Exhibit 10.123
                            Lease Agreement - Pier 39

                        PIER 39 LIMITED PARTNERSHIP LEASE

                                Table of Contents

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1.  Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

2.  Shopping Center Plan. . . . .  . . . . . . . . . . . . . . . . . . . . . . .1

3.  Premises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

4.  Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  .1

5.  Term Commencement: Opening for Business  . . . . . . . . . . . . . . . . . .2
         5.1      Term. (2)
         5.2      Landlord's Ability to Deliver Premises. (2)
         5.3      Tenant's Opening. (2)
         5.4      No Extension or Renewal of Lease or Tenancy. (2)
         5.5      Early Termination (2)

6.  Rent. . . . . . . . . . . . . . . . . . . . . . . .  . . . . . . . . . . . .3

         6.1      Minimum Monthly Rent. (3)
         6.2      Cost of Living Adjustment. (3)
         6.3      Commencement of Rent. (3)
         6.4      Percentage Rent. (3)
         6.5      Definition of Gross Sales. (4)
         6.6      Statement of Gross Sales. (4)
         6.7      Records/Audit. (4)
         6.8      Additional Rent. (5)
         6.9      Late Payment. (5)
         6.10     Place of Payment. (6)


7.  Security Deposit. . . . . . . . . . . . . . . . . .INTENTIONALLY OMITTED . .6

8.  Use and Operation of Premises. . . . . . . . . . . . . . . . . . . . . . . .6

         8.1      Authorized Use. (6)
         8.2      Continuous Operation. (6)
         8.3      Limitation on Non-Sales Uses. (6)
         8.4      Vending Machines. (6)
         8.5      Distress Sales. (6)
         8.6      Lawful Use, Nuisance, Waste, Interference. (6)
         8.7      Clean-up. (6)
         8.8      Displays, Solicitation. (7)
         8.9      Deliveries. (7)
         8.10      Operating Standards. (7)

9.  Utilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

         9.1      Utilities Furnished by Utility Companies. (7)
         9.2      Utilities Furnished by Landlord. (7)
10.  Indemnity, Waiver of Subrogation. . . . . . . . . . . . . . . . . . . . . .7

         10.1     Indemnity. (7)
         10.2     Waiver of Subrogation. (7)
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11.  Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

         11.1     Comprehensive, General and Automobile Liability Insurance. (8)
         11.2     Workers' Compensation and Employers' Liability. (8)
         11.3     Plate Glass. (8)
         11.4     Boiler and Equipment. (8)
         11.5     Fire and Extended Coverage of Tenant's Improvements and Property. (8)
         11.6     Fire and Extended Coverage of Center. (8)
         11.7     Effective Date, Policy Forms and Provisions. (8)
         11.8     Landlord's Right to Maintain Insurance and Allocate Costs. (9)
         11.9     Insurance During Course of Construction. (9)
         11.10             Adjustments to Coverage's and Amounts. (9)

12.  Tenant's Right to Make Alterations. . . . . . . . . . . . . . . . . . . . .9

13.  Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

         13.1     Real Property. (10)
         13.2     Personal Property. (10)
         13.3     Payment of Real Property Taxes. (10)
         13.4     Definition of Taxes. (11)
         13.5      Prepaid Tax Deposit. (11)

14.  Common Areas. . . . .. . . . . . . . . . . .. . . . . . . . . . . .. . . . 11

         14.1     Definitions. (11)
         14.2     Landlord's Duties. (11)
         14.3     Management. (12)
         14.4     Nonexclusive Rights. (12)
         14.5     Payment by Tenant. (12)
         14.6     Maximum Annual Increase (12)

15.  Repairs, Surrender of Premises. . . . . . . . . . . . . . . . . . . . . . .13

         15.1     Landlord's Obligations. (13)
         15.2     Tenant's Obligations. (13)
         15.3     Surrender. (13)
         15.4     Landlord's Rights. (13)
         15.5     Improvements. (13)

16.  Fixtures and Personal Property. . . . . . . . . . . . . . . . . . . . . . .14

17.  Assignment; Subletting, .. . . . . . . . . . . .. . . . . . . . . . . .. . 14

18.  Condemnation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

         18.1     Taking. (15)
         18.2     Termination. (15)
         18.3     Award. (15)

19.  Advertising and Signs. . . . . . . . . . . . . . . . . . . . . . . . . . . 15

         19.1     Signs. (15)
         19.2     Advertising. (15)

20.  Mechanic's Liens.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

         20.1     Tenant's Duties. (15)
         20.2     Contest and Discharge of Liens. (16)



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21.  Destruction, Reconstruction.. . . . . . . . . . . . . . . . . . . . . . . .16

         21.1     Destruction. (16)
         21.2     Destruction of Building or Center. (16)
         21.3     Restoration and Abatement of Rent. (16)
         21.4     Restoration of Leasehold Improvements and Fixtures. (16)
         21.5     Deposits of Insurance Proceeds. (17)
         21.6     Termination. (17)

22.  Subordination; Attornment.. . . . . . . . . . . . . . . . . . . . . . . . .17

         22.1     Subordination. (17)
         22.2     Attornment. (17)

23.  Bankruptcy and Insolvency.. . . . . . . . . . . . . . . . . . . . . . . . .17

         23.1     Termination. (17)
         23.2     Effect. (18)
         23.3     Guarantor of Lease. (18)

24.  Default and Remedies. . . . . . . . . . . . . . . . . . . .. . . . . . . . 18

         24.1     Defaults. (18)
         24.2     Remedies. (18)
         24.3     No Termination. (18)
         24.4     Termination. (18)
         24.5     Personal Property, Fixtures. (19)
         24.6     Remedies Not Limited. (19)
         24.7     No Setoff. (19)
         24.8     Waiver of Rights of Redemption. (19)
         24.9     Waiver of Trial by Jury. (19)
         24.10             Default by Landlord. (19)

25.  Marketing Fund. . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . 20

26.  Sale of Premises by Landlord. . . . . . . . . . . . . . . . . . . . . . . .20

27.  Master Lease. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20

29.  Rules and Regulations. . . . . . . . . . . . . . . . . . . . . . . . . . . 20

30.  Holding Over. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20

31.  Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

32.  Radius Clause. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

33.  Changes To Center. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

34.  Design Criteria. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

35.  Sign Criteria                  . . . . . . . . . . . . . . . . . . . . . . 21

36.  General Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . .21

         36.1     Offset Statement. (21)
         36.2     Waiver. (22)
         36.3     Force Majeure. (22)
         36.4     Modification. (22)
         36.5     Governing Law. (22)
         36.6     Disclaimer. (22)
         36.7     Severability. (22)
         36.8     Entire Agreement. (22)
         36.9     Time. (22)
         36.10             Joint and Several. (22)
         36.11             Captions; Terms. (23)
         36.12             Successors. (23)
         36.13             Notices. (23)
         36.14             No Merger. (23)
         36.15             Offer. (23)
         36.16             Authority. (23)


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37.  Sponsorship Program . . . . . . . . . . . . . . . . . . . . . . . . . . . .24


38.  Hazardous Material. . . . . . . . . . . . . . . . . . . . . . . . . . . . .24

39.  Other Toy Tenants . . . . . . . . . . .. . . . . . . . . . . . . . .. . . .24

40.  Co-Tenancy . . . . . . . . . . .. . . . . . . . . . . . . . .. . . . . . . 25

EXHIBIT "A" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

EXHIBIT "B" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

EXHIBIT "C" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

         Division 1 Landlord's Work . . . . . . . . . . . . . . . . . . . . . . 28

         Division 2 Tenant's Work                    .        . . . . . . . . . 28

         Division 3 Plans and Specifications. . . . . . . . . . . . . . . . . . 29

         Division 4 Construction . . . . . . . . . . . . . . . . . . . . . . . .29

ADDENDUM TO EXHIBIT "C" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

EXHIBIT "D" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

EXHIBIT "E" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

EXHIBIT "F" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

EXHIBIT "G" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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<PAGE>
                        PIER 39 LIMITED PARTNERSHIP LEASE


         1. Parties

     This Lease is dated and  effective  on  November 1, 1998,  between  PIER 39
LIMITED  PARTNERSHIP,  a California  Limited  Partnership  ("Landlord") and Toys
International, a California corporation ("Tenant").

         2.  Shopping Center Plan

     The general plan of PIER 39 CENTER,  the integrated  retail shopping center
which Landlord constructed in the City and County of San Francisco  (hereinafter
called the  "Shopping  Center" or  "Center")  is shown on Exhibit  "A"  attached
hereto and made a part  hereof.  Except as otherwise  restricted  by this Lease,
Tenant  acknowledges  that  the  Landlord  may  change,  eliminate  or  add  any
improvements to any portion of the Shopping Center.

         3.  Premises

     Landlord hereby leases and demises to Tenant,  and Tenant hereby leases and
takes  from  Landlord  the  commercial  space  K-105  (hereinafter  called  "the
premises"),  consisting of approximately 5500 square feet, with a location, size
and shape  substantially as shown on Exhibit "B" attached hereto and made a part
hereof, and all improvements  thereon,  together with the right of all necessary
ingress and egress and the  nonexclusive  use of Common  Areas,  as  hereinafter
described and defined. Landlord reserves the right to install, maintain, use and
replace  ducts,  wires,  conduits  and pipes  leading  through  the  premises in
locations which will not materially interfere with Tenant's use of the premises.
The exact boundaries of the premises shall be as constructed and shall extend to
the unfinished  interior surface of all perimeter walls,  except glazing,  which
shall be included within the premises, the unfinished surface of all floors, and
the  underside  of the  structural  concrete  slab or other  structural  element
forming  the  ceiling of the  premises.  Within  sixty (60) days  following  the
Commencement  Date,  Landlord  shall  deliver  to Tenant a  certificate  stating
Landlord's  determination  of the actual  number of square feet of floor area in
the  premises,  and the  parties  agree that in the event of a dispute as to the
number  of  square  feet of  floor  area in the  premises,  the  decision  of an
independent  architect mutually selected by the parties shall be final,  binding
and  conclusive.  In the event the square feet of floor area in the  premises is
not 5,500,  then this Lease  shall be  amended to reflect  the actual  number of
square feet of floor area in the premises,  and appropriate  adjustment shall be
to rental and other  charges  based  upon the  square  feet of floor area in the
premises..

         4.  Construction

     The  premises  have  been  constructed  generally  in  accordance  with the
provisions  of Exhibit  "C",  attached  hereto and made a part  hereof,  and the
allocation between Landlord's work and Tenant's work is set forth therein.

     Tenant  shall,  at its sole  cost and  expense,  obtain  and  maintain  all
permits,    authorizations    and   approvals   from   all    governmental   and
quasi-governmental  authorities  necessary  to  construct  and operate  Tenant's
business on the premises.

     Tenant  shall,  at its  sole  cost and  expense,  diligently  prosecute  to
completion  all work  necessary  to fully  construct  its  business  within  the
premises in compliance with all laws, ordinances,  rules, regulations,  permits,
authorizations  and  approvals  from  all  governmental  and  quasi-governmental
authorities.  Tenant shall indemnify, defend and hold Landlord harmless from any

<PAGE>

and all damages,  liabilities,  claims,  demands,  costs and expenses (including
attorneys,  accountants  and  investigation  fees and costs)  arising from or in
connection  with  Tenant's  failure to fully comply with the  provisions of this
Section 4. Promptly after receipt of written request from Tenant, Landlord shall
execute  and deliver to Tenant or Tenant's  designee  an  instrument,  on a form
reasonably  acceptable to Landlord and Landlord's  lender(s),  pursuant to which
Landlord  waives and  relinquishes,  in favor of any lender or lessor of Tenant,
any lien or security  interest  which Landlord may have with respect to Tenant's
trade  fixtures,  machinery,  equipment,  furnishings,  furniture,  merchandise,
inventory  and  personal  property  now or  hereafter  placed in the premises by
Tenant.

     Tenant  shall be solely  responsible  and liable for the full and  complete
design and  construction  necessary  for the  operation  of its  business in the
premises,  and all  requirements of all permits,  approvals and  authorizations.
Tenant shall submit to Landlord  all plans and  specifications  for the proposed
construction  and such  plans and  specifications  shall be subject to the prior
written approval of Landlord, which approval shall not be unreasonably withheld.
All  construction  work  shall be made  under  the  supervision  of a  competent
architect or competent licensed structural engineer in accordance with the plans
and specifications which Landlord has approved in writing. All such construction
work shall be  contracted  for and paid for by Tenant or other  persons  without
cost to  Landlord,  and  shall  be  completed  free of  liens  and in a good and
workmanlike manner, all in accordance with such reasonable rules and regulations
as Landlord may establish from time to time for remodeling and construction work
done by tenants in the Center.

     Tenant's  Architect/Engineer  shall provide on-site construction inspection
throughout the course of construction  to insure  conformity with all aspects of
plans,  specifications,  building codes and general construction practices. Upon
substantial  completion of Tenant's  construction,  Tenant shall cause  Tenant's
Architect/Engineer to prepare and deliver to Landlord a Notice of Completion and
an Architect's Certificate of Acceptance of said premises.

     Tenant  shall  promptly  correct  all  work  reasonably   rejected  by  the
Landlord's Construction  Representative as defective or as failing to conform to
the plans and specifications  approved by Landlord in writing,  whether observed
before or after substantial completion and whether or not fabricated,  installed
or  completed.  Tenant shall bear all costs of  correcting  such  rejected  work
including  compensation  of  the  Landlord's  Construction   Representative  for
services made necessary thereby.

     It is hereby agreed that Tenant shall take all appropriate action necessary
to insure that the premises,  and every part thereof, are maintained in a manner
consistent with Landlord's design criteria and Landlord's  maintenance standards
throughout  the Term of this  Lease.  The nature and extent of such  maintenance
work shall be approved in writing by Landlord prior to commencement of the work,
and  shall be at the  sole  cost and  expense  of  Tenant  and  pursuant  to all
applicable provisions of this Lease.

     Landlord  does not, and has not,  made any  representations  or  warranties
regarding the physical  condition of the  premises,  the nature or extent of the
improvements  located  therein,  or the  fitness  for  Tenant's  particular  use
thereof.  Tenant has made its own investigation of the premises,  and every part
thereof,  and is taking possession of the premises based upon such investigation
only. By taking possession of the premises,  Tenant  acknowledges that the same,
and every part thereof, is fit for its intended purpose.

     5.   Term Commencement: Opening for Business

     5.1  Term.  The term of this  Lease  ("Term")  shall be for ten (10)  years
commencing on the earlier of (a) the date upon which Tenant  initially opens for

<PAGE>

business in the premises, or (b) May 1, 1999 ("Commencement Date"), and expiring
on April 30, 2009, unless earlier terminated  pursuant to the provisions of this
Lease or as provided by law.  Notwithstanding  the foregoing,  the  Commencement
Date shall be postponed  one (1) day for each day that Landlord does not deliver
possession of the premises beyond February 1, 1999.

     5.2 Landlord's Ability to Deliver Premises. The Lease shall not be rendered
void or voidable by Landlord's inability to deliver the premises; nor shall such
inability to deliver the premises  render Landlord liable to Tenant for any loss
or damage whatsoever suffered by Tenant thereby. No extension of the Lease shall
result from a delay in delivering the premises.  Notwithstanding anything to the
contrary  contained  in this  Lease,  in the event  Landlord  has not  delivered
possession  of the  premises to Tenant by written  notice to Tenant  given on or
before  February 1, 1999,  then Tenant  shall have the right to  terminate  this
Lease effective upon written notice to Landlord, which notice may be given after
February 1, 1999 and any time prior to such delivery of possession.

     5.3 Tenant's Opening.  Tenant shall open the premises for business no later
than the  Commencement  Date.  Within  thirty (30) days after  Tenant  opens for
business and receipt of Landlord's  request,  Tenant will execute and deliver to
Landlord a certificate substantially in the form attached hereto, marked Exhibit
"D" and made a part hereof,  indicating thereon any exceptions thereto which may
exist  at  that  time.  Failure  of the  Tenant  to  execute  and  deliver  such
certificate shall constitute an acceptance of the premises and acknowledgment by
Tenant that the statements included in Exhibit "D" are true and correct, without
exception.

     5.4 No Extension or Renewal of Lease or Tenancy. Landlord has no obligation
of any kind -- legal,  equitable or otherwise -- to grant to Tenant an extension
or renewal of this Lease or to enter into a new or other lease with Tenant,  and
Landlord  shall  have  no  liability  to  Tenant,   its  agents,   employees  or
representatives,  and each of them, for Landlord's failure or refusal to consent
to or grant an  extension of renewal of this Lease and/or to enter into a new or
other lease with Tenant.

