupying space adjacent to Tenant, and agrees to cooperate with 
the Fire Department and NTI to provide such emergency access exit through the 
hallways of the Premises in the event such emergency access is required. 
Tenant agrees to cooperate with NTI in order to develop safety and security 
procedures and systems for emergency access through the doors separating the 
Premises and the premises occupied by NTI.

SECTION 20. NOTICES

     Except as otherwise expressly provided in this Lease, any bills, 
statements, notices, demands, requests or other communications given or 
required to be given under this Lease shall be effective only if rendered or 
given in writing, and either sent by overnight delivery service or registered 
or certified mail, return receipt requested, addressed (a) to Tenant (i) at 
the Premises, or (ii) at Tenant's last known address or at any place where 
Landlord believes that Tenant or any agent or employee of Tenant may be 
found, if sent subsequent to Tenant's vacating, deserting, abandoning or 
surrendering the Premises, (b) to Landlord at Landlord's Address, or (c) to 
either Landlord or Tenant at such other address as either Landlord or Tenant 
may designate as its new address for such purpose by notice given to the 
other in accordance with the provisions of this Section 20. Any such bill, 
statement, notice, demand, request or other communications shall be deemed to 
have been rendered or given (i) on the date it is officially recorded as 
delivered to the intended recipient by return receipt or equivalent, and, in 
the absence of such record of delivery, the effective date shall be presumed 
to have been the third (3rd) business day after the date when it shall have 
been deposited in the mail as provided in this Section 20 if sent by 
registered or certified mail. If Tenant is notified of the identity and 
address of any mortgagee of Landlord, Tenant shall give to such mortgagee by 
registered or certified mail written notice of any default by Landlord or 
failure by Landlord to perform any of its obligations hereunder.

SECTION 21. RULES AND REGULATIONS

     Tenant shall faithfully observe and comply with the rules and 
regulations for the Buildings, a copy of which has been provided to Tenant, 
and all reasonable modifications thereof and additions thereto which are 
applicable to multiple tenants and which do not adversely affect Tenant in a 
material way from time to time put into effect by Landlord. Landlord shall 
have the right to promulgate different rules and regulations applicable to 
different portions of the Buildings, but Landlord shall not have the right to 
promulgate different rules and regulations applicable only to Tenant. If 
there is any conflict between the terms of the rules and regulations and any 
provision of this Lease, the terms of this Lease shall govern. Landlord shall 
not be responsible

                                      23







<PAGE>

for the nonperformance by any other tenant or occupant of the Buildings of 
any of such rules and regulations.  Landlord's consent where required under 
the rules and regulations shall not be unreasonably withheld, conditioned or 
delayed.

SECTION 22.  SECURITY DEPOSIT

    Tenant agrees to deposit with Landlord the Security Deposit, if any, set 
forth in the Basic Lease Information upon execution of this Lease, as 
security for Tenant's faithful performance of its obligations under this 
Lease.  Landlord and Tenant agree that the Security Deposit may be commingled 
with other funds of Landlord.  If Tenant fails to pay any Rent or other 
amount when due and payable under this Lease, or fails to perform any of the 
terms hereof, Landlord may appropriate and apply or use all or any portion of 
the Security Deposit for Rent payments or any other amount then due and 
unpaid, for payment of any amount for which Landlord has become obligated as 
a result of Tenant's default or breach, and Landlord may so apply or use this 
deposit without prejudice to any other remedy Landlord may have by reason of 
Tenant's default or breach.  If Landlord so uses any of the Security Deposit, 
Tenant shall, within ten (10) days after written demand therefor, restore the 
Security Deposit to the full amount originally deposited; Tenant failure to 
do so shall constitute an act of default hereunder.  If Tenant performs all 
of tenant's obligations hereunder, the Security Deposit, or so much thereof 
as has not theretofore been applied by Landlord, shall be returned to Tenant 
(or to the last permitted assignee, if any, of Tenant's interest hereunder) 
within fifteen (15) days after the end of the Lease.  If Landlord sells its 
interest in the Premises, Landlord shall deliver this deposit to the 
purchaser of Landlord's interest and thereupon be relieved of any further 
liability or obligation with respect to the Security Deposit.

