<PAGE>


                                                                   Exhibit 10.13

                       CARMEL MOUNTAIN DISTRIBUTION CENTER
                        MULTI-TENANT INDUSTRIAL NET LEASE

                       CALWEST INDUSTRIAL PROPERTIES, LLC
                     a California Limited Liability Company
                                    Landlord

                                       AND

                          ACCREDITED HOME LENDERS, INC.
                            A California Corporation
                                     Tenant

                                October 17, 2001

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                                TABLE OF CONTENTS

Article                                                                    Page

l.   USE AND RESTRICTIONS ON USE.............................................1

2.   TERM....................................................................1

3.   RENT....................................................................2

4.   RENT ADJUSTMENTS........................................................2

5.   SECURITY DEPOSIT........................................................3

6.   ALTERATIONS.............................................................4

7.   REPAIR..................................................................4

8.   LIENS...................................................................5

9.   ASSIGNMENT AND SUBLETTING...............................................5

10.  INDEMNIFICATION.........................................................7

11.  INSURANCE...............................................................7

12.  WAIVER OF SUBROGATION...................................................7

13.  SERVICES AND UTILITIES..................................................7

14.  HOLDING OVER............................................................8

15.  SUBORDINATION...........................................................8

16.  RULES AND REGULATIONS...................................................8

17.  REENTRY BY LANDLORD.....................................................8

18.  DEFAULT.................................................................9

19.  REMEDIES................................................................9

20.  TENANT'S BANKRUPTCY OR INSOLVENCY......................................11

21.  QUIET ENJOYMENT........................................................12

22.  DAMAGE BY FIRE, ETC....................................................12

23.  EMINENT DOMAIN.........................................................13

24.  SALE BY LANDLORD.......................................................13

25.  ESTOPPEL CERTIFICATES..................................................13

26.  SURRENDER OF PREMISES..................................................13

27.  NOTICES................................................................14

28.  TAXES PAYABLE BY TENANT................................................14

29.  RELOCATION OF TENANT...................................................14

30.  DEFINED TERMS AND HEADINGS.............................................14

31.  TENANT'S AUTHORITY.....................................................15

32.  COMMISSIONS............................................................15

33.  TIME AND APPLICABLE LAW................................................15

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34.  SUCCESSORS AND ASSIGNS.................................................15

35.  ENTIRE AGREEMENT.......................................................15

36.  EXAMINATION NOT OPTION.................................................15

37.  RECORDATION............................................................15

38.  FINANCIALS.............................................................15

39.  RENT SCHEDULE..........................................................16

40.  RENEWAL OPTION.........................................................16

41.  PARKING................................................................16

42.  LIMITATION OF LANDLORD'S LIABILITY.....................................17

EXHIBIT A - PREMISES
EXHIBIT B - INITIAL ALTERATIONS
EXHIBIT C - RULES AND REGULATIONS
EXHIBIT D - CONDITIONS OF PREMISES

                                       ii

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                        MULTI-TENANT INDUSTRIAL NET LEASE
                                 REFERENCE PAGE

<TABLE>
<S>                                  <C>
BUILDING:                            Carmel Mountain Distribution Center

LANDLORD:                            Calwest Industrial Properties, LLC, a
                                     California limited liability company

LANDLORD'S ADDRESS:                  2121 Palomar Airport Rd., Suite 100, Carlsbad,
                                     CA 92009

LEASE REFERENCE DATE:                October 17, 2001

TENANT:                              Accredited Home Lenders, Inc., a California
                                     corporation

TENANT'S ADDRESS:                                              With copy to:
(a) As of beginning of Term:         12310 World Trade Drive   15030 Avenue of Science
(b) Prior to beginning of Term       Suite 101                 Suite 100
  (if different):                    San Diego, CA 92128       San Diego, CA 92128

PREMISES IDENTIFICATION:             Suite Number 101
                                     (for outline of Premises see Exhibit A)

PREMISES RENTABLE AREA:              Approximately 17,935 square feet: approximately
                                     8,416 square feet (the "Initial Space") upon
                                     Landlord's possession of premises and an
                                     additional 9,519 square feet (the "Additional
                                     Space") upon completion of the Initial Landlord
                                     Alterations described in Exhibit B

USE                                  General office space

SCHEDULED COMMENCEMENT DATE:         October 10, 2001 with respect to the Initial
                                     Space and upon completion of the Initial
                                     Alterations except Item #7 with respect to the
                                     Additional Space

SCHEDULED TERMINATION DATE:          December 31, 2005

TERM OF LEASE:                       (4 years and 2 months, approximately)
                                     beginning on the Commencement Date and ending
                                     on the Termination Date (unless sooner
                                     terminated pursuant to the Lease)

INITIAL ANNUAL RENT (Article 3):     $258,264 on 17,395 square feet (See Article 39)

INITIAL MONTHLY INSTALLMENT OF       $14,500.00 Gross, plus utilities and janitorial
ANNUAL RENT (Article 3):             $21,522.00 Net (See Article 39)

INITIAL ESTIMATED MONTHLY
INSTALLMENT OF RENT ADJUSTMENTS
(Article 4):                         $2,299.00

TENANT'S PROPORTIONATE SHARE:        5.4% of the Project, calculated by dividing the
                                     rentable square feet of the Premises by the
                                     rentable square feet of the Project, and 36.7%
                                     of the Building, calculated by dividing the
                                     rentable square feet of the Premises by the
                                     rentable square feet of the Building (subject to
                                     adjustment per Addendum)

SECURITY DEPOSIT:                    $26,457

ASSIGNMENT/SUBLETTING FEE:           $500.00

REAL ESTATE BROKER DUE COMMISSION:   CB Richard Ellis, Inc. represents both Landlord
COMMISSION:                          and Tenant
</TABLE>

The Reference Page information is incorporated into and made apart of the Lease.
In the event of any conflict between any Reference Page information and the
Lease, the Lease shall control. This Lease includes Exhibits A through D, all of
which are made a part of this Lease.

LANDLORD:                            TENANT:
CALWEST INDUSTRIAL PROPERTIES,       ACCREDITED HOME LENDERS, INC.,
LLC, a California limited            a California
liability company                    corporation


By:     RREEF Management Company,
        a Delaware corporation


By:     /s/ Jill E. Shanahan         By:     /s/ Ray W. McKewon
        --------------------------           -----------------------------
        Jill E. Shanahan                     Ray W. McKewon
Title:  Vice President               Title:  Executive Vice President

Dated:  11/12/01                     Dated:  11-9-01

<PAGE>

                                      LEASE

          By this Lease Landlord leases to Tenant and Tenant leases from
Landlord the Premises in the Building as set forth and described on the
Reference Page. The Reference Page, including all terms defined thereon, is
incorporated as part of this Lease.

1. USE AND RESTRICTIONS ON USE.

     1.1 The Premises are to be used solely for the purposes stated on the
Reference Page. 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, annoy, or disturb them or
allow the Premises to be used for any improper, immoral, unlawful, or
objectionable purpose. Tenant shall not do, permit or suffer in, on, or about
the Premises the sale of any alcoholic liquor without the written consent of
Landlord first obtained, or the commission of any waste. Tenant shall comply
with all governmental laws, ordinances and regulations applicable to the use of
the Premises and its occupancy and shall promptly comply with all governmental
orders and directions for the correction, prevention and abatement of any
violations in or upon, or in connection with, the Premises, all at Tenant's sole
expense. Tenant shall not do or permit anything to be done on or about the
Premises or bring or keep anything into the Premises which will in any way
increase the rate of, invalidate or prevent the procuring of any insurance
protecting against loss or damage to the Building or any of its contents by fire
or other casualty or against liability for damage to property or injury to
persons in or about the Building or any part thereof.

     1.2 Tenant shall not, and shall not direct, suffer or permit any of its
agents, contractors, employees, licensees or invitees to at any time handle,
use, manufacture, store or dispose of in or about the Premises or the Building
any (collectively "Hazardous Materials") flammables, explosives, radioactive
materials, hazardous wastes or materials, toxic wastes or materials, or other
similar substances, petroleum products or derivatives or any substance subject
to regulation by or under any federal, state and local laws and ordinances
relating to the protection of the environment or the keeping, use or disposition
of environmentally hazardous materials, substances, or wastes, presently in
effect or hereafter adopted, all amendments to any of them, and all rules and
regulations issued pursuant to any of such laws or ordinances (collectively
"Environmental Laws"), nor shall Tenant suffer or permit any Hazardous Materials
to be used in any manner not fully in compliance with all Environmental Laws, in
the Premises or the Building and appurtenant land or allow the environment to
become contaminated with any Hazardous Materials. Notwithstanding the foregoing,
and subject to Landlord's prior consent, Tenant may handle, store, use or
dispose of products containing small quantities of Hazardous Materials (such as
aerosol cans containing insecticides, toner for copiers, paints, paint remover
and the like) to the extent customary and necessary for the use of the Premises
for general office purposes; provided that Tenant shall always handle, store,
use, and dispose of any such Hazardous Materials in a safe and lawful manner and
never allow such Hazardous Materials to contaminate the Premises, Building and
appurtenant land or the environment. Tenant shall protect, defend, indemnify and
hold each and all of the Landlord Entities (as defined in Article 30) harmless
from and against any and all loss, claims, liability or costs (including court
costs and attorney's fees) incurred by reason of any actual or asserted failure
of Tenant to fully comply with all applicable Environmental Laws, or the
presence, handling, use or disposition in or from the Premises of any Hazardous
Materials (even though permissible under all applicable Environmental Laws or
the provisions of this Lease), or by reason of any actual or asserted failure of
Tenant to keep, observe, or perform any provision of this Section 1.2.

2. TERM.

     2.1 The Term of this Lease shall begin on the date ("Commencement Date")
which shall be the Scheduled Commencement Date with respect to the Initial Space
and, with respect to the Additional Space, the later of the Scheduled
Commencement Date as shown on the Reference Page and the date that Landlord
shall tender possession of the Premises to Tenant. Landlord shall tender
possession of the Premises with all the work, if any, to be performed by
Landlord pursuant to Exhibit B to this Lease substantially completed. Tenant
shall deliver a punch list of items not completed within 30 days after Landlord
tenders possession of the Premises and Landlord agrees to proceed with due
diligence to perform its obligations regarding such items. Landlord and Tenant
shall execute a memorandum setting forth the actual Commencement Date and
Termination Date.