     5.5 Early  Termination.  Landlord  and  Tenant  shall  each have a one-time
option to  terminate  this Lease in the event that Tenant  shall fail to achieve
gross  sales  (as  defined  below)  in and from the  premises,  as  reported  to
Landlord,  of One Million  Five Hundred  Twelve  Thousand  Five Hundred  Dollars
($1,512,500.00)  during  the  period  of May 1,  2001  through  April  30,  2002
(the"Test  Period");  neither  Landlord nor Tenant may  terminate  this Lease if
Tenant's  gross sales equal or exceed said sum during said period.  Either party
may exercise its option to terminate this Lease upon written notice to the other
party given not later than June 30,  2002,  and stating  the  effective  date of
termination,  which  shall not be less than sixty (60) days nor more than ninety
(90) days after  such  notice is given.  In the event  this Lease is  terminated
pursuant  to the  foregoing,  the Term  shall  end upon such  effective  date of
termination as if the same were the expiration date originally  provided in this
Lease.  In the event that at any time or times during the Test Period  Tenant is
prevented  from  operating its business at the premises due to matters set forth
in Section  36.3 of this  Lease,  then for  purposes  of this  Section 5.5 only,
Tenant's  gross  sales for such time or times  during the Test  Period  shall be
deemed to be equal to Tenant's  gross sales for the identical  period(s)  during
the most recent year as to which Tenant was not so prevented  from operating its
business at the premises.

     Except as otherwise  expressly provided in this Lease, Tenant shall have no
other right to  terminate  this Lease  except the  specific  right to  terminate
provided herein.

     6. Rent


<PAGE>

     6.1 Minimum  Monthly  Rent.  Tenant shall pay to Landlord in advance on the
first day of each calendar  month of the Lease Term without set off or deduction
minimum monthly rent as follows:

     (i) For the first (1st) through thirty-sixth (36th) full calendar months of
the Term, the sum of Nine Thousand Six Hundred  Twenty Five Dollars  ($9,625.00)
per month.

     (ii) For the thirty-seventh (37th) through  seventy-second (72nd) months of
the Term, the sum of Eleven Thousand Dollars ($11,000.00) per month.

     (iii) For the seventy-third  (73rd) through  ninety-sixth  (96th) months of
the  Term,  the  sum  of  Eleven  Thousand  Four  Hundred  Fifty  Eight  Dollars
($11,458.00) per month.

     (iv) For the  ninety-seventh  (97th)  through  the one  hundredth-twentieth
(120th)  months of the Term, the sum of Twelve  Thousand  Three Hundred  Seventy
Five Dollars ($12,375.00) per month.

     Rent for any  fractional  month shall be prorated and paid on the first day
rent accrues during said month.

     Notwithstanding  anything to the contrary  contained in this Lease,  Tenant
shall not be required to pay minimum  monthly rent with respect to the first six
(6) months of the Term; provided, however, that Tenant shall be required to make
all other payments specified in the Lease during said period, including, without
limitation,  percentage rent, common area maintenance charges, real estate taxes
and promotional fund contributions.

     6.2 Cost of Living Adjustment. INTENTIONALLY OMITTED.

     6.3  Commencement  of Rent.  Except as  otherwise  provided in Section 6.1,
minimum  monthly  rent shall  commence on the  Commencement  Date.  ("Rent Start
Date")

     6.4  Percentage  Rent.  Tenant shall also pay to Landlord  percentage  rent
equal to six percent (6%) of Tenant's  gross sales (as the term "gross sales" is
defined in Paragraph  6.5 of the Lease) in excess of the Annual  Breakpoint  (as
defined below) made from or upon the premises during each Lease Year (as defined
below).  The Annual  Breakpoint  shall be $1,776,923  annually for years one (1)
through (3) of the Term,  $2,030,769 annually for years four (4) through six (6)
of the Term,  $2,115,385 annually for years seven (7) and eight (8) of the Term,
and $2,284,615 annually for years nine (9) and ten (10) of the Term.  Percentage
rent shall be computed each calendar  month.  Commencing with the calendar month
in each Lease Year in which Tenant's gross sales exceeds the Annual  Breakpoint,
on or before the tenth (10th) day of the calendar  month  immediately  following
the close of each calendar  month,  Tenant shall pay to Landlord an amount equal
to six percent  (6%) of the excess over the Annual  Breakpoint  of the amount of
all gross sales  during the Lease Year through and  including  those made during
the  calendar  month for  which  the  installment  of  percentage  rent is being
calculated,  as reduced by the amount,  if any, of  installments of percent rent
previously paid by Tenant for the Lease Year.

     Within  ninety  (90) days after the end of each Lease Year  Landlord  shall
determine  the  amount of  percentage  rent  based on the gross  sales of Tenant
during the Lease Year, and the sums paid to Landlord as minimum monthly rent and
percentage  rent.  If Tenant has paid to Landlord an amount of  percentage  rent
greater than the  percentage  rent it is in fact  obligated to pay for the Lease
Year as determined in this  Paragraph,  Tenant shall be entitled to an immediate
refund of said sum so  determined.  If Tenant has paid to  Landlord an amount of
percentage  rent less than Tenant is required to pay,  Tenant shall  immediately
pay the difference to Landlord.
<PAGE>

     A "Lease Year" is a calendar  year,  except that the first Lease Year shall
commence on the date the Term commences and the last Lease Year shall end on the
date the Term expires or terminates.

     For the purpose of computing the percentage  rent for any fractional  Lease
Year,  percentage  rent shall be equal to the  product of (A) six  percent  (6%)
multiplied  by the excess,  if any,  of (i) the amount of  Tenant's  gross sales
during  the  period of 365 days  beginning  on the Rent Start Date or during the
period of 365 days ending at the end of the Term,  as the case may be, over (ii)
the Annual Breakpoint in effect during the fractional Lease Year,  multiplied by
(B) a fraction,  the numerator of which shall be the number of days contained in
such fractional Lease Year and the denominator of which shall be 365.

     6.5 Definition of Gross Sales. As used herein, the term "gross sales" means
the entire amount of the actual sales price,  whether  wholly or partly for cash
or credit,  of all merchandise and services sold and all other receipts by sale,
barter or  otherwise  of all  business  conducted  in, on or from the  premises,
including,  without  limiting  the  foregoing,  all  deposits  not  returned  to
purchasers,  all sales to employees or agents of Tenant,  all orders taken in or
from the premises  although  said orders may be received by telephone or mail or
through the Internet or other electronic media, or filled elsewhere, or procured
from the  premises by house to house or other  canvassing,  all sales by vending
machines on the premises, and sales by any sublessee, licensee or concessionaire
in or from the  premises,  all without  credit to Tenant for cash  discounts  or
uncollected or  uncollectible  credit  accounts.  There shall be excluded or, if
previously included, deducted from "gross sales" the following:

     (a) Any refund or credit given on merchandise  sold in or from the premises
and  returned by a customer  for cash or credit,  or the amount of any refund or
credit given in lieu of accepting the return of such merchandise;

     (b) Goods  returned to sources or transferred to another store or warehouse
owned by or affiliated with Tenant;

     (c) Sums and  credits  received by Tenant in the  settlement  of claims for
loss of or damage to merchandise;

     (d) Receipts from public telephones and stamp machines;

     (e) Sales taxes,  so-called luxury taxes,  consumers'  excise taxes,  gross
receipt taxes and other similar taxes now or hereafter  imposed upon the sale of
merchandise or services, but only if collected separately from the selling price
of merchandise or services and collected from customers;

     (f) Sales of fixtures, equipment or property which are not stock in trade;

     (g) Sales to employees  of Tenant for their own use and not for resale,  to
the extent such sales do not exceed in the aggregate three percent (3%) of gross
sales for the Lease Year;

     (h) The amount of any discount  given on promotional  items,  with only the
amount actually charged by Tenant to be included in gross sales;

     (i) Bulk  sales  of goods or  merchandise  not in the  ordinary  course  of
Tenant's business for the purpose of resale;

     (j) Uncollected or uncollectible credit accounts,  bounced checks and other
bad debts;

     (k) Gift certificates,  or like vouchers, until such time as the same shall
have been converted into a sale by redemption;
<PAGE>

     (l) Receipts from vending machines installed solely for the use of Tenant's
employees; and

     (m) Receipts  from  so-called  "layaway"  sales except and as to the extent
actually received by Tenant.

     All sales  originating  at the  premises  shall be  considered  as made and
completed therein,  although bookkeeping and payment of the account,  filling of
the order,  or delivery of the  merchandise may be made in or from a place other
than the premises.

     6.6 Statement of Gross Sales. Tenant agrees to furnish Landlord a statement
of gross sales of Tenant for each calendar  month within ten (10) days after the
close of such month,  and an annual  statement of gross sales for each  calendar
year  within  thirty  (30)  days  after the close of such  calendar  year.  Such
statements  shall be signed and  certified  correct by  Tenant.  The  receipt by
Landlord of any statement or any payment of percentage rent shall not bind it as
to the correctness of the statement or payment.

     6.7 Records/Audit.

     (a) Tenant shall  establish and comply with an adequate system of recording
sales  and bank  deposits  in  accordance  with  generally  accepted  accounting
standards for internal controls.  Tenant shall record all sales of every kind on
computer  equipment,  a cash  register  with  locked  continuous  tape or  other
method(s) reasonably satisfactory to Landlord.

     (b) INTENTIONALLY OMITTED

     (c) All records which refer or pertain to the premises  including,  but not
limited to, all cash register tape;  non  consolidated  sales tax returns;  bank
books, records, and statements,  and invoices,  vouchers and bills shall be made
available  at a  reasonable  time and  place  (it  being  agreed  that  Tenant's
corporate headquarters is a reasonable place if it is located in California) for
the inspection of Landlord,  its accountants  and attorneys  within fifteen (15)
days of written notice from  Landlord.  Tenant shall keep safe and intact all of
the  aforesaid  records  for a period of three  (3) years  after the date of the
submission  to  Landlord  of the annual  statement  of gross sales to which said
records pertain.

     (d) At any time within  three (3) years after the receipt of any  statement
of gross  sales,  Landlord  shall be  entitled  to an audit of such gross  sales
either  by  Landlord  and/or  by  representatives  of  Landlord.  If it shall be
determined by such audit that there has been  improper  reporting of gross sales
which  results  in a  failure  to pay the  proper  amount  of  rent,  then  such
deficiency shall become  immediately due and payable,  with interest at the rate
set forth in 6.9, from the date when said payment should have been made. If such
audit shall disclose an  understatement of more than three percent (3%) of gross
sales,  Tenant shall promptly pay to Landlord the cost of said audit in addition
to the deficiency of percentage  rent,  which deficiency shall be payable in any
event.  The furnishing by Tenant of any fraudulent  understatement  of more than
five percent (5%) shall  constitute an immediate and noncureable  breach of this
Lease,  and shall give  Landlord the right to terminate  this Lease upon 15 days
written  notice to Tenant  within 90 days  after  Landlord's  discovery  of such
breach.  If any such audit discloses that actual gross sales by Tenant were less
than those reported,  and, as a result thereof, Tenant paid more percentage rent
than was due hereunder,  Landlord shall promptly  refund to Tenant the amount of
the excess percentage rent payment, less the cost to Landlord of the audit.

     (e) If, during an audit conducted by Landlord,  Tenant's accounting records
are  determined (in  Landlord's  sole judgment) to be unauditable  and/or do not

<PAGE>

comply with Sections 6.7(a),  (b) and/or (c) of the Lease, then Tenant shall pay
to Landlord all reasonable  costs and expenses which may be incurred by Landlord
in conducting such audit.  Tenant acknowledges that Tenant's failure to maintain
its books of account as required by Section 6.7 of the Lease or in an  otherwise
auditable  condition  will  cause  Landlord  certain  damages  as  a  result  of
Landlord's  inability to ascertain  through  audit or otherwise  Tenant's  gross
sales. The exact amount of said damages are extremely difficult or impracticable
to fix. Such damages will include, but not be limited to, the loss of percentage
rent and promotional fund contributions.  Therefore,  in addition to the payment
of all costs and expenses of the audit, Tenant shall pay to Landlord upon demand
the sum of One Hundred  Dollars  ($100.00)  for each day that  Tenant  failed to
properly  maintain its books of account as provided herein.  Landlord and Tenant
agree that this sum represents a reasonable estimate of such damages and is fair
compensation to Landlord for its loss caused by Tenant's failure to maintain its
books of account.

     The  provisions of this Section 6.7 shall survive the expiration or earlier
termination of this Lease.

     6.8  Additional  Rent.  Tenant shall pay within fifteen (15) days following
demand  therefor as additional  rent all sums of money  designated as additional
rent and all other sums of money or charges  required to be paid by Tenant under
this Lease, whether or not the same be designated "additional rent".

     6.9 Late  payment.  If Tenant  shall fail to pay,  when the same is due and
payable,  any minimum or percentage rent,  additional rent, or any other amounts
or charges to be paid by Tenant,  such unpaid  amounts  shall bear interest from
the date due to the date of payment at the maximum  lawful  rate which  Landlord
may charge, or if there be no such maximum, at a rate equal to five percent (5%)
in excess of the rate charged by the Federal  Reserve  Bank of San  Francisco to
its member  banks on  overnight  credits  (commonly  known as the Federal  Funds
Rate).

     If  Tenant  shall  fail  to pay  any  installment  of  percentage  rent  or
promotional  fund  charges when due, or any  installment  of minimum rent or any
other amounts or charges due  hereunder  within five (5) days of the date due, a
late charge equal to ten percent  (10%) of such rent or other amount due,  shall
be immediately due and payable to Landlord by Tenant. The Tenant agrees that the
damage  sustained  by  Landlord  by reason of  Tenant's  failure to make  timely
payment  would be  impractical  and  extremely  difficult to  determine  and the
foregoing  late charges  represent a fair and  reasonable  estimate of the costs
Landlord will incur by reason of late payment by Tenant.

     6.10 Place of Payment.  All rent and other payments shall be paid by Tenant
to Landlord at its management  office in the Shopping  Center,  or at such other
place as may from time to time be designated by Landlord in writing.


       INTENTIONALLY OMITTED


     8. Use and Operation of Premises

     8.1  Authorized  Use.  Tenant  shall use and  occupy the  premises  for the
purposes and under the trade name as set forth in Exhibit "E".  Tenant shall not
use or permit the premises to be used for any other purpose or purposes or under
any other trade name whatsoever without the prior written consent of Landlord.

     8.2  Continuous  Operation.  Subject to the  provisions of paragraph  36.3,
Tenant shall,  continuously  and  uninterruptedly  after its initial opening for
business,  conduct and carry on Tenant's  business in the  premises and keep the
premises open for business seven (7) days per week, from 10:30 a.m. to 8:30 p.m.

<PAGE>

(or longer at Tenant's option). Tenant will be subject to a mandatory injunction
to compel the specific performance of the provisions of this paragraph. Landlord
reserves  the  right  to  alter  the  minimum  hours  at  it's  sole  reasonable
discretion,  provided  at least 30 days  notice in  writing  is given to Tenant.
Notwithstanding  the  foregoing,  Tenant may be closed on  Thanksgiving  Day and
Christmas Day.

     8.3 Limitation on Non-Sales Uses. Tenant agrees to warehouse,  store and/or
stock on the premises only such goods,  wares and  merchandise as Tenant intends
to offer for sale at retail from the  premises  within a  reasonable  time after
receipt thereof,  shall use for office,  clerical or other  nonselling  purposes
only  such  space  as is from  time to time  reasonably  required  for  Tenant's
business therein, and shall not perform therein any such functions for any other
store of Tenant or any affiliate thereof.

     8.4 Vending  machines.  Except in non-sales  areas of the premises,  Tenant
shall not, without the prior written consent of Landlord, sell merchandise from,
use or allow in or upon the  premises,  any vending  machines  or  coin-operated
music, amusement, or gaming machines.

     8.5 Distress  Sales.  Tenant shall not use or permit the  premises,  or any
part thereof, to be used for the conducting of a second-hand store,  auction, or
distress, fire, bankruptcy or going-out-of-business sale.

     8.6 Lawful  Use,  Nuisance,  Waste,  Interference.  During the Term of this
Lease,  Tenant  shall not use or permit the  premises  to be used for any use or
purpose in violation of the laws, ordinances, regulations or requirements of the
United States of America, State of California, City and County of San Francisco,
or any other lawful  authority.  Tenant shall keep the premises,  and every part
thereof, in a clean and wholesome condition,  free of any objectionable  noises,
odors  or  nuisances,   and  will  comply  fully  with  all  health  and  police
regulations.  Tenant shall not commit, permit or suffer waste to be committed on
or to occur to the  premises.  Tenant  further  agrees  not to use or permit the
premises to be used in any which will interfere with the peace,  quiet enjoyment
or business  of any other  tenant,  operator  or customer in the Center.  Tenant
shall not commit any acts on the  premises,  nor use the premises in any manner,
that will cause the  cancellation  of any fire,  liability,  or other  insurance
policy insuring the premises or the improvements on the premises.  Tenant shall,
at Tenant's sole cost and expense,  comply with all  requirements  of Landlord's
insurance  carriers  that  are  necessary  for  the  continued   maintenance  at
reasonable  rates of fire and liability  insurance  policies on the premises and
the Center, and otherwise consistent with the terms of this Lease. Tenant shall,
at Tenant's sole cost and expense,  comply with all laws,  rules,  orders of all
federal, state and municipal governments or agencies, including, but not limited
to, the Americans  with  Disabilities  Act, now in effect or which may hereafter
come into  effect,  whether or not they reflect a change in policy from that now
existing,  relating in any manner to the premises and the  occupation and use by
Tenant of the  premises.  Tenant shall not do anything on the premises that will
cause  damage  to  the  premises.  The  premises  shall  not be  overloaded.  No
machinery, equipment, apparatus, or other appliance shall be used or operated in
or on the  premises  that  will in any  manner  injure,  vibrate  or  shake  the
premises.