SECTION 23.  SURRENDER OF PREMISES ON TERMINATION

    On the Expiration Date or earlier termination of the Term, Tenant shall 
quit and surrender the Premises to the Landlord, broom clean, in good order, 
condition and repair as required by Section 10.1, ordinary wear and tear, 
fire and other casualties, acts of God or other causes beyond the control of 
the Tenant excepted, and Tenant shall comply with the provisions of Section 
9.2 of this Lease.  Unless Landlord expressly agrees in writing to the 
contrary, Tenant shall remove all machinery, equipment, trade fixtures and 
materials that Tenant has placed on the Premises and Tenant shall repair any 
and all damage to the Premises caused by Tenant's removal of such equipment, 
machinery, trade fixtures and materials.

SECTION 24.  MISCELLANEOUS

    24.1  SUCCESSORS AND ASSIGNS.  Subject to the provisions of Section 15 
regarding assignment and subleasing by Tenant, the terms, covenants and 
conditions contained in this Lease shall bind and inure to the benefit of 
Landlord and Tenant and, except as otherwise provided herein, their 
respective personal representatives and successors and assigns; provided, 
however, that upon the sale, assignment or transfer by Landlord (or by any 
subsequent landlord) 

                                   24

<PAGE>

of its interest in the Buildings or the property as owner or lessee, 
including any transfer upon or in lieu of foreclosure or by operation of law, 
Landlord (or subsequent landlord) shall be relieved from all subsequent 
obligations or liabilities under this Lease.  Provided that Landlord delivers 
the Security Deposit, if any, to its successor, Landlord shall have no 
further liability to Tenant with respect thereto.

    24.2  CONSTRUCTION.  This Lease shall be governed by and construed in 
accordance with the laws of the State of California.  Any actions or 
proceedings brought under this Lease, or with respect to any matter arising 
under or out of this Lease, shall be brought and tried only in courts located 
in the County of Contra Costa, California (excepting appeal courts).

    24.3  INTEGRATION.  The terms of this Lease are intended by the parties 
as a final expression in their agreement with respect to such terms as are 
included in this Lease, and may not be contradicted by evidence of any prior 
or contemporaneous agreement, arrangement, understanding or negotiation 
(whether oral or written).  The parties further intend that this Lease 
constitute the complete and exclusive statement of its terms, and no 
extrinsic evidence whatsoever may be introduced in any judicial proceeding 
involving this Lease.  The language in all parts of this Lease shall in all 
cases be construed as a whole and in accordance with its fair meaning and not 
restricted for or against any party.

    24.4  LIGHT, AIR, VIEW, SIGNS, ETC.  Tenant covenants and agrees that no 
diminution of light, air or view, or any impairment of the visibility of the 
Premises from inside or outside the Buildings, by any structure or other 
object that may be hereafter erected (whether or not by Landlord) shall 
entitle Tenant to any reduction of Rent under this Lease, constitute an 
actual or constructive eviction of Tenant, result in any liability of 
Landlord to Tenant, or in any other way affect this Lease or Tenant's 
obligations hereunder.  Landlord shall have the exclusive right to use all 
exterior walls, roofs and other portions of the Buildings for signs, notices 
and other reasonable promotional purposes.  Tenant shall not place or allow 
to be placed in, on or about the Buildings any sign or other notice 
indicating Tenant's desire to assign this Lease or sublet the Premises.

    24.5  HOLDING OVER.  If Tenant remains in possession of the Premises 
after the expiration of the Term with the express written consent of Landlord 
and without executing a new lease, then such holding over shall be deemed a 
tenancy from month-to-month, subject to all conditions, provisions and 
obligations of this Lease.  No holding over by Tenant after the Term shall 
operate to extend the Term.  In the event of any unauthorized holding over, 
Landlord and Tenant agree that Landlord's damages, including any claims for 
damages by any other tenant to whom Landlord may have leased all or any part 
of Premises, would be difficult to establish.  Landlord and Tenant desire to 
liquidate the damages payable to Landlord in the event Tenant holds over 
after the term without Landlord's consent and therefore agree upon damages 
payable by Tenant to Landlord in a daily amount of the monthly Fixed Rent in 
effect immediately prior to holding over, which daily amount shall increase 
by five percent (5%) per day but in no event more than 100%, such that for 
example, on the tenth day, the increase for

                                     25

<PAGE>

such day would be 50%.  Landlord and Tenant agree that the above described 
formula to establish damages is fair and reasonable. 

    24.6  COUNTERPARTS.  This Lease may be executed in one or more 
counterparts, each of which shall be deemed an original, but all of which 
together shall constitute one and the same instrument.