     2.2 Tenant agrees that in the event of the inability of Landlord to deliver
possession of the Additional Space on the Scheduled Commencement Date, Landlord
shall not be liable for any damage resulting from such inability, but Tenant
shall not be liable for any rent until the time when Landlord can, after notice
to Tenant, deliver possession of the Premises to Tenant. No such failure to give
possession on the Scheduled Commencement Date shall affect the other obligations
of Tenant under this Lease, except that if Landlord is unable to deliver
possession of the Additional Space within one hundred twenty (120) days of the
Scheduled Commencement Date (other than as a result of strikes, shortages of
materials or similar matters beyond the reasonable control of Landlord and
Tenant is notified by

                                       1

<PAGE>

Landlord in writing as to such delay), Tenant shall have the option to terminate
this Lease unless said delay is as a result of: (a) Tenant's failure to agree to
plans and specifications; (b) Tenant's request for materials, finishes or
installations other than Landlord's standard except those, if any, that Landlord
shall have expressly agreed to furnish without extension of time agreed by
Landlord; (c) Tenant's change in any plans or specifications; or, (d)
performance or completion by a party employed by Tenant. If any delay is the
result of any of the foregoing, the Commencement Date and the payment of rent
under this Lease shall be accelerated by the number of days of such delay.

     2.3 In the event Landlord shall permit Tenant to occupy the Premises prior
to the Commencement Date, such occupancy shall be subject to all the provisions
of this Lease. Said early possession shall not advance the Termination Date.

3. RENT.

     3.1 Tenant agrees to pay to Landlord the Annual Rent in effect from time to
time by paying the Monthly Installment of Rent then in effect on or before the
first day of each full calendar month during the Term, except that the first
month's rent shall be paid upon the execution of this Lease. The Monthly
Installment of Rent in effect at any time shall be one-twelfth of the Annual
Rent in effect at such time. Rent for any period during the Term which is less
than a full month shall be a prorated portion of the Monthly Installment of Rent
based upon a thirty (30) day month. Said rent shall be paid to Landlord, without
deduction or offset and without notice or demand, at the Landlord's address, as
set forth on the Reference Page, or to such other person or at such other place
as Landlord may from time to time designate in writing.

     3.2 Tenant recognizes that late payment of any rent or other sum due under
this Lease will result in administrative expense to Landlord, the extent of
which additional expense is extremely difficult and economically impractical to
ascertain. Tenant therefore agrees that if rent or any other sum is not paid
within five (5) business days following the date it is due and payable pursuant
to this Lease, a late charge shall be imposed in an amount equal to the greater
of: (a) Fifty Dollars ($50.00), or (b) a sum equal to five percent (5%) per
month of the unpaid rent or other payment. The amount of the late charge to be
paid by Tenant shall be reassessed and added to Tenant's obligation for each
successive monthly period until paid. The provisions of this Section 3.2 in no
way relieve Tenant of the obligation to pay rent or other payments on or before
the date on which they are due, nor do the terms of this Section 3.2 in any way
affect Landlord's remedies pursuant to Article 19 in the event said rent or
other payment is unpaid after date due.

4. RENT ADJUSTMENTS.

     4.1 For the purpose of this Article 4, the following terms are defined as
follows:

          4.1.1 Lease Year: Each calendar year falling partly or wholly within
the Term.

          4.1.2 Direct Expenses: All direct costs of operation, maintenance,
repair and management of the Building (including the amount of any credits which
Landlord may grant to particular tenants of the Building in lieu of providing
any standard services or paying any standard costs described in this Section
4.1.2 for similar tenants), as determined in accordance with generally accepted
accounting principles, including the following costs by way of illustration, but
not limitation: water and sewer charges; insurance charges of or relating to all
insurance policies and endorsements deemed by Landlord to be reasonably
necessary or desirable and relating in any manner to the protection,
preservation, or operation of the Building or any part thereof; utility costs,
including, but not limited to, the cost of heat, light, power, steam, gas, and
waste disposal; the cost of janitorial services; the cost of security and alarm
services (including any central station signalling system); window cleaning
costs; labor costs; costs and expenses of managing the Building including
management fees; air conditioning maintenance costs; elevator maintenance fees
and supplies; material costs; equipment costs including the cost of maintenance,
repair and service agreements and rental and leasing costs; purchase costs of
equipment other than capital items; current rental and leasing costs of items
which would be amortizable capital items if purchased; tool costs; licenses,
permits and inspection fees; wages and salaries; employee benefits and payroll
taxes; accounting and legal fees; any sales, use or service taxes incurred in
connection therewith. Direct Expenses shall not include depreciation or
amortization of the Building or equipment in the Building except as provided
herein, loan principal payments, costs of alterations of tenants' premises,
leasing commissions, interest expenses on long-term borrowings, advertising
costs or management salaries for executive personnel other than personnel
located at the Building. In addition, Landlord shall be entitled to amortize and
include as an additional rental adjustment: (i) an allocable portion of the cost
of capital improvement items which are reasonably calculated to reduce operating
expenses; (ii) fire sprinklers and suppression systems and other life safety
systems; and (iii) other capital expenses which are required under any
governmental laws, regulations or ordinances which were not applicable to the
Building at the time it was constructed. All such costs shall be amortized over
the reasonable life of such improvements in accordance with such reasonable life
and amortization schedules as shall be determined by Landlord in accordance with
generally

                                       2

<PAGE>

accepted accounting principles, with interest on the unamortized amount at one
percent (1%) in excess of the prime lending rate announced from time to time as
such by The Northern Trust Company of Chicago, Illinois.

          4.1.3 Taxes: Real estate taxes and any other taxes, charges and
assessments which are levied with respect to the Building or the land
appurtenant to the Building, or with respect to any improvements, fixtures and
equipment or other property of Landlord, real or personal, located in the
Building and used in connection with the operation of the Building and said
land, any payments to any grounds lessor in reimbursement of tax payment made by
such lessor; and all fees, expenses and costs reasonably incurred by landlord in
investigating, protesting, contesting or in any way seeking to reduce or avoid
increase in any assessments, levies or the tax rate pertaining to any Taxes to
be paid by Landlord in any Lease Year. Taxes shall not include any corporate
franchise, or estate, inheritance or net income tax, or tax imposed upon any
transfer by Landlord of its interest in this Lease or the Building.

     4.2 Tenant shall pay as additional rent for each Lease Year Tenant's
Proportionate Share of Direct Expenses and Taxes incurred for such Lease Year.

     4.3 The annual determination of Direct Expenses shall be made by Landlord.
Tenant may review the books and records supporting such determination in the
office of Landlord, or Landlord's agent, during normal business hours, upon
giving Landlord five (5) days advance written notice within sixty (60) days
after receipt of such determination, but in no event more often than once in any
one year period. In the event that during all or any portion of any Lease Year,
the Building is not fully rented and occupied Landlord may make any appropriate
adjustment in occupancy-related Direct Expenses for such year for the purpose of
avoiding distortion of the amount of such Direct Expenses to be attributed to
Tenant by reason of variation in total occupancy of the Building, by employing
sound accounting and management principles to determine Direct Expenses that
would have been paid or incurred by Landlord had the Building been fully rented
and occupied, and the amount so determined shall be deemed to have been Direct
Expenses for such Lease Year.

     4.4 Prior to the actual determination thereof for a Lease Year, Landlord
may from time to time estimate Tenant's liability for Direct Expenses and/or
Taxes under Section 4.2, Article 6 and Article 28 for the Lease Year or portion
thereof. Landlord will give Tenant written notification of the amount of such
estimate and Tenant agrees that it will pay, by increase of its Monthly
Installments of Rent due in such Lease Year, additional rent in the amount of
such estimate. Any such increased rate of Monthly Installments of Rent pursuant
to this Section 4.4 shall remain in effect until further written notification to
Tenant pursuant hereto.

     4.5 When the above mentioned actual determination of Tenant's liability for
Direct Expenses and/or Taxes is made for any Lease Year and when Tenant is so
notified in writing, then:

          4.5.1 If the total additional rent Tenant actually paid pursuant to
Section 4.3 on account of Direct Expenses and/or Taxes for the Lease Year is
less than Tenant's liability for Direct Expenses and/or Taxes, then Tenant shall
pay such deficiency to Landlord as additional rent in one lump sum within thirty
(30) days of receipt of Landlord's bill therefor, and

          4.5.2 If the total additional rent Tenant actually paid pursuant to
Section 4.3 on account of Direct Expenses and/or Taxes for the Lease Year is
more than Tenant's liability for Direct Expenses and/or Taxes, then Landlord
shall credit the difference against the then next due payments to be made by
Tenant under this Article 4. Tenant shall not be entitled to a credit by reason
of actual Direct Expenses and/or Taxes in any Lease Year being less than Direct
Expenses and/or Taxes in the Base Year (Direct Expenses and/or Taxes).

     4.6 If the Commencement Date is other than January 1 or if the Termination
Date is other than December 31, Tenant's liability for Direct Expenses and Taxes
for the Lease Year in which said Date occurs shall be prorated based upon a
three hundred sixty-five (365) day year.

5. SECURITY DEPOSIT.

Tenant shall deposit the Security Deposit with Landlord upon the execution of
this Lease. Said sum shall be held by Landlord as security for the faithful
performance by Tenant of all the terms, covenants and conditions of this Lease
to be kept and performed by Tenant and not as an advance rental deposit or as a
measure of Landlord's damage in case of Tenant's default. If Tenant defaults
with respect to any provision of this Lease, Landlord may use any part of the
Security Deposit for the payment of any rent or any other sum in default, or for
the payment of any amount which Landlord may spend or become obligated to spend
by reason of Tenant's default, or to compensate Landlord for any other loss or
damage which Landlord may suffer by reason of Tenant's default. If any portion
is so used, Tenant shall within five (5) days after written demand therefor,
deposit with Landlord an amount sufficient to restore the Security Deposit to
its original amount and Tenant's failure to do so shall be a material breach of
this

                                       3

<PAGE>

Lease. Except to such extent, if any, as shall be required by law, Landlord
shall not be required to keep the Security Deposit separate from its general
funds, and Tenant shall not be entitled to interest on such deposit. If Tenant
shall fully and faithfully perform every provision of this Lease to be performed
by it, the Security Deposit or any balance thereof shall be returned to Tenant
at such time after termination of this Lease when Landlord shall have determined
that all of Tenant's obligations under this Lease have been fulfilled.

6.   ALTERATIONS.

     6.1 Except for those, if any, specifically provided for in Exhibit B to
this Lease, Tenant shall not make or suffer to be made any alterations,
additions or improvement, including, but not limited to, the attachment of any
fixtures or equipment in, on, or to the Premises or any part thereof or the
making of any improvements as required by Article 7, without the prior written
consent of Landlord, which consent shall not be unreasonably withheld or
delayed. When applying for such consent, Tenant shall, if requested by Landlord,
furnish complete plans and specifications for such alterations, additions and
improvements.

     6.2 In the event Landlord consents to the making of any such alteration,
addition or improvement by Tenant, the same shall be made using Landlord's
contractor (unless Landlord agrees otherwise) at Tenant's sole cost and expense.
If Tenant shall employ any Contractor other than Landlord's Contractor and such
other Contractor or any Subcontractor of such other Contractor shall employ any
non-union labor or supplier, Tenant shall be responsible for any and all delays,
damages and extra costs suffered by Landlord as a result of any dispute with any
labor unions concerning the wage, hours, terms or conditions of the employment
of any such labor. In any event Landlord may charge Tenant a reasonable charge
to cover its overhead as it relates to such proposed work.