     8.7  Clean-up.  Tenant  shall be  responsible  for  cleaning up all debris,
refuse, and trash generated by Tenant's  operation,  whether within the premises
or adjacent  thereto and within fifteen (15) feet from the front entrance of the
premises.

     8.8 Displays, Solicitation. Tenant shall not display or sell merchandise or
allow carts,  portable signs,  showcases or any other objects to be stored or to
remain outside the defined  exterior wall,  roof, and permanent  doorways of the
premises.  Tenant will not  solicit in any manner in any of the Common  Areas of
the Center or the parking garage for the Center operated by Landlord.
<PAGE>

     8.9  Deliveries.  Tenant  shall  complete,  or cause to be  completed,  all
deliveries,  loading,  unloading and service to the premises prior to 11:30 a.m.
of each day. Tenant shall prevent  delivery  trucks or other vehicles  servicing
the premises  from parking or standing in front or at rear of the premises  from
11:30 a.m. to 11:30 p.m. of each day.  Landlord  reserves  the right to regulate
further the  activities of Tenant in regard to  deliveries  and servicing of the
premises,  and  Tenant  agrees  to  abide  by  such  further  non-discriminatory
regulations of Landlord.

     8.10 Operating Standards.  Tenant shall, throughout the Term of this Lease,
manage and operate its  business in the premises  according to sound  commercial
practices in accordance with the highest  standards of quality and  presentation
and consistent  with the overall  objective of presenting  PIER 39 as the finest
attraction of its kind in the City and County of San Francisco.

     9. Utilities

     9.1 Utilities Furnished by Utility Companies.  Tenant, from the date of the
delivery of the premises and  thereafter to expiration  or  termination  of this
Lease,  shall pay before  delinquency  for all water,  gas,  heat,  electricity,
power, sewage, telephone, and all other service supplied by utility companies to
and consumed in or on the premises.

     9.2  Utilities  Furnished  by  Landlord.  In the  event one or more of said
utilities is not separately  metered and is furnished by Landlord,  Tenant shall
pay as additional rent, within ten (10) days after receipt of Landlord's invoice
therefor,  a charge,  as reasonably  determined by Landlord's  engineer based on
Tenant's  premises  and  Tenant's  use,  to  reimburse  Landlord  for  utilities
furnished by Landlord to the premises.  Such charge shall not exceed that of the
local utility company if its services were furnished directly to Tenant.

     Landlord shall not be liable whatsoever,  in damages or otherwise,  for any
failure or interruption of any utility service being furnished the premises, and
no failure or interruption  shall affect Tenant's  obligations  under or entitle
Tenant to terminate this Lease.

     In the event electric power is wholly unavailable to the premises such that
Tenant is unable to transact any business  therefrom  ("Electrical  Disruption")
for five  (5)  consecutive  days,  commencing  on the  sixth  (6th)  day of such
Electrical Disruption the minimum monthly rental shall be abated proportionately
for each day thereafter that the Electric Disruption continues.

     10. Indemnity; Waiver of Subrogation

     10.1  Indemnity.  Tenant  covenants with Landlord  (defined for purposes of
this paragraph as also including the San Francisco Port  Commission and the City
and County of San Francisco and, during the course of  construction,  Landlord's
Construction  Manager and General  Contractor) that Landlord shall not be liable
for any damage or liability of any kind or for any injury to or death of persons
or damage to property of Tenant or any other person,  from any cause whatsoever,
by  reason of the  construction  of  Tenant's  work,  or any other  construction
undertaken by Tenant,  or the use,  occupancy or enjoyment of or presence on the
premises of Tenant,  or any person holding under Tenant or otherwise  present on
the premises. Tenant will indemnify,  defend and save harmless Landlord from all
liability  whatsoever,  including attorneys,  accountants and investigation fees
and costs,  on account of any such real or claimed  damage or injury arising out
of the use of the  premises,  its  facilities,  or as otherwise set forth above.
Tenant shall not, however, be liable for damage or injury occasioned by the sole
negligence of Landlord, its employees, agents and representatives.

     10.2  Waiver  of  Subrogation.  Notwithstanding  anything  to the  contrary

<PAGE>

contained in this Lease,  Landlord  (defined  for purposes of this  paragraph as
including,  during the course of construction,  Landlord's  Construction Manager
and General Contractor) and Tenant hereby waive any rights each may have against
the other and Tenant  waives any rights it may have  against  the San  Francisco
Port  Commission and the City and County of San Francisco on account of any loss
or damage occasioned to Landlord or Tenant, as the case may be, their respective
property,  the  premises,  or its contents or to other  portions of the Shopping
Center, arising from any risk generally covered by property insurance carried or
required to be carried by either party; and the parties each, on behalf of their
respective  insurance  companies  insuring  the  property of either  Landlord or
Tenant against any such loss,  waive any right of subrogation that each may have
against the other;  Tenant,  on behalf of its insurance  companies  insuring the
premises,  its  contents,  Tenant's  other  property  or other  portions  of the
Shopping Center,  waives any right of subrogation which such insurer or insurers
may have against the San Francisco  Port  Commission  and the City and County of
San Francisco.

     The  provisions of this Section 10 shall survive the  expiration or earlier
termination of this Lease.

     11. Insurance

     11.1 Commercial,  General and Automobile Liability Insurance.  Tenant shall
carry  and  maintain  at its  sole  cost  and  expense  commercial  general  and
automobile  liability  insurance  against  any and  all  damages  and  liability
resulting  from,  arising out of, or relating to the  premises,  the  operations
thereof,  the products sold or produced therein, and the operation of any owned,
non-owned and hired vehicles  against claims for bodily injury,  personal injury
and property damage in an amount not less than One Million Dollars  ($1,000,000)
per  occurrence.  Such  policy or  policies  shall  further be  endorsed  if any
applicable  exposure  exists at the request of the  Landlord  for the  following
hazards: Blanket Contractual Liability,  Liquor Liability or Dramshop Insurance,
Broad Form  Property  Damage,  Owned  and/or  Non-Owned  Water Craft  Liability,
Deletion of XCU Hazards.

     11.2 Workers' Compensation and Employers' Liability. Tenant shall carry and
maintain  at its own cost  and  expense  Workers'  Compensation  and  Employers'
Liability  insurance  covering  employees for California  Workers'  Compensation
benefits,  including  Employer's  Liability with limits of at least Five Hundred
Thousand Dollars ($500,000) for each accident. Where such coverage is reasonably
commercially  available such policy or policies shall be endorsed to provide the
benefits of the Federal  United States  Longshoremen  and Harbor Workers Act, if
applicable.

     11.3 Plate Glass.  Tenant shall be responsible  for the  maintenance of the
plate glass on the premises,  but shall have the option to insure or self-insure
the risk of damage.

     11.4 Boiler and  Equipment.  If not  otherwise  covered by  Tenant's  other
policies,  Tenant shall carry and  maintain in full force and effect  boiler and
machinery  insurance on all boilers and other  pressure  vessels and systems (if
such  exist),  whether  fired of unfired,  serving the premises in an amount not
less than One Hundred Thousand Dollars ($100,000.00).

     11.5 Fire and  Extended  Coverage of Tenant's  Improvements  and  Property.
Tenant shall carry and maintain insurance providing protection against any peril
included within the classification  "fire and extended  coverage," together with
insurance against sprinkler damage,  vandalism and malicious mischief,  covering
Tenant's leasehold improvements (including Tenant's work in Exhibit "C") and any
alterations thereto, trade fixtures, equipment,  merchandise, and other personal
property  in an  amount  equal to one  hundred  percent  (100%)  of  their  full
replacement  cost.  Said  policy  shall  contain  a  standard  replacement  cost

<PAGE>

endorsement providing for no deduction for depreciation.

     11.6  Fire and  Extended  Coverage  of  Center.  Landlord  shall  carry and
maintain,  at Tenant's pro rata expense,  insurance providing protection against
any peril  included  within  the  classification  "fire and  extended  coverage"
together  with  insurance  against  sprinkler  damage,  vandalism  and malicious
mischief and such other insurance as Landlord deems  appropriate with respect to
the buildings and improvements (including the underlying deck and pier areas) of
which the premises are a part, exclusive of Tenant's leasehold  improvements and
trade  fixtures,  in an amount  equal to at least ninety  percent  (90%) of full
replacement  cost.  Said  policy  shall  contain  a  standard  replacement  cost
endorsement providing for no deduction for depreciation.

     From and after the Commencement  Date,  Tenant shall pay as additional rent
its pro rata share of the premiums for such insurance within ten (10) days after
receipt of Landlord's invoice therefor.  Tenant's pro rata share will equal that
amount  of  insurance  premiums  which  when  compared  to the  total  amount of
insurance  premiums,  as  determined  by  Landlord's  insurance  carrier  to  be
allocable to the building and  improvements  (including the underlying  deck and
pier area) of which the premises  are a part,  is directly  proportional  to the
floor area of Tenant's  premises as compared to the useable  total floor area of
the building and improvements of which Tenant's premises are a part.

     11.7 Effective Date, Policy Forms and Provisions. The policies of insurance
referred to in paragraphs 11.1 through 11.5 shall be carried and maintained from
and after the date of delivery of the  premises to Tenant to  expiration  of the
Lease Term.

     All such policies of insurance shall be issued by insurance  companies with
a general policy  holders rating of not less than A and a financial  rating of X
as rated in the most current available Best's Insurance Reports and qualified to
do business in the State of California.

     All such  policies  shall be issued in the names of and for the  mutual and
joint benefit and protection of Tenant,  Landlord,  Pier 39 Limited Partnership,
San Francisco Port Commission,  City and County of San Francisco,  and lender(s)
designated  from time to time by Landlord  (with respect to all policies  except
liability policies).

     Executed copies of such policies of insurance or certificates thereof shall
be delivered to Landlord  within ten (10) days after  delivery of  possession of
the premises to Tenant,  and thereafter with respect to renewals or new policies
at least thirty (30) days prior to the effective date thereof. All such policies
shall contain a provision that the insurance company will give Landlord and each
other  additional  insured at least thirty (30) days written notice prior to any
cancellation, lapse, change in coverage, scope or amount, or any other amendment
of the insurance policy.

     All such public  liability,  property damage,  and other casualty  policies
shall be written as primary  policies  with  respect to the interest of Landlord
and all other additional  insureds and shall provide that any insurance  carried
by Landlord  or such other  additional  insureds is excess and not  contributing
insurance  with  respect  to  the  insurance  required  hereunder.   The  public
liability,  property  damage or other  casualty  policies  shall contain  "cross
liability" or "severability of interest" provisions.

     Notwithstanding  anything to the contrary contained within this Section 11,
Tenant's  obligations to carry the insurance  provided for herein may be brought
within the coverage of a so-called umbrella,  excess liability or blanket policy
or  policies  of  insurance  carried and  maintained  by the  Tenant;  provided,
however, that Landlord and the other aforementioned additional insureds shall be
named as loss payees or additional  insureds  thereunder as their  interests may

<PAGE>

appear,  that the  coverage  afforded  Landlord  and them will not be reduced or
diminished by reason of the use of such blanket  policy of  insurance,  and that
the  requirements  set forth herein are  otherwise  satisfied.  Tenant agrees to
permit the Landlord at all reasonable times to inspect the policies of insurance
of the Tenant  covering  risks upon the premises,  if any, for which policies or
copies thereof are not required to be delivered to Landlord.

     The procurement  and  maintenance by Tenant of the policies  required to be
obtained  and  maintained  by Tenant  under this Section 11 shall not relieve or
satisfy Tenant's obligations under paragraph 10.1.

     11.8  Landlord's  Right to Maintain  Insurance and Allocate  Costs.  In the
event Tenant is in default under this Section 11, Landlord shall have the right,
at its option, to maintain all or some of the insurance required by this Section
11 to be  maintained  by Tenant.  In such case  Tenant  shall pay to Landlord as
additional rent within ten (10) days after receipt of a statement therefor, that
portion of the  premiums of such  insurance  allocable  to Tenant as  reasonably
determined by Landlord.

     11.9  Insurance  During  Course of  Construction.  Tenant  shall  cause its
contractors to maintain  insurance in accordance with Exhibit C, with respect to
any construction work undertaken by Tenant.

     11.10  Adjustments to Coverage's  and Amounts.  Landlord shall evaluate and
review the types of  coverage,  the  coverage's  and  amounts  of the  insurance
required  pursuant to this Section 11 on a periodic  basis,  and shall take into
account all relevant factors, including, without limitation, the then prevailing
practices among  first-class  shopping centers and  entertainment  facilities as
well as trends  in the risk  management,  current  insurance  industry  and tort
litigation and law, inflation,  etc. The coverage' and amounts of such insurance
shall then be adjusted in accordance  with such review and evaluation (but in no
event shall such  coverage's or amounts be adjusted  downward).  Notwithstanding
the  foregoing,  Tenant shall procure and maintain  insurance in the amounts and
covering the risks as may be  determined by  Landlord's  lender(s)  from time to
time.

     12. Tenant's Right to Make Alterations

     Landlord  agrees that Tenant,  at Tenant's  sole cost and expense and after
giving  Landlord  seven (7) days prior written notice of its intention to do so,
from time to time may make  alterations,  additions,  and  changes in and to the
interior of the premises  (except  those of a structural  nature) as it may find
necessary  or  convenient  for  its  purposes,  provided  that  no  alterations,
additions  or  changes  costing  in  excess  of  Seventy-Five  Thousand  Dollars
($75,000.00) may be made in any successive  twelve (12) month period without the
prior written  approval of Landlord,  and provided  further that no alterations,
additions  or changes  shall be made to any store front,  the exterior  walls or
roof of the premises,  nor shall Tenant erect any mezzanine or increase the size
of same if one be initially  constructed,  without the prior written  consent of
Landlord which consent shall not be unreasonably withheld.

     All  alterations,  additions  or changes  which  require  the  approval  of
Landlord shall be under the  supervision  of a competent  architect or competent
licensed   structural   engineer   and  made  in   accordance   with  plans  and
specifications  with respect  thereto,  approved in writing by Landlord prior to
commencement of work, and as otherwise  provided in Section 4 of this Lease. All
alterations,  additions, and changes must be performed in a good and workmanlike
manner and diligently prosecuted to completion.

     13. Taxes

     13.1  Real  Property.  Tenant  shall  pay its pro  rata  share  of the real

<PAGE>

property  and  possessory  interest  taxes and  assessments  levied  against the
building and improvements (including the underlying deck and pier area) of which
the premises are a part, including all permit,  inspection and license fees, and
other public charges of whatever  nature that are assessed  against the premises
or  arise  because  of  the  occupancy,  use,  or  possession  of  the  premises
(including,  but not  limited to,  taxes on, or which shall be measured  by, any
rents or rental income, and taxes on personal  property,  whether of Landlord or
Tenant). Tenants pro rata share will equal that portion of said taxes which when
compared to the total of said taxes will be directly  proportional  to the floor
area (as  defined in  paragraph  14.1) of  Tenant's  premises as compared to the
gross leased and occupied floor area of the building and  improvements  of which
Tenant's premises are a part.

     If the  building  of  which  the  premises  are a part  together  with  the
underlying deck and pier area is itself not separately  assessed,  the amount of
taxes and assessments allocable to the building shall be determined as follows:

     (a) There shall be allocated to that  building a portion of the total taxes
and  assessments  assessed on total  underlying deck and pier area in the Center
(excluding  UnderWater  World),  other than that  included  in the Common  Area,
proportionate  to the deck surface area occupied by that building as compared to
the total deck surface area occupied by all buildings  other than those included
in the Common Area (and UnderWater World); and

     (b) There shall be allocated to that  building a portion of the total taxes
and assessments on all buildings with which that building is included,  directly
in  proportion  to the value placed on that building by the assessor as compared
to the total value placed by the assessor on all  buildings  included in the one
assessment of the group of buildings (excluding UnderWater World).

     13.2 Personal  Property.  Tenant shall pay prior to  delinquency  all taxes
levied against  personal  property,  trade fixtures and other property placed by
Tenant in or about the  premises.  If any of such  personal  property  of Tenant
shall be assessed  against  Landlord or  Landlord's  real or personal  property,
Tenant shall pay to Landlord the taxes  attributable  to Tenant  within  fifteen
(15) days after receiving a statement thereof from Landlord.

