<PAGE>

                               OFFICE SPACE LEASE

         This Office  Space Lease is dated this 31st day of May,  1995,  between
KGK Enterprises, Inc., a California corporation organized and existing under the
laws of the State of California  ("Landlord") and Seagull  Entertainment,  Inc.,
("Tenant").

                             BASIC LEASE PROVISIONS

         The  following  provisions  shall be  referred  to in this Lease as the
"Basic  Lease  Provisions."  The terms set forth in the Basic  Lease  Provisions
shall be defined terms and shall have a meaning  consistent with the Basic Lease
Provisions when used in this Lease consisting of the Basic Lease Provisions, the
Standard Lease Provisions and the Exhibits and/or Addenda attached hereto.

         a.       Tenant:           Seagull Entertainment, Inc.

         b.       Building:         Cornerstone Plaza
                                    1990 South Bundy Drive
                                    Los Angeles, California 90025

         Building Rentable Area:    164,311 square feet of office space.

         c.      Premises:

         (1)     Floor: Seventh (7th)

         (2)     Suite: 725

         (3)     Rentable Area: 2,804 rentable square feet

         d.      Basic Rent:

         (a)     Annual Basic Rent: $58,884.00

         (b)     Monthly Basic Rent: $4,907.00

         e.      Increases in Annual Basic Rent: None.

         f.      Tenant's Building Expense Percentage: 1.71%

         g.      Tenant's Expense Stop Base or Base Year: 1995

         h.      Rent Abatement: One and one half months (1 1/2) of free rent.

         i.      Term:

         (1)     Length of Term: Five (5) years.

         (2)     Estimated Commencement Date: June 23, 1995

         j.      Option to Extend: One (1) five (5) year Option to Extend at
                 Fair Market Value and six (6) months written notice.

         k.      Prepaid Rent: $4,907.00

         1.      Security Deposit: $4,907.00

         m.      Tenant Improvement Allowance: Refer to Exhibit B herein.

                                      -1-
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         n.      Broker: Beitler Commercial Realty Services -- Lark Christensen
         o.      Guarantor: Paul Siegel and Henry Siegel (Jointly and Severally)
         p.      Permitted Use: General Office.
         q.      Parking Spaces:

         (1)    On-site:    Three (3) unreserved  permits for every 1,000
                            rentable  square feet leased at  prevailing
                            building rates.

         (2)    Off-site:   N/A

         r.      Building Directory Board: Tenant at Tenant's expense, may
                 purchase one directory strip for the directory board in the
                 main building lobby.

         s.      Addresses for Payments and Notice:

         (1)     If to Landlord:

                            KGK Enterprises, Inc.
                            c/o Trammell Crow Company
                            1990 South Bundy Drive
                            Los Angeles, California 90025

         (2)     If to Tenant:

                 To the Premises.

                                       -2-

<PAGE>

                               OFFICE SPACE LEASE
                            STANDARD LEASE PROVISIONS

ARTICLE I                           PREMISES.

     Landlord  leases to Tenant,  and Tenant  leases from Landlord the Premises,
shown in the drawing attached to this Lease as Exhibit "A" and by this reference
incorporated  herein,  in  the  Building,   which  Building  together  with  the
underlying  land,   landscaping,   plaza  area,  parking  facilities  and  other
improvements  are  referred  to in this  Lease as the  "Project".  This Lease is
subject to all of the terms,  covenants  and  conditions  set forth in the Basic
Lease Provisions, the Standard Lease Provisions, and the Exhibits and/or addenda
attached to this Lease.

     1.2 Right of First  Offer.  If during the first  thirty  (30) months of the
Initial  Lease Term,  the 2,478  square foot space  immediately  adjacent to the
Premises on the seventh floor  ("Additional  Space") shall become  available for
lease  and  provided  that  Tenant  is not then in  default  of any of its Lease
obligations and has not assigned the Lease or sublet the entire Premises, Tenant
shall  hare the  first  right  option to lease the  Additional  Space.  When the
Additional  Space  becomes  available,  or at Landlord's  option,  up to six (6)
months  prior to the date  that the  Additional  Space is  scheduled  to  become
available,  Landlord. Shall first offer in writing to lease such space to Tenant
upon the same  terms  and  conditions  and at the same  rental  rate as would be
offered by Landlord  to third  parties.  If within five (5) days after  Landlord
delivers to Tenant such written offer if,  Landlord  does not receive  notice in
writing that Tenant elects to lease all of the  Additional  Space and within ten
(10) days thereafter Tenant does not execute a lease amendment incorporating all
of the terms of this Lease,  except as said provisions are clearly  inapplicable
to the  Additional  Space,  then  Landlord  shall  have the  right to lease  the
Additional Space (or any part thereof) to a third party.  Provided,  however, if
during the initial term, the  Additional  Space becomes  available  after it has
been  initially  leased to a third party,  then Tenant's  right pursuant to this
paragraph shall continue.

     Additionally,  if after Landlord has first offered the Additional  Space to
Tenant and Tenant has refused to lease said  Additional  Space and then Landlord
decides  to offer said  Additional  Space to third  parties at a Rental  Rate in
excess of ten percent  (10%) below  Landlord's  original  offer to Tenant,  then
Landlord  must offer said  Additional  Space to Tenant at this lower rate.  Upon
Landlord's  delivery of such written offer,  Tenant shall have three (3) days to
elect to exercise said option by providing Landlord written notice of its intent
to lease said  Additional  Space. If Landlord does not receive notice in writing
that Tenant elects to lease all of the Additional Space and within ten (10) days
thereafter  Tenant does not execute a lease  amendment on the Additional  Space,
then  Landlord  shall  have the right to lease the  Additional  Space to a third
party.

ARTICLE II                            TERM.

     2.1  Commencement  Date.  The term shall  commence  on the  earliest of the
following three dates, which earliest date shall be referred to in this Lease as
the "Commencement Date":

          (a) The  seventh  day  following  the  Beneficial  Occupancy  Date (as
     defined in Section 2.4 below);

          (b) The date when Tenant  enters or occupies  the Premises for any use
     other than for purposes of  construction  of  improvements or inspection of
     the Premises under construction; or

                                      -3-
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          (c) The date upon which the parties agree as the Commencement Date.

     When the Commencement Date is ascertained as above, the term shall commence
and upon request of Landlord,  Tenant shall execute a certificate  or memorandum
confirming the  Commencement  Date and the Expiration  Date. Upon termination of
this  Lease,  whether  upon  expiration  of the  entire  term of this  Lease  or
otherwise, Tenant agrees to execute and deliver to Landlord within ten (10) days
after written request therefor any documents  reasonably required by Landlord to
confirm or evidence the termination of this Lease.

     2.2 Measurement of Lease Term and Expiration  Date. The Lease term shall be
for the number of years  and/or  months set forth in the Basic Lease  Provisions
measured from the Commencement  Date if such date is the first day of a calendar
month or otherwise  measured from the first day of the calendar month  beginning
after the Commencement  Date, which date shall be the "Measurement Date" of this
Lease.  The Lease term shall  include any period of less than one (1) month from
the  Commencement  Date  to the  first  day  of the  next  calendar  month.  The
"Expiration  Date" shall be the last day of the last  calendar  month  occurring
upon  lapse of the  number of years  and/or  months  stated  in the Basic  Lease
Provisions as Length of Term measured from the Measurement Date. The period from
the  Commencement  Date  through  and  including  the  Expiration  Date shall be
referred to in this Lease as the "Term".

     2.3 Estimated  Commencement  Date.  The Basic Lease  Provisions  contain an
Estimated  Commencement  Date  stating  the  date on which  Landlord  reasonably
believes the  Premises  will be available  for  beneficial  occupancy by Tenant.
Landlord shall use all reasonable  efforts to make the Premises available on the
Estimated  Commencement  Date;  provided,  however,  that  Landlord  and  Tenant
acknowledge that delays or time savings which are beyond the control of Landlord
may cause the  Commencement  Date to occur on a date  other  than the  Estimated
Commencement Date. Accordingly, failure of the Commencement Date to occur on the
Estimated Commencement Date shall not affect the terms, conditions,  validity or
commencement  of this Lease,  and Landlord shall have no liability to Tenant for
any loss,  cost,  expense or  liability  arising out of or related to failure of
this Lease to commence on the Estimated Commencement Date.

     2.4 Beneficial  Occupancy Date. The Premises shall be deemed  available for
beneficial occupancy when all of the following conditions have been satisfied:

          (a) Landlord has placed in operating condition the plumbing,  heating,
     air conditioning and electrical systems serving the Premises;

          (b) Landlord  shall have  substantially  completed all of the work, if
     any,  required  to be  performed  by  Landlord  pursuant to any Work Letter
     Agreement attached to this Lease as an exhibit; provided, however, that the
     date of such  substantial  completion  shall be  advanced  by any period of
     delay which Landlord  determines  has been caused by Tenant  (including any
     delay referred to in the Work Letter Agreement as Tenant Delay). If no Work
     Letter  Agreement is attached to this Lease,  then this condition  shall be
     deemed satisfied; and

          (c) Any  previous  tenant or  occupants  of the  Premises  shall  have
     vacated the Premises.

     The date when the Premises are available for beneficial  occupancy shall be
the "Beneficial Occupancy Date."

     2.5 Option to Renew.  Tenant shall have the right, at its option, to extend
the term for (1)  period  of five (5)  years  (the  "Option  Term")  immediately
following the expiration of the initial term. Tenant shall exercise its right to
extend the Term by  delivery  of  written  notice to  Landlord  at least six (6)
months prior to the then scheduled  Expiration  Date of the Term. This Option to
Extend is personal to Tenant and may not be exercised by any assignee or

                                       -4-

<PAGE>

subtenant  of Tenant,  even if  Landlord  has  consented  to the  assignment  or
subletting.

          (a)  Incorporation  of Lease by Reference, All of the terms, covenants
     and conditions  (including  without  limitation  defined terms contained in
     this Lease shall be  applicable to the Option Term in the event of exercise
     by Tenant.

          Term,  Annual Basic Rent and the Monthly  Basic Rent shall be modified
     as provided  herein and Tenant shall not be entitled to any further  option
     to extend this Lease.

          (b) Rent.  Subject to  adjustment  as hereafter  provided,  the Annual
     Basic Rent for the Option Term  should be  adjusted to one hundred  percent
     (100%) of the Prevailing  Market Rent,  described  below. The Monthly Basic
     Rent shall be adjusted to one-twelfth  (1/12} of the adjusted  Annual Basic
     Rent.

          (c)  Prevailing  Market Rent.  The  "Prevailing  Market Rent" shall be
     equal to the then  prevailing  market rate for  comparable  office space in
     first class office  buildings in the West Los Angeles area. In  determining
     the  Prevailing  Market  Rent,  whether  for  comparable  space  within the
     Building or in the West Los Angeles area of Los Angeles County, California,
     the following factors shall be taken into account:

               (i)  The  particular  configuration,   frontage  along  a  public
          thoroughfare,  signage visible to the public, parking facilities,  and
          general  level  of  quality  of  improvements  and  location  of  each
          comparison building shall be relevant.

               (ii)   Charges  for  parking,   if  any,   shall  be  taken  into
          consideration and adjustments shall be made for variations, if any, in
          charges paid as additional rent by Tenants.

               (iii)  No rent  which  has not been set or  adjusted  during  the
          twelve month period  immediately  preceding the Expiration Date of the
          Initial Term shall be considered prevailing or current.

               (iv)  Periods  of free rent or other  rent  concessions  shall be
          taken into account. 

     If Tenant has timely exercised the 0ption,  Landlord shall notify Tenant in
writing of the  proposed new Annual  Basic Rent  determined  by Landlord for the
Option Term at least one  hundred  twenty  (120) days prior to the  Commencement
Date of the Option  Term.  Unless  Tenant  objects to the amount  determined  by
Landlord  within  fifteen  (15) days after  receipt of such  notice,  the amount
stated in such notice shall be the new Annual Basic Rent.  If Tenant  objects to
Landlord's proposal, then the new Annual Basic Rent shall be determined by a MAI
appraiser  chosen by  Landlord  and  approved  by  Tenant.  If  Tenant  does not
disapprove  Landlord's  choice of an appraiser by delivery of written  notice of
disapproval  within five (5) days of written  notice of such choice by Landlord,
then landlord's  appraiser  shall be deemed to be approved by Tenant.  If Tenant
does not approve  Landlord's  choice of an appraiser,  then  Tenant's  notice of
disapproval  shall  name a MAI  appraiser  designated  by  Tenant,  and  each of
Landlord's  appraiser and Tenant's appraiser shall appoint a third MAI appraiser
and each appraiser shall  determine the Prevailing  Market Rent. The two amounts
which are closest shall be averaged,  and such average  shall be the  Prevailing
Market Rent for purposes of this Option.  The cost of any common appraiser shall
be split equally by Landlord and Tenant,  and if three  appraisers are utilized,
Landlord  and  Tenant  shall each be  responsible  for the fees and costs of the
appraiser  which it  appoints.  If the  Annual  Basic  Rent  shall not have been
determined by the Commencement  Date of the Option Term, until it is determined,
Tenant shall pay Monthly  Basic Rent when due during the Option Term  determined
using Landlord's proposed Annual Basic Rent, and when the actual adjusted Annual

                                       -5-

<PAGE>  

Basic Rent is  determined,  either  Tenant shall pay to Landlord any  additional
rent due for the months which have elapsed in the Option Term, or Landlord shall
credit any excess  payment for the elapsed months to the next Monthly Basic Rent
becoming due.

ARTICLE III         TENANT IMPROVEMENTS AND ACCEPTANCE OF PREMISES.

     Landlord's sole obligation with respect to Tenant  improvements shall be to
perform the work set forth in any Work Letter  Agreement  attached to this Lease
as Exhibit "B". If a Work Letter  Agreement is not attached to this Lease,  then
Landlord shall have no obligation to construct leasehold improvements for Tenant
or to repair or refurbish the Premises  whatsoever.  By taking possession of the
Premises, Tenant shall have acknowledged that (i) it has inspected the Premises,
(ii) it accepts the Premises, (iii) the Premises are in good and sanitary order,
and (iv) all work to be performed by Landlord has been satisfactorily  completed
except for those minor  items  which  Landlord  and Tenant  shall agree  require
further  completion and which items shall be  incorporated  into a written punch
list  executed by Landlord and Tenant prior to the  Beneficial  Occupancy  Date.
Landlord shall use all reasonable efforts to cause the items listed on the punch
list to be completed within a reasonable time. Tenant  acknowledges that neither
Landlord  nor any agent of  Landlord  has made any  promise,  representation  or
warranty  with respect to the  Premises,  the  Building or the Project,  or with
respect  to the  suitability  of any  part of the  Project  for the  conduct  of
Tenant's business unless otherwise set forth in this Lease or its exhibits.

ARTICLE IV                            RENT.

     4.1 Basic Rent.  Tenant shall pay to Landlord the Annual Basic Rent for the
Premises set forth in the Basic Lease  Provisions,  as the same may be increased
pursuant  to this  Lease.  Tenant's  obligation  to pay rent shall  begin on the
Commencement  Date and shall  continue  until all rent due for the Term has been
paid.  The Monthly  Basic Rent is an amount equal to  one-twelfth  of the Annual
Basic Rent,  as adjusted.  The Monthly Basic Rent shall be paid in advance on or
before the first day of each and every  calendar  month during the Term.  If the
Commencement  Date occurs on a day other than the first day of a calendar month,
then the rent payable by Tenant to Landlord for the period from the Commencement
Date to the  Measurement  Date shall be  prorated  and the rent for the  partial
month following the Commencement Date shall be payable on the Commencement Date.
Any rent due for a period  other  than a full month will be pro rated on a daily
basis using a 30 day month.  The rent payable for the first full calendar  month
of the Term shall be payable upon execution of this Lease by Tenant.  Rent shall
be payable  without notice,  demand,  reduction or setoff in lawful money of the
United  States of America to  Landlord  or its agent at the address set forth in
the  Basic  Lease  Provisions,  or to such  other  person or such  other  places
Landlord may from time to time designate in writing.  If (a) any check submitted
by Tenant in payment of rent or any other  charge due under this Lease  shall be
returned for  insufficient  funds,  or (b) Tenant shall fail to pay when due its
rent or any other charge due under this Lease for two (2) consecutive  months or
three (3) times in any twelve (12) month  period,  then in addition to any other
rights and remedies of Landlord, Landlord may require that Tenant thereafter pay
its basic rent and other  charges by  cashiers'  check and/or pay its basic rent
and other charges in quarterly  payments covering three (3) months each, instead
of monthly.

     4.2  Increases  in Annual  Basic  Rent.  The  Annual  Basic  Rent  shall be
increased  annually on each  anniversary of the Measurement  Date beginning with
the first  anniversary of the Measurement  Date. If Tenant remains in possession
of the Premises for any period of a partial year after the last  anniversary  of
the Measurement  Date, then the increase in the Annual Basic Rent shall apply to
such partial year. If Tenant exercises any option to extend the Term, and unless
the instrument  containing such option to extend the Term contains  inconsistent
provisions  for  annual  increases  of the  rent  for  the  option  term  (which
provisions for increases in rent shall control over  inconsistent  provisions of
this

                                       -6-

<PAGE>

Section),  then the Annual  Basic Rent for the option term shall be increased on
the first day of the option term and each anniversary thereof in accordance with
this  Section  4.2  substituting  the  first  day  of  such  option  term  as  a
"Measurement Date".