     6.3 All alterations, additions or improvements proposed by Tenant shall be
constructed in accordance with all government laws, ordinances, rules and
regulations and Tenant shall, prior to construction, provide the additional
insurance required under Article 11 in such case, and also all such assurances
to Landlord, including but not limited to, waivers of lien, surety company
performance bonds and personal guaranties of individuals of substance as
Landlord shall require to assure payment of the costs thereof and to protect
Landlord and the Building and appurtenant land against any loss from any
mechanic's, materialmen's or other liens. Tenant shall pay in addition to any
sums due pursuant to Article 4, any increase in real estate taxes attributable
to any such alteration, addition or improvement for so long, during the Term, as
such increase is ascertainable; at Landlord's election said sums shall be paid
in the same way as sums due under Article 4.

     6.4 All alterations, additions, and improvements in, on, or to the Premises
made or installed by Tenant, including carpeting, shall be and remain the
property of Tenant during the Term but, excepting furniture, furnishings,
movable partitions of less than full height from floor to ceiling and other
trade fixtures, shall become a part of the realty and belong to Landlord without
compensation to Tenant upon the expiration or sooner termination of the Term, at
which time title shall pass to Landlord under this Lease as by a bill of sale,
unless Landlord elects otherwise. Upon such election by Landlord, Tenant shall
upon demand by Landlord, at Tenant's sole cost and expense, forthwith and with
all due diligence remove any such alterations, additions or improvements other
than those provided for in Exhibit B, which were designated by Landlord to be
removed at the time of installation and Tenant shall forthwith and with all due
diligence, at its sole cost and expense, repair and restore the Premis to their
original condition, reasonable wear and tear and damage by fire or other
casualty excepted.

7.   REPAIR.

     7.1 Landlord shall have no obligation to alter, remodel, improve, repair,
decorate or paint the Premises, except as specified in Exhibit B if attached to
this Lease and except that Landlord shall repair and maintain the structural
portions of the roof, walls and foundation of the Building and all other aspects
of the Building not covered by Tenant's obligations under Section 7.3 below. By
taking possession of the Premises, Tenant accepts them as being in good order,
condition and repair and in the condition in which Landlord is obligated to
deliver them. It is hereby understood and agreed that no representations
respecting the condition of the Premises or the Building have been made by
Landlord to Tenant, except as specifically set forth in this Lease. Landlord
shall not be liable for any failure to make any repairs or to perform any
maintenance unless such failure shall persist for an unreasonable time after
written notice of the need of such repairs or maintenance is given to Landlord
by Tenant.

     7.2 Tenant hereby waives and releases its right to make repairs at
Landlord's expense under Section 1941 and 1942 of the California Civil Code and
its right to terminate the Lease under Section 1932(1) of the California Civil
Code or under any similar law, statute or ordinance now or hereafter in effect.

     7.3 Tenant shall at its own cost and expense keep and maintain all parts of
the Premises and such portion of the Building and improvements as are within the
exclusive control of Tenant in good condition, promptly making all necessary
repairs and replacements, whether ordinary or extraordinary, with materials and
workmanship of the same character, kind and quality as the original (including,
but not limited to, repair and replacement of all fixtures installed by Tenant,
water heaters serving the Premises, windows, glass and plate glass, doors,
exterior stairs,

                                       4

<PAGE>

skylights, any special office entries, interior walls and finish work, floors
and floor coverings, heating and air conditioning systems serving the Premises,
electrical systems and fixtures, sprinkler systems, dock boards, truck doors,
dock bumpers, plumbing work and fixtures, and performance of regular removal of
trash and debris). Tenant as part of its obligations hereunder shall keep the
Premises in a clean and sanitary condition. Tenant will, as far as possible keep
all such parts of the Premises from deterioration due to ordinary wear and from
falling temporarily out of repair, and upon termination of this Lease in any way
Tenant will yield up the Premises to Landlord in good condition and repair, loss
by fire or other casualty excepted (but not excepting any damage to glass).
Tenant shall, at its own cost and expense, repair any damage to the Premises or
the Building resulting from and/or caused in whole or in part by the negligence
or misconduct of Tenant, its agents, employees, invitees, or any other person
entering upon the Premises as a result of Tenant's business activities or caused
by Tenant's default hereunder.

     7.4 Except as provided in Article 22, 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 to
fixtures, appurtenances and equipment in the Building, provided that no activity
of Landlord or its contractors shall unreasonably interfere with Tenant's use of
the Premises. Except to the extent, if any, prohibited by law, Tenant waives the
right to make repairs at Landlord's expense under any law, statute or ordinance
now or hereafter in effect.

     7.5 Tenant shall, at its own cost and expense, enter into a regularly
scheduled preventive maintenance/service contract with a maintenance contractor
reasonably approved by Landlord for servicing all heating and air conditioning
systems and equipment serving the Premises (and a copy thereof shall be
furnished to Landlord). The service contract must include all services suggested
by the equipment manufacturer in the operation/maintenance manual and must
become effective within thirty (30) days of the date Tenant takes possession of
the Premises. Otherwise, Landlord may, upon notice to Tenant, enter into such a
maintenance/ service contract on behalf of Tenant or perform the work and in
either case, charge Tenant the cost thereof along with a reasonable amount for
Landlord's overhead.

     7.6 Landlord shall coordinate any repairs and other maintenance of any
railroad tracks serving the Building and, if Tenant uses such rail tracks,
Tenant shall reimburse Landlord or the railroad company from time to time upon
demand, as additional rent, for its share of the costs of such repair and
maintenance and for any other sums specified in any agreement to which Landlord
or Tenant is a party respecting such tracks, such costs to be borne
proportionately by all tenants in the Building using such rail tracks, based
upon the actual number of rail cars shipped and received by such tenant during
each calendar year during the Term.

8.   LIENS.

Tenant shall keep the Premises, the Building and appurtenant land and Tenant's
leasehold interest in the Premises free from any liens arising out of any
services, work or materials performed, furnished, or contracted for by Tenant,
or obligations incurred by Tenant. In the event that Tenant shall not, within
ten (10) days following the imposition of any such lien, either cause the same
to be released of record or provide Landlord with insurance against the same
issued by a major title insurance company or such other protection against the
same as Landlord shall accept, Landlord shall have the right to cause the same
to be released by such means as it shall deem proper, including payment of the
claim giving rise to such lien. All such sums paid by Landlord and all expenses
incurred by it in connection therewith shall be considered additional rent and
shall be payable to it by Tenant on demand. Landlord shall have the right at all
times to post and keep posted on the Premises any notices permitted or required
by law, or that Landlord shall deem proper, for the protection of Landlord, the
Premises, the Building, and any other party having an interest therein, from
mechanics' and materialmen's liens, and Tenant shall give to Landlord at least
five business days' prior notice of commencement of any construction on the
Premises.

9.   ASSIGNMENT AND SUBLETTING.

     9.1 Tenant shall not have the right to assign or pledge this Lease or to
sublet the whole or any part of the Premises whether voluntarily or by operation
of law, or permit the use or occupancy of the Premises by anyone other than
Tenant, and shall not make, suffer or permit such assignment, subleasing or
occupancy, without the prior written consent of Landlord, which consent shall
not be unreasonably withheld or delayed, and said restrictions shall be binding
upon any and all assignees of the Lease and subtenants of the Premises. In the
event Tenant desires to sublet, or permit such occupancy of, the Premises, or
any portion thereof, or assign this Lease, Tenant shall give written notice
thereof to Landlord at least fifteen (15) days but no more than one hundred
eighty (180) days prior to the proposed commencement date of such subletting or
assignment, which notice shall set forth the name of the proposed subtenant or
assignee, the relevant terms of any sublease or assignment and copies of
financial reports and other relevant financial reports and other relevant
financial information of the proposed subtenant or assignee.

     9.2 Notwithstanding any assignment or subletting, permitted or otherwise,
Tenant shall at all times remain directly, primarily and fully responsible and
liable for the payment of the rent specified in this Lease and for com-

                                       5

<PAGE>

pliance with all of its other obligations under the terms, provisions and
covenants of this Lease. Upon the occurrence of an Event of Default, if the
Premises or any part of them are then assigned or sublet, Landlord, in addition
to any other remedies provided in this Lease or provided by law, may, at its
option, collect directly from such assignee or subtenant all rents due and
becoming due to Tenant under such assignment or sublease and apply such rent
against any sums due to Landlord from Tenant under this Lease, and no such
collection shall be construed to constitute a novation or release of Tenant from
the further performance of Tenant's obligations under this Lease.

     9.3 In addition to Landlord's right to approve of any subtenant or
assignee, Landlord shall have the option, in its sole discretion, in the event
of any proposed subletting or assignment, to terminate this Lease, or in the
case of a proposed subletting of less than the entire Premises, to recapture the
portion of the premises to be sublet, as of the date the subletting or
assignment is to be effective. The option shall be exercised, if at all, by
Landlord giving Tenant written notice given by Landlord to Tenant within
fifteen (15) days following Landlord's receipt of Tenant's written notice as
required above. If this Lease shall be terminated with respect to the entire
Premises pursuant to this Section, the Term of this Lease shall end on the date
stated in Tenant's notice as the effective date of the sublease or assignment as
if that date had been originally fixed in this Lease for the expiration of the
Term. If Landlord recaptures under this Section only a portion of the Premises,
the rent to be paid from time to time during the unexpired Term shall abate
proportionately based on the proportion by which the approximate square footage
of the remaining portion of the Premises shall be less than that of the Premises
as of the date immediately prior to such recapture.

     9.4 In the event that Tenant sell, sublets, assigns or transfers this
Lease, Tenant shall pay to Landlord as additional rent an amount equal to fifty
percent (50%) of any increased Rent (as defined below) when and as such
Increased Rent is received by Tenant less Tenant Improvements, Lease Commission,
and rental abatement. As used in this Section, "Increased Rent" shall mean the
excess of (i) all rent and other consideration which Tenant is entitled to
receive by reason of any sale, sublease, assignment or other transfer of this
Lease, over (ii) the rent Otherwise payable by Tenant under this Lease at such
time. For purposes of the foregoing, any consideration received by Tenant in
form other than cash shall be valued at its fair market value as determined by
Landlord in good faith.

     9.5 Notwithstanding any other provision hereof, Tenant shall have no right
to make (and Landlord shall have the absolute right to refuse consent to) any
assignment of this Lease or sublease of any portion of the Premises if at the
time of either Tenant's notice of the proposed assignment or sublease or the
proposed commencement date thereof, there shall exist any uncured default of
Tenant or matter which will become a default of Tenant with passage of time
unless cured, or if the proposed assignee or sublessee is an entity: (c) is a
governmental agency; (d) is incompatible with the character of occupancy of the
Building; or (e) would subject the Premises to a use which would: (i) involve
increased personnel or wear upon the Building; (ii) violate any exclusive right
granted to another tenant of the Building; (iii) require any addition to or
modification of the Premises or the Building in order to comply with building
code or other governmental requirements; or, (iv) involve a violation of Section
1.2. Tenant expressly agrees that Landlord shall have the absolute right to
refuse consent to any such assignment or sublease and that for the purposes of
any statutory or other requirement of reasonableness on the part of Landlord
such refusal shall be reasonable.