     13.3 Payment of Real Property  Taxes.  Tenants shall pay its pro rata share
of the real property and possessory  interest taxes and  assessments  determined
pursuant to paragraph  13.1.  Tenant shall pay to Landlord as additional rent on
the first day of the calendar  month during the term hereof an amount  estimated
by  Landlord  to be 1/12 of Tenant's  pro rata share of such real  property  and
possessory  interest  taxes and  assessments.  Landlord may adjust the amount of
such monthly payment at any time when in Landlord's  judgment such adjustment is
necessary  to  discharge  fully  Tenant's  pro  rata  share  of such  taxes  and
assessments  as and when the same become due. If at any time within  thirty (30)
days prior to the due date of any of such real property or  possessory  interest
taxes and assessments the amount then on deposit  therefor shall be insufficient
for the payment of such  obligations  in full,  Tenant shall within  thirty (30)
days after demand  deposit the amount of the deficiency  with  Landlord.  All of
said amounts collected  hereunder by Landlord shall be held not in trust and not
as agent of Tenant  and shall not bear  interest,  and shall be  applied  to the
payment of the obligation for which the amounts were  deposited.  If the amounts
deposited are in excess of the actual  obligation for which they were deposited,
Landlord  may refund any such excess,  or, at its option,  may hold the same and
reduce  proportionately  the required  monthly  deposits  for the ensuing  year.
Tenant shall be obligated to pay all real property and possessory interest taxes
and  assessments  from the  Commencement  Date to  expiration of the Lease Term,
prorated  for any partial tax year on a daily basis so that Tenant shall pay all
taxes attributable to the portion of any tax year occurring within the period of
Tenant's  obligations.  With  respect  to any  assessments  which  may be levied
against or upon the premises and the  Shopping  Center,  or which under the laws

<PAGE>

then in force may be evidenced by improvement or other bonds,  or may be paid in
annual   installments,   only  the  amount  of  such  annual  installment  (with
appropriate  proration  for any  partial  year)  shall be  included  within  the
computation of Tenant's pro rata share of real property taxes for any particular
year.  Landlord  shall  furnish  Tenant  with  copies  of all  applicable  bills
pertaining  to real property  taxes within thirty (30) days of Tenant's  written
request therefor.

     13.4  Definition of Taxes.  The term " real property  taxes" shall mean and
include all taxes, permit, inspection and license fees, assessments,  possessory
interest taxes,  taxes on rent and/or other charges or on account of rent and/or
other charges payable to Landlord hereunder, taxes or levies wholly or partly in
lieu of the foregoing, and all other governmental or public charges, general and
special,  ordinary  and  extraordinary,  of  any  kind  and  nature  whatsoever,
including,  but not limited to, assessments for public  improvements or benefits
which shall during the Term hereof be laid,  assessed,  levied,  imposed upon or
become due and payable,  with the exception of income,  inheritance,  and estate
taxes  imposed  upon  Landlord;  and  shall  include  all  costs,  expenses  and
attorneys'  fees incurred by Landlord in contesting or  negotiating  with public
authorities  (Landlord  having the sole  authority  to conduct such a contest or
enter into such negotiations) as to any of the same. In no event shall Tenant be
required  to pay  (a) any  portion  of  Landlord's  general  income,  franchise,
inheritance,  estate or gift taxes,  (b) any business license tax or fee imposed
upon  Landlord  which is  generally  applicable  to all real estate  related and
non-real  estate  related  business  owners or operators in the city,  county or
state in which the Premises is located,  nor (c) any assessments levied in order
to finance in whole or in part the development or construction of any portion of
the Shopping Center.

     13.5 Prepaid Tax Deposit. Tenant has deposited with Landlord upon execution
of  this  Lease  the sum of  Nineteen  Thousand  Nine  Hundred  and Ten  Dollars
($19,910.00) as a prepaid tax deposit.  Said deposit represents  Landlord's best
estimate of Tenant's tax  liability  for the then current year (said taxes being
required to be paid in advance). Said deposit shall not be assigned, transferred
or  encumbered by Tenant and any attempt to do so by Tenant shall not be binding
upon Landlord.  This deposit is in addition to the monthly payments  provided in
Section 13.3 of the Lease. Landlord shall apply said deposit in full to Tenant's
then current tax  liability.  No trust  relationship  is created  herein between
Landlord or Tenant with respect to said deposit.  Landlord shall not be required
to keep the deposit  separate  from its general  accounts.  Tenant  shall not be
entitled to any interest on the sum deposited.  Said deposit,  or so much as has
not been used to discharge Tenant's obligations hereunder,  shall be returned to
Tenant at the expiration of the Lease Term.

     14. Common Areas

     14.1  Definitions.  The term "Common  Areas" means all areas and facilities
outside the premises and within the exterior  boundaries of the Shopping  Center
and the park areas that are provided  and  designated  by Landlord  from time to
time for the general use and  convenience  of Tenant and of other tenants of the
Shopping Center and their representatives,  invitees and public invitees. Common
Areas include,  without  limiting the foregoing,  pedestrian  walkways,  patios,
landscaped  areas  and  parks,   sidewalks,   service  corridors,   recreational
facilities,  rest-rooms,  stairways, decorative walls, elevators, plazas, malls,
throughways, roadways, and vehicles for moving customers.

     The term  "Common Area  expenses"  means the total of all items of cost and
expense related to owning, maintaining, managing and operating the Common Areas,
maintained,  managed and operated by Landlord.  This includes,  without limiting
the generality of the foregoing,  all such maintenance,  repair and construction
work as shall be  required to  preserve,  maintain  and  restore  utility of the
Common Areas,  reasonable  supervision and management  fees, all real estate and

<PAGE>

personal  property taxes and assessments  levied on land and  improvements,  and
equipment  and other  personal  property;  all costs of  policing  and  security
protection  for  the  Common  Areas,  resurfacing,   repainting  and  remarking,
cleaning,  sweeping and other janitorial  services;  purchase,  construction and
maintenance of refuse  receptacles  and other  equipment;  repair,  maintenance,
servicing  and  replacement  of sprinkler  system;  planting and  relandscaping;
directional  signs  and  other  markers;  lighting  and all  costs of  utilities
utilized in connection therewith;  reasonable  depreciation  allowance on Common
Area improvements,  machinery,  and equipment used in connection with the Common
Areas; rentals of equipment,  premiums on public liability,  property damage and
other  insurance,  costs  of  compliance  with  any  statutes,   ordinances  and
regulations, including costs of any required changes in installations for supply
of utilities,  or sanitary  facilities,  or other public  facilities;  and other
costs necessary in Landlord's  judgment for the maintenance and operation of the
Common Area.  Notwithstanding  anything to the contrary contained in this Lease,
Tenant  shall not be  required  to pay its pro rata share of any costs which (i)
are incurred as a result of the sole  negligence  or  intentional  misconduct of
Landlord,  (ii) are reimbursed to Landlord from insurance proceeds or warranties
or another person or entity responsible therefor,  (iii) are directly and solely
caused by defects in the original  construction of the Shopping Center, (iv) are
in connection with the  construction or installation of new capital items (other
than any new  capital  improvements  made after the  original  construction  and
installation  of the  Shopping  Center  which  (a) are  required  under any law,
statute,  ordinance,  rule or  restriction  not applicable to or required at the
time of such original  construction or  installation,  or (b) are an undertaking
for the  protection  of the health and safety of occupants  and customers of the
Shopping  Center or are made for the  purpose  of  reducing  other  Common  Area
expenses);  however,  the costs and  expenses  of the  maintenance,  repair  and
replacement  of capital  items shall be  included;  and (v) are in excess of the
depreciated  portion of  capital  expenditures  attributable  to  Tenant's  Term
hereunder.

     The term "floor  area"  wherever  used in this Lease means and includes all
areas for the exclusive use and occupancy by a tenant of Landlord, measured from
the exterior  walls (and from the extensions  thereof,  in the case of openings)
and from the center of the  interior  dividing  partitions,  separating  two (2)
leased premises, including mezzanines, warehousing or storage areas, clerical or
office areas and  employee  areas.  The term  "leased and  occupied  floor area"
wherever  used in this Lease means the total of all leased and  occupied  tenant
floor area (excluding UnderWater World.)

     14.2 Landlord's Duties. Landlord shall cause the Common Areas to be kept in
a neat,  clean and orderly  condition as Landlord deems necessary for the proper
operation of the Center.

     14.3  Management.  Landlord shall at all times have the right and privilege
of  determining  the nature and  extent of the  Common  Area and in making  such
changes therein and thereto from time to time which in its opinion are deemed to
be desirable,  and for the best interest of all persons using said Common Areas,
including  the location and  relocation  of  driveways,  entrances,  exits,  the
direction  and flow of traffic,  installation  of prohibited  areas,  landscaped
areas,  and  all  other  facilities  thereof.  Notwithstanding  anything  to the
contrary  contained in this Lease,  in no event may any changes  which  Landlord
makes to the  Shopping  Center,  or any  portion  thereof,  have a material  and
adverse effect upon access to and/or visibility of the Premises.

     Landlord shall also have the right to establish, change, alter, and enforce
against  Tenant  and  other  users of said  Common  Areas  reasonable  rules and
regulations  as it may deem  necessary or advisable for the proper and efficient
operation and maintenance of said Common Areas,  including,  without limitation,
establishing the hours during which the Common Areas shall be open for use.


<PAGE>

     Landlord shall at all times during the Term of this Lease have the sole and
exclusive  control of the Common Areas, may at any time exclude and restrain any
person from use and occupancy thereof, excepting,  however, bona fide customers,
patrons,  and  suppliers of Tenant and other tenants of Landlord who make use of
said areas in accordance with the rules and regulations established by Landlord.

     It is  understood  and agreed that  Landlord or some other person or entity
may be  engaged  to manage  the  Common  Areas  and  shall be paid a  reasonable
management fee for this service.

     14.4  Nonexclusive  Rights.  The rights of Tenant  hereunder  in and to the
Common  Areas shall at all times be subject to the rights of Landlord  and other
tenants of Landlord  to use the same in common with the Tenant,  and it shall be
the duty of Tenant to keep said areas free and clear of any obstruction  created
or permitted by Tenant or resulting  from  Tenant's  operation and to permit the
use of said  Common  Areas only for  normal  ingress  and  egress by  customers,
patrons and suppliers to and from Tenant and other tenants of Landlord.

     14.5 Payment by Tenant.  All expenses in  connection  with the Common Areas
shall be charged and prorated to Tenant in the following manner:

     (1)  Tenant  shall pay  Landlord  on the first day of each  calendar  month
during the term of this Lease an amount estimated by Landlord to be Tenant's pro
rata share of such  Common  Area  expenses.  Landlord  may adjust the  estimated
monthly  charge  at any time and from  time to time on the  basis of  Landlord's
experience and reasonably anticipated costs.

     (2) Within one hundred twenty (120) days following the end of each calendar
year,  Landlord shall furnish Tenant a statement covering the calendar year just
expired,  certified as correct by a certified public accountant or an authorized
representative  of Landlord,  showing the total cost, the amount of Tenant's pro
rata share of such Common Area  expenses for such calendar year and the payments
made by Tenant  with  respect to such  period as set forth in  subparagraph  (a)
above. If Tenant's pro rata share of such Common Area expenses  exceeds Tenant's
payments so made,  Tenant shall pay Landlord the  deficiency  within thirty (30)
days after receipt of such statement. If said payments exceeds Tenant's pro rata
share of such  Common  Area  expenses,  Tenant  shall be  entitled to offset the
excess against  payments next  thereafter to become due Landlord as set forth in
said subparagraph (a), or entitled to a refund at the end of the Term.

     (3)  Tenant's  pro rata share of the total  Common  Area  expenses  for the
previous  calendar  year will equal that  portion  of such  expenses  which when
compared to the total of such  expenses is  directly  proportional  to the floor
area of Tenant's  premises as compared to the gross  leased and  occupied  floor
area of  buildings in the  Shopping  Center  (excluding  UnderWater  World).  In
addition,  Tenant shall pay a sum to Landlord for the  accounting,  bookkeeping,
and  collection  of said  expenses in an amount  equal to ten  percent  (10%) of
Tenant's pro rata share of said expenses.

     (4) Tenant  shall be  obligated  for its pro rata share of the total Common
Area expenses from the Commencement  Date through  expiration of the Lease term,
prorated on a daily basis so that Tenant  shall pay its pro rata share of Common
Area expenses attributable to the period of Tenant's obligation.

     14.6  Maximum  Annual  Increase.  Notwithstanding  anything to the contrary
contained in this Lease,  Tenant's pro rata share of common area expenses  shall
not increase by more than six percent (6%) annually.

     15. Repairs, Surrender of Premises

     15.1 Landlord's  Obligations.  Subject to the provisions of Section 21, and
except for damage  caused by any  negligent  or  intentional  act or omission of

<PAGE>

Tenant,  Tenant's  agents,  employees,  or  invitees,  Landlord,  at  Landlord's
expense,  shall keep in good order,  condition  and repair the roof,  structural
parts of the premises,  and structural floor,  foundations,  exterior walls, and
pipes and conduits  outside the premises for the  furnishing  to the building of
various  utilities  (except  to the extent  the same are the  obligation  of the
appropriate  utility  company).  Landlord  shall not,  however,  be obligated to
maintain windows,  window sash, casement or frames, door and door frames, signs,
locks, closing devices, the interior surface of exterior walls, or store fronts.
Landlord  shall have no  obligation to make repairs  under this  paragraph  15.1
until a  reasonable  time after  receipt  of written  notice of the need of such
repairs.  Tenant  expressly  waives to the extent allowed by law the benefits of
any statute now or hereafter in effect  which would  otherwise  allow Tenant the
right to make repairs at Landlord's  expense or to terminate  this Lease because
of Landlord's failure to keep the premises in good order, condition and repair.

     15.2 Tenant's Obligations.  Subject to the provisions of paragraph 15.1 and
section 21, Tenant, at Tenant's sole cost and expense, shall keep in good order,
condition  and repair the premises and every part  thereof,  including,  without
limiting  the  generality  of the  foregoing,  plumbing,  heating,  ventilation,
electrical and lighting facilities and equipment within the premises,  fixtures,
interior walls, ceilings, partitions, windows, window sash, casement and frames,
doors and door frames,  plate glass, signs, locks and closing devices, and store
fronts;  any damage  resulting  from any breach of any  covenant  of this Lease,
negligent  act,  intentional  act,  or  omission  by  Tenant,  Tenant's  agents,
employees or invites;  and any items of repair,  maintenance  and improvement or
reconstruction  which are at any time  required  with respect to the premises by
any laws, ordinances,  or rules or regulations of any public authority or of the
National Fire Protection  Association,  or any similar body, whether foreseen or
unforeseen.  In addition, Tenant shall undertake reasonable periodic painting as
reasonably determined by Landlord to the interior of the premises, the color, if
different,  to be subject to  Landlord's  prior  written  consent.  Tenant shall
maintain the premises, the improvements located therein, and every part thereof,
in  first-class  condition  and repair and up to the  standards  established  by
Landlord from time to time. Notwithstanding the foregoing,  except to the extent
covered by Tenant's  waiver  pursuant to paragraph  10.2,  Tenant shall not (and
Landlord shall) be obligated to make repairs of damage caused by Landlord's sole
negligence or intentional misconduct, or that of Landlord's agents, employees or
representatives.

     15.3  Surrender.  On the  last  day  of  the  Term  hereof,  or any  sooner
termination,  Tenant shall surrender the premises to Landlord broom clean and in
good condition, ordinary wear and tear and casualty damage excepted as corrected
by normal maintenance and repair. Tenant shall repair any damage to the premises
occasioned  by its use thereof,  or by the removal of Tenant's  trade  fixtures,
furnishings  and  equipment  pursuant to section 16, which repairs shall include
the patching and filling of holes and repair of structural damage.  Landlord may
require Tenant to remove its sign and all or any portion of its trade fixtures.

     15.4 Landlord's  Rights.  If Tenant fails to perform  Tenant's  obligations
under  paragraph  15.2,  Landlord  may, at its option,  enter upon the premises,
after ten (10) days prior  written  notice to  Tenant,  and put the same in good
order,  condition and repair,  and the cost thereof shall become due and payable
as additional  rent to Landlord on the date of Tenant's  next rent  installment,
plus  interest  at the rate set forth in Section  6.9 from the date  incurred by
Landlord  and paid by Tenant.  Tenant shall permit  Landlord  and/or  Landlord's
agents,  representatives  or employees  to enter the premises at all  reasonable
times to inspect the premises to determine  whether Tenant is complying with the
terms of this  Lease,  to  perform  any  repair  or other  work in and about the
premises,  and to do  other  lawful  acts  that  may  be  necessary  to  protect
Landlord's  interest in the premises  under this Lease or to perform  Landlord's
duties under this Lease,  all without  liability to Tenant for any  interference
with Tenant's use or occupancy of the premises,  and shall be without  abatement

<PAGE>

of rent or other charges under this Lease. Notwithstanding the foregoing, in the
event that due to any entry by Landlord  into the  premises,  the  premises  are
totally  unavailable for the conduct of Tenant's  business  therein for five (5)
consecutive   business  days,   commencing  on  the  sixth  (6th)  day  of  such
unavailability the minimum monthly rent shall be abated proportionately for each
day thereafter  until the premises become available to Tenant for the conduct of
its business therefrom.