     Each increase shall be determined as follows:

          (a) The month immediately preceding the month in which the Measurement
     Date occurs shall be the "Base  Month".  The same month  occurring one year
     later shall be the "Comparison  Month".  In each succeeding  year, the most
     recent  Comparison  Month shall be substituted  as the Base Month,  and the
     next  Comparison  Month shall be the same calendar month occurring one year
     later.  The Annual Basic Rent for each  succeeding  full or partial year of
     the Term  beginning on each  anniversary of the  Measurement  Date shall be
     equal to the Annual  Basic Rent then in effect  increased  by a  percentage
     equal to the  percentage  increase  in the Index  (defined  below)  for the
     Comparison Month over the Index for the Base Month applicable to such year.
     In no event  shall  the  Annual  Basic  Rent for any year be less  than the
     Annual Basic Rent for the preceding  year.  The Monthly Basic Rent shall be
     recomputed as one-twelfth (1/12) of the increased Annual Basic Rent and the
     Monthly  Basic Rent as recomputed  shall be due in accordance  with Section
     4.1 of this Lease.

          (b) The term  "Index"  shall mean the  "Consumer  Price  Index for All
     Urban  Consumers,  Los  Angeles  --  Anaheim  Riverside  CMSA,  All  Items,
     (1982--1984=100)" compiled by the United States Department of Labor, Bureau
     of Labor Statistics.

          (c) If the Index is changed in any material respect, including without
     limitation,  any change in the base of the Index at 100 for 1982-1984, then
     Landlord may at its election adjust the Index as appropriate to provide for
     comparison of relative changes in prices of goods and services to consumers
     in the area where the Index is measured.  If the Bureau of Labor Statistics
     shall  cease to publish  the Index,  then  Landlord  shall  substitute  any
     official index published by the Bureau of Labor Statistics or any successor
     or  similar   governmental   agency  as  may  then  be  in  existence   and
     substantially equivalent, and Landlord shall be entitled at its election to
     make any adjustments in the substituted  index, as appropriate,  to provide
     for  comparison of relative  changes in the prices of goods and services to
     consumers in the area where the index is measured.

          (d) The rent as  increased by the annual rent  increases  shall be due
     and payable  regardless  of notice of such  increase by Landlord to Tenant;
     provided,  however,  that Tenant shall not be in default because of payment
     of less than the increased  amount until  Landlord  notifies  Tenant of the
     increased  amount of rent as long as Tenant pays the Monthly Basic Rent set
     for the prior year when due,  Tenant pays any deficiency to Landlord within
     five (5) days after notice of the increased  rent, and  thereafter,  Tenant
     pays the increased amount as Monthly Basic Rent for such year.

     4.3 Late  Charges.  If Tenant fails to pay any  installment  of rent within
five (5) days of the date due or if Tenant  fails to make any other  payment due
under this Lease within five (5) days of the date due,  then Tenant shall pay to
Landlord a late charge  equal to the greater of five  percent (5%) of the amount
due or $100 to  compensate  Landlord for the extra cost  incurred as a result of
such late payment.

ARTICLE V                       ADDITIONAL RENT.

     5.1  Obligations  to Pay  Additional  Rent. In addition to the Annual Basic
Rent and  other  sums to be paid by  Tenant  to  Landlord,  Tenant  shall pay to
Landlord as  additional  rent the amount by which  Tenant's  share of  Operating
Expenses  (defined  below) for any calendar year or part thereof during the Term
exceeds Tenant's Expense Stop Base. If the Basic Lease Provisions state the

                                      -7-

<PAGE>

Tenant's  Expense Stop Base in terms of a Base Year,  then the Tenant's  Expense
Stop Base shall be equal to the Tenant's  share of  Operating  Expenses for such
Base Year.  Tenant's share of Operating Expenses shall be an amount equal to the
product of the Operating Expenses times Tenant's Building Expense Percentage. If
any part of the Term  begins or ends on any day other than the first or last day
of a calendar year respectively,  then the annual Operating Expense and Tenant's
Expense Stop Base shall be prorated for such partial year on a daily basis using
a 30 day month and 360 day year to determine the amount of  additional  rent due
to Landlord.

     5.2  Estimated  Operating  Expenses.  Landlord  shall be entitled to make a
reasonable  estimate of Operating  Expenses  projected for each  calendar  year.
Landlord shall be entitled to revise such estimates at any time and from time to
time during the calendar  year to increase or decrease the estimate of Operating
Expenses.  If Landlord notifies Tenant that Landlord's  estimate (or any revised
estimate) of Operating  Expenses  would result in an obligation of Tenant to pay
additional  rent,  then upon request by Landlord,  Tenant shall pay  one-twelfth
(1/12) of such  estimated  additional  rent on the  first  day of each  month in
advance together with the Monthly Basic Rent. If Landlord shall so notify Tenant
after the commencement of a calendar year, then with the next payment of Monthly
Basic Rent due,  Tenant shall also pay to Landlord  one--twelfth  (1/12) of such
estimated additional rent for each month of such calendar year which has already
elapsed.

     5.3  Annual  Statement.  Landlord  shall  provide  Tenant  with  an  annual
statement showing Tenant's share of the annual Operating  Expenses over Tenant's
Expense  Stop Base,  if any,  for the prior  calendar  year,  together  with any
proration.  Landlord  shall use all  reasonable  efforts to  deliver  the annual
statement  within one hundred  twenty  (120) days after the end of the  calendar
year;  provided,  however,  that  failure  of  Landlord  to  deliver  the annual
statement  within such period shall not impair or constitute  waiver of Tenant's
obligations to pay additional rent or cause Landlord to incur any obligation for
damages.  If the amount of the additional rent due for the calendar year exceeds
any amounts paid by Tenant as estimated  additional rent for such calendar year,
then Tenant shall pay such excess to Landlord within ten (10) days of receipt of
the Landlord's statement. If the amounts paid as estimated additional rent for a
calendar  year  exceed the  amount of  Tenant's  obligation  shown on the annual
statement,   then  Tenant  shall  be  entitled  to  a  credit  against   monthly
installments  of estimated  additional rent due for the then current year. If no
further sums of additional  rent are or will become due against which the excess
can be credited,  then,  subject to offset at Landlord's  election against other
sums owed by Tenant,  Landlord  shall pay such excess to Tenant  within ten (10)
days after delivery of the annual statement. If Landlord has not required Tenant
to pay installments of estimated additional rent, then Tenant shall pay Landlord
any sum of additional rent due within ten (10) days of any statement by Landlord
reflecting  the  amount of  overall  additional  rent.  All  obligations  to pay
additional rent and/or the obligation of Landlord to credit or reimburse  Tenant
for any excess payment of estimated  additional rent shall survive expiration of
the Term or earlier termination of this Lease.

     Tenant shall have a period of thirty (30) days after delivery of the annual
statement  of  Operating  Expenses  to question or  challenge  the amount  shown
thereon as being the annual  Operating  Expenses  or Tenant's  share  thereof by
giving  written notice to Landlord  specifying  the items which are  challenged.
Tenant waives and  relinquishes  the right to challenge or object to the amounts
shown at any time after  expiration  of such thirty  (30) day period.  If Tenant
timely challenges any item shown on the annual statement, Tenant shall then have
a period of sixty  (60) days in which to  inspect  during  business  hours  upon
reasonable  written notice to Landlord at Landlord's office  Landlord's  records
relating to the  challenged  item or items.  Tenant shall give written notice to
Landlord prior to expiration of such sixty (60) day of whether Tenant  continues
to  challenge  any  of  the  items  originally  objected  to,  in  which  case a
certification as to proper amount shall be made, at Tenant's expense, by

                                      -8-

<PAGE>

Landlord's independent certified public accountant, which certification shall be
final and  conclusive.  If Tenant  fails to review the  records or fails to give
timely written notice to Landlord that it continues to object, then Tenant shall
be deemed to have  waived  its  objection  and shall  have no  further  right to
challenge  or object  thereto.  Notwithstanding  any  objection  or challenge of
Tenant,  Tenant  shall pay the amount  claimed by Landlord to be due as and when
provided for herein, pending the resolution of Tenant's objection.

     5.4  Operating  Expenses.  "Operating  Expenses"  of the  Building  and the
Project mean any and all costs and expenses of ownership, operation, management,
maintenance  and repair of the  Project  and  Building,  including  the  parking
facilities and Common Areas.  Operating  Expenses include but are not limited to
each of the following costs and expenses:

          (a) All costs and expenses of utilities  furnished to the Building and
     the  Project  including,   without  limitation,   all  costs  and  expenses
     attributable  to supply of electrical  service,  water and sewage  service,
     natural gas,  cable  television  or other  electronic  or microwave  signal
     reception, telephone service or other communication,  steam, heat, cooling,
     or any other  service  which is now or in the future  considered  a utility
     furnished to the Building and/or the Project.

          (b) All real property taxes which shall include (i) any form of tax or
     assessment,  license  fee,  license tax, tax or excise on rent or any other
     levy, charge, expense or imposition made or required by any federal, state,
     county,  city,  district or other political  subdivision on any interest of
     Landlord and/or Tenant in the Premises,  the Building,  or the remainder of
     the Project, including without limitation, the underlying real property and
     appurtenances; (ii) any fee for services charged by any governmental agency
     or  quasi-governmental  agency for any  services  such as fire  protection,
     street, sidewalk and road maintenance,  refuse collection,  school systems,
     or other  services  provided  or formerly  provided to property  owners and
     residents  within  the  general  area of the  Project at no cost or minimal
     cost;  (iii) any governmental  impositions  allocable to or measured by the
     area of the  Premises or the amount of any rent  payable  under this Lease,
     including,  without limitation, any tax on gross receipts or any excise tax
     or other charges levied by any federal,  state,  county,  city, district or
     other governmental agency or political  subdivision with respect to rent or
     upon or with respect to the possession,  leasing,  operation,  maintenance,
     alteration,  repair,  use or  occupancy  of  the  Premises  or any  portion
     thereof;  (iv) any  impositions  by any  governmental  agency on this Lease
     transaction  or charge with  respect to any  document to which  Tenant is a
     party  creating or  transferring  an interest or an estate in the Premises;
     and (v) any increase in any of the  foregoing  based upon  construction  of
     improvements  on the  Project or changes in  ownership  (as  defined in the
     California Revenue and Taxation Code) of the Property.  Real property taxes
     shall not  include  taxes on the  Landlord's  net  income  including  state
     franchise taxes or any inheritance, estate or gift taxes.

          (c) The sum of building  operating costs and common  facilities  costs
     which shall include all costs of managing,  operating and  maintaining  and
     repairing  the Project  including  all Common Areas and  facilities  of the
     Project.  Such costs shall include,  without  limitation,  all expenses for
     insurance  obtained  by Landlord  (including,  without  limitation,  public
     liability,  contractual  liability,  property  damage,  fire  and  extended
     coverage, sprinkler damage, theft, malicious mischief and vandalism, flood,
     rental   loss,   rent   continuation,   boiler  and   machinery,   business
     interruption,  earthquake,  all risk coverage,  and other coverages in such
     amounts as Landlord  determines  appropriate  to carry in  connection  with
     ownership  and operation of a first class  building in Los Angeles  County,
     California,  or such other  insurance  as may be required by any present of
     future  lender  on loans  secured  by the  Project),  labor  and  supplies,
     license,   permit  and  inspection   fees,  all   assessments  and  special
     assessments   due  to  deed   restrictions,   declarations   and/or  owners
     associations  which accrue  against the Project,  the cost of  compensation
     (including  employment  taxes,  similar  governmental  charges,  and fringe
     benefits) with respect to all persons who

                                      -9-

<PAGE>


     perform duties in connection with landscaping, janitorial, painting, window
     washing and general  cleaning  services,  security  services  and any other
     services related to the operation, maintenance or repair of the Project (as
     well as the cost of all personal  property  equipment  used in  conjunction
     therewith),  costs of  clean-up  and  removal of  Hazardous  Materials  (as
     hereafter  defined)  and any fines and  penalties  imposed by reason of the
     existence of  Hazardous  Materials  on, in or about the  Project,  the fair
     market  rental value of the Project  management  office,  management  fees,
     legal expenses and accounting expenses.

          (d) If the  Building  is not at least  95%  occupied  during  all or a
     portion of any  calendar  year,  then  Landlord  shall make an  appropriate
     adjustment  of the  Operating  Expenses for such calendar year to determine
     what the Operating  Expenses  would have been for such year if the Building
     had been 95%  occupied and the amount so  determined  shall be deemed to be
     the amount of the Operating Expenses for the year. Such adjustment shall be
     made by Landlord  increasing  those costs  included in  Operating  Expenses
     which in Landlord's  judgment vary based upon the level of occupancy of the
     Building to the amount of cost which in Landlord's judgment would have been
     incurred if the  Building  had been 95%  occupied  for the entire  calendar
     year.

          (e) Operating  Expenses shall not include  depreciation  of or capital
     expenditures  made in connection with the Project or any equipment  therein
     or thereon,  payments of principal and interest on any loans secured by the
     Project,  commissions paid for leasing,  building  construction permits and
     fees,  or costs of  alteration  of the  Project;  provided,  however,  that
     Operating Expenses shall include the costs of any capital improvements made
     to the Project for the purposes of reducing  Operating Expenses or pursuant
     to the requirements of any governmental  entity, such costs to be amortized
     over a  reasonable  period  as  Landlord  shall  determine,  together  with
     interest on the unamortized  balance at the rate of interest which would be
     payable on sums due under this Lease at the time such capital  improvements
     are performed.

          (f) Charges for any services, goods or materials furnished by Landlord
     at Tenant's request and charges for services, goods and materials furnished
     by  Landlord  as a result of uses or  demands  by Tenant in excess of those
     charges which are normally  furnished to other tenants in the Building with
     general office usage, and all other sums payable by Tenant under this Lease
     shall not be included in Operating  Expenses but shall be payable by Tenant
     pursuant to this Lease (or if not  provided  for in this Lease,  within ten
     (10) days after Landlord  delivers a statement for such services,  goods or
     materials to Tenant).  If any other tenant of the Project  either pays sums
     directly to third parties or  specifically  reimburses  Landlord sums which
     otherwise  would be  included  in  Operating  Expenses,  such  payments  or
     reimbursements  shall not be included in Operating Expenses for the purpose
     of determining the amount of Operating Expenses allocable to Tenant.

ARTICLE VI                      SECURITY DEPOSIT.

     Tenant has deposited  with Landlord the Security  Deposit in the amount set
forth in the Basic  Lease  Provisions.  The  Security  Deposit  shall be held by
Landlord  as  security  for the  performance  and  observance  by  Tenant of all
Tenant's obligations hereunder. If the Annual Basic Rent is increased during the
Term,  then,  within  fifteen  (15)  days of  notification  by  Landlord  of the
increased  Annual  Basic  Rent,  without  further  notice,  Tenant  shall pay to
Landlord an additional amount to be held as part of the Security Deposit so that
the total  Security  Deposit held by Landlord is in the same  proportion  to the
increased  Annual  Basic  Rent  as the  original  Security  Deposit  bore to the
original  Annual  Basic Rent.  No  interest  shall  accrue  with  respect to the
Security  Deposit.  If Tenant performs and observes all of the terms,  covenants
and  conditions of this Lease which are required to be performed and observed by
it and pays all sums due  Landlord,  then  Landlord  shall  return the  Security
Deposit, or balance thereof then held by Landlord,  without interest,  to Tenant
within two weeks after Landlord recovers and accepts possession of the Premises.
If Tenant defaults, 

                                      -10-

<PAGE>

Landlord  may,  at its option and without  notice,  apply all or any part of the
Security  Deposit in payment of rent or to cure any other  default.  If Landlord
does so, then Tenant shall,  upon notice of such  application,  deposit with the
Landlord the amount so applied so that  Landlord  will have on hand at all times
during the Term the full amount of the Security  Deposit.  Landlord shall not be
required to hold the Security Deposit as a separate  account,  but may commingle
it with Landlord's  other funds. In the event of a sale or other  disposition of
the Premises,  Landlord shall have the right to transfer the Security Deposit to
the new owner and deliver to Tenant the notice required by Section 1950.7 of the
Civil Code of California.  Thereafter, Landlord shall be released by Tenant from
all  responsibility  for the return of such Security  Deposit,  and Tenant shall
look solely to the new owner for the return of such Security Deposit.  If Tenant
assigns this Lease,  Tenant's rights in the Security  Deposit shall be deemed to
be assigned to the assignee,  such Security Deposit shall be held by Landlord as
a Security  Deposit  made by the  assignee  and  Landlord  shall have no further
responsibility for the return of the Security Deposit to Tenant.

ARTICLE VII                           USE.