     9.6 Upon any request to assign or sublet, Tenant will pay to Landlord the
Assignment/Subletting Fee regardless of whether Landlord shall consent to,
refuse consent, or determine that Landlord's consent is not required for, such
assignment, pledge or sublease. Any purported sale, assignment, mortgage,
transfer of this Lease or subletting which does not comply with the provisions
of this Article 9 shall be void.

     9.7 If Tenant is a corporation, partnership or trust, any transfer or
transfers of or change or changes within any twelve month period in the number
of the outstanding voting shares of the corporation, the general partnership
interests in the partnership or the identity of the persons or entities
controlling the activities of such partnership or trust resulting in the persons
or entities owning or controlling a majority of such shares, partnership
interests or activities of such partnership or trust at the beginning of such
period no longer having such ownership or control shall be regarded as
equivalent to an assignment of this Lease to the persons or entities acquiring
such ownership or control and shall be subject to all the provisions of this
Article 9 to the same extent and for all intents and purposes as though such an
assignment. The foregoing provisions shall not apply to an initial public
offering of Tenant's common stock or a merger/acquisition transaction in which
the surviving entity's net worth is at least as great as Tenant's.

                                       6

<PAGE>

10. INDEMNIFICATION.

None of the Landlord Entities shall be liable and Tenant hereby waives all
claims against them for any damage to any property or any injury to any person
in or about the Premises or the Building by or from any cause whatsoever
(including without limiting the foregoing, rain or water leakage of any
character from the roof, windows, walls, basement, pipes, plumbing works or
appliances, the Building not being in good condition or repair, gas, fire, oil,
electricity or theft), except to the extent caused by or arising from the gross
negligence or willful misconduct of or breach of this Lease by Landlord or its
agents, employees or contractors. Subject to the foregoing exception, Tenant
shall protect, indemnify and hold the Landlord Entities harmless from and
against any and all loss, claims, liability or costs (including court costs and
attorney's fees) incurred by reason of (a) any damage to any property (including
but not limited to property of any Landlord Entity) or any injury (including but
not limited to death) to any person occurring in, on or about the Premises or
the Building to the extent that such injury or damage shall be caused by or
arise from any actual or alleged act, neglect, fault, or omission by or of
Tenant, its agents, servants, employees, invitees, or visitors to meet any
standards imposed by any duty with respect to the injury or damage; (b) the
conduct or management of any work or thing whatsoever done by the Tenant in or
about the Premises or from transactions of the Tenant concerning the Premises;
(c) Tenant's failure to comply with any and all governmental laws, ordinances
and regulations applicable to the condition or use of the Premises or its
occupancy; or (d) any breach or default on the part of Tenant in the performance
of any covenant or agreement on the part of the Tenant to be performed pursuant
to this Lease. The provisions of this Article shall survive the termination of
this Lease with respect to any claims or liability accruing prior to such
termination.

11. INSURANCE.

     11.1 Tenant shall keep in force throughout the Term: (a) a Commercial
General Liability insurance policy or policies to protect the Landlord Entities
against any liability to the public or to any invitee of Tenant or a Landlord
Entity incidental to the use of or resulting from any accident occurring in or
upon the Premises with a limit of not less than $1,000,000 per occurrence and
not less than $2,000,000 in the annual aggregate, or such larger amount as
Landlord may prudently require from time to time, covering bodily injury and
property damage liability and $1,000,000 products/completed operations
aggregate; (b) Business Auto Liability covering owned, non-owned and hired
vehicles with a limit of not less than $1,000,000 per accident; (c) insurance
protecting against liability under Worker's Compensation Laws with limits at
least as required by statute; (d) Employers Liability with limits of $1,000,000
each accident, $1,000,000 disease policy limit, $1,000,000 disease--each
employee; (e) All Risk or Special Form coverage protecting Tenant against loss
of or damage to Tenant's alterations, additions, improvements, carpeting, floor
coverings, panelings, decorations, fixtures, inventory and other business
personal property situated in or about the Premises to the full replacement
value of the property so insured; (f) Business Interruption Insurance for 100%
of the 12 month actual loss sustained, and, (g) Excess Liability in the amount
of $5,000,000.

     11.2 Each of the aforesaid policies shall (a) be provided at Tenant's
expense; (b) name the Landlord and building management company, if any, as
additional insureds; (c) be issued by an insurance company with a minimum Best's
rating of "A:VII" during the Term; and (d) provide that said insurance shall not
be cancelled unless thirty (30) days prior written notice (ten days for
non-payment of premium) shall have been given to Landlord; and said policy or
policies or certificates thereof shall be delivered to Landlord by Tenant upon
the Commencement Date and at least thirty (30) days prior to each renewal of
said insurance.

     11.3 Whenever Tenant shall undertake any alterations, additions or
improvements in, to or about the Premises ("Work") the aforesaid insurance
protection must extend to and include injuries to persons and damage to property
arising in connection with such Work, without limitation including liability
under any applicable structural work act, and such other insurance as Landlord
shall reasonably require; and the policies of or certificates evidencing such
insurance must be delivered to Landlord prior to the commencement of any such
Work.

12. WAIVER OF SUBROGATION.

So long as their respective insurers so permit, Tenant and Landlord hereby
mutually waive their respective rights of recovery against each other for any
loss insured by fire, extended coverage, All Risks or other insurance now or
hereafter existing for the benefit of the respective party but only to the
extent of the net insurance proceeds payable under such policies. Each party
shall obtain any special endorsements required by their insurer to evidence
compliance with the aforementioned waiver.

13. SERVICES AND UTILITIES.

Tenant shall pay for all water, gas, heat, light, power, telephone, sewer,
sprinkler system charges and other utilities and services used on or from the
Premises, together with any taxes, penalties, and surcharges or the like
pertaining thereto and any maintenance charges for utilities. Tenant shall
furnish all electric light bulbs, tubes and ballasts,

                                       7

<PAGE>

battery packs for emergency lighting and fire extinguishers. If any such
services are not separately metered to Tenant, Tenant shall pay such proportion
of all charges jointly metered with other premises as determined by Landlord, in
its sole discretion, to be reasonable. Any such charges paid by Landlord and
assessed against Tenant shall be immediately payable to Landlord on demand and
shall be additional rent hereunder. Landlord shall in no event be liable for any
interruption or failure of utility services on or to the Premises. Landlord
shall insure that all utilities are separately metered within the Premises.

14. HOLDING OVER.

Tenant shall pay Landlord for each day Tenant retains possession of the Premises
or part of them after termination of this Lease by lapse of time or otherwise at
the rate ("Holdover Rate") which shall be 150% of the greater of: (a) the amount
of the Annual Rent for the last period prior to the date of such termination
plus all Rent Adjustments under Article 4; and, (b) the then market rental value
of the Premises as determined by Landlord assuming a new lease of the Premises
of the then usual duration and other terms, in either case prorated on a daily
basis, and also pay all damages sustained by Landlord by reason of such
retention. If Landlord gives notice to Tenant of Landlord's election to that
effect, such holding over shall constitute renewal of this Lease for a period
from month to month or one year, whichever shall be specified in such notice, in
either case at the Holdover Rate, but if the Landlord does not so elect, no such
renewal shall result notwithstanding acceptance by Landlord of any sums due
hereunder after such termination; and instead, a tenancy at sufferance at the
Holdover Rate shall be deemed to have been created. In any event, no provision
of this Article 14 shall be deemed to waive Landlord's right of reentry or any
other right under this Lease or at law.

15. SUBORDINATION.

Without the necessity of any additional document being executed by Tenant for
the purpose of effecting a subordination, this Lease shall be subject and
subordinate at all times to ground or underlying leases and to the lien of any
mortgages or deeds of trust now or hereafter placed on, against or affecting the
Building, Landlord's interest or estate in the Building, or any ground or
underlying lease; provided, that, so long as an Event of Default has occurred
and is continuing, Tenant's possession of the Premises shall not be disturbed as
a result of any such subordination; and provided, that if the lessor, mortgagee,
trustee, or holder of any such mortgage or deed of trust elects to have Tenant's
interest in this Lease be superior to any such instrument, then, by notice to
Tenant, this Lease shall be deemed superior, whether this Lease was executed
before or after said instrument. Notwithstanding the foregoing, Tenant covenants
and agrees to execute and deliver upon demand such further instruments
evidencing such subordination or superiority of this Lease as may be required by
Landlord.

16. RULES AND REGULATIONS.

Tenant shall faithfully observe and comply with all the rules and regulations as
set forth in Exhibit C to this Lease and all reasonable modifications of and
additions to them from time to time put into effect by Landlord. Subject to
Section 21, Landlord shall not be responsible to Tenant for the non-performance
by any other tenant or occupant of the Building of any such rules and
regulations.

17. REENTRY BY LANDLORD.

     17.1 Landlord reserves and shall at all times have the right to re-enter
the Premises to inspect the same, to show said Premises to prospective
purchasers, mortgagees or , within sixty (60) days prior to the expiration of
this Lease, tenants, and to alter, improve or repair the Premises and any
portion of the Building, without abatement of rent, and may for that purpose
erect, use and maintain scaffolding, pipes, conduits and other necessary
structures and open any wall, ceiling or floor in and through the Building and
Premises where reasonably required by the character of the work to be performed,
provided entrance to the Premises shall not be blocked thereby, and further
provided that the business of Tenant shall not be interfered with unreasonably.

     17.2 Landlord shall have the right at any time to change the arrangement
and/or locations of entrances, or passageways, doors and doorways, and
corridors, windows, elevators, stairs, toilets or other public parts of the
Building and to change the name, number or designation by which the Building is
commonly known. In the event that Landlord damages any portion of any wall or
wall covering, ceiling, or floor or floor covering within the Premises, Landlord
shall repair or replace the damaged portion to match the original as nearly as
commercially reasonable but shall not be required to repair or replace more than
the portion actually damaged.

     17.3 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 occasioned by any action
of Landlord authorized by this Article 17. Tenant agrees to reimburse Landlord,
on demand, as additional rent, for any expenses which Landlord may reasonably
incur in thus effecting compliance with Tenant's obligations under this Lease.

                                       8

<PAGE>

     17.4 For each of the aforesaid purposes, Landlord shall at all times have
and retain a key with which to unlock all of the doors in the Premises,
excluding Tenant's vaults and safes or special security areas (designated in
advance), and Landlord shall have the right to use any and all means which
Landlord may deem proper to open said doors in an emergency to obtain entry to
any portion of the Premises. As to any portion to which access cannot be had by
means of a key or keys in Landlord's possession, Landlord is authorized to gain
access in an emergency by such means as Landlord shall elect and the cost of
repairing any damage occurring in doing so shall be borne by Tenant and paid to
Landlord as additional rent upon demand.