    24.7  BROKER'S COMMISSION.  Landlord shall pay all brokers commissions 
payable to the Brokers listed in the Basic Lease Information in connection 
with this transaction.  Tenant represents and warrants that other than such 
Brokers, Tenant has not entered into any agreement or incurred or created any 
obligation which might require Landlord to pay any broker's commission, 
finder's fee or other commission or fee relating to the leasing of the 
Premises, unless disclosed to and accepted by Landlord in writing before the 
date hereof, and Tenant shall defend, indemnify and hold harmless Landlord 
from and against any claims for any such commissions or fees by anyone 
claiming by or though Tenant.

    24.8  LANDLORD'S CONSENTS.  Unless otherwise expressly provided in this 
Lease, all consents and approvals to be given by Landlord may be withheld for 
any reason or no reason, at Landlord's sole discretion, and any such action 
shall not be deemed inconsistent with any covenant of good faith and fair 
dealing otherwise implied by law to be a part of this Lease.  Landlord's 
failure to respond to a request for consent or approval from tenant with 
thirty (30) days (or such other period as may be provided in this Lease) 
shall be deemed to constitute the granting of such consent or approval.

    24.9  AMENDMENTS.  No amendments or modifications of this lease or any 
agreements in connection therewith shall be valid unless in writing duly 
executed by both Landlord and Tenant.

    24.10  CONFIDENTIALITY.  Landlord shall keep and maintain as confidential 
and shall not disclose to third parties all information, documents and other 
data supplied by Tenant to Landlord pursuant to or in connection with this 
Lease that Tenant identifies as confidential at the time Tenant provides such 
information to Landlord; provided, however, that Landlord may disclose such 
information, documents and other data to its counsel and consultants who 
agree to keep it confidential and to the extent required by applicable 
governmental laws, orders, rules, ordinances and regulations.

    24.11  ATTORNEYS' FEES.  If either party becomes a party to any 
litigation concerning this Lease, the Premises, or the Property by reason of 
any act or omission of its authorized representative, the party that causes 
the other party to become involved in the litigation shall be liable to the 
party involved for reasonable attorneys' fees and court costs incurred by it 
in the litigation.  If either party commences an action against the other 
party arising out of or in connection with this Lease, or institutes any 
proceeding in a bankruptcy or similar court which has jurisdiction over the 
other party or any or all of its property or assets, the prevailing party 
shall be entitled to have and 

                                 26



<PAGE>

recover from the losing party reasonable attorneys' fees and court costs. 
"PREVAILING PARTY" within the meaning of this Section 24.11 shall include a 
party who dismisses an action for recovery hereunder in exchange for payment 
of the sums allegedly due, performance of covenants allegedly breached or 
consideration substantially equal to the relief sought in the action.

     24.12 NO DISCRIMINATION. There shall be no discrimination against or 
segregation of any person or group of persons, on account of race, color, 
creed, religion, sex, marital status, national origin, or ancestry, in the 
leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of 
the Premises, nor shall Tenant or any person claiming under or through 
Tenant, establish or permit any such practice of discrimination or 
segregation with reference to the selection, location, number, use, or 
occupancy, of tenants, lessees, sublessees, subtenants, or vends in the 
Premises affecting the Premises. Landlord shall deliver to Tenant a copy of 
(a) any Covenants, Conditions and Restrictions affecting the Premises; and 
(b) any rules and regulations governing Tenant's use of the Premises. Tenant 
hereby acknowledges receipt of the aforementioned documents.

SECTION 25. PARKING AND SIGNAGE

     25.1 PARKING. During the Term, Tenant shall have the non-exclusive right 
to three (3) parking spaces per 1,000 square feet of the Rentable Area in the 
Premises (18 spaces). The parking spaces shall be in the areas designated by 
Landlord from time to time for non-exclusive Tenant parking. Tenant shall 
abide by any and all reasonable parking regulations and rules applicable to 
multiple tenants established from time to time by Landlord.

     25.2 SIGNAGE. Tenant shall not affix, paint, erect or inscribe any sign, 
projection, awning, or advertisement of any kind to any part of the Premises, 
Building or Property, including, without limitation, the inside or outside of 
windows or doors, without the written consent of Landlord which shall not be 
unreasonably withheld, conditioned or delayed so long as such signage is 
consistent with signage generally approved by Landlord for the Property.