     7.1 Use in General.  Tenant shall use the Premises for the use set forth in
the Basic Lease  Provisions  and shall not use or permit the Premises to be used
for any other purpose without the prior written  consent of Landlord,  which may
be withheld by Landlord in its sole and absolute  discretion.  Nothing contained
herein  shall be deemed to give  Tenant any  exclusive  right to such use in the
Building.  Tenant  shall not use or occupy the Premises in violation of law, any
permit or the certificate of occupancy  issued for the Building or the Premises.
Upon  written  notice from  Landlord,  Tenant shall  discontinue  any use of the
Premises which is declared by any governmental  authority having jurisdiction to
be a violation of law, any permit or any certificate of occupancy.  Tenant shall
comply with any direction of any  governmental  authority,  having  jurisdiction
which  shall,  by  reason of the  nature of  Tenant's  use or  occupancy  of the
Premises, impose any duty upon Tenant or Landlord respecting the Premises or use
or occupation  thereof.  Tenant shall not do or permit to be done anything which
will invalidate or increase the cost of any fire, extended coverage or any other
insurance  policy covering the Project and/or property located therein and shall
comply with all rules,  orders,  regulations and requirements of any fire rating
bureau or any other  organization  performing  a similar  function.  If Landlord
shall request Tenant to designate a fire warden or other responsible person from
among the persons  regularly  located at the  Premises,  Tenant  shall make such
person available at reasonable times for training,  briefing and drills.  Tenant
shall  promptly,  upon demand,  reimburse  Landlord for any  additional  premium
charged for any  insurance  policy by reason of Tenant's  failure to comply with
the  provisions  of this Article.  Tenant shall not do or permit  anything to be
done in or about the Premises  which will in any way obstruct or interfere  with
the rights of other  tenants or  occupants of the  Building,  or injure or annoy
them,  or use or  allow  the  Premises  to be used  for any  improper,  immoral,
unlawful or objectionable  purpose,  nor shall Tenant cause,  maintain or permit
any nuisance in, on or about the Premises.  Tenant shall not commit or suffer to
be committed any waste in or upon the Premises.

     7.2 Hazardous  Material.  Tenant shall not bring, place, hold or dispose of
any Hazardous  Material  (defined  hereafter) on, under or at the Premises,  the
Building  or the  Project.  Tenant  shall not cause or allow any  material  with
asbestos,  polychlorinated  biphenyls  (PCBS) or formaldehyde or other Hazardous
Materials to be incorporated into any improvements or alterations which it makes
or causes to be made to the Premises.  Tenant shall comply with the requirements
of Section  25359.7(b)  of the  California  Health  and  Safety  Code to provide
Landlord with notice that any  Hazardous  Material has come to be located on the
Premises,  the  Building or the  Project if Tenant  discovers  or  suspects  the
presence of such materials. Tenant shall not take any remedial action related to
Hazardous  Materials  located  in or about the  Premises,  the  Building  or the
Project and shall not enter into a settlement,  consent  decree or compromise in
response to any claim related to Hazardous  Materials  without  first  notifying


                                      -11-

<PAGE>

Landlord  in writing  of  Tenant's  proposed  action  and  affording  Landlord a
reasonable  opportunity to appear,  intervene,  or otherwise  participate in any
discussion or proceeding for the purposes of protecting  Landlord's  interest in
the  Premises,  the Building and the Project.  Tenant shall  immediately  notify
Landlord  in  writing  of  (i)  any  enforcement,  clean-up,  removal  or  other
governmental action instituted, completed or threatened with regard to Hazardous
Materials  involving the Premises,  the Building or the Project,  (ii) any claim
made or threatened by any person against  Tenant,  Landlord,  the Premises,  the
Building  or  the  Project  related  to  damage,  contribution,  cost  recovery,
compensation,  loss or injury  resulting  from or  claimed  to  result  from any
Hazardous  Materials  and (iii) any  reports  made to any  environmental  agency
arising out of or in connection with any Hazardous  Materials at or removed from
the Premises,  the Building or the Project,  including any complaints,  notices,
warnings or assertions of any violation in connection therewith.

     In addition to any other indemnity  contained in this Lease,  Tenant hereby
shall defend,  indemnify and hold Landlord harmless from and against any and all
losses, liabilities,  general, special, consequential and/or incidental damages,
injuries,  costs,  expenses,  claims of any and every kind whatsoever (including
without  limitation,  court costs,  attorney's fees,  damages to any person, the
Premises,  the  Building,  the  Project or any other  property or loss of rents)
which at any time or from time to time may be paid,  incurred  or suffered by or
asserted  against  Landlord or, with respect to, or as direct or indirect result
of breach by Tenant of any of the covenants set forth in this Article, or to the
extent caused or allowed by Tenant, or any agent, employee,  contractor, invitee
or licensee of Tenant, the presence on, under or the escape,  seepage,  leakage,
spillage,  discharge,  emission,  release from,  onto or into the Premises,  the
Building,  the Project,  any land, the atmosphere,  or any watercourse,  body of
water or ground water of any Hazardous Material (including,  without limitation,
any losses,  liabilities,  damages, injuries, costs, expenses or claims asserted
or arising under the  Comprehensive  Environmental  Response,  Compensation  and
Liability Act, as amended,  any so--called  "Superfund" or "Superlien"  law, the
Resource  Conservation  and  Recovery  Act, as amended,  the Clean Water Act, as
amended,  or any other federal,  state, local or other statute,  law, ordinance,
code,  rule,  regulation,  permit,  order or decree  regulating,  relating to or
imposing  liability  or  standards  of  conduct  of  Hazardous  Material).   The
provisions of an  undertaking  and  indemnification  set forth in this Paragraph
shall  survive  the  termination  of this  Lease  and shall  continue  to be the
personal liability and obligation of Tenant, binding upon Tenant forever.

     "Hazardous Material" means any hazardous,  harmful,  odorous,  radioactive,
toxic or dangerous waste, substance or material,  including, without limitation,
any hazardous  substance or any pollutant or contaminant defined as such (or for
purposes  of)  the  Comprehensive   Environmental  Response,   Compensation  and
Liability Act, as amended,  or any  "Superfund"  or  "Superlien"  law, the Toxic
Substances Control Act, the Resource  Conservation and Recovery Act, as amended,
the Clean Water Act, as amended,  or any other federal,  state or local statute,
law,  ordinance,  code, rule,  regulation,  permit,  order or decree regulating,
relating  to, or imposing  liability or  standards  of conduct  concerning,  any
hazardous,  toxic or dangerous waste,  substance or material as is now or at any
time hereafter may be, in effect.  Tenant's  liability  under this Section shall
extend to any and all such Hazardous Materials whether or not such substance was
defined, recognized or known or suspected of being toxic, dangerous or wasteful,
at the time of any act or emission giving rise to Tenant's liability.  If Tenant
or its agents,  employees or  contractors  cause any  Hazardous  Materials to be
located on or about the Premises, the Building or the Project, then Tenant shall
obtain insurance or other means of financial capability satisfactory to Landlord
to assure  compliance  with the  obligations  of  Tenant  related  to  Hazardous
Materials set forth in this Lease or otherwise now or in the future  required by
law. Such assurance  shall be on forms, in amounts and with persons as from time
to time reasonably requested by Landlord.

ARTICLE VIII               TAXES ON TENANT'S PROPERTY.

                                      -12-

<PAGE>

     8.1 Payment By Tenant.  Tenant  shall be liable for and shall pay, at least
ten (10) days before delinquency, all taxes levied against any personal property
or trade  fixtures  located in or about the  Premises.  If any taxes on Tenant's
personal  property or trade fixtures are levied  against  Landlord or Landlord's
property or if the assessed  value of the Premises,  the Building or the Project
is  increased  by the  inclusion  of the  value of  personal  property  or trade
fixtures  located at the Premises in the assessed value of Landlord's  property,
then Tenant shall pay to Landlord the amount of taxes  reasonably  determined by
Landlord as levied on  Landlord's  property  or  attributable  to any  increased
assessment  within  ten (10) days  after  delivery  of notice of such  amount by
Landlord.

     8.2 Excess Taxes on Tenant Improvements.  If the Tenant Improvements in the
Premises,  whether installed,  and/or paid for by Landlord or Tenant and whether
or not affixed to the real property so as to become a part thereof, are assessed
for real property tax purposes at a valuation higher than the valuation at which
Tenant Improvements  conforming to Landlord's building standard for the Building
are assessed,  then the real property taxes and  assessments  levied against the
Building by reason of such excess assessed valuation shall be deemed to be taxes
levied  against  personal  property  of  Tenant  and  shall be  governed  by the
provisions  of Section  8.1 above.  If the  records of the County  Assessor  are
available and sufficiently  detailed to serve as a basis for determining whether
such Tenant  Improvements  are assessed at a higher  valuation  than  Landlord's
building  standard,  such records  shall be binding on both the Landlord and the
Tenant.  If  the  records  of the  County  Assessor  are  not  available  or not
sufficiently  detailed to serve as a basis for making said  determination,  then
Landlord  shall  determine the real property or other taxes  allocable to Tenant
based on Landlord's good faith estimate of the taxes  attributable to the excess
of the actual cost of  construction of the Tenant  Improvements  over Landlord's
estimate of the cost to  construct  Tenant  Improvements  according  to building
standard.

ARTICLE IX                   CONDITION OF PREMISES.

     9.1 Tenant's  Obligations to Maintain.  Tenant shall, at Tenant's sole cost
and expense,  keep the Premises in good, clean and sanitary order.  Tenant shall
use all electrical,  gas and plumbing fixtures properly and keep them in a good,
clean and sanitary condition.  Neither Tenant nor any subtenant, agent, employee
or contractor of Tenant shall destroy, deface, damage, impair or remove any part
of the  Premises,  the Building or the Project or the  facilities,  equipment or
appurtenances  of the  Premises,  the Building or the Project.  Tenant shall not
place any object or series of objects  on the floors of the  Premises  in such a
manner as to exceed the load  capacity  of the floors on a per square inch basis
as determined by any architect,  engineer or other consultant of Landlord, or as
otherwise  limited by any law,  code,  regulation,  permit or certificate of any
governmental  authority.  Tenant shall,  at its sole cost and expense,  make all
repairs to the Premises  which are required to correct any damage or  deficiency
caused by failure of Tenant to keep the  Premises in the  condition  required by
this Section.  Tenant shall reimburse Landlord for the cost of any repair to the
Premises,  the  Building  or the  Project  required as a result of any misuse or
neglect committed or permitted by Tenant or by any subtenant, agent, employee or
contractor  of Tenant.  Tenant  shall,  at its sole cost and expense,  repair or
reimburse  Landlord for any damage to the Premises,  the Building or the Project
caused by any person who has entered the  Premises as a result of the express or
implied  invitation  or  permission  of Tenant.  If Tenant does not make repairs
promptly  and  adequately  or fails to maintain the Premises as required by this
Section  within five (5) days after delivery of written notice of any deficiency
by Landlord (or if such deficiency  cannot be reasonably  corrected  within five
(5) days and Tenant shall not commence to correct  such  deficiency  within such
five (5) day period and diligently  pursue  completion of such correction,  then
Landlord may, but shall not be required to,  perform such  repairs,  maintenance
and/or  correction  to the  Premises  and any  amounts  expended  by Landlord to
prosecute  correction shall be reimbursed by Tenant to Landlord  together with a
20%  overhead

                                      -13-

<PAGE>

charge upon demand; provided,  however, that if in Landlord's judgment, there is
an  emergency,  Landlord may perform the repairs  prior to delivery of notice to
Tenant or expiration of Tenant's cure period. If Landlord performs such repairs,
maintenance and/or corrections on behalf of Tenant, Landlord shall not be liable
to Tenant for any loss or damage that may accrue to Tenant's personal  property,
trade fixtures and/or records and data occasioned or resulting from such repair,
maintenance  and/or correction by Landlord.  Entry by Landlord to pursue repair,
maintenance  and/or  correction  shall not be  deemed an actual or  constructive
eviction  and shall not entitle  Tenant to any  abatement  or reduction of rent.
Tenant shall notify  Landlord in writing  promptly upon discovery of any damage,
defect or malfunction  of any structural or mechanical  portions of the Building
which Landlord is required to repair and maintain pursuant to Article 10 below.

     9.2 Condition Upon  Surrender.  Upon  expiration or earlier  termination of
this Lease,  Tenant shall remove from the  Premises  all movable  furniture  and
movable personal property,  and shall promptly repair any damage to the Premises
or the  Building  caused by such  removal.  All removal  and repair  shall be at
Tenant's sole cost and expense. Tenant shall not remove any wall covering, floor
covering,  shelving, cabinet units (whether for storage, for library purposes or
for any other  purpose),  or other  improvements  affixed to the Premises unless
requested  to do so by Landlord.  At any time within  fifteen (15) days prior to
expiration of the scheduled Term, or within a reasonable time promptly after any
other termination of this Lease, Landlord may demand that Tenant remove from the
Premises  any  alterations,   additions,   improvements,   fixtures,  equipment,
shelving,  cabinet units or other personal property designated by Landlord to be
removed.  In such event Tenant shall complete such removal (including the repair
of any damage  caused by such  removal)  entirely  at its own expense and within
fifteen (15) days of Landlord's  demand.  All repairs required by Tenant in this
Section  shall be performed  in a manner  satisfactory  to  Landlord,  and shall
include, without limitation, the following: cap all plumbing, cap all electrical
wiring,  repair all holes in walls, restore damage to the floors and/or ceiling,
repair any other  cosmetic  damage,  and clean the Premises.  If Tenant fails to
remove from the Premises all of its personal  property  (together with any other
items requested by Landlord to be removed in accordance with this Section) prior
to the expiration or earlier  termination  of this Lease,  then Landlord may, at
its sole option (i) treat Tenant as a holdover in which event the  provisions of
Article 26 of this Lease  shall  apply or (ii)  handle the items as  provided in
Section 19.2(b) of this Lease.

     Unless Landlord demands otherwise  pursuant to this Article,  Tenant shall,
upon expiration or earlier termination of this Lease,  surrender to Landlord the
Premises in the same  condition as the Premises were upon delivery of possession
to Tenant, broom clean,  reasonable wear and tear excepted,  shall surrender all
keys to the Landlord at the place then fixed for the payment of rent,  and shall
inform the Landlord of all combinations of locks,  safes and vaults,  if any, on
the Premises.  Promptly upon request by Landlord following expiration or earlier
termination  of this Lease,  Tenant shall  execute,  acknowledge  and deliver to
Landlord an instrument in recordable form releasing,  remising and  quitclaiming
to Landlord all right, title and interest of Tenant in the Premises by reason of
this Lease or otherwise.

ARTICLE X             MAINTENANCE AND REPAIRS BY LANDLORD.


     Landlord shall repair and maintain the  structural and mechanical  portions
of  the  Building,   including  basic  plumbing,   heating,   ventilating,   air
conditioning  and  electrical  systems  installed or furnished by Landlord,  and
Landlord  shall  keep all  Common  Areas  in good,  clean  and  sanitary  order;
provided,  however,  that if  maintenance  and  repairs are caused in part or in
whole by the act,  neglect,  or  omission  of any duty by  Tenant,  its  agents,
servants,  employees  or  invitees,  then  Tenant  shall  pay  to  Landlord,  as
additional rent, the reasonable cost of such  maintenance and repairs.  Landlord
shall not be liable for any  failure to make any such  repairs or to perform any
maintenance,  and Tenant shall be entitled to any abatement or reduction in rent
by reason of such failure, no actual or

                                      -14-


<PAGE>

constructive eviction of Tenant shall result from such failure, Tenant shall not
have the right to terminate  this Lease,  and Tenant shall not be relieved  from
the  performance  of any  covenant or  agreement  in this Lease  because of such
failure. Except as provided in Article 17 hereof, there shall be no abatement of
rent and no  liability  of Landlord  by reason of any injury to or  interference
with Tenant's  business  arising from the making of any repairs,  alterations or
improvements  in or to any portion of the  Building or the  Premises or in or to
fixtures,   appurtenances  and  equipment  therein.  Tenant  hereby  waives  the
provisions of Section 1932,  1933(4) and 1942 of the Civil Code of California or
any similar or  successor  statutes to the fullest  extent  permitted by law and
Tenant  acknowledges  that Tenant shall not be entitled to terminate this Lease,
withhold rent or make any repair and deduct the cost of repair from rent payable
under  this  Lease in the  event  Landlord  fails to make a  repair  or  perform
maintenance.  Tenant  acknowledges  that Tenant's sole remedy for breach of this
Article   by   Landlord   shall  be  an   action   for   damages.


ARTICLE   XI                      ALTERATIONS.
 
     Tenant shall make no  alterations,  additions or  improvements in or to the
Premises  without  Landlord's  prior  written  consent.  If Tenant shall request
Landlord's consent for any alterations,  additions or improvements,  then Tenant
shall submit  detailed plans,  specifications  and an itemized budget for making
such  alterations,  additions or improvements.  Tenant shall pay to Landlord all
costs incurred by Landlord for any  architectural,  engineering,  supervisory or
legal services in connection with making a determination  concerning consent for
any  alteration,  addition or  improvement  requested by Tenant or in connection
with making any  correction  to any work or  improvement  performed by or at the
request of Tenant.  Landlord may impose any conditions and the  requirements  to
any  consent  as  Landlord  shall  in its  discretion  deem to be  necessary  or
advisable,  including  without  limitation the hours when work may be performed.
Any  approved  alteration,  addition  or  improvement  shall  be  made  only  by
contractors or mechanics approved by Landlord. The review, approval,  inspection
or  examination  by Landlord or any of its agents of any plans,  specifications,
contractors  or any other  items shall be solely for  Landlord's  benefit and to
protect its  interests,  and neither  Landlord nor its agents shall be deemed to
have assumed any responsibility for the quality of work of any contractor or the
accuracy,  sufficiency,  quality or suitability of such plans, specifications or
other items.  Tenant agrees that there shall be no construction of partitions or
other  obstructions  which  might  interfere  with  Landlord's  free  access  to
mechanical installations or service facilities of the Building or interfere with
the moving of Landlord's  equipment to or from the  enclosures  containing  said
installations  or facilities.  Tenant covenants and agrees that all work done by
Tenant shall be  performed  in full  compliance  with all laws,  rules,  orders,
ordinances, regulations, permits and requirements of any insurance rating bureau
used by insurers  selected  to carry  Landlord's  insurance,  and of any similar
body.  Before  commencing any work, Tenant shall give Landlord at least ten (10)
days written  notice of the  proposed  commencement  of such work and shall,  if
required by Landlord,  secure at Tenant's own cost and expense, a completion and
lien  indemnity  bond  satisfactory  to  Landlord  for said work and such  other
comprehensive general public liability insurance,  builders risk insurance,  and
other such  insurance  coverages  so as to protect the  insurable  interests  of
Landlord,  Tenant, contractors and subcontractors in amounts and on forms as may
be  requested  by  Landlord.  Tenant  further  covenants  and  agrees  that  any
mechanic's  lien filed  against the  Premises or against the  Building  for work
claimed to have been done, or materials claimed to have been furnished,  will be
discharged  by  Tenant,  by bond or  otherwise,  within  ten (10) days after the
filing  thereof,  at the sole  cost and  expense  of  Tenant.  All  alterations,
additions or  improvements  upon the Premises  made by either  party,  including
without limitation, all wall coverings, floor coverings,  built-in cabinet work,
paneling and the like,  shall,  unless  Landlord  elects  otherwise,  become the
property  of  Landlord,  and shall  remain  upon,  and be  surrendered  with the
Premises, as a part thereof, at the end of the Term or upon earlier termination;
provided,  however,  that  Landlord  may, by written  notice to Tenant,  require
Tenant to remove all 

                                      -15-

<PAGE>

improvements,  alterations and additions made by Tenant, and Tenant shall repair
all damage  resulting from such removal or, at Landlord's  option,  shall pay to
Landlord all costs arising from such removal.