     15.5  Improvements.  Subject to the  provisions  of paragraph  15.3 of this
Lease,  any alterations and improvements  located on or in the premises,  or any
part thereof, shall immediately upon the expiration or termination of this Lease
become Landlord's  property,  be considered part of the premises,  and not to be
removed  at or prior  to the end of the  Lease  Term  without  Landlord's  prior
written consent, unless Landlord requests Tenant to remove all or any portion of
the same.

     16. Fixtures and Personal Property

     Subject to the provisions of paragraph 15.5, any trade fixtures,  signs and
other personal property of Tenant not permanently  affixed to the premises shall
remain the  property of Tenant and  Landlord  agrees that Tenant  shall have the
right,  provided  Tenant is not in  default  under the terms of this  Lease,  to
remove,  at any time, and from time to time, any and all of its trade  fixtures,
signs and other  personal  property which it may have stored or installed in the
premises,  provided that (except upon the  expiration or earlier  termination of
this Lease)  Tenant  replaces  said  property  with new  property of the same or
similar  character so as to assure that  Tenant's  business  within the premises
will continue in operation and produce the maximum gross sales.  Tenant,  at its
expense,  shall  immediately  repair any damage  occasioned  to the  premises by
reason of the  removal  of any such  trade  fixtures,  signs and other  personal
property as provided in  paragraph  15.3.  All  improvements  to the premises by
Tenant  except trade  fixtures and signs,  shall become the property of Landlord
upon expiration or earlier termination of this Lease.

     The term "trade fixtures" wherever used in this Lease specifically excludes
paneling, windows, non decorative light fixtures, floor covering and partitions,
which shall be considered leasehold improvements.

     17. Assignment; Subletting

     Tenant  shall not  voluntarily  or by operation  of law  transfer,  assign,
sublet,  enter into a license or  concession  agreement,  or encumber all or any
part of this Lease or Tenant's  interest in and to the Lease or premises without
the prior written  consent of Landlord,  which consent shall not be unreasonably
withheld. Any attempt at transfer, assignment, subletting, license or concession
agreement,  or encumbrance without Landlord's written consent, shall be void and
confer no rights upon any third  person,  and shall,  at the option of Landlord,
constitute a default under this Lease.  No consent to any transfer,  assignment,
subletting,  license or concession agreement,  or encumbrance shall be deemed to
be a consent to any  subsequent  transfer,  assignment,  subletting,  license or
concession agreement, or encumbrance of this Lease.

     Notwithstanding  any transfer,  assignment or subletting to which  Landlord
has  consented,  Tenant  shall  not be  relieved  of any  of  its  liability  or
obligations hereunder.

     Tenant  agrees  to  reimburse  Landlord's  reasonable  expenses  (including
attorney's  and  accountants's   fees  and  expenses)  for  the  processing  and
documentation of any such requested transfer, assignment, subletting, license or
concession agreement, change in ownership (except as exempted below) or mortgage
of this Lease or Tenant's interest in and or to the premises.


<PAGE>

     If the Tenant  hereunder  is a  corporation  which is not deemed a publicly
held  corporation,  or is an  unincorporated  association  or  partnership,  the
transfer,  assignment  or  hypothecation  of  any  stock  or  interest  in  such
corporation,  association or partnership in the aggregate in excess of 50% shall
be deemed an assignment  within the meaning and provisions of this paragraph 17,
provided,  however, this paragraph shall not apply to a transfer of any stock or
interest if at the time of the transfer the Tenant  entity is operating at least
fifteen (15) retail stores..

     Notwithstanding  anything to the contrary  contained in this Lease,  Tenant
shall have the right, without Landlord's consent, but only after giving Landlord
at least fifteen (15) days prior written notice,  to assign this Lease to any of
the following:  (i) to any corporation or other entity  resulting from a merger,
consolidation or reorganization  involving Tenant, so long as Tenant or entities
controlled by or under common control with Tenant control at least fifty percent
(50%)  of  the  merged,  consolidated  or  reorganized  entity  or  Landlord  is
reasonably assured that the transaction will not materially adversely affect the
quality of operation of Tenant's  store in the  premises;  (ii) to the parent of
Tenant or to a corporation or other entity in which at least fifty percent (50%)
of the stock or other ownership  interests are owned or controlled,  directly or
indirectly,  by  Tenant  or  Tenant's  parent;  or (iii) to a person  or  entity
acquiring  substantially  all of Tenant's  assets,  in each case provided and on
condition that:

     (1) Tenant shall not be in default  under this Lease beyond the  expiration
of any applicable cure or grace period;

     (2) In the case of a merger, consolidation or reorganization, the resulting
entity  shall  thereafter  have all or  substantially  all of the assets held by
Tenant prior to such merger or consolidation and all or substantially all of the
assets of Tenant's toy stores;  or in the case of an assignment to a subsidiary,
the subsidiary shall thereafter continue to be owned or controlled,  directly or
indirectly, by Tenant;

     (3) The assignee shall have a net worth not less than Five Million  Dollars
($5,000,000.00);

     (4) Tenant shall give Landlord  prior written notice and a true and correct
copy of any such assignment;

     (5) The  assignee  shall  expressly  assume in writing the  obligations  of
Tenant under this Lease;

     (6) Tenant  shall not be  released  from its  obligations  and  liabilities
provided for under this Lease by virtue of such assignment; and

     (7) The premises  shall  continue to be operated  only under the trade name
and only for the use specified in this Lease.

     18. Condemnation

     18.1  Taking.  If the whole or any part of the premises or Common Areas are
taken for public or quasi-public  use by the exercise or the threat of the right
of eminent  domain,  or similar laws,  governmental  easements,  servitudes,  or
similar  rights,  with  or  without  litigation,  or by  judgment  or  agreement
(including  voluntary  sale),  then as to the portion of the  premises or Common
Areas  taken,  this Lease shall  terminate as of the date the title vests in the
condemning authority. If the portion of the premises remaining after such taking
can be occupied  and used by Tenant for the  purposes  described  in this Lease,
then Landlord  shall have the option for a period of thirty (30) days after said
taking either to terminate this Lease or to elect to continue this Lease in full
force and effect, in which event Landlord,  at its sole expense,  shall promptly

<PAGE>

restore the premises as economically and otherwise practicable to the conditions
existing  immediately  prior to such taking,  and Tenant  shall do likewise,  at
Tenant's sole expense, with respect to Tenant's leasehold improvements described
in Exhibit "C" and any alterations  thereto, all exterior signs, trade fixtures,
equipment,  display cases,  furniture,  furnishings and other  installations  of
Tenant.  During the period said repairs are being effected,  the minimum monthly
rent,  real property  taxes and Common Area expenses  payable by Tenant for said
period shall be reduced  equitably to the degree the repair work interferes with
the normal business conducted on the premises. However, the obligation of Tenant
to pay  percentage  rent,  additional  rent (other than real property  taxes and
Common Area expenses), and other charges shall remain in full force and effect.

     18.2  Termination.  If the  portion of the  premises  remaining  after such
taking cannot be occupied and used by Tenant for the purposes  described in this
Lease,  or Landlord  exercises its option to terminate  this Lease in accordance
with paragraph 18.1 above,  then this Lease shall terminate as of the date title
vests in the condemning  authority.  In the event the Lease is  terminated,  the
parties  shall be released  from all  obligations  under this Lease  except such
obligations as are accrued and unpaid up to the date of termination.

     18.3  Award.  Landlord  shall  receive  all  proceeds  (including,  without
limitation,  proceeds for the value of Tenant's leasehold) awarded, compensated,
or paid, except that Tenant shall have the right to receive the proceeds for its
trade fixtures and personal property.

     19. Advertising and Signs.

     19.1 Signs. Tenant shall affix a sign to the exterior wall of the premises.
The size,  content,  design and location  thereof  shall be subject to the prior
written approval of Landlord, which approval shall not be unreasonably withheld.

     Tenant shall not affix or maintain  upon the glass pane and supports of the
show window (and within six (6) inches of any window),  doors or exterior  walls
of the premises, any signs, advertising placards,  names, insignia, trade marks,
descriptive  material  or any other  such like item or items  without  the prior
written approval of Landlord, which approval shall not be unreasonably withheld.
Tenant  shall not affix any sign to the roof of the  premises.  Landlord has the
right to remove all unauthorized  signs at Tenant's expense.  All costs of signs
shall be the responsibility of the Tenant.

     19.2  Advertising.  Tenant shall use no  advertising  medium which  creates
aural  or  visual  effects  outside  Tenant's   premises,   including,   without
limitation,  flashing lights, search lights, loud speakers,  phonographs, radios
or television.  Tenant shall not display, paint, place or cause to be displayed,
painted or placed any handbills, bumper stickers or other advertising devices on
any vehicle parked in the parking  garage,  whether  belonging to Tenant,  or to
Tenant's agents, or to any other person; nor shall Tenant distribute or cause to
be distributed in the Center any handbills or other advertising  devices.  There
shall be no  advertising  or  display on the  premises  except  relating  to the
products and services offered on the premises.

     20. Mechanic's Liens.

     20.1 Tenant's Duties. Tenant shall give seven (7) days prior written notice
to Landlord  before  contracting  for any work or repairs to the  premises  that
might  subject the property to any lien,  to enable  Landlord to post notices of
nonresponsibility.  Tenant shall pay and  discharge  when due any and all claims
upon which any lien against the premises could be based for any labor, services,
materials,  or  equipment  furnished  to or for  Tenant  in,  upon or about  the
premises.  Tenant shall  indemnify,  defend and hold  Landlord free and harmless
from any such lien or claim of lien, liability,  damages,  costs, and attorneys'
fees relating thereto.  Tenant shall give Landlord prompt notice of any claim of

<PAGE>

lien filed against the premises or any action affecting title to the premises.

     20.2 Contest and Discharge of Liens. Tenant shall have the right to contest
the  validity or amount of any claim of lien,  but in such event,  Tenant  shall
within fifteen (15) days after receiving notice of such claim of lien, record in
the office of the San Francisco County Recorder a corporate surety bond pursuant
to California  Civil Code Section 3143, in a sum equal to one and one-half (1.5)
times the  amount of the claim  naming  Landlord  as  principal.  Upon the final
determination  of the  validity  of any such  lien,  Tenant  shall  satisfy  and
discharge such lien within three (3) days thereafter.  In the event Landlord has
elected  at its  option  to pay any sums on  behalf  of  Tenant  as a result  of
Tenant's failure to perform the obligations  contained herein,  Tenant shall pay
the amount  thereof as  additional  rent to Landlord  within ten (10) days after
demand.

     21. Destruction, Reconstruction.

     21.1  Destruction.  In the event the  premises  are  totally  or  partially
destroyed by fire or any other peril,  whether or not covered by insurance,  and
the restoration can be completed in Landlord's reasonable judgment within a time
period  such that after  completion  there is at least a term of ten (10) months
until expiration of the Lease Term herein, the Landlord shall have the option to
elect,  by  giving  written  notice to Tenant  within  thirty  (30) days of such
destruction,  either to perform reconstruction of Landlord's work in Exhibit "C"
at its sole  expense,  in which case this Lease  shall  remain in full force and
effect, or to terminate this Lease. In the event restoration cannot be completed
in  Landlord's  reasonable  judgment  within  a  time  period  such  that  after
completion there is at least ten (10) months until expiration of the Lease term,
the Lease shall be  automatically  terminated.  Tenant waives the  provisions of
Section 1932 (2) and Section 1933 (4) of the California Civil Code.

     Notwithstanding  anything to the  contrary  contained  in this  Lease,  and
subject to the  provisions of the Master  Lease,  in the event that the premises
are  damaged  during the last two (2) years of the Term to an extent of at least
fifty percent (50%) of the full replacement  cost thereof,  Tenant may terminate
this Lease by giving  written  notice to Landlord  within  sixty (60) days after
such damage occurs.  In the event of any fire or other casualty damage occurring
to the  premises  which is not  repaired or  restored  within one year after its
occurrence  or which is  incapable  of being  repaired or  restored  within such
period,  then Tenant may  terminate  this Lease by notice to Landlord  stating a
termination date at least sixty (60) days after the notice,  given within thirty
(30) days  following  the end of such one year period or, if the  casualty is so
incapable of being restored,  within sixty (60) days following the casualty.  If
Tenant gives such notice,  the Term of this Lease shall end and  terminate  upon
the effective date of termination specified in such notice in the same manner as
if the same were the expiration date originally provided in this Lease.

     21.2  Destruction  of  Building  or Center.  If the  building  in which the
premises are located is totally or partially  destroyed or if any other building
comprising a part of the Center is partially or totally  destroyed to the extent
that:

     (a) The then  cost of the  reconstruction  of the  building  in  which  the
premises  are located is greater than twenty  percent  (20%) of the then cost of
replacing said whole building, or

     (b) The then  cost of  repairs  for the  damages  to one or more  buildings
comprising a part of the Center is greater than twenty percent (20%) of the then
cost of replacing all the  buildings  comprising  the Center,  then the Landlord
shall have the option for sixty (60) days after the date of such  destruction to
terminate this Lease by written notice.


<PAGE>

     21.3  Restoration  and  Abatement  of Rent.  Subject to the  provisions  of
paragraph  21.4,   Landlord  shall  cause  all  work  necessary  to  effect  all
restoration  undertaken  pursuant to paragraph 21.1 to be commenced promptly and
prosecuted diligently to completion. During restoration the minimum monthly rent
payable by Tenant shall be reduced to the degree the restoration work interferes
with the normal  business  conducted on the premises.  Tenant shall continue the
operation of its  business on the premises  during any such period to the extent
reasonably  practicable from the standpoint of prudent business management,  and
in the event Tenant does continue  operation of its business,  the obligation of
Tenant hereunder to pay percentage rent,  additional rent, and all other charges
shall  remain in full force and  effect.  Tenant  shall not be  entitled  to any
compensation  or damages  from  Landlord for loss of the use of the whole or any
part  of the  premises,  Tenant's  personal  property  or any  inconvenience  or
annoyance occasioned by such damage, repair, reconstruction or restoration.

     21.4 Restoration of Leasehold  Improvements and Fixtures. If restoration of
the  premises is effected by  Landlord,  Tenant,  at its sole cost and  expense,
shall restore and repair  promptly all leasehold  improvements,  trade fixtures,
equipment and other property of Tenant located on the premises that were damaged
or destroyed, so as to restore all property of Tenant located on the premises to
a condition  substantially equal to that which existed immediately prior to said
damage and destruction. Tenant shall commence said restoration work promptly and
prosecute it diligently to completion.  Tenant shall be responsible for the work
described in this paragraph to the extent not covered by insurance proceeds.

     21.5 Deposits of Insurance Proceeds. Subject to the rights of the holder of
any first  mortgage or deed of trust  encumbering  the  premises  and  adjoining
property, all proceeds of insurance which pursuant to the terms of the Lease are
to be used for the purpose of repairs,  reconstruction  and restoration shall be
deposited  in a  trust  account  in a bank  to be  selected  by  Landlord  to be
disbursed upon Landlord's written instructions for the purposes of accomplishing
the necessary repairs and reconstruction,  with such controls on disbursement as
may be required by any Lender or by the insurance carrier.

     21.6 Termination. Upon any termination of the Lease under the provisions of
this section,  the parties shall be released thereby without further obligations
to the other  party as of the date of the  destruction,  except for items  which
have accrued and are then unpaid. In the event of termination, all proceeds from
fire and extended insurance,, with required endorsements, including insurance on
the items  specified  as  Tenant's  work in Exhibit "C" and  Tenant's  leasehold
improvements and alterations thereto, but excluding proceeds for trade fixtures,
merchandise, signs and other personal property of Tenant, shall be disbursed and
paid to Landlord.  In exercising its termination rights provided in this Section
21, other than a right to terminate arising solely by reason of a substantial or
total  destruction  of the  premises  during the last two (2) years of the term,
Landlord  shall not terminate  this Lease unless  Landlord also  terminates  the
leases of all other tenants similarly affected by the casualty

     22. Subordination; Attornment.

     22.1  Subordination.  This Lease shall be  subordinate to any ground lease,
mortgage,  deed of trust, or any other  hypothecation  for security now or later
placed  upon the  premises  and to any  advances  made on the  security of it or
Landlord's interest in it, and to all renewals,  modifications,  consolidations,
replacements,  and  extensions  of it.  Upon the  written  request  of any first
mortgagee or  beneficiary  of any first deed of trust made by  Landlord,  Tenant
shall execute and deliver a writing in the form required by such first mortgagee
or  beneficiary  (without cost and within ten (10) days  following  such written
request) subordinate its rights hereunder to the lien of any mortgage or deed of
trust, now or hereafter  encumbering the land and building of which the premises
are a part,  and to all advances  made or hereafter to be made upon the security
thereof.
<PAGE>

     22.2 Attornment. In the event of foreclosure,  the exercise of the power of
sale  under any  mortgage  or deed of trust  made by  Landlord  encumbering  the
premises, or a deed in lieu of foreclosure, Tenant shall attorn to the purchaser
upon any such  foreclosure  or sale or the  grantee as the  Landlord  under this
Lease.  In the event of  termination  of the  Master  Lease,  this  Lease  shall
continue in effect, and Tenant agrees to attorn to the landlord under the Master
Lease or its successor.