SECTION 26. EXPANSION OPTION

     26.1 OPTION. Provided this Lease is in full force and effect and Tenant 
is not in default hereunder, Tenant shall have the option ("Expansion 
Option") from the date of this Lease until May 31, 2000 to lease all and not 
part of the adjacent space in the Building currently occupied by NTI, 
consisting of approximately 6,912 square feet of space (the "Expansion 
Space"), upon Tenant's receipt of written notice from Landlord ("Expansion 
Space Notice") stating that the Expansion Space has become available for 
lease by Tenant. If Tenant fails to exercise the Expansion Option within 
thirty (30) days following Tenant's receipt of the Expansion Space Notice, 
the Extension Option shall lapse and be of no further force and effect. NTI's 
current lease with Landlord expires on April 30, 1999 with an option by NTI 
to extend its lease with Landlord for an additional year. Accordingly, Tenant 
acknowledges that the Expansion Space may never become available. TENANT 
HEREBY FURTHER ACKNOWLEDGES AND AGREES THAT BY EXERCISING ITS EXPANSION 
OPTION HEREUNDER, TENANT SHALL BE DEEMED TO HAVE EXERCISED ITS OPTION TO EXTEND


                                      27

<PAGE>

THIS LEASE PURSUANT TO SECTION 27 BELOW FOR AN ADDITIONAL FIVE (5) YEAR TERM 
COMMENCING UPON THE EXPIRATION OF THE INITIAL TERM OF THIS LEASE.

     26.2 EXPANSION SPACE COMMENCEMENT DATE. The "Expansion Space 
Commencement Date" shall occur on the earlier of (i) the date Tenant enters 
into occupancy of all or any portion of the Expansion Space for the purpose 
of conducting Tenant's business thereon or (ii) the date which shall occur 
sixty (60) days after Landlord delivers vacant possession of the Expansion 
Space to Tenant. Notwithstanding anything contained herein to the contrary, 
(i) Landlord shall not be obligated to lease and deliver the Expansion Space 
to Tenant if at the time of Landlord's Expansion Space Notice or if, at or 
prior to delivery of the Expansion Space, an Event of Default shall have 
occurred and be continuing hereunder and (ii) in the event Landlord shall not 
deliver possession of all or any portion of the Expansion Space to Tenant on 
or before the Expansion Space Commencement Date for any reason other that the 
willful default of Landlord. Landlord shall not be deemed in default of or 
otherwise liable to Tenant for any claims, damages or liabilities in 
connection therewith and the Term of this Lease with respect to the Expansion 
Space shall commence on the date Landlord delivers possession of the 
Expansion Space to Tenant; provided however that if the Expansion Space to 
Tenant; provided however that if the Expansion Space is not available by 
reason of the holding over or the retention of possession by any tenants or 
occupants thereof, Landlord shall promptly and diligently take all steps 
which are commercially reasonable to obtain possession thereof.

     26.3 EXPANSION SPACE TERMS. In the event Tenant exercises its Expansion 
Option as provided herein, from and after the Expansion Space Commencement 
Date, The Premises shall thereafter include the Expansion Space and this 
Lease shall continue on the same terms and conditions except that (i) the 
fixed Monthly Rent shall be an amount equal to $19,125,000 and (ii) Tenant's 
Share of Operating Expenses and Real Estate Taxes shall increase to 9.75% to 
reflect the inclusion of the Expansion Space in the Premises. The Expansion 
Space shall be delivered in its "AS IS" condition and Landlord shall have no 
obligation to perform any work or alternations in order to prepare the 
Expansion Space for Tenant's initial occupancy.

SECTION 27. OPTION TO EXTEND

     Provided this Lease is in full force and effect and Tenant is not in 
default hereunder, Tenant shall have the right to extend the Term of this 
Lease for one (1) five (5) year term ("Extended Term") upon prior written 
notice to Landlord given not later than six (6) months prior to the 
expiration of the initial Term ("Extension Notice") unless previously 
exercised by Tenant under Section 26 of this Lease. It is understood and 
agreed that Tenant's submittal of Tenant's Extension Notice shall bind Tenant to
a five (5) year extension of this Lease. The Extended Term shall be on the same 
terms and conditions as provided in this Lease, except that (i) Tenant shall 
occupy the Premises in its then "AS IS" condition and (ii) if Tenant has not