ARTICLE XII                          LIENS.

     Tenant  shall keep the  Premises,  the  Building  and the  Project  and all
underlying  realty and  appurtenances  free from any mechanic's or materialmen's
liens and any other liens of a similar  nature  placed upon the  Premises or any
realty of the  Project  by any  reason  of or in  connection  with any  repairs,
additions,  alterations or  improvements  contracted for or initiated by Tenant.
Tenant  shall be  solely  responsible  for  making  payment  for  such  work and
discharging liens for such work. Tenant indemnifies  Landlord fully with respect
to all liability for such liens,  claims and demands,  together with  reasonable
attorneys  fees and all costs and  expenses in  connection  therewith.  Landlord
shall  have  the  right  at all  times  to  post  on  the  Premises  notices  of
nonresponsibility  (and to record  verified  copies  thereof)  in order to place
contractors  and  materialmen  on  notice  that  Landlord  is  not  to  be  held
financially responsible for such work. Tenant shall, at the request of Landlord,
provide  Landlord with executed and  acknowledged  full and  unconditional  lien
releases in  recordable  form and paid  receipts  from any  general  contractor,
subcontractor,  materialman or other person furnishing labor and/or materials in
connection  with any work  connected  with the  Premises,  as well as any  other
evidence  required by Landlord to demonstrate  that there are no liens affecting
Landlord or any property of Landlord by reason of such work.  Any amount paid by
Landlord  to  discharge  or bond  around any liens shall be payable by Tenant to
Landlord  upon demand.  Tenant shall be permitted to contest the validity of any
such lien,  claim or demand  provided  Tenant  acquires and records a bond in an
amount,  in a form and from a surety  reasonably  satisfactory  to Landlord  and
Tenant  shall,  at its sole cost and expense,  defend  itself and Landlord  with
counsel  reasonably  satisfactory to Landlord.  Tenant shall pay and satisfy any
adverse  judgment that may be rendered prior to any action taken to enforce such
judgment against Landlord or the Project.

ARTICLE XIII                   ENTRY BY LANDLORD.

     Landlord  reserves  and shall at any and all times  have the right to enter
the  Premises to inspect the same,  to supply  janitorial  service and any other
service to be provided by Landlord to Tenant hereunder,  to show the Premises to
prospective  purchasers  or tenants,  to post notices of  nonresponsibility,  to
alter, improve or repair the Premises or any other portion of the Building,  all
without such entry  constituting  any actual or constructive  eviction of Tenant
and  without  abatement  of rent.  Landlord  may,  in  order  to carry  out such
purposes,  erect  scaffolding and other necessary  structures  where  reasonably
required by the  character of the work to be  performed,  provided that Landlord
shall use  reasonable  efforts to  minimize  interference  with the  business of
Tenant.  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,  and any other loss in, upon and about the
Premises. Landlord shall at all times have and retain a key with which to unlock
all doors in the Premises,  excluding Tenant's vaults and safes.  Landlord shall
have the right to use any and all means which  Landlord  may deem proper to open
said doors in an emergency in order to obtain entry to the  Premises.  Any entry
to the Premises  obtained by Landlord by any of said means, or otherwise,  shall
not be construed or deemed to be a forcible or unlawful entry into the Premises,
or an  eviction of Tenant from the  Premises  or any  portion  thereof,  and any
damages caused on account thereof shall be paid by Tenant.  No provision of this
Article  shall be  construed  as  obligating  Landlord to perform  any  repairs,
alterations  or  decorations  except as  otherwise  expressly  agreed  herein by
Landlord.  

ARTICLE XIV                       UTILITIES AND  SERVICES. 


                                      -16-

<PAGE>

     Provided that Tenant is not in default under this Lease, Landlord agrees to
furnish or cause to be  furnished to the  Premises  the  utilities  and services
described in the  Standards  for  Utilities  and  Services,  attached  hereto as
Exhibit "C".  Tenant agrees to perform and be bound by all of the  provisions of
Exhibit "C".  Interruption  of utilities  or services or  Landlord's  failure to
furnish any of such utilities or services when such  interruption  or failure is
caused by (i) accident,  breakage, or repairs,  (ii) strikes,  lockouts or other
labor  disturbance  or  labor  dispute  of  any  character,  (iii)  governmental
regulation,  moratorium or other governmental action, (iv) inability despite the
exercise of reasonable diligence to obtain electricity,  gas, water or fuel, (v)
limitation,   rationing,  curtailment  or  restriction  on  the  use  of  water,
electricity, gas, heating, cooling or other forms of service or utility provided
to the  Premises  or the  Building,  or (vi) any other cause  beyond  Landlord's
reasonable control,  shall not give rise to a claim for damages against Landlord
or otherwise result in any liability to Landlord. In addition,  Tenant shall not
be entitled  to any offset,  abatement  or  reduction  of rent by reason of such
failure,  no actual or  constructive  eviction of Tenant  shall result from such
failure and Tenant shall not be relieved from the performance of any covenant or
agreement in this Lease  because of such  failure.  In the event of any failure,
stoppage or interruption  thereof,  Landlord shall diligently  attempt to resume
service promptly. 

ARTICLE XV                         BANKRUPTCY.

     If Tenant shall file a petition in  bankruptcy  under any  provision of the
Bankruptcy Code as then in effect,  or if Tenant shall be adjudicated a bankrupt
in involuntary  bankruptcy  proceeding and such adjudication shall not have been
vacated  within  sixty  (60)  days  from the  date  thereof,  or if a  receiver,
disbursing  agent or trustee  shall be appointed  for Tenant's  property and the
order  appointing  such receiver,  disbursing  agent or trustee shall not be set
aside or vacated  within sixty (60) days after the entry  thereof,  or if Tenant
shall be  adjudicated a bankrupt in any  involuntary  bankruptcy  proceeding and
such  adjudication  shall not have been vacated  within sixty (60) days from the
date thereof,  or if a receiver,  disbursing agent or trustee shall be appointed
for Tenant's  property and the order appointing such receiver,  disbursing agent
or trustee  shall not be set aside or vacated  within  sixty (60) days after the
entry  thereof,  or if Tenant shall assign its estate or effects for the benefit
of creditors, or if this Lease shall, by operation of law or otherwise,  pass to
any person or persons  other than Tenant,  then  Landlord may elect to terminate
this Lease, with or without notice of such election and with or without entry or
action by Landlord. In the event of such termination,  notwithstanding any other
provisions  of this  Lease,  Landlord,  in  addition  to any and all  rights and
remedies allowed by law or equity, shall, upon such termination,  be entitled to
recover damages in the amount  provided in Section 19.2(a) hereof.  In the event
of such  termination,  neither Tenant nor any person  claiming  through or under
Tenant or by virtue of any  statute or order of any court  shall be  entitled to
possession of the Premises but shall surrender the Premises to Landlord. Nothing
contained  herein  shall  limit or  prejudice  the right of  Landlord to recover
damages by reason of any such termination equal to the maximum amount allowed by
any  statute  or rule of law in  effect  at the time  when,  and  governing  the
proceedings in which, such damages are to be proved,  whether or not such amount
is greater,  equal to, or less than the amount of damages  recoverable under the
provisions  of  this  Article.  

ARTICLE  XVI                INDEMNITY AND INSURANCE.

     16.1 Tenant's Indemnity.  Tenant shall protect,  defend, indemnify and hold
Landlord, its partners, shareholders,  officers, directors, trustees, employees,
agents, authorized  representatives and contractors  (collectively,  "Landlord's
Affiliates") harmless from and against any and all claims,  demands,  judgments,
loss,  cost,  expense,  liability,  damage  or injury to  property  or  persons,
resulting from or occurring by reason of: (a) the use, occupancy or nonoccupancy
of the  Premises or by the actions or  inactions,  whether or not  negligent  of
Tenant and/or any subtenant, and their agents, officers, employees, contractors,

                                      -17-


<PAGE>

customers,  invitees,  or licensees whether the active or passive  negligence of
Landlord  was or is a  contributing  factor;  (b) any  default or breach of this
Lease by  Tenant;  and (c) the  failure  of  Tenant  or any  other  occupant  to
surrender  possession of the Premises upon the expiration or earlier termination
of this Lease in accordance  with the  provisions  of this Lease,  either due to
failure of Tenant to timely  perform its  obligations  for removal and repair of
personal  property or any other reason,  which  indemnity  shall include without
limitation  any claims made by any  succeeding  Tenant  founded upon such delay;
provided,  however,  that Tenant shall not be obligated to so indemnify Landlord
or any of Landlord's  Affiliates from matters arising from or caused by the sole
willful  misconduct  or  gross  negligence  of  Landlord  or any  of  Landlord's
Affiliates  each  acting  within  the  scope of their  authority  on  behalf  of
Landlord.  Payment of any sum by Landlord shall not be a condition  precedent to
Tenant's obligations hereunder.  If Tenant is required to defend Landlord,  then
Landlord  shall be entitled to select its own defense  counsel and Tenant  shall
pay on behalf of, or to,  Landlord all defense  expenses  incurred by,  Landlord
including,  without limitation,  reasonable attorneys fees and expenses, fees of
experts and accountants and court costs.

     16.2 Tenant's  Insurance.  Tenant shall carry at its own expense throughout
the  Term  of this  Lease,  comprehensive  general  public  liability  insurance
covering the Premises and,  appurtenant  areas,  and Tenant's use thereof,  and,
covering  Tenant's   contractual   liability  under  this  Lease  in  an  amount
periodically adjusted to conform to then current standard business practices for
comparable business operations,  but in no case less than $2,000,000 in combined
single limit and general aggregate coverage for bodily injury or death, personal
injury and property damage.  Tenant shall keep in full force and effect a policy
or  policies  of  Worker's  Compensation  insurance  as required by law and with
employer's  liability  coverage of not less than  $500,000  per employee and per
occurrence.  The amounts of general liability and employer's liability insurance
shall be increased on the third  anniversary of the  Measurement  Date and every
third anniversary  thereafter to an amount reasonably  determined by Landlord as
may be required,  given the then  current  economic  conditions  and the size of
damage  awards  generally,  to  approximate  the same level of protection as was
provided on the Commencement  Date. Tenant shall provide Landlord with copies of
insurance  policies or other  evidence of such  insurance  coverage prior to the
Commencement  Date  of the  Lease  and  shall  provide  to  Landlord  copies  of
replacement  policies at least thirty (30) days prior to the date of  expiration
of a policy.  A binder or certificate of insurance shall be sufficient  evidence
of insurance pending issuance of a policy; provided,  however, that Tenant shall
forward a copy of each policy to Landlord when issued.  Such insurance  policies
shall be on forms  reasonably  acceptable to Landlord and such policies shall be
on an occurrence  basis.  Such insurance  shall name Landlord and any management
agent from time to time  designated  by  Landlord  and any lender of Landlord as
additional  insureds,  and shall provide that  coverage of  additional  insureds
shall be primary and that any insurance  maintained by Landlord  shall be excess
only.  Such insurance  shall provide that the interests of Landlord,  Tenant and
other  insureds  shall be severable such that the act or omission of one insured
shall not avoid or reduce the coverage of other  insureds.  Such insurance shall
contain  endorsements (i) stating that the insurer agrees to notify Landlord not
less than thirty (30) days in advance of modification  or cancellation  thereof,
(ii)  deleting  any  employee  exclusion  on  personal  injury  coverage,  (iii)
including  employees as additional  insureds,  (iv) deleting any exclusion  from
liability caused by serving alcoholic beverages incidental to Tenant's business,
and (v) providing for coverage for  employer's  nonowned  automobile  liability.
Failure of Tenant to maintain insurance coverages required by this Lease for any
time  period  during  the Term or  failure  of Tenant  to  deliver  evidence  of
insurance or copies of policies shall be material defaults under this Lease.

     16.3  Tenant's  Property.  Tenant  agrees  that all  personal  property  of
whatever kind, including,  without limitation,  inventory and/or goods stored at
or about the Premises,  Tenant's trade fixtures and Tenant's  interest in tenant
improvements which may be at any time located in, on or about the Premises, the

                                      -18-

<PAGE>

Building,  whether  owned by Tenant or third  parties  shall be at Tenant's sole
risk or at the risk of those claiming  through  Tenant,  and that Landlord shall
not be liable  for any  damage to or loss of such  property  except  for loss or
damage arising from or caused by the sole gross negligence of Landlord or any of
Landlord's officers, employees, agents or authorized representatives each acting
within the scope of their authority.  Tenant shall obtain and maintain  policies
of fire and extended  coverage and sprinkler damage insurance  covering the full
replacement cost of all such property.

     16.4 Form of Insurance Policies.  All insurance policies required of Tenant
by this Lease shall be  obtained  from  insurers  doing  business in  California
having a rating of A XIII or better in the  current  issue of "Best's  Insurance
Guide".  All loss  payable  clauses  shall name  Landlord as a loss payee and/or
conform to the  requirements of any mortgage  lenders.  Tenant's  insurance may,
provided  Tenant obtains the prior written  approval of Landlord (which approval
shall not be  unreasonably  withheld),  provide for  deductibles  in  reasonable
amounts.  If Tenant  requests  approval of a  deductible,  Tenant shall  provide
evidence of financial responsibility  reasonably satisfactory to Landlord to pay
the deductible  amount in the event of a loss. Any policy of insurance  required
to be  maintained  by Tenant under this Lease may be  maintained  under a policy
commonly  referred to as a "blanket  policy" insuring other parties and/or other
locations; provided however, that the amount of insurance and the scope and type
of coverage shall conform to the requirements contained in this Lease.

     16.5  Exemption  of  Landlord  From  Liability.  Except  in  the  event  of
Landlord's  sole gross  negligence or willful  misconduct,  Tenant hereby agrees
that Landlord (including Landlord's officers,  trustees,  partners,  affiliates,
directors,  agents,  management  contractors and  representatives  (collectively
referred  to as  "Landlord's  Affiliates")  shall  not be liable  for  injury to
Tenant's business or loss of income therefrom or for damage to the goods, wares,
merchandise  or  other  property  of  Tenant,   Tenant's  employees,   invitees,
customers,  or any other person in or about the Premises.  Tenant further agrees
that Landlord and  Landlord's  Affiliates  shall not be liable for injury to the
person of Tenant,  Tenant's  employees,  agents or  contractors  or to  Tenant's
property,  whether  such  damage or injury is caused by or  results  from  fire,
steam,  electricity,  gas,  water  or  rain,  or  from  the  breakage,  leakage,
obstruction or other defects of pipes, sprinklers, wires, appliances,  plumbing,
heating,  ventilation, air conditioning, or lighting fixtures, or from any other
cause,  whether  damage or  injury  results  from  conditions  arising  upon the
Premises or upon other  portions of the Building or the  Project,  or from other
sources or places  appurtenant  to the  Premises and  regardless  of whether the
cause  of  such  damage  or  injury  or the  means  of  repairing  the  same  is
inaccessible to Tenant.  Landlord and Landlord's  Affiliates shall not be liable
for any damages arising from any act or neglect of any other tenant,  if any, of
the Building or the Project.

     16.6 Waiver of  Subrogation,  Landlord and Tenant hereby release each other
from any and all liability for any loss,  damage or injury to person or property
occurring in, on or about or to the Premises,  improvements to the Building,  or
person or  property  in,  on or about or to the  Premises,  improvements  to the
Building or  personal  property  within the  Building by reason of fire or other
casualty which is required:  to be insured against,  as stipulated in this Lease
under a standard  fire and extended  coverage  insurance  policy,  regardless of
cause,  including the negligence of Landlord or Tenant.  Each party shall notify
their insurance carrier of this waiver of subrogation. If Tenant's insurer fails
to obtain a waiver of subrogation against Landlord,  then Landlord's  obligation
to obtain a waiver of subrogation shall cease and terminate.