     Subject to the observance and performance by Tenant of all terms, covenants
and  conditions of the Lease on the part of Tenant to be observed and performed,
Landlord's  successor by reason of termination of the Master Lease,  purchase at
the  foreclosure or trustee's  sale or deed in lieu of foreclosure  (hereinafter
referred to as "Successor  Landlord")  shall  recognize the leasehold  estate of
Tenant under all of the terms,  covenants  and  conditions  of the Lease for the
remaining  balance of the Term with the same  force and  effect as if  Successor
Landlord were the Landlord under the Lease;  provided,  however,  that Successor
Landlord  shall not be (a)  liable  for any act or  omission  of  Landlord,  (b)
obligated to cure any defaults of Landlord  under the Lease which occurred prior
to the time that Successor  Landlord succeeded to the interest of Landlord under
the Lease,  (c) subject to any offsets or defenses  which Tenant may be entitled
to assert against Landlord,  (d) bound by any payment of rent or additional rent
by Tenant to Landlord  for more than one (1) month in advance,  (e) bound by any
amendment or  modification  of the Lease made without the written consent of the
mortgagee or beneficiary of any deed of trust made by Landlord  encumbering  the
premises,  or (f) liable or  responsible  for or with respect to the  retention,
application  and/or  return to Tenant of any security  deposit paid to Landlord,
whether or not still held by Landlord,  unless and until Successor  Landlord has
actually  received  for its own  account  as  Landlord  the full  amount of such
security deposit.

     23. Bankruptcy and Insolvency.

     23.1 Termination. This Lease, at the option of Landlord, shall terminate on
the happening of any of the following  events:  (a) the filing or institution by
Tenant of any proceeding under the Bankruptcy Act and any amendment thereto,  or
any other  federal  or state act now or  hereafter  relating  to the  subject of
bankruptcy,  insolvency,  arrangement,  reorganization,  or other form of debtor
relief;  (b) the  institution or filing of any  involuntary  proceeding  against
Tenant under any of the aforementioned  laws unless such proceeding is dismissed
within  sixty (60) days  thereafter;  (c) an  adjudication  of  bankruptcy  or a
finding or judgment of insolvency of Tenant;  (d) an assignment  for the benefit
of creditors  by Tenant;  (e) the levy of a writ of execution on the business of
Tenant or the assets of Tenant  located on the premises  which is not discharged
within ten (10) days after the date of said levy;  or (f) the  appointment  of a
receiver to take possession of any property of Tenant at the premises.

     23.2 Effect.  The  occurrence of any of the events listed in paragraph 23.1
shall be deemed to be a material  breach and  default of this  Lease,  entitling
Landlord to exercise  the remedies  set forth in  paragraph  24.2 below.  In the
event of the occurrence of any of the events listed in paragraph 23.1, then this
Lease or any interest in the  premises  shall not become an asset in any of such
proceedings.

     23.3 Guarantor of Lease. The provisions of this section 23 shall also apply
to any guarantor of this Lease,  giving  Landlord the same remedies and right to
terminate this Lease, as if the stated events had occurred to Tenant.

     24. Default and Remedies.

     24.1 Defaults.  The occurrence of any of the following  shall  constitute a
material breach and default of this Lease by Tenant:
<PAGE>

     (a) Any failure by Tenant to pay when due any of the rent,  additional rent
or other charges payable by Tenant  hereunder  where such failure  continues for
ten (10) days after notice the same is due.

     (b) A failure by Tenant to observe and perform any other  provision of this
Lease to be observed or performed by Tenant when such failure continues for more
than a  reasonable  time (in no event to exceed  thirty (30) days after  written
notice thereof from  Landlord);  if more than thirty (30) days shall be required
because of the nature of the default,  if Tenant shall fail to commence the cure
within  thirty  (30)  days  and  fails  to  diligently  prosecute  the  cure  to
completion.

     (c) The abandonment or the vacation of the premises.

     24.2 Remedies.  In the event of any default of Tenant under paragraphs 23.1
or 24.1, then in addition to any and all other remedies available to Landlord at
law and equity, Landlord shall have the right:

     (a) To declare the Lease  terminated  and to reenter the  premises and take
possession  thereof and remove all persons  therefrom,  and Tenant shall have no
further claim thereon or thereunder; or

     (b) Without  declaring  this Lease  terminated  to reenter the premises and
occupy,  relet or sublet  the whole or any part  thereof  for and on  account of
Tenant and to collect said rent and other sums that may thereafter  come due and
payable.

     (c) Without  declaring  this Lease  terminated  to collect  rents and other
sums, as they become due hereunder.

     (d) To  reenter  the  premises  pursuant  to  subparagraph  (b)  above  and
thereafter  elect to terminate this Lease and all of the rights of the Tenant in
or to the premises.

     24.3 No Termination. In the event Landlord has reentered the premises under
the provisions of subparagraph 24.2(b) or obtained possession of the premises by
service of a notice pursuant to California Code of Civil Procedure  Section 1161
or abandonment by Tenant,  Landlord shall not be deemed to have  terminated this
Lease, unless Landlord shall have so notified Tenant in writing.

     24.4  Termination.  In the event  Landlord  elects to terminate  this Lease
under the provisions of subparagraphs 24.2(a) or (d) above, Landlord may recover
from Tenant as damages:

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

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

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

     (d) Any other amount necessary to compensate Landlord for all the detriment
approximately  caused by Tenant's failure to perform its obligations  under this
Lease or which in the  ordinary  course  of  things  would be  likely  to result
therefrom,  including,  but not limited  to, any costs or  expenses  incurred by

<PAGE>

Landlord in maintaining or preserving the premises after such default, preparing
the premises for reletting to a new tenant,  any repairs or  alterations  to the
premises for such reletting,  leasing commissions, and any other costs necessary
or appropriate to relet the premises.

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

     As used in  subparagraphs  (a) and (b)  above,  the  "worth  at the time of
award" is  computed by  allowing  interest at the rate of ten percent  (10%) per
annum.  As used in subparagraph  (c) above,  the "worth at the time of award" is
computed by discounting  such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent (1%).

     For all  purposes of this Section 24, the term "rent" shall be deemed to be
all sums however denominated required to be paid by Tenant pursuant to the terms
of this Lease.

     Percentage  rent  shall be  computed  on the basis of the  average  monthly
amount  thereof  accruing  during the  immediately  preceding  twelve (12) month
period,  except that if it becomes  necessary to compute such rent before such a
twelve (12) month period has  occurred,  it shall be on the basis of the average
monthly amount accruing during the such shorter period.

     24.5 Personal Property, Fixtures. INTENTIONALLY OMITTED.

     24.6 Remedies Not Limited.  The remedies  given to Landlord in this section
shall be in addition and  supplemental to all other rights or remedies which the
Landlord  may have under the laws then in force,  and all such  remedies  may be
exercised alternatively, cumulatively, concurrently and/or consecutively.

     24.7 No Setoff.  The covenants to pay rent and other amounts  hereunder are
independent  covenants  and Tenant  shall have no right to hold back,  offset or
fail to pay any such  amounts for the  alleged  default of Landlord or any other
reason whatsoever, except as otherwise expressly provided herein.

     24.8 Waiver of Rights of Redemption.  To the extent permitted by applicable
law,  Tenant  waives  any and all rights of  redemption  granted by or under any
present or future laws if Tenant is evicted or dispossessed for any cause, or if
Landlord obtains possession of the premises due to Tenant's default hereunder or
otherwise.

     24.9 Mutual Waiver of Trail by Jury. LANDLORD AND TENANT HEREBY WAIVE TRIAL
BY JURY in any action or  proceeding by either of them against the other arising
out of or in connection with the Lease,  the relationship of Landlord and Tenant
created  thereby,  Tenant's use or occupancy  of the  premises,  or any claim of
injury or damage occurring in or about the Center or the premises.

     24.10 Default by Landlord. Landlord shall not be in default unless Landlord
fails to perform obligations  required of Landlord within thirty (30) days after
receipt of written  notice of default (or if more than thirty (30) days shall be
required because of the nature of the default, if Landlord shall fail to proceed
diligently to cure such default after  written  notice).  If Landlord is thus in
default, then Tenant,  subject to the provisions of paragraphs 22.2 and 36.3 and
Section 26, and except as otherwise provided in this Lease, shall be entitled to
recover  from  Landlord  any and all damages  sustained by Tenant as a result of
Landlord's  (ii) any money  judgment  resulting  from any default or other claim
arising under this Lease shall be satisfied  only out of Landlord's  interest in
the  Center,  (iii) no other  real,  personal  or mixed  property  of  Landlord,
wherever located,  shall be subject to levy (or pre-judgment  attachment) on any
such judgment  obtained  against  Landlord,  (iv) if Landlord's  interest in the

<PAGE>

Center is insufficient  to satisfy such judgment,  Tenant will not institute any
further action, suit, claim or demand, in law or equity, against Landlord for or
on the account of such  deficiency,  and (v) such  neglect or failure  shall not
constitute  consent by  Landlord  for Tenant to perform or observe  such  terms,
covenants or conditions  at Landlord's  expense.  Tenant hereby  waives,  to the
extend  permitted  under law, any right to satisfy said money  judgment  against
Landlord except from Landlord's  interest in the Center. The term "Landlord" for
purposes of this subsection only shall mean any and all persons and/or entities,
if any, which hold an ownership or beneficial interest in or comprise Landlord.

     25. Marketing Fund.

     Tenant shall pay to Pier 39  Marketing  Fund,  in care of  Landlord,  on or
before the tenth (10th) day following each calendar month during the Lease Term,
an amount  equal to One Thousand  Dollars  ($1,000.00).  Monies  received by the
Marketing Fund shall be expended to cover  expenses of all marketing  activities
for the benefit of the Shopping  Center and to cover  reasonable  administration
expenses for the administration of the Fund.

     26. Sale of Premises by Landlord.

     In the event of any sale or exchange of the  premises by the  Landlord  and
assignment by Landlord of this Lease,  Landlord shall be and is hereby  entirely
freed and  relieved  of all  liability  under any and all of its  covenants  and
obligations in or derived from this Lease arising out of any act, occurrence, or
omission relating to the premises or this Lease occurring after the consummation
of such sale or exchange and assignment.

     27. Master Lease.

     Landlord is the lessee  under that certain  lease  ("Master  Lease")  dated
August 3, 1977, as amended,  with the San Francisco  Port  Commission as Lessor.
The premises leased herein are included in the premises leased by Landlord under
the Master Lease,  and Tenant is subject to and shall comply with all provisions
of the Master Lease as the same may be hereafter amended or modified  including,
without limitation, the nondiscrimination provisions thereof.

     28. Guarantee

     All obligations of Tenant, hereunder shall be guaranteed in the form and by
the  guarantor  as set forth in  Exhibit  "F",  attached  hereto and made a part
hereof.

     29. Rules and Regulations.

     The  rules  and  regulations  attached  to this  Lease as  Exhibit  "G" are
incorporated  herein and made a part hereof,  reserving to Landlord the right to
amend or supplement said rules and regulations from time to time so long as they
operate without unreasonable  discrimination as to all tenants. Violation of any
rule or regulation is breach of this Lease.

     30. Holding Over.

     Unless given written  notice by Landlord at least thirty (30) days prior to
expiration  of the Term of this Lease,  Tenant may,  upon giving at least thirty
(30) days written notice to Landlord,  hold possession of the premises after the
expiration of the Term of this Lease, and such  holding-over  shall be deemed to
be a month-to-month  tenancy terminable upon thirty (30) days notice from either
party to the other, at commencing to accrue upon notice from Landlord to Tenant,
double minimum  monthly rent, and otherwise  subject to all terms and provisions
of this Lease,  including without  limitation,  any and all terms and provisions
relating to percentage and additional rent.  Tenant shall indemnify,  defend and

<PAGE>

hold Landlord harmless from any and all claims and damages, including attorneys,
accountants and investigation fees and costs, resulting from Tenant's failure to
surrender  the  premises  upon  the  expiration  of the  Term of this  Lease  or
termination by Landlord of Tenant's tenancy. Any holding-over without Landlord's
written consent shall entitled  Landlord to re-enter the premises as provided in
Section 24 of the Lease.

     31. Attorneys' Fees

     If any action is brought for a  declaration  of rights  under or to enforce
the  provisions  of this  Lease,  the  prevailing  party  shall be  entitled  to
reasonable attorney's fees and costs as fixed by the Court.

     32. Radius Clause. INTENTIONALLY OMITTED.

     33. Changes To Center.

     Except  as  otherwise  restricted  herein,  Landlord  hereby  reserves  the
absolute  right  at any  time  and  from  time to time  (a) to make  changes  or
revisions  in the  site  plans  as shown  on  Exhibits  "A" and  "B";  including
additions to, subtractions from, or rearrangements of the building(s) and Common
Areas  indicated on Exhibits "A" and "B";  and (b) to  construct  additional  or
other  buildings or  improvements  to the Common Areas in the Center and to make
alterations thereof or additions thereto and to build additional stores on or in
any such buildings and to build adjoining same.

     34. Design Criteria.

     All improvements to ceilings,  walls,  lighting,  floors,  display systems,
storage,  and equipment by Tenant are subject to Landlord's  written approval in
advance, which approval shall not be unreasonably withheld.

     Tenant shall furnish  Landlord space layout drawings  giving  technical and
design information relative to the demised premises.

     35. Sign Criteria

     It is intended that the signing of the stores at Center be imaginative  and
varied in manner.  Landlord's  written  approval of Tenant's  sign  drawings and
specifications  is required which approval shall not be  unreasonably  withheld.
The  furnishing and  installation  of sign(s) and the cost incurred shall be the
sole  responsibility of the Tenant. Each tenant will be required to identify its
premises by a sign. Sign criteria are as follows:

     (a) Materials:  carved wood,  stained glass,  applied  letters (no plastic)
painted on wood or glass.

     (b) Colors: with Landlord's written approval.

     (c) Lighting: incandescent, front lighted.

     (d) Size:  Shop size 400 square  feet and under - sign size 6 square  feet;
shops size  400-600  square feet - sign size 8 square  feet;  shop size  600-800
square feet - sign size 10 square  feet;  shop size  800-1100  square feet -sign
size 12 square feet.

     36. General Provisions.

     36.1 Offset  Statement.  Within  fifteen  (15) days after  written  request
therefor by Landlord,  Tenant agrees to deliver in recordable form a certificate
in the form of Exhibit "D"  addressed  to Landlord or any person  designated  by
Landlord stating:
<PAGE>

     (a) This Lease is unmodified and in full force and effect (or, if modified,
stating the nature of such modification and that this Lease, as so modified,  is
in full force and effect);

     (b) The date to which the rent and any other  charges  are paid in advance;
and

     (c) To  Tenant's  best  knowledge,  there are no defenses or offsets to the
Lease or any amounts owing thereunder, or specifying the defenses or offsets, if
any, which are claimed.

     Any such  statement  may be  conclusively  relied upon by Landlord  and any
lender or  prospective  purchaser of the premises.  Tenant's  failure to deliver
such statement  within fifteen (15) days of written  request can be conclusively
relied upon by Landlord  and any lender or  prospective  purchaser to the effect
that the Lease is unmodified and in full force and effect, that only the current
month's  rents and  charges  have been paid in  advance,  and that  there are no
defenses or offsets to the Lease or amounts owed thereunder.

     Landlord agrees to execute and deliver to Tenant a similar certificate from
time to time  within  thirty  (30) days of Tenant's  written  request  therefor,
subject to Landlord's lender(s) written consent as to form and substance.

     36.2 Waiver. No covenant, term, condition, or breach of this Lease shall be
deemed  waived except as expressly  stated in a writing  executed by the waiving
party.  A waiver by either  party of any breach of the other  party shall not be
deemed to be a waiver of any preceding or succeeding  breach.  Acceptance of all
or any  portion  of rent at any time by  Landlord  shall  not be  deemed to be a
waiver of any  preceding  breach by Tenant,  other  than the  failure to pay the
particular  rent  so  accepted,  regardless  of  Landlord's  knowledge  of  such
preceding breach at the time of acceptance of such rent.  Either party's consent
to or approval of any act by the other party requiring consent or approval shall
not be deemed to waive or  render  unnecessary  consent  to or  approval  of any
subsequent similar act.