<PAGE>

exercised its Expansion Option in Section 26 above, the Fixed Monthly Rent 
for the extended Term shall be as follows:

<TABLE>
<CAPTION>
                  YEAR                       FIXED MONTHLY RENT
                  ----                       ------------------
                  <S>                        <C>
                  January 1, 2001 -          $8,807.00
                  December 31, 2001

                  January 1, 2002 -          $9,071.00
                  December 31, 2002

                  January 1, 2003 -          $9,343.00
                  December 31, 2003

                  January 1, 2004 -          $9,623.00
                  December 31, 2004

                  January 1, 2005 -          $9,912.00
                  December 31, 2005

</TABLE>

     In the event Tenant has exercised its Expansion Option in Section 26 
above, the Fixed Monthly Rent shall be as follows:

<TABLE>
<CAPTION>
                  YEAR                       FIXED MONTHLY RENT
                  ----                       ------------------
                  <S>                        <C>
                  January 1, 2001 -          $19,699.00
                  December 31, 2001

                  January 1, 2002 -          $20,290.00
                  December 31, 2002

                  January 1, 2003 -          $20,898.00
                  December 31, 2003

                  January 1, 2004 -          $21,525.00
                  December 31, 2004

                  January 1, 2005 -          $22,171.00
                  December 31, 2005

</TABLE>

<PAGE>

     IN WITNESS WHEREOF, Landlord and Tenant have each caused their duly 
authorized representatives to execute this lease on their respective behalf 
as of the day and year first above written.

LANDLORD:

MARINA WESTSHORE PARTNERS, LLC,
a California limited liability company

By: /s/ Richard R. Poe
   -------------------------------
     Richard R. Poe, Its Manager

TENANT:

QRS CORPORATION,
a Delaware corporation

By: /s/ Shawn O'Connor
   -------------------------------
   Name:  Shawn O'Connor
   Title: Chief Operating Officer








<PAGE>







                                   EXHIBIT A
                                   ---------

                                   FLOOR PLAN









<PAGE>






                                   EXHIBIT B
                                   ---------

                               LEGAL DESCRIPTION











<PAGE>


                                   EXHIBIT B
                                   ---------

ORDER NO. 19003



The land referred to in this report is situated in the state of California, 
County of CONTRA COSTA, and is described as follows:

CITY OF RICHMOND

PARCELS A AND C OF SUBDIVISION N.S. 758-89, FILED OCTOBER 3, 1989, IN BOOK 
142 OF PARCEL MAPS, PAGES 36 & 37, CONTRA COSTA COUNTY RECORDS.

EXCEPTING THEREFROM:

EXCEPTING FROM A PORTION OF THE ABOVE DESCRIBED PARCEL:

ALL OIL, GAS AND OTHER HYDROCARBON AND MINERAL SUBSTANCES LYING NOT LESS THAN 
500 FEET BELOW THE SURFACE OF SAID LAND, PROVIDED THAT GRANTOR, ITS 
SUCCESSORS AND ASSIGNS SHALL NOT HAVE THE RIGHT TO GO UPON THE SURFACE OF 
SAID LAND FOR THE PURPOSE OF EXTRACTING SAID OIL, GAS OR OTHER HYDROCARBON 
AND MINERAL SUBSTANCES, NOR FOR ANY PURPOSE IN CONNECTION THEREWITH, BUT 
SHALL HAVE THE RIGHT TO EXTRACT AND REMOVE SAID OIL, GAS AND OTHER 
HYDROCARBON AND MINERAL SUBSTANCE BY MEANS OF SLANT DRILLED WELLS OR SIMILAR 
METHODS LOCATED ON ADJACENT OR NEARBY LAND OR BY OTHER MEANS WHICH SHALL NOT 
REQUIRE ENTRY UPON THE SURFACE OF SAID LAND, AS RESERVED IN THE DEEDS FROM 
SANTA FE LAND IMPROVEMENT COMPANY, RECORDED SEPTEMBER 16, 1977, IN BOOK 3506, 
PAGES 381 AND 415, OFFICIAL RECORDS.