     16.7 Waiver of Damages.  Tenant hereby  acknowledges that the City may from
time to time impose certain restrictions which will affect Tenant, its employees
and  visitors  during  such times as it may chose to  schedule/sponsor/cooperate
with various  municipal  and or private  party  events.  Such  restrictions  may
provide for limited vehicular and pedestrian access to the Building, its parking
facilities,

                                      -19-
<PAGE>

and the public  streets,  sidewalks and  rights-of-way  surrounding  them.  Such
restrictions may apply from before the  commencement  until after the conclusion
of each event.  Tenant  acknowledges  that such restrictions will interfere with
vehicular  and  pedestrian  access to the Building  and its parking  facilities.
Tenant  hereby  waives all  claims  against  Landlord  for  damages,  losses and
expenses of any kind  whatsoever  arising from or related to the  imposition  of
such restrictions.

ARTICLE XVII                DAMAGE OR DESTRUCTION.

     If either the Building,  the Project or the Premises should be partially or
wholly  destroyed  or  damaged  by fire or other  casualty  and such  damage  or
destruction cannot in Landlord's judgment be repaired or substantially  restored
within 180 days of the date of such damage or  destruction,  then Landlord shall
so notify  Tenant and either  party  hereto may, at its option,  terminate  this
Lease by giving  written  notice thereof to the other party within 30 days after
the date of such casualty. In such event, rent shall be apportioned to and shall
cease as of the date of such casualty.  If neither party  exercises this option,
then the Premises shall be reconstructed and restored, at Landlord's expense, to
substantially  the same  condition as they were prior to the casualty,  provided
that, if Tenant has made any alterations,  additions or improvements pursuant to
Article 11 or if tenant  improvements  have been constructed at a cost in excess
of costs paid or reimbursed by Landlord,  then Tenant shall  reimburse  Landlord
for the  excess  cost of  reconstructing  the  same  whether  or not the cost of
restoration  exceeds  the cost of  initial  construction.  In the  event of such
reconstruction,  rent shall be abated in  proportion to the area of the Premises
not capable of use by Tenant  from the date of the  casualty  until  substantial
completion of the  reconstruction  repairs and this Lease shall continue in full
force and effect for the balance of the Term.

     If the Project,  the Building or the Premises  should be damaged by fire or
other casualty and, in Landlord's  judgment,  the Premises can be  substantially
restored  within 180 days of the date of such damage,  then such damaged part of
the Premises shall be  reconstructed  and restored,  at Landlord's  expense,  to
substantially  the same  condition as they were prior to the casualty,  provided
that if Tenant has made any alterations,  additions or improvements or if tenant
improvements  have been  constructed  for a cost in excess  of  amounts  paid by
Landlord,   then  Tenant  shall  reimburse  Landlord  for  the  excess  cost  of
reconstructing  the same whether or not the cost of reconstruction  exceeds cost
of  initial  construction.  Rent  shall be  abated in the  proportion  which the
approximate  area of the damaged and destroyed  portion of the Premises bears to
the total area in the Premises from the date of the casualty  until  substantial
completion of the reconstruction  repairs; and this Lease shall continue in full
force and effect  for the  balance of the Term.  Landlord  shall use  reasonable
diligence in completing such reconstruction repairs.

     Notwithstanding anything else to the contrary contained in this Article 17,
Landlord shall have no obligation to pay for the repair or restoration of damage
or  destruction  to the Premises  caused by fire or other casualty more than the
amount of the insurance  proceeds  payable for the benefit of Landlord by reason
of such damage or destruction,  plus any amounts actually paid by Tenant for the
excess of the cost of reconstructing  tenant improvements over the original cost
of such tenant improvements paid initially by Landlord.

ARTICLE XVIII                    EMINENT DOMAIN.

     If the whole or any part of the  Premises  or  appurtenant  areas  shall be
taken for public or quasi-public use by a governmental or other authority having
the power of eminent  domain or shall be conveyed to such  authority  in lieu of
such taking,  and if such taking or conveyance shall cause the remaining part of
the Premises or appurtenant areas not so taken to be untenantable and inadequate
for use by  Tenant,  then  this  Lease  shall  terminate  as of the date of such
taking.  If a part of the Premises  and/or  appurtenant  areas shall be taken or
conveyed but

                                      -20-


<PAGE>

the  portion,  remaining  after  restoration  can be made  usable  for  Tenant's
purposes,  then this  Lease  shall not be  terminated  as  provided  for in this
Article  18, but this Lease  shall be  terminated  only as to the portion of the
Premises  (without  consideration of appurtenant  areas) taken or conveyed as of
the date Tenant  surrenders  possession  of such  portion of the  Premises,  and
Landlord  shall  make  such  repairs,  alterations  and  improvements  as may be
necessary  to  render  any part  not  taken or  conveyed  tenantable;  provided,
however, Landlord shall have no obligation to pay for such repairs,  alterations
and  improvements  more than the amount of such award payable for the benefit of
Landlord for such taking,  and the rent shall be reduced  proportionately to the
amount (based on square footage) of the Premises taken. All compensation awarded
for such taking or  conveyance  shall be the  property  of Landlord  without any
deduction  therefrom  for any  present or future  estate of  Tenant,  and Tenant
hereby  assigns to Landlord  all of its right,  title and interest in and to any
such award. Tenant shall have no claim against Landlord or against the condemnor
for the value of any  unexpired  portion of the term of this Lease or otherwise,
and Tenant  shall not be  entitled to any part of any award that may be made for
such  taking.  However,  Tenant  shall  have the  right  to  recover  from  such
authority,  but not from Landlord, such compensation as may be awarded to Tenant
on account of moving and, relocation expenses and depreciation to and removal of
Tenant s trade  fixtures and personal  property.  It is further  understood  and
agreed  that  neither the Tenant nor the  Landlord  shall have any rights in any
award  made  to  the  other  by  any   condemnation   authority.   

ARTICLE   XIX                 DEFAULTS AND REMEDIES.

     19.1 Tenant's  Default.  The occurrence of any one or more of the following
events shall be a default and breach of this Lease by Tenant:

          (a) Tenant  fails to pay any rent  payment or other sum due under this
     Lease within five (5) days after the same shall be due and payable.

          (b) Tenant fails to perform or observe any term,  condition,  covenant
     or  obligation  required to be performed or observed by it under this Lease
     for a period of thirty (30) days (or such  shorter  time  provided  herein)
     after notice thereof from Landlord;  provided,  however,  that if the term,
     condition,  covenant or  obligation  to be  performed  by Tenant is of such
     nature that the same cannot reasonably be cured within thirty (30) days and
     if Tenant commences such performance within said thirty-day (30) period and
     thereafter  diligently  undertakes to complete the same,  then such failure
     shall not be a default  hereunder  if it is cured  within  sixty  (60) days
     following Landlord's notice.

          (c) Tenant  vacates or abandons,  or fails to occupy the Premises,  or
     any substantial portion thereof, for a period of fourteen (14) days.

          (d) A trustee,  disbursing  agent,  or receiver is  appointed  to take
     possession of all or  substantially  all of Tenant's assets in, on or about
     the  Premises  or of  Tenant's  interest  in this Lease (and  Tenant or any
     guarantor  of  Tenant's  obligations  under  this  Lease  does  not  regain
     possession within sixty (60) days after such appointment);  Tenant makes an
     assignment  for the benefit of creditors;  or all or  substantially  all of
     Tenant's  assets in, on or about the Premises or Tenant's  interest in this
     Lease are  attached  or levied  upon under  execution  (and Tenant does not
     discharge the same within sixty (60) days thereafter).

          (e) A petition in bankruptcy,  insolvency,  or for  reorganization  or
     arrangement  is filed by or against  Tenant or any  guarantor  of  Tenant's
     obligations under this Lease pursuant to any federal or state statute, and,
     with  respect  to any  such  petition  filed  against  it,  Tenant  or such
     guarantor  fails to secure a stay or  discharge  thereof  within sixty (60)
     days after the  filing  of  the   same.  

                                      -21-

  <PAGE>

          (f) Immediately,  in the event of any assignment,  subletting or other
     transfer for which the prior  written  consent of the Landlord has not been
     obtained.

          (g) Immediately,  in the event of discovery of any false or misleading
     statement concerning financial  information submitted by Tenant to Landlord
     in connection  with  obtaining this Lease or any other consent or agreement
     by Landlord.

     19.2  Landlord's  Remedies.  Upon the  occurrence  of any event of default,
Landlord  shall have the  following  rights and  remedies,  in addition to those
allowed by law or in equity,  any one or more of which may be  exercised  or not
exercised  without  precluding  the Landlord  from  exercising  any other remedy
provided in this Lease or otherwise allowed by law or in equity:

          (a) Landlord may terminate this Lease and Tenant's right to possession
     of the Premises. If Tenant has abandoned and vacated the Premises, the mere
     entry of the Premises by Landlord in order to perform acts of  maintenance,
     cure defaults,  preserve the Premises, or to attempt to relet the Premises,
     or the  appointment  of a  receiver  in order  to  protect  the  Landlord's
     interest  under this Lease,  shall not be deemed a termination  of Tenant's
     right to  possession  or a  termination  of this Lease unless  Landlord has
     notified  Tenant in writing that this Lease is terminated.  Notification of
     any  default in Section  19.1 of this Lease shall be in lieu of, and not in
     addition  to, any notice  required  under  Section  1161,  et seq.,  of the
     California Code of Civil Procedure.  If Landlord  terminates this Lease and
     Tenant's  right to possession of the Premises  pursuant to this  Subsection
     19.2(a), then Landlord may recover from Tenant:

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

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

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

               (iv) Any other amounts  necessary to compensate  the Landlord for
          all of the detriment proximately caused by Tenant's failure to perform
          its  obligations  under this  Lease  which in the  ordinary  course of
          things  would  be  likely  to  result  therefrom,  including,  without
          limitation,  any legal expenses,  brokers  commissions or finders fees
          (in connection with reletting the Premises and the pro rata portion of
          any leasing  commission paid by Landlord in connection with this Lease
          which is  applicable  to the  portion  of the Term,  including  option
          periods,  which  is  unexpired  as of the  date on  which  this  Lease
          terminated), the costs of repairs, cleanup, refurbishing,  removal and
          storage or disposal of Tenant's personal property, equipment, fixtures
          and anything  else that Tenant is required  under this Lease to remove
          but does not  remove  (including  those  alterations  which  Tenant is
          required to remove  pursuant to an election by Landlord  and  Landlord
          actually removes whether or not notice to remove shall be delivered to
          Tenant),  and any costs for  alterations,  additions  and  renovations
          incurred by Landlord in  regaining  possession  of and  reletting  (or
          attempting  to  relet)  the  Premises.  Tenant  shall  also  reimburse
          Landlord for the pro rata portion of leasehold  improvement costs paid
          by Landlord to install leasehold improvements on the Premises which is
          applicable to that portion of the Term  including  any option  periods
          which is unexpired as of the date of this Lease  discounted to present
          value.

                                      -22-

<PAGE>

          All  computations  of the  "worth at the time of the award" of amounts
     recoverable  by Landlord  under  Subsections  (i) and (ii) hereof  shall be
     computed by  allowing  interest at the  maximum  lawful  contract  rate per
     annum.  The "worth at the time of the award"  recoverable by Landlord under
     Subsection  (iii) and the  discount  rate for purposes of  determining  any
     amounts recoverable under Subsection (iv), if applicable, shall be computed
     by discounting  the amount  recoverable by Landlord at the discount rate of
     the Federal  Reserve Bank of  California  San  Francisco at the time of the
     award plus one percent (1%). If Tenant tenders to Landlord sums in an offer
     of  settlement  of payment of any sums due under  this  Subsection  19.2(a)
     after  Landlord has notified  Tenant of exercise of the remedies under this
     Subsection  19.2(a),  then the  "worth at the time of the  award"  shall be
     determined  at the time a lawful  tender of payment of the entire amount of
     such sums by Tenant.

          (b)  Upon  termination  of this  Lease,  whether  by  lapse of time or
     otherwise,  Tenant  shall  immediately  vacate  the  Premises  and  deliver
     possession to Landlord.  If Tenant has vacated the Premises and Landlord or
     any of its agents  have  reason to believe  that  Tenant does not intend to
     reoccupy the Premises,  and current or past rent has been due or unpaid for
     at least fourteen (14) consecutive days, then Landlord shall have the right
     to send Tenant a notice of belief of abandonment pursuant to Section 1951.3
     of the California  Civil Code. The Premises will be deemed  abandoned,  and
     the Tenant's right to possession of the Premises will terminate on the date
     set forth in such  notice,  unless  Landlord  receives  (at its address for
     notices  set forth in this  Lease)  before  such date a notice  from Tenant
     stating  (i)  Tenant's  intent not to  abandon  the  Premises,  and (ii) an
     address at which Tenant may be served in any action for  unlawful  detainer
     of the  Premises  and/or  damages and other  relief  available at law or in
     equity.   If  the  Premises  are  deemed  abandoned   (either  through  the
     aforementioned  procedure or due to any statement by Tenant to that effect)
     or if Landlord or any of its agents acts  pursuant to a court  order,  then
     Landlord  or any of its agents  shall have the right,  without  terminating
     this Lease,  to re-enter the Premises and remove all persons  therefrom and
     any or all of Tenant's  fixtures,  equipment,  furniture and other personal
     property (herein collectively referred to as "Property") from the Premises,
     without  being  deemed in any manner  liable  for  trespass,  eviction,  or
     forcible  entry  or  detainer,  or  conversion  of  Property,  and  without
     relinquishing  any right given to Landlord under this Lease or by operation
     of law. If Landlord re-enters the Premises in such situation,  all Property
     removed  from the Premises by Landlord or any of its agents and not claimed
     by the owner may be handled,  removed, or stored, in a commercial warehouse
     or otherwise by Landlord at Tenant's risk and expense,  and Landlord  shall
     in no event be  responsible  for the  value,  preservation  or  safekeeping
     thereof.  Before  retaking of any such Property from storage,  Tenant shall
     pay to Landlord, upon demand, all expenses incurred in such removal and all
     storage charges  against such Property.  Any such Property of Tenant not so
     retaken from storage by Tenant  within thirty (30) days after such Property
     is removed from the Premises  shall be deemed  abandoned  and may be either
     disposed of by Landlord  pursuant to Section 1988 of the  California  Civil
     Code or retained by Landlord as its own property.

          (c) Notwithstanding  Landlord's right to terminate this Lease pursuant
     to Section  19.2(a),  Landlord  may, at its option,  even though Tenant has
     breached this Lease and abandoned the Premises, continue this Lease in full
     force and  effect  and not  terminate  Tenant's  right to  possession,  and
     enforce all of Landlord's  rights and remedies under this Lease,  including
     the right to recover  rent as it becomes  due under this Lease  pursuant to
     Section 1951.4 of the  California  Civil Code. In such event Landlord shall
     be  entitled  to  recover  from  Tenant  all  costs  of   maintenance   and
     preservation of the Premises,  and all costs,  including attorneys fees and
     receivers fees,  incurred in connection with appointment of and performance
     by a receiver to protect the Premises and  Landlord's  interest  under this
     Lease. No reentry or taking possession of the Premises by Landlord pursuant
     to this Section 19.2(c) shall be construed as an election to terminate this
     Lease unless a written notice (signed by a duly  authorized  representative
     of Landlord) of intention to terminate this Lease is

                                      -23-

<PAGE>

     given to Tenant.  Landlord may at any time after default by Tenant elect to
     terminate   this  Lease  pursuant  to  Section   19.2(a),   notwithstanding
     Landlord's  prior  continuance  of this  Lease in effect  for any period of
     time, and upon and after Tenant's  default under this Lease,  Landlord may,
     but need not,  relet the  Premises  or any part  thereof for the account of
     Tenant to any person,  firm,  partnership,  corporation  or other  business
     entity for such rent, for such time and upon such terms as Landlord, in its
     sole discretion,  shall determine.  Subject to the provisions of this Lease
     regarding  assignment and  subletting in Article 20,  Landlord shall not be
     required to accept any  substitute  tenant  offered by Tenant or to observe
     any  instructions  given by Tenant  regarding such reletting.  Landlord may
     remove (and repair any damage caused by such removal) and store (or dispose
     of) any of Tenant's personal property,  equipment,  fixtures,  and anything
     else  Tenant is required  (under this Lease at the  election of Landlord or
     otherwise)  to  remove  but does not  remove,  and  Landlord  may also make
     repairs,  renovations,  alterations and/or additions to the Premises to the
     extent  deemed by Landlord  necessary or desirable in  connection  with any
     attempt to relet the  Premises,  Tenant  shall upon  demand pay the cost of
     such repairs,  alterations,  additions,  removal,  storage and renovations,
     together with any legal expenses,  brokers  commissions or finders fees and
     any other  expenses  incurred by Landlord in  connection  with entry of the
     Premises and attempting to relet the Premises. If Landlord is able to relet
     the Premises for Tenant's account during the remaining  portion of the Term
     and the  consideration  collected  by Landlord  from any  reletting  is not
     sufficient  to pay  monthly  the full  amount of rent and  additional  rent
     payable  by Tenant  under this  Lease,  together  with any legal  expenses,
     brokers  commissions  or finders fees,  any cost for repairs,  alterations,
     additions, removal, storage and renovations, and any other cost and expense
     incurred  by  Landlord  in  re-entering  the  Premises  and  reletting  the
     Premises,  then  Tenant  shall pay to Landlord  the amount of each  monthly
     deficiency  upon  demand.  Any rentals  received by Landlord  from any such
     reletting shall be applied as follows:

               (i) First, to the payment of any indebtedness other than rent due
          hereunder from Tenant to Landlord;

               (ii) Second, to the payment of any costs of reentry and reletting
          the Premises;

               (iii)  Third,  to the  payment of costs of any such  alterations,
          repairs, additions, removal, storage and renovations to the Premises;

               (iv)  Fourth,  to the  payment of rent due and unpaid  under this
          Lease; and

               (v) The residue, if any, shall be held by Landlord and applied as
          payment of future  rent as the same may become due and  payable  under
          this Lease.