18. DEFAULT.

     18.1 Except as otherwise provided in Article 20, the following events shall
be deemed to be Events of Default under this Lease:

          18.1.1 Tenant shall fail to pay when due any sum of money becoming due
to be paid to Landlord under this Lease, whether such sum be any installment of
the rent reserved by this Lease, any other amount treated as additional rent
under this Lease, or any other payment or reimbursement to Landlord required by
this lease, whether or not treated as additional rent under this Lease, and such
failure shall continue for a period of five business days after written notice
that such payment was not made when due, but if any such notice shall be given,
for the twelve month period commencing with the date of such notice, the failure
to pay within five days after due any additional sum of money becoming due to be
paid to Landlord under this Lease during such period shall be an Event of
Default, without notice.

          18.1.2 Tenant shall fail to comply with any term, provision or
covenant of this Lease which is not provided for in another Section of this
Article and shall not cure such failure within twenty (20) days (forthwith, if
the failure involves a hazardous condition) after written notice of such failure
to Tenant.

          18.1.3 Tenant shall fail to vacate the Premises immediately upon
termination of this Lease, by lapse of time or otherwise, or upon termination of
Tenant's right to possession only.

          18.1.4 Tenant shall become insolvent, admit in writing its inability
to pay its debts generally as they become due, file a petition in bankruptcy or
a petition to take advantage of any insolvency statute, make an assignment for
the benefit of creditors, make a transfer in fraud of creditors, apply for or
consent to the appointment of a receiver of itself or of the whole or any
substantial part of its property, or file a petition or answer seeking
reorganization or arrangement under the federal bankruptcy laws, as now in
effect or hereafter amended, or any other applicable law or statute of the
United States or any state thereof.

          18.1.5 A court of competent jurisdiction shall enter an order,
judgment or decree adjudicating Tenant bankrupt, or appointing a receiver of
Tenant, or of the whole or any substantial part of its property, without the
consent of Tenant, or approving a petition filed against Tenant seeking
reorganization or arrangement of Tenant under the bankruptcy laws of the United
States, as now in effect or hereafter amended, or any state thereof, and such
order, judgment or decree shall not be vacated or set aside or stayed within
thirty (30) days from the date of entry thereof.

19. REMEDIES.

     19.1 Upon the occurrence of any of such events of default described in
Article 18.1 or elsewhere in this Lease, Landlord shall have the following
rights and remedies in addition to all other rights or remedies available to
Landlord in law or equity:

          19.1.1 The rights and remedies provided by California Civil Code
Section 1951.2, including, but not limited to, the right to terminate Tenant's
right to possession of the Premises and to recover the worth at the time of
award of the amount by which the unpaid rent for the balance of the Term after
the time of award exceeds the amount of rental loss for the same period that the
Tenant proves could be reasonably avoided, as computed pursuant to subsection
(b) of said Section 1951.2;

          19.1.2 The rights and remedies provided by California Civil Code
Section 1951.4, that allows Landlord to continue this Lease in effect and to
enforce all of its rights and remedies under this Lease, including the right to
recover rent as it becomes due, for so long as Landlord does not terminate
Tenant's right to possession; provided, however, if Landlord elects to exercise
its remedies described in this subsection and Landlord does not terminate this
Lease, and if Tenant requests Landlord's consent to an assignment of this Lease
or a sublease of the Premises at such time as Tenant is in default, Landlord
shall not unreasonably withhold its consent to such assignment or sublease. Acts
of maintenance or preservation, efforts to relet the Premises or the appointment
of a receiver upon

                                       9

<PAGE>

Landlord's initiative to protect its interest under this Lease shall not
constitute a termination of Tenant's right to possession;

          19.1.3 The right to terminate this Lease by giving notice to Tenant in
accordance with applicable law;

          19.1.4 The right and power, as attorney-in-fact for Tenant, to enter
the Premises and remove therefrom all persons and property, to store such
property in a public warehouse or elsewhere at the cost of and for the account
of Tenant, and to sell such property and apply the proceeds therefrom pursuant
to applicable California law. Landlord, as attorney-in-fact for Tenant, may from
time to time sublet the Premises or any part thereof for such term or terms
(which may extend beyond the Term) and at such rent and such other terms as
Landlord in its sole discretion may deem advisable, with the right to make
alterations and repairs to the Premises. Upon each such subletting, (i) Tenant
shall be immediately liable for payment to Landlord of, in addition to
indebtedness other than rent due hereunder, the cost of such subletting and such
alterations and repairs incurred by Landlord and the amount, if any, by which
the rent for the period of such subletting (to the extent such period does not
exceed the Term) exceeds the amount to be paid as rent for the Premises for such
period, or (ii) at the option of Landlord, rents received from such subletting
shall be applied, first, to payment of any indebtedness other than rent due
hereunder from Tenant to Landlord; second, to the payment of any costs of such
subletting and of such alterations and repairs; third, to payment of rent due
and unpaid hereunder; and the residue, if any, shall be held by Landlord and
applied in payment of future rent as the same become due hereunder. If Tenant
has been credited with any rent to be received by such subletting under clause
(i) and such rent shall not be promptly paid to Landlord by the subtenant(s), or
if such rentals received from such subletting under clause (ii) during any month
are less than those to be paid during that month by Tenant hereunder, Tenant
shall pay any such deficiency to Landlord. Such deficiency shall be calculated
and paid monthly. For all purposes set forth in this subparagraph, Landlord is
hereby irrevocably appointed attorney-in-fact for Tenant, with power of
substitution. No taking of possession of the Premises by Landlord, as
attorney-in-fact for Tenant, shall be construed as an election on its part to
terminate this Lease unless a written notice of such intention is given to
Tenant. Notwithstanding any such subletting without termination, Landlord may at
any time thereafter elect to terminate this Lease for such previous breach; and

          19.1.5 The right to have a receiver appointed for Tenant upon
application by Landlord, to take possession of the Premises and to apply any
rental collected from the Premises and to exercise all other rights and remedies
granted to Landlord as attorney-in-fact for Tenant pursuant to subparagraph
19.1.4.

          19.1.6 For purposes of this Article 19: "worth at the time of award"
shall be computed by allowing interest at a per annum rate of ten percent and
rent with respect to each month shall be deemed to be a monthly rental arrived
at by adding (i) one twelfth of the Annual Rent, plus (ii) an amount equal to
the monthly average of all the percentage rental received by or payable to
Landlord during the period that Tenant was conducting Tenant's business in the
Premises in the manner and to the extent required by this Lease, plus (iii) one
twelfth of any items of additional rent paid or payable by Tenant hereunder
during the 12 consecutive month period prior to the month in which Tenant's
default occurs or one twelfth of the annualized amount of the additional rent
paid or payable and the last day of the calendar month prior to the month in
which such default occurs, if such default occurs during the first 12 calendar
months of the Term).

     19.2 If, on account of any breach or default by Tenant in Tenant's
obligations under the terms and conditions of this Lease, it shall become
necessary or appropriate for Landlord to employ or consult with an attorney
concerning or to enforce or defend any of Landlord's rights or remedies arising
under this Lease, Tenant agrees to pay all Landlord's attorney's fees so
incurred. Tenant expressly waives any right to: (a) trial by jury; and (b)
service of any notice required by any present or future law or ordinance
applicable to landlords or tenants but not required by the terms of this Lease.

     19.3 Pursuit of any of the foregoing remedies shall not preclude pursuit of
any of the other remedies provided in this Lease or any other remedies provided
by law (all such remedies being cumulative), nor shall pursuit of any remedy
provided in this Lease constitute a forfeiture or waiver of any rent due to
Landlord under this Lease or of any damages accruing to Landlord by reason of
the violation of any of the terms, provisions and covenants contained in this
Lease.

     19.4 No act or thing done by Landlord or its agents during the Term shall
be deemed a termination of this Lease or an acceptance of the surrender of the
Premises, and no agreement to terminate this Lease or accept a surrender of said
Premises shall be valid, unless in writing signed by Landlord. No waiver by
Landlord of any violation or breach of any of the terms, provisions and
covenants contained in this Lease shall be deemed or construed to constitute a
waiver of any other violation or breach of any of the terms, provisions and
covenants contained in this Lease. Landlord's acceptance of the payment of
rental or other payments after the occurrence of an Event of Default shall not
be construed as a waiver of such Default, unless Landlord so notifies Tenant in
writing. Forbearance by Landlord in enforcing one or more of the remedies
provided in this Lease upon an Event of Default

                                       10

<PAGE>

shall not be deemed or construed to constitute a waiver of such Default or of
Landlord's right to enforce any such remedies with respect to such Default or
any subsequent Default.

     19.5 To secure the payment of all rentals and other sums of money becoming
due from Tenant under this Lease, Landlord shall have and Tenant grants to
Landlord a first lien upon the leasehold interest of Tenant under this Lease,
which lien may be enforced in equity. In the event of a Default under this
Lease, Landlord shall have, in addition to any other remedies provided in this
Lease or by law, all rights and remedies under the Uniform Commercial Code,
including without limitation the right to sell the property described in this
Section 19.5 at public or private sale upon five (5) days' notice to Tenant.
Tenant shall execute all such financing statements and other instruments as
shall be deemed necessary or desirable in Landlord's discretion to perfect the
security interest hereby created.

20.  TENANTS BANKRUPTCY OR INSOLVENCY.

     20.1 If at any time and for so long as Tenant shall be subjected to the
provisions of the United States Bankruptcy Code or other law of the United
States or any state thereof for the protection of debtors as in effect at such
time (each a "Debtor's Law"):

          20.1.1 Tenant, Tenant as debtor-in-possession, and any trustee or
receiver of Tenant's assets (each a "Tenant's Representative") shall have no
greater right to assume or assign this Lease or any interest in this Lease, or
to sublease any of the Premises than accorded to Tenant in Article 9, except to
the extent Landlord shall be required to permit such assumption, assignment or
sublease by the provisions of such Debtor's Law. Without limitation of the
generality of the foregoing, any right of any Tenant's Representative to assume
or assign this Lease or to sublease any of the Premises shall be subject to the
conditions that:

               20.1.1.1 Such Debtor's Law shall provide to Tenant's
Representative a right of assumption of this Lease which Tenant's Representative
shall have timely exercised and Tenant's Representative shall have fully cured
any default of Tenant under this Lease.

               20.1.1.2 Tenant's Representative or the proposed assignee, as the
case shall be, shall have deposited with Landlord as security for the timely
payment of rent an amount equal to the larger of: (a) three months' rent and
other monetary charges accruing under this Lease; and (b) any sum specified in
Article 5; and shall have provided Landlord with adequate other assurance of the
future performance of the obligations of the Tenant under this Lease. Without
limitation, such assurances shall include, at least, in the case of assumption
of this Lease, demonstration to the satisfaction of the Landlord that Tenant's
Representative has and will continue to have sufficient unencumbered assets
after the payment of all secured obligations and administrative expenses to
assure Landlord that Tenant's Representative will have sufficient funds to
fulfill the obligations of Tenant under this Lease; and, in the case of
assignment, submission of current financial statements of the proposed assignee,
audited by an independent certified public accountant reasonably acceptable to
Landlord and showing a net worth and working capital in amounts determined by
Landlord to be sufficient to assure the future performance by such assignee of
all of the Tenant's obligations under this Lease.