ALSO EXCEPTING FROM A PORTION OF THE ABOVE DESCRIBED PARCEL:

ALL OIL, GAS, MINERALS AND GEOTHERMAL ENERGY EXISTING 500 FEET BELOW THE 
SURFACE OF THE LANDS CONVEYED BY THIS DEED TO THE RICHMOND REDEVELOPMENT 
AGENCY, HOWEVER, THIS RESERVATION OF RIGHTS TO SAID OIL, GAS, MINERAL AND 
GEOTHERMAL ENERGY SHALL NOT INCLUDE ANY RIGHTS TO UTILIZE THE SURFACE OF THE 
LANDS CONVEYED HEREIN FOR ACCESS: THE RESERVED RIGHT TO EXPLOIT SAID OIL, 
GAS, MINERAL AND GEOTHERMAL ENERGY IS LIMITED TO SLANT DRILLING OR SIMILAR 
METHODS FROM ADJACENT OR NEARBY PROPERTIES WITH SAID DRILLING TO BE AT LEAST 
200 FEET BELOW THE SURFACE OF SAID CONVEYED LANDS, AND IN ANY EVENT SUCH 
SLANT DRILLING SHALL BE DONE IN A MANNER AND AT SUCH DEPTH AS TO NOT ENDANGER 
THE SAFETY OF ANY IMPROVEMENTS ERECTED HEREAFTER UPON THE LANDS CONVEYED 
HEREIN, AS EXCEPTED IN THE DEED FROM THE REGENTS OF THE UNIVERSITY OF 
CALIFORNIA, A PUBLIC CALIFORNIA CORPORATION, RECORDED MARCH 29, 1979, IN BOOK 
9283, OR, PAGE 983.

ASSESSOR'S PARCEL NO. 560-181-036


<PAGE>


                                   EXHIBIT C
                                   ---------

                                  WORK LETTER


     The Work Letter is incorporated into and made a part of that certain 
Marina Bay Business Park Office Lease between Marina Westshore Partners, LLC 
and QRS Corporation. All initial-capitalized terms used in this Work Letter 
and not otherwise defined herein shall have the meanings ascribed to them 
elsewhere in the Lease.

                                   ARTICLE 1
                              GENERAL PROVISIONS
                              ------------------

     1.1 TENANT IMPROVEMENTS.  Tenant shall plan, design and construct 
certain office improvements (the "Tenant Improvements") in accordance with 
the provisions of this Work Letter and all other applicable terms and 
conditions of the Lease.

     1.2 TENANT'S WORK.  The planning, design and construction of the Tenant 
Improvements are referred to collectively as "Tenant's Work."

     1.3 COSTS OF THE WORK.  For purposes of this Work Letter, "Costs of the 
Work" shall mean and include all: (a) architect's, engineer's and consultants'
fees and costs; (b) deposits, fees and costs for building and other permits, 
licenses and approvals; (c) tests and inspections; (d) security; (e) insurance
and bond premiums; (f) utilities; (g) all amounts payable to any contractors, 
subcontractors, suppliers and vendors; and (h) all other charges, fees, 
expenses and other costs incurred or arising in connection with any 
particular work.

     1.4 CONSTRUCTION STANDARDS.  The Tenant Improvements shall be 
constructed by Tenant in a good and workmanlike manner, free from material 
defects in workmanship and materials and in accordance with Section 9 of this 
Lease and all applicable laws.

                                   ARTICLE 2
                               IMPROVEMENT PLANS
                               -----------------

21. PLANS FOR TENANT IMPROVEMENTS.  Tenant agrees at Tenant's sole cost and 
expense, to perform the Tenant's Work in accordance with drawings, 
specifications and other plans necessary for the development, approval and 
construction of the Tenant Improvements (collectively, the "Plans") 
reasonably approved by Landlord, Landlord shall have the right to reasonably 
approve the general contractor for Tenant's Work. Tenant shall submit the 
Plans for Tenant's Work to Landlord and shall reimburse Landlord for all 
reasonable costs which Landlord may incur in connection with the granting 
approval of Tenant's Work. Landlord shall, within thirty (30) days of receipt 
of the Plans, approve or disapprove the Plans. In the event of disapproval, 
Landlord shall state its reasons for disapproval and the parties thereafter 
shall work together in good faith to reach prompt agreement upon 
modifications to the Plans. Tenant shall file a notice of completion after 
completion of Tenant's Work and provide Landlord with a copy thereof.

     2.2 EFFECT OF LANDLORD'S ACCEPTANCE.  Tenant acknowledges that 
Landlord's review of the Plans are not being undertaken solely for Landlord's 
benefit, and Landlord shall not be