          (d) No act or omission by Landlord or its agents during the Term shall
     be an  acceptance of a surrender of the Premises and no agreement to accept
     a  surrender  of the  Premises  shall be valid  unless  made in writing and
     signed by a duly authorized representative of Landlord.  Neither any remedy
     set forth in this Lease nor pursuit of any particular remedy shall preclude
     Landlord  from  any  other  remedy  set  forth in this  Lease or  otherwise
     available at law or in equity.  Landlord shall be entitled to a restraining
     order or injunction to prevent  Tenant from  breaching or defaulting  under
     any of its  obligations  under this Lease other than the payment of rent or
     other sums due hereunder.

          (e)  Neither  the  termination  of this Lease nor the  exercise of any
     remedy  under this Lease or  otherwise  available at law or in equity shall
     affect the right of Landlord to any right of  indemnification  set forth in
     this  Lease  or  otherwise  available  at law or in  equity  for any act or
     omission of Tenant,  and all rights to indemnification or other obligations
     of Tenant are 

                                      -24-

<PAGE>

     intended to be  performed  after  termination  of this Lease shall  survive
     termination  of this Lease and  termination of Tenant's right to possession
     under this Lease.

     19.3 Default By Landlord And Remedies Of Tenant.  It shall be a default and
breach of this Lease by  Landlord  if it shall  fail to  perform or observe  any
term, condition,  covenant or obligation required to be performed or observed by
it under this Lease for a period of thirty (30) days after  notice  thereof from
Tenant; provided,  however, that if the term, condition,  covenant or obligation
to be performed by Landlord is of such nature that the same cannot reasonably be
performed  within such thirty (30) day period,  such default  shall be deemed to
have been cured if Landlord  commences such performance  within said thirty (30)
day period and thereafter diligently undertakes to complete the same.

     Tenant  shall  not have the  right  based  upon a default  of  Landlord  to
terminate  this  Lease or to  withhold,  offset  or abate  rent,  Tenant's  sole
recourse for Landlord's default being an action for damages against Landlord for
diminution  in the rental  value of the  Premises  for the period of  Landlord's
default,  which is proximately  caused by Landlord's  default.  Tenant shall not
have the  right to  terminate  this  Lease or to  withhold,  offset or abate the
payment of rent based upon the unreasonable or arbitrary withholding by Landlord
of its  consent  or  approval  of any  matter  requiring  Landlord's  consent or
approval,  including but not limited to any proposed  assignment or  subletting,
Tenant's remedies in such instance being limited to a declaratory relief action,
specific performance,  injunctive relief or an action of actual damages.  Tenant
shall not in any case be entitled to any consequential or punitive damages based
upon any Landlord default or withholding of consent or approval. Notwithstanding
anything to the contrary contained in this Lease,  Tenant agrees and understands
that  Tenant  shall look  solely to the estate and  property  of Landlord in the
Building of which the  Premises are a part for the  enforcement  of any judgment
(or other judicial decree)  requiring the payment of money by Landlord to Tenant
by  reason  of any  default  or breach by  Landlord  in the  performance  of its
obligations  under this Lease,  it being intended hereby that no other assets of
Landlord or any of Landlord's  Affiliates  shall be subject to levy,  execution,
attachment or any other legal process for the enforcement or satisfaction of the
remedies pursued by Tenant in the event of such default or breach.

     In the  event  of a sale or  transfer  of the  Premises  by  Landlord,  the
Landlord named herein, or, in the case of a subsequent transfer, the transferor,
shall,  after the date of such  transfer,  be  automatically  released  from all
personal  liability for the  performance  or observance of any term,  condition,
covenant  or  obligation  required  to be  performed  or  observed  by  Landlord
hereunder; and the transferee shall be deemed to have assumed all of such terms,
conditions, covenants and obligations, it being intended hereby that such terms,
conditions,  covenants  and  obligations  shall be binding  upon  Landlord,  its
successors and assigns only during and in respect of their successive periods of
ownership during the Term.

     19.4 Non-waiver Of Default.  The failure or delay by either party hereto to
enforce  or  exercise  at any  time  any of the  rights  or  remedies  or  other
provisions  of this Lease shall not be  construed  to be a waiver  thereof,  nor
affect  the  validity  of any part of this  Lease or the right of  either  party
thereafter to enforce each and every such right or remedy or other provision. No
waiver of any  default or breach of this  Lease  shall be held to be a waiver of
any other or subsequent  default or breach. The receipt by Landlord of less than
the full rent due shall not be  construed  to be other than a payment on account
of rent then due,  no  statement  on Tenant's  check or any letter  accompanying
Tenant's check be deemed an accord and satisfaction, and Landlord may accept any
payment without prejudice to Landlord's right to recover the balance of the rent
due or to pursue any other  remedies  provided in this Lease or available at law
or in equity. 

                                      -25-

<PAGE>

ARTICLE XX  ASSIGNMENT AND SUBLETTING.

     Tenant covenants and agrees that neither all nor any part of Tenant's
interest under this Lease shall be assigned, sublet, mortgaged, pledged or
otherwise transferred (whether voluntarily, involuntary or by operation of law,
or otherwise), without the prior written consent of Landlord, which consent
shall not be unreasonably withheld. Tenant agrees that it shall not be
unreasonable for Landlord to withhold its consent for any of the following
reasons which are not exclusive:

          (a) The proposed assignee or sublessee is not a reputable party or
     reasonable financial worth and/or financial stability in view of the
     responsibilities involved;

          (b) In the sole judgment of Landlord, the proposed assignee or
     sublessee is of a character or engaged in a business which is not in
     keeping with the standards of Landlord in the Project;

          (c) The proposed assignee or sublessee is a governmental authority (or
     a subdivision or agency thereof);

          (d) The terms of the proposed assignment or sublease will allow the
     assignee or sublessee to exercise a right of renewal or extension, right of
     expansion, right of first offer or other similar right held by Tenant; or

          (e) The proposed assignee or sublessee or any of its affiliates
     occupies space in the Project at the time of the request for consent.

     Landlord's consent may be made or withheld subject to such terms and
conditions as Landlord considers necessary in order to protect its interest in
the Premises, the Building and the Project, including but not limited to the
following: that the proposed transferee shall execute, acknowledge and deliver
to Landlord an agreement in form and substance satisfactory to Landlord whereby
such transferee shall assume and agree to perform and to be personally bound by
and upon all the covenants, agreements, terms and conditions of this Lease on
the part of Tenant to be performed and whereby such transferee shall expressly
agree that the provisions of this Article, notwithstanding such assignment and
transfer, shall continue to be binding upon it with respect to future
assignments, subleases, and/or other transfers; in the event Landlord requires
personal guarantees from financially responsible persons as a condition of
consent, that such guarantors shall execute, acknowledge and deliver an absolute
and unconditional guaranty in a form presented by Landlord which shall contain
waivers of all defenses to the maximum extent permitted by law; and that Tenant
shall continue to be liable to Landlord under this Lease for the terms,
covenants, and conditions to be complied with by Tenant whether this Lease is
assigned or sublet.

     If at any time Tenant desires to enter into an assignment or subletting,
Tenant shall submit to Landlord in writing (i) the name of the proposed assignee
or sublessee, (ii) such information as to such assignee's or sublessee's
financial responsibility and standing as Landlord may reasonably require, and
(iii) the proposed sublease or instrument of assignment containing all of the
terms and conditions of the proposed assignment or sublease. At any time within
thirty (30) days after Landlord's receipt of Tenant's full submission (including
any additional information Landlord may request), Landlord may by written notice
to Tenant elect either to: (a) consent to the proposed sublease or assignment;
(b) withhold its consent to the proposed sublease or assignment; (c) terminate
this Lease in its entirety in the case of a proposed assignment or with respect
to the proposed sublease premises in the case of a proposed sublease (in which
case the rent, parking rights and any other rights or obligations under this
Lease which are based upon the square footage of the Premises shall be
proportionately adjusted, and Tenant shall pay the cost of any alterations
necessary to divide the proposed


                                     - 26 -
<PAGE>


sublease premises from the remainder of the Premises), which termination shall
take effect on the date set forth in Landlord's notice but in no event more than
ninety (90) days after Landlord has so notified Tenant; or (d) take an
assignment or sublease, as applicable, from Tenant in its own name on the same
terms as Tenant shall propose to enter into an assignment or sublease (but
Landlord shall have the unqualified right to re-assign, sublet or sub-sublet
without Tenant's consent and Landlord may offset any sums due or to become due
to Tenant under any assignment or sublease against any sums due to Landlord
under this Lease).

     If Tenant shall assign this Lease or sublet any portion of the Premises,
Tenant shall pay to Landlord as additional rent as and when received by Tenant:

          (a) In the case of an assignment, an amount equal to 50% of all
     consideration paid to Tenant by the assignee for or by reason of the
     assignment, whether paid in a lump sum or over time, including but not
     limited to any sums paid for personal property or services in excess of the
     fair market value thereof and sums paid for tenant improvements or
     fixtures;

          (b) In the case of a sublease, an amount equal to 50% of the amount by
     which the sublease rent and any other consideration paid to Tenant, whether
     paid in a lump sum or over time, including but not limited to any sums paid
     for personal property or services in excess of the fair market value
     thereof and sums paid for tenant improvements or fixtures, exceeds the
     rents payable which are proportionately allocable to the subleased premises
     based on the ratio of the area of the subleased premises to the area of the
     entire Premises.

     Tenant shall be deemed to have assigned its interest hereunder within the
meaning of this Article if legal or beneficial interests representing 20% or
more of the interests in either voting power, capital, or profits in any
corporation, partnership, joint venture, or other entity comprising Tenant are
transferred by any means.

     If this Lease is assigned, or if the Premises or any part thereof are
sublet or occupied by anyone other than Tenant, without first obtaining
Landlord's consent and complying with all conditions to such consent, then
Tenant shall be in default under this Lease and Landlord may collect rent from
the assignee, subtenant or occupant, and apply the net amount collected to the
rent herein reserved but no such assignment, subletting, occupancy or collection
shall be deemed a waiver by Landlord of any default by Tenant or of the
obligation of Tenant to perform all covenants and comply with all conditions
contained in this Lease or a release of Tenant from the performance by Tenant of
the covenants on the part of Tenant contained in this Lease.

     Tenant shall reimburse Landlord for any reasonable costs and expenses,
including but not limited to legal expenses, incurred by Landlord in connection
with its review of any proposed assignment or subletting, whether or not
Landlord gives its consent.

     Landlord shall have the right to sell, transfer, or assign its interest
hereunder, or any part thereof, without the prior consent of Tenant. After such
sale, transfer, or assignment, Tenant shall attorn to such purchaser,
transferee, or assignee.

ARTICLE XXI  SUBORDINATION AND ESTOPPEL.

     At the election of Landlord, or the holder of any mortgage or deed of trust
affecting real property of which the Premises are a part, this Lease and all of
the rights of Tenant hereunder shall be subject and subordinate at all times to
all deeds of trust or mortgages which may now or hereafter affect the real
property of which the Premises are a part, and to all renewals, modifications,
consolidations, replacements and extensions thereof. At the request of Landlord


                                     - 27 -
<PAGE>


or the holder of such mortgage or deed of trust, Tenant shall execute,
acknowledge and deliver promptly in recordable form any instrument or
subordination agreement that Landlord or such holder may request; provided,
however, that such instrument shall include a provision requiring the purchaser
at any foreclosure sale or other execution sale to continue this Lease in full
force and effect in the same manner as if such purchaser were the Landlord so
long as Tenant is not otherwise in default and requiring Tenant to attorn to
such purchaser. If Tenant fails to execute such instrument within ten (10) days
after a request to do so, such failure shall be a material default under this
Lease.

     Within ten (10) days after request therefor by Landlord, Tenant agrees to
execute and deliver in recordable form an estoppel certificate to any holder of
a mortgage or proposed mortgage or proposed purchaser or to Landlord certifying
(if such is the case) that this Lease is unmodified and in full force and effect
(and if there has been any modification, that the same is in full force and
effect as modified and stating the modifications); that there are no uncured
defaults by Landlord; that there are no defenses or offsets against the
enforcement thereof or stating those claimed by Tenant; stating the date to
which rent and other sums due hereunder are paid; and containing such other
statements regarding this Lease, the Premises or Tenant as Landlord, the
proposed mortgagee or purchaser shall reasonably require. Such certificate shall
also include such other information and agreements by Tenant to protect the
security interest of any lender as may be required or requested by such lender.
The failure by Tenant to deliver any such certificate within ten (10) days after
request therefor shall be deemed to constitute the certification by Tenant that
this Lease is in full force and effect and has not been modified except as may
be represented by Landlord, that no rent or other payment has been paid more
than one month in advance, and that there are no uncured defaults by Landlord
and there are no defenses or offsets against the enforcement thereof. If Tenant
fails to deliver such estoppel certificate within said ten (10) days, Tenant
shall and does hereby irrevocably appoint Landlord as Tenant's attorney in fact
to execute and deliver such certificate. Failure of Tenant to provide such
statement, whether Landlord acts as agent to provide a statement or not, shall
be a material default under this Lease, and Tenant shall indemnify Landlord for
all liabilities, costs, expenses and losses (including forfeited deposits, lost
opportunity to pay lower interest or to obtain additional investment funds and
other consequential damages.)

ARTICLE XXII  BUILDING PLANNING.

     If Landlord requires the Premises for use in conjunction with another suite
or for other reasons connected with the Landlord's Building planning program,
upon notifying Tenant in writing, Landlord shall have the right to move Tenant
to other space in the Building, which is or shall be built out by Landlord in a
manner comparable to the Premises, and the terms and conditions of the original
Lease shall remain in full force and effect, save and excepting that a revised
Exhibit "A" shall become part of this Lease and shall reflect the location of
the new space. Landlord shall pay the reasonable costs of moving Tenant's
furniture, equipment and personal property to the new space and shall reimburse
Tenant for reasonable incidental costs of moving such as reprinting stationery
with Tenant's new location.

ARTICLE XXIII  NOTICES.

     Any and all notices, approvals or demands required or permitted under this
Lease shall be in writing and shall be served either personally or by United
States Certified Mail, postage prepaid, return receipt requested. If served
personally service shall be deemed conclusively to occur at the time of service.
If served by Certified Mail, service shall be deemed conclusively to occur on
the second business day after the postmark, postage meter date, or the date
stamped by the United States Postal Service on a certified mail receipt provided
such item of mail reflects the correct postage and the latest known address of
the party to whom such notice or demand is to be given. Such item of mail shall
be


                                     - 28 -
<PAGE>


presumed to have the correct postage the latest known address of the addressee
and to have been mailed on the date asserted by the party giving notice. The
burden of proving improper postage and/or address and/or date shall be on the
party seeking to prove improper notice. Any notice or demand to each respective
party shall be sent to their addresses as set forth in the Basic Lease
Provisions, or to such other address of which such party shall advise the other
in writing in the manner provided in this Article; provided, however, that any
notice or demand made upon Tenant may be made and shall be complete if delivered
to the Premises. All notices to Landlord shall be deemed incomplete and not made
unless delivered to each of the addresses set forth in the Basic Lease
Provisions and/or such other address or addresses as Landlord shall advise
Tenant by delivery of written notice to Tenant in accordance with this Section.
 
ARTICLE XXIV  BROKERS.

     Tenant warrants that it has had no dealings with any real estate broker or
agent in connection with the negotiation of this Lease, except the broker listed
in the Basic Lease Provisions whose commission shall be payable by Landlord, and
that it knows of no other real estate broker or agent who is or might be
entitled to a commission in connection with this Lease. If Tenant has dealt with
any other person or real estate broker with respect to leasing or renting space
in the Building, Tenant shall be solely responsible for the payment of any fee
due such person or broker and Tenant shall hold Landlord free and harmless,
against any liability in respect thereto, including attorneys fees and costs

ARTICLE XXV  HOLDING OVER.

     If Tenant holds over after the expiration or earlier termination of the
term of this Lease without the express written consent of Landlord, Tenant shall
become a Tenant at sufferance only, at a rental rate equal to two hundred
percent of the rent in effect upon the date of such expiration (subject to
adjustment as provided in Section 4.2 hereof and prorated on a daily basis), and
otherwise subject to the terms, covenants and conditions specified in this
Lease, so far as applicable. Acceptance by Landlord of rent after such
expiration or earlier termination shall not result in a renewal of this Lease or
waiver of any default or circumstances of termination. The foregoing provisions
of this Article are in addition to and do not affect Landlord's right of
re-entry or any rights of Landlord otherwise provided in this Lease or as
otherwise provided by law. If Tenant fails to surrender the Premises upon the
expiration of this Lease despite demand to do so by Landlord, Tenant shall
indemnify and hold Landlord harmless from all loss, cost, expense or liability,
including without limitation, any claim made by any succeeding tenant founded on
or resulting from such failure to surrender and any attorneys fees and other
costs of legal proceedings.

ARTICLE XXVI  MISCELLANEOUS.

     26.1 Rules And Regulations. Tenant shall faithfully observe and comply with
the "Rules and Regulations," a copy of which is attached hereto and marked
Exhibit D, and all reasonable and nondiscriminatory modifications thereof and
additions thereto from time to time put into effect by Landlord. Landlord shall
not be responsible to Tenant for the violation or non-performance by any other
tenant or occupant of the Building of any of the Rules and Regulations.