               20.1.1.3 The assumption or any contemplated assignment of this
Lease or subleasing any part of the Premises, as shall be the case, will not
breach any provision in any other lease, mortgage, financing agreement or other
agreement by which Landlord is bound.

               20.1.1.4 Landlord shall have, or would have had absent the
Debtor's Law, no right under Article 9 to refuse consent to the proposed
assignment or sublease by reason of the identity or nature of the proposed
assignee or sublessee or the proposed use of the Premises concerned.

21.  QUIET ENJOYMENT.

Landlord represents and warrants that it has full right and authority to enter
into this Lease and that Tenant, while paying the rental and performing its
other covenants and agreements contained in this Lease, shall peaceably and
quietly have, hold and enjoy the Premises for the Term without hindrance or
molestation from Landlord subject to the terms and provisions of this Lease.
Landlord shall not be liable for any interference or disturbance by other
tenants or third persons, nor shall Tenant be released from any of the
obligations of this Lease because of such interference or disturbance, provided
that the business of Tenant shall not be interfered with unreasonably.

                                       11

<PAGE>

22.  DAMAGE BY FIRE, ETC.

     22.1 In the event the Premises or the Building are damaged by fire or other
cause and in Landlord's reasonable estimation such damage can be materially
restored within one hundred eighty (180) days, Landlord shall forthwith repair
the same and this Lease shall remain in full force and effect, except that
Tenant shall be entitled to a proportionate abatement in rent from the date of
such damage. Such abatement of rent shall be made pro rata in accordance with
the extent to which the damage and the making of such repairs shall interfere
with the use and occupancy by Tenant of the Premises from time to time. Within
forty-five (45) days from the date of such damage, Landlord shall notify Tenant,
in writing, of Landlord's reasonable estimation of the length of time within
which material restoration can be made, and Landlord's determination shall be
binding on Tenant. For purposes of this Lease, the Building or Premises shall be
deemed "materially restored" if they are in such condition as would not prevent
or materially interfere with Tenant's use of the Premises for the purpose for
which it was being used immediately before such damage.

     22.2 If such repairs cannot, in Landlord's reasonable estimation, be made
within one hundred eighty (180) days, Landlord and Tenant shall each have the
option of giving the other, at any time within sixty (60) days after such
damage, notice terminating this Lease as of the date of such damage. In the
event of the giving of such notice, this Lease shall expire and all interest of
the Tenant in the Premises shall terminate as of the date of such damage as if
such date had been originally fixed in this Lease for the expiration of the
Term. In the event that neither Landlord nor Tenant exercises its option to
terminate this Lease, then Landlord shall repair or restore such damage, this
Lease continuing in full force and effect, and the rent hereunder shall be
proportionately abated as provided in Section 22.1.

     22.3 Landlord shall not be required to repair or replace any damage or loss
by or from fire or other cause to any panelings, decorations, partitions,
additions, railings, floor coverings, office fixtures or any other property or
improvements installed on the Premises or belonging to Tenant. Any insurance
which may be carried by Landlord or Tenant against loss or damage to the
Building or Premises shall be for the sole benefit of the party carrying such
insurance and under its sole control.

     22.4 In the event that Landlord should fail to complete such repairs and
material restoration within thirty (30) days after the date estimated by
Landlord therefor as extended by this Section 22.4, Tenant may at its option and
as its sole remedy terminate this Lease by delivering written notice to
Landlord, within fifteen (15) days after the expiration of said period of time,
whereupon the Lease shall end on the date of such notice or such later date
fixed in such notice as if the date of such notice was the date originally fixed
in this Lease for the expiration of the Term; provided, however, that if
construction is delayed because of changes, deletions or additions in
construction requested by Tenant, strikes, lockouts, casualties, Acts of God,
war, material or labor shortages, government regulation or control or other
causes beyond the reasonable control of Landlord, the period for restoration,
repair or rebuilding shall be extended for the amount of time Landlord is so
delayed.

     22.5 Notwithstanding anything to the contrary contained in this Article:
(a) Landlord shall not have any obligation whatsoever to repair, reconstruct, or
restore the Premises when the damages resulting from any casualty covered by the
provisions of this Article 22 occur during the last twelve (12) months of the
Term or any extension thereof, but if Landlord determines not to repair such
damages Landlord shall notify Tenant and if such damages shall render any
material portion of the Premises untenantable Tenant shall have the right to
terminate this Lease by notice to Landlord within fifteen (l5) days after
receipt of Landlord's notice; and (b) in the event the holder of any
indebtedness secured by a mortgage or deed of trust covering the Premises or
Building requires that any insurance proceeds be applied to such indebtedness,
then Landlord shall have the right to terminate this Lease by delivering written
notice of termination to Tenant within fifteen (15) days after such requirement
is made by any such holder, whereupon this Lease shall end on the date of such
damage as if the date of such damage were the date originally fixed in this
Lease for the expiration of the Term.

     22.6 In the event of any damage or destruction to the Building or Premises
by any peril covered by the provisions of this Article 22, it shall be Tenant's
responsibility to properly secure the Premises and upon notice from Landlord to
remove forthwith, at its sole cost and expense, such portion of all of the
property belonging to Tenant or its licensees from such portion or all of the
Building or Premises as Landlord shall request.

     22.7 The provisions of this Lease, including this Article, constitute an
express agreement between Landlord and Tenant with respect to any and all damage
to, or destruction of, all or any part of the Premises or the Building and any
statute or regulation of the State of California, including, without limitation,
Sections 1932 (2) and 1934(4) of the California Civil Code, with respect to any
rights or obligations concerning damage or destruction in the absence of an
express agreement between the parties, and any other statute or regulation, now
or hereafter in effect, shall have no application to the Lease or any damage or
destruction to all or any part of the Premises or the Building.

                                       12

<PAGE>

23.  EMINENT DOMAIN.

If all or any substantial part of the Premises shall be taken or appropriated by
any public or quasi-public authority under the power of eminent domain, or
conveyance in lieu of such appropriation, either party to this Lease shall have
the right, at its option, of giving the other, at any time within thirty (30)
days after such taking, notice terminating this Lease, except that Tenant may
only terminate this Lease by reason of taking or appropriation, if such taking
or appropriation shall be so substantial as to materially interfere with
Tenant's use and occupancy of the Premises. If neither party to this Lease shall
so elect to terminate this Lease, the rental thereafter to be paid shall be
adjusted on a fair and equitable basis under the circumstances. In addition to
the rights of Landlord above, if any substantial part of the Building shall be
taken or appropriated by any public or quasi-public authority under the power of
eminent domain or conveyance in lieu thereof, and regardless of whether the
Premises or any part thereof are so taken or appropriated, Landlord shall have
the right, at its sole option, to terminate this Lease. Landlord shall be
entitled to any and all income, rent, award, or any interest whatsoever in or
upon any such sum, which may be paid or made in connection with any such public
or quasi-public use or purpose, and Tenant hereby assigns to Landlord any
interest it may have in or claim to all or any part of such sums, other than any
separate award which may be made with respect to Tenant's trade fixtures and
moving expenses; Tenant shall make no claim for the value of any unexpired Term.

24.  SALE BY LANDLORD.

In event of a sale or conveyance by Landlord of the Building, the same shall
operate to release Landlord from any future liability upon any of the covenants
or conditions, expressed or implied, contained in this Lease in favor of Tenant
to the extent assumed by Landlord's successor in interest, and in such event
Tenant agrees to look solely to the responsibility of the successor in interest
of Landlord in and to this Lease. Except as set forth in this Article 24, this
Lease shall not be affected by any such sale and Tenant agrees to attorn to the
purchaser or assignee. If any security has been given by Tenant to secure the
faithful performance of any of the covenants of this Lease, Landlord may
transfer or deliver said security, as such, to Landlord's successor in interest
and thereupon Landlord shall be discharged from any further liability with
regard to said security.

25.  ESTOPPEL CERTIFICATES.

Within ten (10) days following any written request which Landlord may make from
time to time, Tenant shall execute and deliver to Landlord or mortgagee or
prospective mortgagee a sworn statement certifying: (a) the date of commencement
of this Lease; (b) the fact that this Lease is unmodified and in full force and
effect (or, if there have been modifications to this Lease, that this Lease is
in full force and effect, as modified, and stating the date and nature of such
modifications); (c) the date to which the rent and other sums payable under this
Lease have been paid; (d) the fact that there are no current defaults under this
Lease by either Landlord or Tenant except as specified in Tenant's statement;
and (e) such other matters as may be reasonably requested by Landlord. Landlord
and Tenant intend that any statement delivered pursuant to this Article 25 may
be relied upon by any mortgagee, beneficiary or purchaser and Tenant shall be
liable for all loss, cost or expense resulting from the failure of any sale or
funding of any loan caused by any material misstatement contained in such
estoppel certificate. Tenant irrevocably agrees that if Tenant fails to execute
and deliver such certificate within such ten (10) day period Landlord or
Landlord's beneficiary or agent may execute and deliver such certificate on
Tenant's behalf, and that such certificate shall be fully binding on Tenant.

26.  SURRENDER OF PREMISES.

     26.1 Tenant shall, at least thirty (30) days before the last day of the
Term, arrange to meet Landlord for a joint inspection of the Premises. In the
event of Tenant's failure to arrange such joint inspection to be held prior to
vacating the Premises, Landlord's inspection at or after Tenant's vacating the
Premises shall be conclusively deemed correct for purposes of determining
Tenant's responsibility for repairs and restoration.

     26.2 At the end of the Term or any renewal of the Term or other sooner
termination of this Lease, Tenant will peaceably deliver up to Landlord
possession of the Premises, together with all improvements or additions upon or
belonging to the same, by whomsoever made, in the condition set forth in Exhibit
D. Tenant may, and at Landlord's request shall, at Tenant's sole cost, remove
upon termination of this Lease, any and all furniture, furnishings, movable
partitions of less than full height from floor to ceiling, trade fixtures and
other property installed by Tenant, title to which shall not be in or pass
automatically to Landlord upon such termination, repairing all damage caused by
such removal. Property not so removed shall, unless requested to be removed, be
deemed abandoned by the Tenant and title to the same shall thereupon pass to
Landlord under this Lease as by a bill of sale. All other alterations, additions
and improvements in, on or to the Premises shall be dealt with and disposed of
as provided in Article 6.