     36.3 Force  Majeure.  Any  prevention,  delay or  stoppage  due to strikes,
lock-outs,  labor disputes,  acts of God, inability to obtain labor or materials
or reasonable substitutes therefore,  governmental  restrictions or regulations,
judicial orders, enemy or hostile governmental action, civil commotion,  fire or
other  casualty,  and other causes  beyond the  reasonable  control of the party
obligated to perform,  shall excuse the  performance  by such party for a period
equal to any such  prevention,  delay or stoppage of it. The  provisions of this
paragraph shall not excuse Tenant from prompt payment of rent or additional rent
and  other  charges  to be paid by  Tenant  pursuant  to this  Lease;  provided,
however,  the  Commencement  Date of this Lease is subject to the force  majeure
provisions herein.

     36.4  Modification.  Tenant  agrees  this Lease  shall be  modified  at the
request of  Landlord  in any manner  requested  by a first  mortgagee  providing
construction  or  permanent  financing  to Landlord  with respect to the Center,
provided that no such modification  shall  substantially  decrease the rights or
increase  the  obligations  of  Tenant  hereunder,  and in all  events  no  such
modification  shall change the amount of rent or  additional  rent to be paid by
Tenant.

     36.5 Governing Law. This Lease shall be governed and interpreted  solely by
the laws of the State of California.

     36.6  Disclaimer.  Nothing  contained  herein shall be deemed to create any
relationship  between the parties other than that of Landlord and Tenant.  It is

<PAGE>

expressly  stipulated  that the parties are not partners,  joint  venturers,  or
agents of one another.

     36.7  Severability.  The  invalidity  of any  provision  of this Lease,  as
determined  by a court of  competent  jurisdiction,  shall in no way  affect the
validity of any other provision hereof.

     36.8 Entire  Agreement.  This Lease  contains  all of the  agreements,  and
supersedes all prior  agreements  between the parties hereto with respect to the
subject  matter  hereof,  and none shall be used to interpret  or construe  this
Lease.  This Lease may be modified  (including  any  extension or renewal of the
Term of this  Lease)  only by an  agreement  in  writing  signed  by each of the
parties.

     36.9  Time.  Time is of the  essence  in this  Lease  and  each  and  every
provision thereof.

     36.10 Joint and Several. All the terms,  covenants and conditions contained
in this Lease to be  performed by Tenant,  if Tenant shall  consist of more than
one person or organization, shall be deemed to be joint and several.

     36.11  Captions;  Terms.  The captions of sections and  paragraphs  of this
Lease are for  convenience  only and shall not be  considered  in resolving  any
questions of  interpretation or construction of any section or paragraph of this
Lease. Each number,  singular or plural, as used in this Lease shall include all
numbers and each gender shall be deemed to include all genders.

     36.12 Successors. Except as otherwise set forth in Section 17 and paragraph
22.2 above, and as otherwise  expressly  provided  elsewhere in this Lease, each
and all of the terms,  covenants  and  conditions of this Lease shall be binding
upon and inure to the benefit of the parties hereto and their heirs,  executors,
administrators, successors in the interest and assigns.

     36.13 Notices. Any notice,  request,  demand,  consent,  approval, or other
communication  required  or  permitted  under this Lease must be in writing  and
shall be deemed to have been  given  (a) when  personally  delivered  or sent by
facsimile  with receipt  acknowledged,  (b) one business day  following  prepaid
deposit with any nationally  recognized overnight carrier which routinely issues
receipts,  or (c)  three  business  days  following  deposit  in any  depository
regularly  maintained  by the United  States Postal  Service,  postage  prepaid,
certified mail, return receipt requested,  in any case addressed to the party to
whom it is intended at its address:

Tenant: Toys International, a California corporation
550 Rancheros Drive
San Marcos, CA 92069
Attention: President
Telephone: 619/471-4505
FAX: 619/471-9624



Landlord: PIER 39 LIMITED PARTNERSHIP
P.O. BOX 193730
SAN FRANCISCO, CALIFORNIA 94119

Telephone: 415/705-5500
FAX: 415/981-8808

     Either party may change its address for purposes of any such  communication
by giving ten (10) days prior  written  notice of such change to the other party
in the manner set forth herein.
<PAGE>

     Tenant  hereby  appoints  as  its  agent  to  receive  the  service  of all
dispossessory  or distraint  proceedings  and notices  thereunder  the person in
charge of or occupying  the premises at the time,  and, if no person shall be in
charge of or occupying the same,  then such service may be made by attaching the
same on the main entrance of the premises.

     36.14 No Merger.  The voluntary or other surrender of this Lease by Tenant,
or a mutual cancellation thereof, or a termination by Landlord, shall not work a
merger,  and shall,  at the option of  Landlord,  terminate  all or any existing
subtenancies  or may, at the option of  Landlord,  operate as an  assignment  to
Landlord of any or all of such subtenancies.

     36.15 Offer.  Preparation of this Lease by Landlord or Landlord's agent and
submission  of the same to Tenant  shall  not be deemed an offer to lease.  This
Lease shall become  binding upon Landlord and Tenant only when fully executed by
Landlord and Tenant.

     36.16 Quiet Enjoyment.  Landlord,  subject to the provisions  hereafter set
out, agrees that Tenant shall have quiet  possession of the premises  throughout
the  term,  provided  Tenant  is not in  default  in  performance  of any of the
covenants or conditions of this Lease. Tenant expressly  acknowledges and agrees
that  Tenant's  right to quiet  possession  of the  premises  shall not preclude
Landlord's  right to make changes and  additions to the Center and to do work in
the premises on the terms and conditions set forth in this Lease. Landlord shall
be fully released from its obligation  under this Paragraph and any  obligations
or warranties imposed by law for quiet possession of Tenant upon a sale or other
transfer of Landlord's  interest in the premises or any part  thereof;  provided
that the transferee  fully assumes  Landlord's  obligations to Tenant under this
Lease.

     37. Sponsorship Program.

     Tenant  understands and  acknowledges  that Landlord runs a very successful
and effective  Sponsorship Program at the Center, and that such Program benefits
all of the  tenants  at PIER  39.  Accordingly,  Tenant  agrees  that  it  will,
throughout the Term of this Lease, fully cooperate with and fully participate in
Landlord's Sponsorship Program at PIER 39.

     38. Hazardous Material.

     Tenant  shall not bring  upon or  generate  toxic or  hazardous  substances
within the premises,  and should  Tenant so act, then Tenant shall,  at its sole
cost and expense, comply with all Federal, State or local laws from time to time
in  effect  ("Hazardous   Materials  Laws")  concerning  the  management,   use,
generation,  storage,   transportation,   presence,  discharge  or  disposal  of
hazardous,  toxic,  radioactive or carcinogenic  materials,  substances or waste
("Hazardous  Materials").  Tenant  shall cause any and all  Hazardous  Materials
brought  onto or used,  generated,  stored or  discharged  in the premises to be
removed from the  premises  and  transported  for  disposal in  accordance  with
applicable  Hazardous Materials Laws. Landlord shall have the right to enter the
premises from time to time upon reasonable notice to conduct tests,  inspections
and surveys concerning  Hazardous  Materials and to monitor Tenant's  compliance
with its  obligations  concerning  Hazardous  Materials and Hazardous  Materials
Laws.  Tenant shall also supply  Landlord,  as promptly as possible,  and in any
event within thirty (30) days after Tenant receives or sends same, copies of all
claims, reports,  complaints,  notices, warnings or asserted violations relating
in any way to the  premises or Tenant's  use  thereof and  concerning  Hazardous
Materials or Hazardous  Materials Laws. Tenant shall not negotiate or enter into
any  settlement  agreement,  consent  decree or other  compromise  in respect to
Hazardous  Materials or Hazardous  Materials Laws affecting the premises  except
after giving  Landlord prior written  notice and a full and fair  opportunity to

<PAGE>

appear,  intervene  or  otherwise  assert  and  protect  Landlord's  rights  and
interests.

     Tenant shall  indemnify,  defend and hold Landlord,  the City and County of
San Francisco and the San Francisco Port Commission,  and each of them, harmless
from any claims, causes of action, liabilities, costs or expenses (including all
reasonable  attorneys'  fees  and  costs)  arising  from or in  connection  with
personal  injury or death or property damage or clean-up costs caused or alleged
to have been  caused by the  presence of  Hazardous  Materials  brought  upon or
generated by Tenant  within the premises,  including,  without  limitation,  any
personal injury,  death or property damage caused or alleged to have been caused
by the release of Hazardous  Materials or other toxic substances into the air as
a result  of such  contamination,  whether  such  claims,  causes  of  action or
liabilities  are  first  asserted  during  the Term  hereof or  thereafter,  and
including,  without  limitation,  claims made against  Landlord  with respect to
personal  injury,  death or property damage sustained by third parties caused or
alleged to have been caused by the presence or release of Hazardous Materials or
other toxic substances.

     Nothing contained in this Section shall be construed to prevent Tenant from
using and disposing of cleaning supplies and other similar supplies  customarily
used in the  operation  of a business  similar to  Tenant's,  even  though  such
supplies  may  contain  Hazardous  Materials,  provided  the  same  is  done  in
accordance with all applicable laws and the provisions of this Lease.

     39. Other Toy Tenants.

     Throughout the Term of this Lease,  Landlord  agrees that it will not enter
into a lease  with any  person or entity  which  intends to use a portion of the
Center for the predominant  and primary purpose of offering  children's toys for
sale at retail;  provided,  however,  that said restrictions  shall not apply to
premises  of 1,500  square  feet or less,  and,  provided,  further,  that  said
restrictions shall not apply to any stores open for business at the Center as of
the date of this Lease.

     40. Co-Tenancy.

     Currently  there is a Carousel and a Performance  Stage located  within 100
feet of the front of the  premises.  Landlord  agrees  that during the period of
February 1, 1999  through  January 31, 2002,  the  Carousel and Stage,  or other
similar uses (for  example,  a Ferris Wheel) shall remain within 100 feet of the
front  of  the  premises,   subject  to  removal  or  inoperation   for  repair,
refurbishment  and/or replacement,  provided Landlord uses reasonable efforts to
accomplish  such  repair,  refurbishment  and/or  replacement  in  a  reasonably
diligent manner.

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

LANDLORD

PIER 39 LIMITED PARTNERSHIP
a California Limited Partnership

By: PIER 39 GP, LLC, a Delaware
Limited Liability Company, as
the General Partner

By: PIER 39 GP, INC., a Delaware
Corporation, as
Managing Member

By
Its:

By
Its:

TENANT

Toys International, a California corporation

By
Its:

By
Its:




<PAGE>
                                   EXHIBIT "A"

                                   EXHIBIT "B"

                                   EXHIBIT "C"
                     Description of Work To Be Performed By
                     Landlord and Tenant On Demised Premises


                                  Exhibit "C"

     Landlord has erected a "semi-turnkey" shell for Tenant as described below.


Division 1
Landlord's Work

     1.  Structure.  Wood framed with wood siding,  doors,  windows and complete
roofing system in accordance with applicable  codes and in keeping with "turn of
the century" architectural concept.

     2. Floors. Cement or plywood subfloor (Landlord's option).

     3. Walls.  Wood frame or metal stud exposed or covered  with gypsum  board,
taped and sanded (Landlord's option).

     4. Ceiling. Exposed floor or roof structure components.

     5. Electric Service.  Conduit only from Landlord's distribution switchboard
to an approved junction box within the demised premises.

     6.  Telephone  Service.  An empty conduit shall be installed for use of the
telephone company to a point within the demised premises.

     7. Other  Utilities.  To be  provided  by Tenant or by Landlord at Tenant's
expense.

     8. Fire Protection System.  Sprinkler system,  fire hose cabinets and other
equipment  in  accordance  with  Landlord's  insurance   underwriters  and  Code
requirements. (Modification by Tenant at Tenant's expense.)

Division 2
Tenant's Work

     Tenant,  at its sole cost and expense,  shall perform all work,  other than
that to be  performed  by Landlord  as set forth in Division 1 of this  exhibit,
required to complete the demised premises to a finished  condition ready for the
conduct of business therein. (Please see Addendum)

     1. Architectural and Finish Work. All interior partitioning,  ceiling work,
floor coverings and painting and finishing work.

     2. Electrical.  All conduit, wiring, lighting fixtures, lamps and any other
electrical equipment required by the Tenant.

     3. Mechanical.  Heating and ventilating  systems as required.  Tenant shall
employ  a  roofing  contractor  acceptable  to  Landlord  to  provide  any  roof
penetrations.

     4. Sign. Size, design and location to be approved by Landlord.

Division 3

<PAGE>

Plans and Specifications

     1. Design Drawings.  Tenant shall submit forthwith to Landlord's  Architect
for  approval  two sets of design  drawings  showing  intended  finishing of the
demised  premises.  Said  drawings must be approved in writing prior to Tenant's
commencement of work.


Division 4
Construction

     1.  Contractors.  All  contractors  engaged  by Tenant  shall be  bondable,
licensed  contractors,  possessing good labor  relations,  capable of performing
quality  workmanship and working in harmony with Landlord's  General  Contractor
and other contractors on the job and Landlord's Construction Representative. All
work shall be coordinated with the general project work.

     2. Insurance. (Please see Addendum)

     (a) Landlord shall procure and maintain fire and extended  coverage and all
risk  insurance,   including  earthquake  and  flood,  upon  the  buildings  and
improvements  (including the  underlying  deck and pier areas) of which Tenant's
premises are a part, exclusive of Tenant's leasehold  improvements  described as
Tenant's work in this Exhibit "C", Tenant's furnishings, fixtures and equipment,
and any  improvements  made by Tenant  not  described  in this  "Exhibit  "C" as
Tenant's work.  Coverage for any peril included within the classification  "fire
and extended  coverage"  shall be equal to one hundred percent 100%) of the full
replacement  value,  with  coverage  for loss or damage  from other  perils in n
amount to be determined by Landlord.

     Tenant shall reimburse  Landlord for its pro rata share of the premiums for
the  insurance  provided  for herein  attributable  to the period from and after
delivery of the premises to Tenant.  The premium cost of such  insurance will be
allocated among all tenants, and Tenant's pro rata share,  computed as set forth
in  paragraph  11.6 of the  Lease,  shall be  payable  by Tenant to  Landlord  a
additional rent, within ten (10) days of presentation of a statement therefor.

     (b) Tenant shall secure, pay for and maintain,  or cause its contractors to
secure,  pay for and maintain  during  construction  and  fixturing  work within
Tenant's  demised  premises,  all of  the  insurance  policies  as  required  by
Landlord. Tenant shall not permit its contractors to commence any work until all
the required insurance has been obtained and certificates of such insurance have
been delivered to Landlord.

     3. Tenant  Obligations.  Tenant shall prepare all its plans and perform all
its work to comply with the governing statutes,  ordinances,  regulations, codes
and  insurance  rating  boards;  take  out  all  necessary  permits  and  obtain
Certificates  of  Occupancy  for  the  work  performed  by it,  all  subject  to
Landlord's  written  approval.  Landlord's  approval of  Tenant's  plan does not
relieve Tenant of its obligation to complete the  development in accordance with
the terms of the Lease, nor does it relieve Tenant of the necessity of complying
with  the  laws,  rules,  regulations,   and  requirements  of  local  governing
authorities. Certificates of Occupancy or copies thereof are mandatory and shall
be filed with Landlord before Tenant opens for business.

     4. Storefront Glass. All storefront glass must be safety plate or tempered.

     5. Sprinklers.  All  modifications to the existing Tenant sprinkler grid to
fit new Tenant's sprinkler  requirements be by Tenant's Sprinkler  Contractor at
Tenant's sole expense.

     Tenant's  Contractor shall notify  Landlord's local authority prior to each

<PAGE>

shutting down or filling of Tenant's sprinkler system.

     6.  Modification  Costs.  All engineering,  architectural  and construction
costs for  modifications to Landlord's  structure and appurtenances are Tenant's
responsibility.

     7.  Work  Condition.  All such  work  shall  be  performed  in  first-class
workmanlike  manner and shall be in a good and usable  condition  at the date of
completion thereof.  Tenant shall require any person performing any such work to
guarantee  the  same to be free  from any and all  defects  in  workmanship  and
materials for one (1) year from the date of completion thereof.

     8. On-site  Inspection.  Tenant's  Architect/Engineer  will provide on-site
construction   inspection  throughout  the  course  of  construction  to  insure
conformity with all aspects of plans, specifications, building codes and general
construction  practices.  Upon substantial  completion of Tenant's construction,
Tenant  shall  cause  Tenant's  Architect/Engineer  to  prepare  and  deliver to
Landlord a Notice of Completion and an Architect's  Certificate of Acceptance of
said premises.