     26.2 Interpretation. This Lease shall be construed fairly as to all parties
and not in favor of or against any party regardless of which party prepared this
Lease. This Lease and the rights of the parties hereunder shall be interpreted
in accordance with the laws of the State of California and any issue or
proceeding arising out of this Lease shall be determined by a court of competent
jurisdiction in the County of Los Angeles, California.

     26.3 Successors and Assigns. This Lease and the respective rights and
obligations of the parties hereto shall inure to the benefit of and be binding
upon the successors and assigns of the parties hereto as well as the parties


                                     - 29 -
<PAGE>


themselves; provided, however, that Landlord, its successors and assigns shall
be obligated to perform Landlord's covenants under this Lease only during and in
respect of their successive periods of ownership during the term of this Lease.

     26.4 Surrender of Premises. The voluntary or other surrender of this Lease
by Tenant, or a mutual cancellation thereof, shall not work a merger, and shall,
at the option of Landlord, operate as an assignment to it of any or all
subleases or subtenancies.

     26.5 Attorneys' Fees.

          (a) If Landlord should bring suit for possession of the Premises, for
     the recovery of any sum due under this Lease, or because of the breach of
     any provisions of this Lease, or for any other relief against Tenant
     hereunder, or in the event of any other litigation between the parties with
     respect to this Lease, then all costs and expenses, including reasonable
     attorneys fees, incurred by the prevailing party therein shall be paid by
     the other party, which obligation on the part of the other party shall be
     deemed to have accrued on the date of the commencement of such action and
     shall be enforceable whether or not the action is prosecuted to judgment.
     The "prevailing party" in any action involving recovery of possession of
     the Premises shall be the Landlord if it recovers the right to possession,
     shall be the Landlord if it does not recover the right to possession but
     does obtain an award of damages against Tenant and shall be Tenant if
     Tenant retains the right to possession and does not suffer an award of
     damage against itself.

          (b) If Landlord is named as a defendant in any suit brought against
     Tenant in connection with or arising out of Tenant's occupancy hereunder,
     Tenant shall pay to Landlord its costs and, expenses incurred in such suit,
     including reasonable attorneys' fees.

     26.6 Performance By Tenant. All covenants and agreements to be performed by
Tenant under any of the terms of this Lease shall be performed by Tenant at
Tenant's sole cost and expense and without any abatement of rent. If Tenant
shall fail to pay any sum of money owed to any party other than Landlord, for
which it is liable hereunder, or if Tenant shall fail to perform any other act
on its part to be performed hereunder, and such failure shall continue for ten
(10) days after notice thereof by Landlord, Landlord may, without the obligation
to do so and/or waiving or releasing Tenant from its obligations, make any such
payment or perform any such other act to be made or performed by Tenant. All
sums so paid by Landlord and all necessary incidental costs together with
interest thereon at the maximum contract rate permissible by law, from the date
of such payment by Landlord, shall be payable by Tenant to Landlord on demand.
Tenant covenants to pay any such sums, and Landlord shall have (in addition to
any other right or remedy of Landlord) all rights and remedies in the event of
the nonpayment thereof by Tenant as are set forth in Article 19 hereof.

     26.7 Mortgagee Protection. In the event of any default on the part of
Landlord, Tenant shall notify, by registered or on certified mail, any
beneficiary of a deed of trust or mortgage covering the Premises whose address
shall have been furnished to Tenant, and shall offer such beneficiary or
mortgagee a reasonable opportunity to cure the default, including time to obtain
possession of the Premises by power of sale or a judicial foreclosure, if such
should prove necessary to effect a cure.

     26.8 Waiver. The waiver by Landlord of any breach of any term, covenant or
condition herein contained shall not be deemed to be a waiver of any subsequent
breach of the same or any other term, covenant or condition herein contained,
nor shall any custom or practice which may grow up between the parties in the
administration of the terms hereof be deemed a waiver of or in any way affect
the right of Landlord to insist upon the performance by Tenant in strict
accordance with said terms. The subsequent acceptance of rent hereunder by
Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of


                                     - 30 -
<PAGE>


any term, covenant or condition of this Lease, other than the failure of Tenant
to pay the particular rent so accepted, regardless of Landlord's knowledge of
such preceding breach at the time of acceptance of such rent.

     26.9 Identification of Tenant. If more than one person executes this Lease
as Tenant:

          (a) Each of them is jointly and severally liable for the keeping,
     observing and performing of all of the terms, covenants, conditions,
     provisions and agreements of this Lease to be kept, observed and performed
     by Tenant, and

          (b) The term "Tenant" as used in this Lease shall mean and include
     each of them jointly and severally. The act of or notice from, or notice or
     refund to, or the signature of any one or more of them, with respect to the
     tenancy of this Lease, including, but not limited to any renewal,
     extension, expiration, termination or modification of this Lease, shall be
     binding upon each and all of the persons executing this Lease as Tenant and
     binding upon any guarantor with the same force and effect as if each and
     all of them had so acted or so given or received such notice or refund or
     so signed or consented.

     26.10 Parking. Tenant shall have the right to lease on a monthly basis
permits for parking on an unreserved basis in the Project's parking facilities
the number of automobiles set forth in the Basic Lease Provisions. All such
permits shall be available at the same rates as established from time to time by
Landlord or Landlord's parking operator for other spaces in the same location
within the designated parking structure or lot. The use by Tenant, its employees
and invitees of the parking facilities of the Project shall be subject to such
rules and regulations as from time to time are established by Landlord or
Landlord's parking operator. The number of parking permits shall be subject to
reasonable adjustment by Landlord if such adjustment is required by any
governmental authority in connection with any traffic or pollution or other
control program of such governmental authority.

     26.11 Captions, Number, Gender, and Joint and Several Liability. The
article, title or section headings of the various provisions of this Lease are
intended solely for convenience of reference and shall not in any manner
amplify, limit or modify or otherwise be used in the interpretation of any of
such provisions. As used in this Lease, the masculine, feminine, or neuter
gender and the singular or plural number shall be deemed to include the other
whether the context so indicates or requires. If Tenant consists of more than
one person or entity, they and each of them shall be bound jointly and severally
by the terms, covenants and conditions of this Lease. This Lease shall be
construed without regard to any presumption or other rule requiring construction
against the party drafting a document.

     26.12 Lease Examination. Submission of this instrument for examination or
signature by Tenant does not constitute an offer or option to lease, and it
shall not be effective as a lease or otherwise until execution and delivery by
both Landlord and Tenant.

     26.13 Time is of the Essence. Time is of the essence of this Lease in 11
circumstances where time is an element.

     26.14 Entire Agreement. This Lease, together with its exhibits and
attachments referenced herein, which are incorporated herein by such reference
and shall constitute a part of this Lease, constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof, and the
final, complete and exclusive expression of the terms and conditions of this
Lease, all prior agreements, promises, representations, negotiations, and
understandings of the parties hereto, oral or written, express or implied, are
hereby superseded and merged herein, except for representations of financial
condition of Tenant delivered to Landlord upon which Landlord has relied in
connection with leasing of the Premises or consent to any matter.


                                     - 31 -
<PAGE>


     26.15 Severability. If any provision of this Lease, as applied to any party
or to any circumstance, shall be adjudged by a court of competent jurisdiction
to be void or unenforceable for any reason, the same shall not affect (to the
maximum extent permissible by law) any other provision of this Lease, the
application of such provision under circumstances different from those adjudged
by the court, or the validity or enforceability of this Lease as whole.

     26.16 Recording. Neither Landlord nor Tenant shall attempt to record this
Lease or any memorandum or short form of this Lease.

     26.17 Modifications For Lender. If, in connection with obtaining
construction, interim or permanent financing for the Building or the Project any
lender or proposed lender shall request reasonable modifications in this Lease
as a condition to such financing, then Tenant shall not unreasonably withhold,
delay or defer its consent thereto, provided that such modifications do not
increase the obligations of Tenant hereunder or materially, adversely affect the
leasehold interest hereby created or Tenant's rights hereunder.

     26.18 Payments to Affiliates. Nothing in this Lease shall be construed to
prevent Landlord from paying for services rendered or materials delivered with
respect to the Building, the Project or to the Premises (including, without
limitation, management services and contracting out capital improvements or
other capital repairs or construction items) by affiliates of Landlord or its
beneficiary, provided that the fees or costs of such services and materials are
at market rates in the metropolitan area of which the Project is a part. All
such fees or costs paid by Landlord to such affiliates shall be deemed to
constitute expenses of maintenance and repair on the same terms and conditions
as if such fees and costs were paid to nonaffiliates of Landlord or its
beneficiaries.

     26.19 Landlord's Inability to Perform. Landlord shall not be in default
hereunder if Landlord is unable to fulfill any of its obligations under this
Lease, provided Landlord is prevented or delayed from so doing by any accident,
breakage, repair, alteration, improvement, strike or labor troubles, moratorium,
war, civil unrest, act of God, or any outside cause whatsoever beyond the
reasonable control of Landlord, including, but not limited to, energy shortages
or governmental preemption in connection with a national emergency, or by reason
of law or any rule, order or regulation of any department or subdivision thereof
of any governmental agency, or by reason of the conditions of supply and demand
which have been or are affected by war, hostilities, or other emergency. The
performance by Landlord of its covenants contained in this Lease shall be
independent of Tenant's covenants to pay rent and perform Tenant's obligations
under this Lease. The failure of Landlord to perform its covenants under this
Lease shall not relieve Tenant of its covenants to pay rent and perform under
this Lease or entitle Tenant to any offset or abatement of rent, and Tenant
waives the benefit of any statute or rule of law now or hereafter in effect to
the contrary.

     26.20 Interest. Any sum due from Tenant to Landlord not paid when due shall
bear interest from the date due until the date paid at the annual rate of two
(2) percentage points per annum above the rate of interest then most recently
announced by Citibank, N.A., New York, New York, or its successor, as its prime
rate of interest, as such rate may change from time to time during this Lease;
provided, however, that such rate shall not exceed the maximum contract rate
permitted by law. The payment of such amount shall not excuse or cure any
default of Tenant under this Lease except as to the nonpayment of such amount.

     26.21 The Common Areas. The term "Common Areas" refers to the areas of the
Building and the realty in the Project which are designed for use in common by
all tenants of the Building and the Project and their respective employees,
agents, customers, invitees and others, and includes, by way of illustration and
not limitation, entrances and exits, hallways, stairwells, elevators, restrooms,
sidewalks, driveways, parking areas (subject to the right of Landlord or its
parking operator to control access thereto, charge for its use), landscaped
areas


                                     - 32 -
<PAGE>


and other areas as may be designated as part of the Common Areas. The Premises
shall include the nonexclusive right to use the Common Areas in common with and
subject to the rights of other tenants in the Building and the Project and the
rules and regulations established by Landlord.

     26.22 Authorized Signatory. If Tenant signs as a corporation, each person
executing this Lease on behalf of Tenant does hereby covenant and warrant that
Tenant is a duly authorized and existing corporation, that Tenant has and is
qualified to do business in California, that the corporation has full right and
authority to enter into this Lease, that each person executing this Lease on
behalf of the corporation is authorized to do so, and that such execution is
fully binding on the corporation. If Tenant signs as a partnership, joint
venture, or sole proprietorship (each being herein called "Entity") each person
executing on behalf of Tenant does hereby covenant and warrant that Tenant is a
duly authorized and existing Entity, that Tenant has full right and authority to
enter into this Lease, that each person executing this Lease on behalf of the
Entity is authorized to do so, and that such execution is fully binding on the
Entity and its partners, joint venturers, or principal, as the case may be.

     26.23 Covenants and Conditions. Each provision of this Lease required to be
performed by Tenant shall be deemed both a covenant and a condition.

     26.24 Reservations of Landlord. Landlord shall have the right to change the
name, number or designation of the Building or the Project without notice or
liability to Tenant. In addition, Tenant shall not, without Landlord's prior
written consent, use the name of the Building or the Project for any purpose
other than as the address of the business to be conducted by Tenant and the
Premises, and in no event shall Tenant acquire any rights in or to such names.
Landlord shall have the right at any time to change the arrangement and/or
location of entrances or passageways, doors and doorways, corridors, elevators,
stairs, toilets or other parts of the Common Area in the Building or the
Project, and Landlord reserves the right at any time to make alterations or
additions to the Building and to build adjoining the same. Landlord reserves the
right to construct other buildings or improvements in the vicinity of the
Building from time to time, to make alterations thereof or additions thereto,
and to build additional stories on any such buildings and to build adjoining the
same. Landlord further reserves the exclusive right to the roof of the Building.
No easement for light, air or view is included in the leasing of the Premises to
Tenant. Accordingly, any diminution or shutting off of light, air or view by any
structure which may be erected in the vicinity of the Building shall in no way
affect this Lease or impose any liability upon Landlord.

     26.25 Quiet Enjoyment. Subject to payment of all rents and other sums
required of Tenant under this Lease and observance and performance of all of the
covenants, terms and conditions required to be performed on the Tenant's part
and subject to the rights of any mortgagee or ground lessor having priority over
this Lease, Tenant shall peaceably hold the Premises for the Term hereby demised
without hindrance or interruption by Landlord or any other person or persons
lawfully or equitably claiming by, through or under the Landlord, subject,
nevertheless, to the terms and conditions of this Lease.

     26.26 Amendment. No amendment or addition, modification of or alteration of
any provision contained in this Lease shall be effective unless fully set forth
in writing and executed by Landlord and Tenant.

     26.27 Cumulative Rights. All rights, elections and remedies of Landlord
contained in this Lease shall be construed and held to be cumulative, and no one
of them shall be exclusive of the other and Landlord shall have the right to
pursue any one or all of such remedies or any other remedy or relief which may
be provided by law or equity, whether or not stated in this Lease.

     26.28 Financial Statements. Tenant represents and warrants that all
financial statements and financial information provided to Landlord prior to


                                     - 33 -
<PAGE>


execution of this Lease or in connection with obtaining any consent are true and
correct and accurately reflect the financial condition of the person or entity
covered by such statements as of the date of such statements and that no
material adverse change has occurred since such date. Tenant further agrees to
provide additional financial statements certified to be true and correct and
accurately presenting Tenant's financial condition as of Tenant's last annual
and quarterly accounting periods as from time to time requested by Landlord
within fifteen (15) days after such request.

     26.29 Waiver of Right to Trial by Jury. Tenant waives the right to trial by
jury.

     26.30 Exculpation. Tenant acknowledges that this Lease is being executed by
Trammell Crow Northwestern California, Inc. on behalf of Landlord, not
personally, but solely as managing agent for Landlord, and nothing in this Lease
or any other instrument, document or agreement shall create any personal
liability on the part of Trammell Crow Northwestern California, Inc., its
shareholders, officers, directors, partners or employees, nor shall any such
liability be asserted or claimed.

     IN WITNESS WHEREOF, the parties have executed this Lease as of the date
first above written.


LANDLORD:                                    TENANT:

KGK ENTERPRISES, INC.,                       SEAGULL ENTERTAINMENT, INC.
a California corporation                     a Delaware corporation


By:  Trammell Crow NW, Inc.,                 By:  /s/  Paul Siegel
     its Managing Agent                           ---------------------------


By:  /s/  Albert W. Sandell                  Its: President
     -------------------------------              ---------------------------


Its: TRAMMELL CROW NW. INC.                  By:  /s/  Henry Siegel
     -------------------------------              ---------------------------
     Executive Vice-President                     

                                             Its: Chairman
                                                  ---------------------------


                                     - 34 -
<PAGE>


                                GUARANTY OF LEASE

     THIS GUARANTY OF LEASE (this "Guaranty") is made by Paul Siegel and Henry
Siegel, ("Guarantor"), to KGK Enterprises. Inc., a California corporation,
("Landlord"), with respect to the Standard Industrial Lease Agreement (the
"Lease") dated May 31, 1995, between Landlord and Seagull Entertainment. Inc., a
California corporation, ("Tenant"), with respect to certain premises (the
"Premises") located in Cornerstone Plaza, 1990 South Bundy Drive, Los Angeles,
California 90025.

     As a material inducement to and in consideration of Landlord's entering
into the Lease, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Guarantor hereby covenants and
agrees with Landlord as follows:

     1. Guarantor absolutely, unconditionally and fully guarantees the following
(the "Obligations"): (a) the payment of all rent, monies and charges payable by
Tenant under the Lease at the times the same are required to be paid thereunder;
(b) the performance when due of each and all of the covenants and provisions
contained in the Lease to be kept, performed or observed by Tenant; and (c) the
payment of all damages owing to Landlord by Tenant after termination of the
Lease following a default thereof by Tenant or otherwise.

     2. The liability of Guarantor hereunder shall not be affected, impaired,
limited or reduced in any way by any action taken by Landlord under any
provision hereof, or by any delay, failure or refusal of Landlord to exercise
any right or remedy Landlord may have against Tenant or against any other
guarantor. Guarantor agrees that if any of the Obligations is not paid or
performed as required under the Lease, Guarantor, after receipt of written
demand therefor by Landlord, shall pay such Obligation when required of Tenant
under the Lease as if such Obligations constituted the direct and primary
obligations of Guarantor. Guarantor shall indemnify, defend, protect and hold
Landlord harmless from any losses, liabilities, costs, expenses, causes of
action and damages arising out of (a) any failure by Tenant to pay or perform
any Obligations, or (b) the recapture of any rent, monies or charges received
during a preference period provided by any state or federal bankruptcy law.