                                       13

<PAGE>

     26.3 All obligations of Tenant under this Lease not fully performed as of
the expiration or earlier termination of the Term shall survive the expiration
or earlier termination of the Term. In the event that Tenant's failure to
perform prevents Landlord from releasing the Premises, Tenant shall continue to
pay rent pursuant to the provisions of Article 14 until such performance is
complete. Upon the expiration or earlier termination of the Term, Tenant shall
pay to Landlord the amount, as reasonably estimated by Landlord, necessary to
repair and restore the Premises as provided in this Lease and/or to discharge
Tenant's obligation for unpaid amounts due or to become due to Landlord. All
such amounts shall be used and held by Landlord for payment of such obligations
of Tenant, with Tenant being liable for any additional costs upon demand by
Landlord, or with any excess to be returned to Tenant after all such obligations
have been determined and satisfied. Any otherwise unused Security Deposit shall
be credited against the amount payable by Tenant under this Lease.

27.  NOTICES.

Any notice or document required or permitted to be delivered under this Lease
shall be addressed to the intended recipient, shall be transmitted personally,
by fully prepaid registered or certified United States Mail return receipt
requested, or by reputable independent contract delivery service furnishing a
written record of attempted or actual delivery, and shall be deemed to be
delivered when tendered for delivery to the addressee at its address set forth
on the Reference Page, or at such other address as it has then last specified by
written notice delivered in accordance with this Article 27, or if to Tenant at
either its aforesaid address or its last known registered office or home of a
general partner or individual owner, whether or not actually accepted or
received by the addressee.

28.  TAXES PAYABLE BY TENANT.

In addition to rent and other charges to be paid by Tenant under this Lease,
Tenant shall reimburse to Landlord, upon demand, any and all taxes payable by
Landlord (other than net income taxes) whether or not now customary or within
the contemplation of the parties to this Lease: (a) upon, allocable to, or
measured by or on the gross or net rent payable under this Lease, including
without limitation any gross income tax or excise tax levied by the State, any
political subdivision thereof, or the Federal Government with respect to the
receipt of such rent; (b) upon or with respect to the possession, leasing,
operation, management, maintenance, alteration, repair, use or occupancy of the
Premises or any portion thereof, including any sales, use or service tax imposed
as a result thereof; (c) upon or measured by the Tenant's gross receipts or
payroll or the value of Tenant's equipment, furniture, fixtures and other
personal property of Tenant or leasehold improvements, alterations or additions
located in the Premises; or (d) upon this transaction or any document to which
Tenant is a party creating or transferring any interest of Tenant in this Lease
or the Premises. In addition to the foregoing, Tenant agrees to pay, before
delinquency, any and all taxes levied or assessed against Tenant and which
become payable during the term hereof upon Tenant's equipment, furniture,
fixtures and other personal property of Tenant located in the Premises.

29.  RELOCATION OF TENANT.

30.  DEFINED TERMS AND HEADINGS.

The Article headings shown in this Lease are for convenience of reference and
shall in no way define, increase, limit or describe the scope or intent of any
provision of this Lease. Any indemnification or insurance of Landlord shall
apply to and inure to the benefit of all the following "Landlord Entities",
being Landlord, Landlord's investment manager, and the trustees, boards of
directors, officers, general partners, beneficiaries, stockholders, employees
and agents of each of them. Any option granted to Landlord shall also include or
be exercisable by Landlord's trustee, beneficiary, agents and employees, as the
case may be. In any case where this Lease is signed by more than one person, the
obligations under this Lease shall be joint and several. The terms "Tenant" and
"Landlord" or any pronoun used in place thereof shall indicate and include the
masculine or feminine, the singular or plural number, individuals, firms or
corporations, and each of their respective successors, executors, administrators
and permitted assigns, according to the context hereof. The term "rentable area"
shall mean the rentable area of the Premises or the Building as calculated by
the Landlord on the basis of the plans and specifications of the Building
including a

                                       14

<PAGE>

proportionate share of any common areas. Tenant hereby accepts and agrees to be
bound by the figures for the rentable square footage of the Premises and
Tenant's Proportionate Share shown on the Reference Page.

31.  TENANT'S AUTHORITY.

If Tenant signs as a corporation each of the persons executing this Lease on
behalf of Tenant represents and warrants that Tenant has been and is qualified
to do business in the state in which the Building is located, that the
corporation has full right and authority to enter into this Lease, and that all
persons signing on behalf of the corporation were authorized to do so by
appropriate corporate actions. If Tenant signs as a partnership, trust or other
legal entity, each of the persons executing this Lease on behalf of Tenant
represents and warrants that Tenant has complied with all applicable laws, rules
and governmental regulations relative to its right to do business in the state
and that such entity on behalf of the Tenant was authorized to do so by any and
all appropriate partnership, trust or other actions. Tenant agrees to furnish
promptly upon request a corporate resolution, proof of due authorization by
partners, or other appropriate documentation evidencing the due authorization of
Tenant to enter into this Lease.

32.  COMMISSIONS.

Each of the parties represents and warrants to the other that it has not dealt
with any broker or finder in connection with this Lease, except as described on
the Reference Page.

33.  TIME AND APPLICABLE LAW.

Time is of the essence of this Lease and all of its provisions. This Lease shall
in all respects be governed by the laws of the state in which the Building is
located.

34.  SUCCESSORS AND ASSIGNS.

Subject to the provisions of Article 9, the terms, covenants and conditions
contained in this Lease shall be binding upon and inure to the benefit of the
heirs, successors, executors, administrators and assigns of the parties to this
Lease.

35.  ENTIRE AGREEMENT.

This Lease, together with its exhibits, contains all agreements of the parties
to this Lease and supersedes any previous negotiations. There have been no
representations made by the Landlord or understandings made between the parties
other than those set forth in this Lease and its exhibits. This Lease may not be
modified except by a written instrument duly executed by the parties to this
Lease.

36.  EXAMINATION NOT OPTION.

Submission of this Lease shall not be deemed to be a reservation of the
Premises. Landlord shall not be bound by this Lease until it has received a copy
of this Lease duly executed by Tenant and has delivered to Tenant a copy of

this Lease duly executed by Landlord, and until such delivery Landlord reserves
the right to exhibit and lease the Premises to other prospective tenants.
Notwithstanding anything contained in this Lease to the contrary, Landlord may
withhold delivery of possession of the Premises from Tenant until such time as
Tenant has paid to Landlord any security deposit required by Article 5, the
first month's rent as set forth in Article 3 and any sum owed pursuant to this
Lease.

37.  RECORDATION.

Tenant shall not record or register this Lease or a short form memorandum hereof
without the prior written consent of Landlord, and then shall pay all charges
and taxes incident such recording or registration.

38.  FINANCIAL STATEMENTS.

Tenant acknowledges that it has provided Landlord with its (and, if applicable,
its guarantor's) financial statement(s) as a material inducement to Landlord's
agreement to lease the Premises to Tenant, and that Landlord has relied on the
accuracy of said financial statement(s) in entering into this Lease. Tenant
represents and warrants that the information contained in said financial
statement(s) is true, complete and correct in all material aspects, and agrees
that the foregoing representation and warranty shall be a precondition to this
Lease. At any time during the term of this Lease, within ten days of Landlord's
request, Tenant shall furnish to Landlord financial statements of a similar

                                       15

<PAGE>

nature for Tenant's most recent fiscal year available and shall represent and
warrant the accuracy of such information.

39. RENT SCHEDULE

<TABLE>
<CAPTION>
Base Rent for the period   October 10, 2001   through November 30, 2001   shall be   $14,500.00   gross, plus utilities
                                                                                                  and janitorial (pro
                                                                                                  rated monthly)
<S>                        <C>                <C>                         <C>        <C>          <C>
Base Rent for the period   December l, 2001   through November 30, 2002   shall be   $21,522.00   per month net
Base Rent for the period   December l, 2002   through November 30, 2003   shall be   $22,382.80   per month net
Base Rent for the period   December l, 2003   through November 30, 2004   shall be   $23,278.20   per month net
Base Rent for the period   December l, 2004   through November 30, 2005   shall be   $24,209.32   per month net
Base Rent for the period   December l, 2005   through December 30, 2005   shall be   $25,177.70   per month net
</TABLE>

40. RENEWAL OPTION

Tenant shall, provided the Lease is in full force and effect and Tenant is not
in default under any of the other terms and conditions of the Lease at the time
of notification or commencement, have one (1) successive option to renew this
Lease for a term of five (5) years, for the portion of the Premises being leased
by Tenant as of the date the renewal term is to commence, on the same terms and
conditions set forth in the Lease, except as modified by the terms, covenants
and conditions as set forth below:

a.   If Tenant elects to exercise said option, then Tenant shall provide
     Landlord with written notice no later than the date which is one hundred
     eighty (180) days prior to the expiration of the then current term of this
     Lease. If Tenant fails to provide such notice, Tenant shall have no further
     or additional right to extend or renew the term of the Lease.

b.   The Annual Rent and Monthly Installment in effect at the expiration of the
     then current term of the Lease shall be increased to reflect the current
     fair market rental for comparable space in the Building and in other
     similar buildings in the same rental market as of the date the renewal term
     is to commence, taking into account the specific provisions of the Lease
     which will remain constant. Landlord shall advise Tenant of the new Annual
     Rent and Monthly Installment for the Premises no later than thirty (30)
     days after receipt of Tenant's written request therefor. Said request shall
     be made no earlier than thirty (30) days prior to the first date on which
     Tenant may exercise its option under this Paragraph. Said notification of
     the new Annual Rent may include a provision for its escalation to provide
     for a change in fair market rental between the time of notification and the
     commencement of the renewal term. In no event shall the Annual Rent and
     Monthly Installment for any option period be less then the Annual Rent and
     Monthly Installment in the preceding period.

     However, if the parties cannot reach such agreement within said thirty (30)
     day period, such fair market rental value shall be determined in the
     following manner: Landlord and Tenant shall each appoint one (1) arbitrator
     who shall by profession be a qualified licensed real estate broker who
     shall have been active over the five (5) year period ending on the date the
     applicable Option is exercised in the leasing of industrial and commercial
     real property in San Diego County. Each arbitrator shall be appointed
     within ten (10) days after the expiration of the thirty (30) day mutual
     agreement period described hereinabove. If within thirty (30) days after
     the arbitrators are appointed, the arbitrators are unable to agree upon the
     fair market value, then the two (2) arbitrators so appointed shall, within
     fifteen (15) days after expiration of said thirty (30) day period, agree
     upon and appoint a third arbitrator who shall be qualified under the same
     criteria set forth hereinabove for qualification of the initial two
     arbitrators and who shall render a decision regarding fair market rental
     value within fifteen (15) days following his or her appointment. The
     decision of the third arbitrator shall be binding upon Landlord and Tenant.
     If the two (2) arbitrators fail to agree upon and appoint a third
     arbitrator, the matter shall be decided forthwith by the American
     Arbitration Association pursuant to its Commercial Arbitration Rules. The
     cost of the arbitration shall be paid equally by Landlord and Tenant. The
     determination of fair market rental value by the arbitrators under this
     Section shall include determinations for the increases to the Monthly
     Installment of Annual Rent each year during the Extended Term.

c.   This option is not transferable; the parties hereto acknowledge and agree
     that they intend that the aforesaid option to renew this Lease shall be
     "personal" to Tenant as set forth above and that in no event will any
     assignee or sublessee have any rights to exercise the aforesaid option to
     renew.