     9.  Rejected  Work.  Tenant  shall  promptly  correct  all work  reasonably
rejected by the Landlord's Architect/Construction Representative as defective or
as failing to conform to the working  drawings  and  specifications  approved by
Landlord, whether observed before or after substantial completion and whether or
not  fabricated,  installed  or  completed.  Tenant  shall  bear  all  costs  of
correcting  such  rejected  work  including   compensation  for  the  Landlord's
Architect's/Construction  Representative's  additional  services made  necessary
thereby.


                     PLEASE SEE ADDENDUM TO THIS EXHIBIT "C"

                                   ADDENDUM TO
                                   EXHIBIT "C"

     1. It is  understood  that Tenant  will be  remodeling  an existing  space.
Reliable "as built" drawings do not exist for such space.  Tenant's drawings, as
provided  in  Division  3, Plans and  Specifications,  shall  show all  existing
conditions,  including,  but not limited to,  existing floor plan,  ceilings and
floor  elevations,   shear  walls,  bracing,  columns,   heating,   ventilation,
electrical,  plumbing,  and communication wiring. If any of these conditions are
to remain in the  premises  and/or to be affected by the work to be performed by
Tenant, then complete plans,  sections and details shall be included in Tenant's
drawings and  specifications.  Any  conditions  that are  discovered  during the
course  of  Tenant's   work,   and  not  indicated  on  Tenant's   drawings  and
specifications,  shall  not  be  disturbed  until  inspected  and  approved  for
relocation and/or modification by Landlord's representative.

     2. Tenant takes and accepts the premises in its "as-is"  condition.  Tenant
has made its own investigation of the conditions in the premises, and has relied
solely upon its own investigation and judgment  concerning the conditions in the
premises.  Landlord  has not made,  and does not  make,  any  representation  or
warranty  concerning  the physical  condition of the  premises,  the  condition,
nature  and/or  extent of the  improvements  located  inside or  outside  of the
premises, or the fitness of use of the premises; Tenant acknowledges that it has
not relied upon any such  representations  or  warranties  in entering into this
Lease.

     3. It is hereby agreed that Tenant shall remodel the premises,  interior or
and  exterior,  including  but not limited  to, the  storefront,  show  windows,
signage,  electrical  system,  interior  fixturing,   displays,  cash  wrap  and
finishes. Tenant shall employ an architect and/or designer licensed in the State

<PAGE>

of California,  to design and coordinate all aspects of said remodel in a manner
consistent  with  Landlord's  design  criteria.  The  nature  and extent of said
remodeling  shall be approved by Landlord in writing  prior to  commencement  of
work.  Said  work  shall be  completed  within  90 days  and all  work  shall be
performed  at  Tenant's  sole cost and expense  and  pursuant to all  applicable
provisions of the Lease.

     4.  It is  hereby  agreed  that  Tenant  shall  conform  to the  Landlord's
construction  requirements  as  outlined  in the PIER 39  construction  package.
Remodeling required by this Lease shall be completed to Landlord's  satisfaction
prior to the dates or time periods outlined herein.

     5. It is hereby  agreed  that  Tenant  shall  take all  appropriate  action
necessary to insure that the premises, and every part thereof, including but not
limited to the interior fixturing,  store front elements,  signage,  awnings and
finishes are maintained in a manner  consistent with PIER 39 design criteria and
PIER 39 maintenance  standards throughout the term of this lease. The nature and
extent  of  said  maintenance  work  shall  be  approved  in  writing  prior  to
commencement of work and shall be at the sole cost and expense of the Tenant and
pursuant to all applicable provisions of the Lease.

     Notwithstanding  anything to the  contrary  contained  in the  construction
package or design criteria  (collectively  "Criteria") of this Lease, (i) Tenant
shall not be  required to pay  Landlord  for any item of work,  installation  or
service,  or any other sum  whatsoever,  that is not provided for in this Lease,
(ii)  Tenant's  obligation  to use Landlord or a particular  contractor  for the
performance of any part of Tenant's work  (excluding the provisions of paragraph
15.4) is conditioned upon Landlord or such contractor charging a competitive fee
for its work or service and being available when needed by Tenant,  (iii) in the
event of any  conflict  between  this Lease and the  Criteria,  this Lease shall
control,  (iv) in the event of any  conflict  between the  Criteria and Tenant's
Landlord  approved design drawings,  the approved design drawings shall control,
and (v) Landlord will not disapprove a proposed  contractor or  subcontractor of
Tenant unless  Landlord has had a negative  experience  with such  contractor or
subcontractor.

     Notwithstanding  anything to the contrary  contained in this Lease,  Tenant
shall  have  the  right  without  Landlord's  consent  to  re-use  any  and  all
improvements,  fixtures and equipment existing in the premises as of the date of
this Lease to the extent  same are  working,  in good  repair and have  adequate
capacity and life.  Landlord agrees that no such  improvements,  fixtures and/or
equipment  shall be removed from the premises prior to delivery of possession to
Tenant,  except to the extent removed by the previous tenant of the premises (or
portion thereof).



<PAGE>
                                   EXHIBIT "D"

                         STATEMENT OF TENANT RE: LEASE



DATED:                                 , 19______

RE:               K-105
                  FOR PREMISES AT PIER 39 CENTER
                  SAN FRANCISCO, CALIFORNIA



To Landlord and Lenders:

     The    undersigned,    as   tenant   under   that   certain   lease   dated
_________________,  199___  made  and  entered  into  between  PIER  39  LIMITED
PARTNERSHIP,  as Landlord, and the undersigned,  as Tenant, hereby ratifies said
Lease and  certifies  that the  undersigned  has entered  into  occupancy of the
premises  described in said Lease,  that the minimum monthly rent is as follows:
(i) For the first (1st) through  thirty-sixth (36th) months of the term, the sum
of Nine Thousand Six Hundred Twenty Five Dollars ($9,625.00) per month, (ii) For
the thirty-seventh (37th) through  seventy-second (72nd) months of the term, the
sum  of  Eleven  Thousand  Dollars   ($11,000.00)  per  month,   (iii)  For  the
seventy-third  (73rd) through ninety-sixth (96th) months of the term, the sum of
Eleven Thousand Four Hundred Fifty Eight Dollars  ($11,458.00)  per month,  (iv)
For the ninety-seventh (97th) through the one hundredth-twentieth (120th) months
of the term,  the sum of Twelve  Thousand  Three  Hundred  Seventy  Five Dollars
($12,375.00)  per month and was payable  starting April 1, 1999; that said Lease
is in full force and effect and has not been assigned, modified, supplemented or
amended in any way; that the same  represents the entire  agreement  between the
parties as to said  Lease;  that the term of said Lease  expires on January  31,
2009, that all conditions  under said Lease to be performed by the Landlord have
been satisfied and on this date there are no existing  defenses or offsets which
the undersigned has against the enforcement of said Lease by the Landlord;  that
no rent has been paid in advance and the sum of N/A ($ N/A ) has been  deposited
with  Landlord as security (no minimum rent is due until  October 1, 1999);  and
that the minimum monthly rent for October 1 , 19 99 has been paid.

     Tenant further  certifies that all of "Landlord's Work" as required by said
Lease and  Exhibit  "C" thereto  has been  completed  in a good and  workmanlike
manner and to the satisfaction of Tenant.

     This certification is made by the undersigned with the intent and knowledge
that a Lender or Lenders and the  Landlord  will be relying  hereon in advancing
loan funds to the Landlord  under said Lease to be secured by a mortgage or deed
of trust upon the subject premises and adjoining property.



Very truly yours,


Toys International, a California corporation


By ____________________________________________
Its:

By ____________________________________________
Its:
<PAGE>
                                   EXHIBIT "E"
                         USE OF PREMISES AND TRADE NAME


Tenant shall use and occupy the premises under the following name:


     Toys  International,  or  other  tradename  used  in  substantially  all of
Tenant's other toy stores,  subject to Landlord's prior written  consent,  which
consent shall not be unreasonably withheld.


     Tenant shall use and occupy the premises for the following purposes and for
no other purposes:


     Retail sale of toys, better quality collectibles, hobbies, arts and crafts,
children's books, dolls, model kits, child-oriented games,  child-oriented video
and  audio  cassettes,   child-oriented  compact  and  laser  discs,  and  other
technological  innovations thereof,  child-oriented computer software,  sporting
goods,  and such other items as are  typically  displayed in toy stores  located
within first-class regional shopping centers.






<PAGE>
                                   EXHIBIT "F"

                                    GUARANTEE

     Play Co. Toys and Entertainment Corp., a Delaware corporation, "GUARANTOR",
as a material inducement to and in consideration of PIER 39 LIMITED PARTNERSHIP,
"LANDLORD",  entering  into a written  lease,  "LEASE" with Toys  International,
"TENANT", dated the same date as this Guarantee,  "GUARANTEE", pursuant to which
LEASE  LANDLORD  leased to TENANT  and TENANT  leased  from  LANDLORD,  premises
described  in  Exhibit  "B"  to  LEASE,   unconditionally  guarantees  the  full
performance  of each and every term,  condition  and covenant of the LEASE to be
performed  by TENANT,  including  the  payment of all rent and other  charges to
accrue thereunder.

         GUARANTOR further agrees as follows:

     1. This  GUARANTEE  shall  continue  in favor of  LANDLORD  notwithstanding
forbearance under or extension, modification or alteration of LEASE entered into
by and between the  parties  thereto,  or their  successors  or assigns,  or the
impairment or suspension of LANDLORD'S  rights or remedies  against TENANT,  the
release or  modification  of security,  or assignment of LEASE by TENANT with or
without the consent of LANDLORD.

     2. LANDLORD may, without notice, assign GUARANTEE in whole or in part.

     3. The liability of GUARANTOR  hereunder is primary and independent of that
of TENANT with  respect to any right of action which  accrues to LANDLORD  under
the LEASE, and LANDLORD may, at its option,  proceed against  GUARANTOR  without
having exercised any or all of its rights or remedies against TENANT,  commenced
any action or obtained  any judgment  against  TENANT,  or  exercised  any other
remedy  in  LANDLORD'S   power.   GUARANTOR  waives   presentment,   demand  for
performance,  notice of nonperformance,  protest,  notice of protest,  notice of
dishonor, and notice of acceptance of this GUARANTEE.

     4.  Until all  TENANT'S  obligations  to  LANDLORD  under  LEASE  have been
discharged in full,  GUARANTOR shall have no right to subrogation against TENANT
and waives any right to enforce any remedies that LANDLORD now has, or later may
have, against TENANT.

     5. Notice to TENANT shall constitute notice to GUARANTOR.

     6. GUARANTOR shall pay a reasonable  attorney's fee and all other costs and
expenses which may be incurred by LANDLORD in the enforcement of GUARANTEE.

     7. No failure on the part of  LANDLORD  to pursue any remedy  hereunder  or
under LEASE shall  constitute a waiver on LANDLORD'S part of the right to pursue
said remedy on the basis of the same or subsequent breach.

     8. The terms and provisions of GUARANTEE shall be binding upon and inure to
the benefit of the  respective  successors  and  assigns of the  parties  herein
named.

     9. GUARANTEE  shall be enforceable by LANDLORD in accordance  with the laws
of the State of California and shall be construed in accordance therewith.

     10. The obligations of GUARANTOR hereunder (if there are more than one) are
joint and several. The use of the singular herein shall include the plural.

     DATED: , 19 .

GUARANTOR

Play Co. Toys and Entertainment Corp. a
Delaware corporation

By ___________________________________
Its:

By ___________________________________
Its:



<PAGE>
                                   EXHIBIT "G"
                              RULES AND REGULATIONS


     1. Tenant will be responsible for removing all garbage from its premises to
a  location  designated  by the  Landlord  adjacent  to the  perimeter  roadway.
Violation of this will result in a $100.00 charge per violation.

     2. INTENTIONALLY OMITTED.

     3. All Tenants will require their  employees not to use the parking garage.
Under no circumstances should validation stamps ever be given to any employee.

     4. All  deliveries  must take place  between  the hours  after 2:30 a.m. to
11:30 a.m. All removals, the carrying in or out of safes, freight,  furniture or
bulky matter of any description must take place during these hours. All vendors,
suppliers  and other  trucks  must be off the  perimeter  roadway  by 11:30 a.m.
Violation of this 11:30 a.m.  rule will result in a $50.00  charge per violation
to the Tenant.  This charge should be passed to the party who violates the 11:30
a.m. time limit.

     The  Landlord  reserves the right to inspect all freight to be brought into
the Center and to exclude  from the Center all  freight  which  violates  any of
these rules and regulations or terms of the Lease.

     5.  The  sidewalks,   entrances,  passages,  courts,  elevators,  perimeter
roadway,  vestibules,  stairways,  corridors or halls shall not be obstructed or
encumbered by any Tenant or used for any purpose other than ingress or egress to
and from the demised premises

     6. No awnings,  curtains,  blinds, shades,  aerials,  antennae or any other
projections  shall be attached to the outside  walls or roof of any  building in
the Center without the prior written consent of Landlord.

     7. The sashes,  sash doors,  skylights,  windows and doors that  reflect or
admit light and air into the halls,  passageways  or other public  places in the
Center shall not be covered or obstructed by any Tenant,  nor shall any bottles,
parcels, or other articles be placed on the window sills.

     8. No Tenant shall cause or permit any unusual or objectionable odors to be
produced upon or permeated  from the demised  premises nor shall Tenant vent any
fumes or odors into the interior of the premises of another Tenant.

     9. No Tenant shall make,  or permit to be made,  any unseemly or disturbing
noises or  disturb,  or  interfere  with the  occupants  of this or  neighboring
buildings or premises or those having  business  with them whether by the use of
any musical instrument,  amplified sound, un-musical noise, whistling,  singing,
or in any other way. No Tenant shall throw anything out of the doors, windows or
skylights, down the passageways, or off the balconies.

     No Tenant shall do anything or permit anything to be done on or from Tenant
s premises  which will  disturb the quiet  enjoyment  of any other Tenant or its
premises.

     10. No Tenant, nor any of Tenant's servants, employees, agents, visitors or
licensees,  shall  at any time  bring or keep  upon  the  demised  premises  any
flammable, combustible or explosive fluid, chemical or substance.

     11. Landlord shall have the right to prohibit any advertising by any Tenant
which,  in Landlord s opinion,  tends to impair the  reputation of the Center or
its  desirability  as a Center through retail sales and upon written notice from
Landlord, Tenant shall refrain from or discontinue such advertising.

     12.  The  premises  shall not be used for  lodging or  sleeping  or for any
immoral or illegal purpose.

     13.  Canvassing,  soliciting  and peddling in the Center is prohibited  and
each Tenant shall cooperate to prevent the same.

     14.  There  shall not be used in any space,  or in the public  halls of any
building,  either by any  Tenant or by  jobbers  or  others in the  delivery  or
receipt of merchandise, any hand trucks, except those equipped with rubber tires
and side guards.

     15. Tenant agrees to accept  BankAmericard,  Master Charge, and Visa credit
cards at all times during the Term of this Lease.

     16. Tenant will cooperate by appropriate decoration of the demised premises
in promotional and public  relations  activities of the Center for holidays such
as Christmas, Easter, Valentine's Day and Halloween.

     17. Tenant will also cooperate in any other  promotional  programs designed
by Landlord from time to time.

     18.  Tenant  will at all times  maintain  membership  in the San  Francisco
Convention and Visitor's Bureau.

     19.  Tenant  recognizes  that it will be the  policy of the  Center and its
Tenant's  to  cooperate  with the  activities  of the San  Francisco  Chamber of
Commerce and other specified  organizations which will contribute to the success
of the Center.

     20.  Tenant  recognizes  that it will be the  policy  of the  Center to the
extent not in violation of any laws, to give reasonable preference in employment
to residents of the City and County of San Francisco.

     21.  Tenant will  cooperate in all  procedures  and programs  calculated to
discourage shoplifting in the Center.

     22.  Landlord  shall  not  be  responsible  to  Tenant  hereunder  for  the
non-observance  or violation of any of these rules and  regulations by any other
Tenants.  Landlord shall have the right, but not the obligation,  to take action
against any Tenant for violation of any of the rules and regulations.

     23.  Tenant agrees that a late opening or an early closing will result in a
$100.00 charge to the Tenant per violation.  The imposition of this charge shall
not preclude Landlord from pursuing any or all other remedies available to it..

     24. Tenant will be required to illuminate the interior of its premises from
8:30 p.m. (or closing time) to 11:00 p.m.

     25. For any check  returned to the Landlord from the bank,  the Tenant will
be charged a penalty of $15.00.

     26.  Tenant will be required to attend at least one  merchandising  seminar
once a year.

     27. Tenant agrees, if Landlord so desires, to retain a professional display
person to dress the Tenant's windows.

     28. Tenant agrees to encourage its employees, agents, vendors, contractors,
etc. to cooperate in environmental  protection and/or conservation programs that
Landlord promotes to maintain or improve the quality of the local environment.