     3. Satisfaction by Guarantor of any liability hereunder incident to a
particular default shall not discharge Guarantor except for the default
satisfied. This Guaranty and the obligations of Guarantor hereunder shall be
continuing and irrevocable until (a) Landlord has received full payment of all
rents, monies and charges, and full performance of all of the Obligations due
under the Lease or to become due during the term of the Lease, including any
optional extensions thereof, and (b) any applicable preference period under
state or federal bankruptcy law has expired, and (c) Landlord has released
Guarantor from the Obligations, which may be accomplished only by an instrument
in writing signed by Landlord.

     4. Guarantor hereby waives all presentments, demands (including demands for
performance), protests, notices of protest, notices of dishonor and notices of
acceptance of this Guaranty by Landlord, and this Guaranty shall be binding upon
Guarantor immediately upon its delivery to Landlord.

     5. Guarantor hereby waives and agrees not to assert or take advantage of
(a) any right to require Landlord to proceed against Tenant or a co-guarantor or
to proceed against or exhaust any security held by Landlord at any time; (b) any
defense of the statute of limitations in any action hereunder or in any action
for the performance of any Obligation; (c) any defense that my arise by reason
of the incapacity, lack of authority, death or disability of any other person or
persons or the failure of Landlord to file or enforce a claim against the estate
(in administration, bankruptcy or any other proceeding) of any other person or
persons; (d) any demands for performance or notice of nonperformance on the part
of Tenant of the terms of the Lease; (e) any defense based on the fact that the
liability of the Guarantor hereunder may be greater than the liability of the
Tenant by reason of (i) amendments to the Lease, (ii) the Landlord's agreement
to forebear


<PAGE>


from enforcing its rights under the Lease or at law or in equity, or (iii) any
other set of facts, acts or omissions; (f) any defense based upon an election of
remedies by Landlord, including any election which destroys or impairs any right
of subrogation, reimbursement or contribution which Guarantor may have, or any
rights or benefits under any provision of applicable law in any way qualifying,
conditioning or limiting the obligations of Guarantor based on any steps or
procedures that Landlord allegedly should take before proceeding against
Guarantor; (g) any duty on the part of Landlord to disclose to Guarantor any
facts Landlord may now or hereafter know about Tenant, regardless of whether
Landlord (i) has reason to believe that any such facts materially increase the
risk beyond that which Guarantor intends to assume, or (ii) has reason to
believe that such facts are unknown to Guarantor, or (iii) has a reasonable
opportunity to communicate such facts to Guarantor, it being understood and
agreed that Guarantor is fully responsible for becoming the remaining informed
of the financial condition of Tenant and of any and all circumstances bearing on
the risk of nonperformance of any Obligation; (h) any rights or benefits in
favor of Guarantor under Sections 2809, (which provides that the obligation of a
surety must be neither larger in amount nor in order respects more burdensome
than that of the principal), 2810 (which defines a surety's liability in the
event of disability of the principal), 2815 (which provides that a continuing
guaranty may be revoked by the guarantor unless there is continuing
consideration), 2819 (which provides for exoneration of the surety if the
original obligation of the principal is altered in any respect, or the remedies
or rights of the creditor against the principal are impaired or suspended
without the consent of the surety), 2839 (which provides that a surety is
exonerated by the performance or the offer of performance of the principal
obligation), 2845 (which provides that a surety may require the creditor to
proceed against the principal), 2849 (which provides that a surety is entitled
to the benefit of security for the performance of the principal obligation held
by the creditor), 2850 (which provides that the surety is entitled to have the
property of the principal first applied to the discharge of the obligation),
2899 (which provides for the order of resort to different funds held by the
creditor), or 3433 (which provides for the relative rights of different
creditors) of the California Civil Code or under 11 U.S.C. Sections 364 or
1111(b), or any amendment to any of the foregoing statutes; (i) any transfer of
Landlord's interest in the Premises; 6) any transfer of Tenant's interest as
tenant under the Lease or any portion thereof or any sublease or assignment by
Tenant; (k) any merger or consolidation of Tenant or sale of all or a
substantial portion of Tenant's assets; (l) any sale of all or any portion of
any capital stock of Tenant or partnership interest in Tenant owned by
Guarantor; (m) any prior or concurrent representation, understanding, promise
or condition concerning the subject matter hereof which is not expressed herein,
which are hereby declared to be of no force or effect; or (n) any right or
defense arising by reason of the absence, impairment, modification, limitation,
destruction or cessation of any rights or remedies (in bankruptcy, by an
election of remedies or otherwise).

     GUARANTOR HEREBY ACKNOWLEDGES AND AGREES THAT THE WAIVERS CONTAINED IN THIS
GUARANTY HAVE BEEN KNOWINGLY AND VOLUNTARILY MADE AND THE LEGAL CONSEQUENCES OF
SUCH WAIVERS AND THE CONTENT OF THIS GUARANTY HAVE BEEN EXPLAINED TO GUARANTOR
BY ITS INDEPENDENT LEGAL COUNSEL AND GUARANTOR UNDERSTANDS THE LEGAL
CONSEQUENCES OF THE FOREGOING WAIVERS AND THE CONTENT AND NATURE OF THIS
GUARANTY.


/s/  Paul Siegel
     ---------------------------
     GUARANTOR (Paul Siegel)


/s/  Henry Siegel
     ---------------------------
     GUARANTOR (Henry Siegel)

     6. Without limiting the generality of the foregoing, Guarantor's liability
under this Guaranty shall not be deemed to have been waived, released,
discharged, limited, impaired or affected by reason of (a) the expiration or
termination of the term of the Lease; (b) the release or discharge of Tenant in
any receivership, bankruptcy, winding-up or other creditors' proceedings or the
rejection, disaffirmance or disclaimer of the Lease by any party in any such
proceeding; (c) the repossession of the Premises, provided,

                                     2 of 4


<PAGE>


however, that the net payments received by Landlord after deducting all costs
and expenses of repossession and/or reletting the same shall be credited from
time to time by Landlord to the account of Guarantor; or (d) any amendment of
the terms of the Lease without Guarantor's consent.

     7. Guarantor shall not, without the prior written consent of Landlord,
commence or join with any other person in commencing any bankruptcy,
reorganization or insolvency proceedings against Tenant.

     8. Guarantor shall file in any bankruptcy or other proceeding in which the
filing of claims is required or permitted by law all claims which Guarantor may
have against Tenant relating to any indebtedness of Tenant to Guarantor and will
assign to Landlord all rights of Guarantor thereunder. Landlord shall have the
sole right to accept or reject any plan proposed in such proceedings and to take
any other action which a party filing a claim is entitled to do. In all such
cases, whether in administration, bankruptcy, or otherwise, the person or
persons authorized to pay such claim shall pay to Landlord the amount payable on
such claim and, to the full extent necessary for that purpose, Guarantor hereby
assigns to Landlord all of Guarantor's right to any such payments or
distributions to which Guarantor would otherwise be entitled; provided, however,
that Guarantor's obligations hereunder shall not be satisfied except to the
extent that Landlord receives cash by reason of any such payments or
distribution. If Landlord receives anything hereunder other than cash, the same
shall be held as collateral for amounts due under this Guaranty.

     9. The amount of Guarantor's liability and all rights, powers and remedies
of Landlord hereunder shall be cumulative and not alternative and such rights,
powers and remedies shall be in addition to all rights, powers and remedies
available to Landlord at law or in equity.

     10. In the event of any default hereunder, a separate action or actions may
be brought and prosecuted against Guarantor, whether or not Tenant is joined
herein or a separate action or actions are brought against Tenant. Landlord may
maintain successive actions for other defaults.

     11. Guarantor shall pay Landlord, upon demand, reasonable attorney's fees
and all costs and other expenses which Landlord expends or incurs in enforcing
this Guaranty, obtaining any judgement under this Guaranty against Guarantor, or
in connection with any insolvency, bankruptcy, reorganization, arrangement or
other similar proceedings involving Tenant, Guarantor, or either of them, which
in any way affect the exercise by Landlord of its rights and remedies hereunder.

     12. Should any provision of this Guaranty be determined to be illegal or
unenforceable, all other provisions hereof shall nevertheless be deemed
effective.

     13. No provision of this Guaranty or right of Landlord hereunder may be
waived, nor shall Guarantor be released from performance of Guarantor's
obligations hereunder, except by a writing duly executed by Landlord, which may
be withheld in its sole and absolute discretion.

     14. This Guaranty shall inure to the benefit of and bind the heirs, legal
representatives, administrators, executors, successors and assigns of Guarantor
and of Landlord. If more than one person or entity executes this Guaranty, the
obligations of each hereunder shall be joint and several.

     15. The acceptance by Landlord of the performance of any of the Obligations
under the Lease by Guarantor, including, without limitation, the acceptance of
rent payments, shall constitute neither an assignment of the Lease to Guarantor
nor Landlord's consent to such an assignment.

     16. Guarantor, from time to time within ten (10) days following Landlord's
request, shall execute and deliver to Landlord (i) an estoppel certificate
containing such truthful information as Landlord

                                     3 of 4


<PAGE>


may reasonably request, and (ii) such further instruments or documentation as
may reasonably be requested by Landlord to ratify and confirm this Guaranty and
the continuing liability of Guarantor hereunder.

     17. This Guaranty shall be governed by and construed in accordance with the
laws of the State of California. The parties hereby consent to jurisdiction and
venue in any California court of competent jurisdiction or the United States
District Court for the county and federal judicial district, respectively, in
which the Premises are located, and agree that such courts shall constitute the
exclusive venue for any dispute arising hereunder.

     IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date
written below.


DATED:  June 1, 1995.              GUARANTOR:

                                   Paul Siegel
                                   Henry Siegel

                                   BY:  /s/  Paul Siegel
                                        ---------------------------------------
                                        Paul Siegel

                                   SOCIAL SECURITY #:  ###-##-####

                                   DRIVER'S LICENSE #:  A175986

                                   HOME ADDRESS:  510 Erskine Dr.
                                                  Pacific Palisades, CA 90272

                                   HOME PHONE:  (310) 454-2395


                                   By:  /s/   Henry Siegel
                                        ---------------------------------------
                                        Henry Siegel

                                   SOCIAL SECURITY #:  ###-##-####

                                   DRIVER'S LICENSE #:  540-426-191

                                   HOME ADDRESS:  38 Shinglehouse Rd
                                                  Millwood NY 10546

                                   HOME PHONE:  (914) 923-4264

                                     4 of 4


<PAGE>


              FIRST AMENDMENT TO OFFICE LEASE AND GUARANTY OF LEASE

     THIS FIRST AMENDMENT TO OFFICE LEASE AND GUARANTY OF LEASE ("First
Amendment") is made and entered into as of June 13, 1996, by and between KGK
Enterprises, Inc., a California Corporation ("Landlord"), and Seagull
Entertainment, Inc. ("Tenant") who agrees as follows:

                                    RECITALS

This First Amendment is made with reference to the following facts and
objectives:

     A. Landlord and Tenant entered into that certain Office Lease dated as of
May 31, 1995, (referred to as the "Lease"), covering the premises located in the
City and County of Los Angeles, State of California, commonly known as Suite 725
on the seventh floor of the Cornerstone Plaza office building (the "Building")
located at 1990 South Bundy Drive, Los Angeles, California 90025 (collectively,
the "Premises").

     B. Paul Siegel and Henry Siegel (Collectively the "Guarantor") and Landlord
entered into that certain Guaranty of Lease dated as of May 31, 1995
("Guaranty") with the respect to the Lease.

     C. Landlord and Tenant wish to amend the Lease and Guaranty as provided in
this First Amendment.

     NOW THEREFORE, the parties hereto agree to follows:

     1. Effective Date. The "Effective Date" of this First Amendment shall be
that date in which the Tenant Improvements (as defined below) for the Expansion
Premises (as defined below) are substantially complete.

     2. Premises. Effective as of the Effective Date, the Premises shall be
increased by adding 3,058 rentable square feet ("Expansion Premises") to the
existing 2,804 rentable square feet ("Existing Premises") and shall thereafter
be 5,862 ("Expanded Premises") rentable square feet. The Premises shall
thereafter consist of that portion of the seventh floor that is depicted and
identified as the Expanded Premises on Exhibit A-1 to this First Amendment.

     3. Proportionate Share. Effective as of the Effective Date, Tenant's
Building Expense Percentage as depicted in Item f. of the Basic Lease Provisions
shall be increased from 1.719% to 3.57%.


<PAGE>


First Amendment to Office Lease and Guaranty of Lease
Seagull Entertainment, Inc.
Page Two


     4. Basic Annual Rent. Effective as of the Effective Date the Basic Annual
Rent (and Monthly Rental) for the Premises shall be as follows:

         Annual Basic Rent:                  $123,102.00 ($21.00/sf/mo.)
         Monthly Basic Rent:                 $ 10,258.50 ($1.75/sf/mo.)

     5. Term. Effective as of the Effective Date, the Term of the Lease shall be
extended by two (2) years so that the new Lease expiration date shall,
thereafter be June 18, 2002 instead of June 18, 2000.

     6. Tenant Improvements: Landlord, at its sole cost and expense shall modify
the Premises pursuant to a mutually acceptable space plan (a copy of which is
attached hereto as Exhibit A-2) using building standard materials. The following
work shall be provided by Landlord:

     1    Remove existing pass thru sliding window. Replace wood transaction top
          to match existing (room 701).

     2    New embossed (approx. 5'0" X 7'0") glass window in totally recessed
          stainless steel channels top and bottom, side edges of glass insert
          into drywall (partition detail to follow). Glass: "Ultrastorm" DTO1
          tempered 3/8" Starfire by Ultraglass (room #701).

     3    New (approx. 2'0" X 7'0") single light solid wood paint grade door.
          Min. sized styles, door size to fit existing frame. New building
          standard latch set to match, re-install existing closer, paint door
          semi-gloss enamel finish to match walls. Upgrade hinges as required.
          Glass specification same as indicated at Note 2 above.

     4    Two (2) new duplex outlet and two (2) tele/data outlets where
          indicated (reception room of Existing Premises).

     5    Fill opening from removed double entry door, construction to maintain
          integrity of existing one hour tunnel corridor.

     6    Relocate one (1) light switch.


<PAGE>


First Amendment to Office Lease and Guaranty of Lease
Seagull Entertainment, Inc.
Page Three


          i.   Throughout Expansion Premises, all existing wallcovering to be
               removed, walls prepped to receive new paint, paint to match
               Existing Premises.

          ii.  Throughout Expansion Premises, demo existing carpet. Provide new
               to match Suite #725.

          iii. Refinish wood floor at entry room #701 (Expansion Premises).

          iv.  At room #716 (Expansion Premises), provide two (2) new recessed,
               adjustable Halogen downlights.

          v.   At room #710 (Expansion Premises), provide line item cost to
               remove existing wood shelving, and relocate to undetermined
               location in existing Premises.

     7. Security Deposit. Upon execution of this First Amendment, Tenant shall
increase its Security Deposit by $5,351.50 from $4,907.00 to $10,258.50.

     8. Guaranty of Lease. Effective as of the Effective Date, the Guaranty of
Lease shall be expanded to cover the Expanded Premises.

     9. No Broker. Tenant represents and warrants that it has dealt with no
broker, agent or other person in connection with this transaction other than
Trammell Crow Company and that no broker, agent or other person brought about
this transaction other than Trammell Crow Company, and Tenant hereby agrees to
indemnify, defend, protect and hold Landlord harmless from and against any
claims, losses, liabilities, demands, costs, expenses or causes of action by any
broker, agent or other person claiming any commission or other form of
compensation by virtue of having dealt with Tenant with regard to this
transaction.

     10. Further Assurances. In addition to the obligations required to be
performed under the Lease as amended hereby, Landlord and Tenant shall each
perform such other acts, and shall execute, acknowledge and/or/or deliver such
other instruments, documents and other materials, as may be reasonably required
in order to accomplish the intent and purposes of the Lease, as hereby amended.


<PAGE>


First Amendment to Office Lease and Guaranty of Lease
Seagull Entertainment, Inc.
Page Four


     11. Authority. Each party hereby represent and warrants to the other that
it has the due power and authority to enter into this Amendment and to be bound
by the terms hereof.

     12. Binding Effect. This Amendment shall be binding upon and inure to the
benefit of Landlord, its successors and assigns and Tenant and its successors
and assigns.

     13. Attorney's Fees. Should any party initiate a legal proceeding against
any other party, including an arbitration, then the prevailing party shall be
entitled to receive reasonable attorney's fees and costs incurred in connection
with such legal proceeding.

     14. Counterparts. This Amendment may be excluded in any number of
counterparts, each of which shall be an original, but all of which shall
constitute one and the same instrument.

     15. No Other Amendment. Except as modified by this Amendment, the
provisions of the Lease (including all exhibits thereto) shall remain unaffected
and in full force and effect. To the extent that any terms or provisions of this
Amendment are inconsistent with any terms or provisions of the Lease, the terms
and provisions of this Amendment shall control.

     IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
as of the day and year first above written.


LANDLORD:                                    TENANT:

KGK ENTERPRISES, INC.,                       Seagull Entertainment, Inc.
a California corporation

By:  Trammell Crow NW Inc.
     its Managing Agent

By:                                          By:  /s/  Paul Siegel
     -----------------------------                ------------------------------
     Albert W. Sandell                            Paul Siegel

Its: Executive Vice President                By:  /s/  Henry Siegel
                                                  ------------------------------
                                                  Henry Siegel