41. PARKING

Tenant shall be granted its pro rata share of nonreserved, unassigned parking
spaces, free of rent, based on the project's parking ratio of four spaces per
one thousand square feet leased (4/1,000).

                                       16

<PAGE>

42. LIMITATION OF LANDLORD'S LIABILITY

Redress for any claim against Landlord under this Lease shall be limited to and
enforceable only against and to the extent of Landlord's interest in the
building. The obligations of Landlord under this Lease are not intended to and
shall not be personally binding on, nor shall any resort be had to the private
properties of, any of its trustees or board of directors and officers, as the
case may be, its investment manager, the general partners thereof, or any
beneficiaries, stockholders, employees, or agents of Landlord or the investment
manager.

LANDLORD:                                     TENANT:
CALWEST INDUSTRIAL PROPERTIES, LLC,           ACCREDITED HOME LENDERS, INC., a
a California limited liability company        California corporation

By:    RREEF Management Company,
       a Delaware corporation


By:    /s/ Jill E. Shanahan                   By:    /s/ Ray W. McKewon
       -----------------------                       ---------------------------
       Jill E. Shanahan                              Ray W. McKewon
Title: Vice President                         Title: Executive Vice President

Dated: 11/12/01                               Dated: 11-9-01

<PAGE>

                                    EXHIBIT A
                                    ---------

       This Exhibit A is attached to and made a part of the Lease bearing
              the Lease Reference Date of October 17, 2001 between
            Calwest Industrial Properties, LLC, a California limitied
                        liability company as Landlord and
        Accredited Home Lenders, Inc., a California corporation as Tenant

                                    PREMISES

Exhibit A is intended only to show the general layout of the Premises of the
beginning of the Term of this Lease. It does not in any way supersede any of
Landlord's rights set forth in Section 17.2 with respect to arrangements and/or
locations of public parts of the Building and changes in such arrangements
and/or locations. It is not to be scaled; any measurements or distances shown
should be taken as approximate.

12310 World Trade Drive, Suite 101
San Diego, CA 92128

                                   [GRAPHIC]

                                       18

<PAGE>

                                    EXHIBIT B
                                    ---------

       This Exhibit B is attached to and made a part of the Lease bearing
              the Lease Reference Date of October 17, 2001 between
            Calwest Industrial Properties, LLC, a California limitied
                        liability company as Landlord and
        Accredited Home Lenders, Inc., a California corporation as Tenant

                               INITIAL ALTERATIONS

Landlord, at Landlord's sole cost and expense, shall perform the improvements
outlined below:

1.   Remove two (2) walls to free up more open space.

2.   Close off the current doorway leading from the ladies rest room to the
     lounge and create a doorway from that lounge into the kitchen/breakroom.

3.   Remove the closet and demising wall to open up the corridor.

4.   Completely remove this large room to free up more open space.

5.   Remove the demising wall to open up the corridor.

6.   Where two (2) offices used to be, the doors and wall between have been
     removed and tile installed. Erect the wall again, install the two (2)
     doors, and carpet the floor to make the two (2) offices whole again.

In accordance with the above referenced improvements, Landlord shall patch
carpeting, paint, and repair ceiling grid where necessary.

The cost of the following improvements shall be borne by Tenant, amortized over
the initial Term of the Lease at 10%.

7.   Remove the warehouse walls and create additional office space complete with
     drop ceilings, HVAC, electrical, carpeting, and paint per a mutually
     agreeable space plan.

Other than the above, the Tenant shall occupy the Premises in its current "as
is" condition. Landlord shall ensure that all HVAC, electrical, mechanical,
plumbing are in good working order and condition as of the commencement of the
Lease.

                                   [GRAPHIC]

                                       19

<PAGE>

                                    EXHIBIT C
                                    ---------

           This Exhibit C is attached to and made a part of the Lease
          bearing the Lease Reference Date of October 17, 2001 between
            Calwest Industrial Properties, LLC, a California limitied
                        liability company as Landlord and
        Accredited Home Lenders, Inc., a California corporation as Tenant

                              RULES AND REGULATIONS

1.   REFUSE. All garbage and refuse shall be kept in the container supplied by
     Lessor and placed at the location prepared for refuse collection, in the
     manner and at the times and places specified by Lessor.

2.   PARKING. Lessee shall be entitled to park in common with the other tenants
     of Lessor. Lessee agrees not to overburden the parking facilities and
     agrees to cooperate with Lessor and other Lessees in the use of parking
     facilities. Lessor reserves the right in its absolute discretion to
     determine whether parking facilities are becoming overcrowded and, in such
     event, to allocate parking spaces among Lessee or to designate areas within
     which Lessee must park.

3.   SIGN CRITERIA. No sign, placard, picture, advertisement, name or notice
     shall be inscribed, displayed or printed or affixed to or to any part of
     the outside or inside of the Property without written consent of the Lessor
     first obtained and Lessor shall have the right to remove any such sign,
     placard, picture, advertisement, name or notice without notice to and at
     the expense of Lessee. Lessee shall be entitled to signage which complies
     with governmental regulations and similar to that allowed other tenants in
     the park, subject to Lessor's approval. (See also Exhibit D).

4.   No aerial shall be erected on the roof or exterior walls of the Premises,
     or on the grounds, without in each instance, the written consent of the
     Lessor. Any aerial so installed without such written consent shall be
     subject to removal without notice at any time.

5.   No loud speakers, televisions, phonographs, radios, or other devises shall
     be used in a manner so as to be heard or seen outside of the premises
     without the prior written consent of the Lessor.

6.   The outside areas immediately adjoining the Premises shall be kept clean
     and fee from dirt and rubbish by the Lessee to the satisfaction of the
     Lessor and Lessee shall not place or permit any obstruction or materials in
     such areas. No exterior storage shall be allowed without permission in
     writing from Lessor.

7.   The plumbing facilities shall not be used for any other purpose that which
     they are constructed, and no foreign substance of any kind shall be thrown
     therein, and the expense of any breakage, stoppage or damage resulting from
     a violation of this provision shall be borne by Lessee, who shall, or whose
     employees, agents, or invitees, have caused it.

8.   Lessee shall not burn any trash or garbage of any kind in or about the
     Premises, or the park.

9.   Lessor reserves the right from time to time to amend or supplement the
     foregoing rules and regulations, and to adopt and promulgate additional
     reasonable rules and regulations applicable to the Premises. Notice of such
     rules and regulations and amendments and supplements thereto, if any, shall
     be given to Lessee.

                                       20

<PAGE>

                                    EXHIBIT D
                                    ---------

       This Exhibit D is attached to and made a part of the Lease bearing
              the Lease Reference Date of October 17, 2001 between
            Calwest Industrial Properties, LLC, a California limitied
                        liability company as Landlord and
        Accredited Home Lenders, Inc., a California corporation as Tenant

                              CONDITION OF PREMISES

Prior to vacating the Premises, it must be left in good, clean condition with
all systems in good working order, normal wear and tear excepted. The items that
will be inspected by Landlord are listed below, but not limited to the
following:

1.   Service and repair all heating and air conditioning equipment, exhaust fans
     and hot water heater. Provide Landlord's office with a copy of the
     inspection and service report provided by the mechanical contractor.

2.   All lights in the office and warehouse must be working. Relamp and/or
     reballast the fixtures as necessary.

3.   Overhead doors must be serviced and repaired.

4.   All exterior metal doors, including hardware should be serviced or replaced
     as necessary.

5.   Repair all damaged sheetrock in the office area and in the warehouse along
     the demising walls.

6.   Office and warehouse floors should be left in good, clean condition.

7.   Any exterior signage must be removed; repair and repaint the facia as
     necessary.

8.   The bathroom and any janitors' sinks and closets must be cleaned with all
     plumbing in good working order and condition, all lights and fans in good
     working condition and all items removed from any cabinets.

9.   All data and electrical wiring for Tenant's personal equipment and
     machinery needs to be removed to the point of origin and any repairs from
     damage made.

                                       21

<PAGE>

                            FIRST AMENDMENT TO LEASE

     THIS AMENDMENT, dated this 18th day of March, 2002, between CALWEST
INDUSTRIAL PROPERTIES, LLC, a California Limited Liability Company and RREEF
MANAGEMENT COMPANY, a Delaware Limited Liability Company ("Landlord") and
ACCREDITED HOME LENDERS, INC., a California Corporation ("Tenant"), for the
premises located in the City of San Diego, County of San Diego State of
California, commonly known as 12310 World Trade Drive, Suite 101 (the
"Premises").

                              W I T N E S S E T H:

     WHEREAS, Landlord and Tenant, entered into that certain Lease dated,
October 17, 2001 (hereinafter collectively referred to as the "Lease"); and

     WHEREAS, Landlord and Tenant desire to amend the Lease as more fully set
forth below.

     NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

1.   Definitions. Unless otherwise specifically set forth herein, all
     -----------
     capitalized terms herein shall have the same meaning as set forth in the
     Lease.

2.   Amortization of Tenant Improvements
     -----------------------------------

     Per Exhibit B of the Lease, the Tenant Improvements in Item 7 shall be
     borne by the Tenant and such costs shall be amortized over the Initial Term
     of the Lease at ten percent (10%). The total cost of $45,541.30 shall be
     repaid to Landlord in forty-four (44) equal monthly payments of $1,240.61
     commencing May 1, 2002 and terminating with the final payment due December
     1, 2005.

3.   Incorporation. Except as modified herein, all other terms and conditions of
     -------------
     the Lease between the parties above described, as attached hereto, shall
     continue in full force and effect.

4.   Limitation of Landlord's Liability. Redress for any claims against Landlord
     ----------------------------------
     under this Amendment or under the Lease shall only be made against Landlord
     to the extent of Landlord's interest in the property to which the Premises
     are a part. The obligations of Landlord under this Amendment and the Lease
     shall not be personally binding on, nor shall any resort be had to the
     private properties of, any of its trustees or board of directors and
     officers, as the case may be, the general partners thereof or any
     beneficiaries, stockholders, employees or agents of Landlord, or its
     investment manager.

<PAGE>

     IN WITNESS WHEREOF, Landlord and Tenant have executed the Amendment as of
the day and year first written above.

LANDLORD:                                      TENANT:

CALWEST INDUSTRIAL PROPERTIES, LLC,            ACCREDITED HOME LENDERS, INC.,
a California limited liability company         a California corporation

By: RREEF MANAGEMENT COMPANY,
a Delaware corporation, its Property Manager


By:    /s/ Jill E. Shanahan                    By:    /s/ Ray W. McKewon
       -------------------------                      --------------------------
       Jill E. Shanahan                               Ray W. McKewon
Title: Vice President                          Title: Executive Vice President

Date : 4/5/02                                  Date : 4-1-02